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Significant Accounting Policies (Policies) | 9 Months Ended
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Sep. 30, 2022
Accounting Policies [Abstract] |
Organization | Organization Martin Marietta Materials, Inc. (the Company or Martin Marietta) is a natural resource-based building materials company. As of September 30, 2022, the Company supplies aggregates (crushed stone, sand and gravel) through its network of approximately 350 quarries, mines and distribution yards in 28 states, Canada and The Bahamas. Martin Marietta also provides cement and downstream products and services, namely, ready mixed concrete, asphalt and paving, in vertically-integrated structured markets where the Company has a leading aggregates position. In addition, the Company has 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 two reportable segments: the East Group and the West Group.
BUILDING MATERIALS BUSINESS
Reportable Segments |  | East Group |  | West Group
Operating Locations |  | Alabama, Florida, Georgia, Indiana, Iowa, Kansas, Kentucky, Maryland, Minnesota, Missouri, Nebraska, North Carolina, Ohio, Pennsylvania, South Carolina, Tennessee, Virginia, West Virginia, Nova Scotia and The Bahamas |  | Arizona, Arkansas, California, Colorado, Louisiana, Oklahoma, Texas, Utah, Washington and Wyoming
Product Lines |  | Aggregates and Asphalt |  | Aggregates, Cement, 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 | 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, 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, 2022 are not necessarily indicative of the results expected for other interim periods or the full year. The consolidated balance sheet at December 31, 2021 has been derived from the audited consolidated financial statements at that date but does not include all of the information and notes required by U.S. GAAP for complete financial statements. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 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.
Consolidated Comprehensive (Loss) Earnings and Accumulated Other Comprehensive Loss | 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. Consolidated comprehensive earnings (loss) attributable to Martin Marietta is as follows:
|  | 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 |
Changes in accumulated other comprehensive loss, net of tax, are as follows:
|  | (Dollars in Millions) |
|  | Pension and Postretirement Benefit Plans |  |  | Foreign Currency |  |  | Accumulated Other Comprehensive Loss |
|  | Three Months Ended September 30, 2022 |
Balance at beginning of period |  | $ | (127.6 | ) |  | $ | (0.5 | ) |  | $ | (128.1 | )
Other comprehensive loss before reclassifications, net of tax |  |  | — |  |  |  | (1.9 | ) |  |  | (1.9 | )
Amounts reclassified from accumulated other comprehensive loss, net of tax |  |  | 4.9 |  |  |  | — |  |  |  | 4.9 |
Other comprehensive earnings (loss), net of tax |  |  | 4.9 |  |  |  | (1.9 | ) |  |  | 3.0 |
Balance at end of period |  | $ | (122.7 | ) |  | $ | (2.4 | ) |  | $ | (125.1 | )
|  | Three Months Ended September 30, 2021 |
Balance at beginning of period |  | $ | (153.5 | ) |  | $ | 0.5 |  |  | $ | (153.0 | )
Other comprehensive loss before reclassifications, net of tax |  |  | — |  |  |  | (0.6 | ) |  |  | (0.6 | )
Amounts reclassified from accumulated other comprehensive loss, net of tax |  |  | 2.2 |  |  |  | — |  |  |  | 2.2 |
Other comprehensive earnings (loss), net of tax |  |  | 2.2 |  |  |  | (0.6 | ) |  |  | 1.6 |
Balance at end of period |  | $ | (151.3 | ) |  | $ | (0.1 | ) |  | $ | (151.4 | )
|  | (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 | )
|  | Nine Months Ended September 30, 2021 |
Balance at beginning of period |  | $ | (158.1 | ) |  | $ | (0.3 | ) |  | $ | (158.4 | )
Other comprehensive earnings before reclassifications, net of tax |  |  | — |  |  |  | 0.2 |  |  |  | 0.2 |
Amounts reclassified from accumulated other comprehensive loss, net of tax |  |  | 6.8 |  |  |  | — |  |  |  | 6.8 |
Other comprehensive earnings, net of tax |  |  | 6.8 |  |  |  | 0.2 |  |  |  | 7.0 |
Balance at end of period |  | $ | (151.3 | ) |  | $ | (0.1 | ) |  | $ | (151.4 | )
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 |
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 |  |  |
Earnings per Common Share | 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 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, 2022 and 2021, the diluted per-share computations reflect the number of common shares outstanding including the number of additional shares that would have been outstanding if the potentially dilutive common shares had been issued. The following table reconciles the denominator for basic and diluted earnings from continuing operations per common share:
|  | Three Months Ended |  |  | 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 | Restricted Cash At December 31, 2021, the Company had restricted cash of $0.5 million, which was invested in an account designated for the purchase of like-kind exchange replacement assets under Section 1031 of the Internal Revenue Code and related IRS procedures (Section 1031). The Company was restricted from utilizing the cash for purposes other than the purchase of the qualified assets for a designated period from receipt of the proceeds from the sale of the exchanged property. There was no restricted cash at 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, |
|  | 2022 |  |  | 2021 |
|  | (Dollars in Millions) |
Cash and cash equivalents |  | $ | 135.7 |  |  | $ | 258.4 |
Restricted cash |  |  | — |  |  |  | 0.5 |
Total cash, cash equivalents and restricted cash presented in the consolidated statements of cash flows |  | $ | 135.7 |  |  | $ | 258.9 |
Restricted Investments | Restricted Investments At September 30, 2022, the Company had $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 2023 Notes on the maturity date of 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 those trust assets are for the account of the Company (after satisfaction of all amounts payable in connection with the 2023 Notes). The Company has consolidated the trust account on its balance sheet at September 30, 2022.
Policy Elections | Policy Elections. When the Company arranges third-party freight to deliver products to customers, the Company has elected the delivery to be a fulfillment activity rather than a separate performance obligation. Further, the Company acts as a principal in the delivery arrangements and, as required by the accounting standard, the related revenues and costs are presented gross and are included in the consolidated statements of earnings.

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