Financial Data and Key Metrics Changes - The company reported consolidated total revenues of $1.82 billion, an 11% increase year-over-year [19] - Consolidated gross profit reached $560 million, a 32% increase [19] - Adjusted EBITDA was $596 million, reflecting a 25% increase [19] - Aggregates gross profit per ton increased to $6.80, a 28% rise [19] - The company raised its 2023 adjusted EBITDA guidance to a range of $2 billion to $2.1 billion, representing a 28% increase at the midpoint compared to the previous year [4] Business Line Data and Key Metrics Changes - Aggregate shipments declined by 5.7% due to a lag in single-family housing starts, but pricing fundamentals remained strong with an 18.6% increase [106] - Texas cement shipments were a record 1.1 million tons, with pricing growing by 21.8% [106] - Ready-mix concrete shipments decreased by 1.7%, while pricing increased by 21.9% [106] - Asphalt shipments increased by 1.7%, with pricing improving by 7.9% [106] - Magnesia Specialties revenues totaled $80.5 million, with gross profit increasing by 13% to $27.7 million [108] Market Data and Key Metrics Changes - Non-residential construction accounted for 35% of second-quarter aggregate shipments, with demand driven by onshore manufacturing and energy projects [6] - Construction spending for manufacturing in the U.S. reached a seasonally adjusted annual rate of $194 billion, a 76% increase from the previous year [6] - The value of state and local government contract awards for infrastructure projects increased by 25% year-over-year to a record $114 billion [111] Company Strategy and Development Direction - The company is focused on maintaining a resilient aggregates-led business model and executing its SOAR 2025 initiatives [8] - The divestiture of the Stockton, California cement import terminal was finalized to enhance the company's margin profile [91] - The company anticipates sustained demand for products due to historic legislation like the Infrastructure Investment and Jobs Act [98] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving the raised financial guidance for 2023, citing strong second-quarter performance as a foundation for the remainder of the year [8] - The company expects recent declines in aggregate shipments to find a bottom in the third quarter of 2023 [4] - Management noted that the residential market has likely found a bottom, with expectations for a recovery in single-family starts [22] Other Important Information - The company returned $116 million to shareholders through dividends and share repurchases in the quarter [96] - The net debt-to-EBITDA ratio improved to 2.1x, within the targeted range of 2x to 2.5x [109] - The Midlothian, Texas plant is expected to complete a new finish mill by the third quarter of 2024, increasing production capacity [94] Q&A Session Summary Question: What are the drivers for cement performance in Texas? - Management noted that cement can perform better in adverse weather conditions compared to aggregates, with strong performance in Dallas and San Antonio [10][11] Question: How is the company positioned strategically with the infrastructure bill? - Management highlighted that the company is halfway through its SOAR 2025 program and sees significant opportunities due to government infrastructure investments [27] Question: What is the outlook for pricing and volume? - Management indicated that pricing is currently a stronger driver than volume, with expectations for continued price increases and a recovery in volumes later in the year [29][33] Question: How are cement margins expected to evolve? - Management expects cement margins to remain strong, benefiting from the company's position as a large-scale supplier in Texas [81][60] Question: What is the impact of mid-year price increases? - Management anticipates a positive carryover effect from mid-year price increases into 2024, with expectations for further price increases in January [48][118]

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 OR UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q (Mark One) ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 1-12744 MARTIN MARIETTA MATERIALS, INC. (Exact Name of Registrant as Specified in its Charter) North Carolina 56-1848578 (State or ot ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 1-12744 MARTIN MARIETTA MATERIALS, INC. (Exact name of registrant as specified in its charter) North Carolina 56-1848578 (State or other ...

Martin Marietta Materials, Inc. (NYSE:MLM) Q4 2022 Earnings Conference Call February 15, 2023 10:00 AM ET Company Participants Jennifer Park - VP, IR Ward Nye - Chairman and CEO Jim Nickolas - SVP and CFO Conference Call Participants Kathryn Thompson - Thompson Research Group Trey Grooms - Stephens Stanley Elliott - Stifel Anthony Pettinari - Citi Jerry Revich - Goldman Sachs Tyler Brown - Raymond James Keith Hughes - Truist Phil Ng - Jefferies Michael Dudas - Vertical Research Partners Michael Feniger - Ba ...

Martin Marietta Materials, Inc. (NYSE:MLM) Q3 2022 Earnings Conference Call November 2, 2022 11:00 AM ET Company Participants Jennifer Park - Vice President, Investor Relations Ward Nye - Chairman of the Board, President and Chief Executive Officer Jim Nickolas - Senior Vice President and Chief Financial Officer Conference Call Participants Stan Elliott - Stifel Kathryn Thompson - Thomson Research Group Trey Grooms - Stephens Jerry Revich - Goldman Sachs Phil Ng - Jefferies Timna Tanners - Wolfe Research Ke ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 1-12744 MARTIN MARIETTA MATERIALS, INC. (Exact Name of Registrant as Specified in its Charter) North Carolina 56-1848578 ( State ...

MARTIN MARIETTA REPORTS THIRD-QUARTER 2022 RESULTS Achieved Record Quarterly Revenues and Gross Profit Driven by Double-Digit Pricing Growth Across All Building Materials' Product Lines Pricing Momentum Expected to Drive Margin Expansion in Fourth Quarter Updates Full-Year 2022 Guidance RALEIGH, N.C. (November 2, 2022) – Martin Marietta Materials, Inc. (NYSE: MLM) ("Martin Marietta" or the "Company"), a leading national supplier of aggregates and heavy building materials, today reported results for the thir ...

Martin Marietta Materials, Inc. (NYSE:MLM) Q2 2022 Results Conference Call July 28, 2022 11:00 AM ET Company Participants Jennifer Park - VP, IR Ward Nye - Chairman, CEO Jim Nickolas - SVP, CFO Conference Call Participants Brian Biros - Thompson Research Group David MacGregor - Longbow Research Jerry Revich - Goldman Sachs Keith Hughes - Truist Kevin Gainey - Thompson Davis Michael Dudas - Vertical Research Partners Phil Ng - Jefferies Elliott Stanley - Stifel Trey Grooms - Stephens Operator Good morning, ...

[FORM 10-Q Cover Page](index=1&type=section&id=FORM%2010-Q%20Cover%20Page) - This report is a quarterly report for the period ended June 30, 2022, for **MARTIN MARIETTA MATERIALS, INC.**, with stock ticker **MLM**, listed on the **New York Stock Exchange**[2](index=2&type=chunk)[3](index=3&type=chunk) FORM 10-Q Cover Page Key Details | Metric | Details | | :--- | :--- | | Report Type | Quarterly Report (FORM 10-Q) | | Quarter End Date | June 30, 2022 | | Commission File Number | 1-12744 | | Registrant Name | MARTIN MARIETTA MATERIALS, INC. | | State of Incorporation | North Carolina | | Principal Executive Offices | 4123 Parklake Avenue, Raleigh, NC 27612 | | Telephone Number | (919) 781-4550 | | Title of Each Class of Securities | Common Stock (par value $0.01) | | Trading Symbol | MLM | | Name of Each Exchange on Which Registered | NYSE | | All Reports Filed | Yes | | Large Accelerated Filer | Yes | | Common Stock Outstanding as of July 25, 2022 (shares) | 62,374,140 | [Table of Contents](index=2&type=section&id=Table%20of%20Contents) The report's table of contents lists **Part I Financial Information** (including financial statements and management's discussion and analysis) and **Part II Other Information** (including legal proceedings, risk factors, equity security sales, and exhibits)[6](index=6&type=chunk) [PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents the company's unaudited consolidated financial statements as of June 30, 2022, including balance sheets, statements of earnings and comprehensive earnings, cash flows, and equity, along with detailed notes explaining accounting policies, operations, recent M&A, debt, taxes, pensions, and market risks Consolidated Balance Sheets Key Data (As of June 30, 2022 vs. December 31, 2021) | Metric | As of June 30, 2022 (million USD) | As of December 31, 2021 (million USD) | Change (million USD) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | **Assets** | | | | | | Cash and Cash Equivalents | 772.1 | 258.4 | 513.7 | 198.8% | | Accounts Receivable Net | 1,026.6 | 774.0 | 252.6 | 32.6% | | Inventories, Net | 835.2 | 752.6 | 82.6 | 11.0% | | Current Assets Held for Sale | 57.5 | 102.2 | (44.7) | (43.7)% | | Total Current Assets | 2,760.3 | 2,025.6 | 734.7 | 36.3% | | Property, Plant and Equipment Net | 6,164.3 | 6,338.0 | (173.7) | (2.7)% | | Goodwill | 3,400.5 | 3,494.4 | (93.9) | (2.7)% | | Noncurrent Assets Held for Sale | 388.2 | 616.9 | (228.7) | (37.1)% | | Total Assets | 14,542.8 | 14,393.0 | 149.8 | 1.0% | | **Liabilities and Equity** | | | | | | Total Current Liabilities | 761.4 | 752.6 | 8.8 | 1.2% | | Long-Term Debt | 5,044.3 | 5,100.8 | (56.5) | (1.1)% | | Deferred Income Tax Net | 852.8 | 895.3 | (42.5) | (4.7)% | | Total Liabilities | 7,770.7 | 7,855.4 | (84.7) | (1.1)% | | Total Stockholders' Equity | 6,770.0 | 6,535.3 | 234.7 | 3.6% | | Total Liabilities and Equity | 14,542.8 | 14,393.0 | 149.8 | 1.0% | Consolidated Statements of Earnings and Comprehensive Earnings Key Data (As of June 30, 2022) | Metric | Q2 2022 (million USD) | Q2 2021 (million USD) | Change (%) | H1 2022 (million USD) | H1 2021 (million USD) | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Total Revenue | 1,641.7 | 1,377.9 | 19.1% | 2,872.5 | 2,360.3 | 21.7% | | Total Cost of Sales | 1,216.5 | 992.8 | 22.5% | 2,291.2 | 1,800.5 | 27.2% | | Gross Profit | 425.2 | 385.1 | 10.4% | 581.3 | 559.8 | 3.8% | | Selling, General and Administrative Expenses | 104.1 | 82.4 | 26.3% | 201.2 | 162.2 | 24.0% | | Operating Earnings | 478.6 | 307.5 | 55.7% | 538.4 | 406.8 | 32.4% | | Pre-tax Earnings from Continuing Operations | 457.5 | 288.1 | 58.1% | 487.7 | 369.4 | 32.0% | | Income Tax Expense | 104.4 | 62.3 | 67.6% | 110.2 | 78.1 | 41.1% | | Earnings from Continuing Operations | 353.1 | 225.8 | 56.4% | 377.5 | 291.3 | 29.6% | | Earnings from Discontinued Operations (Net of Tax) | 13.3 | — | N/A | 10.2 | — | N/A | | Consolidated Net Earnings | 366.4 | 225.8 | 62.3% | 387.7 | 291.3 | 33.1% | | Net Earnings Attributable to Martin Marietta Materials, Inc. | 366.5 | 225.8 | 62.3% | 387.9 | 291.1 | 33.3% | | Basic Earnings Per Share from Continuing Operations | 5.66 | 3.62 | 56.3% | 6.06 | 4.66 | 30.0% | | Diluted Earnings Per Share from Continuing Operations | 5.65 | 3.61 | 56.5% | 6.04 | 4.65 | 30.0% | Consolidated Statements of Cash Flows Key Data (As of June 30, 2022) | Metric | H1 2022 (million USD) | H1 2021 (million USD) | Change (million USD) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Net Cash Provided by Operating Activities | 286.2 | 441.2 | (155.0) | (35.1)% | | Net Cash Used in Investing Activities | 433.5 | (823.1) | 1,256.6 | 152.7% | | Net Cash Provided by (Used in) Financing Activities | (206.5) | 147.8 | (354.3) | (239.7)% | | Net Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash | 513.2 | (234.1) | 747.3 | 319.2% | | Cash, Cash Equivalents and Restricted Cash at End of Period | 772.1 | 70.3 | 701.8 | 998.3% | - Net Cash Used in Investing Activities significantly increased, primarily due to **644.4 million USD** in proceeds from asset divestitures, compared to substantial M&A expenditures in the prior-year period[13](index=13&type=chunk) Consolidated Statements of Total Equity Key Data (As of June 30, 2022) | Metric | As of June 30, 2022 (million USD) | As of December 31, 2021 (million USD) | Change (million USD) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Common Stock | 0.6 | 0.6 | 0.0 | 0.0% | | Additional Paid-in Capital | 3,474.4 | 3,470.4 | 4.0 | 0.1% | | Accumulated Other Comprehensive Loss | (128.1) | (97.6) | (30.5) | 31.2% | | Retained Earnings | 3,423.1 | 3,161.9 | 261.2 | 8.3% | | Total Stockholders' Equity | 6,770.0 | 6,535.3 | 234.7 | 3.6% | | Noncontrolling Interests | 2.1 | 2.3 | (0.2) | (8.7)% | | Total Equity | 6,772.1 | 6,537.6 | 234.5 | 3.6% | - As of June 30, 2022, the company's total stockholders' equity was **6.77 billion USD**, a **3.6%** increase from year-end 2021, primarily driven by increased retained earnings, partially offset by an expanded accumulated other comprehensive loss[15](index=15&type=chunk) [Notes to Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) [1. Significant Accounting Policies](index=8&type=section&id=1.%20Significant%20Accounting%20Policies) This note outlines the company's organizational structure, primary business segments (Building Materials and Magnesia Specialties), accounting basis, comprehensive earnings components, earnings per share calculation, and restricted cash disclosures - The company's primary business involves natural resource-based construction materials, including aggregates, cement, ready mixed concrete, asphalt, and paving services, divided into East and West business groups, also operating a Magnesia Specialties business[19](index=19&type=chunk)[20](index=20&type=chunk)[21](index=21&type=chunk)[23](index=23&type=chunk) - As of June 30, 2022, the company's California cement plant, cement distribution terminals, and ready mixed concrete operations were classified as assets held for sale and discontinued operations[19](index=19&type=chunk) Comprehensive Earnings Attributable to Martin Marietta (As of June 30, 2022) | Metric | Q2 2022 (million USD) | Q2 2021 (million USD) | H1 2022 (million USD) | H1 2021 (million USD) | | :--- | :--- | :--- | :--- | :--- | | Net Earnings Attributable to Martin Marietta | 366.5 | 225.8 | 387.9 | 291.1 | | Other Comprehensive Earnings (Loss), Net of Tax | 1.2 | 2.6 | (30.5) | 5.4 | | Comprehensive Earnings Attributable to Martin Marietta | 367.7 | 228.4 | 357.4 | 296.5 | - As of June 30, 2022, the company had no restricted cash, compared to **0.5 million USD** as of December 31, 2021, primarily for Section 1031 tax-deferred transactions[34](index=34&type=chunk) [2. Revenue Recognition](index=12&type=section&id=2.