What changed in this filing

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Item 1. Financial Statements

2021-11-02 compared with 2021-07-29 · 206 added, 164 removed, 582 unchanged (39% of the section changed)

3 unchanged sentences

(UNAUDITED) CONSOLIDATED BALANCE SHEETS

September 30,

(Dollars in Millions, Except Par Value Data)

27 unchanged sentences

Total Liabilities

Common stock, par value $ 0.01 per share

Common stock, par value $ 0.01 per share ( 62.4 and 62.3 shares

outstanding at September 30, 2021 and December 31, 2020, respectively)

Preferred stock, par value $ 0.01 per share

10 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

(In Millions, Except Per Share Data)

7 unchanged sentences

Acquisition-related expenses

Other operating (income) and expenses, net

Other operating income, net

Earnings from Operations

18 unchanged sentences

(UNAUDITED) CONSOLIDATED STATEMENTS OF CASH FLOWS

Six Months Ended

Nine Months Ended

September 30,

(Dollars in Millions)

33 unchanged sentences

Net Cash Provided by (Used for) Financing Activities

Net (Decrease) Increase in Cash, Cash Equivalents and Restricted Cash

Net Increase in Cash, Cash Equivalents and Restricted Cash

Cash, Cash Equivalents and Restricted Cash, beginning of period

11 unchanged sentences

Noncontrolling Interests

Balance at March 31, 2021

Balance at June 30, 2021

Consolidated net earnings

5 unchanged sentences

Stock-based compensation expense

Distributions to owners of

noncontrolling interest

Balance at June 30, 2021

Balance at September 30, 2021

Balance at December 31, 2020

8 unchanged sentences

noncontrolling interest

Balance at June 30, 2021

Balance at September 30, 2021

See accompanying notes to the consolidated financial statements.

9 unchanged sentences

Noncontrolling Interests

Balance at March 31, 2020

Balance at June 30, 2020

Consolidated net earnings

2 unchanged sentences

Issuances of common stock for stock

Shares withheld for employees'

income tax obligations

Stock-based compensation expense

Balance at June 30, 2020

Balance at September 30, 2020

Balance at December 31, 2019

7 unchanged sentences

Stock-based compensation expense

Balance at June 30, 2020

Balance at September 30, 2020

See accompanying notes to the consolidated financial statements.

1 unchanged sentence

AND CONSOLIDATED SUBSIDIARIES

For the Quarter Ended June 30, 2021

For the Quarter Ended September 30, 2021

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2 unchanged sentences

(the Company or Martin Marietta) is a natural resource-based building materials company.

The Company supplies aggregates (crushed stone, sand and gravel) through its network of approximately 310 quarries, mines and distribution yards in 26 states, Canada and The Bahamas.

As of September 30, 2021, the Company supplies aggregates (crushed stone, sand and gravel) through its network of approximately 320 quarries, mines and distribution yards in 26 states, Canada and The Bahamas.

In the southwestern and western United States, 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.

The Company also provides asphalt in Minnesota subsequent to a business combination in the quarter ended June 30, 2021.

The Company’s heavy-side building materials are used in infrastructure, nonresidential and residential construction projects.

Aggregates are also used in agricultural, utility and environmental applications and as railroad ballast.

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

The 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:

23 unchanged sentences

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, 2021 are not necessarily indicative of the results expected for other interim periods or the full year.

The consolidated results of operations for the three and nine months ended September 30, 2021 are not necessarily indicative of the results expected for other interim periods or the full year.

The consolidated balance sheet at December 31, 2020 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

GAAP for complete financial statements.

These consolidated financial statements should be read in conjunction with the audited

MARTIN MARIETTA MATERIALS, INC.

AND CONSOLIDATED SUBSIDIARIES

For the Quarter Ended June 30, 2021

For the Quarter Ended September 30, 2021

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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, 2020 .

consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 .

The preparation of the Company’s consolidated financial statements requires management to make certain estimates and assumptions about future events.

5 unchanged sentences

The reclassification had no impact on the Company’s previously reported results of operations, financial position or cash flows.

