What changed in this filing

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Item 1. Financial Statements

2022-05-03 compared with 2021-11-02 · 219 added, 349 removed, 439 unchanged (56% of the section changed)

3 unchanged sentences

(UNAUDITED) CONSOLIDATED BALANCE SHEETS

September 30,

(Dollars in Millions, Except Par Value Data)

(In Millions, Except Par Value Data)

Current Assets:

3 unchanged sentences

Inventories, net

Current assets held for sale

Other current assets

5 unchanged sentences

Operating lease right-of-use assets, net

Noncurrent assets held for sale

Other noncurrent assets

4 unchanged sentences

Accrued other taxes

Current maturities of long-term debt and short-term facilities

Accrued interest

Operating lease liabilities

Current liabilities held for sale

Other current liabilities

3 unchanged sentences

Noncurrent operating lease liabilities

Noncurrent liabilities held for sale

Other noncurrent liabilities

Total Liabilities

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

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

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

outstanding at March 31, 2022 and December 31, 2021)

Preferred stock, par value $ 0.01 per share

10 unchanged sentences

Three Months Ended

Nine Months Ended

September 30,

(In Millions, Except Per Share Data)

6 unchanged sentences

Selling, general & administrative expenses

Acquisition-related expenses

Acquisition and integration expenses

Other operating income, net

2 unchanged sentences

Other nonoperating income, net

Earnings before income tax expense

Earnings from continuing operations before income tax expense

Income tax expense

Earnings from continuing operations

Loss from discontinued operations, net of income tax benefit

Consolidated net earnings

Net earnings attributable to noncontrolling interests

Net Earnings Attributable to Martin Marietta Materials, Inc.

Consolidated Comprehensive Earnings:

Earnings attributable to Martin Marietta Materials, Inc.

Earnings attributable to noncontrolling interests

Net (loss) earnings attributable to noncontrolling interests

Net Earnings Attributable to Martin Marietta Materials, Inc.

Consolidated Comprehensive (Loss) Earnings:

(Loss) Earnings attributable to Martin Marietta Materials, Inc.

(Loss) Earnings attributable to noncontrolling interests

Net Earnings (Loss) Attributable to Martin Marietta Materials, Inc.

Per Common Share:

Basic attributable to common shareholders

Diluted attributable to common shareholders

Basic from continuing operations attributable to common shareholders

Basic from discontinued operations attributable to common shareholders

Diluted from continuing operations attributable to common shareholders

Diluted from discontinued operations attributable to common

Weighted-Average Common Shares Outstanding:

3 unchanged sentences

(UNAUDITED) CONSOLIDATED STATEMENTS OF CASH FLOWS

Nine Months Ended

September 30,

Three Months Ended

(Dollars in Millions)

6 unchanged sentences

Gain on divestitures and sales of assets

Deferred income taxes

Deferred income taxes, net

Other items, net

14 unchanged sentences

Cash Flows from Financing Activities:

Borrowings of debt

Repayments of debt

Payments on financing leases

Debt issuance costs

Distributions to owners of noncontrolling interest

Payments on finance lease obligations

Repurchases of common stock

2 unchanged sentences

Shares withheld for employees' income tax obligations

Net Cash Provided by (Used for) Financing Activities

Net Increase in Cash, Cash Equivalents and Restricted Cash

Net Cash Used for Financing Activities

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

Cash, Cash Equivalents and Restricted Cash, beginning of period

11 unchanged sentences

Noncontrolling Interests

Balance at June 30, 2021

Consolidated net earnings

Other comprehensive earnings,

Dividends declared ($ 0.61 per share)

Issuances of common stock for stock

Shares withheld for employees'

income tax obligations

Stock-based compensation expense

Balance at September 30, 2021

Balance at December 31, 2020

6 unchanged sentences

Stock-based compensation expense

Distributions to owners of

noncontrolling interest

Balance at September 30, 2021

See accompanying notes to the consolidated financial statements.

MARTIN MARIETTA MATERIALS, INC.