%20Revenue%20Recognition) This note details the company's revenue recognition for products and services, including product sales recognized upon transfer of control, service revenue using the percentage-of-completion method, and freight revenue recognition principles, also disclosing future revenue from unfulfilled contract obligations and revenue breakdown by business segment - Product revenue is recognized when control transfers, while service revenue (e.g., paving) is recognized using the cost-to-cost percentage-of-completion method; freight revenue is recognized concurrently with product revenue[36](index=36&type=chunk)[37](index=37&type=chunk) Future Revenue from Unfulfilled Contract Obligations (As of June 30, 2022) | As of | Future Revenue (million USD) | Remaining Completion Period | | :--- | :--- | :--- | | June 30, 2022 | 322.5 | 1 to 23 months | | June 30, 2021 | 215.5 | 1 to 21 months | Total Revenue by Business Segment and Revenue Category (As of June 30, 2022) | Business Segment | Q2 2022 Product and Service Revenue (million USD) | Q2 2022 Freight Revenue (million USD) | Q2 2022 Total Revenue (million USD) | | :--- | :--- | :--- | :--- | | East Group | 632.4 | 42.1 | 674.5 | | West Group | 816.8 | 68.7 | 885.5 | | Total Building Materials Business | 1,449.2 | 110.8 | 1,560.0 | | Magnesia Specialties | 74.6 | 7.1 | 81.7 | | **Total** | **1,523.8** | **117.9** | **1,641.7** | | Business Segment | H1 2022 Product and Service Revenue (million USD) | H1 2022 Freight Revenue (million USD) | H1 2022 Total Revenue (million USD) | | :--- | :--- | :--- | :--- | | East Group | 1,027.0 | 66.3 | 1,093.3 | | West Group | 1,499.2 | 121.3 | 1,620.5 | | Total Building Materials Business | 2,526.2 | 187.6 | 2,713.8 | | Magnesia Specialties | 145.4 | 13.3 | 158.7 | | **Total** | **2,671.6** | **200.9** | **2,872.5** | [3. Business Combinations, Divestitures and Discontinued Operations](index=15&type=section&id=3.%20Business%20Combinations%2C%20Divestitures%20and%20Discontinued%20Operations) This note discloses the company's recent business combinations (e.g., Lehigh Hanson Western operations, Southern Crushed Concrete, and Tiller Corporation) and divestiture activities (e.g., California cement and ready mixed concrete operations, Colorado and Central Texas ready mixed concrete operations), detailing financial data for discontinued operations and the composition of assets and liabilities held for sale - In October 2021, the company acquired Lehigh Hanson, Inc.'s Western business for **2.26 billion USD**, primarily financed by publicly traded debt, with results included in the company's West Group[46](index=46&type=chunk) - On June 30, 2022, the company sold its Redding, California cement plant, related cement distribution terminals, and 14 California ready mixed concrete operations for **235 million USD** in cash, and agreed to sell its interest in a cement distribution terminal joint venture for **15 million USD**[52](index=52&type=chunk) - On April 1, 2022, the company divested its Colorado and Central Texas ready mixed concrete operations, generating **151.7 million USD** in pre-tax earnings, recorded in 'Other Operating Income, Net'[53](index=53&type=chunk) Discontinued Operations Financial Data (As of June 30, 2022) | Metric | Q2 2022 (million USD) | H1 2022 (million USD) | | :--- | :--- | :--- | | Total Revenue | 111.7 | 206.4 | | Pre-tax Operating Earnings | 20.5 | 16.4 | | Pre-tax Loss on Divestiture | (1.0) | (1.0) | | Pre-tax Earnings | 19.5 | 15.4 | | Income Tax Expense | 6.2 | 5.2 | | Earnings from Discontinued Operations (Net of Tax) | 13.3 | 10.2 | [4. Goodwill](index=18&type=section&id=4.%20Goodwill) This note discloses changes in the company's goodwill during the reporting period, including the impact of acquisitions, purchase price allocation adjustments, and divestitures Goodwill Changes (As of June 30, 2022) | Metric | East Group (million USD) | West Group (million USD) | Total (million USD) | | :--- | :--- | :--- | :--- | | Balance as of January 1, 2022 | 759.4 | 2,735.0 | 3,494.4 | | Acquisitions | — | 3.7 | 3.7 | | Purchase Price Allocation Adjustments | 5.0 | 52.8 | 57.8 | | Divestitures | — | (159.7) | (159.7) | | Goodwill Reclassified from Assets Held for Sale | — | 4.3 | 4.3 | | Balance as of June 30, 2022 | 764.4 | 2,636.1 | 3,400.5 | - As of June 30, 2022, total company goodwill was **3.4005 billion USD**, a slight decrease from the beginning of the year, primarily due to divestitures[56](index=56&type=chunk) [5. Inventories, Net](index=18&type=section&id=5.%20Inventories%2C%20Net) This note provides a detailed breakdown of the company's inventories, net, including finished goods, work-in-process, raw materials, and supplies and consumables, along with corresponding allowances Inventories, Net Composition (As of June 30, 2022 vs. December 31, 2021) | Inventory Category | As of June 30, 2022 (million USD) | As of December 31, 2021 (million USD) | | :--- | :--- | :--- | | Finished Goods | 859.8 | 713.3 | | Work-in-Process | 9.1 | 30.1 | | Raw Materials | 96.7 | 69.6 | | Supplies and Consumables | 139.6 | 153.9 | | Subtotal | 1,105.2 | 966.9 | | Less: Allowance | (270.0) | (214.3) | | **Total** | **835.2** | **752.6** | - As of June 30, 2022, the company's inventories, net, were **835.2 million USD**, an increase from **752.6 million USD** at year-end 2021, primarily due to growth in finished goods inventory[57](index=57&type=chunk) [6. Long-Term Debt](index=18&type=section&id=6.%20Long-Term%20Debt) This note details the composition of the company's long-term debt, including various senior notes and borrowings, and discloses the utilization of trade accounts receivable securitization financing and revolving credit facilities, along with related debt covenants Long-Term Debt Composition (As of June 30, 2022 vs. December 31, 2021) | Debt Type | As of June 30, 2022 (million USD) | As of December 31, 2021 (million USD) | | :--- | :--- | :--- | | 0.650% Senior Notes, 2023 due | 698.3 | 697.4 | | 4.250% Senior Notes, 2024 due | 398.6 | 398.3 | | 7% Bonds, 2025 due | 124.6 | 124.6 | | 3.450% Senior Notes, 2027 due | 298.1 | 297.9 | | 3.500% Senior Notes, 2027 due | 496.7 | 496.4 | | 2.500% Senior Notes, 2030 due | 471.8 | 491.1 | | 2.400% Senior Notes, 2031 due | 888.2 | 891.8 | | 6.25% Senior Notes, 2037 due | 228.3 | 228.3 | | 4.250% Senior Notes, 2047 due | 590.1 | 592.1 | | 3.200% Senior Notes, 2051 due | 849.6 | 882.9 | | Other Notes | — | 0.1 | | **Total Debt** | **5,044.3** | **5,100.9** | | Less: Current Portion of Long-Term Debt | — | (0.1) | | **Long-Term Debt** | **5,044.3** | **5,100.8** | - As of June 30, 2022, total company long-term debt was **5.0443 billion USD**, a slight decrease from year-end 2021, primarily due to the repurchase of **60.5 million USD** (face value) of senior notes[58](index=58&type=chunk)[59](index=59&type=chunk) - The company has **400 million USD** in trade accounts receivable securitization financing and an **800 million USD** five-year senior unsecured revolving credit facility, both with no outstanding borrowings as of June 30, 2022, and complied with the debt covenant for a consolidated net debt to Adjusted EBITDA ratio not exceeding **3.50x**[60](index=60&type=chunk)[61](index=61&type=chunk) [7. Financial Instruments](index=19&type=section&id=7.%20Financial%20Instruments) This note describes the composition of the company's primary financial instruments, including cash investments, accounts receivable, accounts payable, and long-term debt, and discloses their carrying and fair values - The company's financial instruments include short-term cash investments, restricted cash, accounts receivable, accounts payable, and long-term debt; the fair value of short-term investments and receivables/payables approximates their carrying value[63](index=63&type=chunk)[64](index=64&type=chunk)[65](index=65&type=chunk)[66](index=66&type=chunk)[67](index=67&type=chunk) Carrying Value and Fair Value of Long-Term Debt (As of June 30, 2022 vs. December 31, 2021) | Metric | As of June 30, 2022 (million USD) | As of December 31, 2021 (million USD) | | :--- | :--- | :--- | | Long-Term Debt Carrying Value | 5,040 | 5,100 | | Long-Term Debt Fair Value | 4,480 | 5,450 | - As of June 30, 2022, the fair value of the company's long-term debt was **4.48 billion USD**, lower than the carrying value of **5.04 billion USD**, while at year-end 2021, fair value exceeded carrying value, reflecting market interest rate changes on debt valuation[68](index=68&type=chunk) [8. Income Taxes](index=20&type=section&id=8.%20Income%20Taxes) This note discloses the company's effective income tax rate from continuing operations and explains the primary reasons for changes in the rate Effective Income Tax Rate from Continuing Operations (As of June 30, 2022) | Period | Effective Income Tax Rate | | :--- | :--- | | H1 2022 | 22.6% | | H1 2021 | 21.2% | - The effective income tax rate for the first half of 2022 increased to **22.6%** from **21.2%** in the prior-year period, primarily due to the divestiture of Colorado and Central Texas ready mixed concrete operations[69](index=69&type=chunk) [9. Pension and Postretirement Benefits](index=20&type=section&id=9.%20Pension%20and%20Postretirement%20Benefits) This note discloses amendments to the company's pension plans and their impact on net periodic benefit costs, and lists the components of pension and postretirement benefit costs - In the first half of 2022, the company amended its qualified pension plan to provide enhanced benefits for eligible hourly employees, resulting in a pension plan remeasurement and increased annual pension expense estimates[29](index=29&type=chunk)[71](index=71&type=chunk) Pension and Postretirement Benefits Net Periodic Benefit Cost (As of June 30, 2022) | Cost Component | Q2 2022 (million USD) | Q2 2021 (million USD) | H1 2022 (million USD) | H1 2021 (million USD) | | :--- | :--- | :--- | :--- | :--- | | Service Cost | 14.0 | 10.6 | 24.0 | 23.0 | | Interest Cost | 11.9 | 8.3 | 20.6 | 17.7 | | Expected Return on Assets | (22.5) | (16.3) | (38.7) | (35.1) | | Amortization: Prior Service Cost (Credit) | 1.4 | 0.3 | 2.5 | 0.4 | | Amortization: Actuarial Loss (Gain) | 1.2 | 2.8 | 2.0 | 6.2 | | **Net Periodic Pension Benefit Cost** | **6.0** | **5.7** | **10.4** | **12.2** | | **Net Periodic Postretirement Benefit Cost (Credit)** | **(0.2)** | **(0.1)** | **(0.3)** | **(0.3)** | [10. Commitments and Contingencies](index=21&type=section&id=10.%20Commitments%20and%20Contingencies) This note discloses the legal and administrative proceedings faced by the company, borrowing arrangements with affiliates, and outstanding letter of credit commitments - The company is involved in legal and administrative proceedings related to its normal business activities, including environmental matters, with management deeming the likelihood of any material loss from current litigation as remote[74](index=74&type=chunk) - The company, as guarantor, provides a **15 million USD** revolving credit facility for a non-consolidated affiliate, with **3.7 million USD** drawn as of June 30, 2022[76](index=76&type=chunk) - As of June 30, 2022, the company had **17.2 million USD** in letter of credit contingencies, of which **2.6 million USD** were issued under its revolving credit facility[78](index=78&type=chunk) [11. Business Segments](index=22&type=section&id=11.%20Business%20Segments) This note provides the company's financial data by reporting segment, including total revenue, product and service revenue, and operating earnings (loss), to assess the performance and resource allocation of each segment - The company has three reporting segments: Building Materials (East Group and West Group) and Magnesia Specialties, with performance primarily assessed based on operating earnings[79](index=79&type=chunk) Total Revenue and Operating Earnings by Business Segment (As of June 30, 2022) | Metric | Q2 2022 (million USD) | Q2 2021 (million USD) | H1 2022 (million USD) | H1 2021 (million USD) | | :--- | :--- | :--- | :--- | :--- | | **Total Revenue** | | | | | | East Group | 674.5 | 635.3 | 1,093.3 | 1,030.2 | | West Group | 885.5 | 666.8 | 1,620.5 | 1,183.4 | | Total Building Materials Business | 1,560.0 | 1,302.1 | 2,713.8 | 2,213.6 | | Magnesia Specialties | 81.7 | 75.8 | 158.7 | 146.7 | | **Total** | **1,641.7** | **1,377.9** | **2,872.5** | **2,360.3** | | **Operating Earnings (Loss)** | | | | | | East Group | 210.6 | 197.8 | 238.5 | 259.5 | | West Group | 274.5 | 101.8 | 317.6 | 133.6 | | Total Building Materials Business | 485.1 | 299.6 | 556.1 | 393.1 | | Magnesia Specialties | 20.3 | 23.1 | 41.8 | 46.7 | | Corporate | (26.8) | (15.2) | (59.5) | (33.0) | | **Total** | **478.6** | **307.5** | **538.4** | **406.8** | - In Q2 2022, West Group operating earnings significantly increased to **274.5 million USD**, primarily driven by **151.7 million USD** in non-recurring earnings from asset divestitures[81](index=81&type=chunk)[82](index=82&type=chunk) [12. Revenues and Gross Profit](index=24&type=section&id=12.