UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, ~~D.C.~~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, ~~2021~~2022


☐	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~~ Number: 1-12744

MARTIN MARIETTA MATERIALS, INC.

(Exact ~~name~~Name of ~~registrant~~Registrant as ~~specified~~Specified in its ~~charter)~~Charter)

~~North Carolina~~		~~56-1848578~~
North Carolina	56-1848578
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification ~~Number)~~No.)

4123 Parklake Avenue, Raleigh, NC	27612	~~27612~~
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: ~~919-781-4550~~(919) 781-4550

~~(Former name, former address and former fiscal year, if changes since last report)~~

Securities registered pursuant to Section 12(b) of the Act:

Title of ~~Each Class~~each class

Trading

~~Trading~~ Symbol(s)

Name of each exchange on
which registered

Common Stock (Par Value $0.01)

~~MLM~~

~~NYSE~~MLM

NYSE

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes☑☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes☑☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

~~Large accelerated filer~~	☑	~~Accelerated filer~~	☐
~~Non-accelerated filer~~	☐	~~Smaller reporting company~~	☐
Large accelerated filer	☒	Accelerated filer	☐

Non-accelerated filer	☐	Smaller reporting company	☐

Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the ~~Securities~~Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☑☒

Indicate the number of shares outstanding of each of the issuer’s classes of Common Stock, as of the latest practicable date.


Class		Outstanding as of October ~~28, 2021~~27, 2022
Common Stock, $0.01 par value		~~62,381,891~~62,090,694

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended September 30, ~~2021~~2022


	Page
Part I. Financial Information:

Item 1. Financial Statements

Consolidated Balance Sheets – September 30, ~~2021~~2022 and December 31, ~~2020~~2021		3

Consolidated Statements of Earnings and Comprehensive Earnings – Three and Nine Months Ended September 30, ~~2021~~2022 and ~~2020~~2021		4

Consolidated Statements of Cash Flows – Nine Months Ended September 30, ~~2021~~2022 and ~~2020~~ 2021		5

Consolidated ~~Statement~~Statements of Total Equity – Three and Nine Months Ended September 30, ~~2021~~2022 and ~~2020~~ 2021		6

Notes to Consolidated Financial Statements		8

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		2826

Item 3. Quantitative and Qualitative Disclosures About Market Risk		5049

Item 4. Controls and Procedures		5150

Part II. Other Information:

Item 1. Legal Proceedings		5251

Item 1A. Risk Factors		5251

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		5251

Item 4. Mine Safety Disclosures		5251

Item 6. Exhibits		5352

Signatures		5453

Page 2 of 5453

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

(UNAUDITED) CONSOLIDATED BALANCE SHEETS


	September 30,			December 31,			September 30,			December 31,
	2021			2020			2022			2021
	(Dollars in Millions, Except Par Value Data)						(In Millions, Except Par Value Data)
ASSETS
Current Assets:
Cash and cash equivalents	$	2,381.4		$	207.3		$	135.7		$	258.4
Restricted cash		1.7			97.1			—			0.5
Restricted investments (to satisfy discharged debt and related interest)								704.6			—
Accounts receivable, net		801.9			575.1			1,011.7			774.0
Inventories, net		717.5			709.0			823.4			752.6
Current assets held for sale								79.5			102.2
Other current assets		98.2			79.8			92.4			137.9
Total Current Assets		4,000.7			1,668.3			2,847.3			2,025.6

Property, plant and equipment		9,536.9			8,955.0			10,400.0			10,370.0
Allowances for depreciation, depletion and amortization		(3,926.4	)		(3,712.7	)		(4,246.2	)		(4,032.0	)
Net property, plant and equipment		5,610.5			5,242.3			6,153.8			6,338.0
Goodwill		2,610.6			2,414.0			3,640.4			3,494.4
Other intangibles, net		787.2			508.0			855.7			1,065.0
Operating lease right-of-use assets, net		417.8			453.0			397.3			426.7
Noncurrent assets held for sale								375.1			616.9
Other noncurrent assets		359.4			295.2			460.1			426.4
Total Assets	$	13,786.2		$	10,580.8		$	14,729.7		$	14,393.0

LIABILITIES AND EQUITY
Current Liabilities:
Accounts payable	$	249.3		$	207.8		$	333.5		$	356.2
Accrued salaries, benefits and payroll taxes		65.5			82.6			77.1			86.6
Accrued other taxes		59.4			45.4			57.9			58.4
Current maturities of long-term debt and short-term facilities		20.1			—
Accrued interest		46.1			18.3			41.1			48.0
Current maturities of discharged long-term debt								698.7			—
Operating lease liabilities		47.3			48.6			55.0			53.9
Current liabilities held for sale								4.6			7.5
Other current liabilities		113.5			96.6			151.8			142.0
Total Current Liabilities		601.2			499.3			1,419.7			752.6

Long-term debt		5,099.4			2,625.8			4,339.9			5,100.8
Deferred income taxes, net		809.3			781.5			886.0			895.3
Noncurrent operating lease liabilities		375.9			410.4			348.4			379.4
Noncurrent liabilities held for sale								23.8			53.5
Other noncurrent liabilities		542.2			370.5			774.1			673.8
Total Liabilities		7,428.0			4,687.5			7,791.9			7,855.4

Equity:
Common stock, par value $0.01 per share (62.4 and 62.3 shares outstanding at September 30, 2021 and December 31, 2020, respectively)		0.6			0.6
Preferred stock, par value $0.01 per share		—			—
Common stock, par value $0.01 per share (62.1 shares and 62.4 shares outstanding at September 30, 2022 and December 31, 2021, respectively)								0.6			0.6
Preferred stock, par value $0.01 per share								—			—
Additional paid-in capital		3,463.3			3,440.8			3,483.2			3,470.4
Accumulated other comprehensive loss		(151.4	)		(158.4	)		(125.1	)		(97.6	)
Retained earnings		3,043.4			2,607.7			3,577.0			3,161.9
Total Shareholders' Equity		6,355.9			5,890.7			6,935.7			6,535.3
Noncontrolling interests		2.3			2.6			2.1			2.3
Total Equity		6,358.2			5,893.3			6,937.8			6,537.6
Total Liabilities and Equity	$	13,786.2		$	10,580.8		$	14,729.7		$	14,393.0

See accompanying notes to the consolidated financial statements.

Page 3 of 5453

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

(UNAUDITED) CONSOLIDATED STATEMENTS OF EARNINGS AND COMPREHENSIVE EARNINGS


	Three Months Ended						Nine Months Ended						Three Months Ended						Nine Months Ended
	September 30,						September 30,						September 30,						September 30,
	2021			2020			2021			2020			2022			2021			2022			2021
	(In Millions, Except Per Share Data)												(In Millions, Except Per Share Data)
Products and services revenues	$	1,462.7		$	1,240.7		$	3,679.9		$	3,321.2		$	1,680.5		$	1,462.7		$	4,352.1		$	3,679.9
Freight revenues		94.6			80.7			237.7			229.1			131.2			94.6			332.1			237.7
Total Revenues		1,557.3			1,321.4			3,917.6			3,550.3			1,811.7			1,557.3			4,684.2			3,917.6

Cost of revenues - products and services		1,021.0			836.1			2,676.9			2,390.9			1,193.8			1,021.0			3,281.3			2,676.9
Cost of revenues - freight		94.4			80.8			239.0			232.0			130.1			94.4			333.8			239.0
Total Cost of Revenues		1,115.4			916.9			2,915.9			2,622.9			1,323.9			1,115.4			3,615.1			2,915.9

Gross Profit		441.9			404.5			1,001.7			927.4			487.8			441.9			1,069.1			1,001.7

Selling, general & administrative expenses		86.0			71.1			248.2			221.0			94.9			86.0			296.0			248.2
Acquisition-related expenses		7.4			0.4			18.0			1.2
Acquisition and integration expenses														1.8			7.4			6.1			18.0
Other operating income, net		(8.4	)		(67.6	)		(28.2	)		(59.6	)		(14.8	)		(8.4	)		(177.4	)		(28.2	)
Earnings from Operations		356.9			400.6			763.7			764.8			405.9			356.9			944.4			763.7

Interest expense		44.3			28.7			99.9			89.7			42.8			44.3			126.4			99.9
Other nonoperating income, net		(5.6	)		(4.0	)		(23.8	)		(5.9	)		(7.3	)		(5.6	)		(40.1	)		(23.8	)
Earnings before income tax expense		318.2			375.9			687.6			681.0
Earnings from continuing operations before income tax expense														370.4			318.2			858.1			687.6
Income tax expense		63.6			81.5			141.7			143.0			79.2			63.6			189.4			141.7
Earnings from continuing operations														291.2			254.6			668.7			545.9
Earnings from discontinued operations, net of income tax expense														4.1			—			14.3			—
Consolidated net earnings		254.6			294.4			545.9			538.0			295.3			254.6			683.0			545.9
Less: Net earnings attributable to noncontrolling interests		—			—			0.2			—
Net Earnings Attributable to Martin Marietta Materials, Inc.	$	254.6		$	294.4		$	545.7		$	538.0
Less: Net (loss) earnings attributable to noncontrolling interests														—			—			(0.2	)		0.2
Net Earnings Attributable to Martin Marietta													$	295.3		$	254.6		$	683.2		$	545.7

Consolidated Comprehensive Earnings:
Earnings attributable to Martin Marietta Materials, Inc.	$	256.2		$	298.0		$	552.7		$	545.2
Earnings attributable to noncontrolling interests		—			—			0.2			—
Consolidated Comprehensive Earnings (Loss):
Earnings attributable to Martin Marietta													$	298.3		$	256.2		$	655.7		$	552.7
(Loss) Earnings attributable to noncontrolling interests														—			—			(0.2	)		0.2
	$	256.2		$	298.0		$	552.9		$	545.2		$	298.3		$	256.2		$	655.5		$	552.9
Net Earnings Attributable to Martin Marietta Materials, Inc.
Net Earnings Attributable to Martin Marietta
Per Common Share:
Basic attributable to common shareholders	$	4.08		$	4.72		$	8.74		$	8.63
Diluted attributable to common shareholders	$	4.07		$	4.71		$	8.72		$	8.61
Basic from continuing operations attributable to common shareholders													$	4.67		$	4.08		$	10.73		$	8.74
Basic from discontinued operations attributable to common shareholders														0.07			—			0.23			—
													$	4.74		$	4.08		$	10.96		$	8.74

Diluted from continuing operations attributable to common shareholders													$	4.67		$	4.07		$	10.69		$	8.72
Diluted from discontinued operations attributable to common shareholders														0.06			—			0.23			—
													$	4.73		$	4.07		$	10.92		$	8.72

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

See accompanying notes to the consolidated financial statements.

Page 4 of 5453

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

(UNAUDITED) CONSOLIDATED STATEMENTS OF CASH FLOWS


	Nine Months Ended						Nine Months Ended
	September 30,						September 30,
	2021			2020			2022			2021
	(Dollars in Millions)						(Dollars in Millions)
Cash Flows from Operating Activities:
Consolidated net earnings	$	545.9		$	538.0		$	683.0		$	545.9
Adjustments to reconcile consolidated net earnings to net cash provided by operating activities:
Depreciation, depletion and amortization		320.0			292.2			380.3			320.0
Stock-based compensation expense		33.0			22.4			34.3			33.0
Gain on divestitures and sales of assets		(26.6	)		(71.2	)
Deferred income taxes		25.7			24.8
Gain on divestitures, sales of assets and extinguishment of debt								(190.7	)		(26.6	)
Deferred income taxes, net								(1.0	)		25.7
Other items, net		(8.3	)		0.8			(1.0	)		(8.3	)
Changes in operating assets and liabilities, net of effects of acquisitions and divestitures:
Accounts receivable, net		(218.0	)		(104.5	)		(237.9	)		(218.0	)
Inventories, net		65.1			(22.6	)		(87.0	)		65.1
Accounts payable		66.9			(0.8	)		18.1			66.9
Other assets and liabilities, net		(23.4	)		4.9			(37.4	)		(23.4	)
Net Cash Provided by Operating Activities		780.3			684.0			560.7			780.3

Cash Flows from Investing Activities:
Additions to property, plant and equipment		(321.3	)		(250.8	)		(309.1	)		(321.3	)
Acquisitions, net of cash acquired		(792.9	)		(64.0	)		11.0			(792.9	)
Proceeds from divestitures and sales of assets		41.4			141.2			679.1			41.4
Purchase of restricted investments to discharge long-term debt								(704.6	)		—
Investments in life insurance contracts, net		13.9			(12.7	)		2.2			13.9
Other investing activities, net		—			(5.4	)		(3.0	)		—
Net Cash Used for Investing Activities		(1,058.9	)		(191.7	)		(324.4	)		(1,058.9	)

Cash Flows from Financing Activities:
Borrowings of debt		2,896.6			628.1			—			2,896.6
Repayments of debt		(400.0	)		(777.0	)		(54.5	)		(400.0	)
Payments on financing leases		(7.6	)		(2.3	)
Debt issuance costs		(6.1	)		(2.0	)
Payments on finance lease obligations								(11.1	)		(7.6	)
Debt issuance and extinguishment costs								(0.3	)		(6.1	)
Distributions to owners of noncontrolling interest		(0.5	)		—			—			(0.5	)
Repurchases of common stock		—			(50.0	)		(150.0	)		—
Dividends paid		(109.7	)		(104.8	)		(118.1	)		(109.7	)
Proceeds from exercise of stock options		1.1			1.4			0.6			1.1
Shares withheld for employees' income tax obligations		(16.5	)		(13.0	)		(26.1	)		(16.5	)
Net Cash Provided by (Used for) Financing Activities		2,357.3			(319.6	)
Net Increase in Cash, Cash Equivalents and Restricted Cash		2,078.7			172.7
Net Cash (Used for) Provided by Financing Activities								(359.5	)		2,357.3
Net (Decrease) Increase in Cash, Cash Equivalents and Restricted Cash								(123.2	)		2,078.7
Cash, Cash Equivalents and Restricted Cash, beginning of period		304.4			21.0			258.9			304.4
Cash, Cash Equivalents and Restricted Cash, end of period	$	2,383.1		$	193.7		$	135.7		$	2,383.1

See accompanying notes to the consolidated financial statements.

Page 5 of 5453

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

(UNAUDITED) CONSOLIDATED STATEMENTS OF TOTAL EQUITY


(In Millions, Except Per Share Data)	Shares of Common Stock		Common Stock		Additional Paid-in Capital			Accumulated Other Comprehensive Loss			Retained Earnings			Total Shareholders' Equity			Noncontrolling Interests			Total Equity			Shares of Common Stock			Common Stock		Additional Paid-in Capital			Accumulated Other Comprehensive Loss			Retained Earnings			Total Shareholders' Equity			Noncontrolling Interests			Total Equity
Balance at June 30, 2021		62.4	$	0.6	$	3,451.1		$	(153.0	)	$	2,827.2		$	6,125.9		$	2.3		$	6,128.2
Balance at June 30, 2022																								62.4		$	0.6	$	3,474.4		$	(128.1	)	$	3,423.1		$	6,770.0		$	2.1		$	6,772.1
Consolidated net earnings		—		—		—			—			254.6			254.6			—			254.6			—			—		—			—			295.3			295.3			—			295.3
Other comprehensive earnings, net of tax		—		—		—			1.6						1.6			—			1.6			—			—		—			3.0			—			3.0			—			3.0
Dividends declared ($0.61 per share)		—		—		—			—			(38.4	)		(38.4	)		—			(38.4	)
Dividends declared ($0.66 per share)																								—			—		—			—			(41.4	)		(41.4	)		—			(41.4	)
Shares withheld for employees' income tax obligations																								—			—		(1.1	)		—			—			(1.1	)		—			(1.1	)
Repurchases of common stock																								(0.3	)		—		—			—			(100.0	)		(100.0	)		—			(100.0	)
Stock-based compensation expense																								—			—		9.9			—			—			9.9			—			9.9
Balance at September 30, 2022																								62.1		$	0.6	$	3,483.2		$	(125.1	)	$	3,577.0		$	6,935.7		$	2.1		$	6,937.8

Balance at December 31, 2021																								62.4		$	0.6	$	3,470.4		$	(97.6	)	$	3,161.9		$	6,535.3		$	2.3		$	6,537.6
Consolidated net earnings (loss)																								—			—		—			—			683.2			683.2			(0.2	)		683.0
Other comprehensive loss, net of tax																								—			—		—			(27.5	)		—			(27.5	)		—			(27.5	)
Dividends declared ($1.88 per share)																								—			—		—			—			(118.1	)		(118.1	)		—			(118.1	)
Issuances of common stock for stock award plans		—		—		0.4			—			—			0.4			—			0.4			0.1			—		4.7			—			—			4.7			—			4.7
Shares withheld for employees' income tax obligations		—		—		(0.4	)		—			—			(0.4	)		—			(0.4	)		—			—		(26.2	)		—			—			(26.2	)		—			(26.2	)
Repurchases of common stock																								(0.4	)		—		—			—			(150.0	)		(150.0	)		—			(150.0	)
Stock-based compensation expense		—		—		12.2			—			—			12.2			—			12.2			—			—		34.3			—			—			34.3			—			34.3
Balance at September 30, 2021		62.4	$	0.6	$	3,463.3		$	(151.4	)	$	3,043.4		$	6,355.9		$	2.3		$	6,358.2

Balance at December 31, 2020		62.3	$	0.6	$	3,440.8		$	(158.4	)	$	2,607.7		$	5,890.7		$	2.6		$	5,893.3
Consolidated net earnings		—		—		—			—			545.7			545.7			0.2			545.9
Other comprehensive earnings, net of tax		—		—		—			7.0			—			7.0			—			7.0
Dividends declared ($1.75 per share)		—		—		—			—			(110.0	)		(110.0	)		—			(110.0	)
Issuances of common stock for stock award plans		0.1		—		6.0			—			—			6.0			—			6.0
Shares withheld for employees' income tax obligations		—		—		(16.5	)		—			—			(16.5	)		—			(16.5	)
Stock-based compensation expense		—		—		33.0			—			—			33.0			—			33.0
Distributions to owners of noncontrolling interest		—		—		—			—			—			—			(0.5	)		(0.5	)
Balance at September 30, 2021		62.4	$	0.6	$	3,463.3		$	(151.4	)	$	3,043.4		$	6,355.9		$	2.3		$	6,358.2
Balance at September 30, 2022																								62.1		$	0.6	$	3,483.2		$	(125.1	)	$	3,577.0		$	6,935.7		$	2.1		$	6,937.8

See accompanying notes to the consolidated financial statements.

Page 6 of 5453

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

(UNAUDITED) CONSOLIDATED STATEMENTS OF TOTAL EQUITY (Continued)


(In Millions, Except Per Share Data)	Shares of Common Stock			Common Stock		Additional Paid-in Capital			Accumulated Other Comprehensive Loss			Retained Earnings			Total Shareholders' Equity			Noncontrolling Interests		Total Equity			Shares of Common Stock		Common Stock		Additional Paid-in Capital			Accumulated Other Comprehensive Loss			Retained Earnings			Total Shareholders' Equity			Noncontrolling Interests			Total Equity
Balance at June 30, 2020		62.3		$	0.6	$	3,431.0		$	(142.2	)	$	2,201.7		$	5,491.1		$	2.5	$	5,493.6
Balance at June 30, 2021																								62.4	$	0.6	$	3,451.1		$	(153.0	)	$	2,827.2		$	6,125.9		$	2.3		$	6,128.2
Consolidated net earnings		—			—		—			—			294.4			294.4			—		294.4			—		—		—			—			254.6			254.6			—			254.6
Other comprehensive earnings, net of tax		—			—		—			3.6			—			3.6			—		3.6			—		—		—			1.6			—			1.6			—			1.6
Dividends declared ($0.57 per share)		—			—		—			—			(35.6	)		(35.6	)		—		(35.6	)
Dividends declared ($0.61 per share)																								—		—		—			—			(38.4	)		(38.4	)		—			(38.4	)
Issuances of common stock for stock award plans		—			—		0.2			—			—			0.2			—		0.2			—		—		0.4			—			—			0.4			—			0.4
Shares withheld for employees' income tax obligations																								—		—		(0.4	)		—			—			(0.4	)		—			(0.4	)
Stock-based compensation expense		—			—		2.7			—			—			2.7			—		2.7			—		—		12.2			—			—			12.2			—			12.2
Balance at September 30, 2020		62.3		$	0.6	$	3,433.9		$	(138.6	)	$	2,460.5		$	5,756.4		$	2.5	$	5,758.9
Balance at September 30, 2021																								62.4	$	0.6	$	3,463.3		$	(151.4	)	$	3,043.4		$	6,355.9		$	2.3		$	6,358.2

Balance at December 31, 2019		62.4		$	0.6	$	3,418.8		$	(145.8	)	$	2,077.2		$	5,350.8		$	2.5	$	5,353.3
Balance at December 31, 2020																								62.3	$	0.6	$	3,440.8		$	(158.4	)	$	2,607.7		$	5,890.7		$	2.6		$	5,893.3
Consolidated net earnings		—			—		—			—			538.0			538.0			—		538.0			—		—		—			—			545.7			545.7			0.2			545.9
Other comprehensive earnings, net of tax		—			—		—			7.2			—			7.2			—		7.2			—		—		—			7.0			—			7.0			—			7.0
Dividends declared ($1.67 per share)		—			—		—			—			(104.7	)		(104.7	)		—		(104.7	)
Dividends declared ($1.75 per share)																								—		—		—			—			(110.0	)		(110.0	)		—			(110.0	)
Issuances of common stock for stock award plans		0.1			—		5.7			—			—			5.7			—		5.7			0.1		—		6.0			—			—			6.0			—			6.0
Shares withheld for employees' income tax obligations		—			—		(13.0	)		—			—			(13.0	)		—		(13.0	)		—		—		(16.5	)		—			—			(16.5	)		—			(16.5	)
Repurchases of common stock		(0.2	)		—		—			—			(50.0	)		(50.0	)		—		(50.0	)
Stock-based compensation expense		—			—		22.4			—			—			22.4			—		22.4			—		—		33.0			—			—			33.0			—			33.0
Balance at September 30, 2020		62.3		$	0.6	$	3,433.9		$	(138.6	)	$	2,460.5		$	5,756.4		$	2.5	$	5,758.9
Distributions to owners of noncontrolling interest																								—		—		—			—			—			—			(0.5	)		(0.5	)
Balance at September 30, 2021																								62.4	$	0.6	$	3,463.3		$	(151.4	)	$	3,043.4		$	6,355.9		$	2.3		$	6,358.2

See accompanying notes to the consolidated financial statements.