Consolidated Comprehensive Earnings/Loss and Accumulated Other Comprehensive Loss

Consolidated comprehensive earnings/loss and accumulated other comprehensive loss consist of consolidated net earnings;

Consolidated Comprehensive Earnings and Accumulated Other Comprehensive Loss

Consolidated comprehensive earnings and accumulated other comprehensive loss consist of consolidated net earnings;

adjustments for the funded status of pension and postretirement benefit plans;

3 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

(Dollars in Millions)

4 unchanged sentences

AND CONSOLIDATED SUBSIDIARIES

For the Quarter Ended June 30, 2021

For the Quarter Ended September 30, 2021

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

4 unchanged sentences

Other Comprehensive

Three Months Ended June 30, 2021

Three Months Ended September 30, 2021

Balance at beginning of period

Other comprehensive earnings before reclassifications,

Other comprehensive loss before reclassifications,

Amounts reclassified from accumulated other

comprehensive loss, net of tax

Other comprehensive earnings, net of tax

Other comprehensive earnings (loss), net of tax

Balance at end of period

Three Months Ended June 30, 2020

Three Months Ended September 30, 2020

Balance at beginning of period

8 unchanged sentences

Other Comprehensive

Six Months Ended June 30, 2021

Nine Months Ended September 30, 2021

Balance at beginning of period

5 unchanged sentences

Balance at end of period

Six Months Ended June 30, 2020

Nine Months Ended September 30, 2020

Balance at beginning of period

8 unchanged sentences

AND CONSOLIDATED SUBSIDIARIES

For the Quarter Ended June 30, 2021

For the Quarter Ended September 30, 2021

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

(Dollars in Millions)

4 unchanged sentences

Three Months Ended

Six Months Ended

Affected line items in the consolidated

statements of earnings and

comprehensive earnings

Nine Months Ended

Affected line items in the

September 30,

consolidated statements of earnings

and comprehensive earnings

(Dollars in Millions)

2 unchanged sentences

Amortization of:

Prior service cost (credit)

Prior service credit

Actuarial loss

6 unchanged sentences

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 and six months ended June 30, 2021 and 2020, 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.

For the three and nine months ended September 30, 2021 and 2020, 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 11 of 54

1 unchanged sentence

AND CONSOLIDATED SUBSIDIARIES

For the Quarter Ended June 30, 2021

For the Quarter Ended September 30, 2021

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1 unchanged sentence

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

(In Millions)

8 unchanged sentences

Restricted Cash

At June 30, 2021 and December 31, 2020, the Company had restricted cash of $ 17.2 million and $ 97.1 million, respectively, which is 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).

At September 30, 2021 and December 31, 2020, the Company had restricted cash of $ 1.7 million and $ 97.1 million, respectively, which is 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 is 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.

Any unused cash at the end of the designated period will be transferred to unrestricted accounts of the Company and can then be used for general corporate purposes.

The Company has until November 22, 2021 to use the remaining restricted cash to purchase qualified assets under Section 1031.

The Company has until January 10, 2022 to use the remaining restricted cash to purchase qualified assets under Section 1031.

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:

September 30,

(Dollars in Millions)

9 unchanged sentences

AND CONSOLIDATED SUBSIDIARIES

For the Quarter Ended June 30, 2021

For the Quarter Ended September 30, 2021

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

7 unchanged sentences

Intersegment and interproduct revenues are eliminated in consolidation.

Service revenues are derived from the paving business and recognized using the percentage-of-completion method under the cost-to-cost approach.

Service revenues are derived from the paving business and are recognized using the percentage-of-completion method 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.

5 unchanged sentences

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 June 30, 2021 and 2020 were $ 215.5 million and $ 202.7 million, respectively, where the remaining periods to complete these obligations ranged from one month to 21 months and one month to 14 months, respectively.

Future revenues from unsatisfied performance obligations at September 30, 2021 and 2020 were $ 183.0 million and $ 150.2 million, respectively, where the remaining periods to complete these obligations ranged from one month to 21 months and one month to 13 months, respectively.

Page 13 of 54

1 unchanged sentence

AND CONSOLIDATED SUBSIDIARIES

For the Quarter Ended June 30, 2021

For the Quarter Ended September 30, 2021

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2 unchanged sentences

Three Months Ended

June 30, 2021

September 30, 2021

Products and Services

3 unchanged sentences

Three Months Ended

June 30, 2020

September 30, 2020

Products and Services

2 unchanged sentences

Magnesia Specialties

Service revenues, which include paving operations located in Colorado, were $ 73.4 million and $ 94.0 million for the three months ended June 30, 2021 and 2020, respectively.

Service revenues, which include paving services located in Colorado , were $ 100.5 million and $ 112.8 million for the three months ended September 30, 2021 and 2020, respectively, and are reported in the West Group .

