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 March 31, 2016
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 May 2, 2016 |
Common Stock, $0.01 par value |
|
63,527,166 |
MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
FORM 10-Q
For the Quarter Ended March 31, 2016
Page 2 of 46
PA RT I. FINANCIAL INFOMRATION
MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
(UNAUDITED) CONSOLIDATED BALANCE SHEETS
|
|
March 31, |
|
|
December 31, |
|
|
March 31, |
|
|||
|
|
2016 |
|
|
2015 |
|
|
2015 |
|
|||
|
|
(Dollars in Thousands, Except Per Share Data) |
|
|||||||||
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
Current Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
27,242 |
|
|
$ |
168,409 |
|
|
$ |
56,366 |
|
Accounts receivable, net |
|
|
448,048 |
|
|
|
410,921 |
|
|
|
381,389 |
|
Inventories, net |
|
|
485,367 |
|
|
|
469,141 |
|
|
|
505,047 |
|
Other current assets |
|
|
37,658 |
|
|
|
33,164 |
|
|
|
103,027 |
|
Total Current Assets |
|
|
998,315 |
|
|
|
1,081,635 |
|
|
|
1,045,829 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment |
|
|
5,778,368 |
|
|
|
5,613,198 |
|
|
|
5,694,546 |
|
Allowances for depreciation, depletion and amortization |
|
|
(2,515,387 |
) |
|
|
(2,457,198 |
) |
|
|
(2,329,440 |
) |
Net property, plant and equipment |
|
|
3,262,981 |
|
|
|
3,156,000 |
|
|
|
3,365,106 |
|
Goodwill |
|
|
2,135,295 |
|
|
|
2,068,235 |
|
|
|
2,071,471 |
|
Operating permits, net |
|
|
444,148 |
|
|
|
444,725 |
|
|
|
497,841 |
|
Other intangibles, net |
|
|
75,267 |
|
|
|
65,827 |
|
|
|
94,113 |
|
Other noncurrent assets |
|
|
142,281 |
|
|
|
141,189 |
|
|
|
102,959 |
|
Total Assets |
|
$ |
7,058,287 |
|
|
$ |
6,957,611 |
|
|
$ |
7,177,319 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
Current Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
Bank overdraft |
|
$ |
— |
|
|
$ |
10,235 |
|
|
$ |
— |
|
Accounts payable |
|
|
174,398 |
|
|
|
164,718 |
|
|
|
184,066 |
|
Accrued salaries, benefits and payroll taxes |
|
|
17,052 |
|
|
|
30,939 |
|
|
|
23,590 |
|
Pension and postretirement benefits |
|
|
9,169 |
|
|
|
8,168 |
|
|
|
6,637 |
|
Accrued insurance and other taxes |
|
|
52,501 |
|
|
|
62,781 |
|
|
|
58,742 |
|
Current maturities of long-term debt and short-term facilities |
|
|
177,430 |
|
|
|
18,713 |
|
|
|
13,873 |
|
Accrued interest |
|
|
23,004 |
|
|
|
16,156 |
|
|
|
22,461 |
|
Other current liabilities |
|
|
38,577 |
|
|
|
54,948 |
|
|
|
33,653 |
|
Total Current Liabilities |
|
|
492,131 |
|
|
|
366,658 |
|
|
|
343,022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt |
|
|
1,575,327 |
|
|
|
1,550,061 |
|
|
|
1,562,190 |
|
Pension, postretirement and postemployment benefits |
|
|
226,924 |
|
|
|
224,538 |
|
|
|
252,923 |
|
Deferred income taxes, net |
|
|
620,569 |
|
|
|
583,459 |
|
|
|
518,360 |
|
Other noncurrent liabilities |
|
|
197,700 |
|
|
|
172,718 |
|
|
|
158,641 |
|
Total Liabilities |
|
|
3,112,651 |
|
|
|
2,897,434 |
|
|
|
2,835,136 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity: |
|
|
|
|
|
|
|
|
|
|
|
|
Common stock, par value $0.01 per share |
|
|
633 |
|
|
|
643 |
|
|
|
673 |
|
Preferred stock, par value $0.01 per share |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Additional paid-in capital |
|
|
3,302,258 |
|
|
|
3,287,827 |
|
|
|
3,255,809 |
|
Accumulated other comprehensive loss |
|
|
(103,833 |
) |
|
|
(105,622 |
) |
|
|
(106,723 |
) |
Retained earnings |
|
|
743,593 |
|
|
|
874,436 |
|
|
|
1,190,807 |
|
Total Shareholders' Equity |
|
|
3,942,651 |
|
|
|
4,057,284 |
|
|
|
4,340,566 |
|
Noncontrolling interests |
|
|
2,985 |
|
|
|
2,893 |
|
|
|
1,617 |
|
Total Equity |
|
|
3,945,636 |
|
|
|
4,060,177 |
|
|
|
4,342,183 |
|
Total Liabilities and Equity |
|
$ |
7,058,287 |
|
|
$ |
6,957,611 |
|
|
$ |
7,177,319 |
|
See accompanying notes to the consolidated financial statements.
Page 3 of 46
MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
(UNAUDITED) CONSOLIDATED STATEMENTS OF EARNINGS AND COMPREHENSIVE EARNINGS
|
|
Three Months Ended |
|
|||||
|
|
March 31, |
|
|||||
|
|
2016 |
|
|
2015 |
|
||
|
|
(In Thousands, Except Per Share Data) |
|
|||||
|
|
|
|
|||||
Net Sales |
|
$ |
733,960 |
|
|
$ |
631,876 |
|
Freight and delivery revenues |
|
|
54,774 |
|
|
|
59,471 |
|
Total revenues |
|
|
788,734 |
|
|
|
691,347 |
|
|
|
|
|
|
|
|
|
|
Cost of sales |
|
|
589,326 |
|
|
|
557,615 |
|
Freight and delivery costs |
|
|
54,774 |
|
|
|
59,471 |
|
Total cost of revenues |
|
|
644,100 |
|
|
|
617,086 |
|
|
|
|
|
|
|
|
|
|
Gross Profit |
|
|
144,634 |
|
|
|
74,261 |
|
|
|
|
|
|
|
|
|
|
Selling, general & administrative expenses |
|
|
59,861 |
|
|
|
49,450 |
|
Acquisition-related expenses, net |
|
|
425 |
|
|
|
1,604 |
|
Other operating expenses and (income), net |
|
|
579 |
|
|
|
(2,364 |
) |
Earnings from Operations |
|
|
83,769 |
|
|
|
25,571 |
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
20,034 |
|
|
|
19,331 |
|
Other nonoperating (income) and expenses, net |
|
|
(1,030 |
) |
|
|
893 |
|
Earnings before taxes on income |
|
|
64,765 |
|
|
|
5,347 |
|
Taxes on income |
|
|
19,710 |
|
|
|
(812 |
) |
Consolidated net earnings |
|
|
45,055 |
|
|
|
6,159 |
|
Less: Net earnings attributable to noncontrolling interests |
|
|
61 |
|
|
|
33 |
|
Net Earnings Attributable to Martin Marietta Materials, Inc. |
|
$ |
44,994 |
|
|
$ |
6,126 |
|
|
|
|
|
|
|
|
|
|
Consolidated Comprehensive Earnings: (See Note 1) |
|
|
|
|
|
|
|
|
Earnings attributable to Martin Marietta Materials, Inc. |
|
$ |
46,783 |
|
|
$ |
5,562 |
|
Earnings attributable to noncontrolling interests |
|
|
92 |
|
|
|
35 |
|
|
|
$ |
46,875 |
|
|
$ |
5,597 |
|
Net Earnings Attributable to Martin Marietta Materials, Inc. |
|
|
|
|
|
|
|
|
Per Common Share: |
|
|
|
|
|
|
|
|
Basic attributable to common shareholders |
|
$ |
0.70 |
|
|
$ |
0.07 |
|
Diluted attributable to common shareholders |
|
$ |
0.69 |
|
|
$ |
0.07 |
|
|
|
|
|
|
|
|
|
|
Weighted-Average Common Shares Outstanding: |
|
|
|
|
|
|
|
|
Basic |
|
|
64,158 |
|
|
|
67,411 |
|
Diluted |
|
|
64,350 |
|
|
|
67,676 |
|
|
|
|
|
|
|
|
|
|
Cash Dividends Per Common Share |
|
$ |
0.40 |
|
|
$ |
0.40 |
|
See accompanying notes to the consolidated financial statements.
Page 4 of 46
MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
(UNAUDITED) CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
March 31, |
|
|||||
|
|
2016 |
|
|
2015 |
|
||
|
|
(Dollars in Thousands) |
|
|||||
|
|
|
|
|||||
Cash Flows from Operating Activities: |
|
|
|
|
|
|
|
|
Consolidated net earnings |
|
$ |
45,055 |
|
|
$ |
6,159 |
|
Adjustments to reconcile consolidated net earnings to net cash provided by operating activities: |
|
|
|
|
|
|
|
|
Depreciation, depletion and amortization |
|
|
68,410 |
|
|
|
67,268 |
|
Stock-based compensation expense |
|
|
7,228 |
|
|
|
2,907 |
|
Gain on divestitures and sales of assets |
|
|
(100 |
) |
|
|
(1,576 |
) |
Deferred income taxes |
|
|
17,988 |
|
|
|
27,774 |
|
Excess tax benefits from stock-based compensation transactions |
|
|
(1,278 |
) |
|
|
(109 |
) |
Other items, net |
|
|
(2,036 |
) |
|
|
1,192 |
|
Changes in operating assets and liabilities, net of effects of acquisitions and divestitures: |
|
|
|
|
|
|
|
|
Accounts receivable, net |
|
|
(29,695 |
) |
|
|
40,006 |
|
Inventories, net |
|
|
(13,495 |
) |
|
|
(19,071 |
) |
Accounts payable |
|
|
9,231 |
|
|
|
(20,328 |
) |
Other assets and liabilities, net |
|
|
(34,300 |
) |
|
|
(69,097 |
) |
Net Cash Provided by Operating Activities |
|
|
67,008 |
|
|
|
35,125 |
|
|
|
|
|
|
|
|
|
|
Cash Flows from Investing Activities: |
|
|
|
|
|
|
|
|
Additions to property, plant and equipment |
|
|
(94,228 |
) |
|
|
(56,085 |
) |
Acquisitions, net |
|
|
(123,000 |
) |
|
|
(10,589 |
) |
Cash received in acquisition |
|
|
3,446 |
|
|
|
— |
|
Proceeds from divestitures and sales of assets |
|
|
3,415 |
|
|
|
1,475 |
|
Repayments from affiliate |
|
|
— |
|
|
|
1,808 |
|
Net Cash Used for Investing Activities |
|
|
(210,367 |
) |
|
|
(63,391 |
) |
|
|
|
|
|
|
|
|
|
Cash Flows from Financing Activities: |
|
|
|
|
|
|
|
|
Borrowings of debt |
|
|
210,000 |
|
|
|
— |
|
Repayments of debt |
|
|
(26,390 |
) |
|
|
(4,738 |
) |
Payments on capital lease obligations |
|
|
(780 |
) |
|
|
(795 |
) |
Change in bank overdraft |
|
|
(10,235 |
) |
|
|
(183 |
) |
Dividends paid |
|
|
(25,847 |
) |
|
|
(28,354 |
) |
Issuances of common stock |
|
|
4,166 |
|
|
|
9,942 |
|
Repurchases of common stock |
|
|
(150,000 |
) |
|
|
— |
|
Excess tax benefits from stock-based compensation transactions |
|
|
1,278 |
|
|
|
109 |
|
Net Cash Provided by (Used for) Financing Activities |
|
|
2,192 |
|
|
|
(24,019 |
) |
Net Decrease in Cash and Cash Equivalents |
|
|
(141,167 |
) |
|
|
(52,285 |
) |
Cash and Cash Equivalents, beginning of period |
|
|
168,409 |
|
|
|
108,651 |
|
Cash and Cash Equivalents, end of period |
|
$ |
27,242 |
|
|
$ |
56,366 |
|
Supplemental Disclosures of Cash Flow Information: |
|
|
|
|
|
|
|
|
Cash paid for interest |
|
$ |
11,394 |
|
|
$ |
11,417 |
|
Cash paid for income taxes |
|
$ |
10,721 |
|
|
$ |
18,678 |
|
See accompanying notes to the consolidated financial statements.
Page 5 of 46
MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARES
(UNAUDITED) CONSOLIDATED STATEMENT OF TOTAL EQUITY
(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, 2015 |
|
|
64,479 |
|
|
$ |
643 |
|
|
$ |
3,287,827 |
|
|
$ |
(105,622 |
) |
|
$ |
874,436 |
|
|
$ |
4,057,284 |
|
|
$ |
2,893 |
|
|
$ |
4,060,177 |
|
Consolidated net earnings |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
44,994 |
|
|
|
44,994 |
|
|
|
61 |
|
|
|
45,055 |
|
Other comprehensive (loss) earnings, net of tax |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,789 |
|
|
|
— |
|
|
|
1,789 |
|
|
|
31 |
|
|
|
1,820 |
|
Dividends declared |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(25,847 |
) |
|
|
(25,847 |
) |
|
|
— |
|
|
|
(25,847 |
) |
Issuances of common stock for stock award plans |
|
|
54 |
|
|
|
— |
|
|
|
7,203 |
|
|
|
— |
|
|
|
— |
|
|
|
7,203 |
|
|
|
— |
|
|
|
7,203 |
|
Repurchases of common stock |
|
|
(1,028 |
) |
|
|
(10 |
) |
|
|
— |
|
|
|
— |
|
|
|
(149,990 |
) |
|
|
(150,000 |
) |
|
|
— |
|
|
|
(150,000 |
) |
Stock-based compensation expense |
|
|
— |
|
|
|
— |
|
|
|
7,228 |
|
|
|
— |
|
|
|
— |
|
|
|
7,228 |
|
|
|
— |
|
|
|
7,228 |
|
Balance at March 31, 2016 |
|
|
63,505 |
|
|
$ |
633 |
|
|
$ |
3,302,258 |
|
|
$ |
(103,833 |
) |
|
$ |
743,593 |
|
|
$ |
3,942,651 |
|
|
$ |
2,985 |
|
|
$ |
3,945,636 |
|
See accompanying notes to the consolidated financial statements.