Page 7 of 5453

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended September 30, ~~2021~~2022

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.	~~Significant Accounting Policies~~

~~Organization~~

Significant Accounting Policies

Organization

Martin Marietta Materials, Inc. (the Company or Martin Marietta) is a natural resource-based building materials company. As of September 30, ~~2021,~~2022, the Company supplies aggregates (crushed stone, sand and gravel) through its network of approximately ~~320~~350 quarries, mines and distribution yards in 2628 states, Canada and The Bahamas. ~~In the southwestern and western United States,~~ Martin Marietta also provides cement and downstream products and services, namely, ready mixed concrete, asphalt and paving, in vertically-integrated structured markets where the Company has a leading aggregates position. In addition, the Company has one cement plant, related cement distribution terminals and ready mixed concrete operations in California that are classified as assets held for sale and discontinued operations as of and for the nine months ended September 30, 2022 and as of December 31, 2021. The Company’s heavy-side building materials are used in infrastructure, nonresidential and residential construction projects. Aggregates are also used in agricultural, utility and environmental applications and as railroad ballast. The aggregates, cement, ready mixed concrete, asphalt and paving product lines are reported collectively as the “Building Materials” business.

The Company’s Building Materials business includes 2two reportable segments: the East Group and the West Group.


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

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

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

Basis of Presentation

The accompanying unaudited consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP) for interim financial information and with the instructions to the Quarterly Report on Form 10-Q and in Article 10 of Regulation S-X. The Company has continued to follow the accounting policies set forth in the audited consolidated financial statements and related notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2020.~~2021. In the opinion of management, the interim consolidated financial information provided herein reflects all adjustments, consisting of normal recurring accruals, necessary for a fair statement of the results of operations, financial position and cash flows for the interim periods. The consolidated results of operations for the three and nine months ended September 30, ~~2021~~2022 are not necessarily indicative of the results expected for other interim periods or the full year. The consolidated balance sheet at December 31, ~~2020~~2021 has been derived from the audited consolidated financial

Page 8 of 53

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended September 30, 2022

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Continued)

statements at that date but does not include all of the information and notes required by U.S. GAAP for complete financial statements. These consolidated financial statements should be read in conjunction with the audited

~~Page 8 of 54~~

~~MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES~~

~~FORM 10-Q~~

~~For the Quarter Ended September 30, 2021~~

~~(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Continued)~~

consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2020.~~2021.

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

~~Reclassifications~~

~~As of January 1, 2021, the Company reclassified accrued income taxes from~~ ~~Other current liabilities~~ to ~~Accrued other taxes~~ on the Company’s consolidated balance sheet. Prior-year information has been reclassified to conform to current year presentation. The reclassification had no impact on the Company’s previously reported results of operations, financial position or cash flows.

Consolidated Comprehensive Earnings (Loss) and Accumulated Other Comprehensive Loss

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

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

Three Months Ended

Nine Months Ended

September 30,

September 30,

2021

2020

2021

2020

(Dollars in Millions)

Net earnings attributable to Martin Marietta

$
254.6

$
294.4

$
545.7

$
538.0

Other comprehensive earnings, net of tax

1.6

3.6

7.0

7.2

Comprehensive earnings attributable to Martin
Marietta

$
256.2

$
298.0

$
552.7

$
545.2


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2022		2021		2022			2021
	(Dollars in Millions)
Net earnings attributable to Martin Marietta	$	295.3	$	254.6	$	683.2		$	545.7
Other comprehensive earnings (loss), net of tax		3.0		1.6		(27.5	)		7.0
Consolidated comprehensive earnings attributable to Martin Marietta	$	298.3	$	256.2	$	655.7		$	552.7

Page 9 of 5453

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended September 30, ~~2021~~2022

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Continued)

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


	(Dollars in Millions)									(Dollars in Millions)
	Pension and Postretirement Benefit Plans			Foreign Currency			Accumulated Other Comprehensive Loss			Pension and Postretirement Benefit Plans			Foreign Currency			Accumulated Other Comprehensive Loss
	Three Months Ended September 30, 2021									Three Months Ended September 30, 2022
Balance at beginning of period	$	(153.5	)	$	0.5		$	(153.0	)	$	(127.6	)	$	(0.5	)	$	(128.1	)
Other comprehensive loss before reclassifications, net of tax		—			(0.6	)		(0.6	)		—			(1.9	)		(1.9	)
Amounts reclassified from accumulated other comprehensive loss, net of tax		2.2			—			2.2			4.9			—			4.9
Other comprehensive earnings (loss), net of tax		2.2			(0.6	)		1.6			4.9			(1.9	)		3.0
Balance at end of period	$	(151.3	)	$	(0.1	)	$	(151.4	)	$	(122.7	)	$	(2.4	)	$	(125.1	)

	Three Months Ended September 30, 2020									Three Months Ended September 30, 2021
Balance at beginning of period	$	(140.0	)	$	(2.2	)	$	(142.2	)	$	(153.5	)	$	0.5		$	(153.0	)
Other comprehensive earnings before reclassifications, net of tax		—			0.5			0.5
Other comprehensive loss before reclassifications, net of tax											—			(0.6	)		(0.6	)
Amounts reclassified from accumulated other comprehensive loss, net of tax		3.1			—			3.1			2.2			—			2.2
Other comprehensive earnings, net of tax		3.1			0.5			3.6
Other comprehensive earnings (loss), net of tax											2.2			(0.6	)		1.6
Balance at end of period	$	(136.9	)	$	(1.7	)	$	(138.6	)	$	(151.3	)	$	(0.1	)	$	(151.4	)

	(Dollars in Millions)
										(Dollars in Millions)
										Pension and Postretirement Benefit Plans			Foreign Currency			Accumulated Other Comprehensive Loss
										Nine Months Ended September 30, 2022
Balance at beginning of period										$	(97.6	)	$	—		$	(97.6	)
Other comprehensive loss before reclassifications, net of tax											(33.0	)		(2.4	)		(35.4	)
Amounts reclassified from accumulated other comprehensive loss, net of tax											7.9			—			7.9
Other comprehensive loss, net of tax											(25.1	)		(2.4	)		(27.5	)
Balance at end of period										$	(122.7	)	$	(2.4	)	$	(125.1	)
	Pension and Postretirement Benefit Plans			Foreign Currency			Accumulated Other Comprehensive Loss
	Nine Months Ended September 30, 2021									Nine Months Ended September 30, 2021
Balance at beginning of period	$	(158.1	)	$	(0.3	)	$	(158.4	)	$	(158.1	)	$	(0.3	)	$	(158.4	)
Other comprehensive earnings before reclassifications, net of tax		—			0.2			0.2			—			0.2			0.2
Amounts reclassified from accumulated other comprehensive loss, net of tax		6.8			—			6.8			6.8			—			6.8
Other comprehensive earnings, net of tax		6.8			0.2			7.0			6.8			0.2			7.0
Balance at end of period	$	(151.3	)	$	(0.1	)	$	(151.4	)	$	(151.3	)	$	(0.1	)	$	(151.4	)

	Nine Months Ended September 30, 2020
Balance at beginning of period	$	(144.9	)	$	(0.9	)	$	(145.8	)
Other comprehensive loss before reclassifications, net of tax		—			(0.8	)		(0.8	)
Amounts reclassified from accumulated other comprehensive loss, net of tax		8.0			—			8.0
Other comprehensive earnings (loss), net of tax		8.0			(0.8	)		7.2
Balance at end of period	$	(136.9	)	$	(1.7	)	$	(138.6	)

Page 10 of 5453

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended September 30, ~~2021~~2022

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Continued)

The $33.0 million, net of tax, other comprehensive loss before reclassifications in the Pension and Postretirement Benefit Plans for the nine months ended September 30, 2022 is driven by the remeasurement of the funded status of the Company’s qualified pension plan, required as a result of a plan amendment that provided an enhanced benefit for eligible hourly employees.

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


	Pension and Postretirement Benefit Plans
	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2022			2021			2022		2021
	(Dollars in Millions)
Balance at beginning of period	$	79.5		$	87.9		$	69.7	$	89.4
Tax effect of other comprehensive (earnings) loss		(1.6	)		(0.8	)		8.2		(2.3	)
Balance at end of period	$	77.9		$	87.1		$	77.9	$	87.1

Pension and Postretirement Benefit Plans

Three Months Ended

Nine Months Ended

September 30,

September 30,

2021

2020

2021

2020

(Dollars in Millions)

Balance at beginning of period

$
87.9

$
83.6

$
89.4

$
85.2

Tax effect of other comprehensive earnings

(0.8
)

(1.1
)

(2.3
)

(2.7
)
Balance at end of period

$
87.1

$
82.5

$
87.1

$
82.5

Reclassifications out of accumulated other comprehensive loss are as follows:


	Three Months Ended						Nine Months Ended						Affected line items in the
	September 30,						September 30,						consolidated statements of earnings
	2022			2021			2022			2021			and comprehensive earnings
	(Dollars in Millions)
Pension and postretirement benefit plans
Settlement charge	$	4.5		$	—		$	4.5		$	—
Amortization of:
Prior service cost		1.1			—			3.2			—
Actuarial loss		0.9			3.0			2.8			9.1
		6.5			3.0			10.5			9.1		Other nonoperating income, net
Tax benefit		(1.6	)		(0.8	)		(2.6	)		(2.3	)	Income tax expense
	$	4.9		$	2.2		$	7.9		$	6.8

Three Months Ended

Nine Months Ended

Affected line items in the

September 30,

September 30,

consolidated statements of earnings

2021

2020

2021

2020

and comprehensive earnings

(Dollars in Millions)

Pension and postretirement
benefit plans

Amortization of:

Prior service credit

$
—

$
—

$
—

$
(0.1
)

Actuarial loss

3.0

4.2

9.1

10.8

Other nonoperating income, net

3.0

4.2

9.1

10.7

Tax benefit

(0.8
)

(1.1
)

(2.3
)

(2.7
)

Income tax expense

$
2.2

$
3.1

$
6.8

$
8.0

Earnings per Common Share

The numerator for basic and diluted earnings per common share is net earnings attributable to Martin Marietta reduced by dividends and undistributed earnings attributable to certain of the Company’s stock-based ~~compensation.~~compensation arrangements. If there is a net loss, no amount of the undistributed loss is attributed to unvested participating securities. The denominator for basic earnings per common share is the weighted-average number of common shares outstanding during the period. Diluted earnings per common share are computed assuming that the weighted-average number of common shares is increased by the conversion, using the treasury stock method, of awards to be issued to employees and nonemployee members of the Company’s Board of Directors under certain stock-based compensation arrangements if the conversion is dilutive. For the three and nine months ended September 30, ~~2021~~2022 and ~~2020,~~2021, the diluted per-share computations reflect the number of common shares outstanding ~~to include~~including the number of additional shares that would have been outstanding if the potentially dilutive common shares had been issued.

Page 11 of 5453

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended September 30, ~~2021~~2022

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Continued)

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

Three Months Ended

Nine Months Ended

September 30,

September 30,

2021

2020

2021

2020

(In Millions)

Net earnings attributable to Martin Marietta

$
254.6

$
294.4

$
545.7

$
538.0

Less: Distributed and undistributed earnings
   attributable to unvested awards

—

0.3

—

0.5

Basic and diluted net earnings available to common
   shareholders attributable to Martin Marietta

$
254.6

$
294.1

$
545.7

$
537.5

Basic weighted-average common shares outstanding

62.4

62.3

62.4

62.3

Effect of dilutive employee and director awards

0.2

0.1

0.2

0.1

Diluted weighted-average common shares
   outstanding

62.6

62.4

62.6

62.4


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
	(In Millions)

Basic weighted-average common shares outstanding		62.3		62.4		62.4		62.4
Effect of dilutive employee and director awards		0.2		0.2		0.1		0.2
Diluted weighted-average common shares outstanding		62.5		62.6		62.5		62.6

Restricted Cash

At ~~September 30, 2021 and~~ December 31, ~~2020,~~2021, the Company had restricted cash of ~~$1.7~~$0.5 million, ~~and $97.1 million, respectively,~~ which iswas invested in an account designated for the purchase of like-kind exchange replacement assets under Section 1031 of the Internal Revenue Code and related IRS procedures (Section 1031). The Company iswas restricted from utilizing the cash for purposes other than the purchase of the qualified assets for a designated period from receipt of the proceeds from the sale of the exchanged property. ~~Any unused~~There was no restricted cash at the end of the designated period will be transferred to unrestricted accounts of the Company and can then be used for general corporate purposes. The Company has until January 10, 2022 to use the remaining restricted cash to purchase qualified assets under Section 1031.September 30, 2022.

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

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


	September 30,		December 31,		September 30,		December 31,
	2021		2020		2022		2021
	(Dollars in Millions)				(Dollars in Millions)
Cash and cash equivalents	$	2,381.4	$	207.3	$	135.7	$	258.4
Restricted cash		1.7		97.1		—		0.5
Total cash, cash equivalents and restricted cash presented in the consolidated statements of cash flows	$	2,383.1	$	304.4	$	135.7	$	258.9

~~New Accounting Pronouncement~~Restricted Investments

~~In March 2020,~~At September 30, 2022, the ~~FASB issued Accounting Standards Update (ASU) 2020-04, “~~Company had $~~Reference Rate Reform (Topic 848): Facilitation~~704.6 million of restricted investments, representing assets irrevocably transferred to an escrow trust account to satisfy and discharge the Company’s $700 million of 0.650% Senior Notes due 2023 (the 2023 Notes) (see Note 6). The assets in the escrow trust account may not be used for any purpose other than to satisfy the remaining interest payments on the 2023 Notes and to repay the principal amount of the ~~Effects~~2023 Notes on the maturity date of ~~Reference Rate Reform~~July 15, 2023. The assets transferred to the escrow trust account are invested in a U.S. Treasury securities fund (see Note 7) and investment returns on ~~Financial Reporting”, an optional guidance~~those trust assets are for ~~a limited period~~the account of ~~time to ease~~ the ~~transition from~~Company (after satisfaction of all amounts payable in connection with the ~~London interbank offered rate (“LIBOR”) to an alternative reference rate.~~2023 Notes). The Company has consolidated the trust account on its balance sheet at September 30, 2022.

Page 12 of 5453

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended September 30, ~~2021~~2022

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

~~(Continued)~~

ASU intends to address certain concerns relating to accounting for contract modifications and hedge accounting. These optional expedients and exceptions to applying U.S. GAAP, assuming certain criteria are met, are allowed through December 31, 2022, and any amendments should be applied on a prospective basis. The Company does not expect the transition from LIBOR to have a material impact on its consolidated financial statements. (Continued)

Revenue Recognition

~~Revenue Recognition~~

Total revenues include sales of products and services to customers, net of any discounts or allowances, and freight revenues. Product revenues are recognized when control of the promised good is transferred to the customer, typically when finished products are shipped. Intersegment and interproduct revenues are eliminated in consolidation. Service revenues are derived from the paving business and are recognized using the percentage-of-completion method under the cost-to-cost approach. Freight revenues reflect delivery arranged by the Company using a third party on behalf of the customer and are recognized consistently with the timing of the product revenues.

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

Future revenues from unsatisfied performance obligations at September 30, 2022 and 2021 ~~and 2020~~ were ~~$183.0~~$304.3 million and ~~$150.2~~$183.0 million, respectively, where the remaining periods to complete these obligations ranged from less than one month to 37 months and one month to 21 months, ~~and one month to 13 months,~~ respectively.

~~Page 13 of 54~~

~~MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES~~

~~FORM 10-Q~~

~~For the Quarter Ended September 30, 2021~~

~~(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Continued)~~

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


	Three Months Ended						Three Months Ended
	September 30, 2021						September 30, 2022
	Products and Services		Freight		Total		Products and Services		Freight		Total
	(Dollars in Millions)						(Dollars in Millions)
East Group	$	641.8	$	42.3	$	684.1	$	728.5	$	45.1	$	773.6
West Group		749.0		45.8		794.8		883.0		79.4		962.4
Total Building Materials business		1,390.8		88.1		1,478.9		1,611.5		124.5		1,736.0
Magnesia Specialties		71.9		6.5		78.4		69.0		6.7		75.7
Total	$	1,462.7	$	94.6	$	1,557.3	$	1,680.5	$	131.2	$	1,811.7

	Three Months Ended						Three Months Ended
	September 30, 2020						September 30, 2021
	Products and Services		Freight		Total		Products and Services		Freight		Total
	(Dollars in Millions)						(Dollars in Millions)
East Group	$	514.1	$	35.2	$	549.3	$	641.8	$	42.3	$	684.1
West Group		671.4		39.8		711.2		749.0		45.8		794.8
Total Building Materials business		1,185.5		75.0		1,260.5		1,390.8		88.1		1,478.9
Magnesia Specialties		55.2		5.7		60.9		71.9		6.5		78.4
Total	$	1,240.7	$	80.7	$	1,321.4	$	1,462.7	$	94.6	$	1,557.3

Service revenues, which include paving services located in California and Colorado, , were ~~$100.5~~$138.7 million and ~~$112.8~~$100.5 million for the three months ended September 30, ~~2021~~2022 and ~~2020,~~2021, respectively, and are reported in the West ~~Group .~~Group.

Page 1413 of 5453

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended September 30, ~~2021~~2022

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Continued)


	Nine Months Ended						Nine Months Ended
	September 30, 2021						September 30, 2022
	Products and Services		Freight		Total		Products and Services		Freight		Total
	(Dollars in Millions)						(Dollars in Millions)
East Group	$	1,610.9	$	103.5	$	1,714.4	$	1,755.5	$	111.4	$	1,866.9
West Group		1,861.9		116.3		1,978.2		2,382.2		200.7		2,582.9
Total Building Materials business		3,472.8		219.8		3,692.6		4,137.7		312.1		4,449.8
Magnesia Specialties		207.1		17.9		225.0		214.4		20.0		234.4
Total	$	3,679.9	$	237.7	$	3,917.6	$	4,352.1	$	332.1	$	4,684.2

	Nine Months Ended						Nine Months Ended
	September 30, 2020						September 30, 2021
	Products and Services		Freight		Total		Products and Services		Freight		Total
	(Dollars in Millions)						(Dollars in Millions)
East Group	$	1,371.8	$	94.1	$	1,465.9	$	1,610.9	$	103.5	$	1,714.4
West Group		1,785.4		118.8		1,904.2		1,861.9		116.3		1,978.2
Total Building Materials business		3,157.2		212.9		3,370.1		3,472.8		219.8		3,692.6
Magnesia Specialties		164.0		16.2		180.2		207.1		17.9		225.0
Total	$	3,321.2	$	229.1	$	3,550.3	$	3,679.9	$	237.7	$	3,917.6

Service revenues for the nine months ended September 30, 2022 and 2021 ~~and 2020~~ were ~~$182.7~~$252.1 million and ~~$221.3~~$182.7 million, respectively.

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


(Dollars in Millions)	September 30, 2021		December 31, 2020		September 30, 2022		December 31, 2021
Costs in excess of billings	$	10.8	$	2.2	$	19.9	$	4.3
Billings in excess of costs	$	10.7	$	14.0	$	9.9	$	7.8

Revenues recognized from the beginning balance of contract liabilities for the three months ended September 30, 2022 and 2021 ~~and 2020~~ were ~~$7.1~~$4.1 million and ~~$8.5~~$7.1 million, respectively, and for the nine months ended September 30, 2022 and 2021 ~~and 2020~~ were ~~$11.9~~$7.4 million and ~~$7.2~~$11.9 million, ~~respectively~~.respectively.

Retainage, which primarily relates to the paving services, represents amounts that have been billed to customers but payment withheld until final acceptance by the customer of the performance obligation. ~~Included~~Retainage, which is included in ~~other~~Other current assets on the Company’s consolidated balance sheets, ~~retainage~~ was ~~$10.0~~$13.9 million and ~~$10.6~~$10.5 million at September 30, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively.

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

Page 1514 of 5453

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended September 30, ~~2021~~2022

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

~~(Continued)~~

~~Company~~ (Continued)

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

3.	~~Business Combinations~~

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

~~On July 30,~~Business Combinations

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

The Company determined the acquisition-date fair values of assets acquired and liabilities assumed. Although the initial accounting for the business combination has been recorded, these amounts are subject to change during the measurement period, which extends no longer than one year from the consummation date, based on additional reviews. Notably, during the quarter ended September 30, 2022, the Company reduced the acquisition-date fair value of intangible assets, other than goodwill, by $119.5 million; increased the acquisition-date fair value of asset retirement obligations and other liabilities assumed by $50.9 million; and increased goodwill by $171.4 million. While the determination of the acquisition-date fair values of assets acquired and liabilities assumed is substantially complete as of September 30, 2022, the measurement period remains open for asset retirement obligations and other liabilities. The Company does not expect any material measurement period adjustments to be recorded during the quarter ending December 31, 2022. Amortization of the goodwill generated by the transaction is deductible for income tax purposes.