Page 14 of 54

1 unchanged sentence

AND CONSOLIDATED SUBSIDIARIES

For the Quarter Ended June 30, 2021

For the Quarter Ended September 30, 2021

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Six Months Ended

June 30, 2021

Nine Months Ended

September 30, 2021

Products and Services

2 unchanged sentences

Magnesia Specialties

Six Months Ended

June 30, 2020

Nine Months Ended

September 30, 2020

Products and Services

2 unchanged sentences

Magnesia Specialties

Service revenues for the six months ended June 30, 2021 and 2020 were $ 82.2 million and $ 108.5 million, respectively.

Service revenues for the nine months ended September 30, 2021 and 2020 were $ 182.7 million and $ 221.3 million, respectively.

Contract Balances.

4 unchanged sentences

(Dollars in Millions)

June 30, 2021

September 30, 2021

December 31, 2020

1 unchanged sentence

Billings in excess of costs

Revenues recognized from the beginning balance of contract liabilities for the three months ended June 30, 2021 and 2020 were $ 5.4 million and $ 4.1 million, respectively, and for the six months ended June 30, 2021 and 2020 were $ 9.4 million and $ 6.6 million, respectively .

Revenues recognized from the beginning balance of contract liabilities for the three months ended September 30, 2021 and 2020 were $ 7.1 million and $ 8.5 million, respectively, and for the nine months ended September 30, 2021 and 2020 were $ 11.9 million and $ 7.2 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 $ 8.6 million and $ 10.6 million at June 30, 2021 and December 31, 2020, respectively.

Included in other current assets on the Company’s consolidated balance sheets, retainage was $ 10.0 million and $ 10.6 million at September 30, 2021 and December 31, 2020, respectively.

Policy Elections.

3 unchanged sentences

AND CONSOLIDATED SUBSIDIARIES

For the Quarter Ended June 30, 2021

For the Quarter Ended September 30, 2021

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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.

Business Combination

Business Combinations

On July 30, 2021 , the Company acquired assets of Southern Crushed Concrete (SCC).

SCC is a leading producer of recycled concrete in the Houston area, one of the country’s largest addressable aggregates markets.

Recycled concrete is principally used as a base aggregates product in infrastructure, commercial and residential construction applications.

The Company acquired inventories;

property, plant and equipment;

intangible assets (including goodwill), and right-of-use assets;

and assumed asset retirement obligations;

lease obligations;

and other liabilities.

The goodwill generated by the transaction will be deductible for income tax purposes.

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 September 30, 2021.

The acquisition is reported in the Company’s West Group, but is immaterial for pro-forma financial statement disclosures.

On April 30, 2021 , the Company completed the acquisition of Tiller Corporation (Tiller), a leading aggregates and hot mix asphalt supplier in the Minneapolis/St.

Paul region, one of the largest and fastest growing midwestern metropolitan areas, which complements the Company’s existing product offerings in the surrounding areas.

Paul area, one of the largest and fastest growing midwestern metropolitan areas.

The Tiller acquisition complements the Company’s existing product offerings in the surrounding areas.

Additionally, Tiller sells asphalt solely as a materials provider and does not offer paving or other associated services.

1 unchanged sentence

The Company has recorded preliminary fair values of the assets acquired and liabilities assumed, which are subject to asset verification and a normal post-closing working capital adjustment.

Therefore, the measurement period for accounts receivable;

property, plant and equipment;

intangible assets, including goodwill;

and accounts payable remains open as of June 30, 2021.

The impact of the acquisition is not material to the Company’s operating results;

therefore, pro forma financial information is not included.

The operations are reported in the Company’s East Group.

Therefore, the measurement period for property, plant and equipment and goodwill remains open as of September 30, 2021.

The goodwill generated by the transaction will be deductible for income tax purposes.

The acquisition is reported in the Company’s East Group, but is immaterial for pro-forma financial statement disclosures.