Page 6 of 46
MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
FORM 10-Q
For the Quarter Ended March 31, 2016
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 55% of 2015 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 27% of 2015 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, Nova Scotia and the Bahamas. 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,
|
|
Arkansas, Colorado, southern Kansas, Louisiana, western Nebraska, Nevada, Oklahoma, Texas, Utah and Wyoming |
The Corporation has a Cement segment, which accounted for 11% of 2015 consolidated net sales. The Cement segment has production facilities located in Midlothian, Texas, south of Dallas/Fort Worth and Hunter, Texas, north of San Antonio. The Cement business produces Portland and specialty 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 owned by the Cement business and are 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 7% of 2015 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 46
MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
FORM 10-Q
For the Quarter Ended March 31, 2016
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(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, 2015. 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 months ended March 31, 2016 are not indicative of the results expected for other interim periods or the full year. The consolidated balance sheet at December 31, 2015 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, 2015.
Debt Issuance Costs
The Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2015-03, “Simplifying the Presentation of Debt Issuance Costs” (“ASU 2015-03”), which amends the presentation of debt issuance costs in the financial statements. The ASU requires an entity to present debt issuance costs related to a recognized debt liability in the balance sheet as a direct deduction from the carrying amount of the debt liability, consistent with debt discounts, and does not impact the recognition and measurement guidance for debt issuance costs. The Corporation adopted this ASU on January 1, 2016 and has retrospectively adjusted the prior periods presented, resulting in a reclassification of $3,588,000 and $4,427,000 from Other noncurrent assets to Long-term debt as of December 31, 2015 and March 31, 2015, respectively, and $533,000 from Other current assets to Current maturities of long-term debt and short-term maturities as of December 31, 2015 and March 31, 2015.
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 the provisions of the new standard will have on its financial statements.
Page 8 of 46
MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
FORM 10-Q
For the Quarter Ended March 31, 2016
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
Lease Standard
In February 2016, the FASB issued a new accounting standard, Accounting Codification Standard 842 – Leases, intending to improve financial reporting of leases and to provide more transparency into off-balance sheet leasing obligations. The guidance requires virtually all leases, excluding mineral interest leases, to be recorded on the balance sheet and provides guidance on the recognition of lease expense and income. The new standard is effective January 1, 2019 and must be applied on a modified retrospective approach. The Corporation is currently evaluating the impact the new standard will have on its financial statements.
Share-based Payment Standard
In March 2016, the FASB issued ASU 2016-09, “Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting” , which simplifies certain aspects of accounting guidance and requirements for share-based transactions. The ASU is effective for reporting periods beginning January 1, 2017. The Corporation is evaluating the impact of the ASU on its financial statements.
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 |
|
|||||
|
|
March 31, |
|
|||||
|
|
2016 |
|
|
2015 |
|
||
|
|
(Dollars in Thousands) |
|
|||||
Net earnings attributable to Martin Marietta Materials, Inc. |
|
$ |
44,994 |
|
|
$ |
6,126 |
|
Other comprehensive earnings (loss), net of tax |
|
|
1,789 |
|
|
|
(564 |
) |
Comprehensive earnings attributable to Martin Marietta Materials, Inc. |
|
$ |
46,783 |
|
|
$ |
5,562 |
|
Page 9 of 46
MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
FORM 10-Q
For the Quarter Ended March 31, 2016
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
Consolidated Comprehensive Earnings/Loss and Accumulated Other Comprehensive Loss
Comprehensive earnings attributable to noncontrolling interests, consisting of net earnings and adjustments for the funded status of pension and postretirement benefit plans, is as follows:
|
|
Three Months Ended |
|
|||||
|
|
March 31, |
|
|||||
|
|
2016 |
|
|
2015 |
|
||
|
|
(Dollars in Thousands) |
|
|||||
Net earnings attributable to noncontrolling interests |
|
$ |
61 |
|
|
$ |
33 |
|
Other comprehensive earnings, net of tax |
|
|
31 |
|
|
|
2 |
|
Comprehensive earnings attributable to noncontrolling interests |
|
$ |
92 |
|
|
$ |
35 |
|
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 earnings (loss), net of tax, are as follows:
|
|
(Dollars in Thousands) |
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
Unamortized |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value of |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Terminated |
|
|
Accumulated |
|
||
|
|
Pension and |
|
|
|
|
|
|
Forward Starting |
|
|
Other |
|
|||
|
|
Postretirement |
|
|
Foreign |
|
|
Interest Rate |
|
|
Comprehensive |
|
||||
|
|
Benefit Plans |
|
|
Currency |
|
|
Swap |
|
|
Loss |
|
||||
|
|
Three Months Ended March 31, 2016 |
|
|||||||||||||
Balance at beginning of period |
|
$ |
(103,380 |
) |
|
$ |
(264 |
) |
|
$ |
(1,978 |
) |
|
$ |
(105,622 |
) |
Other comprehensive earnings before reclassifications, net of tax |
|
|
— |
|
|
|
115 |
|
|
|
— |
|
|
|
115 |
|
Amounts reclassified from accumulated other comprehensive earnings, net of tax |
|
|
1,473 |
|
|
|
— |
|
|
|
201 |
|
|
|
1,674 |
|
Other comprehensive earnings, net of tax |
|
|
1,473 |
|
|
|
115 |
|
|
|
201 |
|
|
|
1,789 |
|
Balance at end of period |
|
$ |
(101,907 |
) |
|
$ |
(149 |
) |
|
$ |
(1,777 |
) |
|
$ |
(103,833 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, 2015 |
|
|||||||||||||
Balance at beginning of period |
|
$ |
(106,688 |
) |
|
$ |
3,278 |
|
|
$ |
(2,749 |
) |
|
$ |
(106,159 |
) |
Other comprehensive loss before reclassifications, net of tax |
|
|
— |
|
|
|
(2,288 |
) |
|
|
— |
|
|
|
(2,288 |
) |
Amounts reclassified from accumulated other comprehensive earnings, net of tax |
|
|
1,537 |
|
|
|
— |
|
|
|
187 |
|
|
|
1,724 |
|
Other comprehensive earnings (loss), net of tax |
|
|
1,537 |
|
|
|
(2,288 |
) |
|
|
187 |
|
|
|
(564 |
) |
Balance at end of period |
|
$ |
(105,151 |
) |
|
$ |
990 |
|
|
$ |
(2,562 |
) |
|
$ |
(106,723 |
) |
Page 10 of 46
MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
FORM 10-Q
For the Quarter Ended March 31, 2016
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
Consolidated Comprehensive Earnings/Loss and Accumulated Other Comprehensive Loss (continued)
Changes in net noncurrent deferred tax assets recorded in accumulated other comprehensive loss are as follows:
|
|
(Dollars in Thousands) |
|
|||||||||
|
|
Pension and Postretirement Benefit Plans |
|
|
Unamortized Value of Terminated Forward Starting Interest Rate Swap |
|
|
Net Noncurrent Deferred Tax Assets |
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, 2016 |
|
|||||||||
Balance at beginning of period |
|
$ |
66,467 |
|
|
$ |
1,290 |
|
|
$ |
67,757 |
|
Tax effect of other comprehensive earnings |
|
|
(944 |
) |
|
|
(131 |
) |
|
|
(1,075 |
) |
Balance at end of period |
|
$ |
65,523 |
|
|
$ |
1,159 |
|
|
$ |
66,682 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, 2015 |
|
|||||||||
Balance at beginning of period |
|
$ |
68,568 |
|
|
$ |
1,799 |
|
|
$ |
70,367 |
|
Tax effect of other comprehensive earnings |
|
|
(1,016 |
) |
|
|
(120 |
) |
|
|
(1,136 |
) |
Balance at end of period |
|
$ |
67,552 |
|
|
$ |
1,679 |
|
|
$ |
69,231 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reclassifications out of accumulated other comprehensive loss are as follows:
|
|
Three Months Ended |
|
|
Affected line items in the consolidated |
|||||
|
|
March 31, |
|
|
statements of earnings and |
|||||
|
|
2016 |
|
|
2015 |
|
|
comprehensive earnings |
||
|
|
(Dollars in Thousands) |
|
|||||||
Pension and postretirement benefit plans |
|
|
|
|
|
|
|
|
|
|
Settlement charge |
|
$ |
59 |
|
|
$ |
— |
|
|
|
Amortization of: |
|
|
|
|
|
|
|
|
|
|
Prior service credit |
|
|
(374 |
) |
|
|
(471 |
) |
|
|
Actuarial loss |
|
|
2,732 |
|
|
|
3,024 |
|
|
|
|
|
|
2,417 |
|
|
|
2,553 |
|
|
Cost of sales; Selling, general and administrative expenses |
Tax benefit |
|
|
(944 |
) |
|
|
(1,016 |
) |
|
Taxes on income |
|
|
$ |
1,473 |
|
|
$ |
1,537 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unamortized value of terminated forward starting interest rate swap |
|
|
|
|
|
|
|
|
|
|
Additional interest expense |
|
$ |
332 |
|
|
$ |
307 |
|
|
Interest expense |
Tax benefit |
|
|
(131 |
) |
|
|
(120 |
) |
|
Taxes on income |
|
|
$ |
201 |
|
|
$ |
187 |
|
|
|
Page 11 of 46
MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
FORM 10-Q
For the Quarter Ended March 31, 2016
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
Earnings per Common Share
The numerator for basic and diluted earnings per common share is net earnings attributable to Martin Marietta Materials, Inc. reduced by dividends and undistributed earnings attributable to the Corporation’s certain stock-based compensation. 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 Corporation’s Board of Directors under certain stock-based compensation arrangements if the conversion is dilutive. For the three months ended March 31, 2016 and 2015, the diluted per-share computations reflect a change in the number of common shares outstanding to include the number of additional shares that would have been outstanding if the potentially dilutive common shares had been issued.
The following table reconciles the numerator and denominator for basic and diluted earnings per common share:
|
|
Three Months Ended |
|
|||||
|
|
March 31, |
|
|||||
|
|
2016 |
|
|
2015 |
|
||
|
|
(In Thousands) |
|
|||||
Net earnings from continuing operations attributable to Martin Marietta Materials, Inc. |
|
$ |
44,994 |
|
|
$ |
6,126 |
|
Less: Distributed and undistributed earnings attributable to unvested awards |
|
|
298 |
|
|
|
1,369 |
|
Basic and diluted net earnings available to common shareholders attributable to Martin Marietta Materials, Inc. |
|
$ |
44,696 |
|
|
$ |
4,757 |
|
|
|
|
|
|
|
|
|
|
Basic weighted-average common shares outstanding |
|
|
64,158 |
|
|
|
67,411 |
|
Effect of dilutive employee and director awards |
|
|
192 |
|
|
|
265 |
|
Diluted weighted-average common shares outstanding |
|
|
64,350 |
|
|
|
67,676 |
|
2. |
Inventories, Net |
|
|
March 31, |
|
|
December 31, |
|
|
March 31, |
|
|||
|
|
2016 |
|
|
2015 |
|
|
2015 |
|
|||
|
|
(Dollars in Thousands) |
|
|||||||||
Finished products |
|
$ |
443,470 |
|
|
$ |
433,649 |
|
|
$ |
428,783 |
|
Products in process and raw materials |
|
|
59,761 |
|
|
|
55,194 |
|
|
|
70,558 |
|
Supplies and expendable parts |
|
|
112,022 |
|
|
|
110,882 |
|
|
|
125,547 |
|
|
|
|
615,253 |
|
|
|
599,725 |
|
|
|
624,888 |
|
Less: Allowances |
|
|
(129,886 |
) |
|
|
(130,584 |
) |
|
|
(119,841 |
) |
Total |
|
$ |
485,367 |
|
|
$ |
469,141 |
|
|
$ |
505,047 |
|
Page 12 of 46
MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
FORM 10-Q
For the Quarter Ended March 31, 2016
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
|
|
March 31, |
|
|
December 31, |
|
|
March 31, |
|
|||
|
|
2016 |
|
|
2015 |
|
|
2015 |
|
|||
|
|
(Dollars in Thousands) |
|
|||||||||
6.6% Senior Notes, due 2018 |
|
$ |
299,201 |
|
|
$ |
299,113 |
|
|
$ |
298,842 |
|
7% Debentures, due 2025 |
|
|
124,024 |
|
|
|
124,002 |
|
|
|
123,938 |
|
6.25% Senior Notes, due 2037 |
|
|
227,933 |
|
|
|
227,917 |
|
|
|
227,880 |
|
4.25 % Senior Notes, due 2024 |
|
|
394,843 |
|
|
|
394,690 |
|
|
|
394,304 |
|
Floating Rate Notes, due 2017, interest rate of 2.13%, 1.71% and 1.36% at March 31, 2016, December 31, 2015 and March 31, 2015, respectively |
|
|
298,837 |
|
|
|
298,868 |
|
|
|
298,304 |
|
Term Loan Facility, due 2018, interest rate of 1.94%, 1.86% and 1.67% at March 31, 2016, December 31, 2015 and March 31, 2015, respectively |
|
|
217,109 |
|
|
|
222,521 |
|
|
|
231,259 |
|
Revolving Facility, interest rate of 3.75% |
|
|
30,000 |
|
|
|
— |
|
|
|
— |
|
Trade Receivable Facility, interest rate of 1.13% at March 31, 2016 |
|
|
159,925 |
|
|
|
— |
|
|
|
— |
|
Other notes |
|
|
885 |
|
|
|
1,663 |
|
|
|
1,536 |
|
Total debt |
|
|
1,752,757 |
|
|
|
1,568,774 |
|
|
|
1,576,063 |
|
Less: Current maturities |
|
|
(177,430 |
) |
|
|
(18,713 |
) |
|
|
(13,873 |
) |
Long-term debt |
|
$ |
1,575,327 |
|
|
$ |
1,550,061 |
|
|
$ |
1,562,190 |
|
The Corporation, through a wholly-owned special-purpose subsidiary, has a $250,000,000 trade receivable securitization facility (the “Trade Receivable Facility”), which matures on September 30, 2016. The Trade Receivable Facility, with SunTrust Bank, Regions Bank, PNC Bank, N.A. and certain other lenders that may become a party to the facility from time to time, is backed by eligible trade receivables, as defined, and is limited to the lesser of the facility limit or the borrowing base, as defined, of $324,734,000, $282,258,000 and $280,101,000 at March 31, 2016, December 31, 2015 and March 31, 2015, respectively. These receivables are originated by the Corporation and then sold to the wholly-owned special-purpose subsidiary by the Corporation. The Corporation con tinues to be responsible for the servicing and administration of the receivables purchased by the wholly-owned special-purpose subsidiary . Borrowings under the Trade Receivable Facility bear interest at a rate equal to one-month LIBOR plus 0.7%. The Trade Receivable Facility contains a cross-default provision to the Corporation’s other debt agreements.
The Corporation’s Credit Agreement, which provides a $250,000,000 senior unsecured term loan (the “Term Loan Facility”) and a $350,000,000 five-year senior unsecured revolving facility (the “Revolving Facility”), requires the Corporation’s ratio of consolidated debt to consolidated earnings before interest, taxes, depreciation, depletion and amortization (“EBITDA”), as defined by the Credit Agreement, for the trailing twelve months (the “Ratio”) to not exceed 3.50x as of the end of any fiscal quarter, provided that the Corporation may exclude from the Ratio debt incurred in connection with certain acquisitions for a period of 180 days so long as the Corporation, as a consequence of such specified acquisition, does not have its rating on long-term unsecured debt fall below BBB by Standard & Poor’s or Baa2 by Moody’s and the Ratio calculated without such exclusion does not exceed 3.75x. Additionally, if no amounts are outstanding under both the Revolving Facility and the Trade Receivable Facility, consolidated debt, including debt for which the Corporation is a co-borrower, may be reduced by the Corporation’s unrestricted cash and cash equivalents in excess of $50,000,000, such reduction not to exceed $200,000,000, for purposes of the covenant calculation.
Page 13 of 46
MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
FORM 10-Q
For the Quarter Ended March 31, 2016
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
In accordance with the amended Credit Agreement, the Corporation adjusted consolidated EBITDA to add back any integration or similar costs or expenses related to the TXI business combination incurred in any period prior to the second anniversary of the closing of the TXI business combination, not to exceed $70,000,000. The Corporation was in compliance with this Ratio at March 31, 2016.
Available borrowings under the Revolving Facility are reduced by any outstanding letters of credit issued by the Corporation under the Revolving Facility. At March 31, 2016, December 31, 2015 and March 31, 2015, the Corporation had $2,507,000 of outstanding letters of credit issued under the Revolving Facility.
Current debt maturities consist of borrowings under the Trade Receivable Facility as well as the current portions of the Term Loan Facility and other notes. The increase in current debt maturities as of March 31, 2016 is attributable to the balance drawn on the Trade Receivable Facility.
On April 5, 2016, the Corporation repaid the $30,000,000 outstanding on the Revolving Facility.
Accumulated other comprehensive loss includes the unamortized value of terminated forward starting interest rate swap agreements. For the three months ended March 31, 2016 and 2015, the Corporation recognized $332,000 and $307,000, respectively, as additional interest expense. The ongoing amortization of the terminated value of the forward starting interest rate swap agreements will increase annual interest expense by approximately $1,400,000 until the maturity of the 6.6% Senior Notes in 2018.
4. |
Financial Instruments |
The Corporation’s financial instruments include cash equivalents, accounts receivable, notes receivable, bank overdraft, accounts payable, publicly-registered long-term notes, debentures and other long-term debt.
Cash equivalents are placed primarily in money market funds, money market demand deposit accounts and Eurodollar time deposits. The Corporation’s cash equivalents have original maturities of less than three months. Due to the short maturity of these investments, they are carried on the consolidated balance sheets at cost, which approximates fair value.
Accounts receivable are due from a large number of customers, primarily in the construction industry, and are dispersed across wide geographic and economic regions. However, accounts receivable are more heavily concentrated in certain states (namely, Texas, Colorado, North Carolina, Iowa and Georgia). The estimated fair values of accounts receivable approximate their carrying amounts due to the short-term nature of the receivables.
Notes receivable are not publicly traded. Management estimates that the fair value of notes receivable approximates the carrying amount due to the short-term nature of the receivables.
The bank overdraft represents amounts to be funded to financial institutions for checks that have cleared the bank. The estimated fair value of the bank overdraft approximates its carrying value due to the short-term nature of the overdraft.
Accounts payable represent amounts owed to suppliers and vendors. The estimated fair value of accounts payable approximates its carrying amount due to the short-term nature of the payables.
Page 14 of 46
MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
FORM 10-Q
For the Quarter Ended March 31, 2016
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
The carrying values and fair values of the Corporation’s long-term debt were $1,752,757,000 and $1,817,950,000, respectively, at March 31, 2016; $1,568,774,000 and $1,625,193,000, respectively, at December 31, 2015; and $1,576,063,000 and $1,691,478,000, respectively, at March 31, 2015. The estimated fair value of the publicly-registered long-term notes was estimated based on Level 1 of the fair value hierarchy using quoted market prices. The estimated fair value of other borrowings, which primarily represents variable-rate debt, was based on Level 2 of the fair value hierarchy using quoted market prices for similar debt instruments, and approximates their carrying amounts as the interest rates reset periodically.
5. |
Income Taxes |
The Corporation’s effective income tax rate for the three months ended March 31, 2016 was 30.4%. The estimated effective income tax rates reflect the effect of federal and state income taxes and the impact of differences in book and tax accounting arising from the net permanent benefits associated with the statutory depletion deduction for mineral reserves and the domestic production deduction. For the three months ended March 31, 2015, there was an income tax benefit which reflects the exercise of converted stock awards issued to former TXI personnel.
The Corporation records interest accrued in relation to unrecognized tax benefits as income tax expense. Penalties, if incurred, are recorded as operating expenses in the consolidated statements of earnings and comprehensive earnings.
6. |
Pension and Postretirement Benefits |
The estimated components of the recorded net periodic benefit cost (credit) for pension and postretirement benefits are as follows:
|
|
Three Months Ended March 31, |
|
|||||||||||||
|
|
Pension |
|
|
Postretirement Benefits |
|
||||||||||
|
|
2016 |
|
|
2015 |
|
|
2016 |
|
|
2015 |
|
||||
|
|
(Dollars in Thousands) |
|
|||||||||||||
Service cost |
|
$ |
5,507 |
|
|
$ |
6,290 |
|
|
$ |
34 |
|
|
$ |
39 |
|
Interest cost |
|
|
8,871 |
|
|
|
8,112 |
|
|
|
238 |
|
|
|
230 |
|
Expected return on assets |
|
|
(9,434 |
) |
|
|
(9,104 |
) |
|
|
— |
|
|
|
— |
|
Amortization of: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Prior service cost (credit) |
|
|
88 |
|
|
|
105 |
|
|
|
(462 |
) |
|
|
(576 |
) |
Actuarial loss (gain) |
|
|
2,831 |
|
|
|
3,108 |
|
|
|
(99 |
) |
|
|
(82 |
) |
Settlement charge |
|
|
59 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Special termination benefit |
|
|
126 |
|
|
|
256 |
|
|
|
— |
|
|
|
— |
|
Net periodic benefit cost (credit) |
|
$ |
8,048 |
|
|
$ |
8,767 |
|
|
$ |
(289 |
) |
|
$ |
(389 |
) |
Page 15 of 46
MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
FORM 10-Q
For the Quarter Ended March 31, 2016
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
Legal and Administrative Proceedings
The Corporation is engaged in certain legal and administrative proceedings incidental to its normal business activities. In the opinion of management and counsel, based upon currently-available facts, it is remote that the ultimate outcome of any litigation and other proceedings, including those pertaining to environmental matters, relating to the Corporation and its subsidiaries, will have a material adverse effect on the overall results of the Corporation’s operations, its cash flows or its financial position.
Borrowing Arrangements with Affiliate
The Corporation is a co-borrower with an unconsolidated affiliate for a $25,000,000 revolving line of credit agreement with BB&T Bank. The affiliate has agreed to reimburse and indemnify the Corporation for any payments and expenses the Corporation may incur from this agreement. The Corporation holds a lien on the affiliate’s membership interest in a joint venture as collateral for payment under the revolving line of credit.
In addition, the Corporation has a $6,000,000 outstanding loan due from this unconsolidated affiliate as of March 31, 2016, December 31, 2015 and March 31, 2015.
Employees
Approximately 10% of the Corporation’s employees are represented by a labor union. All such employees are hourly employees. The Corporation maintains collective bargaining agreements relating to the union employees with the Aggregates business and Magnesia Specialties segments. For the Magnesia Specialties segment located in Manistee, Michigan and Woodville, Ohio, 100% of its hourly employees are represented by labor unions. The Manistee collective bargaining agreement expires in August 2019, and the Woodville collective bargaining agreement expires in May 2018.
8 . |
Business Segments |
The Aggregates business contains three reportable business segments: Mid-America Group, Southeast Group and West Group. The Corporation also has Cement and Magnesia Specialties segments. Corporate loss from operations primarily includes depreciation on capitalized interest, expenses for certain corporate administrative functions, business development and integration expenses, unallocated corporate expenses and other nonrecurring and/or non-operational adjustments. Intersegment sales represent net sales from one segment to another segment.
Page 16 of 46
MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
FORM 10-Q
For the Quarter Ended March 31, 2016
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
The following tables display selected financial data for continuing operations for the Corporation’s reportable business segments. Total revenues and net sales in the table below, as well as the consolidated statements of earnings and comprehensive earnings, exclude intersegment sales, which are eliminated.
|
|
Three Months Ended |
|
|||||
|
|
March 31, |
|
|||||
|
|
2016 |
|
|
2015 |
|
||
|
|
(Dollars in Thousands) |
|
|||||
Total revenues : |
|
|
|
|
|
|
|
|
Mid-America Group |
|
$ |
186,347 |
|
|
$ |
140,834 |
|
Southeast Group |
|
|
71,671 |
|
|
|
64,678 |
|
West Group |
|
|
392,995 |
|
|
|
320,571 |
|
Total Aggregates Business |
|
|
651,013 |
|
|
|
526,083 |
|
Cement |
|
|
73,551 |
|
|
|
102,100 |
|
Magnesia Specialties |
|
|
64,170 |
|
|
|
63,164 |
|
Total |
|
$ |
788,734 |
|
|
$ |
691,347 |
|
|
|
|
|
|
|
|
|
|
Net sales : |
|
|
|
|
|
|
|
|
Mid-America Group |
|
$ |
173,372 |
|
|
$ |
129,705 |
|
Southeast Group |
|
|
67,284 |
|
|
|
59,770 |
|
West Group |
|
|
363,926 |
|
|
|
287,082 |
|
Total Aggregates Business |
|
|
604,582 |
|
|
|
476,557 |
|
Cement |
|
|
69,873 |
|
|
|
96,565 |
|
Magnesia Specialties |
|
|
59,505 |
|
|
|
58,754 |
|
Total |
|
$ |
733,960 |
|
|
$ |
631,876 |
|
|
|
|
|
|
|
|
|
|
Earnings (Loss) from operations : |
|
|
|
|
|
|
|
|
Mid-America Group |
|
$ |
14,424 |
|
|
$ |
(4,203 |
) |
Southeast Group |
|
|
6,971 |
|
|
|
(1,548 |
) |
West Group |
|
|
38,797 |
|
|
|
14,499 |
|
Total Aggregates Business |
|
|
60,192 |
|
|
|
8,748 |
|
Cement |
|
|
26,316 |
|
|
|
12,229 |
|
Magnesia Specialties |
|
|
20,563 |
|
|
|
17,789 |
|
Corporate |
|
|
(23,302 |
) |
|
|
(13,195 |
) |
Total |
|
$ |
83,769 |
|
|
$ |
25,571 |
|
The decline in the Cement business’s net sales is attributable to the California cement operations, included in the three months ended March 31, 2015 and divested as of September 30, 2015. For the three months ended March 31, 2015, total revenues, net sales and loss from operations for the California cement operations were $33,759,000, $32,511,000 and $7,421,000, respectively.
Page 17 of 46
MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
FORM 10-Q
For the Quarter Ended March 31, 2016
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
Cement intersegment sales, which are to the aggregates and ready mixed concrete product lines in the West Group, were $27,147,000 and $18,377,000 for the three months ended March 31, 2016 and 2015, respectively.
The Aggregates business includes the aggregates product line and aggregates-related downstream product lines, which include asphalt, ready mixed concrete and road paving product lines. All aggregates-related downstream product lines reside in the West Group. The following tables, which are reconciled to consolidated amounts, provide net sales and gross profit by line of business: Aggregates (further divided by product line), Cement and Magnesia Specialties.
|
|
Three Months Ended |
|
|||||
|
|
March 31, |
|
|||||
|
|
2016 |
|
|
2015 |
|
||
|
|
(Dollars in Thousands) |
|
|||||
Net sales : |
|
|
|
|
|
|
|
|
Aggregates |
|
$ |
406,439 |
|
|
$ |
332,214 |
|
Asphalt |
|
|
3,875 |
|
|
|
9,645 |
|
Ready Mixed Concrete |
|
|
186,785 |
|
|
|
127,572 |
|
Road Paving |
|
|
7,483 |
|
|
|
7,126 |
|
Total Aggregates Business |
|
|
604,582 |
|
|
|
476,557 |
|
Cement |
|
|
69,873 |
|
|
|
96,565 |
|
Magnesia Specialties |
|
|
59,505 |
|
|
|
58,754 |
|
Total |
|
$ |
733,960 |
|
|
$ |
631,876 |
|
|
|
|
|
|
|
|
|
|
Gross profit (loss) : |
|
|
|
|
|
|
|
|
Aggregates |
|
$ |
81,083 |
|
|
$ |
41,417 |
|
Asphalt |
|
|
(2,269 |
) |
|
|
(1,463 |
) |
Ready Mixed Concrete |
|
|
18,086 |
|
|
|
2,084 |
|
Road Paving |
|
|
(3,894 |
) |
|
|
(3,311 |
) |
Total Aggregates Business |
|
|
93,006 |
|
|
|
38,727 |
|
Cement |
|
|
32,556 |
|
|
|
18,985 |
|
Magnesia Specialties |
|
|
22,970 |
|
|
|
20,178 |
|
Corporate |
|
|
(3,898 |
) |
|
|
(3,629 |
) |
Total |
|
$ |
144,634 |
|
|
$ |
74,261 |
|
For the three months ended March 31, 2015, gross loss for the California cement operations was $4,046,000.
Page 18 of 46
MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
FORM 10-Q
For the Quarter Ended March 31, 2016
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
The components of the change in other assets and liabilities, net, are as follows:
|
|
Three Months Ended |
|
|||||
|
|
March 31, |
|
|||||
|
|
2016 |
|
|
2015 |
|
||
|
|
(Dollars in Thousands) |
|
|||||
Other current and noncurrent assets |
|
$ |
(2,089 |
) |
|
$ |
(4,083 |
) |
Accrued salaries, benefits and payroll taxes |
|
|
(12,951 |
) |
|
|
(13,703 |
) |
Accrued insurance and other taxes |
|
|
(10,280 |
) |
|
|
386 |
|
Accrued income taxes |
|
|
(8,473 |
) |
|
|
(46,700 |
) |
Accrued pension, postretirement and postemployment benefits |
|
|
5,775 |
|
|
|
5,830 |
|
Other current and noncurrent liabilities |
|
|
(6,282 |
) |
|
|
(10,827 |
) |
|
|
$ |
(34,300 |
) |
|
$ |
(69,097 |
) |
The change in accrued insurance and other taxes is attributable to certain property tax payments for tax year 2015 made in January 2016. These property taxes for tax year 2014 were paid prior to in 2014. The change in accrued income taxes is attributable to an increase in income tax expense in the current year.
Noncash investing and financing activities are as follows:
|
|
Three Months Ended |
|
|||||
|
|
March 31, |
|
|||||
|
|
2016 |
|
|
2015 |
|
||
|
|
(Dollars in Thousands) |
|
|||||
Noncash investing and financing activities: |
|
|
|
|
|
|
|
|
Acquisition of assets through capital lease |
|
$ |
— |
|
|
$ |
1,222 |
|
Acquisition of assets through asset exchange |
|
|
— |
|
|
|
5,153 |
|
10. Business Combination
During the quarter ended March 31, 2016, the Corporation acquired the outstanding stock of Rocky Mountain Materials and Asphalt, Inc., and Rocky Mountain Premix Inc. The acquisition provides more than 500 million tons of mineral reserves and expands the Corporation’s presence along the Front Range of the Rocky Mountains, home to 80% of Colorado’s population. The acquired operations are reported through the West Group. The Corporation has recorded preliminary fair values of the assets acquired and liabilities assumed; however, certain amounts are subject to change as additional reviews are performed, including asset and liability verification. Specific accounts subject to ongoing purchase accounting include property, plant and equipment; goodwill; other intangible assets; deferred income taxes and accrued expenses. The acquisition was not financially material and therefore pro forma information is not required.
Page 19 of 46
MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
FORM 10-Q
For the Quarter Ended March 31, 2016
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
During the quarter ended March 31, 2016, the Corporation awarded its annual grant of stock-based compensation, which included 75,421 of performance stock units and 68,720 of restricted stock units. The grant-date fair value of each award is $142.02 for the performance stock units and $124.41 for the restricted stock units. No stock options are expected to be awarded in 2016. In past years, annual stock-based compensation awards were primarily made in the second quarter of the year. The change in the composition of the awards and the timing of the annual grant resulted in higher expense recorded in the first quarter compared with prior years. For the quarters ended March 31, 2016 and 2015, stock-based compensation expense was $7,228,000 and $2,907,000, respectively.
Page 20 of 46
MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
FORM 10-Q
For the Quarter Ended March 31, 2016
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
First Quarter Ended March 31, 2016
It em 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
OVERVIEW
Martin Marietta Materials, Inc. (the Corporation or Martin Marietta) is a leading supplier of aggregates products (crushed stone, sand and gravel) and heavy building materials for the construction industry, including infrastructure, nonresidential, residential, railroad ballast, agricultural and chemical grade stone used in environmental applications. The Corporation’s annual consolidated net sales and operating earnings are predominately derived from its Aggregates business, which mines, processes and sells granite, limestone, sand, gravel and other aggregates-related downstream products, including asphalt, ready mixed concrete and road paving construction services for use in all sectors of the public infrastructure, environmental industries, nonresidential and residential construction industries, as well as agriculture, railroad ballast, chemical, utility and other uses. The Aggregates business shipped and delivered aggregates, asphalt products and ready mixed concrete from a network of more than 400 quarries, underground mines, distribution facilities and plants in 26 states, Nova Scotia and the Bahamas. The Aggregates business’ products are used primarily by commercial customers principally in domestic construction of highways and other infrastructure projects and for nonresidential and residential building development. Aggregates products are also used in the railroad, agricultural, utility and environmental industries.
The Corporation currently conducts its Aggregates business through three reportable business segments: Mid-America Group, Southeast Group and 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 |
|
|
|
|
|||
Product Lines |
|
Aggregates (crushed stone, sand and gravel) |
|
Aggregates (crushed stone, sand and gravel) |
|
Aggregates (crushed stone, sand and gravel), asphalt, ready mixed concrete and road paving |
|
|
|
|
|||
Types of Aggregates Locations |
|
Quarries and Distribution Facilities |
|
Quarries and Distribution Facilities |
|
Quarries, Plants and Distribution Facilities |
|
|
|
|
|||
Modes of Transportation for Aggregates Product Line |
|
Truck and Rail |
|
Truck, Rail and Water |
|
Truck and Rail |
Page 21 of 46
MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
FORM 10-Q
For the Quarter Ended March 31, 2016
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
First Quarter Ended March 31, 2016
(Continued)
The Cement business produces Portland and specialty 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 production facilities are located in Midlothian, Texas, south of Dallas/Fort Worth and Hunter, Texas, north of San Antonio. The limestone reserves used as a raw material are located on property, owned by the Corporation, adjacent to each of the plants. In addition to the manufactur ing facilities, the Corporation operates cement distribution terminals.
The Corporation also has a Magnesia Specialties segment that produces magnesia-based chemicals products used in industrial, agricultural and environmental applications and dolomitic lime sold primarily to customers in the steel industry.
CRITICAL ACCOUNTING POLICIES
The Corporation outlined its critical accounting policies in its Annual Report on Form 10-K for the year ended December 31, 2015. There were no changes to the Corporation’s critical accounting policies during the three months ended March 31, 2016.
RESULTS OF OPERATIONS
Except as indicated, the comparative analysis in this Management’s Discussion and Analysis of Financial Condition and Results of Operations is based on net sales and cost of sales. Gross margin and operating margin calculated as percentages of total revenues represent the most directly comparable financial measures calculated in accordance with generally accepted accounting principles (“GAAP”). However, gross margin as a percentage of net sales and operating margin as a percentage of net sales represent non-GAAP measures. The Corporation presents these ratios calculated based on net sales, as it is consistent with the basis by which management reviews the Corporation’s operating results. Further, management believes it is consistent with the basis by which investors analyze the Corporation’s operating results given that freight and delivery revenues and costs represent pass-throughs and have no profit mark-up. The following tables present the calculations of gross margin and operating margin for the three months ended March 31, 2016 and 2015 in accordance with GAAP and reconciliations of the ratios as percentages of total revenues to percentages of net sales.
Consolidated Gross Margin in Accordance with GAAP
|
|
Three Months Ended |
|
|||||
|
|
March 31, |
|
|||||
|
|
2016 |
|
|
2015 |
|
||
|
|
(Dollars in Thousands) |
|
|||||
Gross profit |
|
$ |
144,634 |
|
|
$ |
74,261 |
|
Total revenues |
|
$ |
788,734 |
|
|
$ |
691,347 |
|
Gross margin |
|
|
18.3 |
% |
|
|
10.7 |
% |
Page 22 of 46
MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
FORM 10-Q
For the Quarter Ended March 31, 2016
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
First Quarter Ended March 31, 2016
(Continued)
Consolidated Gross Margin Excluding Freight and Delivery Revenues
|
|
Three Months Ended |
|
|||||
|
|
March 31, |
|
|||||
|
|
2016 |
|
|
2015 |
|
||
|
|
(Dollars in Thousands) |
|
|||||
Gross profit |
|
$ |
144,634 |
|
|
$ |
74,261 |
|
Total revenues |
|
$ |
788,734 |
|
|
$ |
691,347 |
|
Less: Freight and delivery revenues |
|
|
(54,774 |
) |
|
|
(59,471 |
) |
Net sales |
|
$ |
733,960 |
|
|
$ |
631,876 |
|
Gross margin excluding freight and delivery revenues |
|
|
19.7 |
% |
|
|
11.8 |
% |
Consolidated Operating Margin in Accordance with GAAP
|
|
Three Months Ended |
|
|||||
|
|
March 31, |
|
|||||
|
|
2016 |
|
|
2015 |
|
||
|
|
(Dollars in Thousands) |
|
|||||
Earnings from operations |
|
$ |
83,769 |
|
|
$ |
25,571 |
|
Total revenues |
|
$ |
788,734 |
|
|
$ |
691,347 |
|
Operating margin |
|
|
10.6 |
% |
|
|
3.7 |
% |
Consolidated Operating Margin Excluding Freight and Delivery Revenues
|
|
Three Months Ended |
|
|||||
|
|
March 31, |
|
|||||
|
|
2016 |
|
|
2015 |
|
||
|
|
(Dollars in Thousands) |
|
|||||
Earnings from operations |
|
$ |
83,769 |
|
|
$ |
25,571 |
|
Total revenues |
|
$ |
788,734 |
|
|
$ |
691,347 |
|
Less: Freight and delivery revenues |
|
|
(54,774 |
) |
|
|
(59,471 |
) |
Net sales |
|
$ |
733,960 |
|
|
$ |
631,876 |
|
Operating margin excluding freight and delivery revenues |
|
|
11.4 |
% |
|
|
4.0 |
% |
Page 23 of 46
MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
FORM 10-Q
For the Quarter Ended March 31, 2016
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
First Quarter Ended March 31, 2016
(Continued)
Consoli dated Heritage Gross Margin in Accordance with GAAP
|
|
Three Months Ended |
|
|||||
|
|
March 31, |
|
|||||
|
|
2016 |
|
|
2015 |
|
||
|
|
(Dollars in Thousands) |
|
|||||
Gross profit |
|
$ |
145,959 |
|
|
$ |
74,261 |
|
Total revenues |
|
$ |
783,393 |
|
|
$ |
691,347 |
|
Gross margin |
|
|
18.6 |
% |
|
|
10.7 |
% |
Consolidated Heritage Gross Margin Excluding Freight and Delivery Revenues
|
|
Three Months Ended |
|
|||||
|
|
March 31, |
|
|||||
|
|
2016 |
|
|
2015 |
|
||
|
|
(Dollars in Thousands) |
|
|||||
Gross profit |
|
$ |
145,959 |
|
|
$ |
74,261 |
|
Total revenues |
|
$ |
783,393 |
|
|
$ |
691,347 |
|
Less: Freight and delivery revenues |
|
|
(54,738 |
) |
|
|
(59,471 |
) |
Net sales |
|
$ |
728,655 |
|
|
$ |
631,876 |
|
Gross margin excluding freight and delivery revenues |
|
|
20.0 |
% |
|
|
11.8 |
% |
Cement Business Gross Margin in Accordance with GAAP
|
|
Three Months Ended |
|
|||||
|
|
March 31, |
|
|||||
|
|
2016 |
|
|
2015 |
|
||
|
|
(Dollars in Thousands) |
|
|||||
Gross profit |
|
$ |
32,556 |
|
|
$ |
18,985 |
|
Total revenues |
|
$ |
73,551 |
|
|
$ |
102,100 |
|
Gross margin |
|
|
44.3 |
% |
|
|
18.6 |
% |
Page 24 of 46
MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
FORM 10-Q
For the Quarter Ended March 31, 2016
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
First Quarter Ended March 31, 2016
(Continued)
Cement Business Gross Margin Excluding Freight and Delivery Revenues
|
|
Three Months Ended |
|
|||||
|
|
March 31, |
|
|||||
|
|
2016 |
|
|
2015 |
|
||
|
|
(Dollars in Thousands) |
|
|||||
Gross profit |
|
$ |
32,556 |
|
|
$ |
18,985 |
|
Total revenues |
|
$ |
73,551 |
|
|
$ |
102,100 |
|
Less: Freight and delivery revenues |
|
|
(3,678 |
) |
|
|
(5,535 |
) |
Net sales |
|
$ |
69,873 |
|
|
$ |
96,565 |
|
Gross margin excluding freight and delivery revenues |
|
|
46.6 |
% |
|
|
19.7 |
% |
Magnesia Specialties Gross Margin in Accordance with GAAP
|
|
Three Months Ended |
|
|||||
|
|
March 31, |
|
|||||
|
|
2016 |
|
|
2015 |
|
||
|
|
(Dollars in Thousands) |
|
|||||
Gross profit |
|
$ |
22,970 |
|
|
$ |
20,178 |
|
Total revenues |
|
$ |
64,170 |
|
|
$ |
63,164 |
|
Gross margin |
|
|
35.8 |
% |
|
|
31.9 |
% |
Magnesia Specialties Gross Margin Excluding Freight and Delivery Revenues
|
|
Three Months Ended |
|
|||||
|
|
March 31, |
|
|||||
|
|
2016 |
|
|
2015 |
|
||
|
|
(Dollars in Thousands) |
|
|||||
Gross profit |
|
$ |
22,970 |
|
|
$ |
20,178 |
|
Total revenues |
|
$ |
64,170 |
|
|
$ |
63,164 |
|
Less: Freight and delivery revenues |
|
|
(4,665 |
) |
|
|
(4,410 |
) |
Net sales |
|
$ |
59,505 |
|
|
$ |
58,754 |
|
Gross margin excluding freight and delivery revenues |
|
|
38.6 |
% |
|
|
34.3 |
% |
Page 25 of 46
MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
FORM 10-Q
For the Quarter Ended March 31, 2016
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
First Quarter Ended March 31, 2016
(Continued)
Ready Mixed Concrete Gross Margin in Accordance with GAAP
|
|
Three Months Ended |
|
|||||
|
|
March 31, |
|
|||||
|
|
2016 |
|
|
2015 |
|
||
|
|
(Dollars in Thousands) |
|
|||||
Gross profit |
|
$ |
18,086 |
|
|
$ |
2,084 |
|
Total revenues |
|
$ |
187,082 |
|
|
$ |
127,802 |
|
Gross margin |
|
|
9.7 |
% |
|
|
1.6 |
% |
Ready Mixed Concrete Gross Margin Excluding Freight and Delivery Revenues
|
|
Three Months Ended |
|
|||||
|
|
March 31, |
|
|||||
|
|
2016 |
|
|
2015 |
|
||
|
|
(Dollars in Thousands) |
|
|||||
Gross profit |
|
$ |
18,086 |
|
|
$ |
2,084 |
|
Total revenues |
|
$ |
187,082 |
|
|
$ |
127,802 |
|
Less: Freight and delivery revenues |
|
|
(297 |
) |
|
|
(230 |
) |
Net sales |
|
$ |
186,785 |
|
|
$ |
127,572 |
|
Gross margin excluding freight and delivery revenues |
|
|
9.7 |
% |
|
|
1.6 |
% |
Earnings before interest, income taxes, depreciation, depletion and amortization (“EBITDA”) is a widely accepted financial indicator of a company’s ability to service and/or incur indebtedness. EBITDA is not defined by generally accepted accounting principles and, as such, should not be construed as an alternative to net earnings or operating cash flow. EBITDA is as follows for the three months ended March 31, 2016 and 2015.
A reconciliation of net earnings (loss) attributable to Martin Marietta Materials, Inc. to consolidated EBITDA is as follows:
|
|
Three Months Ended |
|
|||||
|
|
March 31, |
|
|||||
|
|
2016 |
|
|
2015 |
|
||
Net Earnings Attributable to Martin Marietta Materials, Inc. |
|
$ |
44,994 |
|
|
$ |
6,126 |
|
Add back: |
|
|
|
|
|
|
|
|
Interest expense |
|
|
20,034 |
|
|
|
19,331 |
|
Income tax expense (benefit) for controlling interests |
|
|
19,667 |
|
|
|
(826 |
) |
Depreciation, depletion and amortization expense |
|
|
67,926 |
|
|
|
66,575 |
|
Consolidated EBITDA |
|
$ |
152,621 |
|
|
$ |
91,206 |
|
Page 26 of 46
MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
FORM 10-Q
For the Quarter Ended March 31, 2016
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
First Quarter Ended March 31, 2016
(Continued)
Incremental gross margin (excluding freight and delivery revenues) is a non-GAAP measure. The Corporation presents this metric to enhance analysts’ and investors’ understanding of the impact of increased net sales on profitability. The following shows th e calculation of consolidated incremental gross margin (excluding freight and delivery revenues) for the quarter ended March 31, 2016 (dollars in thousands).
Consolidated net sales for the quarter ended March 31, 2016 |
|
$ |
733,960 |
|
Consolidated net sales for the quarter ended March 31, 2015 |
|
|
631,876 |
|
Incremental net sales |
|
$ |
102,084 |
|
|
|
|
|
|
Consolidated gross profit for the quarter ended March 31, 2016 |
|
$ |
144,634 |
|
Consolidated gross profit for the quarter ended March 31, 2015 |
|
|
74,261 |
|
Incremental gross profit |
|
$ |
70,373 |
|
|
|
|
|
|
Consolidated incremental gross margin (excluding freight and delivery revenues) for quarter ended March 31, 2016 |
|
|
68.9 |
% |
|
|
|
|
|
Significant items for the quarter ended March 31, 2016 (unless noted, all comparisons are versus the prior-year quarter):
|
· |
Record consolidated net sales of $734.0 million compared with $631.9 million, an increase of 16.2% |
|
· |
Aggregates product line volume increase of 13.1%; aggregates product line price increase of 8.1% |
|
· |
Cement business net sales of $69.9 million and gross profit of $32.6 million |
|
· |
Magnesia Specialties net sales of $59.5 million and gross profit of $23.0 million |
|
· |
Consolidated gross margin (excluding freight and delivery revenues) of 19.7%, an increase of 790 basis points |
|
· |
Consolidated selling, general and administrative expenses (“SG&A”) of $59.9 million, or 8.2% of net sales |
|
· |
Consolidated earnings from operations of $83.8 million compared with $25.6 million |
|
· |
Earnings per diluted share of $0.69 compared with $0.07 |
Page 27 of 46
MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
FORM 10-Q
For the Quarter Ended March 31, 2016
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
First Quarter Ended March 31, 2016
(Continued)
The following table presents net sales, gross profit (loss), selling, general and administrative expenses and earnings (loss) from operations data for t he Corporation and its reportable segments for the three months ended March 31, 2016 and 2015 . In each case, the data is stated as a percentage of net sales of the Corporation or the relevant segment, as the case may be.
|
|
Three Months Ended March 31, |
|
|||||||||||||
|
|
2016 |
|
|
2015 |
|
||||||||||
|
|
Amount |
|
|
% of Net Sales |
|
|
Amount |
|
|
% of Net Sales |
|
||||
|
|
(Dollars in Thousands) |
|
|||||||||||||
Net sales: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Heritage: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mid-America Group |
|
$ |
173,372 |
|
|
|
|
|
|
$ |
129,705 |
|
|
|
|
|
Southeast Group |
|
|
67,284 |
|
|
|
|
|
|
|
59,770 |
|
|
|
|
|
West Group |
|
|
358,621 |
|
|
|
|
|
|
|
287,082 |
|
|
|
|
|
Total Heritage Aggregates Business |
|
|
599,277 |
|
|
|
100.0 |
|
|
|
476,557 |
|
|
|
100.0 |
|
Cement |
|
|
69,873 |
|
|
|
100.0 |
|
|
|
96,565 |
|
|
|
100.0 |
|
Magnesia Specialties |
|
|
59,505 |
|
|
|
100.0 |
|
|
|
58,754 |
|
|
|
100.0 |
|
Total Heritage Consolidated |
|
|
728,655 |
|
|
|
100.0 |
|
|
|
631,876 |
|
|
|
100.0 |
|
Acquisitions: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aggregates Business – West Group |
|
|
5,305 |
|
|
|
|
|
|
|
— |
|
|
|
|
|
Total |
|
$ |
733,960 |
|
|
|
100.0 |
|
|
$ |
631,876 |
|
|
|
100.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit (loss): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Heritage: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mid-America Group |
|
$ |
27,424 |
|
|
|
15.8 |
|
|
$ |
7,144 |
|
|
|
5.5 |
|
Southeast Group |
|
|
10,330 |
|
|
|
15.4 |
|
|
|
3,099 |
|
|
|
5.2 |
|
West Group |
|
|
56,577 |
|
|
|
15.8 |
|
|
|
28,484 |
|
|
|
9.9 |
|
Total Heritage Aggregates Business |
|
|
94,331 |
|
|
|
15.7 |
|
|
|
38,727 |
|
|
|
8.1 |
|
Cement |
|
|
32,556 |
|
|
|
46.6 |
|
|
|
18,985 |
|
|
|
19.7 |
|
Magnesia Specialties |
|
|
22,970 |
|
|
|
38.6 |
|
|
|
20,178 |
|
|
|
34.3 |
|
Corporate |
|
|
(3,898 |
) |
|
|
|
|
|
|
(3,629 |
) |
|
|
|
|
Total Heritage Consolidated |
|
|
145,959 |
|
|
|
20.0 |
|
|
|
74,261 |
|
|
|
11.8 |
|
Acquisitions: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aggregates Business – West Group |
|
|
(1,325 |
) |
|
|
|
|
|
|
— |
|
|
|
|
|
Total |
|
$ |
144,634 |
|
|
|
19.7 |
|
|
$ |
74,261 |
|
|
|
11.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Page 28 of 46
MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
FORM 10-Q
For the Quarter Ended March 31, 2016
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
First Quarter Ended March 31, 2016
(Continued)
|
Three Months Ended March 31, |
|
||||||||||||||
|
|
2016 |
|
|
2015 |
|
||||||||||
|
|
Amount |
|
|
% of Net Sales |
|
|
Amount |
|
|
% of Net Sales |
|
||||
|
|
(Dollars in Thousands) |
|
|||||||||||||
Selling, general & administrative expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Heritage: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mid-America Group |
|
$ |
13,135 |
|
|
|
7.6 |
|
|
$ |
12,945 |
|
|
|
10.0 |
|
Southeast Group |
|
|
3,879 |
|
|
|
5.8 |
|
|
|
4,289 |
|
|
|
7.2 |
|
West Group |
|
|
16,816 |
|
|
|
4.7 |
|
|
|
15,709 |
|
|
|
5.5 |
|
Total Heritage Aggregates Business |
|
|
33,830 |
|
|
|
5.6 |
|
|
|
32,943 |
|
|
|
6.9 |
|
Cement |
|
|
6,256 |
|
|
|
9.0 |
|
|
|
6,675 |
|
|
|
6.9 |
|
Magnesia Specialties |
|
|
2,345 |
|
|
|
3.9 |
|
|
|
2,366 |
|
|
|
4.0 |
|
Corporate |
|
|
17,328 |
|
|
|
|
|
|
|
7,466 |
|
|
|
|
|
Total Heritage Consolidated |
|
|
59,759 |
|
|
|
8.2 |
|
|
|
49,450 |
|
|
|
7.8 |
|
Acquisitions: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aggregates Business – West Group |
|
|
102 |
|
|
|
|
|
|
|
— |
|
|
|
|
|
Total |
|
$ |
59,861 |
|
|
|
8.2 |
|
|
$ |
49,450 |
|
|
|
7.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (Loss) from operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Heritage: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mid-America Group |
|
$ |
14,424 |
|
|
|
8.3 |
|
|
$ |
(4,203 |
) |
|
|
(3.2 |
) |
Southeast Group |
|
|
6,971 |
|
|
|
10.4 |
|
|
|
(1,548 |
) |
|
|
(2.6 |
) |
West Group |
|
|
40,228 |
|
|
|
11.2 |
|
|
|
14,499 |
|
|
|
5.1 |
|
Total Heritage Aggregates Business |
|
|
61,623 |
|
|
|
10.3 |
|
|
|
8,748 |
|
|
|
1.8 |
|
Cement |
|
|
26,316 |
|
|
|
37.7 |
|
|
|
12,229 |
|
|
|
12.7 |
|
Magnesia Specialties |
|
|
20,563 |
|
|
|
34.6 |
|
|
|
17,789 |
|
|
|
30.3 |
|
Corporate |
|
|
(23,302 |
) |
|
|
|
|
|
|
(13,195 |
) |
|
|
|
|
Total Heritage Consolidated |
|
|
85,200 |
|
|
|
11.7 |
|
|
|
25,571 |
|
|
|
4.0 |
|
Acquisitions: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aggregates Business – West Group |
|
|
(1,431 |
) |
|
|
|
|
|
|
— |
|
|
|
|
|
Total |
|
$ |
83,769 |
|
|
|
11.4 |
|
|
$ |
25,571 |
|
|
|
4.0 |
|
For the three months ended March 31, 2015, net sales, gross loss, SG&A and loss from operations for the California cement operations were $33,108,000, $4,071,000, $2,504,000 and $7,421,000, respectively.