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


Assets:
Inventories	$	91.2
Property, plant and equipment		849.9
Intangible assets, other than goodwill		431.5
Goodwill		1,213.2
Other assets		54.4
Total assets		2,640.2
Liabilities:
Asset retirement obligations		234.7
Operating and finance lease liabilities		57.5
Other liabilities		83.4
Total liabilities		375.6
Total consideration	$	2,264.6

In July 2021, the Company acquired the assets of Southern Crushed Concrete (SCC). in the Houston area. SCC iswas a leading producer of recycled concrete, ~~in the Houston area, one of the country’s largest addressable aggregates markets. Recycled concrete~~which is principally used as a base aggregates product in infrastructure, commercial and residential construction applications. The Company determined the acquisition-date fair values of the assets acquired ~~inventories; property, plant~~ and ~~equipment;~~liabilities assumed. During the quarter ended September 30, 2022, the Company reduced the acquisition-date fair value of intangible assets, ~~(including goodwill),~~other than goodwill, by $64.0 million and ~~right-of-use assets; and assumed asset retirement obligations; lease obligations; and other liabilities.~~increased goodwill by $64.5 million. The measurement period is closed as of September 30, 2022. Amortization of the goodwill generated by the

Page 15 of 53

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended September 30, 2022

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Continued)

transaction ~~will be~~is deductible for income tax purposes. ~~Although~~The results from the ~~initial accounting for the~~acquired business ~~combination has been recorded, the fair values of these amounts~~ are ~~subject to change during the measurement period, which remains open as of September 30, 2021. The acquisition is reported~~included in the Company’s West Group, but isare immaterial for pro-forma financial statement disclosures.

On In April ~~30,~~ 2021, the Company completed the acquisition of Tiller Corporation (Tiller), a leading aggregates and hot mix asphalt supplier in the Minneapolis/St. Paul area, which is one of the largest and ~~fastest growing~~fastest-growing midwestern metropolitan areas. The Tiller acquisition ~~complements~~complemented the Company’s existing product offerings in the surrounding areas. Additionally, Tiller sells asphalt solely as a materials provider and does not offer paving or other associated services. The Company financed the acquisition using available cash and borrowings under its credit facilities. The Company has recorded preliminary fair valuesAmortization of the assets acquired and liabilities assumed, which are subject to asset verification and a normal post-closing working capital adjustment. Therefore, the measurement period for property, plant and equipment and goodwill remains open as of September 30, 2021. The goodwill generated by the transaction ~~will be~~is deductible for income tax purposes. The ~~acquisition is reported~~results from the acquired business are included in the Company’s East Group, but isare immaterial for pro-forma financial statement disclosures.

Discontinued Operations

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

Discontinued operations include the following:


	Three Months Ended		Nine Months Ended
	September 30, 2022
	(Dollars in Millions)
Total revenues	$	62.4	$	268.8

Pretax earnings from operations	$	4.7	$	21.1
Pretax gain (loss) on divestiture		0.7		(0.3	)
Pretax earnings	$	5.4	$	20.8
Income tax expense		1.3		6.5
Earnings from discontinued operations, net of income tax expense	$	4.1	$	14.3

Total cash provided by operating and investing activities for the discontinued operations was $200.9 million, including $249.9 million of proceeds from divestitures and $13.2 million of cash used for capital expenditures, for the nine months ended September 30, 2022. Non-cash items related to operating and investing activities for the discontinued operations were immaterial for the nine months ended September 30, 2022.

Divestitures

On August 9, 2022, the Company announced a definitive agreement to sell the Tehachapi, California cement plant and related distribution terminals for $350.0 million in cash, subject to regulatory approval and customary closing conditions.

In June 2022, the Company completed the sale of the Redding, California cement plant, related cement distribution terminals and 14 California ready mix operations for $235.0 million in cash. In addition, on July 15, 2022, the Company sold its interest in a joint venture that operates a cement distribution terminal for $15.0 million. These businesses were previously classified as assets held for sale.

In April 2022, the Company divested its Colorado and Central Texas ready mixed concrete operations to Smyrna Ready Mix Concrete LLC. This opportunity optimized the Company’s aggregates-led portfolio and improved its ability to generate more attractive margins over the long term by reducing both business cyclicality and exposure to raw material cost inflation. The transaction resulted in a pretax gain of $151.9 million, which is included in Other operating income, net, for the nine months ended September 30, 2022 and is inclusive of expenses incurred due to the divestiture. The divested operations and the gain on divestiture are all reported in the West Group.

Page 16 of 53

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended September 30, 2022

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Continued)

Assets and Liabilities Held for Sale

Assets and liabilities held for sale at September 30, 2022 include a cement plant in Tehachapi, California; related cement distribution terminals; the California ready mixed concrete plants not sold as part of the aforementioned Redding transaction; and certain investment properties. At December 31, 2021 assets and liabilities held for sale also included the California cement and California ready mix operations that have been sold in 2022. Assets and liabilities held for sale at September 30, 2022 and December 31, 2021 are as follows:


	September 30, 2022								December 31, 2021
	Continuing Operations		Discontinued Operations			Total			Continuing Operations		Discontinued Operations			Total
	(Dollars in Millions)
Inventories, net	$	—	$	37.2		$	37.2		$	—	$	53.1		$	53.1
Investment land		42.0		—			42.0			32.7		—			32.7
Other assets		—		0.3			0.3			—		16.4			16.4
Total current assets held for sale	$	42.0	$	37.5		$	79.5		$	32.7	$	69.5		$	102.2

Property, plant and equipment	$	—	$	127.2		$	127.2		$	—	$	226.0		$	226.0
Intangible assets, excluding goodwill		—		208.5			208.5			—		264.9			264.9
Operating lease right-of-use assets		—		12.7			12.7			—		18.1			18.1
Goodwill		—		31.8			31.8			—		109.3			109.3
Other assets		—		—			—			—		4.6			4.6
Valuation allowance for loss on sale		—		(5.1	)		(5.1	)		—		(6.0	)		(6.0	)
Total noncurrent assets held for sale	$	—	$	375.1		$	375.1		$	—	$	616.9		$	616.9

Lease obligations	$	—	$	(4.6	)	$	(4.6	)	$	—	$	(7.5	)	$	(7.5	)
Total current liabilities held for sale	$	—	$	(4.6	)	$	(4.6	)	$	—	$	(7.5	)	$	(7.5	)

Asset retirement obligations	$	—	$	(17.4	)	$	(17.4	)	$	—	$	(31.5	)	$	(31.5	)
Lease obligations		—		(6.4	)		(6.4	)		—		(22.0	)		(22.0	)
Total noncurrent liabilities held for sale	$	—	$	(23.8	)	$	(23.8	)	$	—	$	(53.5	)	$	(53.5	)

Page 17 of 53

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended September 30, 2022

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Continued)

Goodwill

~~Goodwill and Other Intangibles~~

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


	East		West
	Group		Group			Total
	(Dollars in Millions)
Balance at January 1, 2022	$	759.4	$	2,735.0		$	3,494.4
Acquisitions		—		3.7			3.7
Adjustments to purchase price allocations		5.0		288.8			293.8
Divestitures		—		(159.7	)		(159.7	)
Goodwill reclassified from assets held for sale		—		8.2			8.2
Balance at September 30, 2022	$	764.4	$	2,876.0		$	3,640.4

Inventories, Net

East

West

Group

Group

Total

(Dollars in Millions)

Balance at January 1, 2021

$
572.5

$
1,841.5

$
2,414.0

Acquisitions

185.9

12.8

198.7

Goodwill allocated to assets held for sale

—

(2.1
)

(2.1
)
Balance at September 30, 2021

$
758.4

$
1,852.2

$
2,610.6


	September 30,			December 31,
	2022			2021
	(Dollars in Millions)
Finished products	$	878.0		$	713.3
Products in process		13.3			30.1
Raw materials		72.4			69.6
Supplies and expendable parts		145.3			153.9
		1,109.0			966.9
Less: Allowances		(285.6	)		(214.3	)
Total	$	823.4		$	752.6

Long-Term Debt


	September 30,			December 31,
	2022			2021
	(Dollars in Millions)
0.650% Senior Notes, due 2023 (discharged)	$	698.7		$	697.4
4.250% Senior Notes, due 2024		398.8			398.3
7% Debentures, due 2025		124.6			124.6
3.450% Senior Notes, due 2027		298.2			297.9
3.500% Senior Notes, due 2027		491.4			496.4
2.500% Senior Notes, due 2030		470.3			491.1
2.400% Senior Notes, due 2031		888.4			891.8
6.25% Senior Notes, due 2037		228.4			228.3
4.250% Senior Notes, due 2047		590.1			592.1
3.200% Senior Notes, due 2051		849.7			882.9
Other notes		—			0.1
Total debt		5,038.6			5,100.9
Less: Current maturities		(698.7	)		(0.1	)
Long-term debt	$	4,339.9		$	5,100.8

Page 1618 of 5453

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended September 30, ~~2021~~2022

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Continued)

~~Intangible assets subject~~On September 29, 2022, the Company satisfied and discharged the 2023 Notes. In connection with the satisfaction and discharge, the Company irrevocably deposited with Regions Bank (the Trustee) funds in an amount sufficient to ~~amortization consist~~satisfy all remaining principal and interest payments on the 2023 Notes. Holders of the ~~following:~~

Gross
Amount

Accumulated
Amortization

Net
Balance

(Dollars in Millions)

September 30, 2021

Noncompetition agreements

$
4.2

$
(4.1
)

$
0.1

Customer relationships

312.7

(44.3
)

268.4

Operating permits

523.8

(53.7
)

470.1

Use rights and other

16.4

(13.8
)

2.6

Trade names

23.3

(13.3
)

10.0

Total

$
880.4

$
(129.2
)

$
751.2

December 31, 2020

Noncompetition agreements

$
4.2

$
(4.1
)

$
0.1

Customer relationships

91.3

(35.6
)

55.7

Operating permits

460.8

(48.4
)

412.4

Use rights and other

16.3

(13.0
)

3.3

Trade names

12.8

(12.3
)

0.5

Total

$
585.4

$
(113.4
)

$
472.0

At2023 Notes will receive payment of principal on the scheduled maturity date of the 2023 Notes and payment of interest at the per annum rate (and on the dates) set forth in the 2023 Notes indenture. The Company utilized existing cash resources to fund the satisfaction and discharge. As a result of the satisfaction and discharge of the 2023 Notes, the obligations of the Company under the indenture in respect of the 2023 Notes have been terminated, except those provisions of the indenture that, by their terms, survive the satisfaction and discharge. Because the discharge did not represent a legal defeasance, the 2023 Notes remain on the Company’s consolidated balance sheet at September 30, ~~2021~~2022 and ~~December 31, 2020, intangible~~will continue to accrete to their par value over the period until maturity in July 2023. Additionally, the related trust assets ~~deemed to have an indefinite life~~are included in Restricted investments (to satisfy discharged debt and ~~not being amortized consist of~~related interest) on the ~~following:~~Company’s consolidated balance sheet at September 30, 2022.

(Dollars in Millions)

Building Materials business

Magnesia Specialties

Total

Operating permits

$
6.6

$
—

$
6.6

Use rights

26.7

—

26.7

Trade names

0.2

2.5

2.7

Total

$
33.5

$
2.5

$
36.0

~~For~~During the nine months ended September 30, ~~2021,~~2022, the Company ~~acquired $294.9~~repurchased $67.7 million (par value) of ~~intangibles, which consists of the following:~~

(Dollars in Millions)

Amount

Weighted-average
amortization period
Subject to amortization:

Customer relationships

$
221.4

24 years
Permits

63.0

40 years
Trade name

10.5

9 years
Total

$
294.9

27 years

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

~~Page 17 of 54~~

~~MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES~~

~~FORM 10-Q~~

~~For the Quarter Ended September 30, 2021~~

~~(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Continued)~~

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

(Dollars in Millions)

October - December 2021

$
6.4

2022

25.0

2023

24.7

2024

24.4

2025

24.3

Thereafter

646.4

Total

$
751.2

5.	~~Inventories, Net~~

September 30,

December 31,

2021

2020

(Dollars in Millions)

Finished products

$
683.2

$
667.0

Products in process

25.6

37.1

Raw materials

55.9

35.3

Supplies and expendable parts

152.0

149.9

916.7

889.3

Less: Allowances

(199.2
)

(180.3
)
Total

$
717.5

$
709.0

6.	~~Long-Term Debt~~

September 30,

December 31,

2021

2020

(Dollars in Millions)

0.650% Senior Notes, due 2023

$
696.9

$
—

4.250% Senior Notes, due 2024

398.1

397.6

7% Debentures, due 2025

124.5

124.5

3.450% Senior Notes, due 2027

297.9

297.6

3.500% Senior Notes, due 2027

496.2

495.8

2.500% Senior Notes, due 2030

490.9

490.1

2.400% Senior Notes, due 2031

891.7

—

6.25% Senior Notes, due 2037

228.3

228.2

4.250% Senior Notes, due 2047

592.0

591.9

3.200% Senior Notes, due 2051

882.9

—

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

20.0

—

Other notes

0.1

0.1

Total debt

5,119.5

2,625.8

Less: Current maturities of long-term debt

(20.1
)

—

Long-term debt

$
5,099.4

$
2,625.8

~~Page 18 of 54~~

~~MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES~~

~~FORM 10-Q~~

~~For the Quarter Ended September 30, 2021~~

~~(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Continued)~~

On July 2, 2021, the Company issued $700 million aggregate principal amount of 0.650% Senior Notes due 2023 (the 0.650% Senior Notes), $900 million aggregate principal amount of 2.400% Senior Notes due 2031 (the 2.400% Senior Notes) and $900 million aggregate principal amount of 3.200% Senior Notes due 2051 (the 3.200% Senior Notes) and, together with the 0.650% Senior Notes and the 2.400% Senior Notes (the Senior Notes), pursuant to a base indenture, dated as of May 22, 2017 (the Base Indenture), as amended and supplemented from time to time, including by the Fourth Supplemental Indenture, dated as of July 2, 2021 and, together with the Base Indenture (the Indenture) between the Company and Regions Bank, as trustee, governing theits Senior Notes. ~~The Senior Notes are carried net of original issue discount, which will be amortized using the effective interest method over the lives of the issues.~~

The Company, used the net proceeds of the 2.400% Senior Notes, the 3.200% Senior Notes and the 0.650% Senior Notes to pay the consideration for the acquisition of Lehigh Hanson, Inc.’s West Region (Lehigh West Region) business, and for general corporate purposes. See Note 16 for more information on the Lehigh West Region acquisition, which was consummated on October 1, 2021.

Prior to July 2, 2022 (the 2023 Par Call Date), the Company may redeem the 0.650% Senior Notes, at its option, at any time in whole or from time to time in part at a price equal to the greater of: (i) 100% of the principal amount of the 0.650% Senior Notes to be redeemed and (ii) the sum of the present values of the principal amount of the 0.650% Senior Notes to be redeemed and the remaining scheduled payments of interest thereon after the date of optional redemption (a 2023 Optional Redemption Date) through the 2023 Par Call Date (assuming, for this purpose, that the 0.650% Senior Notes are scheduled to mature on the 2023 Par Call Date), excluding interest, if any, accrued thereon to such 2023 Optional Redemption Date, discounted to such 2023 Optional Redemption Date on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate (as defined in the Indenture) plus 10 basis points (or 0.100%) plus, in each case, unpaid interest, if any, accrued thereon to, but excluding, such 2023 Optional Redemption Date. On or after the 2023 Par Call Date and prior to maturity, the Company may redeem the 0.650% Senior Notes at any time in whole or from time to time in part at a price equal to 100% of the principal amount of the 0.650% Senior Notes, at its option, to be redeemed, plus unpaid interest, if any, accrued thereon to, but excluding, the 2023 Optional Redemption Date.

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

~~Page 19 of 54~~

~~MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES~~

~~FORM 10-Q~~

~~For the Quarter Ended September 30, 2021~~

~~(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Continued)~~

Prior to January 15, 2051 (the 2051 Par Call Date), the Company may redeem the 3.200% Senior Notes, at its option, at any time in whole or from time to time in part at a price equal to the greater of: (i) 100% of the principal amount of the 3.200% Senior Notes to be redeemed and (ii) the sum of the present values of the principal amount of the 3.200% Senior Notes to be redeemed and the remaining scheduled payments of interest thereon after the date of optional redemption (a 2051 Optional Redemption Date) through the 2051 Par Call Date (assuming, for this purpose, that the 3.200% Senior Notes are scheduled to mature on the 2051 Par Call Date), excluding interest, if any, accrued thereon to such 2051 Optional Redemption Date, discounted to such 2051 Optional Redemption Date on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate (as defined in the Indenture) plus 20 basis points (or 0.200%) plus, in each case, unpaid interest, if any, accrued thereon to, but excluding, such 2051 Optional Redemption Date. On or after the 2051 Par Call Date and prior to maturity, the Company may redeem the 3.200% Senior Notes at any time in whole or from time to time in part at a price equal to 100% of the principal amount of the 3.200% Senior Notes, at its option, to be redeemed, plus unpaid interest, if any, accrued thereon to, but excluding, the 2051 Optional Redemption Date.

The ~~Company~~, through a wholly-owned special-purpose subsidiary, has a ~~$400~~$400 million trade receivable securitization facility (the Trade Receivable Facility). On September ~~22, 2021~~21, 2022, the Company extended the maturity to September ~~21, 2022~~20, 2023. The Trade Receivable Facility, with Truist Bank, Regions Bank, PNC Bank, N.A., ~~The~~MUFG Bank, ~~of Tokyo-Mitsubishi UFJ, LTD. (New~~Ltd., New York ~~Branch),~~Branch, and certain other lenders that may become a party to the facility from time to time, is backed by eligible trade receivables, as defined, and is limited to the lesser of the facility limit or the borrowing base, as defined. These receivables are originated by the Company and then sold by the Company to the wholly-owned special-purpose subsidiary. The Company ~~continues~~ continues to be responsible for the servicing and administration of the receivables purchased by the wholly-owned special-purpose ~~subsidiary~~.subsidiary. Borrowings under the Trade Receivable Facility bear interest at a rate equal to asset-backed commercial paper costs of conduit lenders plus ~~0.60%~~0.65% for borrowings funded by conduit lenders and Adjusted Term Secured Overnight Financing Rate (Adjusted Term SOFR), as defined, plus ~~one-month LIBOR plus 0.70%,~~0.7%, subject to change in the event that this rate no longer reflects the lender’s cost of lending, for borrowings funded by all other ~~lenders~~.lenders. The Trade Receivable Facility contains a cross-default provision to the Company’s other debt agreements. Subject to certain conditions, including lenders providing the requisite commitments, the Trade Receivable Facility may be increased to a borrowing base not to exceed ~~$500~~$500 million. There ~~was $20.0 million~~were no borrowings outstanding under the Trade Receivable Facility at September 30, ~~2021,~~2022 and ~~0 borrowings outstanding at~~ December 31, ~~2020.~~2021.

The Company has a ~~$700~~$800 million five-year senior unsecured revolving facility (the Revolving Facility) with JPMorgan Chase Bank, N.A., as Administrative Agent, ~~Truist Bank,~~ Deutsche Bank Securities, Inc., PNC Bank, Truist Bank and Wells Fargo Bank, N.A., as ~~Co-Syndication~~Syndication Agents, and the lenders party ~~thereto.~~thereto (the Credit Agreement). Borrowings under the Revolving Facility bear interest, at the Company’s option, at rates based upon LIBOR or a base rate, plus, for each rate, a margin determined in accordance with a ratings-based pricing grid. There were 0no borrowings outstanding under the ~~Revolving Facility~~Credit Agreement at September 30, ~~2021~~2022 or December 31, ~~2020.~~2021. The ~~Revolving Facility~~Credit Agreement requires the Company’s ratio of consolidated net debt-to-consolidated earnings before interest, taxes, depreciation, depletion and amortization (EBITDA), as defined by the Revolving Facility, for the trailing-twelve months (the Ratio) to not exceed ~~3.50x~~3.50 times as of the end of any fiscal quarter, provided that the Company may exclude from the Ratio debt incurred in connection with certain acquisitions during such quarter or the three preceding quarters so long as the Ratio calculated without such exclusion does not exceed ~~3.75x.~~4.00 times. Additionally, if there are 0no amounts outstanding under both the Revolving Facility and the Trade Receivable Facility, consolidated debt, including debt for which the Company is a ~~co-borrower,~~guarantor (see Note 10), may be reduced byin an amount equal to the lesser of $500 million or the sum of the Company’s unrestricted cash and ~~cash equivalents in excess of $50 million, such reduction not to exceed $200 million,~~temporary investments, for purposes of the covenant calculation. The Company was in compliance with this covenant at September 30, ~~2021.~~2022.

Page 19 of 53

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended September 30, 2022

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Continued)

The Revolving Facility expires on December ~~5, 2024,~~21, 2026, with any outstanding principal amounts, together with interest accrued thereon, due in full on that date. Available borrowings under the Revolving Facility are reduced by any

~~Page 20 of 54~~

~~MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES~~

~~FORM 10-Q~~

~~For the Quarter Ended September 30, 2021~~

~~(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Continued)~~

outstanding letters of credit issued by the Company under the Revolving Facility. The Company had ~~$2.6~~$2.6 million of outstanding letters of credit issued under the Revolving Facility at September 30, ~~2021~~2022 and December 31, ~~2020.~~2021.