Goodwill and Other Intangibles

2 unchanged sentences

Balance at January 1, 2021

Balance at June 30, 2021

Goodwill allocated to assets held for sale

Balance at September 30, 2021

Page 16 of 54

1 unchanged sentence

AND CONSOLIDATED SUBSIDIARIES

For the Quarter Ended June 30, 2021

For the Quarter Ended September 30, 2021

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1 unchanged sentence

(Dollars in Millions)

June 30, 2021

September 30, 2021

Noncompetition agreements

7 unchanged sentences

Use rights and other

At June 30, 2021 and December 31, 2020, intangible assets deemed to have an indefinite life and not being amortized consist of the following:

At September 30, 2021 and December 31, 2020, intangible assets deemed to have an indefinite life and not being amortized consist of the following:

(Dollars in Millions)

2 unchanged sentences

Operating permits

For the six months ended June 30, 2021, the Company acquired $ 225.9 million of intangibles, which consists of the following:

For the nine months ended September 30, 2021, the Company acquired $ 294.9 million of intangibles, which consists of the following:

(Dollars in Millions)

3 unchanged sentences

Customer relationships

Total amortization expense for intangible assets for the six months ended June 30, 2021 and 2020 was $ 8.9 million and $ 6.4 million, respectively.

Total amortization expense for intangible assets for the nine months ended September 30, 2021 and 2020 was $ 15.2 million and $ 9.8 million, respectively.

Page 17 of 54

1 unchanged sentence

AND CONSOLIDATED SUBSIDIARIES

For the Quarter Ended June 30, 2021

For the Quarter Ended September 30, 2021

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The estimated amortization expense for intangibles for the second half of 2021 and for each of the next four years and thereafter is as follows:

The estimated amortization expense for intangibles for the remainder of 2021, each of the next four years, and thereafter is as follows:

(Dollars in Millions)

July - December 2021

October - December 2021

Inventories, Net

September 30,

(Dollars in Millions)

4 unchanged sentences

Long-Term Debt

September 30,

(Dollars in Millions)

0.650 % Senior Notes, due 2023

4.250 % Senior Notes, due 2024

7 % Debentures, due 2025

4 unchanged sentences

6.25 % Senior Notes, due 2037

Trade Receivable Facility, interest rate of 1.09 % at June 30, 2021

4.250 % Senior Notes, due 2047

3.200 % Senior Notes, due 2051

Trade Receivable Facility, interest rate of 0.77 % at September 30, 2021

Current maturities of long-term debt

3 unchanged sentences

AND CONSOLIDATED SUBSIDIARIES

For the Quarter Ended June 30, 2021

For the Quarter Ended September 30, 2021

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

T he Company , through a wholly-owned special-purpose subsidiary, has a $ 400 million trade receivable securitization facility (the Trade Receivable Facility), which expires on September 22, 2021 .

On July 2, 2021, the Company issued $ 700 million aggregate principal amount of 0.650 % Senior Notes due 2023 (the 0.650% Senior Notes), $ 900 million aggregate principal amount of 2.400 % Senior Notes due 2031 (the 2.400% Senior Notes) and $ 900 million aggregate principal amount of 3.200 % Senior Notes due 2051 (the 3.200% Senior Notes) and, together with the 0.650% Senior Notes and the 2.400% Senior Notes (the Senior Notes), pursuant to a base indenture, dated as of May 22, 2017 (the Base Indenture), as amended and supplemented from time to time, including by the Fourth Supplemental Indenture, dated as of July 2, 2021 and, together with the Base Indenture (the Indenture) between the Company and Regions Bank, as trustee, governing the Senior Notes.

The Senior Notes are carried net of original issue discount, which will be amortized using the effective interest method over the lives of the issues.

The Company used the net proceeds of the 2.400% Senior Notes, the 3.200% Senior Notes and the 0.650% Senior Notes to pay the consideration for the acquisition of Lehigh Hanson, Inc.’s West Region (Lehigh West Region) business, and for general corporate purposes.

See Note 16 for more information on the Lehigh West Region acquisition, which was consummated on October 1, 2021.

Prior to July 2, 2022 (the 2023 Par Call Date), the Company may redeem the 0.650% Senior Notes, at its option, at any time in whole or from time to time in part at a price equal to the greater of:

(i) 100 % of the principal amount of the 0.650% Senior Notes to be redeemed and (ii) the sum of the present values of the principal amount of the 0.650% Senior Notes to be redeemed and the remaining scheduled payments of interest thereon after the date of optional redemption (a 2023 Optional Redemption Date) through the 2023 Par Call Date (assuming, for this purpose, that the 0.650% Senior Notes are scheduled to mature on the 2023 Par Call Date), excluding interest, if any, accrued thereon to such 2023 Optional Redemption Date, discounted to such 2023 Optional Redemption Date on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate (as defined in the Indenture) plus 10 basis points (or 0.100%) plus, in each case, unpaid interest, if any, accrued thereon to, but excluding, such 2023 Optional Redemption Date.