%20Revenues%20and%20Gross%20Profit) This note details the revenue and gross profit (loss) for the Building Materials and Magnesia Specialties businesses, broken down by product line (aggregates, cement, ready mixed concrete, asphalt, and paving services) Total Revenue by Product Line (As of June 30, 2022) | Product Line | Q2 2022 (million USD) | Q2 2021 (million USD) | H1 2022 (million USD) | H1 2021 (million USD) | | :--- | :--- | :--- | :--- | :--- | | **Building Materials Business** | | | | | | Aggregates | 955.2 | 801.8 | 1,641.1 | 1,374.4 | | Cement | 157.9 | 116.5 | 292.2 | 226.1 | | Ready Mixed Concrete | 226.1 | 268.4 | 516.2 | 503.7 | | Asphalt and Paving Services | 212.3 | 135.3 | 267.1 | 147.6 | | Freight | 110.8 | 76.8 | 187.6 | 131.6 | | **Magnesia Specialties** | | | | | | Products and Services | 74.6 | 70.0 | 145.4 | 135.2 | | Freight | 7.1 | 5.8 | 13.3 | 11.5 | | **Total** | **1,641.7** | **1,377.9** | **2,872.5** | **2,360.3** | | **Gross Profit (Loss)** | | | | | | **Building Materials Business** | | | | | | Aggregates | 309.0 | 273.0 | 410.9 | 394.7 | | Cement | 51.1 | 36.1 | 78.5 | 51.4 | | Ready Mixed Concrete | 14.3 | 19.1 | 35.4 | 38.6 | | Asphalt and Paving Services | 26.4 | 28.7 | 13.1 | 20.4 | | Freight | (1.7) | 0.7 | (0.4) | 0.5 | | **Magnesia Specialties** | | | | | | Products and Services | 25.8 | 27.9 | 52.6 | 56.3 | | Freight | (1.3) | (0.9) | (2.4) | (1.9) | | **Total** | **425.2** | **385.1** | **581.3** | **559.8** | - In Q2 2022, Aggregates product and service revenue grew to **955.2 million USD**, with gross profit of **309 million USD** and a gross margin of **32.3%**; Cement product and service revenue increased to **157.9 million USD**, with gross profit of **51.1 million USD** and a gross margin of **32.4%**[84](index=84&type=chunk)[107](index=107&type=chunk) [13. Supplemental Cash Flow Information](index=25&type=section&id=13.%20Supplemental%20Cash%20Flow%20Information) This note provides supplemental disclosures for non-cash investing and financing activities and cash flows, including new lease liabilities, accrued liabilities for property, plant and equipment purchases, and interest and income taxes paid Non-Cash Investing and Financing Activities (As of June 30, 2022) | Non-Cash Activity | H1 2022 (million USD) | H1 2021 (million USD) | | :--- | :--- | :--- | | Right-of-Use Assets Obtained in Exchange for New Finance Lease Liabilities | 7.0 | 158.8 | | Right-of-Use Assets Obtained in Exchange for New Operating Lease Liabilities | 13.0 | 13.2 | | Accrued Liabilities for Purchases of Property, Plant and Equipment | 27.3 | 29.5 | | Remeasurement of Operating Lease Right-of-Use Assets | (3.5) | (6.3) | | Remeasurement of Finance Lease Right-of-Use Assets | (6.4) | — | Supplemental Cash Flow Information (As of June 30, 2022) | Cash Flow Information | H1 2022 (million USD) | H1 2021 (million USD) | | :--- | :--- | :--- | | Interest Paid, Net | 84.3 | 53.6 | | Income Taxes Paid, Net | 42.9 | 56.9 | [14. Other Operating Income, Net](index=25&type=section&id=14.%20Other%20Operating%20Income%2C%20Net) This note explains the primary drivers of changes in other operating income, net, particularly earnings related to asset divestitures - In Q2 and the first half of 2022, the increase in other operating income, net, was primarily attributable to **151.7 million USD** in earnings from the divestiture of Colorado and Central Texas ready mixed concrete operations[87](index=87&type=chunk) - In the prior-year period, other operating income, net, included **12.3 million USD** in earnings from the sale of the company's former headquarters[87](index=87&type=chunk) [15. Other Nonoperating Income, Net](index=25&type=section&id=15.%20Other%20Nonoperating%20Income%2C%20Net) This note discloses the composition of other nonoperating income, net, specifically pre-tax earnings related to debt repurchases - In Q2 and the first half of 2022, other nonoperating income, net, included **11.6 million USD** in pre-tax earnings related to the repurchase of company debt[88](index=88&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=26&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides a detailed analysis of the company's financial condition and operating performance, including a business overview, critical accounting policies, operating results (quarterly and semi-annually), liquidity and capital resources, industry trends and risks, and investor information [Overview](index=26&type=section&id=Overview) The company is a natural resource-based construction materials company, primarily providing aggregates, cement, ready mixed concrete, asphalt, and paving services, divided into East and West business groups, also operating a Magnesia Specialties business; the Building Materials business is significantly affected by weather and seasonality - The company's primary business involves aggregates (crushed stone, sand, and gravel), cement, and downstream products (ready mixed concrete, asphalt, and paving), serving infrastructure, nonresidential, and residential construction projects[89](index=89&type=chunk) - The Building Materials business is divided into East and West Groups; the East Group primarily provides aggregates and asphalt, while the West Group offers aggregates, cement, ready mixed concrete, asphalt, and paving services[90](index=90&type=chunk)[92](index=92&type=chunk) - The Building Materials business is significantly affected by weather patterns and seasonality, with production and shipment levels typically higher in spring, summer, and fall[92](index=92&type=chunk) - The Magnesia Specialties business produces magnesia-based chemical products and dolomitic lime, primarily for industrial, agricultural, environmental, and steel and mining industries[94](index=94&type=chunk) [Critical Accounting Policies](index=27&type=section&id=Critical%20Accounting%20Policies) This section states that the company's critical accounting policies remained unchanged for the six months ended June 30, 2022, consistent with those disclosed in the 2021 annual report - The company's critical accounting policies remained unchanged for the six months ended June 30, 2022[95](index=95&type=chunk) [Results of Operations](index=27&type=section&id=Results%20of%20Operations) This section analyzes the company's operating performance for Q2 and the first half of 2022, including Adjusted EBITDA, Adjusted Operating Earnings, and EPS, along with revenue, gross profit, volume, and pricing trends by business segment and product line, discussing cost pressures and market demand [Adjusted EBITDA Reconciliation](index=27&type=section&id=Adjusted%20EBITDA%20Reconciliation) This section provides a reconciliation from net earnings from continuing operations to Adjusted EBITDA, a metric used to assess the company's period operating performance by excluding non-recurring items such as interest, taxes, depreciation, amortization, equity in earnings (losses) of nonconsolidated equity affiliates, acquisition and integration costs, and divestiture gains Adjusted EBITDA Reconciliation (As of June 30, 2022) | Metric | Q2 2022 (million USD) | Q2 2021 (million USD) | H1 2022 (million USD) | H1 2021 (million USD) | | :--- | :--- | :--- | :--- | :--- | | Net Earnings from Continuing Operations Attributable to Martin Marietta | 353.2 | 225.8 | 377.7 | 291.1 | | Add (Subtract): | | | | | | Interest Expense, Net of Interest Income | 42.2 | 28.2 | 82.7 | 55.5 | | Income Tax Expense Attributable to Controlling Interest | 104.4 | 62.2 | 110.2 | 78.1 | | Depreciation, Depletion, and Amortization and Equity in Earnings (Losses) of Nonconsolidated Equity Affiliates | 127.3 | 106.1 | 252.3 | 201.9 | | Acquisition and Integration Costs | 2.9 | 9.3 | 4.3 | 10.6 | | Impact of Inventory Step-up in Acquisition Accounting | — | 7.6 | — | 7.6 | | Divestiture Gain | (151.7) | — | (151.7) | — | | **Adjusted EBITDA** | **478.3** | **439.2** | **675.5** | **644.8** | - Q2 2022 Adjusted EBITDA was **478.3 million USD**, an **8.9%** increase year-over-year; for the first half, it was **675.5 million USD**, up **4.8%**[97](index=97&type=chunk) [Adjusted Earnings from Operations and EPS Reconciliation](index=28&type=section&id=Adjusted%20Earnings%20from%20Operations%20and%20EPS%20Reconciliation) This section provides a reconciliation from GAAP operating earnings to adjusted operating earnings and from GAAP diluted EPS to adjusted diluted EPS, excluding non-recurring items such as acquisition and integration costs, the impact of inventory step-up in acquisition accounting, and divestiture gains Adjusted Consolidated Operating Earnings Reconciliation (As of June 30, 2022) | Metric | Q2 2022 (million USD) | Q2 2021 (million USD) | H1 2022 (million USD) | H1 2021 (million USD) | | :--- | :--- | :--- | :--- | :--- | | GAAP Consolidated Operating Earnings | 478.6 | 307.5 | 538.4 | 406.8 | | Add (Subtract): | | | | | | Acquisition and Integration Costs | 2.9 | 9.3 | 4.3 | 10.6 | | Impact of Inventory Step-up in Acquisition Accounting | — | 7.6 | — | 7.6 | | Divestiture Gain | (151.7) | — | (151.7) | — | | **Adjusted Consolidated Operating Earnings** | **329.8** | **324.4** | **391.0** | **425.0** | Adjusted Diluted Earnings Per Share Reconciliation (As of June 30, 2022) | Metric | Q2 2022 (per share) | Q2 2021 (per share) | H1 2022 (per share) | H1 2021 (per share) | | :--- | :--- | :--- | :--- | :--- | | GAAP Diluted Earnings Per Share from Continuing Operations | 5.65 | 3.61 | 6.04 | 4.65 | | Impact of Acquisition and Integration Costs | 0.04 | 0.11 | 0.05 | 0.13 | | Impact of Divestiture Gain | (1.73) | — | (1.73) | — | | Impact of Inventory Step-up in Acquisition Accounting | — | 0.09 | — | 0.09 | | **Adjusted Diluted Earnings Per Share from Continuing Operations** | **3.96** | **3.81** | **4.36** | **4.87** | - Q2 2022 Adjusted Diluted EPS was **3.96 USD**, up **3.9%** year-over-year; for the first half, it was **4.36 USD**, down **10.5%**[99](index=99&type=chunk)[100](index=100&type=chunk) [Mix-Adjusted Average Selling Price (ASP)](index=29&type=section&id=Mix-Adjusted%20Average%20Selling%20Price%20%28ASP%29) This section explains the calculation of mix-adjusted average selling price (a non-GAAP metric) used to assess the effectiveness of the company's pricing strategy by excluding product, geographic, and other mix impacts, and provides mix-adjusted ASP and its changes for aggregates and cement products across business segments - Mix-adjusted ASP is calculated by comparing current period shipments to comparable prior period shipments of similar products, aiming to assess the effectiveness of the company's pricing strategy[100](index=100&type=chunk) Mix-Adjusted Average Selling Price (ASP) and Changes (As of June 30, 2022) | Product/Business Segment | Q2 2022 Reported ASP | Q2 2022 Mix-Adjusted ASP | Q2 2022 Reported ASP Change | Q2 2022 Mix-Adjusted ASP Change | | :--- | :--- | :--- | :--- | :--- | | Organic East Group - Aggregates | $16.79 | $16.71 | 7.6% | 7.1% | | Organic West Group - Aggregates | $15.67 | $15.20 | 11.7% | 8.3% | | Total Organic Aggregates | $16.40 | $16.20 | 8.8% | 7.5% | | Cement | $140.00 | $137.33 | 14.7% | 12.5% | | Product/Business Segment | H1 2022 Reported ASP | H1 2022 Mix-Adjusted ASP | H1 2022 Reported ASP Change | H1 2022 Mix-Adjusted ASP Change | | :--- | :--- | :--- | :--- | :--- | | Organic East Group - Aggregates | $16.91 | $16.85 | 6.6% | 6.3% | | Organic West Group - Aggregates | $15.37 | $14.92 | 10.3% | 7.1% | | Total Organic Aggregates | $16.34 | $16.16 | 7.7% | 6.5% | | Cement | $134.79 | $132.75 | 13.5% | 11.7% | - In Q2 2022, organic aggregates mix-adjusted ASP increased by **7.5%**, and cement mix-adjusted ASP increased by **12.5%**, indicating an effective pricing strategy[103](index=103&type=chunk) [Quarter Ended June 30, 2022 Financial Highlights](index=31&type=section&id=Quarter%20Ended%20June%2030%2C%202022%20Financial%20Highlights) This section summarizes the company's key financial performance for Q2 2022, including significant growth in total revenue, operating earnings, net earnings, and EPS, as well as changes in adjusted metrics Q2 2022 Financial Highlights (Year-over-Year) | Metric | Q2 2022 (million USD/per share) | Q2 2021 (million USD/per share) | Change (%) | | :--- | :--- | :--- | :--- | | Consolidated Total Revenue | $1,641.7 | $1,377.9 | 19.1% | | Building Materials Business Product and Service Revenue | $1,449.2 | $1,225.3 | 18.3% | | Magnesia Specialties Revenue | $74.6 | $70.0 | 6.6% | | Consolidated Gross Profit | $425.2 | $385.1 | 10.4% | | Consolidated Operating Earnings | $478.6 | $307.5 | 55.7% | | Adjusted Consolidated Operating Earnings | $329.8 | $324.4 | 1.7% | | Net Earnings from Continuing Operations Attributable to Martin Marietta | $353.2 | $225.8 | 56.4% | | Adjusted EBITDA | $478.3 | $439.2 | 8.9% | | Diluted Earnings Per Share from Continuing Operations | $5.65 | $3.61 | 56.5% | | Adjusted Diluted Earnings Per Share from Continuing Operations | $3.96 | $3.81 | 3.9% | [Quarter Ended June 30, 2022 Segment and Product Line Performance](index=32&type=section&id=Quarter%20Ended%20June%2030%2C%202022%20Segment%20and%20Product%20Line%20Performance) This section details the Q2 2022 revenue, gross profit, selling, general and administrative expenses, and operating earnings for each business segment and product line; aggregates business saw increased shipments and pricing, but gross margin was impacted by rising costs; cement business performed strongly, while ready mixed concrete and asphalt businesses were affected by divestitures and accelerating cost increases [Building Materials Business (Quarter)](index=35&type=section&id=Building%20Materials%20Business%20%28Quarter%29) In Q2 2022, Building Materials organic aggregates shipments grew **1.8%**, with pricing up **8.8%** (**7.5%** mix-adjusted); cement shipments hit a quarterly record, with pricing up **14.7%**; ready mixed concrete and asphalt gross margins faced pressure from divestitures and accelerating cost increases Q2 2022 Aggregates Shipments and Pricing Changes (Year-over-Year) | Metric | Shipment Change (%) | Pricing Change (%) | | :--- | :--- | :--- | | East Group | (1.0)% | 7.6% | | West Group | 30.0% | 11.6% | | Total Aggregates Business | 9.3% | 8.4% | | Organic Aggregates Business | 1.8% | 8.8% | Q2 2022 Building Materials Business Product Line Shipments and Average Selling Price (Year-over-Year) | Product Line | 2022 Shipments (million) | 2021 Shipments (million) | Shipment Change (%) | 2022 Average Selling Price | 2021 Average Selling Price | Selling Price Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Aggregates (tons) | 57.8 | 52.9 | 9.3% | $16.34 | $15.07 | 8.4% | | Cement (tons) | 1.1 | 0.9 | 19.8% | $140.00 | $122.11 | 14.7% | | Ready Mixed Concrete (cubic yards) | 1.8 | 2.3 | (22.6)% | $124.51 | $114.27 | 9.0% | | Asphalt (tons) | 2.6 | 1.8 | 40.2% | $60.54 | $48.83 | 24.0% | - Aggregates product gross profit increased **13.2%** to **309 million USD**, but