Financial Instruments

~~Financial Instruments~~

The Company’s financial instruments include temporary cash investments, restricted cash, restricted investments, accounts receivable, notes receivable, accounts payable, publicly-registered long-term notes, debentures and other long-term debt. ~~The estimated fair values for all financial instruments are estimated based on Level 2 of the fair value hierarchy.~~

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

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

Restricted investments are held in a fund that invests solely in U.S. Treasury securities. The estimated fair value of the fund is valued at net asset value, which the fund seeks to maintain at one dollar per share. As such, the estimated fair value of the restricted investments approximate their carrying value. The Company is restricted from accessing the investments, which will be used to settle the 2023 Notes and related interest payments.

Accounts receivable are due from a large number of customers, primarily in the construction industry, and are dispersed across wide geographic and economic regions. ~~NaN~~No single customer accounted for ~~10%~~10% or more of consolidated ~~total revenues in the three-month and nine-month periods ended~~accounts receivable at September 30, ~~2021~~2022 and ~~2020.~~December 31, 2021. The estimated fair values of accounts receivable approximate their carrying amounts due to the short-term nature of the accounts.

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

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

The carrying values and fair values of the Company’s long-term debt were ~~$5.12~~$5.04 billion and ~~$5.49~~$4.23 billion, respectively, at September 30, ~~2021~~2022 and ~~$2.63~~$5.10 billion and ~~$3.08~~$5.45 billion, respectively, at December 31, ~~2020.~~2021. The estimated fair value of the publicly-registered long-term notes was estimated using quoted market prices. The estimated fair values of other borrowings approximate their carrying amounts as the interest rates reset periodically.

Income Taxes

~~Income Taxes~~

The effective income tax rate reflects the effect of federal and state income taxes on earnings and the impact of differences in book and tax accounting arising primarily from the permanent tax benefits associated with the statutory depletion deduction for mineral reserves. ~~For~~The effective income tax rates for continuing operations were 22.1% and 20.6% for the nine months ended September 30, 2022 and 2021, ~~the~~respectively. The higher 2022 effective income tax rate versus 2021 was ~~20.6%, which included a $2.9 million discrete benefit for research~~driven by the impact of the divestiture of the Colorado and development tax credits. For the nine months ended September 30, 2020, the effective income tax rate of 21.0% reflected a $6.9 million discrete benefit from financing third-party railroad track maintenance. In exchange, the Company received a federal income tax credit and deduction. Central Texas ready mixed concrete businesses.

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

Page 2120 of 5453

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended September 30, ~~2021~~2022

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Continued)

Pension and Postretirement Benefits

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

~~Pension and Postretirement Benefits~~

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

Pension

Postretirement Benefits

Three Months Ended September 30,

2021

2020

2021

2020

(Dollars in Millions)

Service cost

$
11.6

$
9.8

$
—

$
—

Interest cost

8.9

9.3

0.1

0.1

Expected return on assets

(17.7
)

(15.2
)

—

—

Amortization of:

Prior service cost (credit)

0.2

0.2

(0.2
)

(0.2
)
Actuarial loss

3.0

4.2

—

—

Net periodic benefit cost (credit)

$
6.0

$
8.3

$
(0.1
)

$
(0.1
)


	Pension						Postretirement Benefits
	Three Months Ended September 30,
	2022			2021			2022			2021
	(Dollars in Millions)
Service cost	$	12.0		$	11.6		$	—		$	—
Interest cost		10.3			8.9			0.1			0.1
Expected return on assets		(19.3	)		(17.7	)		—			—
Amortization of:
Prior service cost (credit)		1.3			0.2			(0.2	)		(0.2	)
Actuarial loss (gain)		1.0			3.0			(0.1	)		—
Settlement charge		4.5			—			—			—
Net periodic benefit cost (credit)	$	9.8		$	6.0		$	(0.2	)	$	(0.1	)


	Pension						Postretirement Benefits
	Nine Months Ended September 30,
	2022			2021			2022			2021
	(Dollars in Millions)
Service cost	$	36.1		$	34.7		$	—		$	—
Interest cost		30.9			26.7			0.2			0.2
Expected return on assets		(58.0	)		(52.8	)		—			—
Amortization of:
Prior service cost (credit)		3.7			0.5			(0.5	)		(0.5	)
Actuarial loss (gain)		3.0			9.2			(0.2	)		(0.1	)
Settlement charge		4.5			—			—			—
Net periodic benefit cost (credit)	$	20.2		$	18.3		$	(0.5	)	$	(0.4	)

Pension

Postretirement Benefits

Nine Months Ended September 30,

2021

2020

2021

2020

(Dollars in Millions)

Service cost

$
34.7

$
29.4

$
—

$
—

Interest cost

26.7

27.8

0.2

0.3

Expected return on assets

(52.8
)

(43.8
)

—

—

Amortization of:

Prior service cost (credit)

0.5

0.5

(0.5
)

(0.6
)
Actuarial loss (gain)

9.2

10.9

(0.1
)

(0.1
)
Net periodic benefit cost (credit)

$
18.3

$
24.8

$
(0.4
)

$
(0.4
)

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

Page 21 of 53

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended September 30, 2022

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Continued)

10. Commitments and Contingencies

~~Commitments and Contingencies~~

Legal and Administrative Proceedings

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

~~Page 22 of 54~~

~~MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES~~

~~FORM 10-Q~~

~~For the Quarter Ended September 30, 2021~~

~~(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Continued)~~

Borrowing Arrangements with Affiliate

The Company is a ~~co-borrower~~guarantor with an unconsolidated affiliate for a ~~$12.5~~$15.0 million revolving line of credit agreement with Truist Bank ~~of which $5.4 million was outstanding as of September 30, 2021 and~~that has a maturity date of March 2024, of which $3.6 million was outstanding at September 30, 2022. The affiliate has agreed to reimburse and indemnify the Company for any payments and expenses the Company may incur from this agreement. The Company holds a lien on the affiliate’s membership interest in a joint venture as collateral for payment under the revolving line of credit.

In addition, the Company has a ~~$6.0~~$6.0 million interest-only loan receivable, due December 31, ~~2022,~~2024, outstanding from this unconsolidated affiliate ~~as of~~at September 30, ~~2021~~2022 and December 31, ~~2020.~~2021. The interest rate is one-month LIBOR plus a current spread of ~~1.75%~~1.63%.

Letters of Credit

In the normal course of business, the Company provides certain third parties with standby letter of credit agreements guaranteeing ~~its~~ payment for certain insurance claims, contract performance and permit requirements. At September 30, ~~2021,~~2022, the Company was contingently liable for ~~$35.0~~$21.8 million in letters of ~~credit, of which $2.6 million were issued under the Company’s Revolving Facility.~~credit.

11. Business Segments

~~11.~~

~~Business Segments~~

The Building Materials business contains 2two reportable segments: the East Group and the West Group. The Company also has a Magnesia Specialties segment. The Company’s evaluation of performance and allocation of resources are based primarily on earnings from operations. Consolidated earnings from operations include total revenues less cost of revenues; selling, general and administrative expenses; ~~acquisition-related~~acquisition and integration expenses; other operating income and expenses, net; and exclude interest expense; other nonoperating income and expenses, net; and income taxes. Corporate loss from operations primarily includes depreciation; expenses for corporate administrative functions; ~~acquisition-related~~acquisition and integration expenses; and other nonrecurring income and expenses ~~excluded from~~not reported in one of the ~~Company’s evaluation of business segment performance and resource allocation.~~operating segments. All long-term debt and related interest expense are held at Corporate.

Page 22 of 53

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended September 30, 2022

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Continued)

The following table displays selected financial data for the Company’s reportable segments. Total revenues, as presented on the consolidated statements of earnings and comprehensive earnings, exclude intersegment revenues, which represent sales from one segment to another segment and are eliminated in consolidation. Total revenues, product and services revenues, and earnings (loss) from operations reflect continuing operations only. For the nine months ended September 30, 2022, earnings from operations for the West Group include a nonrecurring gain on a divestiture of $151.9 million.


	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2022			2021			2022			2021
	(Dollars in Millions)
Total revenues:
East Group	$	773.6		$	684.1		$	1,866.9		$	1,714.4
West Group		962.4			794.8			2,582.9			1,978.2
Total Building Materials business		1,736.0			1,478.9			4,449.8			3,692.6
Magnesia Specialties		75.7			78.4			234.4			225.0
Total	$	1,811.7		$	1,557.3		$	4,684.2		$	3,917.6

Products and services revenues:
East Group	$	728.5		$	641.8		$	1,755.5		$	1,610.9
West Group		883.0			749.0			2,382.2			1,861.9
Total Building Materials business		1,611.5			1,390.8			4,137.7			3,472.8
Magnesia Specialties		69.0			71.9			214.4			207.1
Total	$	1,680.5		$	1,462.7		$	4,352.1		$	3,679.9

Earnings (Loss) from operations:
East Group	$	239.4		$	205.8		$	478.0		$	465.3
West Group		159.7			150.6			477.2			284.2
Total Building Materials business		399.1			356.4			955.2			749.5
Magnesia Specialties		16.5			23.1			58.4			69.8
Corporate		(9.7	)		(22.6	)		(69.2	)		(55.6	)
Total	$	405.9		$	356.9		$	944.4		$	763.7

Page 23 of 5453

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended September 30, ~~2021~~2022

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Continued)

Three Months Ended

Nine Months Ended

September 30,

September 30,

2021

2020

2021

2020

(Dollars in Millions)

Total revenues:

East Group

$
684.1

$
549.3

$
1,714.4

$
1,465.9

West Group

794.8

711.2

1,978.2

1,904.2

Total Building Materials business

1,478.9

1,260.5

3,692.6

3,370.1

Magnesia Specialties

78.4

60.9

225.0

180.2

Total

$
1,557.3

$
1,321.4

$
3,917.6

$
3,550.3

Products and services revenues:

East Group

$
641.8

$
514.1

$
1,610.9

$
1,371.8

West Group

749.0

671.4

1,861.9

1,785.4

Total Building Materials business

1,390.8

1,185.5

3,472.8

3,157.2

Magnesia Specialties

71.9

55.2

207.1

164.0

Total

$
1,462.7

$
1,240.7

$
3,679.9

$
3,321.2

Earnings (Loss) from operations:

East Group

$
205.8

$
181.4

$
465.3

$
386.1

West Group

150.6

212.3

284.2

368.2

Total Building Materials business

356.4

393.7

749.5

754.3

Magnesia Specialties

23.1

16.4

69.8

51.2

Corporate

(22.6
)

(9.5
)

(55.6
)

(40.7
)
Total

$
356.9

$
400.6

$
763.7

$
764.8

12. Revenues and Gross Profit

September 30, 2021

December 31, 2020

Assets employed:

(Dollars in Millions)

East Group

$
5,075.9

$
4,342.5

West Group

5,613.4

5,355.5

Total Building Materials business

10,689.3

9,698.0

Magnesia Specialties

169.6

167.9

Corporate

2,927.3

714.9

Total

$
13,786.2

$
10,580.8

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

~~Page 24 of 54~~

~~MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES~~

~~FORM 10-Q~~

~~For the Quarter Ended September 30, 2021~~

~~(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Continued)~~

~~12.~~

~~Revenues and Gross Profit~~

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


	Three Months Ended						Nine Months Ended						Three Months Ended						Nine Months Ended
	September 30,						September 30,						September 30,						September 30,
	2021			2020			2021			2020			2022			2021			2022			2021
	(Dollars in Millions)												(Dollars in Millions)
Total revenues:
Building Materials business:
Products and services:
Aggregates	$	857.1		$	766.9		$	2,231.5		$	2,092.1		$	1,015.7		$	857.1		$	2,656.8		$	2,231.5
Cement		132.3			115.6			358.4			331.7			163.2			132.3			455.4			358.4
Ready mixed concrete		320.8			254.6			824.5			689.4			227.4			320.8			743.6			824.5
Asphalt and paving services		195.9			129.8			343.5			254.9			309.8			195.9			576.9			343.5
Less: interproduct revenues		(115.3	)		(81.4	)		(285.1	)		(210.9	)		(104.6	)		(115.3	)		(295.0	)		(285.1	)
Products and services		1,390.8			1,185.5			3,472.8			3,157.2			1,611.5			1,390.8			4,137.7			3,472.8
Freight		88.1			75.0			219.8			212.9			124.5			88.1			312.1			219.8
Total Building Materials business		1,478.9			1,260.5			3,692.6			3,370.1			1,736.0			1,478.9			4,449.8			3,692.6
Magnesia Specialties:
Products and services		71.9			55.2			207.1			164.0
Products														69.0			71.9			214.4			207.1
Freight		6.5			5.7			17.9			16.2			6.7			6.5			20.0			17.9
Total Magnesia Specialties		78.4			60.9			225.0			180.2			75.7			78.4			234.4			225.0
Total	$	1,557.3		$	1,321.4		$	3,917.6		$	3,550.3		$	1,811.7		$	1,557.3		$	4,684.2		$	3,917.6

Gross profit (loss):
Gross profit (loss):
Building Materials business:
Products and services:
Aggregates	$	292.9		$	279.1		$	687.7		$	640.4		$	330.3		$	292.9		$	741.2		$	687.7
Cement		49.9			46.5			101.3			117.2			67.7			49.9			146.1			101.3
Ready mixed concrete		31.4			24.7			69.9			56.7			18.7			31.4			54.1			69.9
Asphalt and paving services		38.9			32.6			59.4			46.4			50.5			38.9			63.6			59.4
Products and services		413.1			382.9			918.3			860.7			467.2			413.1			1,005.0			918.3
Freight		1.3			0.9			1.7			0.3			2.1			1.3			1.7			1.7
Total Building Materials business		414.4			383.8			920.0			861.0			469.3			414.4			1,006.7			920.0
Magnesia Specialties:
Products and services		28.1			21.0			84.4			65.3
Products														21.6			28.1			74.3			84.4
Freight		(1.1	)		(1.0	)		(3.0	)		(3.2	)		(1.0	)		(1.1	)		(3.4	)		(3.0	)
Total Magnesia Specialties		27.0			20.0			81.4			62.1			20.6			27.0			70.9			81.4
Corporate		0.5			0.7			0.3			4.3			(2.1	)		0.5			(8.5	)		0.3
Total	$	441.9		$	404.5		$	1,001.7		$	927.4		$	487.8		$	441.9		$	1,069.1		$	1,001.7

Page 2524 of 5453

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended September 30, ~~2021~~2022

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Continued)

13. Supplemental Cash Flow Information

~~13.~~

~~Supplemental Cash Flow Information~~

Noncash investing and financing activities are as follows:

	Nine Months Ended
	September 30,					Nine Months Ended
	2021			2020		September 30,
	(Dollars in Millions)					2022			2021
Noncash investing and financing activities:
						(Dollars in Millions)
Right-of-use assets obtained in exchange for new finance lease liabilities	$	177.8		$	15.0	$	10.2		$	177.8
Right-of-use assets obtained in exchange for new operating lease liabilities	$	17.3		$	29.3	$	23.4		$	17.3
Accrued liabilities for purchases of property, plant and equipment	$	28.6		$	30.5	$	51.8		$	28.6
Remeasurement of operating lease right-of-use assets	$	(12.4	)	$	1.9	$	(4.9	)	$	(12.4	)

Remeasurement of finance lease right-of-use assets						$	(11.4	)	$	—

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

Supplemental disclosures of cash flow information are as follows:


	Nine Months Ended				Nine Months Ended
	September 30,				September 30,
	2021		2020		2022		2021
	(Dollars in Millions)				(Dollars in Millions)
Cash paid for interest, net of capitalized amount	$	68.7	$	74.7	$	126.3	$	68.7
Cash paid for income taxes, net of refunds	$	101.1	$	68.9	$	160.0	$	101.1

During the nine months ended September 30, 2021, ~~and 2020,~~ the Company received proceeds of ~~$13.9~~$13.9 million, ~~and repaid $13.7 million of loans, respectively,~~ related to its company-owned life insurance policies. The proceeds ~~and repayment, as applicable,~~ are included in the Investments in life insurance contracts, net, in the investing activities of the consolidated statements of cash flows.

14. Other Operating Income, Net

~~14.~~

~~Other Operating Income, Net~~

For the nine months ended September 30, 2022, other operating income, net, included a $151.9 million pretax gain on the divestiture of the Colorado and Central Texas ready mixed concrete operations. Other operating income, net, for the nine months ended September 30, 2021 included a $12.3 million pretax gain on the sale of the Company’s former corporate ~~headquarters of $12.3 million.~~headquarters.

15. Other ~~operating~~Nonoperating Income, Net

Other nonoperating income, net, for the ~~three and~~ nine months ended September 30, ~~2020~~2022 included ~~$69.9~~a $12.0 million ~~on nonrecurring gains on~~pretax gain related to the ~~sales~~repurchase of ~~investment land~~the Company’s debt and ~~divested assets, which are recorded in~~higher interest income compared with the ~~West Group.~~prior-year period.

Page 2625 of 5453

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended September 30, ~~2021~~2022

~~(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Continued)~~

~~15.~~

~~Other Nonoperating Income, Net~~

For the three and nine months ended September 30, 2021, the increase in other nonoperating income, net, was primarily attributable to lower pension expense of $3.9 million and $11.8 million, respectively, compared with the prior-year periods. For the nine months ended September 30, 2020, other nonoperating income, net, included $5.6 million of third-party railroad track maintenance expense and reflected a $8.9 million reduction in pension expense compared with the prior-year period.

~~16.~~

~~Subsequent Event~~

On October 1, 2021, the Company successfully completed its previously announced acquisition of the Lehigh West Region business for $2.3 billion in cash. The acquisition was primarily financed using proceeds from the issuance of publicly traded debt during the quarter ended September 30, 2021.

Lehigh West Region has a portfolio of 17 active aggregates quarries, 2 cement plants (with related distribution terminals), and targeted downstream operations in 4 states. These operations provide a new upstream, materials-led growth platform across several of the nation’s largest and fastest growing megaregions in California and Arizona, solidifying the Company’s position as a leading coast-to-coast aggregates producer.

The acquisition reflects a stock transaction where the Company acquired 100% of the voting interest of the legal entities that comprise the Lehigh West Region. For tax purposes, the acquisition is being treated as an asset transaction. The Company acquired inventories; property, plant and equipment; intangible assets; right-of-use assets; and other assets; and assumed accrued liabilities, asset retirement obligations, lease obligations and other liabilities. The Company did not acquire any of Lehigh West Region’s cash, cash equivalents or accounts receivable nor did it assume any accounts payable, outstanding debt, or pension obligation. The Company is in the process of determining the acquisition-date fair values of assets acquired and liabilities assumed, and as of November 2, 2021, the initial accounting for the business combination has not been completed.

~~Page 27 of 54~~

~~MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES~~

~~FORM 10-Q~~

~~For the Quarter Ended September 30, 2021~~

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

OVERVIEW

Martin Marietta Materials, Inc. (the Company or Martin Marietta) is a natural resource-based building materials company. As of September 30, ~~2021,~~2022, the Company supplies aggregates (crushed stone, sand and gravel) through its network of approximately ~~320~~350 quarries, mines and distribution yards in 2628 states, Canada and The Bahamas. ~~In the southwestern and western United States,~~ Martin Marietta also provides cement and downstream products and services, namely, ready mixed concrete, asphalt and paving, in vertically-integrated structured markets where the Company has a leading aggregates position. ~~The~~In addition, the Company ~~also provides asphalt~~has one cement plant, cement distribution terminals and ready mixed concrete operations in ~~Minnesota, subsequent to a business combination in~~California that are classified as assets held for sale and reported as discontinued operations as of and for the ~~quarter~~nine months ended ~~June~~September 30, ~~2021.~~2022. The Company’s heavy-side building materials are used in infrastructure, nonresidential and residential construction projects. Aggregates are also used in agricultural, utility and environmental applications and as railroad ballast. The aggregates, cement, ready mixed concrete and asphalt and paving product lines are reported collectively as the “Building Materials” business.

The Company’s Building Materials business includes two reportable segments: the East Group and the West Group.

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

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

~~Facility Types~~	~~Quarries, Mines, Plants and Distribution Facilities~~		~~Quarries, Mines, Plants and~~ ~~Distribution Facilities~~
Facility Types	Quarries, Mines, Asphalt Plants and Distribution Facilities		Quarries, Mines, Cement Plants, Asphalt Plants, Ready Mixed Concrete Plants and Distribution Facilities

Modes of Transportation	Truck, ~~Railcar~~Rail and Ship	Truck and ~~Railcar~~Rail

The Building Materials business is significantly affected by weather patterns and seasonal changes. Production and shipment levels for aggregates, cement, ready mixed concrete and asphalt materials correlate with general construction activity levels, most of which occur in the spring, summer and fall. Thus, production and shipment levels vary by quarter. Operations concentrated in the northern and midwestern United States generally experience more severe winter weather conditions than operations in the ~~southeast, southwest~~Southeast, Southwest and ~~west.~~West. Excessive rainfall, and conversely excessive drought, can also jeopardize production, shipments and profitability in all markets served by the Company. Due to the potentially significant impact of weather on the Company’s operations, current-period results are not necessarily indicative of expected performance for other interim periods or the full year.

Page 26 of 53

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended September 30, 2022

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

(Continued)

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

~~Page 28 of 54~~

~~MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES~~

~~FORM 10-Q~~

~~For the Quarter September 30, 2021~~

~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND~~

~~RESULTS OF OPERATIONS~~

~~(Continued)~~

CRITICAL ACCOUNTING POLICIES

The Company outlined its critical accounting policies in its Annual Report on Form 10-K for the year ended December 31, ~~2020.~~2021. There were no changes to the Company’s critical accounting policies during the nine months ended September 30, ~~2021.~~ 2022.