On or after the 2023 Par Call Date and prior to maturity, the Company may redeem the 0.650% Senior Notes at any time in whole or from time to time in part at a price equal to 100 % of the principal amount of the 0.650% Senior Notes, at its option, to be redeemed, plus unpaid interest, if any, accrued thereon to, but excluding, the 2023 Optional Redemption Date.

Prior to April 15, 2031 (the 2031 Par Call Date), the Company may redeem the 2.400% Senior Notes, at its option, at any time in whole or from time to time in part at a price equal to the greater of:

(i) 100 % of the principal amount of the 2.400% Senior Notes to be redeemed and (ii) the sum of the present values of the principal amount of the 2.400% Senior Notes to be redeemed and the remaining scheduled payments of interest thereon after the date of optional redemption (a 2031 Optional Redemption Date) through the 2031 Par Call Date (assuming, for this purpose, that the 2.400% Senior Notes are scheduled to mature on the 2031 Par Call Date), excluding interest, if any, accrued thereon to such 2031 Optional Redemption Date, discounted to such 2031 Optional Redemption Date on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate (as defined in the Indenture) plus 15 basis points (or 0.150%) plus, in each case, unpaid interest, if any, accrued thereon to, but excluding, such 2031 Optional Redemption Date.

On or after the 2031 Par Call Date and prior to maturity, the Company may redeem the 2.400% Senior Notes at any time in whole or from time to time in part at a price equal to 100 % of the principal amount of the 2.400% Senior Notes, at its option, to be redeemed, plus unpaid interest, if any, accrued thereon to, but excluding, the 2031 Optional Redemption Date.

Page 19 of 54

MARTIN MARIETTA MATERIALS, INC.

AND CONSOLIDATED SUBSIDIARIES

For the Quarter Ended September 30, 2021

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Prior to January 15, 2051 (the 2051 Par Call Date), the Company may redeem the 3.200% Senior Notes, at its option, at any time in whole or from time to time in part at a price equal to the greater of:

(i) 100 % of the principal amount of the 3.200% Senior Notes to be redeemed and (ii) the sum of the present values of the principal amount of the 3.200% Senior Notes to be redeemed and the remaining scheduled payments of interest thereon after the date of optional redemption (a 2051 Optional Redemption Date) through the 2051 Par Call Date (assuming, for this purpose, that the 3.200% Senior Notes are scheduled to mature on the 2051 Par Call Date), excluding interest, if any, accrued thereon to such 2051 Optional Redemption Date, discounted to such 2051 Optional Redemption Date on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate (as defined in the Indenture) plus 20 basis points (or 0.200%) plus, in each case, unpaid interest, if any, accrued thereon to, but excluding, such 2051 Optional Redemption Date.

On or after the 2051 Par Call Date and prior to maturity, the Company may redeem the 3.200% Senior Notes at any time in whole or from time to time in part at a price equal to 100 % of the principal amount of the 3.200% Senior Notes, at its option, to be redeemed, plus unpaid interest, if any, accrued thereon to, but excluding, the 2051 Optional Redemption Date.

T he 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., The Bank of Tokyo-Mitsubishi UFJ, LTD.

4 unchanged sentences

The Trade Receivable Facility contains a cross-default provision to the Company’s other debt agreements.

There was $ 240 million outstanding under the Trade Receivable Facility at June 30, 2021, and no borrowings outstanding at December 31, 2020.

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 was $ 20.0 million outstanding under the Trade Receivable Facility at September 30, 2021, and no borrowings outstanding at December 31, 2020.

The Company has a $ 700 million five-year senior unsecured revolving facility (the Revolving Facility) with JPMorgan Chase Bank, N.A., as Administrative Agent, Truist Bank, Deutsche Bank Securities, Inc., and Wells Fargo Bank, N.A., as Co-Syndication Agents, and the lenders party thereto.

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 Revolving Facility at June 30, 2021 or December 31, 2020.

There were no borrowings outstanding under the Revolving Facility at September 30, 2021 or December 31, 2020.

The Revolving Facility requires the Company’s ratio of consolidated debt-to-consolidated earnings before interest, taxes, depreciation and amortization (EBITDA), as defined by the Revolving Facility, for the trailing-twelve months (the Ratio) to not exceed 3.50 x 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 3.75 x.

Additionally, if there are no amounts outstanding under the Revolving Facility and the Trade Receivable Facility, consolidated debt, including debt for which the Company is a co-borrower, may be reduced by the Company’s unrestricted cash and cash equivalents in excess of $ 50 million, such reduction not to exceed $ 200 million, for purposes of the covenant calculation.