AND CONSOLIDATED SUBSIDIARIES

(UNAUDITED) CONSOLIDATED STATEMENTS OF TOTAL EQUITY (Continued)

(In Millions, Except Per Share Data)

Shares of Common Stock

Additional Paid-in Capital

Accumulated Other Comprehensive Loss

Retained Earnings

Total Shareholders' Equity

Noncontrolling Interests

Balance at June 30, 2020

Consolidated net earnings

Other comprehensive earnings,

Dividends declared ($ 0.57 per share)

Issuances of common stock for stock

Stock-based compensation expense

Balance at September 30, 2020

Balance at March 31, 2021

Balance at December 31, 2021

Consolidated net earnings

Other comprehensive earnings,

Consolidated net earnings (loss)

Other comprehensive loss, net of tax

Dividends declared ($ 0.61 per share)

4 unchanged sentences

Stock-based compensation expense

Balance at September 30, 2020

Balance at March 31, 2022

See accompanying notes to the consolidated financial statements.

1 unchanged sentence

AND CONSOLIDATED SUBSIDIARIES

For the Quarter Ended September 30, 2021

For the Quarter Ended March 31, 2022

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2 unchanged sentences

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

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.

As of March 31, 2022, the Company supplies aggregates (crushed stone, sand and gravel) through its network of approximately 350 quarries, mines and distribution yards in 28 states, Canada and The Bahamas.

Martin Marietta also provides cement and downstream products and services, namely, ready mixed concrete, asphalt and paving, in vertically-integrated structured markets where the Company has a leading aggregates position.

In addition, the Company has two cement plants, cement distribution terminals and ready mixed concrete operations primarily in California that are classified as assets held for sale and discontinued operations as of and for the quarter ended March 31, 2022.

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

8 unchanged sentences

Iowa, Kansas, Kentucky, Maryland,

Minnesota, Missouri, eastern

Minnesota, Missouri,

Nebraska, North Carolina, Ohio,

2 unchanged sentences

Nova Scotia and The Bahamas

Arkansas, Colorado, Louisiana, western

Nebraska, Oklahoma, Texas, Utah,

Arizona, Arkansas, California, Colorado, Louisiana, Oklahoma, Texas, Utah,

Washington and Wyoming

9 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 nine months ended September 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 months ended March 31, 2022 are not necessarily indicative of the results expected for other interim periods or the full year.

The consolidated balance sheet at December 31, 2021 has been derived from the audited consolidated financial statements at that date but does not include all of the information and notes required by U.S.

3 unchanged sentences

AND CONSOLIDATED SUBSIDIARIES

For the Quarter Ended September 30, 2021

For the Quarter Ended March 31, 2022

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

3 unchanged sentences

Changes in estimates are reflected in the consolidated financial statements in the period in which the change in estimate occurs.

Reclassifications

As of January 1, 2021, the Company reclassified accrued income taxes from Other current liabilities to Accrued other taxes on the Company’s consolidated balance sheet.

Prior-year information has been reclassified to conform to current year presentation.

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

Consolidated Comprehensive Earnings and Accumulated Other Comprehensive Loss

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

Consolidated Comprehensive (Loss) Earnings and Accumulated Other Comprehensive Loss

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

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

1 unchanged sentence

and are presented in the Company’s consolidated statements of earnings and comprehensive earnings.

Comprehensive earnings attributable to Martin Marietta is as follows:

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

Three Months Ended

Nine Months Ended

September 30,

(Dollars in Millions)

Net earnings attributable to Martin Marietta

Other comprehensive earnings, net of tax

Comprehensive earnings attributable to Martin

MARTIN MARIETTA MATERIALS, INC.

AND CONSOLIDATED SUBSIDIARIES

For the Quarter Ended September 30, 2021

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Other comprehensive (loss) earnings, net of tax

Comprehensive (loss) earnings attributable to Martin

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

2 unchanged sentences

Foreign Currency

Other Comprehensive

Three Months Ended September 30, 2021

Three Months Ended March 31, 2022

Balance at beginning of period

Other comprehensive loss before reclassifications,

Other comprehensive (loss) earnings before reclassifications,

Amounts reclassified from accumulated other

comprehensive loss, net of tax

Other comprehensive earnings (loss), net of tax

Other comprehensive (loss) earnings, net of tax

Balance at end of period

Three Months Ended September 30, 2020

Three Months Ended March 31, 2021

Balance at beginning of period

4 unchanged sentences

Balance at end of period

(Dollars in Millions)

Postretirement Benefit Plans

Foreign Currency

Other Comprehensive

Nine Months Ended September 30, 2021

Balance at beginning of period

Other comprehensive earnings before

reclassifications, net of tax

Amounts reclassified from accumulated

other comprehensive loss, net of tax

Other comprehensive earnings, net of tax

Balance at end of period

Nine Months Ended September 30, 2020

Balance at beginning of period

Other comprehensive loss before

reclassifications, net of tax

Amounts reclassified from accumulated

other comprehensive loss, net of tax

Other comprehensive earnings (loss), net of tax

Balance at end of period

Page 10 of 54

MARTIN MARIETTA MATERIALS, INC.