RESULTS OF OPERATIONS

Earnings from continuing operations before interest; income taxes; depreciation, depletion and amortization; the earnings/loss from nonconsolidated equity affiliates; ~~acquisition-related~~acquisition and integration expenses; ~~and~~ the impact of selling acquired inventory after ~~its~~ markup to fair value as part of acquisition ~~accounting~~accounting; and the nonrecurring gain on the divestiture of certain ready mixed concrete operations (Adjusted EBITDA) is an indicator used by the Company and investors to evaluate the Company’s operating performance from period to period. Adjusted EBITDA is not defined by accounting principles generally accepted in the United States (GAAP) and, as such, should not be construed as an alternative to net earnings, earnings from operations or cash provided by operating activities. However, the Company’s management believes that Adjusted EBITDA may provide additional information with respect to the Company’s performance and is a measure used by management to evaluate the Company’s performance. Because Adjusted EBITDA excludes some, but not all, items that affect net earnings and may vary among companies, Adjusted EBITDA as presented by the Company may not be comparable with similarly titled measures of other companies.

A reconciliation of net earnings from continuing operations attributable to Martin Marietta to Adjusted EBITDA is as follows:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,				Three Months Ended					Nine Months Ended
	2021		2020		2021		2020		September 30,					September 30,
	(Dollars in Millions)								2022			2021		2022			2021
Net Earnings Attributable to Martin Marietta	$	254.6	$	294.4	$	545.7	$	538.0
Add back:
									(Dollars in Millions)
Net earnings from continuing operations attributable to Martin Marietta									$	291.2		$	254.6	$	668.9		$	545.7
Add back (Deduct):
Interest expense, net of interest income		44.2		28.6		99.6		89.3		38.8			44.2		121.5			99.6
Income tax expense for controlling interests		63.6		81.5		141.7		143.0		79.1			63.6		189.4			141.7
Depreciation, depletion and amortization and earnings/loss from nonconsolidated equity affiliates		112.1		97.2		314.2		287.5		122.4			112.1		374.6			314.2
Acquisition-related expenses		7.4		—		18.0		—
Acquisition and integration expenses										1.8			7.4		6.1			18.0
Impact of selling acquired inventory after markup to fair value as a part of acquisition accounting		8.1		—		15.7		—		—			8.1		—			15.7
Nonrecurring gain on divestiture										(0.2	)		—		(151.9	)		—
Adjusted EBITDA	$	490.0	$	501.7	$	1,134.9	$	1,057.8	$	533.1		$	490.0	$	1,208.6		$	1,134.9

Page 2927 of 5453

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended September 30, ~~2021~~2022

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

(Continued)

Adjusted consolidated earnings from operations and adjusted earnings per diluted share from continuing operations represent non-GAAP financial measures and exclude acquisition and integration expenses; the impact of selling acquired inventory after its markup to fair value as part of acquisition accounting; and the impact of the nonrecurring gain on the divestiture of certain ready mixed concrete operations. Management presents these measures for investors to evaluate and forecast the Company’s results, as the impact of these items are nonrecurring.

A reconciliation of consolidated earnings from operations to adjusted consolidated earnings from operations is as follows:


	Three Months Ended					Nine Months Ended
	September 30,					September 30,
	2022			2021		2022			2021
	(Dollars in Millions)
Consolidated earnings from operations in accordance with GAAP	$	405.9		$	356.9	$	944.4		$	763.7
Add back (Deduct):
Acquisition and integration expenses		1.8			7.4		6.1			18.0
Impact of selling acquired inventory after its markup to fair value as part of acquisition accounting		—			8.1		—			15.7
Nonrecurring gain on divestiture		(0.2	)		—		(151.9	)		—
Adjusted consolidated earnings from operations	$	407.5		$	372.4	$	798.6		$	797.4

A reconciliation of earnings per diluted share from continuing operations to adjusted earnings per diluted share from continuing operations is as follows:


	Three Months Ended September 30, 2022
	Pretax		Income Tax			After-Tax		Per Share
	(In Millions, Except per Share)
Earnings per diluted share from continuing operations in accordance with GAAP								$	4.67
Impact of acquisition and integration expenses	$	1.8	$	(0.5	)	$	1.3		0.02
Adjusted earnings per diluted share from continuing operations								$	4.69


	Three Months Ended September 30, 2021
	Pretax		Income Tax			After-Tax		Per Share
	(In Millions, Except per Share)
Earnings per diluted share from continuing operations in accordance with GAAP								$	4.07
Impact of acquisition and integration expenses	$	7.4	$	(1.8	)	$	5.6		0.09
Impact of selling acquired inventory after its markup to fair value as part of acquisition accounting	$	8.1	$	(2.3	)	$	5.8		0.09
Adjusted earnings per diluted share from continuing operations								$	4.25

Page 28 of 53

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended September 30, 2022

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

(Continued)


	Nine Months Ended September 30, 2022
	Pretax			Income Tax			After-Tax			Per Share
	(In Millions, Except per Share)
Earnings per diluted share from continuing operations in accordance with GAAP										$	10.69
Impact of acquisition and integration expenses	$	6.1		$	(1.4	)	$	4.7			0.07
Impact of nonrecurring gain on divestiture	$	(151.9	)	$	43.6		$	(108.3	)		(1.73	)
Adjusted earnings per diluted share from continuing operations										$	9.03


	Nine Months Ended September 30, 2021
	Pretax		Income Tax			After-Tax		Per Share
	(In Millions, Except per Share)
Earnings per diluted share from continuing operations in accordance with GAAP								$	8.72
Impact of acquisition and integration expenses	$	18.0	$	(4.2	)	$	13.8		0.22
Impact of selling acquired inventory after its markup to fair value as part of acquisition accounting	$	15.7	$	(4.2	)	$	11.5		0.18
Adjusted earnings per diluted share from continuing operations								$	9.12

Mix-adjusted average selling price (mix-adjusted ASP) excludes the impacts of product, geographic and other mix from the current-period average selling price and is a non-GAAP measure. Mix-adjusted ASP is calculated by comparing current-period shipments to like-for-like shipments in the comparable prior period. Management uses this metric to evaluate the effectiveness of the Company’s pricing increases and believes this information is useful to investors as it provides same-on-same pricing trends.

Page 29 of 53

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended September 30, 2022

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

(Continued)

The following reconciles reported average selling price to mix-adjusted ASP and corresponding variances.

	Three Months Ended					Nine Months Ended
	September 30,					September 30,					Three Months Ended					Nine Months Ended
	2021			2020		2021			2020		September 30,					September 30,
East Group - Aggregates:
											2022			2021		2022			2021
Organic East Group - Aggregates:
Reported average selling price	$	15.25		$	15.19	$	15.62		$	15.26	$	17.01		$	15.25	$	16.95		$	15.62
Adjustment for unfavorable impact of product, geographic and other mix		0.31					0.04
Adjustment for impact of product, geographic and other mix												(0.19	)				(0.08	)
Mix-adjusted ASP											$	16.82				$	16.87

Reported average selling price variance												11.5	%				8.5	%
Mix-adjusted ASP variance												10.3	%				8.0	%

Organic West Group - Aggregates:
Reported average selling price											$	16.11		$	14.33	$	15.71		$	14.09
Adjustment for impact of product, geographic and other mix												0.11					(0.25	)
Mix-adjusted ASP											$	16.22				$	15.46

Reported average selling price variance												12.4	%				11.5	%
Mix-adjusted ASP variance												13.2	%				9.7	%

Total Organic Aggregates:
Reported average selling price											$	16.70		$	14.93	$	16.50		$	15.08
Adjustment for impact of product, geographic and other mix												(0.09	)				(0.13	)
Mix-adjusted ASP	$	15.56				$	15.66				$	16.61				$	16.37

Reported average selling price variance		0.4	%				2.4	%				11.9	%				9.4	%
Mix-adjusted ASP variance		2.5	%				2.6	%				11.3	%				8.6	%

Cement:
Reported average selling price	$	122.91		$	113.41	$	120.29		$	113.83	$	149.24		$	122.91	$	139.64		$	120.29
Adjustment for favorable impact of product, geographic and other mix		(1.97	)				(1.52	)
Adjustment for impact of product, geographic and other mix												(0.97	)				(0.72	)
Mix-adjusted ASP	$	120.94				$	118.77				$	148.27				$	138.92

Reported average selling price variance		8.4	%				5.7	%				21.4	%				16.1	%
Mix-adjusted ASP variance		6.6	%				4.3	%				20.6	%				15.5	%

Page 30 of 5453

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended September 30, ~~2021~~2022

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

(Continued)

Quarter Ended September 30, ~~2021~~2022

Financial highlights for the quarter ended September 30, ~~2021~~2022 (unless noted, all comparisons are versus the prior-year ~~quarter)~~quarter and for continuing operations):

♦

~~Consolidated total revenues of $1.56 billion compared with $1.32 billion~~

♦

Consolidated total revenues of $1.81 billion compared with $1.56 billion

♦

~~Building Materials business products and services revenues of $1.39 billion compared with $1.19 billion~~

♦

Building Materials business products and services revenues of $1.61 billion compared with $1.39 billion

♦

~~Magnesia Specialties products revenues of $71.9 million compared with $55.2 million~~

♦

Magnesia Specialties products revenues of $69.0 million compared with $71.9 million

♦

~~Consolidated gross profit of $441.9 million~~⁽¹⁾ ~~compared with $404.5 million~~

♦

Consolidated gross profit of $487.8 million compared with $441.9 million

♦

~~Consolidated earnings from operations of $356.9 million~~⁽²⁾ ~~compared with $400.6 million~~⁽³⁾

♦

Consolidated earnings from operations of $405.9 million compared with $356.9 million

♦

~~Net earnings attributable to Martin Marietta of $254.6 million compared with $294.4 million~~⁽⁴⁾

♦

Adjusted consolidated earnings from operations of $407.5 million compared with $372.4 million

♦

~~Adjusted EBITDA of $490.0 million compared with $501.7 million~~⁽³⁾

♦

Net earnings from continuing operations attributable to Martin Marietta of $291.2 million compared with $254.6 million

♦

~~Earnings per diluted share of $4.07~~⁽⁵⁾ ~~compared with $4.71~~⁽⁴⁾

⁽¹⁾~~Includes $8.1~~♦

Adjusted EBITDA of $533.1 million ~~of costs for~~ compared with $490.0 million

♦~~selling acquired inventory after markup to fair value as a part of acquisition accounting~~

⁽²⁾~~Includes $8.1 million of costs for~~ ~~selling acquired inventory after markup to fair value as a part of acquisition accounting and $7.4 million of acquisition-related expenses~~

⁽³⁾~~Includes nonrecurring gains on sales of investment land and divested assets of $69.9 million~~

⁽⁴⁾~~Includes nonrecurring gains on sales of investment land and divested assets, net of tax, of $54.1 million, or $0.87~~

Earnings per diluted share from continuing operations of $4.67 compared with $4.07

♦

⁽⁵⁾~~Includes $0.18~~

Adjusted earnings per diluted share from continuing operations of ~~costs for~~ $4.69 compared with $4.25

~~selling acquired inventory after markup to fair value as a part of acquisition accounting and of acquisition-related expenses~~

Page 31 of 5453

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended September 30, ~~2021~~2022

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

(Continued)

The following tables present total revenues, gross profit (loss), selling, general and administrative (SG&A) expenses and earnings (loss) from operations data for the Company and its reportable segments by product line for continuing operations for the three months ended September 30, ~~2021~~2022 and ~~2020.~~2021. In each case, the data is stated as a percentage of revenues of the Company or the relevant segment or product line, as the case may be.

Three Months Ended September 30,

2021

2020

Amount

Amount

(Dollars in Millions)

Total revenues:

Building Materials business:

Products and services

East Group

Aggregates

$
569.7

$
514.1

Asphalt

80.2

—

Less: Interproduct revenues

(8.1
)

—

East Group Total

641.8

514.1

West Group

Aggregates

287.4

252.8

Cement

132.3

115.6

Ready mixed concrete

320.8

254.6

Asphalt and paving

115.7

129.8

Less: Interproduct revenues

(107.2
)

(81.4
)

West Group Total

749.0

671.4

Products and services

1,390.8

1,185.5

Freight

88.1

75.0

Total Building Materials business

1,478.9

1,260.5

Magnesia Specialties:

Products

71.9

55.2

Freight

6.5

5.7

Total Magnesia Specialties

78.4

60.9

Total

$
1,557.3

$
1,321.4


	Three Months Ended September 30,
	2022			2021
	Amount			Amount
	(Dollars in Millions)
Total revenues:
Building Materials business:
Products and services
East Group
Aggregates	$	641.7		$	569.7
Asphalt		96.0			80.2
Less: Interproduct revenues		(9.2	)		(8.1	)
East Group Total		728.5			641.8
West Group
Aggregates		374.0			287.4
Cement		163.2			132.3
Ready mixed concrete		227.4			320.8
Asphalt and paving		213.8			115.7
Less: Interproduct revenues		(95.4	)		(107.2	)
West Group Total		883.0			749.0
Products and services		1,611.5			1,390.8
Freight		124.5			88.1
Total Building Materials business		1,736.0			1,478.9
Magnesia Specialties:
Products		69.0			71.9
Freight		6.7			6.5
Total Magnesia Specialties		75.7			78.4
Total	$	1,811.7		$	1,557.3

Page 32 of 5453

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended September 30, ~~2021~~2022

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

(Continued)


	Three Months Ended September 30,										Three Months Ended September 30,
	2021					2020					2022					2021
	Amount			% of Revenues		Amount			% of Revenues		Amount			% of Revenues		Amount			% of Revenues
	(Dollars in Millions)										(Dollars in Millions)
Gross profit (loss):
Building Materials business:
Products and services
East Group
Aggregates	$	215.6			37.9	$	206.1			40.1
Asphalt		15.1			18.9		—			—
East Group Total		230.7			36.0		206.1			40.1
West Group
Aggregates		77.3			26.9		73.0			28.9		330.3			32.5	$	292.9			34.2
Cement		49.9			37.7		46.5			40.2		67.7			41.5		49.9			37.7
Ready mixed concrete		31.4			9.8		24.7			9.7		18.7			8.2		31.4			9.8
Asphalt and paving		23.8			20.6		32.6			25.2		50.5			16.3		38.9			19.9
West Group Total		182.4			24.3		176.8			26.3
Products and services		413.1			29.7		382.9			32.3		467.2			29.0		413.1			29.7
Freight		1.3					0.9					2.1					1.3
Total Building Materials business		414.4			28.0		383.8			30.4		469.3			27.0		414.4			28.0
Magnesia Specialties:
Products		28.1			39.0		21.0			38.0		21.6			31.3		28.1			39.0
Freight		(1.1	)				(1.0	)				(1.0	)				(1.1	)
Total Magnesia Specialties		27.0			34.4		20.0			32.8		20.6			27.2		27.0			34.4
Corporate		0.5					0.7					(2.1	)				0.5
Total	$	441.9			28.4	$	404.5			30.6	$	487.8			26.9	$	441.9			28.4

~~Aggregates Products Gross Profit Rollforward~~

~~The following presents a rollforward of aggregates products gross profit (dollars in millions):~~

Aggregates products gross profit, quarter ended September 30, 2020

$
279.1

Volume

17.8

Pricing

28.7

Operational performance⁽¹⁾

(32.7
)
Change in aggregates products gross profit

13.8

Aggregates products gross profit, quarter ended September 30, 2021

$
292.9

⁽¹⁾~~Inclusive of cost increases/decreases, product and geographic mix and other operating impacts~~

Page 33 of 5453

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended September 30, ~~2021~~2022

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

(Continued)


	Three Months Ended September 30,
	2022					2021
	Amount			% of Revenues		Amount			% of Revenues
	(Dollars in Millions)
Selling, general & administrative expenses:
Building Materials business:
East Group	$	29.0				$	26.5
West Group		41.0					34.2
Total Building Materials business		70.0					60.7
Magnesia Specialties		4.0					3.8
Corporate		20.9					21.5
Total	$	94.9			5.2	$	86.0			5.5

	Three Months Ended September 30,
	2022					2021
	Amount			% of Revenues		Amount			% of Revenues
	(Dollars in Millions)
Earnings (Loss) from operations:
Building Materials business:
East Group	$	239.4				$	205.8
West Group		159.7					150.6
Total Building Materials business		399.1					356.4
Magnesia Specialties		16.5					23.1
Corporate		(9.7	)				(22.6	)
Total	$	405.9			22.4	$	356.9			22.9

Three Months Ended September 30,

2021

2020

Amount

% of
Revenues

Amount

% of
Revenues

(Dollars in Millions)

Selling, general & administrative expenses:

Building Materials business:

East Group

$
26.5

$
24.9

West Group

34.2

34.2

Total Building Materials business

60.7

59.1

Magnesia Specialties

3.8

3.6

Corporate

21.5

8.4

Total

$
86.0

5.5

$
71.1

5.4

Earnings (Loss) from operations:

Building Materials business:

East Group

$
205.8

$
181.4

West Group

150.6

212.3

Total Building Materials business

356.4

393.7

Magnesia Specialties

23.1

16.4

Corporate

(22.6
)

(9.5
)

Total

$
356.9

22.9

$
400.6

30.3

Page 34 of 53

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended September 30, 2022

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

(Continued)

Building Materials Business

The following tables present aggregates volume and pricing variance data and shipments data by segment:

	Three Months Ended
	September 30, 2021						Three Months Ended
	Volume			Pricing			September 30, 2022
Volume/Pricing variance⁽¹⁾
							Volume			Pricing
Volume/Pricing Variance(1)
East Group		10.1	%		0.4	%		0.2	%		11.5	%
West Group		10.4	%		2.8	%		15.6	%		12.2	%
Total aggregates operations⁽²⁾		10.2	%		1.2	%		5.6	%		11.6	%
Organic aggregates operations⁽³⁾		6.0	%		2.2	%		(0.1	)%		11.9	%


	Three Months Ended
	September 30,
	2022		2021
	(Tons in Millions)
Shipments
East Group		37.2		37.1
West Group		23.0		19.9
Total aggregates operations(2)		60.2		57.0

~~Page 34 of 54~~

~~MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES~~

~~FORM 10-Q~~

~~For the Quarter September 30, 2021~~

~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND~~

~~RESULTS OF OPERATIONS~~

~~(Continued)~~

Three Months Ended

September 30,

2021

2020

(Tons in Millions)

Shipments

East Group

37.1

33.7

West Group

19.9

18.1

Total aggregates operations⁽²⁾

57.0

51.8

⁽¹⁾ Volume/pricing variances reflect the percentage ~~increase/(decrease)~~increase from the comparable period in the prior year.

⁽²⁾(2) Total aggregates operations include acquisitions from the date of acquisition and divestitures through the date of disposal.

⁽³⁾Organic aggregates operations exclude volume and pricing data for acquisitions that have not been included in prior-year operations for the comparable period and divestitures.

Page 35 of 53

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended September 30, 2022

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

(Continued)

The following table presents shipments data by product line for the Building Materials business:

	Three Months Ended
	September 30,							Three Months Ended September 30,
	2021		2020		% Change			2022		2021		% Change
Shipments
Aggregates (in millions):
Tons to external customers		52.0		48.1					55.9		52.0
Internal tons used in other product lines		5.0		3.7					4.3		5.0
Total aggregates tons		57.0		51.8		10.2	%		60.2		57.0		5.6	%

Cement (in millions):
Tons to external customers		0.7	��	0.7					0.8		0.7
Internal tons used in ready mixed concrete		0.4		0.3					0.3		0.4
Total cement tons		1.1		1.0		4.1	%		1.1		1.1		2.3	%

Ready Mixed Concrete (in millions of cubic yards)		2.7		2.2		23.2	%		1.7		2.7		(37.6	)%

Asphalt (in millions):
Tons to external customers		2.0		0.3					2.8		2.0
Internal tons used in paving business		0.8		1.0					0.9		0.8
Total asphalt tons		2.8		1.3		115.9	%		3.7		2.8		31.3	%

~~Page 35 of 54~~

~~MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES~~

~~FORM 10-Q~~

~~For the Quarter September 30, 2021~~

~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND~~

~~RESULTS OF OPERATIONS~~

~~(Continued)~~

The average selling price by product line for the Building Materials business is as follows:

	Three Months Ended
	September 30,							Three Months Ended September 30,
	2021		2020		% Change			2022		2021		% Change
Aggregates (per ton)	$	14.93	$	14.75		1.2	%	$	16.65	$	14.93		11.6	%
Cement (per ton)	$	122.91	$	113.41		8.4	%	$	149.24	$	122.91		21.4	%
Ready Mixed Concrete (per cubic yard)	$	116.75	$	114.15		2.3	%	$	132.64	$	116.75		13.6	%
Asphalt (per ton)	$	48.72	$	49.56		(1.7	)%	$	61.45	$	48.72		26.1	%

Aggregates End-Use Markets

~~Aggregates~~Organic aggregates shipments to the infrastructure market remained flat, reflecting increased ~~5%, primarily driven~~highway construction activity in North Carolina, Colorado, Georgia and Indiana which was offset by ~~strong underlying demand.~~project delays and projects coming to completion in Texas. The infrastructure market accounted for 36% of third-quarter organic aggregates shipments.

~~Aggregates~~Organic aggregates shipments to the nonresidential market increased ~~17%~~2%, driven by ~~robust demand~~several large manufacturing, data center and energy projects in ~~heavy industrial projects of scale across our geographic footprint.~~Georgia, North Carolina, Iowa and Texas. The nonresidential market represented 35% of third-quarter organic aggregates shipments.