The Company was in compliance with this covenant at June 30, 2021.

The Company was in compliance with this covenant at September 30, 2021.

The Revolving Facility expires on December 5, 2024 , 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 June 30, 2021 and December 31, 2020.

Available borrowings under the Revolving Facility are reduced by any

Page 20 of 54

MARTIN MARIETTA MATERIALS, INC.

AND CONSOLIDATED SUBSIDIARIES

For the Quarter Ended September 30, 2021

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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 September 30, 2021 and December 31, 2020 .

Financial Instruments

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

The estimated fair values for all financial instruments are estimated based on Level 2 of the fair value hierarchy.

Temporary cash investments are placed primarily in money market funds, money market demand deposit accounts and Eurodollar time deposits.

4 unchanged sentences

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

Page 19 of 52

MARTIN MARIETTA MATERIALS, INC.

AND CONSOLIDATED SUBSIDIARIES

For the Quarter Ended June 30, 2021

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

consolidated total revenues in the three - month period s ended June 30, 2021 and 2020 .

No single customer accounted for 10 % or more of consolidated total revenues in the three-month and nine-month periods ended September 30, 2021 and 2020.

The estimated fair values of accounts receivable approximate their carrying amounts due to the short-term nature of the accounts.

1 unchanged sentence

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 $ 2.87 billion and $ 3.22 billion, respectively, at June 30, 2021 and $ 2.63 billion and $ 3.08 billion, respectively, at December 31, 2020.

The estimated fair value of the publicly-registered long-term notes was estimated based on Level 2 of the fair value hierarchy using quoted market prices.

The carrying values and fair values of the Company’s long-term debt were $ 5.12 billion and $ 5.49 billion, respectively, at September 30, 2021 and $ 2.63 billion and $ 3.08 billion, respectively, at December 31, 2020.

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.

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.

For the six months ended June 30, 2021, the effective income tax rate was 21.2 %.

For the six months ended June 30, 2020, the effective income tax rate of 20.2 % reflected a $ 6.9 million discrete benefit from financing third-party railroad track maintenance.

For the nine months ended September 30, 2021, the effective income tax rate was 20.6 %, which included a $ 2.9 million discrete benefit for research and development tax credits.

For the nine months ended September 30, 2020, the effective income tax rate of 21.0 % reflected a $ 6.9 million discrete benefit from financing third-party railroad track maintenance.

In exchange, the Company received a federal income tax credit and deduction.

1 unchanged sentence

Penalties, if incurred, are recorded as operating expenses in the consolidated statements of earnings and comprehensive earnings.

Page 21 of 54

MARTIN MARIETTA MATERIALS, INC.

AND CONSOLIDATED SUBSIDIARIES

For the Quarter Ended September 30, 2021

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Pension and Postretirement Benefits

1 unchanged sentence

Postretirement Benefits

Three Months Ended June 30,

Three Months Ended September 30,

(Dollars in Millions)

5 unchanged sentences

Net periodic benefit cost (credit)

Page 20 of 52

MARTIN MARIETTA MATERIALS, INC.

AND CONSOLIDATED SUBSIDIARIES

For the Quarter Ended June 30, 2021

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Postretirement Benefits

Six Months Ended June 30,

Nine Months Ended September 30,

(Dollars in Millions)

13 unchanged sentences

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.

Page 22 of 54

MARTIN MARIETTA MATERIALS, INC.

AND CONSOLIDATED SUBSIDIARIES

For the Quarter Ended September 30, 2021

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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 $ 5.8 million was outstanding as of June 30, 2021 and has a maturity date of March 2022 .

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 $ 5.4 million was outstanding as of September 30, 2021 and has a maturity date of March 2022 .

The affiliate has agreed to reimburse and indemnify the Company for any payments and expenses the Company may incur from this agreement.

The 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, due December 31, 2022 , outstanding from this unconsolidated affiliate as of June 30, 2021 and December 31, 2020.

In addition, the Company has a $ 6.0 million interest-only loan, due December 31, 2022 , outstanding from this unconsolidated affiliate as of September 30, 2021 and December 31, 2020.

The interest rate is one-month LIBOR plus a current spread of 1.75 %.

Letters of Credit

Page 21 of 52

MARTIN MARIETTA MATERIALS, INC.