gross margin decreased by **170 basis points** to **32.3%**, primarily due to significant increases in energy, contract services, supplies, and internal freight costs[115](index=115&type=chunk) - Cement product gross profit increased **41.7%** to **51.1 million USD**, with gross margin expanding by **140 basis points** to **32.4%**, benefiting from volume and pricing growth, partially offset by energy costs and unplanned kiln outages[116](index=116&type=chunk) - Ready mixed concrete product revenue and gross profit decreased by **15.8%** and **25.1%**, respectively, primarily due to the divestiture of Colorado and Central Texas operations[117](index=117&type=chunk) - Asphalt shipments and pricing increased by **40.2%** and **24.0%**, respectively, but rapidly rising liquid asphalt costs compressed gross margin by **880 basis points**[118](index=118&type=chunk) [Aggregates End-Use Markets (Quarter)](index=36&type=section&id=Aggregates%20End-Use%20Markets%20%28Quarter%29) In Q2 2022, organic aggregates shipments increased in both infrastructure and residential markets, while the nonresidential market remained flat, and the ChemRock/Rail market experienced a decline - Infrastructure market organic aggregates shipments increased **5%**, accounting for **35%** of Q2 organic aggregates shipments[112](index=112&type=chunk) - Nonresidential market organic aggregates shipments were flat, accounting for **35%** of Q2 organic aggregates shipments[112](index=112&type=chunk) - Residential market organic aggregates shipments increased **4%**, accounting for **25%** of Q2 organic aggregates shipments[113](index=113&type=chunk) - ChemRock/Rail market shipments decreased **10%**, accounting for **5%** of Q2 organic aggregates shipments[113](index=113&type=chunk) [Magnesia Specialties Business (Quarter)](index=37&type=section&id=Magnesia%20Specialties%20Business%20%28Quarter%29) In Q2 2022, Magnesia Specialties business revenue increased, but gross profit declined due to rising energy costs - Magnesia Specialties Q2 product revenue increased **6.6%** to **74.6 million USD**, driven by strong global demand for magnesia-based chemical products[119](index=119&type=chunk) - Product gross profit decreased **7.6%** to **25.8 million USD**, primarily due to rising energy costs impacting margins[119](index=119&type=chunk) [Consolidated Operating Results (Quarter)](index=37&type=section&id=Consolidated%20Operating%20Results%20%28Quarter%29) In Q2 2022, consolidated selling, general and administrative expenses as a percentage of total revenue slightly increased, operating earnings grew significantly due to divestiture gains, and other operating and nonoperating income were positively impacted by divestiture and debt repurchase gains - Q2 2022 consolidated selling, general and administrative expenses were **6.3%** of total revenue, up **30 basis points** from **6.0%** in the prior-year period[120](index=120&type=chunk) - Q2 operating earnings were **478.6 million USD**, a significant increase from **307.5 million USD** in the prior-year period, primarily benefiting from **151.7 million USD** in earnings from the divestiture of Colorado and Central Texas ready mixed concrete operations[120](index=120&type=chunk) - Other operating income, net, was **160.4 million USD**, primarily attributable to **151.7 million USD** in earnings from the divestiture of Colorado and Central Texas ready mixed concrete operations[121](index=121&type=chunk) - Other nonoperating income, net, was **22 million USD**, including **11.6 million USD** in pre-tax earnings related to the repurchase of company debt[123](index=123&type=chunk) [Six Months Ended June 30, 2022 Financial Highlights](index=38&type=section&id=Six%20Months%20Ended%20June%2030%2C%202022%20Financial%20Highlights) This section summarizes the company's key financial performance for the first half of 2022, including significant growth in total revenue, operating earnings, net earnings, and EPS, as well as changes in adjusted metrics H1 2022 Financial Highlights (Year-over-Year) | Metric | H1 2022 (million USD/per share) | H1 2021 (million USD/per share) | Change (%) | | :--- | :--- | :--- | :--- | | Consolidated Total Revenue | $2,872.5 | $2,360.3 | 21.7% | | Building Materials Business Product and Service Revenue | $2,526.2 | $2,082.0 | 21.3% | | Magnesia Specialties Revenue | $145.4 | $135.2 | 7.5% | | Consolidated Gross Profit | $581.3 | $559.8 | 3.8% | | Consolidated Operating Earnings | $538.4 | $406.8 | 32.4% | | Adjusted Consolidated Operating Earnings | $391.0 | $425.0 | (8.0)% | | Net Earnings from Continuing Operations Attributable to Martin Marietta | $377.7 | $291.1 | 29.6% | | Adjusted EBITDA | $675.5 | $644.8 | 4.8% | | Diluted Earnings Per Share from Continuing Operations | $6.04 | $4.65 | 30.0% | | Adjusted Diluted Earnings Per Share from Continuing Operations | $4.36 | $4.87 | (10.5)% | [Six Months Ended June 30, 2022 Segment and Product Line Performance](index=39&type=section&id=Six%20Months%20Ended%20June%2030%2C%202022%20Segment%20and%20Product%20Line%20Performance) This section details the first half of 2022 revenue, gross profit, selling, general and administrative expenses, and operating earnings for each business segment and product line; aggregates business saw increased shipments and pricing, but gross margin was impacted by rising energy costs; cement business performed strongly, while ready mixed concrete and asphalt businesses faced cost pressures [Building Materials Business (Six Months)](index=41&type=section&id=Building%20Materials%20Business%20%28Six%20Months%29) In the first half of 2022, Building Materials organic aggregates shipments grew **2.4%**, with pricing up **7.7%** (**6.5%** mix-adjusted); cement shipments increased **14.9%**, with pricing up **13.5%**; ready mixed concrete and asphalt gross margins declined due to rising raw material and diesel costs H1 2022 Aggregates Shipments and Pricing Changes (Year-over-Year) | Metric | Shipment Change (%) | Pricing Change (%) | | :--- | :--- | :--- | | East Group | (0.1)% | 6.6% | | West Group | 31.2% | 10.4% | | Total Aggregates Business | 11.0% | 7.2% | | Organic Aggregates Business | 2.4% | 7.7% | H1 2022 Building Materials Business Product Line Shipments and Average Selling Price (Year-over-Year) | Product Line | 2022 Shipments (million) | 2021 Shipments (million) | Shipment Change (%) | 2022 Average Selling Price | 2021 Average Selling Price | Selling Price Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Aggregates (tons) | 99.9 | 90.0 | 11.0% | $16.27 | $15.17 | 7.2% | | Cement (tons) | 2.1 | 1.9 | 14.9% | $134.79 | $118.80 | 13.5% | | Ready Mixed Concrete (cubic yards) | 4.2 | 4.4 | (4.9)% | $122.34 | $113.25 | 8.0% | | Asphalt (tons) | 3.3 | 1.9 | 67.4% | $60.93 | $48.85 | 24.7% | - Aggregates product gross margin decreased by **370 basis points** to **25.0%**, primarily due to rising energy, fuel, supplies, repair, and contract services costs offsetting price increases[134](index=134&type=chunk) - Texas cement shipments increased **14.9%**, with pricing up **13.5%**, and product gross margin expanded by **420 basis points** to **26.9%**[135](index=135&type=chunk) - Ready mixed concrete product gross margin decreased by **80 basis points** to **6.9%**, primarily impacted by rising raw material and diesel costs[136](index=136&type=chunk) - Asphalt product and service gross margin decreased by **900 basis points** to **4.9%**, primarily due to delayed construction season in Minnesota and rising liquid asphalt costs in Colorado[137](index=137&type=chunk) [Aggregates End-Use Markets (Six Months)](index=42&type=section&id=Aggregates%20End-Use%20Markets%20%28Six%20Months%29) In the first half of 2022, organic aggregates shipments increased in both infrastructure and residential markets, while the nonresidential market remained flat, and the ChemRock/Rail market also saw growth - Infrastructure market organic aggregates shipments increased **6%**, accounting for **34%** of H1 organic aggregates shipments[131](index=131&type=chunk) - Nonresidential market organic aggregates shipments were flat, accounting for **35%** of H1 organic aggregates shipments[131](index=131&type=chunk) - Residential market organic aggregates shipments increased **2%**, accounting for **26%** of H1 organic aggregates shipments[132](index=132&type=chunk) - ChemRock/Rail market shipments increased **4%**, accounting for **5%** of H1 organic aggregates shipments[133](index=133&type=chunk) [Magnesia Specialties Business (Six Months)](index=43&type=section&id=Magnesia%20Specialties%20Business%20%28Six%20Months%29) In the first half of 2022, Magnesia Specialties business revenue increased, but gross profit declined due to rising costs - Magnesia Specialties H1 product revenue increased **7.5%** to **145.4 million USD**, driven by strong global demand for magnesia-based chemical products[138](index=138&type=chunk) - Product gross profit was **52.6 million USD**, a decrease from **56.3 million USD** in the prior-year period, with gross margin declining by **550 basis points** to **36.2%**, primarily due to rising energy, supplies, and raw material costs[138](index=138&type=chunk) [Consolidated Operating Results (Six Months)](index=43&type=section&id=Consolidated%20Operating%20Results%20%28Six%20Months%29) In the first half of 2022, consolidated selling, general and administrative expenses as a percentage of total revenue slightly increased, operating earnings grew significantly due to divestiture gains, and other operating and nonoperating income were positively impacted by divestiture and debt repurchase gains - H1 2022 consolidated selling, general and administrative expenses were **7.0%** of total revenue, a slight increase from **6.9%** in the prior-year period[139](index=139&type=chunk) - H1 operating earnings were **538.4 million USD**, a significant increase from **406.8 million USD** in the prior-year period, primarily benefiting from **151.7 million USD** in earnings from the divestiture of Colorado and Central Texas ready mixed concrete operations[139](index=139&type=chunk) - Other operating income, net, was **162.6 million USD**, primarily attributable to **151.7 million USD** in earnings from the divestiture of Colorado and Central Texas ready mixed concrete operations[140](index=140&type=chunk) - Other nonoperating income, net, was **32.9 million USD**, including **11.6 million USD** in pre-tax earnings related to the repurchase of company debt[142](index=142&type=chunk) [Income Tax Expense (Six Months)](index=44&type=section&id=Income%20Tax%20Expense%20%28Six%20Months%29) In the first half of 2022, the company's effective income tax rate from continuing operations increased, primarily due to the divestiture of operations Effective Income Tax Rate from Continuing Operations (As of June 30, 2022) | Period | Effective Income Tax Rate | | :--- | :--- | | H1 2022 | 22.6% | | H1 2021 | 21.2% | - The effective income tax rate for the first half of 2022 increased to **22.6%** from **21.2%** in the prior-year period, primarily due to the divestiture of Colorado and Central Texas ready mixed concrete operations[143](index=143&type=chunk) [Liquidity and Capital Resources](index=44&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's cash flow, capital expenditures, stock repurchases, debt financing instruments and their compliance, and anticipates the company's future capital capacity to meet operational needs and investment plans Cash Flow from Operating Activities and Capital Expenditures (As of June 30, 2022) | Metric | H1 2022 (million USD) | H1 2021 (million USD) | | :--- | :--- | :--- | | Net Cash Provided by Operating Activities | 286.2 | 441.2 | | Additions to Property, Plant and Equipment | (220.7) | (213.0) | - H1 2022 operating cash flow was **286.2 million USD**, a decrease from the prior-year period, primarily due to changes in working capital[144](index=144&type=chunk) - The company repurchased **130,551 shares** of common stock for a total cost of **50 million USD** in the first half of 2022; as of June 30, 2022, **13,390,401 shares** remained authorized for repurchase by the Board of Directors[146](index=146&type=chunk) - The company has **400 million USD** in trade accounts receivable securitization financing and an **800 million USD** five-year senior unsecured revolving credit facility, both with no outstanding borrowings as of June 30, 2022, and complied with the debt covenant for a consolidated net debt to Adjusted EBITDA ratio not exceeding **3.50x**[147](index=147&type=chunk)[148](index=148&type=chunk)[149](index=149&type=chunk) - As of June 30, 2022, the company had **1.1974 billion USD** in unused borrowing capacity, with existing cash, internal cash flow, and financing resources expected to be sufficient to support future operations, debt service, capital expenditures, potential acquisitions, and dividend payments[150](index=150&type=chunk) [Trends and Risks](index=45&type=section&id=Trends%20and%20Risks) This section alerts investors that the company's forward-looking statements involve risks and uncertainties, listing various factors that could cause actual results to differ materially from expectations, including economic events, pricing fluctuations, government funding, construction spending, weather conditions, fuel costs, supply chain challenges, regulatory changes, and inflation - The company's forward-looking statements involve risks and uncertainties, and actual results may differ materially from expectations[154](index=154&type=chunk)[155](index=155&type=chunk) - Key risk factors include: sales volume declines due to economic events, falling aggregates pricing, cement and ready mixed concrete supply/demand and price fluctuations, government transportation or infrastructure project funding levels and timing, construction spending levels, rising residential mortgage interest rates, adverse weather conditions, fluctuating fuel costs (especially diesel), supply chain challenges, equipment failures, COVID-19 pandemic impacts, increased government regulation, transportation availability and costs, labor shortages, inflation, and failure to realize acquisition