mlm-10q_20150930.htm

 

 

 

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

 

(Mark One)

x

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2015

OR

o

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 1-12744

 

MARTIN MARIETTA MATERIALS, INC.

(Exact name of registrant as specified in its charter)

 

 North Carolina

 

56-1848578

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification Number)

 

2710 Wycliff Road, Raleigh, NC

 

27607-3033

(Address of principal executive offices)

 

(Zip Code)

Registrant’s telephone number, including area code 919-781-4550

Former name: None

Former name, former address and former fiscal year, if changes since last report.

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  þ    No  o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes  þ    No  o

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

 Large accelerated filer

 

þ

  

Accelerated filer

 

o

 

 

 

 

Non-accelerated filer

 

o  

  

Smaller reporting company

 

o

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

Yes  o    No   þ

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 30, 2015

Common Stock, $0.01 par value

 

66,140,560

 

 

 

 

 

 

 

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended September 30, 2015

 

 

Page

Part I. Financial Information:

 

 

Item 1. Financial Statements.

 

 

 

Consolidated Balance Sheets – September 30, 2015, December 31, 2014 and September 30, 2014

 

 

3

Consolidated Statements of Earnings and Comprehensive Earnings – Three and Nine Months Ended September 30, 2015 and 2014

 

 

 

4

Consolidated Statements of Cash Flows - Nine Months Ended September 30, 2015 and 2014

 

 

5

Consolidated Statement of Total Equity - Nine Months Ended September 30, 2015

 

 

6

Notes to Consolidated Financial Statements

 

 

7

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

 

 

25

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

 

 

58

Item 4. Controls and Procedures.

 

 

59

Part II. Other Information:

 

 

 

Item 1. Legal Proceedings.

 

 

60

Item 1A. Risk Factors.

 

 

60

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

 

 

60

Item 4. Mine Safety Disclosures.

 

 

60

Item 6. Exhibits.

 

 

61

Signatures

 

 

62

Exhibit Index

 

 

63

 

 

 

 

 

 

 

 

Page 2 of 63

 

 

PART I.  FINANCIAL INFORMATION

 

Item 1.  Financial Statements.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

 

CONSOLIDATED BALANCE SHEETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

September 30,

 

 

December 31,

 

 

September 30,

 

 

 

2015

 

 

2014

 

 

2014

 

 

 

(Unaudited)

 

 

(Audited)

 

 

(Unaudited)

 

 

 

(Dollars in Thousands, Except Per Share Data)

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

436,429

 

 

$

108,651

 

 

$

73,597

 

Accounts receivable, net

 

 

577,424

 

 

 

421,001

 

 

 

523,928

 

Inventories, net

 

 

464,525

 

 

 

484,919

 

 

 

475,293

 

Current deferred income tax benefits

 

 

125,633

 

 

 

244,638

 

 

 

90,136

 

Other current assets

 

 

37,960

 

 

 

29,607

 

 

 

49,844

 

Total Current Assets

 

 

1,641,971

 

 

 

1,288,816

 

 

 

1,212,798

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Property, plant and equipment

 

 

5,488,744

 

 

 

5,691,676

 

 

 

5,624,761

 

Allowances for depreciation, depletion and amortization

 

 

(2,415,210

)

 

 

(2,288,906

)

 

 

(2,246,810

)

Net property, plant and equipment

 

 

3,073,534

 

 

 

3,402,770

 

 

 

3,377,951

 

Goodwill

 

 

2,065,644

 

 

 

2,068,799

 

 

 

2,043,320

 

Operating permits, net

 

 

445,855

 

 

 

499,487

 

 

 

501,734

 

Other intangibles, net

 

 

65,556

 

 

 

95,718

 

 

 

97,488

 

Other noncurrent assets

 

 

145,888

 

 

 

108,802

 

 

 

105,567

 

Total Assets

 

$

7,438,448

 

 

$

7,464,392

 

 

$

7,338,858

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Bank overdraft

 

$

—

 

 

$

183

 

 

$

—

 

Accounts payable

 

 

226,837

 

 

 

202,476

 

 

 

230,206

 

Accrued salaries, benefits and payroll taxes

 

 

30,529

 

 

 

36,576

 

 

 

54,062

 

Pension and postretirement benefits

 

 

8,359

 

 

 

6,953

 

 

 

7,351

 

Accrued insurance and other taxes

 

 

70,509

 

 

 

58,356

 

 

 

70,653

 

Current maturities of long-term debt and short-term facilities

 

 

147,536

 

 

 

14,336

 

 

 

14,331

 

Accrued interest

 

 

22,414

 

 

 

16,136

 

 

 

22,317

 

Other current liabilities

 

 

69,208

 

 

 

61,632

 

 

 

38,078

 

Total Current Liabilities

 

 

575,392

 

 

 

396,648

 

 

 

436,998

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Long-term debt

 

 

1,557,616

 

 

 

1,571,059

 

 

 

1,603,944

 

Pension, postretirement and postemployment benefits

 

 

229,042

 

 

 

249,333

 

 

 

144,077

 

Noncurrent deferred income taxes

 

 

665,712

 

 

 

734,583

 

 

 

633,951

 

Other noncurrent liabilities

 

 

158,106

 

 

 

160,021

 

 

 

144,275

 

Total Liabilities

 

 

3,185,868

 

 

 

3,111,644

 

 

 

2,963,245

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity:

 

 

 

 

 

 

 

 

 

 

 

 

Common stock, par value $0.01 per share

 

 

660

 

 

 

671

 

 

 

671

 

Preferred stock, par value $0.01 per share

 

 

—

 

 

 

—

 

 

 

—

 

Additional paid-in capital

 

 

3,283,200

 

 

 

3,243,619

 

 

 

3,239,709

 

Accumulated other comprehensive loss

 

 

(112,742

)

 

 

(106,159

)

 

 

(43,281

)

Retained earnings

 

 

1,079,764

 

 

 

1,213,035

 

 

 

1,176,121

 

Total Shareholders' Equity

 

 

4,250,882

 

 

 

4,351,166

 

 

 

4,373,220

 

Noncontrolling interests

 

 

1,698

 

 

 

1,582

 

 

 

2,393

 

Total Equity

 

 

4,252,580

 

 

 

4,352,748

 

 

 

4,375,613

 

Total Liabilities and Equity

 

$

7,438,448

 

 

$

7,464,392

 

 

$

7,338,858

 

See accompanying notes to the consolidated financial statements.

 

Page 3 of 63

 

 

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

 

CONSOLIDATED STATEMENTS OF EARNINGS AND COMPREHENSIVE EARNINGS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

 

 

2015

 

 

2014

 

 

2015

 

 

2014

 

 

 

(In Thousands, Except Per Share Data)

 

 

(In Thousands, Except Per Share Data)

 

 

 

(Unaudited)

 

 

(Unaudited)

 

Net Sales

 

$

1,005,218

 

 

$

917,942

 

 

$

2,487,342

 

 

$

1,899,557

 

Freight and delivery revenues

 

 

77,031

 

 

 

85,781

 

 

 

207,672

 

 

 

202,021

 

Total revenues

 

 

1,082,249

 

 

 

1,003,723

 

 

 

2,695,014

 

 

 

2,101,578

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of sales

 

 

742,713

 

 

 

722,349

 

 

 

1,950,424

 

 

 

1,542,527

 

Freight and delivery costs

 

 

77,031

 

 

 

85,781

 

 

 

207,672

 

 

 

202,021

 

Total cost of revenues

 

 

819,744

 

 

 

808,130

 

 

 

2,158,096

 

 

 

1,744,548

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross Profit

 

 

262,505

 

 

 

195,593

 

 

 

536,918

 

 

 

357,030

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general & administrative expenses

 

 

54,887

 

 

 

48,427

 

 

 

161,120

 

 

 

119,239

 

Acquisition-related expenses, net

 

 

2,087

 

 

 

26,118

 

 

 

5,783

 

 

 

41,178

 

Other operating expenses, net

 

 

26,033

 

 

 

5,092

 

 

 

27,963

 

 

 

313

 

Earnings from Operations

 

 

179,498

 

 

 

115,956

 

 

 

342,052

 

 

 

196,300

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

18,926

 

 

 

19,805

 

 

 

57,344

 

 

 

44,954

 

Other nonoperating (income) and expenses, net

 

 

(4,489

)

 

 

(1,841

)

 

 

(6,607

)

 

 

1,330

 

Earnings from continuing operations before taxes on income

 

 

165,061

 

 

 

97,992

 

 

 

291,315

 

 

 

150,016

 

Taxes on income

 

 

47,483

 

 

 

44,089

 

 

 

85,600

 

 

 

59,571

 

Earnings from Continuing Operations

 

 

117,578

 

 

 

53,903

 

 

 

205,715

 

 

 

90,445

 

Loss on discontinued operations, net of related tax benefit of

     $28 and $53, respectively

 

 

—

 

 

 

(69

)

 

 

—

 

 

 

(140

)

Consolidated net earnings

 

 

117,578

 

 

 

53,834

 

 

 

205,715

 

 

 

90,305

 

Less: Net earnings (loss) attributable to noncontrolling interests

 

 

34

 

 

 

91

 

 

 

108

 

 

 

(1,341

)

Net Earnings Attributable to Martin Marietta Materials, Inc.

 

$

117,544

 

 

$

53,743

 

 

$

205,607

 

 

$

91,646

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Earnings (Loss) Attributable to Martin Marietta Materials, Inc.:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings from continuing operations

 

$

117,544

 

 

$

53,812

 

 

$

205,607

 

 

$

91,786

 

Loss from discontinued operations

 

 

—

 

 

 

(69

)

 

 

—

 

 

 

(140

)

 

 

$

117,544

 

 

$

53,743

 

 

$

205,607

 

 

$

91,646

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated Comprehensive Earnings:  (See Note 1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings attributable to Martin Marietta Materials, Inc.

 

$

117,616

 

 

$

52,603

 

 

$

199,024

 

 

$

92,479

 

Earnings (Loss) attributable to noncontrolling interests

 

 

37

 

 

 

93

 

 

 

116

 

 

 

(1,337

)

 

 

$

117,653

 

 

$

52,696

 

 

$

199,140

 

 

$

91,142

 

Net Earnings Attributable to Martin Marietta Materials, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Per Common Share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic from continuing operations attributable to common shareholders

 

$

1.75

 

 

$

0.80

 

 

$

3.05

 

 

$

1.71

 

Discontinued operations attributable to common shareholders

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

$

1.75

 

 

$

0.80

 

 

$

3.05

 

 

$

1.71

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted from continuing operations attributable to common shareholders

 

$

1.74

 

 

$

0.79

 

 

$

3.03

 

 

$

1.70

 

Discontinued operations attributable to common shareholders

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

$

1.74

 

 

$

0.79

 

 

$

3.03

 

 

$

1.70

 

Weighted-Average Common Shares Outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

66,830

 

 

 

67,086

 

 

 

67,203

 

 

 

53,342

 

Diluted

 

 

67,108

 

 

 

67,495

 

 

 

67,470

 

 

 

53,559

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash Dividends Per Common Share

 

$

0.40

 

 

$

0.40

 

 

$

1.20

 

 

$

1.20

 

 

 

See accompanying notes to the consolidated financial statements.

 

Page 4 of 63

 

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

 

CONSOLIDATED STATEMENTS OF CASH FLOWS

 

 

 

 

 

Nine Months Ended

 

 

 

September 30,

 

 

 

2015

 

 

2014

 

 

 

(Dollars in Thousands)

 

 

 

(Unaudited)

 

Cash Flows from Operating Activities:

 

 

 

 

 

 

 

 

Consolidated net earnings

 

$

205,715

 

 

$

90,305

 

Adjustments to reconcile consolidated net earnings to net cash

   provided by operating activities:

 

 

 

 

 

 

 

 

Depreciation, depletion and amortization

 

 

199,935

 

 

 

154,079

 

Stock-based compensation expense

 

 

10,722

 

 

 

6,381

 

Loss (gain) on divestitures and sales of assets

 

 

27,568

 

 

 

(47,815

)

Deferred income taxes

 

 

43,286

 

 

 

44,970

 

Excess tax benefits from stock-based compensation transactions

 

 

—

 

 

 

(2,354

)

Other items, net

 

 

(6,554

)

 

 

1,766

 

Changes in operating assets and liabilities, net of effects of acquisitions

   and divestitures:

 

 

 

 

 

 

 

 

Accounts receivable, net

 

 

(155,054

)

 

 

(120,139

)

Inventories, net

 

 

(17,650

)

 

 

1,283

 

Accounts payable

 

 

22,186

 

 

 

26,515

 

Other assets and liabilities, net

 

 

(10,575

)

 

 

46,637

 

Net Cash Provided by Operating Activities

 

 

319,579

 

 

 

201,628

 

 

 

 

 

 

 

 

 

 

Cash Flows from Investing Activities:

 

 

 

 

 

 

 

 

Additions to property, plant and equipment

 

 

(212,447

)

 

 

(138,570

)

Acquisitions, net

 

 

(10,748

)

 

 

(174

)

Cash received in acquisition

 

 

—

 

 

 

59,887

 

Proceeds from divestitures and sales of assets

 

 

422,045

 

 

 

113,158

 

Repayments from affiliate

 

 

1,808

 

 

 

850

 

Payment of railcar construction advances

 

 

(25,341

)

 

 

(14,513

)

Reimbursement of railcar construction advances

 

 

25,234

 

 

 

14,513

 

Net Cash Provided by Investing Activities

 

 

200,551

 

 

 

35,151

 

 

 

 

 

 

 

 

 

 

Cash Flows from Financing Activities:

 

 

 

 

 

 

 

 

Borrowings of long-term debt

 

 

230,000

 

 

 

868,762

 

Repayments of long-term debt

 

 

(111,384

)

 

 

(1,024,052

)

Payments on capital lease obligations

 

 

(5,784

)

 

 

(2,177

)

Debt issuance costs

 

 

—

 

 

 

(2,402

)

Change in bank overdraft

 

 

(183

)

 

 

(2,556

)

Dividends paid

 

 

(81,219

)

 

 

(64,263

)

Purchase of remaining interest in existing subsidiaries

 

 

—

 

 

 

(19,480

)

Issuances of common stock

 

 

33,892

 

 

 

38,195

 

Repurchases of common stock

 

 

(257,674

)

 

 

—

 

Excess tax benefits from stock-based compensation transactions

 

 

—

 

 

 

2,354

 

Net Cash Used for Financing Activities

 

 

(192,352

)

 

 

(205,619

)

Net Increase in Cash and Cash Equivalents

 

 

327,778

 

 

 

31,160

 

Cash and Cash Equivalents, beginning of period

 

 

108,651

 

 

 

42,437

 

Cash and Cash Equivalents, end of period

 

$

436,429

 

 

$

73,597

 

Supplemental Disclosures of Cash Flow Information:

 

 

 

 

 

 

 

 

Cash paid for interest

 

$

47,069

 

 

$

56,162

 

Cash paid for income taxes

 

$

30,896

 

 

$

6,011

 

 

 

See accompanying notes to the consolidated financial statements.

 

Page 5 of 63

 

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

 

CONSOLIDATED STATEMENT OF TOTAL EQUITY

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(in thousands)

 

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 December 31, 2014

 

 

67,293

 

 

$

671

 

 

$

3,243,619

 

 

$

(106,159

)

 

$

1,213,035

 

 

$

4,351,166

 

 

$

1,582

 

 

$

4,352,748

 

Consolidated net earnings

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

205,607

 

 

 

205,607

 

 

 

108

 

 

 

205,715

 

Other comprehensive (loss) earnings,

     net of tax

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(6,583

)

 

 

—

 

 

 

(6,583

)

 

 

8

 

 

 

(6,575

)

Dividends declared

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(81,219

)

 

 

(81,219

)

 

 

—

 

 

 

(81,219

)

Issuances of common stock for stock

     award plans

 

 

434

 

 

 

4

 

 

 

28,859

 

 

 

—

 

 

 

—

 

 

 

28,863

 

 

 

—

 

 

 

28,863

 

Repurchases of common stock

 

 

(1,587

)

 

 

(15

)

 

 

—

 

 

 

—

 

 

 

(257,659

)

 

 

(257,674

)

 

 

—

 

 

 

(257,674

)

Stock-based compensation expense

 

 

—

 

 

 

—

 

 

 

10,722

 

 

 

—

 

 

 

—

 

 

 

10,722

 

 

 

—

 

 

 

10,722

 

Balance at September 30, 2015

 

 

66,140

 

 

$

660

 

 

$

3,283,200

 

 

$

(112,742

)

 

$

1,079,764

 

 

$

4,250,882

 

 

$

1,698

 

 

$

4,252,580

 

 

 

 

 

 

See accompanying notes to the consolidated financial statements.

 

Page 6 of 63

 

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended September 30, 2015

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

 

1.

Significant Accounting Policies

Organization

Martin Marietta Materials, Inc. (the “Corporation” or “Martin Marietta”) is engaged principally in the construction aggregates business. The aggregates product line accounted for 58% of 2014 consolidated net sales and includes crushed stone, sand and gravel, and is used for construction of highways and other infrastructure projects, and in the nonresidential and residential construction industries. Aggregates products are also used in the railroad, agricultural, utility and environmental industries. These aggregates products, along with the Corporation’s aggregates-related downstream product lines, which accounted for 25% of 2014 consolidated net sales and include asphalt products, ready mixed concrete and road paving construction services, are sold and shipped from a network of more than 400 quarries, distribution facilities and plants in 26 states, Canada, the Bahamas and the Caribbean Islands. The aggregates and aggregates-related downstream product lines are reported collectively as the “Aggregates business”.

The Corporation currently conducts the Aggregates business through three reportable segments: the Mid-America Group, the Southeast Group and the West Group.

 

AGGREGATES BUSINESS

Reportable Segments

  

Mid-America Group

  

Southeast Group

  

West Group

Operating Locations

  

Indiana, Iowa,

northern Kansas, Kentucky, Maryland, Minnesota, Missouri,

eastern Nebraska, North Carolina, Ohio,

South Carolina,

Virginia, Washington and

West Virginia

  

Alabama, Florida, Georgia, Tennessee,
Nova Scotia and the Bahamas

  

Arkansas, Colorado, southern Kansas,

Louisiana, western Nebraska, Nevada, Oklahoma, Texas, Utah

and Wyoming

The Corporation has a Cement segment, which was acquired July 1, 2014 and accounted for 8% of 2014 consolidated net sales.  The Cement segment has production facilities located in Midlothian, Texas, south of Dallas/Fort Worth and Hunter, Texas, south of San Antonio.  The cement business produces Portland and specialty cements, such as masonry and oil well cements. Similar to the Aggregates business, cement is used in infrastructure projects, nonresidential and residential construction, and the railroad, agricultural, utility and environmental industries. The high calcium limestone reserves used as a raw material are a part of owned property adjacent to each of the plants.