AND CONSOLIDATED SUBSIDIARIES

For the Quarter Ended June 30, 2021

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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, 2021 , the Company was contingently liable for $ 32.4 million in letters of credit, of which $ 2.6 million were issued under the Company’s Revolving Facility .

At September 30, 2021, the Company was contingently liable for $ 35.0 million in letters of credit, of which $ 2.6 million were issued under the Company’s Revolving Facility.

Business Segments

17 unchanged sentences

Total revenues, as presented on 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.

Page 23 of 54

MARTIN MARIETTA MATERIALS, INC.

AND CONSOLIDATED SUBSIDIARIES

For the Quarter Ended September 30, 2021

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

(Dollars in Millions)

8 unchanged sentences

Magnesia Specialties

Page 22 of 52

MARTIN MARIETTA MATERIALS, INC.

AND CONSOLIDATED SUBSIDIARIES

For the Quarter Ended June 30, 2021

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2021

September 30, 2021

December 31, 2020

3 unchanged sentences

Magnesia Specialties

The increase in assets from December 31, 2020 to June 30, 2021 primarily relates to right-of-use assets for finance leases and the Tiller acquisition.

The increase in assets from December 31, 2020 to September 30, 2021 primarily relates to the proceeds from the Senior Notes issued in July 2021, new right-of-use assets for finance leases and the Tiller and SCC acquisitions.

The proceeds from the Senior Notes issuance are reflected as Corporate assets as of September 30, 2021.

Page 24 of 54

1 unchanged sentence

AND CONSOLIDATED SUBSIDIARIES

For the Quarter Ended June 30, 2021

For the Quarter Ended September 30, 2021

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

4 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

(Dollars in Millions)

23 unchanged sentences

AND CONSOLIDATED SUBSIDIARIES

For the Quarter Ended June 30, 2021

For the Quarter Ended September 30, 2021

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1 unchanged sentence

Noncash investing and financing activities are as follows:

Six Months Ended

Nine Months Ended

September 30,

(Dollars in Millions)

2 unchanged sentences

new finance lease liabilities

Accrued liabilities for purchases of property, plant and equipment

Right-of-use assets obtained in exchange for new

operating lease liabilities

Accrued liabilities for purchases of property, plant and equipment

Remeasurement of operating lease right-of-use assets

For the six months ended June 30, 2021, the right-of-use assets obtained in exchange for new finance lease liabilities balance was primarily attributable to the leases of the new corporate headquarters, production equipment and leases assumed as part of the Tiller acquisition .

For the nine months ended September 30, 2021, the right-of-use assets obtained in exchange for new finance lease liabilities balance was primarily attributable to the leases of the new corporate headquarters, production equipment and leases assumed as part acquisitions completed during the year .

Supplemental disclosures of cash flow information are as follows:

Six Months Ended

Nine Months Ended

September 30,

(Dollars in Millions)

1 unchanged sentence

Cash paid for income taxes, net of refunds

During the six months ended June 30, 2021 and 2020, the Company received proceeds of $ 11.2 million and repaid $ 7.2 million of loans, respectively, related to its company-owned life insurance policies.

During the nine months ended September 30, 2021 and 2020, the Company received proceeds of $ 13.9 million and repaid $ 13.7 million of loans, respectively, related to its company-owned life insurance policies.

The proceeds and repayment, as applicable, are included in the Investments in life insurance contracts, net , in the investing activities of the consolidated statements of cash flows.

Other Operating (Income) and Expenses, Net

Other operating (income) and expenses, net, for the three and six months ended June 30, 2021 included a gain on the sale of the Company’s corporate headquarters of $ 12.3 million.

Other Nonoperating Income, Net

For the three and six months ended June 30, 2021, the increase in other nonoperating income, net, was primarily attributable to lower pension expense of $ 4.6 million and $ 7.8 million, respectively, compared with the prior-year periods.

For the six months ended June 30, 2020, other nonoperating (income) and expenses, net, included $ 5.6 million of third-party railroad track maintenance expense.

Pending Business Combination and Related Financing

On May 24, 2021 , the Company announced a definitive agreement to acquire Lehigh West Region for $ 2.3 billion in cash.

Lehigh West Region has a portfolio of 17 active aggregates quarries, two cement plants with related distribution terminals, and targeted downstream operations in California and Arizona.

These operations will provide a new upstream, materials-led growth platform across several of the nation’s largest and fastest growing megaregions, solidifying the Company’s position as a leading coast-to-coast aggregates producer.