AND CONSOLIDATED SUBSIDIARIES

For the Quarter Ended September 30, 2021

For the Quarter Ended March 31, 2022

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

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

1 unchanged sentence

Three Months Ended

Nine Months Ended

September 30,

(Dollars in Millions)

Balance at beginning of period

Tax effect of other comprehensive earnings

Tax effect of other comprehensive loss (earnings)

Balance at end of period

1 unchanged sentence

Three Months Ended

Nine Months Ended

Affected line items in the

September 30,

consolidated statements of earnings

13 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 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.

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For the three months ended March 31, 2022 and 2021, the diluted per-share computations reflect the number of common shares outstanding to include the number of additional shares that would have been outstanding if the potentially dilutive common shares had been issued.

MARTIN MARIETTA MATERIALS, INC.

AND CONSOLIDATED SUBSIDIARIES

For the Quarter Ended September 30, 2021

For the Quarter Ended March 31, 2022

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

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

Three Months Ended

Nine Months Ended

September 30,

(In Millions)

Net earnings attributable to Martin Marietta

Net earnings from continuing operations attributable to

Martin Marietta

Distributed and undistributed earnings

attributable to unvested awards

Basic and diluted net earnings available to common

shareholders attributable to Martin Marietta

Basic and diluted net earnings from continuing operations available

to common shareholders attributable to Martin Marietta

Basic weighted-average common shares outstanding

Effect of dilutive employee and director awards

Diluted weighted-average common shares

Diluted weighted-average common shares outstanding

Restricted Cash

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

At December 31, 2021, the Company had restricted cash of $ 0.5 million, which was invested in an account designated for the purchase of like-kind exchange replacement assets under Section 1031 of the Internal Revenue Code and related IRS procedures (Section 1031).

The Company was restricted from utilizing the cash for purposes other than the purchase of the qualified assets for a designated period from receipt of the proceeds from the sale of the exchanged property.

There was no restricted cash at March 31, 2022.

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

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

September 30,

(Dollars in Millions)

3 unchanged sentences

the consolidated statements of cash flows

New Accounting Pronouncement

In March 2020, the FASB issued Accounting Standards Update (ASU) 2020-04, “ Reference Rate Reform (Topic 848):

Facilitation of the Effects of Reference Rate Reform on Financial Reporting ”, an optional guidance for a limited period of time to ease the transition from the London interbank offered rate (“LIBOR”) to an alternative reference rate.

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MARTIN MARIETTA MATERIALS, INC.

AND CONSOLIDATED SUBSIDIARIES

For the Quarter Ended September 30, 2021

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

ASU intends to address certain concerns relating to accounting for contract modifications and hedge accounting.

These optional expedients and exceptions to applying U.S.

GAAP, assuming certain criteria are met, are allowed through December 31, 2022, and any amendments should be applied on a prospective basis.

The Company does not expect the transition from LIBOR to have a material impact on its consolidated financial statements.

Revenue Recognition

2 unchanged sentences

Intersegment and interproduct revenues are eliminated in consolidation.

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

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

Page 10 of 41

MARTIN MARIETTA MATERIALS, INC.

AND CONSOLIDATED SUBSIDIARIES

For the Quarter Ended March 31, 2022

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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 consistent ly with the timing of the product revenues.

Performance Obligations.

4 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 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.

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MARTIN MARIETTA MATERIALS, INC.

AND CONSOLIDATED SUBSIDIARIES

For the Quarter Ended September 30, 2021

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Revenue by Category.

1 unchanged sentence

Three Months Ended

September 30, 2021

March 31, 2022

Products and Services

3 unchanged sentences

Three Months Ended

September 30, 2020

March 31, 2021

Products and Services

2 unchanged sentences

Magnesia Specialties

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 .

