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Business Combinations, Divestitures, Discontinued Operations and Assets and Liabilities Held for Sale | 12 Months Ended
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Dec. 31, 2022
Business Combinations [Abstract] |
Business Combinations, Divestitures, Discontinued Operations and Assets and Liabilities Held for Sale | Note C: Business Combinations, Divestitures, Discontinued Operations and Assets and Liabilities Held for Sale Business Combinations Total revenues and earnings from operations attributable to continuing operations acquired in 2021 (as subsequently described) included in the consolidated statement of earnings were $338.6 million and $12.1 million, respectively, for the year ended December 31, 2021. Total acquisition and integration expenses were $57.9 million for the year ended December 31, 2021 and were primarily related to the acquisition of Lehigh Hanson, Inc.'s West Region business (Lehigh West Region). Lehigh West Region. In October 2021, the Company completed the acquisition of Lehigh West Region for $2.26 billion. The acquisition was primarily financed using proceeds from the issuance of publicly traded debt. These operations provided an 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 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. Nota bly, during the year ended December 31, 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 $115.7 million; and increased goodwill by $233.1 million. As of December 31, 2022, t he measurement period is closed. T he following is a summary of the fair values of the assets acquired and the liabilities assumed as of the acquisition date:
(in millions) |  |  |
Assets: |  |  |
Inventories |  | $ | 90.9 |
Property, plant and equipment 1 |  |  | 847.5 |
Intangible assets, other than goodwill |  |  | 431.5 |
Goodwill |  |  | 1,222.3 |
Other assets |  |  | 54.4 |
Total Assets |  |  | 2,646.6 |
Liabilities: |  |  |
Asset retirement obligations |  |  | 247.5 |
Operating and finance lease liabilities |  |  | 57.5 |
Other liabilities |  |  | 77.0 |
Total Liabilities |  |  | 382.0 |
Total Consideration |  | $ | 2,264.6 |
1. Includes mineral reserves of $332.0 million. Goodwill represents the excess purchase price over the fair values of assets acquired and liabilities assumed and reflects projected operating synergies from the transaction, including expected overhead savings. Amortization of the goodwill generated by the transaction is deductible for income tax purposes. The following unaudited pro forma financial information summarizes the combined results of operations for the Company and Lehigh West Region as though the companies were combined as of January 1, 2020. Financial information for periods prior to the October 1, 2021 acquisition date included in the pro forma earnings does not reflect any cost savings or associated costs to achieve such savings from operating efficiencies or synergies that may result from the combination. Consistent with the assumed acquisition date of January 1, 2020, the pro forma financial results for the year ended December 31, 2020 include acquisition and integration expenses of $46.8 million. The unaudited pro forma financial information does not purport to project the future financial position or operating results of the combined company. The following pro forma financial information is for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisition had taken place as of January 1, 2020:
years ended December 31 |  |  |  |  |  |
(in millions, except for per share data) |  | 2021 |  |  | 2020 |
Total revenues |  | $ | 5,755.1 |  |  | $ | 5,184.9 |
Net earnings from continuing operations attributable to Martin Marietta |  | $ | 737.3 |  |  | $ | 642.4 |
Diluted net earnings from continuing operations per share |  | $ | 11.78 |  |  | $ | 10.30 |
The pro forma financial information excludes the acquired cement and California ready mix businesses, which were classified as assets held for sale and reported as discontinued operations as of and for the year ended December 31, 2021. Southern Crushed Concrete. In July 2021, the Company acquired the assets of Southern Crushed Concrete (SCC), a leading producer in the Houston area of 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 and liabilities assumed. Notably, during the year ended December 31, 2022, the Company reduced the acquisition-date fair value of intangible assets, other than goodwill, by $64.0 million and increased goodwill by $64.7 million. As of December 31, 2022, the measurement period is closed. Amortization of the goodwill generated by the transaction is deductible for income tax purposes. The results from the acquired business are reported in the Company’s West Group and are immaterial for pro forma financial statement disclosures. Tiller Corporation. In April 2021, the Company completed the acquisition