synergies[156](index=156&type=chunk)[157](index=157&type=chunk) [Other Matters](index=45&type=section&id=Other%20Matters) This section advises investors to review the company's annual reports, quarterly reports, and 8-K reports filed with the SEC for additional information, and provides avenues for accessing these documents - The company advises investors to review its annual reports and Forms 10-K, 10-Q, and 8-K filed with the SEC, which are available on the company's website and the SEC's website[153](index=153&type=chunk)[160](index=160&type=chunk) [Investor Access to Company Filings](index=48&type=section&id=Investor%20Access%20to%20Company%20Filings) This section provides specific ways for investors to access the company's SEC filings, including through written request, the company's website, and the SEC's EDGAR system - Investors can obtain the company's annual reports, press releases, and SEC filings via written request, the company's website (www.martinmarietta.com), or the SEC's website (www.sec.gov)[160](index=160&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=49&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section discloses the various market risks faced by the company, including those related to interest-rate-sensitive construction and steel industries, changes in short-term interest rates, pension expense, income taxes, and fluctuations in energy and commodity costs - The company's operations are highly dependent on interest-rate-sensitive construction and steel industries, with residential and nonresidential construction markets accounting for **61%** of H1 2022 aggregates shipments[163](index=163&type=chunk) - Rising federal funds rates could lead to difficulties in financing construction projects or decreased consumer confidence, impacting market activity levels[163](index=163&type=chunk) - The company faces short-term interest rate risk, with its **800 million USD** revolving credit facility and **400 million USD** trade accounts receivable securitization financing both utilizing floating interest rates[165](index=165&type=chunk) - Pension expense is affected by discount rates and expected return on assets; following the February 2022 pension plan remeasurement, the discount rate increased by approximately **50 basis points** from year-end 2021[166](index=166&type=chunk) - Energy costs (including diesel, natural gas, electricity, coal, and liquid asphalt) are significant production costs for the company; in H1 2022, organic energy expense increased by approximately **59%** year-over-year, primarily due to rising diesel, natural gas, electricity, and gasoline prices[168](index=168&type=chunk) - Cement, as a commodity, is highly sensitive to supply and demand changes; a **10%** change in cement costs could increase ready mixed concrete product line costs by **32.3 million USD**[170](index=170&type=chunk)[171](index=171&type=chunk) [Item 4. Controls and Procedures](index=50&type=section&id=Item%204.%20Controls%20and%20Procedures) This section states that as of June 30, 2022, the company's management (including the CEO and CFO) assessed and determined that disclosure controls and procedures were effective, and internal control over financial reporting was effective, having completed the integration of information systems for the Pacific operations acquired in 2021 - As of June 30, 2022, company disclosure controls and procedures were determined to be effective[173](index=173&type=chunk) - The information systems for the Pacific operations acquired in October 2021 have been integrated into the company's current point-of-sale and general ledger systems, and as of June 30, 2022, the company's internal control over financial reporting was determined to be effective[173](index=173&type=chunk) [PART II. OTHER INFORMATION](index=51&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section contains other important disclosures beyond financial information, including legal proceedings, risk factors, equity security sales, mine safety disclosures, and a list of report exhibits [Item 1. Legal Proceedings](index=51&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to the disclosure regarding the company's legal and administrative proceedings in Note 10 of the financial statements - Information regarding legal proceedings is provided in Note 10, 'Commitments and Contingencies, Legal and Administrative Proceedings,' of this Form 10-Q[175](index=175&type=chunk) [Item 1A. Risk Factors](index=51&type=section&id=Item%201A.%20Risk%20Factors) This section refers to the disclosure regarding risk factors and forward-looking statements in Part I, Item 1A of the company's 2021 Annual Report on Form 10-K - Information regarding risk factors is provided in Part I, Item 1A, 'Risk Factors and Forward-Looking Statements,' of Martin Marietta's Annual Report on Form 10-K for the year ended December 31, 2021[176](index=176&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=51&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section discloses the execution of the company's common stock repurchase program, including the number of shares repurchased and the remaining number of shares available for repurchase Issuer Purchases of Equity Securities (As of June 30, 2022) | Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans | Maximum Shares Yet to Be Purchased Under Plans | | :--- | :--- | :--- | :--- | :--- | | April 1 - April 30, 2022 | — | $— | — | 13,390,401 | | May 1 - May 31, 2022 | — | $— | — | 13,390,401 | | June 1 - June 30, 2022 | — | $— | — | 13,390,401 | | **Total** | **—** | | **—** | | - As of June 30, 2022, the company made no common stock repurchases in Q2; the Board of Directors authorized a maximum repurchase of **20 million shares**, with **13,390,401 shares** remaining available for repurchase as of June 30, 2022[177](index=177&type=chunk) [Item 4. Mine Safety Disclosures](index=51&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section states that information regarding mine safety violations or other regulatory matters is included in Exhibit 95 of this quarterly report - Information regarding mine safety violations or other regulatory matters is included in Exhibit 95 to this quarterly report[178](index=178&type=chunk) [Item 6. Exhibits](index=52&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with Form 10-Q, including CEO and CFO certifications, mine safety disclosures, and XBRL-related documents Exhibit List | Exhibit Number | Description | | :--- | :--- | | 31.01 | Certification of Chief Executive Officer pursuant to Section 13a-14 of the Securities Exchange Act of 1934 (adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002), dated July 28, 2022 | | 31.02 | Certification of Chief Financial Officer pursuant to Section 13a-14 of the Securities Exchange Act of 1934 (adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002), dated July 28, 2022 | | 32.01 | Written Statement of Chief Executive Officer pursuant to 18 U.S.C. 1350 (adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002), dated July 28, 2022 | | 32.02 | Written Statement of Chief Financial Officer pursuant to 18 U.S.C. 1350 (adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002), dated July 28, 2022 | | 95 | Mine Safety Disclosures | | 101.INS | Inline XBRL Instance Document | | 101.SCH | Inline XBRL Taxonomy Extension Schema Document | | 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | | 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | | 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | | 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | | 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) | [Signatures](index=53&type=section&id=Signatures) - This report was signed by Martin Marietta Materials, Inc. on July 28, 2022, by James A. J. Nickolas, Senior Vice President and Chief Financial Officer[182](index=182&type=chunk)

```markdown [PART I. FINANCIAL INFORMATION](index=3&type=section&id=Part%20I.%20Financial%20Information) This section presents the company's unaudited consolidated financial statements and management's financial analysis [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited consolidated financial statements and related disclosures for the quarter [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) This section details the company's financial position, including assets, liabilities, and equity Consolidated Balance Sheet Highlights (In Millions) | Metric | March 31, 2022 | December 31, 2021 | Change | % Change | | :-------------------------------- | :------------- | :---------------- | :----- | :------- | | Total Current Assets | $1,987.5 | $2,025.6 | $(38.1) | -1.88% | | Net Property, Plant and Equipment | $6,208.9 | $6,338.0 | $(129.1) | -2.04% | | Goodwill | $3,392.0 | $3,494.4 | $(102.4) | -2.93% | | Total Assets | $14,241.5 | $14,393.0 | $(151.5) | -1.05% | | Total Current Liabilities | $712.9 | $752.6 | $(39.7) | -5.27% | | Long-term Debt | $5,102.3 | $5,100.8 | $1.5 | 0.03% | | Total Liabilities | $7,810.4 | $7,855.4 | $(45.0) | -0.57% | | Total Shareholders' Equity | $6,428.9 | $6,535.3 | $(106.4) | -1.63% | | Total Equity | $6,431.1 | $6,537.6 | $(106.5) | -1.63% | [Consolidated Statements of Earnings and Comprehensive Earnings](index=4&type=section&id=Consolidated%20Statements%20of%20Earnings%20and%20Comprehensive%20Earnings) This section presents the company's financial performance, detailing revenues, costs, and net earnings Consolidated Statements of Earnings Highlights (Three Months Ended March 31, In Millions, Except Per Share Data) | Metric | 2022 | 2021 | Change | % Change | | :---------------------------------------------- | :-------- | :-------- | :-------- | :------- | | Products and services revenues | $1,147.8 | $921.9 | $225.9 | 24.50% | | Freight revenues | $83.0 | $60.5 | $22.5 | 37.19% | | Total Revenues | $1,230.8 | $982.4 | $248.4 | 25.28% | | Total Cost of Revenues | $1,074.7 | $807.7 | $267.0 | 33.06% | | Gross Profit | $156.1 | $174.7 | $(18.6) | -10.65% | | Selling, general & administrative expenses | $97.1 | $79.8 | $17.3 | 21.68% | | Earnings from Operations | $59.9 | $99.3 | $(39.4) | -39.68% | | Interest expense | $40.5 | $27.4 | $13.1 | 47.81% | | Earnings from continuing operations | $24.4 | $65.5 | $(41.1) | -62.75% | | Loss from discontinued operations, net of tax | $(3.1) | — | $(3.1) | N/A | | Consolidated net earnings | $21.3 | $65.5 | $(44.2) | -67.48% | | Net Earnings Attributable to Martin Marietta | $21.4 | $65.3 | $(43.9) | -67.23% | | Diluted EPS from continuing operations | $0.39 | $1.04 | $(0.65) | -62.50% | | Diluted EPS (total) | $0.34 | $1.04 | $(0.70) | -67.31% | [Consolidated Statements of Cash Flows](index=5&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) This section outlines the company's cash inflows and outflows from operating, investing, and financing activities Consolidated Statements of Cash Flows Highlights (Three Months Ended March 31, In Millions) | Metric | 2022 | 2021 | Change | % Change | | :---------------------------------------- | :-------- | :-------- | :-------- | :------- | | Net Cash Provided by Operating Activities | $169.9 | $191.9 | $(22.0) | -11.46% | | Net Cash Used for Investing Activities | $(123.0) | $(88.3) | $(34.7) | 39.29% | | Net Cash Used for Financing Activities | $(116.2) | $(53.2) | $(63.0) | 118.42% | | Net (Decrease) Increase in Cash | $(69.3) | $50.4 | $(119.7) | -237.50% | | Cash, Cash Equivalents and Restricted Cash, end of period | $189.6 | $354.8 | $(165.2) | -46.56% | [Consolidated Statement of Total Equity](index=6&type=section&id=Consolidated%20Statement%20of%20Total%20Equity) This section details changes in the company's total equity, including shareholders' equity and noncontrolling interests Consolidated Statement of Total Equity Highlights (In Millions) | Metric | March 31, 2022 | December 31, 2021 | Change | % Change | | :----------------------------------- | :------------- | :---------------- | :------- | :------- | | Total Shareholders' Equity | $6,428.9 | $6,535.3 | $(106.4) | -1.63% | | Noncontrolling interests | $2.2 | $2.3 | $(0.1) | -4.35% | | Total Equity | $6,431.1 | $6,537.6 | $(106.5) | -1.63% | - Key movements in equity for the three months ended March 31, 2022, include **consolidated net earnings** of **$21.3 million**, an **other comprehensive loss** of **$31.6 million**, **dividends declared** of **$38.4 million**, and **common stock repurchases** of **$50.0 million**[14](index=14&type=chunk) [Notes to Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) This section provides detailed disclosures and explanations for the consolidated financial statements [Note 1. Significant Accounting Policies](index=8&type=section&id=Note%201.%20Significant%20Accounting%20Policies) This note details the company's organizational structure, interim financial statement preparation, and earnings per share [Organization](index=8&type=section&id=Organization) This section outlines the company's business structure, reportable segments, and operational scope - **Martin Marietta Materials, Inc.