~~Aggregates~~Organic aggregates shipments to the residential market ~~increased 8%~~decreased 3%. ~~Low available resale inventory~~Despite overall underbuilt conditions, several markets experienced a slowdown in this end use due to affordability concerns and ~~underbuilt single-family housing conditions continued to drive robust residential construction activity.~~logistical challenges. The residential market accounted for 24% of third-quarter organic aggregates shipments.

The ChemRock/Rail market accounted for the remaining 5% of third-quarter organic aggregates shipments. Volumes to this end use increased ~~14%~~4%, driven by increased ~~aglime shipments in Iowa.~~

~~Building Materials Business Product Lines~~ballast shipments.

Third-quarter aggregates shipments, including shipments from acquired operations, grew 10.2% compared with prior-year quarter. Acquired operations have selling prices below the Company’s average which limited pricing growth to 1.2%. Organic aggregates shipments increased 6.0% while pricing increased 2.2%, reflecting a higher percentage of lower-priced base stone shipments and opportunistic sales of low-priced excess fill material. East Group shipments increased 10.1%, reflecting strong construction activity across all three primary end-use markets and shipments from the recently acquired Tiller operations. Pricing increased 0.4% in the East Group, inclusive of acquisitions. On a mix-adjusted basis, East Group pricing grew 2.5%. West Group shipments increased 10.4%, from strong underlying demand in both Texas and Colorado, improving energy-sector activity and shipments from the recent SCC acquisition in Texas. West Group pricing increased 2.8%. Aggregates product gross margin decreased 220 basis points to 34.2%, driven primarily by higher diesel costs, higher repairs, maintenance and contract service costs and an increase in cost of revenues from the impact of selling acquired inventory after its markup to fair value as part of acquisition accounting, partially offset by higher average selling prices

Cement shipments increased 4.1% benefitting from robust construction activity throughout the Texas Triangle and improving demand for specialty oil-well cement products. Cement pricing improved 8.4%, or 6.6% on a mix-adjusted basis, reflecting periodic price increases. Product gross margin declined 250 basis points to 37.7%, as higher energy, operating and raw materials costs more than offset pricing gains.

Ready mixed concrete shipments increased 23.2%, or 20.5% organically, reflecting the healthy Texas and Colorado demand environment. Pricing increased 2.3% in third quarter 2021 compared with third quarter 2020, following the implementation of mid-year price increases in Texas. Product gross margin increased modestly to 9.8%, as volume and

Page 36 of 5453

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended September 30, ~~2021~~2022

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

~~(Continued)~~

(Continued)

Building Materials Business

Third-quarter organic aggregates shipments were flat, due to logistical constraints and cement shortages as well as inclement weather in certain key markets. Organic pricing ~~growth overcame higher raw material~~increased 11.9%, or 11.3% on a mix-adjusted basis, over the prior-year quarter as the Company continued to benefit from price increases. Including acquired operations, total aggregates shipments and ~~diesel~~pricing grew 5.6% and 11.6%, respectively. East Group total shipments were flat, as strong underlying demand was negatively impacted by logistical bottlenecks and weather-related disruptions. East Group pricing increased 11.5%. West Group total shipments improved 15.6%, driven primarily by contributions from acquired operations and strong Texas demand, partially offset by historically wet weather in North Texas in the month of August. West Group pricing, inclusive of acquisitions, increased 12.2%. West Group organic pricing increased 12.4%, or 13.2% on a mix-adjusted basis. Third-quarter aggregates product gross profit improved 12.8% to $330.3 million, while product gross margin declined 170 basis points to 32.5%, primarily due to increased energy, internal freight and repairs and maintenance costs. ~~Asphalt~~

Cement shipments of 1.1 million tons increased ~~115.9%~~2.3% driven by continued strong demand. Pricing increased 21.4%, or 20.6% on a mix-adjusted basis, following multiple price increases in Texas. Cement product gross profit grew to $67.7 million, an increase of 35.8%, and product gross margin expanded 380 basis points to 41.5%, as ~~incremental volume from the Tiller acquisition~~pricing gains more than offset ~~Colorado shipment declines resulting from~~higher energy costs in the ~~late-summer liquid asphalt shortages that have since been resolved. Asphalt pricing decreased 1.7%~~period.

On an organic basis, ready mix shipments were down 16.8%, ~~reflecting a higher percentage~~largely due to significant rainfall in Texas during August as well as the completion of ~~lower-priced shipments from the Company’s newly-acquired Minnesota business.~~certain large projects. Organic pricing increased ~~1.2%. Asphalt~~20.3% due to multiple price increases implemented during the year. Ready mix product revenues and gross profit from continuing operations declined 29.1% and 40.3%, respectively, driven primarily by the divestiture of the Company’s Colorado and Central Texas ready mixed concrete businesses on April 1, which was partially offset by acquired operations in Arizona.

Including contributions from the acquired West Coast operations, total asphalt shipments and pricing increased 31.3% and 26.1%, respectively. On an organic basis, total asphalt shipments and pricing increased 4.3% and 22.0%, respectively. Total asphalt and paving products and services gross profit increased to a record $50.5 million. However, continued acceleration of liquid asphalt, or bitumen, costs contributed to products and services gross margin ~~decreased 530~~compression of 360 basis points ~~driven by higher raw material costs and operational disruptions from~~in the ~~Colorado liquid asphalt shortage.~~third quarter.

Magnesia Specialties Business

Magnesia Specialties third-quarter product revenues ~~increased 30.3%~~decreased 4.0% to ~~$71.9~~$69.0 million, ~~reflecting improved~~driven largely by lower demand in the steel industry for ~~chemicals and~~dolomitic lime ~~products compared with a COVID-19-challenged prior-year quarter.~~products. Product gross profit ~~was $28.1~~declined 22.9% to $21.6 million, ~~compared with $21.0 million. Product~~as higher energy costs, particularly natural gas, depressed gross margin ~~increased 100 basis points to 39.0% on strong volume and price increases. Third-quarter earnings from operations were $23.1 million~~ in ~~2021 compared with $16.4 million in 2020.~~the quarter.

Consolidated Operating Results

Consolidated SG&A for third quarter ~~2021~~2022 was ~~5.5%~~5.2% of total revenues compared with ~~5.4%~~5.5% in the prior-year ~~quarter. During~~quarter, a 30-basis-point improvement.

Among other items, other operating income, net, includes gains and losses on the sale of assets; recoveries and write-offs related to customer accounts receivable; rental, royalty and services income; and accretion expense, depreciation expense and gains and losses related to asset retirement obligations. For the third quarter, ~~2021, the Company incurred $0.2~~consolidated other operating income, net, was income of $14.8 million in ~~COVID-19-related expenses versus $1.3~~2022 and $8.4 million in 2021, with the ~~prior-year quarter. Prior year spending included stock build~~increase driven by higher gains on sales of ~~enhanced personal protective equipment, as well as cleaning~~surplus land and sanitizing protocols across the Company’s operations, which are recorded in SG&A. The Company incurred acquisition-related expenses of $7.4 million in the quarter ended September 30, 2021 versus $0.4 million in the prior-year quarter. other assets.

Earnings from operations for the quarter were $405.9 million in 2022 compared with $356.9 million in 2021, with the increase driven by year-over-year price increases, partially offset by higher costs for energy, supplies, and freight.

Page 37 of 53

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended September 30, 2022

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

(Continued)

Other nonoperating income, net, includes interest income; pension and postretirement benefit cost excluding service cost; foreign currency transaction gains and losses; equity earnings or losses from nonconsolidated affiliates; and other miscellaneous income and expenses. For the third quarter, other nonoperating income, net, was $7.3 million and $5.6 million in 2022 and 2021, respectively.

Nine Months Ended September 30, 2022

Financial highlights for the nine months ended September 30, 2022 (unless noted, all comparisons are versus the prior-year period:

♦

Consolidated total revenues of $4.68 billion compared with ~~$400.6~~$3.92 billion

♦

Building Materials business products and services revenues of $4.14 billion compared with $3.47 billion

♦

Magnesia Specialties products revenues of $214.4 million compared with $207.1 million

♦

Consolidated gross profit of $1.07 billion compared with $1.00 billion

♦

Consolidated earnings from operations of $944.4 million compared with $763.7 million

♦

Adjusted consolidated earnings from operations of $798.6 million compared with $797.4 million

♦

Net earnings from continuing operations attributable to Martin Marietta of $668.7 million compared with $545.9 million

♦

Adjusted EBITDA of $1.21 billion compared with $1.13 billion

♦

Earnings per diluted share from continuing operations of $10.69 compared with $8.72

♦

Adjusted earnings per diluted share of $9.03 compared with $9.12

Page 38 of 53

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended September 30, 2022

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

(Continued)

The following tables present total revenues, gross profit (loss), selling, general and administrative (SG&A) expenses and earnings (loss) from operations data for the Company and its reportable segments by product line for continuing operations for the nine months ended September 30, 2022 and 2021. In each case, the data is stated as a percentage of revenues of the Company or the relevant segment or product line, as the case may be. For the nine months ended September 30, 2022, earnings from operations for the West Group included a $151.9 million nonrecurring gain on divested assets.


	Nine Months Ended September 30,
	2022			2021
	Amount			Amount
	(Dollars in Millions)
Total revenues:
Building Materials business:
Products and services
East Group
Aggregates	$	1,627.4		$	1,496.5
Asphalt		143.4			127.3
Less: Interproduct revenues		(15.3	)		(12.9	)
East Group Total		1,755.5			1,610.9
West Group
Aggregates		1,029.4			735.0
Cement		455.4			358.4
Ready mixed concrete		743.6			824.5
Asphalt and paving		433.5			216.2
Less: Interproduct revenues		(279.7	)		(272.2	)
West Group Total		2,382.2			1,861.9
Products and services		4,137.7			3,472.8
Freight		312.1			219.8
Total Building Materials business		4,449.8			3,692.6
Magnesia Specialties:
Products		214.4			207.1
Freight		20.0			17.9
Total Magnesia Specialties		234.4			225.0
Total	$	4,684.2		$	3,917.6

Page 39 of 53

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended September 30, 2022

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

(Continued)


	Nine Months Ended September 30,
	2022					2021
	Amount			% of Revenues		Amount			% of Revenues
	(Dollars in Millions)
Gross profit (loss):
Building Materials business:
Aggregates	$	741.2			27.9	$	687.7			30.8
Cement		146.1			32.1		101.3			28.3
Ready mixed concrete		54.1			7.3		69.9			8.5
Asphalt and paving		63.6			11.0		59.4			17.3
Products and services		1,005.0			24.3		918.3			26.4
Freight		1.7					1.7
Total Building Materials business		1,006.7			22.6		920.0			24.9
Magnesia Specialties:
Products		74.3			34.6		84.4			40.7
Freight		(3.4	)				(3.0	)
Total Magnesia Specialties		70.9			30.2		81.4			36.2
Corporate		(8.5	)				0.3
Total	$	1,069.1			22.8	$	1,001.7			25.6


	Nine Months Ended September 30,
	2022					2021
	Amount			% of Total Revenues		Amount			% of Total Revenues
	(Dollars in Millions)
Selling, general & administrative expenses:
Building Materials business:
East Group	$	86.5				$	77.0
West Group		124.0					101.1
Total Building Materials business		210.5					178.1
Magnesia Specialties		12.0					11.1
Corporate		73.5					59.0
Total	$	296.0			6.3	$	248.2			6.3

Earnings (Loss) from operations:
Building Materials business:
East Group	$	478.0				$	465.3
West Group		477.2					284.2
Total Building Materials business		955.2					749.5
Magnesia Specialties		58.4					69.8
Corporate		(69.2	)				(55.6	)
Total	$	944.4			20.2	$	763.7			19.5

Page 40 of 53

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended September 30, 2022

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

(Continued)

Building Materials Business

The following tables present aggregates volume and pricing variance data and shipments data by segment:


	Nine Months Ended
	September 30, 2022
	Volume			Pricing
Volume/Pricing Variance(1)
East Group		—	%		8.5	%
West Group		25.2	%		11.0	%
Total aggregates operations(2)		8.9	%		8.9	%
Organic aggregates operations(3)		2.0	%		9.4	%


	Nine Months Ended
	September 30,
	2022		2021
	(Tons in Millions)
Shipments
East Group		95.2		95.2
West Group		64.9		51.8
Total aggregates operations(2)		160.1		147.0

(1) Volume/pricing variances reflect the percentage increase from the comparable period in ~~2020.~~ the prior year.

(2) Total aggregates operations include acquisitions from the date of acquisition and divestitures through the date of disposal.

(3) Organic aggregates operations exclude volume and pricing data for acquisitions that have not been included in prior-year operations for the comparable period and divestitures.

Page 41 of 53

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended September 30, 2022

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

(Continued)

The following table presents shipments data for the Building Materials business by product line:


	Nine Months Ended September 30,
	2022		2021		% Change
Shipments
Aggregates (in millions):
Tons to external customers		148.0		135.2
Internal tons used in other product lines		12.1		11.8
Total aggregates tons		160.1		147.0		8.9	%

Cement (in millions):
Tons to external customers		2.2		1.8
Internal tons used in ready mixed concrete		1.0		1.1
Total cement tons		3.2		2.9		10.3	%

Ready Mixed Concrete (in millions of cubic yards)		5.9		7.2		(17.4	)%

Asphalt (in millions):
Tons to external customers		5.3		3.3
Internal tons used in paving business		1.6		1.5
Total asphalt tons		6.9		4.8		46.1	%

The average selling price by product line for the Building Materials business is as follows:


	Nine Months Ended September 30,
	2022		2021		% Change
Aggregates (per ton)	$	16.41	$	15.08		8.9	%
Cement (per ton)	$	139.64	$	120.29		16.1	%
Ready Mixed Concrete (per cubic yard)	$	125.32	$	114.59		9.4	%
Asphalt (per ton)	$	61.21	$	48.77		25.5	%

Aggregates End-Use Markets

Organic aggregates shipments to the infrastructure market increased 4%, primarily driven by increased highway construction activity across many of the Company’s key markets. The infrastructure market accounted for 35% of year-to-date organic aggregates shipments.

Organic aggregates shipments to the nonresidential market increased 1%, driven by several large warehouse projects in the Central and Southwest Divisions, partially offset by several large projects in the West Division that were not replaced in the current period. The nonresidential market represented 35% of year-to-date organic aggregates shipments.

Organic aggregates shipments to the residential market remained flat compared with strong prior-year activity, but slowed in the third quarter. The residential market accounted for 25% of year-to-date organic aggregates shipments.

The ChemRock/Rail market accounted for the remaining 5% of year-to-date organic aggregates shipments. Volumes to this end use increased 4%, driven by increased ballast shipments for a large project and increased agricultural lime shipments.

Page 42 of 53

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended September 30, 2022

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

(Continued)

Building Materials Business

Year-to-date organic aggregates shipments increased 2.0%, reflecting healthy underlying public product demand partially constrained by logistics-related bottlenecks and inclement weather in certain key markets. Organic aggregates pricing increased 9.4%, or 8.6% on a mix-adjusted basis. Inclusive of acquired operations, aggregates shipments grew 8.9% and pricing also increased 8.9%, both compared with the comparable prior-year period. East Group total shipments remained flat, reflecting healthy construction activity that was offset by logistical bottlenecks and weather-related disruptions, while pricing increased 8.5%. West Group total shipments increased 25.2%, driven by robust underlying demand in Texas and shipments from acquired operations. West Group pricing, inclusive of acquisitions, increased 11.0%, while organic West Group pricing increased 11.5%, or 9.7% on a mix-adjusted basis, reflecting price increases and a larger percentage of shipments from higher-priced distribution yards. Aggregates product gross margin decreased 290 basis points to 27.9%, as the impact from year-over-year price increases were more than offset by higher costs for energy, fuel, supplies, repairs and contract services.

Texas cement shipments increased 10.3% year-to-date, supported by robust product demand. Cement pricing improved 16.1%, or 15.5% on a mix-adjusted basis, benefitting from multiple price increases. Product gross margin expanded 380 basis points to 32.1% compared with the prior-year period, as shipment and pricing growth more than offset energy and other cost headwinds.

Organic ready mixed concrete shipments decreased 5.4%. Organic pricing grew 15.2% in the first nine months of 2022 compared with 2021. Consolidated ready mixed concrete shipments decreased 17.4%, primarily reflecting the impact of divested operations, partially offset by contributions from acquired ready mix operations in Arizona, and pricing increased 9.4%. Product gross margin declined 120 basis points to 7.3%, driven primarily by higher raw material costs which more than offset price increases.

Organic asphalt shipments increased 2.6%. Organic asphalt pricing increased 19.7%. Including contributions from the acquired West Coast operations, total asphalt shipments and pricing increased 46.1% and 25.5%, respectively. Product and services gross margin decreased 630 basis points to 11.0%, driven by higher liquid asphalt and energy costs.

Magnesia Specialties Business

Magnesia Specialties product revenues increased 3.5% to $214.4 million for the nine months ended September 30, 2022, driven by robust global demand for magnesia-based chemical products. Product gross profit was $74.3 million compared with $84.4 million. Product gross margin decreased 610 basis points to 34.6%, as higher costs for energy, supplies and raw materials more than offset pricing growth.

Consolidated Operating Results

Consolidated SG&A for nine months ended September 30 was 6.3% of total revenues in 2022 and 2021.

Among other items, other operating income, net, includes gains and losses on the sale of assets; recoveries and write-offs related to customer accounts receivable; rental, royalty and services income; accretion expense, depreciation expense and gains and losses related to asset retirement obligations. For the ~~third quarter,~~nine months ended September 30, consolidated other operating income, net, was ~~$8.4~~income of $177.4 million in 2022 and $28.2 million in 2021. The increase in other operating income, net, was primarily attributable to the $151.9 million gain on the divestiture of the Colorado and Central Texas ready mixed concrete operations. Other operating income, net, for the nine months ended September 30, 2021 included a $12.3 million gain on the sale of the Company’s former corporate headquarters.

Earnings from operations for the nine months ended September 30 were $944.4 million in 2022 compared with $763.7 million in 2021, ~~and $67.6~~with the increase driven by the $151.9 million ~~in 2020. The income in 2020 included $69.9 million of nonrecurring gains~~gain on the ~~sales~~divestiture of ~~investment land~~the Colorado and ~~divested assets.~~Central Texas

Page 43 of 53

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended September 30, 2022

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

(Continued)

ready mixed concrete operations and year-over-year price increases, partially offset by higher costs for energy, fuel, supplies, freight and personnel.

Other nonoperating income, net, includes interest income; pension and postretirement benefit cost excluding service cost; foreign currency transaction gains and losses; equity earnings or losses from nonconsolidated ~~affiliates~~affiliates; and other miscellaneous income and expenses. ~~For the third quarter, other nonoperating income, net, was $5.6 million and $4.0 million in 2021 and 2020, respectively. The 2021 amount reflected $3.9 million of lower pension expense.~~

~~Page 37 of 54~~

~~MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES~~

~~FORM 10-Q~~

~~For the Quarter September 30, 2021~~

~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND~~

~~RESULTS OF OPERATIONS~~

~~(Continued)~~

~~Nine Months Ended September 30, 2021~~

~~Financial highlights for the nine months ended September 30, 2021~~ ~~(unless noted, all comparisons are versus the prior-year period):~~

♦

~~Consolidated total revenues of $3.92 billion compared with $3.55 billion~~

♦

~~Building Materials business products and services revenues of $3.47 billion compared with $3.16 billion~~

♦

~~Consolidated gross profit of $1.00 billion~~⁽¹⁾ ~~compared with $927.4 million~~

♦

~~Consolidated earnings from operations of $763.7 million~~⁽²⁾~~compared with $764.8 million~~⁽³⁾

♦

~~Net earnings attributable to Martin Marietta of $545.7 million compared with $538.0 million~~⁽⁴⁾

♦

~~Adjusted EBITDA of $1.13 billion compared with $1.06 billion~~⁽³⁾

♦

~~Earnings per diluted share of $8.72~~⁽⁵⁾ ~~compared with $8.61~~⁽⁴⁾

⁽¹⁾~~Includes $15.7 million of costs for~~ ~~selling acquired inventory after markup to fair value as a part of acquisition accounting~~

⁽²⁾~~Includes $15.7 million of costs for~~ ~~selling acquired inventory after markup to fair value as a part of acquisition accounting and $18.0 million of acquisition-related expenses~~

⁽³⁾~~Includes nonrecurring gains on sales of investment land and divested assets of $69.9 million~~

⁽⁴⁾~~Includes nonrecurring gains on sales of investment land and divested assets, net of tax, of $54.1 million, or $0.87 per diluted share~~

⁽⁵⁾~~Includes~~ ~~$0.40 per diluted share~~ ~~of costs for~~ ~~selling acquired inventory after markup to fair value as a part of acquisition accounting and acquisition-related expenses~~

~~Page 38 of 54~~

~~MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES~~

~~FORM 10-Q~~

~~For the Quarter September 30, 2021~~

~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND~~

~~RESULTS OF OPERATIONS~~

~~(Continued)~~

The following tables present total revenues, gross profit (loss), SG&A expenses and earnings (loss) from operations data for the Company and its reportable segments by product line for the nine months ended September 30, 2021 and 2020. In each case, the data is stated as a percentage of revenues of the Company or the relevant segment or product line, as the case may be.

Nine Months Ended September 30,

2021

2020

Amount

% of Revenues

Amount

% of Revenues

(Dollars in Millions)

Total revenues:

Building Materials business:

Products and services

East Group

Aggregates

$
1,496.5

$
1,371.8

Asphalt

127.3

—

Less: Interproduct revenues

(12.9
)

—

East Group Total

1,610.9

1,371.8

West Group

Aggregates

735.0

720.3

Cement

358.4

331.7

Ready mixed concrete

824.5

689.4

Asphalt and paving

216.2

254.9

Less: Interproduct revenues

(272.2
)

(210.9
)

West Group Total

1,861.9

1,785.4

Products and services

3,472.8

3,157.2

Freight

219.8

212.9

Total Building Materials business

3,692.6

3,370.1

Magnesia Specialties:

Products

207.1

164.0

Freight

17.9

16.2

Total Magnesia Specialties

225.0

180.2

Total

$
3,917.6

$
3,550.3

~~Page 39 of 54~~

~~MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES~~

~~FORM 10-Q~~

~~For the Quarter September 30, 2021~~

~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND~~

~~RESULTS OF OPERATIONS~~

~~(Continued)~~

Nine Months Ended September 30,

2021

2020

Amount

% of Revenues

Amount

% of Revenues

(Dollars in Millions)

Gross profit (loss):

Building Materials business:

Products and services

East Group

Aggregates

$
514.3

34.4

$
460.0

33.5

Asphalt

26.9

21.1

—

—

East Group Total

541.2

33.6

460.0

33.5

West Group

Aggregates

173.4

23.6

180.4

25.0

Cement

101.3

28.3

117.2

35.3

Ready mixed concrete

69.9

8.5

56.7

8.2

Asphalt and paving

32.5

15.0

46.4

18.2

West Group Total

377.1

20.3

400.7

22.4

Products and services

918.3

26.4

860.7

27.3

Freight

1.7

0.3

Total Building Materials business

920.0

24.9

861.0

25.5

Magnesia Specialties:

Products

84.4

40.7

65.3

39.8

Freight

(3.0
)

(3.2
)

Total Magnesia Specialties

81.4

36.2

62.1

34.5

Corporate

0.3

��

4.3

Total

$
1,001.7

25.6

$
927.4

26.1

~~Aggregates Products Gross Profit Rollforward~~

~~The following presents a rollforward of aggregates products gross profit (dollars in millions):~~

Aggregates products gross profit, nine months ended September 30, 2020

$
640.4

Volume

62.2

Pricing

31.4

Operational performance⁽¹⁾

(46.3
)
Change in aggregates products gross profit

47.3

Aggregates products gross profit, nine months ended September 30, 2021

$
687.7

⁽¹⁾~~Inclusive of cost increases/decreases, product and geographic mix and other operating impacts~~

~~Page 40 of 54~~

~~MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES~~

~~FORM 10-Q~~

~~For the Quarter September 30, 2021~~

~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND~~

~~RESULTS OF OPERATIONS~~

~~(Continued)~~

Nine Months Ended September 30,

2021

2020

Amount

% of Total Revenues

Amount

% of Total Revenues

(Dollars in Millions)

Selling, general & administrative expenses:

Building Materials business:

East Group

$
77.0

$
74.0

West Group

101.1

100.2

Total Building Materials business

178.1

174.2

Magnesia Specialties

11.1

10.4

Corporate

59.0

36.4

Total

$
248.2

6.3

$
221.0

6.2

Earnings (Loss) from operations:

Building Materials business:

East Group

$
465.3

$
386.1

West Group

284.2

368.2

Total Building Materials business

749.5

754.3

Magnesia Specialties

69.8

51.2

Corporate

(55.6
)

(40.7
)

Total

$
763.7

19.5

$
764.8

21.5

~~Building Materials Business~~

~~The following tables present aggregates volume and pricing variance data and shipments data by segment:~~

Nine Months Ended

September 30, 2021

Volume

Pricing

Volume/Pricing variance⁽¹⁾

East Group

6.5
%

2.4
%
West Group

0.0
%

1.9
%
Total aggregates operations⁽²⁾

4.1
%

2.4
%
Organic aggregates operations⁽³⁾

2.0
%

2.9
%

~~Page 41 of 54~~

~~MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES~~

~~FORM 10-Q~~

~~For the Quarter September 30, 2021~~

~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND~~

~~RESULTS OF OPERATIONS~~

~~(Continued)~~

Nine Months Ended

September 30,

2021

2020

(Tons in Millions)

Shipments

East Group

95.2

89.4

West Group

51.8

51.8

Total aggregates operations⁽²⁾

147.0

141.2

⁽¹⁾ ~~Volume/pricing variances reflect the percentage increase/(decrease) from the comparable period in the prior year.~~

⁽²⁾ ~~Total aggregates operations include acquisitions from the date of acquisition and divestitures through the date of disposal.~~

⁽³⁾ ~~Organic aggregates operations exclude volume and pricing data for acquisitions that have not been included in prior-year operations for the comparable period and divestitures.~~

~~The following table presents shipments data by product line for the Building Materials business:~~

Nine Months Ended

September 30,

2021

2020

% Change

Shipments

Aggregates (in millions):

Tons to external customers

135.2

131.9

Internal tons used in other product lines

11.8

9.3

Total aggregates tons

147.0

141.2

4.1
%

Cement (in millions):

Tons to external customers

1.8

2.0

Internal tons used in ready mixed concrete

1.1

0.9

Total cement tons

2.9

2.9

0.9
%

Ready Mixed Concrete (in millions of cubic yards)

7.2

6.1

18.7
%

Asphalt (in millions):

Tons to external customers

3.3

0.6

Internal tons used in paving business

1.5

2.0

Total asphalt tons

4.8

2.6

84.8
%

~~Page 42 of 54~~

~~MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES~~

~~FORM 10-Q~~

~~For the Quarter September 30, 2021~~

~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND~~

~~RESULTS OF OPERATIONS~~

~~(Continued)~~

~~The average selling price by product line for the Building Materials business is as follows:~~

Nine Months Ended

September 30,

2021

2020

% Change

Aggregates (per ton)

$
15.08

$
14.73

2.4
%
Cement (per ton)

$
120.29

$
113.83

5.7
%
Ready Mixed Concrete (per cubic yard)

$
114.59

$
113.75

0.7
%
Asphalt (per ton)

$
48.77

$
47.99

1.6
%

~~Aggregates Product Line End-Use Markets~~

For the nine months ended September 30, 2021, organic aggregates shipments to the infrastructure market accounted for 34% of aggregates volumes and declined 5% compared to the prior-year period, primarily attributable to weather-impacted project delays, timing of projects and third-party logistical challenges.

Organic aggregates shipments to the nonresidential market increased 9%, driven by robust warehouse and data center activity. The nonresidential market represented 36% of year-to-date organic aggregates shipments.

Organic aggregates shipments to the residential market increased 9%, reflecting sustained robust housing demand and low available resale inventory. The residential market accounted for 25% of year-to-date organic aggregates shipments.

~~The ChemRock/Rail market accounted for the remaining 5% of year-to-date organic aggregates shipments. Volumes to this end use decreased 10%, driven by lower ballast shipments to Class I railroads.~~

~~Building Materials Business Product Lines~~

For the nine months ended September 30, 2021, aggregates shipments increased 4.1%, reflecting strong construction activity in the Carolinas, Georgia, Florida and Maryland. Pricing increased 2.4% compared with the prior-year period which offset higher energy and operating costs leading to a modest 20-basis-point improvement in aggregates product gross margin to 30.8%. Aggregates shipments increased 2.0% and pricing increased 2.9% on an organic basis.

For the nine months ended September 30, 2021, cement shipments increased 0.9% and pricing increased 5.7% compared with the prior-year period. On a mix-adjusted basis, pricing increased 4.3%. Higher kiln maintenance costs, storm-related incremental costs and inefficiencies caused by weather-related shut downs, coupled with an increase in energy and raw material costs contributed to a 700-basis-point decline in cement product gross margin to 28.3%.

~~Ready mixed concrete shipments increased 18.7%,~~ ~~or 14.2% organically,~~ driven by higher volumes from large projects and continued strong demand. Ready mixed concrete pricing for the nine months ended September 30, 2021 increased 0.7%. Asphalt shipments improved 84.8% compared with the prior-year period, attributable to incremental volumes from the acquired Tiller operations. Asphalt pricing increased 1.6% reflecting increased pricing from organic asphalt operations.

~~Magnesia Specialties Business~~

~~For the nine months ended September 30, 2021, Magnesia Specialties reported product revenues of $207.1 million compared with $164.0 million for the prior-year period~~ ~~reflecting improved demand for chemicals and lime products compared with a COVID-19-challenged prior-year period.~~ Product gross profit was $84.4 million compared with $65.3 million, primarily driven by higher volumes and revenues from improving domestic steel production and global demand for magnesia chemicals products. Product line gross margin for the nine months ended September 30, 2021, was 40.7%,

~~Page 43 of 54~~

~~MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES~~

~~FORM 10-Q~~

~~For the Quarter September 30, 2021~~

~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND~~

~~RESULTS OF OPERATIONS~~

~~(Continued)~~

~~a 90-basis-point increase versus the prior-year period. Earnings from operations were $69.8 million compared with $51.2 million.~~

~~Consolidated Operating Results~~

For the nine months ended September 30, 2021, consolidated SG&A was 6.3% of total revenues compared with 6.2% in 2020. During the first nine months of 2021, the Company incurred $1.8 million in COVID-19-related expenses compared with $4.8 million in the prior-year period for enhanced cleaning and sanitizing protocols across the Company’s operations, which are recorded in SG&A. The Company incurred $18.0 million of acquisition-related expenses for the nine months ended September 30, 2021. Earnings from operations for the nine months ended September 30 were $763.7 million in 2021 compared with $764.8 million in 2020.

For the nine months ended September 30, consolidated other operating income, net, was income of $28.2 million and income of $59.6 million in 2021 and 2020, respectively. The 2021 income includes the $12.3 million gain on the sale of the former corporate headquarters. The 2020 amount ~~included $69.9 million of nonrecurring gains on the sales of investment land and divested assets.~~

For the nine months ended September 30, other nonoperating income, net, was $40.1 million and $23.8 million in 2022 and 2021, ~~and $5.9 million in 2020.~~respectively. The ~~2021 amount reflected $11.8 million of lower pension expense compared with the prior year. The 2020~~2022 amount included ~~an expense~~a $12.0 million pretax gain related to repurchases of ~~$5.6 million to finance third-party railroad track maintenance.~~the Company’s debt.

Income Tax Expense

For the nine months ended September 30, 2022 and 2021, the effective income tax ~~rate was~~rates for continuing operations were 22.1% and 20.6%, ~~which included a $2.9 million discrete benefit for research and development tax credits. For the nine months ended September 30, 2020, the~~respectively. The higher 2022 effective income tax rate versus 2021 was driven by the impact of ~~21.0% reflected a $6.9 million discrete benefit from financing third-party railroad track maintenance. In exchange,~~ the ~~Company received a federal income tax credit~~divestiture of the Colorado and ~~deduction.~~Central Texas ready mixed concrete businesses.

LIQUIDITY AND CAPITAL RESOURCES

Cash provided by operating activities for the nine months ended September 30, 2022 and 2021 was $560.7 million and ~~2020 was~~ $780.3 million, respectively, driven by increased cash taxes and ~~$684.0 million, respectively.~~changes in working capital. Operating cash flow is primarily derived from consolidated net earnings before deducting depreciation, depletion and amortization, and the impact of changes in working capital. Depreciation, depletion and amortization were as follows:


	Nine Months Ended				Nine Months Ended
	September 30,				September 30,
	2021		2020		2022		2021
	(Dollars in Millions)				(Dollars in Millions)
Depreciation	$	262.1	$	251.1	$	296.9	$	262.1
Depletion		29.5		26.2		45.9		29.5
Amortization		28.4		14.9		37.5		28.4
Total	$	320.0	$	292.2	$	380.3	$	320.0

The seasonal nature of construction activity impacts the Company’s interim operating cash flow when compared with the full year. Full-year ~~2020~~2021 net cash provided by operating activities was ~~$1.05~~$1.14 billion.

~~Page 44 of 54~~

~~MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES~~

~~FORM 10-Q~~

~~For the Quarter September 30, 2021~~

~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND~~

~~RESULTS OF OPERATIONS~~

~~(Continued)~~

During the nine months ended September 30, ~~2021~~2022 and ~~2020,~~2021, the Company paid ~~$321.3~~$309.1 million and ~~$250.8~~$321.3 million, respectively, for capital investments. In October 2022, the Company entered into a commitment for 691 railcars at an aggregate value of $75.8 million.

The Company can repurchase its common stock through open-market purchases pursuant to authority granted by its Board of Directors or through private transactions at such prices and upon such terms as the Chief Executive Officer deems appropriate. The Company ~~did not repurchase any~~repurchased 418,336 shares of common stock during the first nine months of ~~2021.~~2022 at an aggregate cost of $150.0 million. At September 30, ~~2021, 13,520,952~~2022, 13,102,616 shares of common stock can be purchased under the Company’s repurchase authorization.

~~On April~~During the nine months ended September 30, ~~2021,~~2022, the Company ~~completed~~repurchased $67.7 million (par value) of its Senior Notes, resulting in a pretax gain of $12.0 million.

Page 44 of 53

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the acquisition of Tiller, a leading aggregates and hot mix asphalt supplier in the Minneapolis/St. Paul region, one of the largest and fastest growing midwestern metropolitan areas. The acquired operations complement the Company’s existing Central Division’s product offerings in the surrounding areas. The Company financed the acquisition using available cash and borrowings under its credit facilities.Quarter Ended September 30, 2022

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

(Continued)

On ~~July 30, 2021,~~September 29, 2022, the Company acquired assets of SCC. SCC is a leading producer of recycled concrete in the Houston area, one of the country’s largest addressable aggregates markets. Recycled concrete is principally used as a base aggregates product in infrastructure, commercialsatisfied and ~~residential construction applications.~~ ~~The Company financed the acquisition using available cash.~~

~~On July 2, 2021, the Company issued $700 million aggregate principal amount of~~discharged its 0.650% Senior Notes due 2023 (the ~~0.650% Senior~~2023 Notes), $900 million aggregate principal amount of 2.400% Senior Notes due 2031 (the 2.400% Senior Notes) and $900 million aggregate principal amount of 3.200% Senior Notes due 2051 (the 3.200% Senior Notes) and, together. In connection with the ~~0.650% Senior~~satisfaction and discharge, the Company irrevocably deposited with Regions Bank (the Trustee) funds in an amount sufficient to satisfy all remaining principal and interest payments on the 2023 Notes. The funds are invested in a fund that invests exclusively in U.S. Treasury securities and are classified as Restricted investments (to satisfy discharged debt and related interest) on the consolidated balance sheet at September 30, 2022. Holders of the 2023 Notes will receive payment of principal on the scheduled maturity date and payment of interest at the ~~2.400% Senior~~per annum rate (and on the dates) set forth in the 2023 Notes ~~(the Senior Notes).~~indenture. The Company ~~used~~utilized existing cash resources to fund the ~~net proceeds for the acquisition~~satisfaction and discharge. As a result of the ~~Lehigh West Region business, which closed~~satisfaction and discharge of the 2023 Notes, the obligations of the Company under the indenture in respect of the 2023 Notes have been terminated, except those provisions of the indenture that, by their terms, survive the satisfaction and discharge. The 2023 Notes remain on ~~October 1, 2021,~~the Company’s consolidated balance sheet at September 30, 2022 and ~~for general corporate purposes. See Note 6 for further information regarding~~will continue to accrete to their par value over the ~~Senior Notes.~~period until maturity in July 2023.

The Company, through a wholly-owned special-purpose subsidiary, has a $400 million trade receivable securitization facility (the Trade Receivable Facility). On September ~~22, 2021,~~21, 2022, the Company extended the maturity of the Trade Receivable Facility to September ~~21, 2022.~~20, 2023. The Trade Receivable Facility contains a cross-default provision to the Company’s other debt agreements. ~~Subject to certain conditions, including lenders providing the requisite commitments, the Trade Receivable Facility may be increased to a borrowing base not to exceed $500 million.~~

The Company has ~~a $700~~an $800 million five-year senior unsecured revolving facility (the Revolving Facility), which expires onin December ~~5, 2024.~~2026. The Revolving Facility requires the Company’s ratio of consolidated debt-to-consolidated EBITDA, as defined, for the trailing-twelve-month period (the Ratio) to not exceed ~~3.50x~~3.50 times as of the end of any fiscal quarter, provided that the Company may exclude from the Ratio debt incurred in connection with certain acquisitions during the quarter or the three preceding quarters so long as the Ratio calculated without such exclusion does not exceed ~~3.75x.~~4.00 times. Additionally, if there are no amounts outstanding under the Revolving Facility and the Trade Receivable Facility, consolidated debt, including debt for which the Company is a ~~co-borrower,~~guarantor, may be reduced byin an amount equal to the lesser of $500.0 million or the sum of the Company’s unrestricted cash and ~~cash equivalents in excess of $50 million, such reduction not to exceed $200 million,~~temporary investments, for purposes of the covenant calculation.

The Company was in compliance with the Ratio is calculated as debt, including debt for which the Company is a co-borrower, divided by consolidated EBITDA, as defined by the Company’s Revolving Facility, for the trailing-twelve months. Consolidated EBITDA is generally defined as earnings before interest expense, income tax expense, and depreciation and amortization expense. Additionally, stock-based compensation expense is added back and interest income is deducted in the calculation of consolidated EBITDA. During periods that include an acquisition, pre-acquisition adjusted EBITDA of the acquired company is added to consolidated EBITDA as if the acquisition occurred on the first day of the calculation period. Certain other nonrecurring items, if they occur, can affect the calculation of consolidated EBITDA.

~~Page 45 of 54~~

~~MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES~~

~~FORM 10-Q~~

~~For the Quarter~~at September 30, ~~2021~~

~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND~~

~~RESULTS OF OPERATIONS~~

~~(Continued)~~

2022.

At September 30, 2021, the Company’s ratio of consolidated net debt-to-consolidated EBITDA, as defined by the Company’s Revolving Facility, for the trailing-twelve months was 3.49 times and was calculated as follows:

October 1, 2020 to

September 30, 2021

(Dollars in Millions)

Earnings from continuing operations attributable to Martin Marietta

$
728.7

Add back:

Interest expense

128.3

Income tax expense

166.8

Depreciation, depletion and amortization expense

416.7

Stock-based compensation expense

40.6

Acquisition-related expenses

33.7

EBITDA related to acquired operations (Pre-acquisition
   October 1, 2020 to July 31, 2021)⁽¹⁾

8.9

Deduct:

Interest income

(0.3
)
Consolidated EBITDA, as defined by the Company’s Revolving Facility

$
1,523.4

Consolidated net debt, as defined and including debt for which the Company
     is a co-borrower, at September 30, 2021

$
5,319.5

Consolidated net debt-to-consolidated EBITDA, as defined by the Company’s
   Revolving Facility, at September 30, 2021 for the trailing-twelve months EBITDA

3.49 times

⁽¹⁾ Inclusive of one-time, non-recurring and transaction-related expenses.

In the event of a default on the Ratio, the lenders can terminate the Revolving Facility and Trade Receivable Facility and declare any outstanding balances as immediately due. There ~~was $20 million~~were no amounts outstanding under the Trade Receivable Facility ~~and no borrowings under~~or the Revolving Facility ~~as of~~at September 30, ~~2021.~~2022.

Cash on hand and restricted investments, along with the Company’s projected internal cash flows and availability of financing resources, including its access to debt and equity capital markets, is expected to continue to be sufficient to provide the capital resources necessary to support anticipated operating needs, cover debt service requirements, address near-term debt maturities, meet capital expenditures and discretionary investment needs, fund certain acquisition opportunities that may arise, allow the repurchase of shares of the Company’s common stock and allow for payment of dividends for the foreseeable future. At September 30, ~~2021,~~2022, the Company had ~~$1,077.4~~$1,197.4 million of unused borrowing capacity under its Revolving Facility and Trade Receivable Facility, subject to complying with the related leverage covenant. Historically, the Company has successfully extended the maturity dates of these credit facilities. ~~Further, as of September 30, 2021, the Company does not have any publicly-traded debt that matures prior to 2023.~~

The Coronavirus Aid, Relief and Economic Security Act (CARES Act) was signed into law in March 2020 and provided liquidity support for businesses. Through the CARES Act, the Company deferred payment of $27.6 million, representing the 6.2% employer share of Social Security taxes for the period from March 27, 2020 through December 31, 2020. Half of the deferred obligation ~~will be due December 31,~~was repaid in 2021 and the remaining half ~~will be~~is due December 31, 2022. There will be no interest assessed on amounts deferred.

Page 4645 of 5453

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended September 30, ~~2021~~2022

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

(Continued)

TRENDS AND RISKS

The Company outlined the risks associated with its business in its Annual Report on Form 10-K for the year ended December 31, ~~2020.~~2021. Management continues to evaluate its exposure to all operating risks on an ongoing basis.

On August 16, 2022, the U.S. enacted the Inflation Reduction Act of 2022, which, among other things, implements a 15% minimum tax on book income of certain large corporations, a 1% excise tax on net stock repurchases and several tax incentives to promote clean energy. Based on the Company’s current analysis of the provisions, management does not believe this legislation will have a material impact on the Company’s consolidated financial statements.

OTHER MATTERS

If you are interested in Martin Marietta stock, management recommends that, at a minimum, you read the Company’s current annual report and Forms 10-K, 10-Q and 8-K reports to the Securities and Exchange Commission (SEC) over the past year. The Company’s recent proxy statement for the annual meeting of shareholders also contains important information. These and other materials that have been filed with the SEC are accessible through the Company’s website at www.martinmarietta.com and are also available at the SEC’s website at www.sec.gov. You may also write or call the Company’s Corporate Secretary, who will provide copies of such reports.