of Tiller Corporation (Tiller), a leading aggregates and hot mix asphalt supplier in the Minneapolis/St. Paul region, one of the largest and fastest-growing midwestern metropolitan areas. The Tiller acquisition complemented the Company’s existing product offerings in the surrounding areas. The Company determined the acquisition-date fair values of the assets acquired and liabilities assumed. As of December 31, 2022, the measurement period is closed. Amortization of the goodwill generated by the transaction is deductible for income tax purposes. The results from the acquired business are reported in the Company’s East Group and are immaterial for pro forma financial statement disclosures. Divestitures On August 9, 2022, the Company announced a definitive agreement to sell its Tehachapi, California cement plant and related distribution terminals for $350.0 million in cash, subject to regulatory approval and customary closing conditions. These operations are classified as assets held for sale and reported as discontinued operations as of and for the years ended December 31, 2022 and 2021. 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 transaction 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, on the Company's consolidated statement of earnings for the year ended December 31, 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. Discontinued Operations Discontinued operations are comprised of the cement and California ready mix businesses acquired as part of the Lehigh West Region transaction. Financial results for the Company's d iscontinued operations were as follows:
years ended December 31 (in millions) |  | 2022 |  |  | 2021 |
Total revenues |  | $ | 308.6 |  |  | $ | 79.2 |
Pretax earnings from operations |  | $ | 16.2 |  |  | $ | 6.6 |
Pretax loss on divestiture |  |  | (0.7 | ) |  |  | (6.0 | )
Pretax earnings |  |  | 15.5 |  |  |  | 0.6 |
Income tax expense |  |  | 5.0 |  |  |  | 0.1 |
Earnings from discontinued operations, net of income tax expense |  | $ | 10.5 |  |  | $ | 0.5 |
Total cash provided by operating and investing activities for discontinued operations was $202.8 million in 2022, which included $249.9 million of proceeds from divestitures and $15.5 million of capital expenditures. Total cash used for operating and investing activities for 2021 was $11.9 million. Assets and Liabilities Held for Sale Assets and liabilities held for sale at December 31, 2022 included 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 Redding, California cement plant, related cement distribution terminals and 14 California ready mix operations that were sold in June 2022. Assets and liabilities held for sale were as follows:
|  | 2022 |  |  | 2021 |
December 31 (in millions) |  | Continuing Operations |  |  | Discontinued Operations |  |  | Total |  |  | Continuing Operations |  |  | Discontinued Operations |  |  | Total |
Inventories, net |  | $ | — |  |  | $ | 31.3 |  |  | $ | 31.3 |  |  | $ | — |  |  | $ | 53.1 |  |  | $ | 53.1 |
Investment land |  |  | 40.6 |  |  |  | — |  |  |  | 40.6 |  |  |  | 32.7 |  |  |  | — |  |  |  | 32.7 |
Other assets |  |  | — |  |  |  | 1.3 |  |  |  | 1.3 |  |  |  | — |  |  |  | 16.4 |  |  |  | 16.4 |
Total current assets held for sale |  | $ | 40.6 |  |  | $ | 32.6 |  |  | $ | 73.2 |  |  | $ | 32.7 |  |  | $ | 69.5 |  |  | $ | 102.2 |
Property, plant and equipment |  | $ | — |  |  | $ | 124.5 |  |  | $ | 124.5 |  |  | $ | — |  |  | $ | 226.0 |  |  | $ | 226.0 |
Intangible assets, excluding goodwill |  |  | — |  |  |  | 208.5 |  |  |  | 208.5 |  |  |  | — |  |  |  | 264.9 |  |  |  | 264.9 |
Operating lease right-of-use assets |  |  | — |  |  |  | 12.1 |  |  |  | 12.1 |  |  |  | — |  |  |  | 18.1 |  |  |  | 18.1 |
Goodwill |  |  | — |  |  |  | 31.9 |  |  |  | 31.9 |  |  |  | — |  |  |  | 109.3 |  |  |  | 109.3 |
Other assets |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 4.6 |  |  |  | 4.6 |
Valuation allowance for loss on sale |  |  | — |  |  |  | (4.5 | ) |  |  | (4.5 | ) |  |  | — |  |  |  | (6.0 | ) |  |  | (6.0 | )
Total noncurrent assets held for sale |  | $ | — |  |  | $ | 372.5 |  |  | $ | 372.5 |  |  | $ | — |  |  | $ | 616.9 |  |  | $ | 616.9 |
Lease obligations |  | $ | — |  |  | $ | (4.5 | ) |  | $ | (4.5 | ) |  | $ | — |  |  | $ | (7.5 | ) |  | $ | (7.5 | )
Total current liabilities held for sale |  | $ | — |  |  | $ | (4.5 | ) |  | $ | (4.5 | ) |  | $ | — |  |  | $ | (7.5 | ) |  | $ | (7.5 | )
Lease obligations |  | $ | — |  |  | $ | (4.1 | ) |  | $ | (4.1 | ) |  | $ | — |  |  | $ | (22.0 | ) |  | $ | (22.0 | )
Asset retirement obligations |  |  | — |  |  |  | (17.7 | ) |  |  | (17.7 | ) |  |  | — |  |  |  | (31.5 | ) |  |  | (31.5 | )
Total noncurrent liabilities held for sale |  | $ | — |  |  | $ | (21.8 | ) |  | $ | (21.8 | ) |  | $ | — |  |  | $ | (53.5 | ) |  | $ | (53.5 | )

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