** is a **natural resource-based building materials company** supplying **aggregates, cement, ready mixed concrete, asphalt, and paving services** across 28 states, Canada, and The Bahamas[16](index=16&type=chunk) - The company's **Building Materials business** includes two **reportable segments**: the **East Group** (**Aggregates** and Asphalt) and the **West Group** (**Aggregates, Cement, Ready Mixed Concrete, Asphalt and Paving**)[17](index=17&type=chunk)[18](index=18&type=chunk) - The **Magnesia Specialties business**, a separate **reportable segment**, produces magnesia-based chemicals and dolomitic lime[20](index=20&type=chunk) [Basis of Presentation](index=8&type=section&id=Basis%20of%20Presentation) This section describes the preparation of unaudited interim financial statements and management's estimates - The **unaudited consolidated financial statements** are prepared in accordance with **U.S. GAAP** for **interim financial information** and reflect all necessary adjustments, consisting of normal recurring accruals[21](index=21&type=chunk) - Management's estimates and assumptions about future events are used in preparing the financial statements, and actual results may differ significantly[23](index=23&type=chunk) [Consolidated Comprehensive (Loss) Earnings and Accumulated Other Comprehensive Loss](index=9&type=section&id=Consolidated%20Comprehensive%20(Loss)%20Earnings%20and%20Accumulated%20Other%20Comprehensive%20Loss) This section presents comprehensive earnings attributable to Martin Marietta and accumulated other comprehensive loss Comprehensive (Loss) Earnings Attributable to Martin Marietta (Three Months Ended March 31, In Millions) | Metric | 2022 | 2021 | | :---------------------------------------------- | :-------- | :-------- | | Net earnings attributable to Martin Marietta | $21.4 | $65.3 | | Other comprehensive (loss) earnings, net of tax | $(31.6) | $2.8 | | Comprehensive (loss) earnings attributable to Martin Marietta | $(10.2) | $68.1 | - The **$33.3 million** **other comprehensive loss** in **Pension and Postretirement Benefit Plans** for Q1 2022 was due to a **remeasurement** of the **qualified pension plan's funded status**, following an amendment for **enhanced benefits** for eligible hourly employees[25](index=25&type=chunk) [Earnings per Common Share](index=10&type=section&id=Earnings%20per%20Common%20Share) This section details the calculation of basic and diluted earnings per common share from continuing operations Basic and Diluted EPS from Continuing Operations (Three Months Ended March 31, In Millions, Except Per Share Data) | Metric | 2022 | 2021 | | :------------------------------------------------------------------ | :----- | :----- | | Net earnings from continuing operations attributable to Martin Marietta | $24.5 | $65.3 |\n| Basic weighted-average common shares outstanding | 62.4 | 62.3 |\n| Diluted weighted-average common shares outstanding | 62.6 | 62.5 |\n| Basic from continuing operations attributable to common shareholders | $0.39 | $1.05 |\n| Diluted from continuing operations attributable to common shareholders | $0.39 | $1.04 | [Restricted Cash](index=11&type=section&id=Restricted%20Cash) This section provides information on the company's restricted cash balances and their purpose - As of March 31, 2022, there was no **restricted cash**, **down from** **$0.5 million** at December 31, 2021, which was held for like-kind exchange replacement assets under Section 1031[30](index=30&type=chunk)[31](index=31&type=chunk) [Note 2. Revenue Recognition](index=11&type=section&id=Note%202.%20Revenue%20Recognition) This note outlines the company's policies for recognizing revenue from products, services, and freight [Performance Obligations](index=12&type=section&id=Performance%20Obligations) This section describes the company's performance obligations for product sales and paving service agreements - **Product sales** are single-performance obligations satisfied at a point in time (shipment), while **paving service agreements** are satisfied over time (one day to two years)[34](index=34&type=chunk) - **Future revenues from unsatisfied performance obligations** were **$213.9 million** at March 31, 2022, **up from** **$172.8 million** at March 31, 2021[35](index=35&type=chunk) [Revenue by Category](index=12&type=section&id=Revenue%20by%20Category) This section provides a breakdown of total revenues by category and segment Total Revenues by Category and Segment (Three Months Ended March 31, In Millions) | Segment / Category | 2022 Products and Services | 2022 Freight | 2022 Total | 2021 Products and Services | 2021 Freight | 2021 Total | | :----------------- | :------------------------- | :----------- | :--------- | :------------------------- | :----------- | :--------- | | East Group | $394.6 | $24.2 | $418.8 | $372.5 | $22.4 | $394.9 | | West Group | $682.4 | $52.6 | $735.0 | $484.1 | $32.5 | $516.6 | | Building Materials | $1,077.0 | $76.8 | $1,153.8 | $856.6 | $54.9 | $911.5 | | Magnesia Specialties | $70.8 | $6.2 | $77.0 | $65.3 | $5.6 | $70.9 | | Total | $1,147.8 | $83.0 | $1,230.8 | $921.9 | $60.5 | $982.4 | - **Service revenues**, primarily from paving in California and Colorado, **increased** to **$18.3 million** in Q1 2022 **from** **$8.8 million** in Q1 2021, reported in the **West Group**[36](index=36&type=chunk) [Contract Balances](index=13&type=section&id=Contract%20Balances) This section details the company's contract assets and liabilities, including costs and billings Contract Balances (In Millions) | Metric | March 31, 2022 | December 31, 2021 | | :------------------------- | :------------- | :---------------- | | Costs in excess of billings | $3.9 | $4.3 | | Billings in excess of costs | $6.4 | $7.8 | - **Revenues recognized from the beginning balance of contract liabilities** were **$3.5 million** in Q1 2022, **down from** **$4.9 million** in Q1 2021[38](index=38&type=chunk) - **Retainage**, primarily for paving services, **decreased** to **$5.5 million** at March 31, 2022, **from** **$10.5 million** at December 31, 2021[39](index=39&type=chunk) [Policy Elections](index=13&type=section&id=Policy%20Elections) This section outlines the company's accounting policies, particularly for third-party freight delivery - The company treats **third-party freight delivery** as a fulfillment activity rather than a separate performance obligation, presenting related revenues and costs gross[40](index=40&type=chunk) [Note 3. Business Combinations and Discontinued Operations](index=13&type=section&id=Note%203.%20Business%20Combinations%20and%20Discontinued%20Operations) This note details recent acquisitions and provides information on operations classified as discontinued [Business Combinations](index=13&type=section&id=Business%20Combinations) This section details the company's recent acquisitions, including Lehigh West Region and other entities - In October 2021, the company acquired **Lehigh Hanson, Inc.'s West Region business** for **$2.26 billion**, primarily financed by debt, adding a new growth platform in California and Arizona[41](index=41&type=chunk) - Preliminary estimated fair values of assets acquired in the **Lehigh West Region acquisition** as of October 1, 2021, included **$992.8 million** in **goodwill** and **$551.0 million** in **other intangible assets**[44](index=44&type=chunk) - The company also acquired **Southern Crushed Concrete (SCC)** in July 2021 and **Tiller Corporation** in April 2021, both of which are subject to ongoing purchase accounting adjustments[44](index=44&type=chunk)[45](index=45&type=chunk) [Discontinued Operations](index=14&type=section&id=Discontinued%20Operations) This section provides financial details and plans for operations classified as discontinued - **Discontinued operations** include the **cement and California ready-mixed concrete businesses** acquired as part of the **Lehigh West Region acquisition**[46](index=46&type=chunk) Discontinued Operations Financials (Quarter Ended March 31, 2022, In Millions) | Metric | Amount | | :----------------- | :------- | | Total revenues | $94.7 | | Loss from operations | $(4.0) | | Pretax loss | $(4.1) | | Income tax benefit | $1.0 | | Net loss | $(3.1) | - The company announced a definitive agreement to sell the **Redding, California cement plant**, related distribution terminals, and **14 California ready mix operations** for **$250 million** cash, expected to close in H2 2022[48](index=48&type=chunk) - The **divestiture of Colorado and Central Texas ready mix concrete operations** was completed on April 1, 2022, **optimizing the aggregates-led portfolio**[49](index=49&type=chunk)[82](index=82&type=chunk) [Note 4. Goodwill](index=16&type=section&id=Note%204.%20Goodwill) This note presents changes in goodwill by reportable segment, reflecting purchase price adjustments and allocations Changes in Goodwill by Reportable Segment (In Millions) | Segment | Balance at Jan 1, 2022 | Adjustments to Purchase Price Allocations | Goodwill Allocated to Assets Held for Sale | Balance at Mar 31, 2022 | | :---------- | :--------------------- | :---------------------------------------- | :----------------------------------------- | :---------------------- | | East Group | $759.4 | $5.0 | — | $764.4 | | West Group | $2,735.0 | $3.8 | $(111.2) | $2,627.6 | | Total | $3,494.4 | $8.8 | $(111.2) | $3,392.0 | [Note 5. Inventories, Net](index=17&type=section&id=Note%205.%20Inventories,%20Net) This note provides a detailed breakdown of the company's inventory components and allowances Inventories, Net (In Millions) | Category | March 31, 2022 | December 31, 2021 | | :------------------------ | :------------- | :---------------- | | Finished products | $810.8 | $713.3 | | Products in process | $14.1 | $30.1 | | Raw materials | $83.9 | $69.6 | | Supplies and expendable parts | $133.5 | $153.9 | | Total (before allowances) | $1,042.3 | $966.9 | | Less: Allowances | $(259.9) | $(214.3) | | Total | $782.4 | $752.6 | [Note 6. Long-Term Debt](index=17&type=section&id=Note%206.%20Long-Term%20Debt) This note outlines the company's long-term debt structure, including senior notes and credit facilities [Long-Term Debt Schedule](index=17&type=section&id=Long-Term%20Debt%20Schedule) This section presents a detailed schedule of the company's long-term debt instruments and their maturities Long-Term Debt (In Millions) | Debt Instrument | March 31, 2022 | December 31, 2021 | | :-------------------------- | :------------- | :---------------- | | 0.650% Senior Notes, due 2023 | $697.8 | $697.4 | | 4.250% Senior Notes, due 2024 | $398.4 | $398.3 | | 7% Debentures, due 2025 | $124.6 | $124.6 | | 3.450% Senior Notes, due 2027 | $298.0 | $297.9 | | 3.500% Senior Notes, due 2027 | $496.5 | $496.4 | | 2.500% Senior Notes, due 2030 | $491.4 | $491.1 | | 2.400% Senior Notes, due 2031 | $892.1 | $891.8 | | 6.25% Senior Notes, due 2037 | $228.3 | $228.3 | | 4.250% Senior Notes, due 2047 | $592.1 | $592.1 | | 3.200% Senior Notes, due 2051 | $883.1 | $882.9 | | Other notes | $0.1 | $0.1 |\n| Total debt | $5,102.4 | $5,100.9 |\n| Less: Current maturities | $(0.1) | $(0.1) |\n| Long-term debt | $5,102.3 | $5,100.8 | [Trade Receivable Securitization Facility](index=18&type=section&id=Trade%20Receivable%20Securitization%20Facility) This section describes the company's trade receivable securitization facility and its utilization - The company has a **$400 million** **trade receivable securitization facility**, extended to September 21, 2022, with no outstanding borrowings at March 31, 2022, or December 31, 2021[55](index=55&type=chunk) [Revolving Facility](index=18&type=section&id=Revolving%20Facility) This section details the company's senior unsecured revolving credit facility and compliance with covenants - The company has an **$800 million** five-year senior unsecured **revolving facility** expiring December 21, 2026, with no outstanding borrowings at March 31, 2022, or December 31, 2021[56](index=56&type=chunk) - The **Revolving Facility** requires a **consolidated net debt-to-consolidated EBITDA ratio** not to exceed **3.50x** (or **4.00x** for certain acquisitions), and the company was in compliance at March 31, 2022[56](index=56&type=chunk) [Note 7. Financial Instruments](index=18&type=section&id=Note%207.%20Financial%20Instruments) This note describes the company's financial instruments and their fair value estimations - The company's **financial instruments** include **temporary cash investments**, **restricted cash**, **accounts receivable**, **notes receivable**, **accounts payable**, and **long-term debt**[58](index=58&type=chunk) - **Fair values** of **temporary cash investments**, **restricted cash**, **accounts receivable**, **notes receivable**, and **accounts payable** approximate their **carrying amounts** due to their short-term nature[59](index=59&type=chunk)[60](index=60&type=chunk)[61](index=61&type=chunk)[62](index=62&type=chunk) Long-Term Debt Carrying vs. Fair Values (In Millions) | Metric | March 31, 2022 | December 31, 2021 | | :---------- | :------------- | :---------------- | | Carrying Value | $5.10 billion | $5.10 billion | | Fair Value | $4.93 billion | $5.45 billion | [Note 8. Income Taxes](index=19&type=section&id=Note%208.%20Income%20Taxes) This note discusses the effective income tax rate and policies for unrecognized tax benefits - The **effective income tax rate** for continuing operations was **19.3%** for Q1 2022, a slight **decrease from** **19.5%** for Q1 2021[64](index=64&type=chunk) - Interest on **unrecognized tax benefits** is recorded as income tax expense, while penalties are recorded as operating expenses[65](index=65&type=chunk) [Note 9. Pension and Postretirement Benefits](index=20&type=section&id=Note%209.%20Pension%20and%20Postretirement%20Benefits) This note details the impact of pension plan amendments and net periodic benefit costs - A **pension plan amendment** in Q1 2022 provided **enhanced benefits** for eligible hourly employees, requiring a **remeasurement** of the **qualified pension plan's funded status**[67](index=67&type=chunk) - The **remeasurement**, performed as of February 28, 2022, used a **discount rate** of **3.75%**, **up from** **3.23%**, leading to higher **projected pension expense** for the year[67](index=67&type=chunk) Net Periodic Benefit Cost (Credit) (Three Months Ended March 31, In Millions) | Component | Pension 2022 | Pension 2021 | Postretirement Benefits 2022 | Postretirement Benefits 2021 | | :------------------------ | :----------- | :----------- | :--------------------------- | :--------------------------- | | Service cost | $11.5 | $11.6 | — | — | | Interest cost | $10.2 | $9.0 | $0.1 | $0.1 | | Expected return on assets | $(19.4) | $(17.6) | — | — | | Amortization of: | | | | | | Prior service cost (credit) | $1.2 | $0.2 | $(0.2) | $(0.2) | | Actuarial loss (gain) | $0.9 | $3.3 | $(0.1) | $(0.1) | | Net periodic benefit cost (credit) | $4.4 | $6.5 | $(0.2) | $(0.2) | [Note 10. Commitments and Contingencies](index=20&type=section&id=Note%2010.