The transaction is expected to close in the second half of 2021, subject to customary closing conditions.

Page 25 of 52

MARTIN MARIETTA MATERIALS, INC.

AND CONSOLIDATED SUBSIDIARIES

For the Quarter Ended June 30, 2021

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Senior Notes are carried net of original issue discount, which will be amortized using the effective interest method over the lives of the issues.

The Company intends to use the net proceeds of the 2.400% Senior Notes and the 3.200% Senior Notes to pay the consideration for the acquisition of Lehigh Hanson, Inc.’s West Region business (Lehigh West Region).

The net proceeds of the 0.650% Senior Notes will be used for general corporate purposes, which may include funding acquisitions (including Lehigh West Region) or repaying indebtedness.

If (i) the Lehigh West Region acquisition is not consummated prior to March 31, 2022, (ii) the securities purchase agreement in respect of the acquisition is terminated at any time prior to March 31, 2022 (other than as a result of consummating the acquisition) or (iii) the Company publicly announces at any time prior to March 31, 2022 that it will no longer pursue the consummation of the acquisition, then the Company will be required to redeem all of the outstanding 2.400% Senior Notes and 3.200% Senior Notes pursuant to a special mandatory redemption at a redemption price equal to 101 % of the aggregate principal amount of the 2.400% Senior Notes and the 3.200% Senior Notes, respectively, plus accrued and unpaid interest to, but excluding, the date of such special mandatory redemption.

The 0.650% Senior Notes will not be subject to the special mandatory redemption.

Prior to July 2, 2022 (the 2023 Par Call Date), the Company may redeem the 0.650% Senior Notes, at its option, at any time in whole or from time to time in part at a price equal to the greater of:

Prior to April 15, 2031 (the 2031 Par Call Date), the Company may redeem the 2.400% Senior Notes, at its option, at any time in whole or from time to time in part at a price equal to the greater of:

Other Operating Income, Net

Other operating income, net, for the nine months ended September 30, 2021 included a gain on the sale of the Company’s former corporate headquarters of $ 12.3 million.

Other operating income, net for the three and nine months ended September 30, 2020 included $ 69.9 million on nonrecurring gains on the sales of investment land and divested assets, which are recorded in the West Group.

Page 26 of 54

1 unchanged sentence

AND CONSOLIDATED SUBSIDIARIES

For the Quarter Ended June 30, 2021

For the Quarter Ended September 30, 2021

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

excluding, such 2031 Optional Redemption Date.

Other Nonoperating Income, Net

For the three and nine months ended September 30, 2021, the increase in other nonoperating income, net, was primarily attributable to lower pension expense of $ 3.9 million and $ 11.8 million, respectively, compared with the prior-year periods.

For the nine months ended September 30, 2020, other nonoperating income, net, included $ 5.6 million of third-party railroad track maintenance expense and reflected a $ 8.9 million reduction in pension expense compared with the prior-year period.

Subsequent Event

On October 1, 2021 , the Company successfully completed its previously announced acquisition of the Lehigh West Region business for $ 2.3 billion in cash.

The acquisition was primarily financed using proceeds from the issuance of publicly traded debt during the quarter ended September 30, 2021.

Lehigh West Region has a portfolio of 17 active aggregates quarries, two cement plants (with related distribution terminals), and targeted downstream operations in four states.

These operations provide a new upstream, materials-led growth platform across several of the nation’s largest and fastest growing megaregions in California and Arizona, solidifying the Company’s position as a leading coast-to-coast aggregates producer.

The acquisition reflects a stock transaction where the Company acquired 100 % of the voting interest of the legal entities that comprise the Lehigh West Region.

For tax purposes, the acquisition is being treated as an asset transaction.

The Company acquired inventories;

property, plant and equipment;

intangible assets;

right-of-use assets;

and other assets;

and assumed accrued liabilities, asset retirement obligations, lease obligations and other liabilities.

The Company did not acquire any of Lehigh West Region’s cash, cash equivalents or accounts receivable nor did it assume any accounts payable, outstanding debt, or pension obligation.

The Company is in the process of determining the acquisition-date fair values of assets acquired and liabilities assumed, and as of November 2, 2021, the initial accounting for the business combination has not been completed.

Page 27 of 54

1 unchanged sentence

AND CONSOLIDATED SUBSIDIARIES

For the Quarter Ended June 30, 2021

For the Quarter Ended September 30, 2021

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

1 unchanged sentence

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements