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Significant Accounting Policies | 3 Months Ended
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Mar. 31, 2023
Accounting Policies [Abstract] |
Significant Accounting Policies | 1. Significant Accounting Policies Organization Martin Marietta Materials, Inc. (the Company or Martin Marietta) is a natural resource-based building materials company. As of March 31, 2023, the Company supplies aggregates (crushed stone, sand and gravel) through its network of approximately 350 q uarries, 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 also has a leading aggregates position. In addition, the Company has one cement plant, related cement distribution terminals, cement import operations and ready mixed concrete operations in California that are classified as assets held for sale and reported as discontinued operations as of and for the three months ended March 31, 2023 and 2022 and as of December 31, 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, 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 (continuing operations only)
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 for steel production and soil stabilization. Basis of Presentation and Use of Estimates 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, 2022. 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 months ended March 31, 2023 are not necessarily indicative of the results expected for other interim periods or the full year. The consolidated balance sheet at December 31, 2022 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, 2022. 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. Revenue Recognition Total revenues include sales of products and services to customers, net of discounts or allowances, if any, and freight and delivery costs billed to customers. Product revenues are recognized when control of the promised good is transferred to unaffiliated customers, 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. 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 Accounting Standards Codification (ASC) 606, the related revenues and costs are presented gross in the consolidated statements of earnings and are recognized consistently with the timing of the product revenues. Restricted Cash At March 31, 2023 and December 31, 2022, the Company had restricted cash of $0.1 million and $0.8 million, respectively, 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 is restricted from utilizing the cash for purposes other than the purchase of qualified assets for 180 days from receipt of the proceeds from the sale of the exchanged property. Any unused cash at the end of the 180 days is transferred to unrestricted accounts of the Company and used for general corporate purposes. The statements of cash flows reflect 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:
|  | March 31, |  |  | December 31, |
|  | 2023 |  |  | 2022 |
|  | (Dollars in Millions) |
Cash and cash equivalents |  | $ | 229.4 |  |  | $ | 358.0 |
Restricted cash |  |  | 0.1 |  |  |  | 0.8 |
Total cash, cash equivalents and restricted cash presented in the consolidated statements of cash flows |  | $ | 229.5 |  |  | $ | 358.8 |
Restricted Investments At March 31, 2023 and December 31, 2022, the Company had $702.3 million and $704.6 million, respectively, of restricted investments, representing assets irrevocably transferred to an escrow trust account to satisfy and discharge the Company’s $700.0 million of 0.650% Senior Notes due 2023 (the 2023 Notes) (see Note 4). The assets in the escrow trust account may not be used for any purpose other than to satisfy the remaining interest payments 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 5) 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 consolidated the trust account on its balance sheets at March 31, 2023 and December 31, 2022. Consolidated Comprehensive Earnings (Loss) and Accumulated Other Comprehensive Loss Consolidated comprehensive earnings (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 |
|  | March 31, |
|  | 2023 |  |  | 2022 |
|  | (Dollars in Millions) |
Net earnings attributable to Martin Marietta |  | $ | 121.4 |  |  | $ | 21.4 |
Other comprehensive earnings (loss), net of tax |  |  | 1.1 |  |  |  | (31.6 | )
Consolidated comprehensive earnings (loss) attributable to Martin Marietta |  | $ | 122.5 |  |  | $ | (10.2 | )
Accumulated other comprehensive loss consists of unrecognized gains and losses related to the funded status of the pension and postretirement benefit plans and foreign currency translation and is presented on the Company’s consolidated balance sheets. The components of the 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 March 31, 2023 |
Balance at beginning of period |  | $ | (36.5 | ) |  | $ | (2.0 | ) |  | $ | (38.5 | )
Other comprehensive earnings before reclassifications, net of tax |  |  | — |  |  |  | 0.1 |  |  |  | 0.1 |
Amounts reclassified from accumulated other comprehensive loss, net of tax |  |  | 1.0 |  |  |  | — |  |  |  | 1.0 |
Other comprehensive earnings, net of tax |  |  | 1.0 |  |  |  | 0.1 |  |  |  | 1.1 |
Balance at end of period |  | $ | (35.5 | ) |  | $ | (1.9 | ) |  | $ | (37.4 | )
|  | Three Months Ended March 31, 2022 |
Balance at beginning of period |  | $ | (97.6 | ) |  | $ | — |  |  | $ | (97.6 | )
Other comprehensive (loss) earnings before reclassifications, net of tax |  |  | (33.3 | ) |  |  | 0.4 |  |  |  | (32.9 | )
Amounts reclassified from accumulated other comprehensive loss, net of tax |  |  | 1.3 |  |  |  | — |  |  |  | 1.3 |
Other comprehensive (loss) earnings, net of tax |  |  | (32.0 | ) |  |  | 0.4 |  |  |  | (31.6 | )
Balance at end of period |  | $ | (129.6 | ) |  | $ | 0.4 |  |  | $ | (129.2 | )
The $33.3 million, net of tax, other comprehensive loss before reclassifications in the Pension and Postretirement Benefit Plans for the three months ended March 31, 2022 was 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 |
|  | March 31, |
|  | 2023 |  |  | 2022 |
|  | (Dollars in Millions) |
Balance at beginning of period |  | $ | 50.1 |  |  | $ | 69.7 |
Tax effect of other comprehensive (earnings) loss |  |  | (0.3 | ) |  |  | 10.5 |
Balance at end of period |  | $ | 49.8 |  |  | $ | 80.2 |
Reclassifications out of accumulated other comprehensive loss are as follows:
|  | Three Months Ended |  |  | Affected line items in the
|  | March 31, |  |  | consolidated statements of earnings
|  | 2023 |  |  | 2022 |  |  | and comprehensive earnings
|  | (Dollars in Millions) |
Pension and postretirement benefit plans |  |  |  |  |  |  |  |
Amortization of: |  |  |  |  |  |  |  |
Prior service cost |  | $ | 1.3 |  |  | $ | 1.0 |  |  |
Actuarial loss |  |  | — |  |  |  | 0.8 |  |  |
|  |  | 1.3 |  |  |  | 1.8 |  |  | Other nonoperating income, net
Tax effect |  |  | (0.3 | ) |  |  | (0.5 | ) |  | Income tax expense
Total |  | $ | 1.0 |  |  | $ | 1.3 |  |  |
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 is 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 months ended March 31, 2023 and 2022, 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 |
|  | March 31, |
|  | 2023 |  |  | 2022 |
|  | (In Millions) |
Basic weighted-average common shares outstanding |  |  | 62.1 |  |  |  | 62.4 |
Effect of dilutive employee and director awards |  |  | 0.1 |  |  |  | 0.2 |
Diluted weighted-average common shares outstanding |  |  | 62.2 |  |  |  | 62.6 |
Reclassifications As of March 31, 2023, the Company combined products and services revenues and freight revenues into total revenues, and combined cost of revenues - products and services and cost of revenues - freight into total cost of revenues on the Company's consolidated statements of earnings and comprehensive earnings. Prior-year information has been reclassified to conform to the current-year presentation. The reclassifications had no impact on the Company’s previously reported results of operations, financial position or cash flows.

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- Definition The entire disclosure for the general note to the financial statements for the reporting entity which may include, descriptions of the basis of presentation, business description, significant accounting policies, consolidations, reclassifications, new pronouncements not yet adopted and changes in accounting principles. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 810 -URI https://asc.fasb.org/topic&trid=2197479 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 275 -URI https://asc.fasb.org/topic&trid=2134479 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 250 -URI https://asc.fasb.org/topic&trid=2122394 Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -URI https://asc.fasb.org/topic&trid=2122369 + Details
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