%20Commitments%20and%20Contingencies) This note addresses legal proceedings, borrowing arrangements with affiliates, and outstanding letters of credit [Legal and Administrative Proceedings](index=20&type=section&id=Legal%20and%20Administrative%20Proceedings) This section discusses the company's involvement in legal and administrative proceedings - The company believes the probability is remote that any currently pending **legal or administrative proceeding** will result in a **material loss**[69](index=69&type=chunk) [Borrowing Arrangements with Affiliate](index=20&type=section&id=Borrowing%20Arrangements%20with%20Affiliate) This section details the company's borrowing arrangements and loans with an unconsolidated affiliate - The company is a co-borrower for a **$12.5 million** **revolving line of credit** with an unconsolidated affiliate, with **$4.5 million** outstanding at March 31, 2022[70](index=70&type=chunk) - The company also has a **$6.0 million** **interest-only loan receivable** from this affiliate, due December 31, 2022[72](index=72&type=chunk) [Letters of Credit](index=21&type=section&id=Letters%20of%20Credit) This section reports the company's contingent liabilities related to outstanding letters of credit - At March 31, 2022, the company was **contingently liable** for **$17.2 million** in **letters of credit**, including **$2.6 million** issued under its **Revolving Facility**[73](index=73&type=chunk) [Note 11. Business Segments](index=21&type=section&id=Note%2011.%20Business%20Segments) This note describes the company's reportable segments and their performance evaluation criteria - The company's **reportable segments** are the **East Group** and **West Group** within the **Building Materials business**, and the **Magnesia Specialties segment**[74](index=74&type=chunk) - Performance evaluation and resource allocation are primarily based on **earnings from operations**, which exclude interest expense, other nonoperating income/expenses, and income taxes[74](index=74&type=chunk) Selected Financial Data for Reportable Segments (Three Months Ended March 31, In Millions) | Segment / Metric | 2022 Total Revenues | 2021 Total Revenues | 2022 Products and Services Revenues | 2021 Products and Services Revenues | 2022 Earnings (Loss) from Operations | 2021 Earnings (Loss) from Operations | | :------------------------ | :------------------ | :------------------ | :---------------------------------- | :---------------------------------- | :----------------------------------- | :----------------------------------- | | East Group | $418.8 | $394.9 | $394.6 | $372.5 | $28.0 | $61.7 | | West Group | $735.0 | $516.6 | $682.4 | $484.1 | $43.0 | $31.9 | | Total Building Materials | $1,153.8 | $911.5 | $1,077.0 | $856.6 | $71.0 | $93.6 | | Magnesia Specialties | $77.0 | $70.9 | $70.8 | $65.3 | $21.5 | $23.5 | | Corporate | N/A | N/A | N/A | N/A | $(32.6) | $(17.8) | | Total | $1,230.8 | $982.4 | $1,147.8 | $921.9 | $59.9 | $99.3 | [Note 12. Revenues and Gross Profit](index=23&type=section&id=Note%2012.%20Revenues%20and%20Gross%20Profit) This note provides a detailed breakdown of total revenues and gross profit by product line Total Revenues by Product Line (Three Months Ended March 31, In Millions) | Product Line | 2022 Products and Services | 2022 Freight | 2022 Total | 2021 Products and Services | 2021 Freight | 2021 Total | | :------------------------ | :------------------------- | :----------- | :--------- | :------------------------- | :----------- | :--------- | | Aggregates | $685.9 | N/A | N/A | $572.6 | N/A | N/A | | Cement | $134.3 | N/A | N/A | $109.6 | N/A | N/A | | Ready mixed concrete | $290.1 | N/A | N/A | $235.3 | N/A | N/A | | Asphalt and paving services | $54.8 | N/A | N/A | $12.2 | N/A | N/A | | Less: interproduct revenues | $(88.1) | N/A | N/A | $(73.1) | N/A | N/A | | Total Building Materials Products and Services | $1,077.0 | $76.8 | $1,153.8 | $856.6 | $54.9 | $911.5 | | Magnesia Specialties Products and Services | $70.8 | $6.2 | $77.0 | $65.3 | $5.6 | $70.9 | | Total | $1,147.8 | $83.0 | $1,230.8 | $921.9 | $60.5 | $982.4 | Gross Profit (Loss) by Product Line (Three Months Ended March 31, In Millions) | Product Line | 2022 Products and Services | 2022 Freight | 2022 Total | 2021 Products and Services | 2021 Freight | 2021 Total | | :------------------------ | :------------------------- | :----------- | :--------- | :------------------------- | :----------- | :--------- | | Aggregates | $101.9 | N/A | N/A | $121.8 | N/A | N/A | | Cement | $27.3 | N/A | N/A | $15.3 | N/A | N/A | | Ready mixed concrete | $21.1 | N/A | N/A | $19.4 | N/A | N/A | | Asphalt and paving services | $(13.3) | N/A | N/A | $(8.2) | N/A | N/A | | Total Building Materials Products and Services | $137.0 | $1.4 | $138.4 | $148.3 | $(0.3) | $148.0 | | Magnesia Specialties Products and Services | $26.8 | $(1.2) | $25.6 | $28.4 | $(0.9) | $27.5 |\n| Corporate | N/A | N/A | $(7.9) | N/A | N/A | $(0.8) |\n| Total | $156.1 | N/A | N/A | $174.7 | N/A | N/A | [Note 13. Supplemental Cash Flow Information](index=24&type=section&id=Note%2013.%20Supplemental%20Cash%20Flow%20Information) This note provides supplemental cash flow disclosures, including noncash activities and cash paid for taxes Noncash Investing and Financing Activities (Three Months Ended March 31, In Millions) | Activity | 2022 | 2021 | | :------------------------------------------------ | :----- | :------ | | Right-of-use assets obtained for new finance lease liabilities | $3.6 | $115.1 | | Right-of-use assets obtained for new operating lease liabilities | $6.1 | $6.0 | | Accrued liabilities for purchases of property, plant and equipment | $24.5 | $28.7 | | Remeasurement of operating lease right-of-use assets | $0.3 | $(6.2) | | Remeasurement of finance lease right-of-use assets | $0.4 | — | Supplemental Cash Flow Information (Three Months Ended March 31, In Millions) | Metric | 2022 | 2021 | | :------------------------------------ | :---- | :--- | | Cash paid for interest, net of capitalized amount | $44.8 | $14.8 | | Cash paid for income taxes, net of refunds | $0.8 | — | [Note 14. Subsequent Event](index=24&type=section&id=Note%2014.%20Subsequent%20Event) This note reports a significant event that occurred after the quarter-end: the divestiture of concrete operations - On April 1, 2022, the company **divested its Colorado and Central Texas ready-mixed concrete operations**, which is expected to result in a **gain**[82](index=82&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=24&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial performance and condition [Overview](index=25&type=section&id=OVERVIEW) This section provides an overview of the company's business, segments, and operational context - **Martin Marietta** is a **natural resource-based building materials company**, supplying **aggregates, cement, ready mixed concrete, asphalt, and paving services**[84](index=84&type=chunk) - The **Building Materials business** operates in two segments: **East Group** and **West Group**, while the **Magnesia Specialties business** is a separate segment[85](index=85&type=chunk)[88](index=88&type=chunk) - The **Building Materials business** is significantly affected by **weather patterns and seasonal changes**, with most construction activity occurring in spring, summer, and fall[87](index=87&type=chunk) [Critical Accounting Policies](index=26&type=section&id=CRITICAL%20ACCOUNTING%20POLICIES) This section discusses the company's critical accounting policies and any recent changes - There were no changes to the company's **critical accounting policies** during the three months ended March 31, 2022[89](index=89&type=chunk) [Results of Operations](index=26&type=section&id=RESULTS%20OF%20OPERATIONS) This section analyzes the company's financial performance, including revenue, profit, and segment results [Adjusted EBITDA Reconciliation](index=26&type=section&id=Adjusted%20EBITDA%20Reconciliation) This section provides a reconciliation of net earnings to Adjusted EBITDA, a non-GAAP measure Adjusted EBITDA (Three Months Ended March 31, In Millions) | Metric | 2022 | 2021 | Change | % Change | | :---------------------------------------------- | :----- | :----- | :------- | :------- | | Net Earnings from continuing operations attributable to Martin Marietta | $24.5 | $65.3 | $(40.8) | -62.48% | | Adjusted EBITDA | $197.2 | $205.6 | $(8.4) | -4.09% | [Mix-adjusted Average Selling Price (ASP)](index=27&type=section&id=Mix-adjusted%20Average%20Selling%20Price%20(ASP)) This section explains the mix-adjusted average selling price as a measure of pricing effectiveness - **Mix-adjusted average selling price (ASP)** is a **non-GAAP measure** used to evaluate **pricing effectiveness** by excluding product, geographic, and other mix impacts[92](index=92&type=chunk) West Group - Aggregates Pricing (Three Months Ended March 31) | Metric | 2022 | 2021 | | :-------------------------- | :------ | :------ | | Reported average selling price | $15.05 | $13.81 | | Mix-adjusted ASP | $14.47 | N/A | | Reported average selling price variance | 9.0% | N/A | | Mix-adjusted ASP variance | 4.8% | N/A | [Quarter Ended March 31, 2022 Financial Highlights](index=27&type=section&id=Quarter%20Ended%20March%2031,%202022%20Financial%20Highlights) This section summarizes key financial performance metrics for the quarter ended March 31, 2022 Q1 2022 Financial Highlights (In Millions, Except Per Share Data) | Metric | 2022 | 2021 | Change | % Change | | :---------------------------------------------- | :-------- | :-------- | :-------- | :------- | | Consolidated total revenues | $1,230.8 | $982.4 | $248.4 | 25.28% | | Building Materials products and services revenues | $1,080.0 | $856.6 | $223.4 | 26.08% | | Magnesia Specialties products revenues | $70.8 | $65.3 | $5.5 | 8.42% | | Consolidated gross profit | $156.1 | $174.7 | $(18.6) | -10.65% | | Consolidated earnings from operations | $59.9 | $99.3 | $(39.4) | -39.68% | | Net earnings from continuing operations attributable to Martin Marietta | $24.5 | $65.3 | $(40.8) | -62.48% | | Adjusted EBITDA | $197.2 | $205.6 | $(8.4) | -4.09% | | Earnings per diluted share from continuing operations | $0.39 | $1.04 | $(0.65) | -62.50% | [Segment and Product Line Performance](index=28&type=section&id=Segment%20and%20Product%20Line%20Performance) This section provides a detailed breakdown of financial performance by segment and product line [Total Revenues by Segment and Product Line](index=28&type=section&id=Total%20Revenues%20by%20Segment%20and%20Product%20Line) This section presents a detailed breakdown of total revenues by segment and product line Total Revenues by Segment and Product Line (Three Months Ended March 31, In Millions) | Segment / Product Line | 2022 Amount | 2021 Amount | | :--------------------- | :---------- | :---------- | | East Group Aggregates | $395.1 | $372.5 | | West Group Aggregates | $290.8 | $200.1 | | West Group Cement | $134.3 | $109.6 | | West Group Ready mixed concrete | $290.1 | $235.3 | | West Group Asphalt and paving | $54.8 | $12.2 | | Total Building Materials Products and services | $1,077.0 | $856.6 | | Total Building Materials Freight | $76.8 | $54.9 | | Total Building Materials business | $1,153.8 | $911.5 | | Magnesia Specialties Products | $70.8 | $65.3 | | Magnesia Specialties Freight | $6.2 | $5.6 | | Total Magnesia Specialties | $77.0 | $70.9 | | Grand Total | $1,230.8 | $982.4 | [Gross Profit (Loss) by Segment and Product Line](index=29&type=section&id=Gross%20Profit%20(Loss)%20by%20Segment%20and%20Product%20Line) This section details gross profit and loss by segment and product line, including percentage of revenues Gross Profit (Loss) by Segment and Product Line (Three Months Ended March 31, In Millions) | Product Line | 2022 Amount | 2022 % of Revenues | 2021 Amount | 2021 % of Revenues | | :------------------------ | :---------- | :----------------- | :---------- | :----------------- | | Aggregates | $101.9 | 14.9% | $121.8 | 21.3% | | Cement | $27.3 | 20.3% | $15.3 | 14.0% | | Ready mixed concrete | $21.1 | 7.3% | $19.4 | 8.3% | | Asphalt and paving | $(13.3) | (24.3)% | $(8.2) | (67.4)% | | Total Building Materials Products and services | $137.0 | 12.7% | $148.3 | 17.3% | | Total Building Materials Freight | $1.4 | N/A | $(0.3) | N/A | | Total Building Materials business | $138.4 | 12.0% | $148.0 | 16.2% | | Magnesia Specialties Products | $26.8 | 37.8% | $28.4 | 43.5% | | Magnesia Specialties Freight | $(1.2) | N/A | $(0.9) | N/A | | Total Magnesia Specialties | $25.6 | 33.3% | $27.5 | 38.8% | | Corporate | $(7.9) | N/A | $(0.8) | N/A | | Grand Total | $156.1 | 12.7% | $174.7 | 17.8% | [Selling, General & Administrative Expenses](index=30&type=section&id=Selling,%20General%20%26%20Administrative%20Expenses) This section analyzes selling, general, and administrative expenses by segment Selling, General & Administrative Expenses (Three Months Ended March 31, In Millions) | Segment | 2022 Amount | 2021 Amount | | :------------------------ | :---------- | :---------- | | East Group | $28.8 | $24.2 | | West Group | $41.3 | $33.3 | | Total Building Materials business | $70.1 | $57.5 | | Magnesia Specialties | $4.0 | $3.7 | | Corporate | $23.0 | $18.6 | | Total | $97.1 | $79.8 | - **Consolidated SG&A as a percentage of total revenues** **improved by** **20 basis points** to **7.9%** in Q1 2022 **from** **8.1%** in Q1 2021[109](index=109&type=chunk) [Earnings (Loss) from Operations by Segment](index=30&type=section&id=Earnings%20(Loss)%20from%20Operations%20by%20Segment) This section presents earnings and losses from operations broken down by reportable segment Earnings (Loss) from Operations by Segment (Three Months Ended March 31, In Millions) | Segment | 2022 Amount | 2022 % of Revenues | 2021 Amount | 2021 % of Revenues | | :------------------------ | :---------- | :----------------- | :---------- | :----------------- | | East Group | $28.0 | N/A | $61.7 | N/A | | West Group | $43.0 | N/A | $31.9 | N/A | | Total Building Materials business | $71.0 | N/A | $93.6 | N/A | | Magnesia Specialties | $21.5 | N/A | $23.5 | N/A | | Corporate | $(32.6) | N/A | $(17.8) | N/A | | Total | $59.9 | 4.9% | $99.3 | 10.1% | - **Consolidated earnings from operations** **decreased** to **$59.9 million** in Q1 2022 **from** **$99.3 million** in Q1 2021, driven by higher costs for energy, supplies, freight, and personnel[109](index=109&type=chunk) [Aggregates Volume and Pricing](index=30&type=section&id=Aggregates%20Volume%20and%20Pricing) This section details aggregates volume and pricing variances by segment, including organic growth Aggregates Volume/Pricing Variance (Three Months Ended March 31, % Change YoY) | Segment / Metric | Volume | Pricing | | :---------------- | :----- | :------ | | East Group | 1.1% | 5.1% | | West Group | 32.7% | 9.0% | | Total aggregates operations | 13.4% | 5.6% | | Organic aggregates operations | 2.5% | 6.5% | Aggregates Shipments (Three Months Ended March 31, In Millions of Tons) | Segment / Metric | 2022 | 2021 | | :---------------- | :--- | :--- | | East Group | 23.0 | 22.7 | | West Group | 19.1 | 14.4 | | Total aggregates operations | 42.1 | 37.1 | [Shipments and Average Selling Price by Product Line](index=31&type=section&id=Shipments%20and%20Average%20Selling%20Price%20by%20Product%20Line) This section provides shipment volumes and average selling prices for key building materials product lines Building Materials Shipments (Three Months Ended March 31, In Millions) | Product Line | 2022 | 2021 | % Change | | :------------------------ | :-------- | :-------- | :------- | | Aggregates (tons) | 42.1 | 37.1 | 13.4% | | Cement (tons) | 1.0 | 0.9 | 10.0% | | Ready Mixed Concrete (cubic yards) | 2.4 | 2.1 | 14.8% | | Asphalt (tons) | 0.7 | 0.1 | 509.1% | Building Materials Average Selling Price (Three Months Ended March 31) | Product Line | 2022 | 2021 | % Change | | :------------------------ | :-------- | :-------- | :------- | | Aggregates (per ton) | $16.17 | $15.31 | 5.6% | | Cement (per ton) | $129.11 | $115.49 | 11.8% | | Ready Mixed Concrete (per cubic yard) | $120.71 | $112.12 | 7.7% | | Asphalt (per ton) | $62.39 | $49.04 | 27.2% | [Aggregates End-Use Markets](index=32&type=section&id=Aggregates%20End-Use%20Markets) This section analyzes aggregates shipments by end-use market, including infrastructure and residential - **Organic aggregates shipments** to the **infrastructure market** **increased** **6.2%** (**32%** of Q1 shipments), driven by **highway widening projects**[101](index=101&type=chunk) - **Organic aggregates shipments** to the **nonresidential market** were **flat** (**36%** of Q1 shipments), with **strong warehousing demand** offset by **decreases** in major projects[102](index=102&type=chunk) - **Organic aggregates shipments** to the **residential market** **decreased** **2%** (**26%** of Q1 shipments) due to **supply chain issues**, **increased costs**, and **labor shortages**[103](index=103&type=chunk) - The **ChemRock/Rail market** saw a **20%** **increase** in volumes (**6%** of Q1 shipments), driven by **aglime and railroad ballast demand**[104](index=104&type=chunk) [Building Materials Business Performance Summary](index=32&type=section&id=Building%20Materials%20Business%20Performance%20Summary) This section summarizes the financial performance of the Building Materials business, highlighting key drivers - **Organic aggregates shipments** **increased** **2.5%** with pricing **up** **6.5%**; **total aggregates shipments** **grew** **13.4%** with pricing **up** **5.6%** (inclusive of acquisitions)[105](index=105&type=chunk) - **Aggregates product gross margin** **decreased** **640 basis points** to **14.9%**, primarily due to higher **diesel fuel costs** (**$12M**), **increased supplies, repair costs, contract service costs** (**$20M**), and higher **internal freight costs** (**$9M**)[105](index=105&type=chunk) - **Texas cement shipments** **increased** **10.0%** with pricing **up** **11.8%**, leading to a **630 basis point** **expansion** in **product gross margin** to **20.3%**[106](index=106&type=chunk) - **Ready mixed concrete shipments and pricing** **increased** **14.8%** and **7.7%** respectively (inclusive of acquired Arizona operations), but **product gross margin** **declined** **100 basis points** to **7.3%** due to higher **raw material and diesel costs**[107](index=107&type=chunk) - **Total asphalt shipments and pricing** **increased** **509.1%** and **27.2%** respectively (inclusive of acquired West Coast operations), but the business posted an **overall loss** consistent with historical first-quarter trends due to **seasonal closures**[107](index=107&type=chunk) [Magnesia Specialties Business Performance Summary](index=33&type=section&id=Magnesia%20Specialties%20Business%20Performance%20Summary) This section summarizes the financial performance of the Magnesia Specialties business - **Magnesia Specialties product revenues** **increased** **8.5%** to **$70.8 million**, driven by **robust global demand** and **improving domestic steel production**[108](index=108&type=chunk) - **Product gross margin** **decreased** **570 basis points** to **37.8%** due to higher costs for energy, supplies, and raw materials[108](index=108&type=chunk) - **First-quarter earnings from operations** for **Magnesia Specialties** were **$21.5 million** in 2022, **down from** **$23.5 million** in 2021[108](index=108&type=chunk) [Consolidated Operating Results Summary](index=33&type=section&id=Consolidated%20Operating%20Results%20Summary) This section provides a consolidated overview of the company's operating results - **Consolidated SG&A as a percentage of total revenues** **improved by** **20 basis points** to **7.9%** in Q1 2022[109](index=109&type=chunk) - **Consolidated earnings from operations** **decreased** to **$59.9 million** in Q1 2022 **from** **$99.3 million** in Q1 2021, primarily due to higher costs for energy, supplies, freight, and personnel[109](index=109&type=chunk) [Income Tax Expense](index=33&type=section&id=Income%20Tax%20Expense) This section discusses the company's income tax expense and effective tax rate - The **effective income tax rate** for continuing operations was **19.3%** for Q1 2022, compared to **19.5%** for Q1 2021[110](index=110&type=chunk) [Liquidity and Capital Resources](index=33&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) This section discusses the company's cash flow, capital investments, and financing resources Cash Flow from Operating Activities (Three Months Ended March 31, In Millions) | Metric | 2022 | 2021 | Change | % Change | | :---------------------------------------- | :----- | :----- | :------- | :------- | | Cash provided by operating activities | $169.9 | $191.9 | $(22.0) | -11.46% | | Depreciation, depletion and amortization | $128.2 | $98.6 | $29.6 | 30.02% | - **Capital investments** for the three months ended March 31, 2022, were **$139.8 million**, **up from** **$110.3 million** in the prior year[112](index=112&type=chunk) - The company **repurchased** **130,551 shares** of **common stock** for **$50.0 million** in Q1 2022, with **13,390,401 shares** remaining under authorization[113](index=113&type=chunk)[144](index=144&type=chunk) - At March 31, 2022, the company had **$1,197.4 million** of **unused borrowing capacity** under its **Revolving Facility** and **Trade Receivable Facility**, and no **publicly-traded debt** maturing before 2023[117](index=117&type=chunk) - The company **deferred** **$27.6 million** in **employer Social Security taxes** under the **CARES Act**, with the remaining half due by December 31, 2022[118](index=118&type=chunk) [Trends and Risks](index=34&type=section&id=TRENDS%20AND%20RISKS) This section refers to the Annual Report on Form 10-K for a comprehensive discussion of business risks - The company refers to its **Annual Report on Form 10-K** for the year ended December 31, 2021, for a comprehensive discussion of **business risks**[119](index=119&type=chunk) [Other Matters](index=34&type=section&id=OTHER%20MATTERS) This section provides cautionary statements regarding forward-looking information and risk factors - Investors are cautioned that **forward-looking statements** in this Form 10-Q involve **risks and uncertainties**, and **actual results may differ materially** from expectations[121](index=121&type=chunk) - Factors that could cause **actual results to differ** include the **COVID-19 pandemic**, **economic performance**, **construction market fluctuations**, **funding levels for public projects**, **weather conditions**, **volatility of fuel and other material costs**, **labor shortages**, and **regulatory changes**[122](index=122&type=chunk)[123](index=123&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=38&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section discusses the company's exposure to market risks, including interest rate and commodity price fluctuations - The company's operations are highly dependent on **interest rate-sensitive construction and steelmaking industries**, with **residential and nonresidential construction** accounting for **62%** of Q1 2022 **aggregates shipments**[129](index=129&type=chunk) - Demand for **aggregates** in the **infrastructure market** is affected by **federal, state, and local budget issues**[130](index=130&type=chunk) - The company has **variable-rate borrowing facilities** (**$800M** **Revolving Facility**, **$400M** **Trade Receivable Facility**) with no outstanding borrowings at March 31, 2022, but future borrowings are exposed to **interest rate risk**[131](index=131&type=chunk) - **Pension expense** is affected by **discount rates** and **expected return on assets**; a **remeasurement** in Q1 2022 due to a plan amendment **increased** the **discount rate by** approximately **50 basis points**[132](index=132&type=chunk) - **Organic energy expense** **increased** approximately **52%** in Q1 2022 compared to the prior-year period, driven by **higher prices for natural gas, diesel, electricity, and gasoline**, exacerbated by the **Russia-Ukraine conflict**[134](index=134&type=chunk) - **Cement is a commodity** with **prices highly sensitive to supply and demand changes**; a **hypothetical 10% change in sales price** would **impact** **full-year cement product revenues by** **$49.5 million**[136](index=136&type=chunk) - **Increases** in **cement costs**, a **key raw material for ready mixed concrete**, may not be fully passed on to customers; a **hypothetical 10% change in cement costs** would **impact** **ready mixed concrete cost of revenues by** **$32.3 million**[137](index=137&type=chunk) [Item 4. Controls and Procedures](index=39&type=section&id=Item%204.%20Controls%20and%20Procedures) This section confirms the effectiveness of disclosure controls and internal control over financial reporting - The company's **disclosure controls and procedures** were **effective** as of March 31, 2022[140](index=140&type=chunk) - There were no **material changes** in the company's **internal control over financial reporting** during the most recently completed fiscal quarter that materially affected, or are reasonably likely to materially affect, **internal control over financial reporting**[140](index=140&type=chunk) [PART II. OTHER INFORMATION](index=40&type=section&id=Part%20II.%20Other%20Information) This section covers legal proceedings, risk factors, equity sales, mine safety disclosures, and other exhibits [Item 1. Legal Proceedings](index=40&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to the notes to financial statements for information on legal and administrative proceedings - Information concerning **Legal and administrative proceedings** is provided in Note 10 Commitments and Contingencies[142](index=142&type=chunk) [Item 1A. Risk Factors](index=40&type=section&id=Item%201A.%20Risk%20Factors) This section directs readers to the Annual Report on Form 10-K for a comprehensive discussion of risk factors - Reference is made to Part I. Item 1A. **Risk Factors** and Forward-Looking Statements of the **Martin Marietta Annual Report on Form 10-K** for the year ended December 31, 2021, for a detailed discussion of risks[143](index=143&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=40&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the company's common stock repurchase activities and remaining authorization Issuer Purchases of Equity Securities (Three Months Ended March 31, 2022) | Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Number of Shares that May Yet be Purchased Under the Plans or Programs | | :----------------------------------- | :------------------------------- | :--------------------------- | :------------------------------------------------------------------------------- | :----------------------------------------------------------------------------- | | January 1, 2022 - January 31, 2022 | — | $— | — | 13,520,952 | | February 1, 2022 - February 28, 2022 | 130,551 | $382.99 | 130,551 | 13,390,401 | | March 1, 2022 - March 31, 2022 | — | $— | — | 13,390,401 | | Total | 130,551 | N/A | 130,551 | N/A | - The company's **Board of Directors authorized** a maximum of **20 million shares** for repurchase under a program with no expiration date, announced on February 10, 2015[144](index=144&type=chunk) [Item 4. Mine Safety Disclosures](index=40&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section indicates that mine safety disclosures are provided in Exhibit 95 of the report - **Mine safety disclosures**, as required by Section 1503(a) of the Dodd-Frank Act and Item 104 of Regulation S-K, are included in **Exhibit 95** to this Quarterly Report on Form 10-Q[145](index=145&type=chunk) [Item 6. Exhibits](index=41&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed as part of the Form 10-Q, including certifications from the CEO and CFO, written statements, mine safety disclosures, and various Inline XBRL documents - The **exhibits** include **certifications** (31.01, 31.02) and **written statements** (32.01, 32.02) from the **Chief Executive Officer** and **Chief Financial Officer**, **mine safety disclosures** (95), and various **Inline XBRL documents** (101.INS, 101.SCH, 101.CAL, 101.LAB, 101.PRE, 101.DEF, 104)[148](index=148&type=chunk) [Signatures](index=42&type=section&id=SIGNATURES) This section provides the official certification and signing details for the quarterly report - The report was **signed on** May 3, 2022, by **James A. J. Nickolas**, **Sr. Vice President and Chief Financial Officer**, on behalf of **Martin Marietta Materials, Inc.**[150](index=150&type=chunk) ```