Page 29 of 46
MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
FORM 10-Q
For the Quarter Ended March 31, 2016
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
First Quarter Ended March 31, 2016
(Continued)
Net sales by product line for the Aggregates business, which reflect the elimination of inter-product line sales, are as follows:
|
|
Three Months Ended |
|
|||||
|
|
March 31, |
|
|||||
|
|
2016 |
|
|
2015 |
|
||
|
|
(Dollars in Thousands) |
|
|||||
Net sales: |
|
|
|
|
|
|
|
|
Heritage: |
|
|
|
|
|
|
|
|
Aggregates |
|
$ |
404,052 |
|
|
$ |
332,214 |
|
Asphalt |
|
|
3,655 |
|
|
|
9,645 |
|
Ready Mixed Concrete |
|
|
184,088 |
|
|
|
127,572 |
|
Road Paving |
|
|
7,482 |
|
|
|
7,126 |
|
Total Heritage |
|
|
599,277 |
|
|
|
476,557 |
|
Acquisitions: |
|
|
|
|
|
|
|
|
Aggregates |
|
|
2,387 |
|
|
|
— |
|
Asphalt |
|
|
220 |
|
|
|
— |
|
Ready Mixed Concrete |
|
|
2,698 |
|
|
|
— |
|
Total Acquisitions |
|
|
5,305 |
|
|
|
— |
|
Total Aggregates Business |
|
$ |
604,582 |
|
|
$ |
476,557 |
|
The following tables present volume and pricing data and shipments data for the aggregates product line.
|
|
Three Months Ended |
|
|||||
|
|
March 31, 2016 |
|
|||||
|
|
Volume |
|
|
Pricing |
|
||
Volume/Pricing Variance (1) |
|
|
|
|
|
|
|
|
Heritage Aggregates Product Line (2) : |
|
|
|
|
|
|
|
|
Mid-America Group |
|
|
27.8 |
% |
|
|
4.3 |
% |
Southeast Group |
|
|
5.6 |
% |
|
|
7.3 |
% |
West Group |
|
|
4.4 |
% |
|
|
11.3 |
% |
Heritage Aggregates Operations (2) |
|
|
12.8 |
% |
|
|
8.1 |
% |
Aggregates Product Line (3) |
|
|
13.3 |
% |
|
|
8.1 |
% |
Page 30 of 46
MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
FORM 10-Q
For the Quarter Ended March 31, 2016
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
First Quarter Ended March 31, 2016
(Continued)
|
|
Three Months Ended |
|
|||||
|
|
March 31, |
|
|||||
|
|
2016 |
|
|
2015 |
|
||
|
|
(Tons in Thousands) |
|
|||||
Shipments |
|
|
|
|
|
|
|
|
Heritage Aggregates Product Line (2) : |
|
|
|
|
|
|
|
|
Mid-America Group |
|
|
12,922 |
|
|
|
10,110 |
|
Southeast Group |
|
|
4,318 |
|
|
|
4,090 |
|
West Group |
|
|
15,279 |
|
|
|
14,636 |
|
Heritage Aggregates Operations (2) |
|
|
32,519 |
|
|
|
28,836 |
|
Acquisitions |
|
|
146 |
|
|
|
— |
|
Aggregates Product Line (3) |
|
|
32,665 |
|
|
|
28,836 |
|
|
|
Three Months Ended |
|
|||||
|
|
March 31, |
|
|||||
|
|
2016 |
|
|
2015 |
|
||
|
|
(Tons in Thousands) |
|
|||||
Shipments |
|
|
|
|
|
|
|
|
Heritage Aggregates Product Line (2) : |
|
|
|
|
|
|
|
|
Tons to external customers |
|
|
30,603 |
|
|
|
27,132 |
|
Internal tons used in other product lines |
|
|
1,916 |
|
|
|
1,704 |
|
Total heritage aggregates tons |
|
|
32,519 |
|
|
|
28,836 |
|
|
|
|
|
|
|
|
|
|
Acquisitions: |
|
|
|
|
|
|
|
|
Tons to external customers |
|
|
141 |
|
|
|
— |
|
Internal tons used in other product lines |
|
|
5 |
|
|
|
— |
|
Total acquisition aggregates tons |
|
|
146 |
|
|
|
— |
|
(1) |
Volume/pricing variances reflect the percentage increase/(decrease) from the comparable period in the prior year. |
(2) |
Heritage Aggregates Product Line and Heritage Aggregates Operations exclude volume and pricing data for acquisitions that have not been included in operations for a full year. |
(3) |
Aggregates Product Line includes all acquisitions from the date of acquisition and divestitures through the date of disposal. |
Aggregates product line shipments reflect growth in all end-use markets. Shipments to the infrastructure market comprised 39% of quarterly volumes and increased 13%. Growth was driven by large projects in North Carolina and Georgia, two states that passed legislation in 2015 increasing near and long-term state infrastructure spending.
The nonresidential market represented 33% of quarterly aggregates product line shipments and increased 14%. The Mid-America Group led with a 50% increase in heavy nonresidential and 25% in light nonresidential. Notably, an improving economy is driving business investment in, for example, industrial warehouse and distribution facilities, which have been dormant in much of the Mid-America Group’s markets over the past several years. The West Group saw a
Page 31 of 46
MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
FORM 10-Q
For the Quarter Ended March 31, 2016
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
First Quarter Ended March 31, 2016
(Continued)
slight increase in nonresidential activity as the diversified Texas economy generat ed a broad range of projects replac ing energy-related shale shipments currently dis placed by volatile oil prices.
The residential end-use market accounted for 18% of quarterly aggregates product line shipments. Volumes within this market increased 20% as the housing recovery continues and expands, particularly in the Corporation’s markets in the southeastern United States . Housing activity in the United States generally remains well below historic averages. That said, housing permits, starts and completions are all up more than ten percent for the trailing-twelve months ended March 2016. Notably, during the first quarter, North Carolina, Iowa, Florida and South Carolina all reported double-digit growth in housing starts. The ChemRock/Rail market accounted for the remaining 10% of aggregates product line volumes and increased slightly.
Overall, aggregates product line shipments increased 13.1%. Geographically, growth was led by the Mid-America Group, which increased 27.8%. The Southeast and West Groups achieved an increase of 5.6% and 4.4%, respectively.
The average per-ton selling price for the heritage aggregates product line was $13.04 and $12.06 for the three months ended March 31, 2016 and 2015, respectively. Aggregates product line pricing improvement of 8.1% reflects growth in all reportable groups, led by the 11.3% increase in the West Group. The most significant improvement was achieved in Colorado, followed by Central and South Texas. The Southeast Group and Mid-America Group reported increases of 7.3% and 4.3%, respectively. The average per-ton selling price for the acquired aggregates product line was $12.50 for the three months ended March 31, 2016.
The Corporation’s aggregates-related downstream product lines include asphalt, ready mixed concrete and road paving businesses in Arkansas, Colorado, Texas and Wyoming. Average selling prices by product line for the Corporation’s aggregates-related downstream product lines are as follows:
|
|
Three Months Ended |
|
|||
|
|
March 31, |
|
|||
|
|
2016 |
|
2015 |
|
|
Heritage: |
|
|
|
|
|
|
Asphalt |
|
$42.85/ton |
|
$43.65/ton |
|
|
Ready Mixed Concrete |
|
$102.28/yd³ |
|
$91.72/yd³ |
|
|
Acquisitions: |
|
|
|
|
|
|
Asphalt |
|
$39.95/ton |
|
|
— |
|
Ready Mixed Concrete |
|
$115.84/yd³ |
|
|
— |
|
Page 32 of 46
MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
FORM 10-Q
For the Quarter Ended March 31, 2016
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
First Quarter Ended March 31, 2016
(Continued)
Unit shipments by product line for the Corporation’s aggregates-related downstream product lines are as follows:
The decline in asphalt product line shipments is primarily attributable to the divestiture of San Antonio Asphalt operations, sold in third quarter 2015, which contributed 123,000 tons during the three months ended March 31, 2015.
The ready mixed concrete product line benefitted from strong demand and much improved operating conditions, driving a reported 31.0% increase in shipments and an 11.7% increase in average selling price, resulting in a 46.4% increase in net sales and an 810-basis-point improvement in gross margin (excluding freight and delivery revenues).
The Aggregates business is significantly affected by erratic weather patterns, seasonal changes and other weather-related conditions. Production and shipment levels for aggregates, asphalt, ready mixed concrete and road paving materials correlate with general construction activity levels, most of which occurs in the spring, summer and fall. Thus, production and shipment levels vary by quarter. Operations concentrated in the northern and midwestern United States generally experience more severe winter weather conditions than operations in the southeast and southwest. Excessive rainfall, and conversely excessive drought, can also jeopardize shipments, production and profitability in all markets served by the Corporation. Because of the potentially significant impact of weather on the Corporation’s operations, current period and year to date results are not indicative of expected performance for other interim periods or the full year.
Cement Business
The Cement business benefitted from strong demand and better weather in Texas and for the quarter generated $69.9 million of net sales and $32.6 million of gross profit. Cement shipments increased 13.8% coupled with a 3.6% improvement in pricing (excluding the impact of the California cement operations sold in 2015). The Corporation’s reported quarterly gross margin (excluding freight and delivery revenues) of 46.6% compared very favorably to the prior year quarter’s 35.9% (excluding the impact of the California cement operations sold in 2015), which was partly aided by
Page 33 of 46
MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
FORM 10-Q
For the Quarter Ended March 31, 2016
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
First Quarter Ended March 31, 2016
(Continued)
favorable energy costs . The business announced price increase s effective April 1, 2016. However, there is a lag time before the full impact of the price increase s are realized.
The Cement business is benefitting from broad based strength in Texas markets, where demand exceeds local supply. During the first quarter 2016, the business incurred $5.6 million in planned cement kiln maintenance costs, and expects to incur $2.7 million, $12.6 million and $1.5 million in the second, third and fourth quarters, respectively.
Cement shipments for the three months ended March 31 were (tons in thousands):
|
|
2016 |
|
|
2015 |
|
||
Tons to external customers |
|
|
685 |
|
|
|
1,025 |
|
Internal tons used in other product lines |
|
|
272 |
|
|
|
192 |
|
Total cement tons |
|
|
957 |
|
|
|
1,217 |
|
The decline in 2016 shipments is attributable to the prior-year divestiture of the California operations, which accounted for 376,000 tons in the first-quarter of 2015.
The Portland Cement Association, or PCA, forecasts continued favorable supply/demand imbalance in Texas over the next several years. Further, the PCA currently forecasts growth each year through 2019.
Magnesia Specialties Business
Magnesia Specialties continued to deliver strong performance and generated first-quarter net sales of $59.5 million. Gross margin (excluding freight and delivery revenues) in the quarter expanded 430 basis points to a record 38.6%. First-quarter earnings from operations were $20.6 million compared with $17.8 million.
