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Business Combinations, Divestitures, Discontinued Operations and Assets and Liabilities Held for Sale | 9 Months Ended
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Sep. 30, 2024
Business Combinations [Abstract] |
Business Combinations, Divestitures, Discontinued Operations and Assets and Liabilities Held for Sale | 2. Business Combinations, Divestitures, Discontinued Operations and Assets and Liabilities Held for Sale Business Combinations Revenues and pretax earnings attributable to operations acquired in 2024 (as subsequently described) included in the Company's consolidated statements of earnings and comprehensive earnings were $85 million and $13 million, respectively, for the three months ended September 30, 2024, and $182 million and $25 million, respectively, for the nine months ended September 30, 2024. The pretax earnings for the nine month period includes a $20 million charge for the impact of selling acquired inventory after its markup to fair value as part of acquisition accounting for the Blue Water Industries LLC transaction. Albert Frei & Sons, Inc. On January 12, 2024, the Company acquired Albert Frei & Sons, Inc. (AFS), a leading aggregates producer in Colorado. This acquisition provides more than 60 years (at 2023 production levels) of high-quality, hard rock reserves to better serve new and existing customers and enhances the Company's aggregates platform in the Denver metropolitan area. The Company has recorded preliminary fair values of the assets acquired and liabilities assumed, which are subject to additional reviews that are not yet complete. Thus, these amounts are subject to change during the measurement period, which extends no longer than one year from the consummation date, and remains open as of September 30, 2024. Specific accounts subject to ongoing purchase accounting adjustments include, but are not limited to, goodwill and deferred income taxes. The goodwill generated by the transaction is not deductible for income tax purposes. The acquisition is reported in the Company's West Group and is immaterial for pro-forma financial statement disclosures. Blue Water Industries LLC. On April 5, 2024, the Company completed the acquisition of 20 active aggregates operations in Alabama, South Carolina, South Florida, Tennessee, and Virginia from affiliates of Blue Water Industries LLC (BWI Southeast) for $2.05 billion in cash. The BWI Southeast acquisition complements Martin Marietta’s existing geographic footprint in the southeast region by expanding into new growth platforms in target markets including Tennessee and South Florida. The results from the acquired operations are reported in the Company's East Group. The Company determined the acquisition-date fair values of assets acquired and liabilities assumed. The Company has recorded preliminary fair values of the assets acquired and liabilities assumed, which are subject to additional reviews that are not yet complete. As such, these amounts are subject to change during the measurement period, which extends no longer than one year from the consummation date, and remains open as of September 30, 2024. Notably, during the quarter ended September 30, 2024, the Company increased the acquisition-date fair value of property, plant and equipment by $91 million and reduced goodwill by $77 million. Specific accounts subject to ongoing purchase accounting adjustments include, but are not limited to, property, plant and equipment; goodwill; deferred income taxes; asset retirement obligations; and other liabilities. The goodwill generated by the transaction is not 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 April 5, 2024 (dollars in millions):
Assets: |  |  |
Inventories |  | $ | 49 |
Property, plant and equipment 1 |  |  | 2,052 |
Intangible assets, other than goodwill |  |  | 19 |
Other assets |  |  | 2 |
Total assets |  |  | 2,122 |
Liabilities: |  |  |
Deferred income taxes |  |  | 239 |
Asset retirement obligations |  |  | 3 |
Other liabilities |  |  | 98 |
Total liabilities |  |  | 340 |
Net identifiable assets acquired |  |  | 1,782 |
Goodwill |  |  | 268 |
Total consideration |  | $ | 2,050 |
1 Includes mineral reserves of $1.9 billion. The following unaudited pro forma financial information summarizes the combined results of operations for the Company and BWI Southeast as though the companies were combined as of January 1, 2023. Consistent with the assumed acquisition date of January 1, 2023, the pro forma financial results include acquisition and integration expenses of $22 million and the $20 million charge for selling inventory after its markup to fair value for the nine months ended September 30, 2023. 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, 2023:
|  | Three Months Ended |  |  | Nine Months Ended |
|  | September 30, |  |  | September 30, |
|  | 2024 |  |  | 2023 |  |  | 2024 |  |  | 2023 |
|  | (Dollars in Millions) |
Revenues |  | $ | 1,889 |  |  | $ | 2,059 |  |  | $ | 4,957 |  |  | $ | 5,335 |
Net earnings from continuing operations attributable to Martin Marietta |  | $ | 363 |  |  | $ | 415 |  |  | $ | 1,733 |  |  | $ | 834 |
On October 25, 2024, the Company completed an aggregates bolt-on acquisition in South Florida. Divestitures On February 9, 2024, the Company completed the sale of its South Texas cement business and certain of its related ready mixed concrete operations to CRH Americas Materials, Inc., a subsidiary of CRH plc, for $2.1 billion in cash plus normal customary closing adjustments. Specifically, the divested facilities included the Hunter cement plant in New Braunfels, Texas, related cement distribution terminals and 20 ready mixed concrete plants that served the Austin and San Antonio region, all of which were classified as assets held for sale as of December 31, 2023. The divestiture provided proceeds the Company used to consummate the BWI Southeast acquisition. The transaction resulted in a pretax gain of $1.3 billion, which is included in Other operating (income) expense, net, on the Company's consolidated statement of earnings and comprehensive earnings for the nine months ended September 30, 2024 and is exclusive of transaction expenses incurred due to the divestiture. The divested operations and the gain on divestiture are reported in the West Group. Discontinued Operations For the three and nine months ended September 30, 2023, discontinued operations included the Company's Tehachapi, California cement plant, which was divested in October 2023. For the nine months ended September 30, 2023, discontinued operations also included the Stockton, California cement import terminal, which was divested in May 2023. There were no discontinued operations for the three and nine months ended September 30, 2024. Financial results for the Company's discontinued operations are as follows:
|  | Three Months Ended |  |  | Nine Months Ended |
|  | September 30, 2023 |
|  | (Dollars in Millions) |
Revenues |  | $ | 27 |  |  | $ | 86 |
Pretax earnings (loss) from operations |  | $ | 4 |  |  | $ | (14 | )
Pretax loss on divestitures and sales of assets |  |  | (21 | ) |  |  | (20 | )
Pretax loss |  |  | (17 | ) |  |  | (34 | )
Income tax benefit |  |  | (4 | ) |  |  | (8 | )
Loss from discontinued operations, net of income tax benefit |  | $ | (13 | ) |  | $ | (26 | )
Cash flow information for the Company's discontinued operations is as follows:
|  | Nine Months Ended |
|  | September 30, 2023 |
|  | (Dollars in Millions) |
Net cash used for operating activities |  | $ | (9 | )
Additions to property, plant and equipment |  | $ | (4 | )
Proceeds from divestitures and sales of assets |  |  | 57 |
Net cash provided by investing activities |  | $ | 53 |
Assets and Liabilities Held for Sale Assets and liabilities held for sale at September 30, 2024 included certain nonoperating land. At December 31, 2023, assets and liabilities held for sale also included the South Texas cement plant, related cement distribution terminals and 20 ready mixed concrete plants that were sold in February 2024. Assets and liabilities held for sale are as follows:
|  | September 30, 2024 |  |  | December 31, 2023 |
|  | Continuing Operations |
|  | (Dollars in Millions) |
Inventories, net |  | $ | — |  |  | $ | 61 |
Investment land |  |  | 10 |  |  |  | 18 |
Other assets |  |  | — |  |  |  | 4 |
Property, plant and equipment |  |  | — |  |  |  | 327 |
Intangible assets, excluding goodwill |  |  | — |  |  |  | 122 |
Operating lease right-of-use assets |  |  | — |  |  |  | 15 |
Goodwill |  |  | — |  |  |  | 260 |
Total current assets held for sale |  | $ | 10 |  |  | $ | 807 |
Lease obligations |  | $ | — |  |  | $ | (16 | )
Asset retirement obligations |  |  | — |  |  |  | (2 | )
Total current liabilities held for sale |  | $ | — |  |  | $ | (18 | )

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