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

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1 unchanged sentence

AND CONSOLIDATED SUBSIDIARIES

For the Quarter Ended September 30, 2021

For the Quarter Ended March 31, 2022

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Nine Months Ended

September 30, 2021

Products and Services

(Dollars in Millions)

Total Building Materials business

Magnesia Specialties

Nine Months Ended

September 30, 2020

Products and Services

(Dollars in Millions)

Total Building Materials business

Magnesia Specialties

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)

September 30, 2021

March 31, 2022

December 31, 2021

1 unchanged sentence

Billings in excess of costs

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 .

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

Retainage, which primarily relates to the paving services, represents amounts that have been billed to customers but payment withheld until final acceptance by the customer of the performance obligation.

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

Included in other current assets on the Company’s consolidated balance sheets, retainage was $ 5.5 million and $ 10.5 million at March 31, 2022 and December 31, 2021, respectively.

Policy Elections.

When the Company arranges third-party freight to deliver products to customers, the Company has elected the delivery to be a fulfillment activity rather than a separate performance obligation.

Further, the Company acts as a principal in the delivery arrangements and, as required by the accounting standard, the related revenues and costs are presented gross and are included in the consolidated statements of earnings.

Business Combinations and Discontinued Operations

Business Combinations

In October 2021 , the Company completed the acquisition of Lehigh Hanson, Inc.’s West Region business (Lehigh West Region) for $ 2.26 billion.

The acquisition was primarily financed using proceeds from the issuance of publicly traded debt.

These operations provided a new upstream, materials-led growth platform across several of the nation’s largest and fastest-growing megaregions in California and Arizona.

The results from the acquired business are included in the Company’s West Group.

The Company determined fair values of assets acquired and liabilities assumed.

Although the initial accounting for the business combination has been recorded, these amounts are subject to change during the measurement period, which extends no longer than one year from the consummation date based on additional reviews, such as asset verification.

Therefore, the measurement period remains open as of March 31, 2022.

Specific accounts subject to ongoing purchase accounting adjustments included, but are not limited to, property, plant and equipment;

lease assets and liabilities;

intangible assets;

asset retirement obligations;

and other liabilities.

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

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1 unchanged sentence

AND CONSOLIDATED SUBSIDIARIES

For the Quarter Ended September 30, 2021

For the Quarter Ended March 31, 2022

(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 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;

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

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 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.

The Company financed the acquisition using available cash and borrowings under its credit facilities.

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 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

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

(Dollars in Millions)

Balance at January 1, 2021

Goodwill allocated to assets held for sale

Balance at September 30, 2021

Intangible assets, other than goodwill

Asset retirement obligations

Operating and finance lease liabilities

Other liabilities

Total liabilities

Total consideration

In July 2021 , the Company acquired assets of Southern Crushed Concrete (SCC) in the Houston area, one of the country’s largest addressable aggregates markets.

SCC was a leading producer of recycled concrete, which is principally used as a base aggregates product in infrastructure, commercial and residential construction applications.

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

The results from the acquired business are included in the Company’s West Group, but are immaterial for pro-forma financial statement disclosures.

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

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

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

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

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

The results from the acquired business are included in the Company’s East Group, but are immaterial for pro-forma financial statement disclosures.

Discontinued Operations

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

Page 13 of 41

1 unchanged sentence

AND CONSOLIDATED SUBSIDIARIES

For the Quarter Ended September 30, 2021

For the Quarter Ended March 31, 2022

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Intangible assets subject to amortization consist of the following:

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

(Dollars in Millions)

September 30, 2021

Noncompetition agreements

Customer relationships

Operating permits

Use rights and other

Total revenues

Loss from operations

Income tax benefit

Total cash used for operating and investing activities for the discontinued operations was $ 14.0 million, including $ 8.6 million in capital expenditures, for the quarter ended March 31, 2022.

Non-cash items related to operating and investing activities for the discontinued operations were immaterial for the quarter ended March 31, 2022.

Assets Held for Sale.

On March 1, 2022, the Company announced a definitive agreement to sell the Redding, California cement plant, related cement distribution terminals and 14 California ready mix operations for $ 250 million in cash.

The transaction is expected to close in the second half of 2022, subject to customary regulatory approvals and closing conditions.

The Company did no t record any amortization or depreciation expense related to these businesses for the quarter ended March 31, 2022, as these are classified as assets held for sale.