Gross Profit
The following presents a rollforward of consolidated gross profit (dollars in thousands):
Consolidated gross profit, quarter ended March 31, 2015 |
|
$ |
74,261 |
|
Heritage aggregates product line: |
|
|
|
|
Volume strength |
|
|
45,158 |
|
Pricing strength |
|
|
31,815 |
|
Cost increases, net |
|
|
(36,125 |
) |
Increase in heritage aggregates product line gross profit |
|
|
40,848 |
|
Heritage aggregates-related downstream product lines |
|
|
14,756 |
|
Acquired Aggregates business operations |
|
|
(1,325 |
) |
Increase in Cement |
|
|
13,571 |
|
Increase in Magnesia Specialties |
|
|
2,792 |
|
Decrease in Corporate |
|
|
(269 |
) |
Increase in consolidated gross profit |
|
|
70,373 |
|
Consolidated gross profit, quarter ended March 31, 2016 |
|
$ |
144,634 |
|
Page 34 of 46
MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
FORM 10-Q
For the Quarter Ended March 31, 2016
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
First Quarter Ended March 31, 2016
(Continued)
Gross profit (loss) by business is as follows:
|
|
Three Months Ended |
|
|||||
|
|
March 31, |
|
|||||
|
|
2016 |
|
|
2015 |
|
||
|
|
(Dollars in Thousands) |
|
|||||
Gross profit (loss): |
|
|
|
|
|
|
|
|
Heritage: |
|
|
|
|
|
|
|
|
Aggregates |
|
$ |
82,265 |
|
|
$ |
41,417 |
|
Asphalt |
|
|
(2,067 |
) |
|
|
(1,463 |
) |
Ready Mixed Concrete |
|
|
18,000 |
|
|
|
2,084 |
|
Road Paving |
|
|
(3,867 |
) |
|
|
(3,311 |
) |
Total Aggregates Business |
|
|
94,331 |
|
|
|
38,727 |
|
Cement |
|
|
32,556 |
|
|
|
18,985 |
|
Magnesia Specialties |
|
|
22,970 |
|
|
|
20,178 |
|
Corporate |
|
|
(3,898 |
) |
|
|
(3,629 |
) |
Total Heritage |
|
|
145,959 |
|
|
|
74,261 |
|
Acquisitions: |
|
|
|
|
|
|
|
|
Aggregates |
|
|
(1,182 |
) |
|
|
— |
|
Asphalt |
|
|
(202 |
) |
|
|
— |
|
Ready Mixed Concrete |
|
|
86 |
|
|
|
— |
|
Road Paving |
|
|
(27 |
) |
|
|
— |
|
Total Acquisitions |
|
|
(1,325 |
) |
|
|
— |
|
Total |
|
$ |
144,634 |
|
|
$ |
74,261 |
|
The consolidated heritage gross margin (excluding freight and delivery revenues) for the quarter was 20%, an 830-basis-point improvement compared with the prior-year quarter. The increase reflects better weather, which lead to increased shipments, pricing growth, management’s cost-disciplined approach and divesting the low-margin California cement operations in the third quarter of 2015.
Consolidated Operating Results
Consolidated SG&A was 8.2% of net sales compared with 7.8% in the prior-year quarter. The increase of 40 basis points reflects increased incentive compensation costs and continued investment in information systems improvements. Earnings from operations for the quarter were $83.8 million compared with $25.6 million in the prior-year quarter.
Among other items, other operating income and expenses, net, includes gains and losses on the sale of assets; recoveries and writeoffs related to customer accounts receivable; rental, royalty and services income; accretion expense, depreciation expense and gains and losses related to asset retirement obligations. For the first quarter, consolidated other operating income and expenses, net, was an expense of $0.6 million in 2016 and income of $2.4 million in 2015.
Page 35 of 46
MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
FORM 10-Q
For the Quarter Ended March 31, 2016
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
First Quarter Ended March 31, 2016
(Continued)
Other nonoperating income and expenses, net, includes foreign currency transaction gains and losses, interest and other miscellaneous income and equity adjustments for nonconsolidated affiliates.
The estimated effective income tax rate for the quarter was 30%, in line with annual guidance. For the year, the Company expects to fully utilize the remaining allowable net operating loss carryforwards of $33 million acquired with TXI.
LIQUIDITY AND CAPITAL RESOURCES
Cash provided by operating activities for the first quarter was $67.1 million compared with $35.1 million for the same period in 2015. The increase was primarily attributable to higher earnings before depreciation, depletion and amortization expense. Operating cash flow is primarily derived from consolidated net earnings before deducting depreciation, depletion and amortization, and the impact of changes in working capital. Depreciation, depletion and amortization were as follows:
|
|
Three Months Ended |
|
|||||
|
|
March 31, |
|
|||||
|
|
2016 |
|
|
2015 |
|
||
|
|
(Dollars in Thousands) |
|
|||||
Depreciation |
|
$ |
61,353 |
|
|
$ |
59,796 |
|
Depletion |
|
|
3,236 |
|
|
|
3,078 |
|
Amortization |
|
|
3,821 |
|
|
|
4,394 |
|
|
|
$ |
68,410 |
|
|
$ |
67,268 |
|
The seasonal nature of the construction aggregates business impacts quarterly operating cash flow when compared with the full year. Full-year 2015 net cash provided by operating activities was $573.2 million compared with $35.1 million for the first three months of 2015.
During the first three months ended March 31, 2016, the Corporation invested $94.2 million of capital into its business. Full-year capital spending is expected to approximate $350 million.
During the quarter ended March 31, 2016, the Corporation acquired the outstanding stock of Rocky Mountain Materials and Asphalt, Inc., and Rocky Mountain Premix Inc. The acquisition included four aggregates plants, two asphalt plants and two ready mixed concrete operations, and provides more than 500 million tons of mineral reserves and expands the Corporation’s presence along the Front Range of the Rocky Mountains, home to 80% of Colorado’s population.
The Corporation can repurchase its common stock through open-market purchases pursuant to authority granted by its Board of Directors or through private transactions at such prices and upon such terms as the Chief Executive Officer deems appropriate. During the first quarter, the Corporation repurchased 1,028,000 shares of common stock for $150 million. At March 31, 2016, 15,686,000 shares of common stock were remaining under the Corporation’s repurchase authorization.
The Credit Agreement (which consists of a $250 million Term Loan Facility and a $350 million Revolving Facility) requires the Corporation’s ratio of consolidated debt to consolidated earnings before interest, taxes, depreciation, depletion and amortization (“EBITDA”), as defined, for the trailing twelve month period (the Ratio) to not exceed 3.50x as of the end of
Page 36 of 46
MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
FORM 10-Q
For the Quarter Ended March 31, 2016
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
First Quarter Ended March 31, 2016
(Continued)
any fiscal quarter, provided that the Corporation may exclude from the Ratio debt incurred in connection with certain acquisitions for a period of 180 days so long as the Corporation, as a consequence of such specified acquisition, does not have its ratings on long-term unsecured debt fall below BBB by Standard & Poor’s or Baa2 by Moody’s and the Ratio calculated without such exclusion does not exceed 3.75x. Additionally, if there are no amounts outstanding under the Revolving Facili ty, consolidated debt, including debt for which the Corporation is a co-borrower, will be reduced for purposes of the covenant calculation by the Corporation’s unrestricted cash and cash equivalents in excess of $50 million, such reduction not to exceed $2 00 million.
The Ratio is calculated as debt, including debt for which the Corporation is a co-borrower, divided by consolidated EBITDA, as defined by the Credit Agreement, for the trailing twelve months. Consolidated EBITDA is generally defined as earnings before interest expense, income tax expense, and depreciation, depletion and amortization expense for continuing operations. Additionally, stock-based compensation expense is added back and interest income is deducted in the calculation of consolidated EBITDA. Certain other nonrecurring noncash items, if they occur, can affect the calculation of consolidated EBITDA.
In accordance with the amended Credit Agreement, the Corporation adjusted consolidated EBITDA to add back any integration or similar costs or expenses related to the TXI business combination incurred in any period prior to the second anniversary of the closing of the TXI business combination, not to exceed $70,000,000.
At March 31, 2016, the Corporation’s ratio of consolidated debt to consolidated EBITDA, as defined, for the trailing-twelve months EBITDA was 2.09 times and was calculated as follows:
|
|
April 1, 2015 to |
|
|
|
|
March 31, 2016 |
|
|
|
|
(Dollars in thousands) |
|
|
Earnings from continuing operations attributable to Martin Marietta |
|
$ |
327,661 |
|
Add back: |
|
|
|
|
Interest expense |
|
|
76,991 |
|
Income tax expense |
|
|
145,286 |
|
Depreciation, depletion and amortization expense |
|
|
262,485 |
|
Stock-based compensation expense |
|
|
17,910 |
|
Acquisition-related expenses, net, related to the TXI acquisition |
|
|
20,616 |
|
Deduct: |
|
|
|
|
Interest income |
|
|
(549 |
) |
Consolidated EBITDA, as defined |
|
$ |
850,400 |
|
Consolidated debt, including debt for which the Corporation is a co-borrower, at March 31, 2016 |
|
$ |
1,777,064 |
|
Consolidated debt to consolidated EBITDA, as defined, at March 31, 2016 for the trailing-twelve months EBITDA |
|
2.09x |
|
The Trade Receivable Facility contains a cross-default provision to the Corporation’s other debt agreements. In the event of a default on the Ratio, the lenders can terminate the Credit Agreement and Trade Receivable Facility and declare any
Page 37 of 46
MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
FORM 10-Q
For the Quarter Ended March 31, 2016
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
First Quarter Ended March 31, 2016
(Continued)
outstanding ba lances as immediately due. Outstanding amounts on the Trade Receivable Facility have been classified as a current liability on the Corporation’s consolidated balance sheet.
On April 5, 2016, the Corporation repaid the $30,000,000 outstanding on the Revolving Facility.
Cash on hand, along with the Corporation’s projected internal cash flows and availability of financing resources, including its access to debt and equity capital markets, is expected to continue to be sufficient to provide the capital resources necessary to support anticipated operating needs, cover debt service requirements, meet capital expenditures and discretionary investment needs, fund certain acquisition opportunities that may arise and allow for payment of dividends for the foreseeable future. At March 31, 2016, the Corporation had $407 million of unused borrowing capacity under its Revolving Facility and Trade Receivable Facility, subject to complying with the related leverage covenant. The Revolving Facility expires on November 29, 2018 and the Trade Receivable Facility expires on September 30, 2016.
The Corporation may be required to obtain financing to fund certain strategic acquisitions, if any such opportunities arise, or to refinance outstanding debt. Any strategic acquisition of size for cash would likely require an appropriate balance of newly-issued equity with debt in order to maintain a composite investment-grade credit rating. Furthermore, the Corporation is exposed to the credit markets, through the interest cost related to its variable-rate debt, which included borrowings under its Term Loan Facility at March 31, 2016. The Corporation is currently rated by three credit rating agencies; two of those agencies’ credit ratings are investment-grade level and the third agency’s credit rating is one level below investment grade. The Corporation’s composite credit rating remains at investment-grade level, which facilitates obtaining financing at lower rates than noninvestment-grade ratings.
TRENDS AND RISKS
The Corporation outlined the risks associated with its business in its Annual Report on Form 10-K for the year ended December 31, 2015. Management continues to evaluate its exposure to all operating risks on an ongoing basis.
OUTLOOK
The Corporation is encouraged by positive trends in the markets it serves and its ability to execute its strategic business plans. Notably:
|
· |
For the public sector, modest growth is expected in 2016 as new monies begin to flow into the system, particularly in the second half of the year. Additionally, state initiatives to finance infrastructure projects, including support from TIFIA ( Transportation Infrastructure Finance and Innovation Act), are expected to grow and continue to play an expanded role in public-sector activity. |
|
· |
Nonresidential construction is expected to increase in both the heavy industrial and commercial sectors. The Dodge Momentum Index is near its highest level since 2009 and signals continued growth. Additionally, energy-related economic activity, including follow-on public and private construction activities in its primary markets, will be mixed with overall strength in large downstream construction projects more than offsetting declines in shale exploration-related volumes. |
Page 38 of 46
MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
FORM 10-Q
For the Quarter Ended March 31, 2016
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
First Quarter Ended March 31, 2016
(Continued)
OTHER MATTERS
If you are interested in Martin Marietta stock, management recommends that, at a minimum, you read the Corporation’s current annual report and Forms 10-K, 10-Q and 8-K reports to the Securities and Exchange Commission (SEC) over the past year. The Corporation’s recent proxy statement for the annual meeting of shareholders also contains important information. These and other materials that have been filed with the SEC are accessible through the Corporation’s website at www.martinmarietta.com and are also available at the SEC’s website at www.sec.gov. You may also write or call the Corporation’s Corporate Secretary, who will provide copies of such reports.
Investors are cautioned that all statements in this Form 10-Q that relate to the future involve risks and uncertainties, and are based on assumptions that the Corporation believes in good faith are reasonable but which may be materially different from actual results. Forward-looking statements give the investor management’s expectations or forecasts of future events. You can identify these statements by the fact that they do not relate only to historical or current facts. They may use words such as "anticipate," "expect," "should be," "believe," “will”, and other words of similar meaning in connection with future events or future operating or financial performance. Any or all of management’s forward-looking statements here and in other publications may turn out to be wrong.