Investors are cautioned that all statements in this Form 10-Q that relate to the future involve risks and uncertainties, and are based on assumptions that the Company believes in good faith are reasonable but which may be materially different from actual results. These statements, which are forward-looking statements under the Private Securities Litigation Reform Act of 1995, provide the investor with the Company’s expectations or forecasts of future events. You can identify these statements by the fact that they do not relate only to historical or current facts. They may use words such as “anticipate,” “may,” “expect,” “should, ~~be,~~” “believe,” “project,” “intend,” “will,” and other words of similar meaning in connection with future events or future operating or financial performance. Any or all of management’s forward-looking statements here and in other publications may turn out to be wrong.

The Company’s outlook is subject to various risks and uncertainties and is based on assumptions that the Company believes in good faith are reasonable but which may be materially different from actual results. Factors that the Company currently believes could cause actual results to differ materially from the forward-looking statements in this Form 10-Q ~~(including the outlook)~~ include, but are not limited to: the ability of the Company to face challenges, including those posed by the COVID-19 pandemic and implementation of any such related response plans; fluctuations in COVID-19 cases in the United States and the extent that geography of outbreak primarily matches the regions in which the Company’s Building Materials business principally operates; the resiliency and potential declines of the Company’s various construction end-use markets; the potential negative impact of the COVID-19 pandemic on the Company’s ability to continue supplying heavy-side building materials and related services at normal levels or at all in the Company’s key regions; the duration, impact and severity of the impact of the COVID-19 pandemic on the Company, including the markets in which the Company does business, its suppliers, customers or other business partners as well as the Company’s employees; the economic impact of government responses to the pandemic; the performance of the United States economy, including the impact on the economy of the COVID-19 pandemic and governmental orders restricting activities imposed to prevent further outbreak of COVID-19; shipment declines resulting from economic events beyond the Company’s control; a widespread decline in aggregates pricing, including a decline in aggregates shipment volume negatively affecting aggregates price; the history of both cement and ready mixed concrete being subject to significant changes in supply, demand and price fluctuations; the termination, capping and/or reduction or suspension of the federal and/or state gasoline tax(es) or other revenue related to public construction; the level and timing of federal, state or local transportation or infrastructure or public projects funding, most particularly in Texas, Colorado, California, North Carolina, Georgia, Minnesota, Iowa, Florida, ~~Minnesota~~Indiana and Maryland; ~~the impact of governmental orders restricting activities imposed to prevent further outbreak of COVID-19 on travel, potentially reducing state fuel tax revenues used to fund highway projects;~~ the United States Congress’ inability to reach agreement among themselves or with the Administration on policy issues that impact the federal budget; the ability of states and/or other entities to finance approved projects either with tax revenues or alternative financing structures; levels of construction spending in

~~Page 47 of 54~~

~~MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES~~

~~FORM 10-Q~~

~~For the Quarter September 30, 2021~~

~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND~~

~~RESULTS OF OPERATIONS~~

~~(Continued)~~

the markets the Company serves; a reduction in defense spending and the subsequent impact on construction activity on or near military bases; a decline in ~~the commercial component of the nonresidential construction market, notably office and retail space, including a decline resulting from economic distress related to the COVID-19 pandemic; a decline in~~ energy-related construction activity resulting from suspension of the gas tax or a sustained period of low global oil prices or changes in oil production patterns or capital spending, particularly in ~~Texas;~~Texas and West Virginia; increasing residential mortgage interest rates and other factors that could result in a slowdown in residential construction; unfavorable weather conditions, particularly Atlantic Ocean and Gulf of Mexico hurricane activity, wildfires, the late start to spring or the early onset of winter and the impact of a drought or excessive rainfall in the markets served by the Company, any of which can significantly affect production schedules, volumes, product and/or geographic mix and profitability; whether the Company’s operations will continue to be treated as “essential” operations under applicable government orders restricting business activities imposed to prevent further outbreak of COVID-19 or, even if so treated, whether site-specific health and safety concerns might otherwise require certain of the Company’s operations to be halted for some period of time; the volatility of fuel costs, particularly diesel fuel,

Page 46 of 53

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended September 30, 2022

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

(Continued)

notably related to the current conflict between Russia and Ukraine, and the impact on the cost, or the availability generally, of other consumables, namely steel, explosives, tires and conveyor belts, and with respect to the Company’s Magnesia Specialties business, natural gas; continued increases in the cost of other repair and supply parts; construction labor shortages and/or supply‐chain challenges; unexpected equipment failures, unscheduled maintenance, industrial accident or other prolonged and/or significant disruption to production facilities; the resiliency and potential declines of the Company’s various construction end-use markets; the potential negative duration, severity and impact of a resurgence of the COVID-19 pandemic on the Company’s ability to continue supplying heavy-side building materials and related services at normal levels or at all in the Company’s key regions, including the markets in which it does business, its suppliers, customers or other business partners as well as on its employees; the economic impact of government responses to a resurgence of COVID-19; the performance of the United States economy; the impact of governmental orders restricting activities imposed to prevent further outbreak of COVID-19 on travel, potentially reducing state fuel tax revenues used to fund highway projects; a decline in the commercial component of the nonresidential construction market, notably office and retail space, including a decline resulting from economic distress related to the COVID-19 pandemic; increasing governmental regulation, including environmental laws; the failure of relevant government agencies to implement expected regulatory reductions; transportation availability or a sustained reduction in capital investment by the railroads, notably the availability of railcars, locomotive power and the condition of rail infrastructure to move trains to supply the Company’s Texas, Colorado, Florida, Carolinas and Gulf Coast markets, including the movement of essential dolomitic lime for magnesia chemicals to the Company’s plant in Manistee, Michigan and its customers; increased transportation costs, including increases from higher or fluctuating passed-through energy costs or fuel surcharges, and other costs to comply with tightening regulations, as well as higher volumes of rail and water ~~shipments (leading to reduced profit margins when compared with aggregates moved by truck);~~shipments; availability of trucks and licensed drivers for transport of the Company’s materials; availability and cost of construction equipment in the United States; weakening in the steel industry markets served by the Company’s dolomitic lime products; trade disputes with one or more nations impacting the U.S. economy, including the impact of tariffs on the steel industry; unplanned changes in costs or realignment of customers that introduce volatility to earnings, including that of the Magnesia Specialties ~~business;~~business that is running at capacity; proper functioning of information technology and automated operating systems to manage or support operations; inflation and its effect on both production and interest costs; the concentration of customers in construction markets and the increased risk of potential losses on customer receivables; the impact of the level of demand in the Company’s end-use markets, production levels and management of production costs on the operating leverage and therefore profitability of the Company; the possibility that the expected synergies from acquisitions will not be realized or will not be realized within the expected time period, including achieving anticipated profitability to maintain compliance with the Company’s leverage ratio debt covenant; changes in tax laws, the interpretation of such laws and/or administrative practices, including acquisitions or divestitures, that would increase the Company’s tax rate; violation of the Company’s debt covenant if price and/or volumes return to previous levels of instability; downward pressure on the Company’s common stock price and its impact on goodwill impairment evaluations; the possibility of a reduction of the Company’s credit rating to non-investment grade; and other risk factors listed from time to time found in the Company’s filings with the SEC.

You should consider these forward-looking statements in light of risk factors discussed in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2020~~2021 and other periodic filings made with the SEC. All of the Company’s forward-looking statements should be considered in light of these factors. In addition, other risks and uncertainties not presently known to the Company or that the Company considers immaterial could affect the accuracy of its ~~forward-~~

~~Page 48 of 54~~

~~MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES~~

~~FORM 10-Q~~

~~For the Quarter September 30, 2021~~

~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND~~

~~RESULTS OF OPERATIONS~~

~~(Continued)~~

~~looking~~forward-looking statements, or adversely affect or be material to the Company. The Company assumes no obligation to update any such forward-looking statements.

Page 47 of 53

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended September 30, 2022

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

(Continued)

INVESTOR ACCESS TO COMPANY FILINGS

Shareholders may obtain, without charge, a copy of Martin Marietta’s Annual Report on Form 10-K, as filed with the Securities and Exchange Commission for the fiscal year ended December 31, ~~2020,~~2021, by writing to:

Martin Marietta

Attn: Corporate Secretary

4123 Parklake Avenue

Raleigh, North Carolina 27612

Additionally, Martin Marietta’s Annual Report, press releases and filings with the Securities and Exchange Commission, including Forms 10-K, 10-Q, 8-K and 11-K, can generally be accessed via the Company’s website. Filings with the Securities and Exchange Commission accessed via the website are available through a link with the Electronic Data Gathering, Analysis, and Retrieval (EDGAR) system. Accordingly, access to such filings is available upon EDGAR placing the related document in its database. Investor relations contact information is as follows:

Telephone: (919) ~~783-4691~~510-4736

Website address: www.martinmarietta.com

Information included on the Company’s website is not incorporated into, or otherwise creates a part of, this report.

Page 4948 of 5453

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended September 30, ~~2021~~2022

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

~~The COVID-19 pandemic continues to impact the global and domestic economy.~~ The Company’s operations ~~have to date been considered “essential” operations under applicable governmental orders that restrict activities~~are highly dependent upon the interest rate-sensitive construction and steelmaking industries. Demand in the residential and nonresidential construction markets, which combined accounted for 60% of aggregates shipments for the nine months ended September 30, 2022, is affected by interest rates. Since December 31, 2021, the Federal Reserve raised the target federal funds rate 300 basis points, and more increases are expected during the fourth quarter. Consequently, these marketplaces could experience lower levels of economic activity in an ~~effort~~environment of rising interest rates or escalating costs if companies and consumers are unable to ~~prevent further outbreak of COVID-19. As such, the Company~~obtain financing for construction projects or if consumer confidence is conducting business with certain modifications, including engaging medical experts to screen those who may have had COVID-19 exposure before allowing access to sites; enhancing the cleaning and disinfection of equipment and common areas, including engaging third-party specialists to disinfect work spaces; and issuing a quarantine policy requiring employees with COVID-19 symptoms to stay home for at least 10 days, among other things. The Company continues to actively monitor the situation and may take further actions that alter its business operations including any that may be requirederoded by ~~federal, state or local authorities or that the Company determines are in the best interests of its employees, customers, suppliers, vendors, communities and other stakeholders.~~economic uncertainty.

Demand for aggregates products, particularly in the infrastructure construction market, is affected by federal, state and local budget and deficit issues. Remote working trends are reducing miles driven, which is having a negative impact on various revenue streams that fund roadway projects. Further, delays or cancellations of projects in the nonresidential and residential construction markets, which combined accounted for 61% of aggregates shipments for the nine months ended September 30, 2021, could occur if companies and consumers are unable to obtain financing for construction projects or if consumer confidence continues to be eroded by economic uncertainty.

The Company’s operations are highly dependent upon the interest rate-sensitive construction and steelmaking industries. Consequently, these marketplaces could experience lower levels of economic activity in an environment of rising interest rates or higher borrowing costs.

Aside from these inherent risks from within its operations, the Company’s earnings are also affected by changes in short-term interest rates and changes in enacted tax laws.

Variable-Rate Borrowing Facilities. At September 30, ~~2021,~~2022, the Company had ~~a $700~~an $800.0 million Revolving Facility and a ~~$400~~$400.0 million Trade Receivable Facility. Borrowings under these facilities bear interest at a variable interest rate. ~~A hypothetical 100-basis-point increase in interest rates~~There were no borrowings outstanding on ~~borrowings of $20 million, which was the collective outstanding balance~~either facility at September 30, ~~2021, would increase~~2022.However, any future borrowings under the credit facilities or outstanding variable-rate debt are exposed to interest ~~expense by $0.2 million on an annual basis.~~rate risk.

Pension Expense. The Company’s results of operations are affected by its pension expense. Assumptions that affect pension expense include the discount rate and, for the qualified defined benefit pension plan only, the expected long-term rate of return on assets. Therefore, the Company has interest rate risk associated with these factors. The impact of hypothetical changes in these assumptions on the Company’s annual pension expense is discussed in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2020.~~2021. The Company remeasured its qualified pension plan as of February 28, 2022, to reflect an amendment that increased the pension benefit for qualifying hourly employees. The discount rate at the remeasurement date was approximately 50 basis points higher compared with the discount rate as of December 31, 2021. As of September 30, ~~2021,~~2022, discount rates ~~were~~have increased approximately 40210 additional basis points ~~higher than~~since the ~~rate selected as of December 31, 2020, the most recent measurement date.~~remeasurement. Unless ananother event requires an interim remeasurement, the Company will next remeasure its pension obligation and funded status as of December 31, ~~2021.~~2022. Changes in the discount rate and pension asset values will impact ~~2022~~2023 pension expense.

Income Tax. Any changes in enacted tax laws, ~~(such as the recent U.S. tax legislation),~~ rules or regulatory or judicial interpretations; or any change in the pronouncements relating to accounting for income taxes could materially impact ~~our~~the Company’s effective tax rate, tax payments, financial condition and results of operations.

~~Page 50 of 54~~

~~MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES~~

~~FORM 10-Q~~

~~For the Quarter Ended September 30, 2021~~

~~(Continued)~~

Energy Costs. Energy costs, including diesel fuel, natural gas, electricity, ~~coal~~ and ~~liquid asphalt,~~coal, represent significant production costs of the Company. The ~~cement operations and~~ Magnesia Specialties business ~~have~~has fixed price agreements covering a majority of ~~their 2021 coal~~its 2022 energy requirements. ~~Energy~~On a consolidated basis, organic energy expense for the nine months ended September 30, ~~2021~~2022 increased approximately ~~29%~~59% compared with the prior-year period, ~~due~~related to ~~increased~~higher prices for diesel, natural gas, ~~diesel,~~ electricity and gasoline ~~costs~~ in ~~2021;~~2022. Specifically, the ongoing conflict between Russia and Ukraine has exacerbated already increased diesel prices; however, any future energy prices cannot be reliably predicted. A hypothetical ~~price change~~increase of ~~29%~~59% would change ~~full year 2021~~consolidated organic full-year 2022 energy expense by ~~$67~~$179.3 million as compared with ~~2020,~~2021, assuming constant volumes. Further, the full-year 2022 impact on consolidated total profitability and margins would be greater when also considering the energy consumed by operations acquired in 2021.

Page 49 of 53

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended September 30, 2022

(Continued)

Commodity Risk. Cement is a commodity, and competition is based principally on price, which is highly sensitive to changes in supply and demand. Prices are often subject to material changes in response to relatively minor fluctuations in supply and demand, general economic conditions and other market conditions beyond the Company’s control. Increases in the production capacity of industry participants or increases in cement imports tend to create an oversupply of such products leading to an imbalance between supply and demand, which can have a negative impact on product prices. There can be no assurance that prices for products sold will not decline in the future or that such declines will not have a material adverse effect on the Company’s business, financial condition and results of operations. Assuming ~~full- year 2020~~full-year 2021 cement product revenues of ~~$453~~$494.5 million, a hypothetical 10% change in sales price would impact full-year cement product revenues by ~~$45.3~~$49.5 million.

Cement is a key raw material in the production of ready mixed concrete. The Company may be unable to pass along increases in the costs of cement and raw materials to customers in the form of price increases for the Company’s products. ~~A hypothetical~~Assuming annual cement costs are $210 million, an approximate 2021 full year rate for ready mixed concrete continuing operations, a 10% change in cement costs, ~~in 2021 compared with 2020,~~ assuming constant volumes, would change the ready mixed concrete product line cost of revenues by ~~$25.5~~$21.0 million. While increases in cement pricing may negatively impact the profitability of the ready mixed concrete operations, the cement business would benefit, although the positive impact may not reflect a direct correlation to the impact on the ready mixed concrete business.

The Company consumes other raw material and supply commodities in its operations, the costs of which have been negatively impacted by high inflation. The Company periodically implements price increases due to rising costs. However, there is a lag between announced price increases and the time when they are fully realized.

Item 4. Controls and ~~Procedures~~Procedures.

Evaluation of Disclosure Controls and Procedures. As of September 30, ~~2021,~~2022, an evaluation was performed under the supervision and with the participation of the Company’s management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and the operation of the Company’s disclosure controls and procedures. Based on that evaluation, the Company’s management, including the Chief Executive Officer and Chief Financial Officer, concluded that the Company’s disclosure controls and procedures were effective as of September 30, ~~2021.~~2022. There were no 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, the Company’s internal control over financial reporting.

Page 5150 of 5453

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended September 30, 2022

PART II. OTHER INFORMATION

Item 1. Legal Proceedings.

See Note 10 Commitments and Contingencies, Legal and Administrative Proceedings, of this Form 10-Q.

Item 1A. 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, ~~2020.~~2021.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

ISSUER PURCHASES OF EQUITY SECURITIES

~~Total Number of Shares~~

~~Maximum Number of~~

~~Purchased as Part of~~

~~Shares that May Yet~~

~~Total Number of~~

~~Average Price~~

~~Publicly Announced~~

~~be Purchased Under~~

~~Period~~

~~Shares Purchased~~

~~Paid per Share~~

~~Plans or Programs~~

~~the Plans or Programs~~

~~July 1, 2021 - July 31, 2021~~

—

~~13,520,952~~

~~August 1, 2021 - August 31, 2021~~

—

~~13,520,952~~

~~September 1, 2021 - September 30, 2021~~

—

~~13,520,952~~

~~Total~~

—


					Total Number of Shares		Maximum Number of
					Purchased as Part of		Shares that May Yet
	Total Number of		Average Price		Publicly Announced		be Purchased Under
Period	Shares Purchased		Paid per Share		Plans or Programs		the Plans or Programs
July 1, 2022 - July 31, 2022		—	$	—		—		13,390,401
August 1, 2022 - August 31, 2022		93,580	$	348.84		93,580		13,296,821
September 1, 2022 - September 30, 2022		194,205	$	346.83		194,205		13,102,616
Total		287,785				287,785

Reference is made to the press release dated February 10, 2015 for the December 31, 2014 fourth-quarter and full-year results and announcement of the share repurchase program. The Company’s Board of Directors authorized a maximum of 20 million shares to be repurchased under the program. The program does not have an expiration date.

Item 4. Mine Safety Disclosures.

The information concerning mine safety violations or other regulatory matters required by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K (17 CFR 229.104) is included in Exhibit 95 to this Quarterly Report on Form 10-Q.

Page 5251 of 5453

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended September 30, 2022

PART II. OTHER INFORMATION

(Continued)

Item 6. Exhibits.


Exhibit No.		Document


31.01		Certification dated November 2, ~~2021~~2022 of Chief Executive Officer pursuant to Securities and Exchange Act of 1934 Rule 13a-14 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.02		Certification dated November 2, ~~2021~~2022 of Chief Financial Officer pursuant to Securities and Exchange Act of 1934 Rule 13a-14 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.01		Written Statement dated November 2, ~~2021~~2022 of Chief Executive Officer required by 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.02		Written Statement dated November 2, ~~2021~~2022 of Chief Financial Officer required by 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

95		Mine Safety Disclosures

101.INS		Inline XBRL Instance Document – The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL 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

104		Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

Page 5352 of 5453

SIGNATURES

~~SIGNATURES~~

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


		MARTIN MARIETTA MATERIALS, INC.
		(Registrant)

Date: November 2, ~~2021~~2022	By:	/s/ James A. J. Nickolas
		James A. J. Nickolas
		Sr. Vice President and
		Chief Financial Officer

Page 5453 of 5453

	Gross Amount		Accumulated Amortization			Net Balance
(Dollars in Millions)	September 30, 2021
Noncompetition agreements	$	4.2	$	(4.1	)	$	0.1
Customer relationships		312.7		(44.3	)		268.4
Operating permits		523.8		(53.7	)		470.1
Use rights and other		16.4		(13.8	)		2.6
Trade names		23.3		(13.3	)		10.0
Total	$	880.4	$	(129.2	)	$	751.2

	December 31, 2020
Noncompetition agreements	$	4.2	$	(4.1	)	$	0.1
Customer relationships		91.3		(35.6	)		55.7
Operating permits		460.8		(48.4	)		412.4
Use rights and other		16.3		(13.0	)		3.3
Trade names		12.8		(12.3	)		0.5
Total	$	585.4	$	(113.4	)	$	472.0

(Dollars in Millions)	Amount		Weighted-average amortization period
Subject to amortization:
Customer relationships	$	221.4	24 years
Permits		63.0	40 years
Trade name		10.5	9 years
Total	$	294.9	27 years

(Dollars in Millions)
October - December 2021	$	6.4
2022		25.0
2023		24.7
2024		24.4
2025		24.3
Thereafter		646.4
Total	$	751.2

	September 30, 2021		December 31, 2020
Assets employed:	(Dollars in Millions)
East Group	$	5,075.9	$	4,342.5
West Group		5,613.4		5,355.5
Total Building Materials business		10,689.3		9,698.0
Magnesia Specialties		169.6		167.9
Corporate		2,927.3		714.9
Total	$	13,786.2	$	10,580.8

	October 1, 2020 to
	September 30, 2021
	(Dollars in Millions)
Earnings from continuing operations attributable to Martin Marietta	$	728.7
Add back:
Interest expense		128.3
Income tax expense		166.8
Depreciation, depletion and amortization expense		416.7
Stock-based compensation expense		40.6
Acquisition-related expenses		33.7
EBITDA related to acquired operations (Pre-acquisition October 1, 2020 to July 31, 2021)⁽¹⁾		8.9
Deduct:
Interest income		(0.3	)
Consolidated EBITDA, as defined by the Company’s Revolving Facility	$	1,523.4
Consolidated net debt, as defined and including debt for which the Company is a co-borrower, at September 30, 2021	$	5,319.5
Consolidated net debt-to-consolidated EBITDA, as defined by the Company’s Revolving Facility, at September 30, 2021 for the trailing-twelve months EBITDA	3.49 times

⁽¹⁾ Inclusive of one-time, non-recurring and transaction-related expenses.