During the quarter, the Company reached agreement with one of the nation’s largest privately-owned concrete producers to divest the Colorado and Central Texas ready mix concrete operations, which was completed on April 1, 2022.

This opportunity optimized the Company’s aggregates-led portfolio and improved its ability to generate generally more attractive margins over the long term by reducing both business cyclicality and exposure to raw material cost inflation.

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MARTIN MARIETTA MATERIALS, INC.

AND CONSOLIDATED SUBSIDIARIES

For the Quarter Ended March 31, 2022

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Assets and liabilities held for sale as of March 31, 2022 and December 31, 2021, which also include a cement plant in Tehachapi, California;

related cement distribution terminals;

the remaining California ready mixed concrete plants;

certain investment properties;

and the Colorado and Central Texas ready mixed concrete operations, which were only classified as held for sale as of March 31, 2022 (see Note 14), are as follows:

March 31, 2022

December 31, 2021

Noncompetition agreements

Customer relationships

Operating permits

Use rights and other

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

Continuing Operations

Discontinued Operations

Continuing Operations

Discontinued Operations

(Dollars in Millions)

Building Materials business

Magnesia Specialties

Operating permits

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

Inventories, net

Investment land

Total current assets held for sale

Property, plant and equipment

Intangible assets, excluding goodwill

Operating lease right-of-use assets

Valuation allowance for loss on sale

Total noncurrent assets held for sale

Lease obligations

Total current liabilities held for sale

Asset retirement obligations

Lease obligations

Other liabilities

Total noncurrent liabilities held for sale

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

(Dollars in Millions)

Weighted-average

amortization period

Subject to amortization:

Customer relationships

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.

Balance at January 1, 2022

Adjustments to purchase price allocations

Goodwill allocated to assets held for sale

Balance at March 31, 2022

Page 15 of 41

1 unchanged sentence

AND CONSOLIDATED SUBSIDIARIES

For the Quarter Ended September 30, 2021

For the Quarter Ended March 31, 2022

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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)

October - December 2021

Inventories, Net

September 30,

(Dollars in Millions)

4 unchanged sentences

Long-Term Debt

September 30,

(Dollars in Millions)

9 unchanged sentences

3.200 % Senior Notes, due 2051

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

Current maturities of long-term debt

Current maturities

Long-term debt

2 unchanged sentences

AND CONSOLIDATED SUBSIDIARIES

For the Quarter Ended September 30, 2021

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

For the Quarter Ended March 31, 2022

(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.

(New York Branch), and certain other lenders that may become a party to the facility from time to time, is backed by eligible trade receivables, as defined, and is limited to the lesser of the facility limit or the borrowing base, as defined.

The Trade Receivable Facility, with Truist Bank, Regions Bank, PNC Bank, N.A., MUFG Bank, Ltd., New York Branch, and certain other lenders that may become a party to the facility from time to time, is backed by eligible trade receivables, as defined, and is limited to the lesser of the facility limit or the borrowing base, as defined.

These receivables are originated by the Company and then sold by the Company to the wholly-owned special-purpose subsidiary.

The Company con tinues to be responsible for the servicing and administration of the receivables purchased by the wholly-owned special-purpose subsidiary .

Borrowings under the Trade Receivable Facility bear interest at a rate equal to asset-backed commercial paper costs of conduit lenders plus 0.60 % for borrowings funded by conduit lenders and one-month LIBOR plus 0.70 %, subject to change in the event that this rate no longer reflects the lender’s cost of lending, for borrowings funded by all other lenders .

Borrowings under the Trade Receivable Facility bear interest at a rate equal to asset-backed commercial paper costs of conduit lenders plus 0.85 % for borrowings funded by conduit lenders and one-month London Inter-bank Offered Rate (LIBOR) plus 1.00 %, subject to change in the event that this rate no longer reflects the lender’s cost of lending, for borrowings funded by all other lenders .

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

Subject to certain conditions, including lenders providing the requisite commitments, the Trade Receivable Facility may be increased to a borrowing base not to exceed $ 500 million.

There 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.

There were no borrowings outstanding under the Trade Receivable Facility at March 31, 2022 and December 31, 2021.

The Company has a $ 800 million five-year senior unsecured revolving facility (the Revolving Facility) with JPMorgan Chase Bank, N.A., as Administrative Agent, Deutsche Bank Securities, Inc., PNC Bank, Truist Bank and Wells Fargo Bank, N.A., as Syndication Agents, and the lenders party thereto (the Credit Agreement).