The Corporation has a Magnesia Specialties segment with manufacturing facilities in Manistee, Michigan and Woodville, Ohio. The Magnesia Specialties segment, which accounted for 9% of 2014 consolidated net sales, produces magnesia-based chemicals products used in industrial, agricultural and environmental applications and dolomitic lime sold primarily to customers in the steel industry.

 

 

Page 7 of 63

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended September 30, 2015

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Continued)

 

1.

Significant Accounting Policies (continued) 

Basis of Presentation

The accompanying unaudited consolidated financial statements of the Corporation have been prepared in accordance with generally accepted accounting principles 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 Corporation has continued to follow the accounting policies set forth in the audited consolidated financial statements and related notes thereto included in the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2014. In the opinion of management, the interim consolidated financial information provided herein reflects all adjustments, consisting of normal recurring accruals, necessary for a fair presentation 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, 2015 are not indicative of the results expected for other interim periods or the full year. The consolidated balance sheet at December 31, 2014 has been derived from the audited consolidated financial statements at that date but does not include all of the information and notes required by generally accepted accounting principles 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 Corporation’s Annual Report on Form 10-K for the year ended December 31, 2014.

Revenue Recognition Standard

The FASB issued an accounting standard update that amends the accounting guidance on revenue recognition. The new standard intends to provide a more robust framework for addressing revenue issues, improve comparability of revenue recognition practices and improve disclosure requirements. The new standard is effective January 1, 2018 and can be applied on a full retrospective or modified retrospective approach. The Corporation is currently evaluating the impact of the provisions of the new standard, and at this time does not expect the impact to be material to its consolidated results of operations.

Consolidated Comprehensive Earnings/Loss and Accumulated Other Comprehensive Loss

Consolidated comprehensive earnings/loss for the Corporation consist of consolidated net earnings or loss; adjustments for the funded status of pension and postretirement benefit plans; foreign currency translation adjustments; and the amortization of the value of terminated forward starting interest rate swap agreements into interest expense, and are presented in the Corporation’s consolidated statements of earnings and comprehensive earnings.

Comprehensive earnings attributable to Martin Marietta is as follows:

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

 

 

2015

 

 

2014

 

 

2015

 

 

2014

 

 

 

(Dollars in Thousands)

 

Net earnings attributable to Martin Marietta

     Materials, Inc.

 

$

117,544

 

 

$

53,743

 

 

$

205,607

 

 

$

91,646

 

Other comprehensive earnings (loss), net of tax

 

 

72

 

 

 

(1,140

)

 

 

(6,583

)

 

 

833

 

Comprehensive earnings attributable to

     Martin Marietta Materials, Inc.

 

$

117,616

 

 

$

52,603

 

 

$

199,024

 

 

$

92,479

 

Page 8 of 63

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended September 30, 2015

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Continued)

 

1.

Significant Accounting Policies (continued) 

Consolidated Comprehensive Earnings/Loss and Accumulated Other Comprehensive Loss (continued)

Comprehensive earnings (loss) attributable to noncontrolling interests, consisting of net earnings or loss and adjustments for the funded status of pension and postretirement benefit plans, is as follows:

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

 

 

2015

 

 

2014

 

 

2015

 

 

2014

 

 

 

(Dollars in Thousands)

 

Net earnings (loss) attributable to noncontrolling interests

 

$

34

 

 

$

91

 

 

$

108

 

 

$

(1,341

)

Other comprehensive earnings, net of tax

 

 

3

 

 

 

2

 

 

 

8

 

 

 

4

 

Comprehensive earnings (loss) attributable to

     noncontrolling interests

 

$

37

 

 

$

93

 

 

$

116

 

 

$

(1,337

)

 

Accumulated other comprehensive loss consists of unrealized gains and losses related to the funded status of pension and postretirement benefit plans; foreign currency translation; and the unamortized value of terminated forward starting interest rate swap agreements, and is presented on the Corporation’s consolidated balance sheets.

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

 

 

(Dollars in Thousands)

 

 

 

 

 

 

 

 

 

 

 

Unamortized