Borrowings under the Revolving Facility bear interest, at the Company’s option, at rates based upon LIBOR or a base rate, plus, for each rate, a margin determined in accordance with a ratings-based pricing grid.

There were no borrowings outstanding under the 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 September 30, 2021.

There were no borrowings outstanding under the Credit Agreement at March 31, 2022 or December 31, 2021.

The Credit Agreement requires the Company’s ratio of consolidated net debt-to-consolidated earnings before interest, taxes, depreciation, depletion and amortization (EBITDA), as defined, by the Revolving Facility, for the trailing-twelve months (the Ratio) to not exceed 3.50 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 4.00 x.

Additionally, if there are no amounts outstanding under both the Revolving Facility and the Trade Receivable Facility, consolidated debt, including debt for which the Company is a co-borrower (see Note 10), may be reduced in an amount equal to the lesser of $ 500 million or the sum of the Company’s unrestricted cash and temporary investments, for purposes of the covenant calculation.

The Company was in compliance with this covenant at March 31, 2022.

The Revolving Facility expires on December 21, 2026 , with any outstanding principal amounts, together with interest accrued thereon, due in full on that date.

Available borrowings under the Revolving Facility are reduced by any

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 .

Available borrowings under the Revolving Facility are reduced by any outstanding letters of credit issued by the Company under the Revolving Facility.

The Company had $ 2.6 million of outstanding letters of credit issued under the Revolving Facility at March 31, 2022 and December 31, 2021.

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.

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

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

3 unchanged sentences

Due to the short-term nature of this account, the fair value of restricted cash approximates its carrying value.

Page 17 of 41

MARTIN MARIETTA MATERIALS, INC.

AND CONSOLIDATED SUBSIDIARIES

For the Quarter Ended March 31, 2022

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Accounts receivable are due from a large number of customers, primarily in the construction industry, and are dispersed across wide geographic and economic regions.

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

No single customer accounted for 10 % or more of consolidated accounts receivable in the three-month period ended March 31, 2022 and 2021.

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

Notes receivable are primarily promissory notes with customers and are not publicly traded.

Management estimates that the fair value of notes receivable approximates its carrying amount.

Accounts payable represent amounts owed to suppliers and vendors.

The estimated fair value of accounts payable approximates the carrying amount due to the short-term nature of the payables.

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

The carrying values and fair values of the Company’s long-term debt were $ 5.10 billion and $ 4.93 billion, respectively, at March 31, 2022 and $ 5.10 billion and $ 5.45 billion, respectively, at December 31, 2021.

The estimated fair value of the publicly-registered long-term notes was estimated using quoted market prices.

1 unchanged sentence

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 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.

The effective income tax rates for continuing operations were 19.3 % and 19.5 % for the three months ended March 31, 2022 and March 31, 2021, respectively.

The Company records interest accrued in relation to unrecognized tax benefits as income tax expense.

3 unchanged sentences

AND CONSOLIDATED SUBSIDIARIES

For the Quarter Ended September 30, 2021

For the Quarter Ended March 31, 2022

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Pension and Postretirement Benefits

During the quarter ended March 31, 2022, the Company amended its qualified pension plan and provided an enhanced benefit for eligible hourly active participants who retire subsequent to April 30, 2022.

The amendment required a pension remeasurement.

The Company elected the use of a practical expedient to perform the pension remeasurement as of February 28, 2022, the month end closest to the approval of the plan amendment.

The discount rate for the remeasurement was 3.75 % compared with 3.23 % prior to the remeasurement.

The enhanced benefit and remeasurement resulted in higher projected pension expense for the year compared with the initial annual pension expense for the qualified plan.

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

Postretirement Benefits

Three Months Ended September 30,

(Dollars in Millions)

Interest cost

Expected return on assets

Amortization of:

Prior service cost (credit)

Actuarial loss

Net periodic benefit cost (credit)

Postretirement Benefits

Nine Months Ended September 30,

Three Months Ended March 31,

(Dollars in Millions)

5 unchanged sentences

Net periodic benefit cost (credit)

The service cost component of net periodic benefit cost (credit) is included in Cost of revenues – products and services and Selling, general and administrative expenses .

The service cost component of net periodic benefit (credit) cost is included in Cost of revenues – products and services and Selling, general and administrative expenses .

All other components are included in Other nonoperating income, net , in the consolidated statements of earnings and comprehensive earnings.

5 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.

Borrowing Arrangements with Affiliate

The Company is a co-borrower with an unconsolidated affiliate for a $ 12.5 million revolving line of credit agreement with Truist Bank, of which $ 4.5 million was outstanding as of March 31, 2022.

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

Page 19 of 41

1 unchanged sentence

AND CONSOLIDATED SUBSIDIARIES

For the Quarter Ended September 30, 2021

For the Quarter Ended March 31, 2022

(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 $ 5.4 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 September 30, 2021 and December 31, 2020.

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

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

The interest rate is one-month LIBOR plus a current spread of 1.63 %.

1 unchanged sentence

In the normal course of business, the Company provides certain third parties with standby letter of credit agreements guaranteeing its payment for certain insurance claims, contract performance and permit requirements.

At September 30, 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.

At March 31, 2022, the Company was contingently liable for $ 17.2 million in letters of credit, of which $ 2.6 million were issued under the Company’s Revolving Facility.

Business Segments

5 unchanged sentences

selling, general and administrative expenses;

acquisition-related expenses;

acquisition and integration expenses;

other operating income and expenses, net;

4 unchanged sentences

expenses for corporate administrative functions;

acquisition-related expenses;

acquisition and integration expenses;

and other nonrecurring income and expenses excluded from the Company’s evaluation of business segment performance and resource allocation.

All long-term debt and related interest expense are held at Corporate.

The following table displays selected financial data for the Company’s reportable segments.

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 20 of 41

1 unchanged sentence

AND CONSOLIDATED SUBSIDIARIES

For the Quarter Ended September 30, 2021

For the Quarter Ended March 31, 2022

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table displays selected financial data for the Company’s reportable segments.

Total revenues, as well as the consolidated statements of earnings and comprehensive earnings, exclude intersegment revenues, which represent sales from one segment to another segment and are eliminated in consolidation.

Total revenues, product and services revenues, and earnings (loss) from operations reflect continuing operations only.

Three Months Ended

Nine Months Ended

September 30,

(Dollars in Millions)

8 unchanged sentences

Magnesia Specialties

September 30, 2021

December 31, 2020

Assets employed:

(Dollars in Millions)

Total Building Materials business

Magnesia Specialties

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 21 of 41

1 unchanged sentence

AND CONSOLIDATED SUBSIDIARIES

For the Quarter Ended September 30, 2021

For the Quarter Ended March 31, 2022

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2 unchanged sentences

Cement and ready mixed concrete product lines and paving services reside only in the West Group.

The following table, which is reconciled to consolidated amounts, provides total revenues and gross profit by product line.

The following table, which is reconciled to consolidated amounts, provides total revenues and gross profit (loss) by product line and reflects continuing operations only.

Three Months Ended

Nine Months Ended

September 30,

(Dollars in Millions)

23 unchanged sentences

AND CONSOLIDATED SUBSIDIARIES

For the Quarter Ended September 30, 2021

For the Quarter Ended March 31, 2022

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1 unchanged sentence

Noncash investing and financing activities are as follows:

Nine Months Ended

September 30,

Three Months Ended

(Dollars in Millions)

6 unchanged sentences

Remeasurement of operating lease right-of-use assets

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 .

Remeasurement of finance lease right-of-use assets

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

Supplemental disclosures of cash flow information are as follows:

Nine Months Ended

September 30,

Three Months Ended

(Dollars in Millions)

1 unchanged sentence

Cash paid for income taxes, net of refunds

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, 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

MARTIN MARIETTA MATERIALS, INC.

AND CONSOLIDATED SUBSIDIARIES

For the Quarter Ended September 30, 2021

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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.

During the three months ended March 31, 2021, the Company received proceeds of $ 9.8 million related to its company-owned life insurance policies.

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

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.

On April 1, 2022, the Company divested its Colorado and Central Texas ready-mixed concrete operations to Smyrna Ready Mix Concrete LLC.

The Company expects the transaction to result in a gain.

These operations are all reported in the Company’s West Group.

Page 23 of 41

1 unchanged sentence

AND CONSOLIDATED SUBSIDIARIES

For the Quarter Ended September 30, 2021

For the Quarter Ended March 31, 2022

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