Factors that the Corporation currently believes could cause actual results to differ materially from the forward-looking statements in this Form 10-Q include, but are not limited to, the performance of the United States economy and the resolution and impact of the debt ceiling and sequestration issues; widespread decline in aggregates pricing; the history of both cement and ready mixed concrete being subject to significant changes in supply, demand and price; the termination, capping and/or reduction or suspension of the federal and/or state gasoline tax(es) or other revenue related to infrastructure construction; the level and timing of federal and state transportation funding, most particularly in Texas, North Carolina, Iowa, Colorado and Georgia; the ability of states and/or other entities to finance approved projects either with tax revenues or alternative financing structures; levels of construction spending in the markets the Corporation serves; a reduction in defense spending, and the subsequent impact on construction activity on or near military bases; a decline in the commercial component of the nonresidential construction market, notably office and retail space; a further slowdown in energy-related drilling activity, particularly in Texas; a slowdown in residential construction recovery; a reduction in construction activity and related shipments due to a decline in funding under the domestic farm bill; unfavorable weather conditions, particularly Atlantic Ocean hurricane activity, the late start to spring or the early onset of winter and the impact of a drought or excessive rainfall in the markets served by the Corporation; the volatility of fuel costs, particularly diesel fuel, and the impact on the cost of other consumables, namely steel, explosives, tires and conveyor belts, and with respect to the Specialty Products business, natural gas; continued increases in the cost of other repair and supply parts; unexpected equipment failures, unscheduled maintenance, industrial accident or other prolonged and/or significant disruption to cement production facilities; increasing governmental regulation, including environmental laws; transportation availability, notably the availability of railcars and locomotive power to move trains to supply the Corporation’s Texas, Florida and Gulf Coast markets; increased transportation costs, including increases from higher passed-through energy and other costs to comply with tightening regulations as well as higher volumes of rail and water shipments; availability of trucks and licensed drivers for transport of the Corporation’s materials, particularly in areas with significant energy-related activity, such as Texas and Colorado;
Page 39 of 46
MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
FORM 10-Q
For the Quarter Ended March 31, 2016
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
First Quarter Ended March 31, 2016
(Continued)
availability and cost of construction equipment in the United States; weakening in the steel industry markets served by the Corporation ’s dolomitic lime products; proper functioning of information technology and automated operating systems to manage or support operations; inflation and its effect on both production and interest costs; ability to successfully integrate acquisitions quickly and in a cost-effective manner and achieve anticipated profitability to maintain compliance with the Corporation’s leverage ratio debt covenant; changes in tax laws, the interpretation of such laws and/or administrative practices that would increase the C orporation’s tax rate; violation of the Corporation’s debt covenant if price and/or volumes return to previous levels of instability; downward pressure on the Corporation’s common stock price and its impact on goodwill impairment evaluations; reduction of the Corporation’s credit rating to non-investment grade resulting from strategic acquisitions; and other risk factors listed from time to time found in the Corporation’s filings with the SEC. Other factors besides those listed here may also adversely aff ect the Corporation, and may be material to the Corporation. The Corporation assumes no obligation to update any such forward-looking statements.
INVESTOR ACCESS TO COMPANY FILINGS
Shareholders may obtain, without charge, a copy of Martin Marietta’s Annual Report on Form 10-K, as filed with the Securities and Exchange Commission for the fiscal year ended December 31, 2015, by writing to:
Martin Marietta
Attn: Corporate Secretary
2710 Wycliff Road
Raleigh, North Carolina 27607-3033
Additionally, Martin Marietta’s Annual Report, press releases and filings with the Securities and Exchange Commission, including Forms 10-K, 10-Q, 8-K and 11-K, can generally be accessed via the Corporation’s website. Filings with the Securities and Exchange Commission accessed via the website are available through a link with the Electronic Data Gathering, Analysis, and Retrieval (EDGAR) system. Accordingly, access to such filings is available upon EDGAR placing the related document in its database. Investor relations contact information is as follows:
Telephone: (919) 510-4776
Website address: www.martinmarietta.com
Information included on the Corporation’s website is not incorporated into, or otherwise create a part of, this report.
Page 40 of 46
MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
FORM 10-Q
For the Quarter Ended March 31, 2016
It em 3. Quantitative and Qualitative Disclosures About Market Risk.
The Corporation’s operations are highly dependent upon the interest rate-sensitive construction and steelmaking industries. Consequently, these marketplaces could experience lower levels of economic activity in an environment of rising interest rates or escalating costs.
Management has considered the current economic environment and its potential impact to the Corporation’s business. Demand for aggregates products, particularly in the infrastructure construction market, is affected by federal and state budget and deficit issues. Further, delays or cancellations of capital projects in the nonresidential and residential construction markets could occur if companies and consumers are unable to obtain financing for construction projects or if consumer confidence continues to be eroded by economic uncertainty.
Demand in the residential construction market is affected by interest rates. The Federal Reserve kept the federal funds rate near zero percent during the three months ended March 31, 2016, unchanged since 2008. The residential construction market accounted for 17% of the Corporation’s aggregates product line shipments in 2015.
Aside from these inherent risks from within its operations, the Corporation’s earnings are also affected by changes in short-term interest rates. However, rising interest rates are not necessarily predictive of weaker operating results. In fact, since 2007, the Corporation’s profitability increased when interest rates rose, based on the last twelve months quarterly historical net income regression versus a 10-year U.S. government bond. In essence, the Corporation’s underlying business generally serves as a natural hedge to rising interest rates.
Variable-Rate Borrowing Facilities. At March 31, 2016, the Corporation had a $600 million Credit Agreement, comprised of a $350 million Revolving Facility and $250 million Term Loan Facility, and a $250 million Trade Receivable Facility. Borrowings under these facilities bear interest at a variable interest rate. A hypothetical 100-basis-point increase in interest rates on borrowings of $407 million, which was the collective outstanding balance at March 31, 2016, would increase interest expense by $4.1 million on an annual basis.
Pension Expense. The Corporation’s results of operations are affected by its pension expense. Assumptions that affect pension expense include the discount rate and, for the defined benefit pension plans only, the expected long-term rate of return on assets. Therefore, the Corporation has interest rate risk associated with these factors. The impact of hypothetical changes in these assumptions on the Corporation’s annual pension expense is discussed in the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2015.
Energy Costs . Energy costs, including diesel fuel, natural gas, coal and liquid asphalt, represent significant production costs of the Corporation. The Corporation entered into a fixed price arrangement, which expires December 31, 2016, for approximately 40% of its diesel fuel to reduce its diesel fuel price risk. The Magnesia Specialties business has fixed price agreements covering half of its 2016 coal requirements and the cement business has fixed pricing agreements on 100% of its 2016 coal requirements. A hypothetical 10% change in the Corporation’s energy prices in 2016 as compared with 2015, assuming constant volumes, would change 2016 energy expense by $25.7 million. However, the impact would be partially offset by the change in the amount capitalized into inventory standards.
Page 41 of 46
MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
FORM 10-Q
For the Quarter Ended March 31, 2016
(Continued)
Commodity risk. Cement is a commodity and competition is based principally on price, which is highly sensitive to changes in supply and demand. Prices are often subject to material changes in response to relatively minor fluctuations in supply and demand, general economic conditions and other market conditions beyond the Corporation’s control. Increases in the production capacity of industry parti cipants or increases in cement imports tend to create an oversupply of such products leading to an imbalance between supply and demand, which can have a negative impact on product prices. There can be no assurance that prices for products sold will not dec line in the future or that such declines will not have a material adverse effect on the Corporation’s business, financial condition and results of operations. Based on forecasted net sales for the Cement business for full-year 2016 of $ 310 million to $ 325 million , a hypothetical 10% change in sales price would impact net sales by $ 3 1 million to $ 32.5 million .
Item 4. Controls and Procedures
As of March 31, 2016, an evaluation was performed under the supervision and with the participation of the Corporation’s management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and the operation of the Corporation’s disclosure controls and procedures. Based on that evaluation, the Corporation’s management, including the Chief Executive Officer and Chief Financial Officer, concluded that the Corporation’s disclosure controls and procedures were effective as of March 31, 2016. There were no changes in the Corporation’s internal control over financial reporting during the most recently completed fiscal quarter that materially affected, or are reasonably likely to materially affect, the Corporation’s internal control over financial reporting.
Page 42 of 46
MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
FORM 10-Q
For the Quarter Ended March 31, 2016
PART II- OTHER INFORMATION
Reference is made to Part I . Item 3. Legal Proceedings of the Martin Marietta Annual Report on Form 10-K for the year ended December 31, 2015.
Reference is made to Part I. Item 1A. Risk Factors and Forward-Looking Statements of the Martin Marietta Annual Report on Form 10-K for the year ended December 31, 2015.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds .
ISSUER PURCHASES OF EQUITY SECURITIES
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Total Number of Shares |
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Maximum Number of |
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||
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Purchased as Part of |
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Shares that May Yet |
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Total Number of |
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Average Price |
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Publicly Announced |
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be Purchased Under |
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||||
Period |
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Shares Purchased |
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Paid per Share |
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Plans or Programs |
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the Plans or Programs |
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||||
January 1, 2016 - January 31, 2016 |
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— |
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$ |
— |
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— |
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16,714,620 |
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February 1, 2016 - February 29, 2016 |
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479,000 |
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$ |
140.57 |
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|
|
479,000 |
|
|
|
16,235,620 |
|
March 1, 2016 - March 31, 2016 |
|
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549,000 |
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|
$ |
150.44 |
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|
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549,000 |
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15,686,620 |
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Reference is made to the press release dated February 10, 2015 for the December 31, 2014 fourth-quarter and full-year results and announcement of the share repurchase program. The Corporation’s Board of Directors authorized a maximum of 20 million shares to be repurchased under the program. The program does not have an expiration date.
Item 4. Mine Safety Disclosures.
The information concerning mine safety violations or other regulatory matters required by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K (17 CFR 229.104) is included in Exhibit 95 to this Quarterly Report on Form 10-Q.
Page 43 of 46
MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
FORM 10-Q
For the Quarter Ended March 31, 2016
PART II- OTHER INFORMATION
(Continued)
Exhibit No. |
|
Document |
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10.01 |
Form of Restricted Stock Unit Award Agreement under the Martin Marietta Materials, Inc. Amended and Restated Stock-Based Award Plan |
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|
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10.02 |
Form of Performance Share Unit Award Agreement under the Martin Marietta Materials, Inc. Amended and Restated Stock-Based Award Plan |
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|
|
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31.01 |
|
Certification dated May 5, 2016 of Chief Executive Officer pursuant to Securities and Exchange Act of 1934 rule 13a-14 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
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|
|
31.02 |
|
Certification dated May 5, 2016 of Chief Financial Officer pursuant to Securities and Exchange Act of 1934 rule 13a-14 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
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|
|
32.01 |
|
Written Statement dated May 5, 2016 of Chief Executive Officer required by 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
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|
|
32.02 |
|
Written Statement dated May 5, 2016 of Chief Financial Officer required by 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
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|
|
95 |
|
Mine Safety Disclosures |
|
|
|
101.INS |
|
XBRL Instance Document |
|
|
|
101.SCH |
|
XBRL Taxonomy Extension Schema Document |
|
|
|
101.CAL |
|
XBRL Taxonomy Extension Calculation Linkbase Document |
|
|
|
101.LAB |
|
XBRL Taxonomy Extension Label Linkbase Document |
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|
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101.PRE |
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XBRL Taxonomy Extension Presentation Linkbase Document |
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101.DEF |
|
XBRL Taxonomy Extension Definition Linkbase |
Page 44 of 46
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
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MARTIN MARIETTA MATERIALS, INC. |
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(Registrant) |
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Date: May 5, 2016 |
By: |
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/s/ Anne H. Lloyd |
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Anne H. Lloyd |
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Executive Vice President and |
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Chief Financial Officer |
Page 45 of 46
MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
FORM 10-Q
For the Quarter Ended March 31, 2016
Exhibit No. |
|
Document |
|
|
|
10.01 |
Form of Restricted Stock Unit Award Agreement under the Martin Marietta Materials, Inc. Amended and Restated Stock-Based Award Plan |
|
|
|
|
10.02 |
Form of Performance Share Unit Award Agreement under the Martin Marietta Materials, Inc. Amended and Restated Stock-Based Award Plan |
|
|
|
|
31.01 |
|
Certification dated May 5, 2016 of Chief Executive Officer pursuant to Securities and Exchange Act of 1934 rule 13a-14 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
|
|
|
31.02 |
|
Certification dated May 5, 2016 of Chief Financial Officer pursuant to Securities and Exchange Act of 1934 rule 13a-14 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
|
|
|
32.01 |
|
Written Statement dated May 5, 2016 of Chief Executive Officer required by 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
|
|
|
32.02 |
|
Written Statement dated May 5, 2016 of Chief Financial Officer required by 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
|
|
|
95 |
|
Mine Safety Disclosures |
|
|
|
101.INS |
|
XBRL Instance Document |
|
|
|
101.SCH |
|
XBRL Taxonomy Extension Schema Document |
|
|
|
101.CAL |
|
XBRL Taxonomy Extension Calculation Linkbase Document |
|
|
|
101.LAB |
|
XBRL Taxonomy Extension Label Linkbase Document |
|
|
|
101.PRE |
|
XBRL Taxonomy Extension Presentation Linkbase Document |
|
|
|
101.DEF |
|
XBRL Taxonomy Extension Definition Linkbase |
Page 46 of 46
EXHIBIT 10.01
MARTIN MARIETTA MATERIALS, INC.
RESTRICTED STOCK UNIT AWARD AGREEMENT
THIS RESTRICTED STOCK UNIT AWARD AGREEMENT (the “Award Agreement”), made as of ____________, between Martin Marietta Materials, Inc., a North Carolina corporation (the “Corporation”), and _____________________ (the “Employee”).
1. |
GRANT |
Pursuant to the Martin Marietta Materials, Inc. Amended and Restated Stock-Based Award Plan (the “Plan”), the Corporation hereby grants the Employee ____________ Restricted Stock Units on the terms and conditions contained in this Award Agreement, and subject to the terms and conditions of the Plan. The term “Restricted Stock Unit” or “Unit(s)” as used in this Award Agreement refers only to the Restricted Stock Units awarded to the Employee under this Award Agreement.
2. |
GRANT DATE |
The Grant Date is ______________.
3. |
RESTRICTION PERIOD |
Subject to the terms and conditions hereof and of the Plan, the restriction period begins on the Grant Date and ends on ____________ (such date, the “Vesting Date” and such period, the “Restriction Period”).
4. |
AWARD PAYOUT |
Unless forfeited or converted and paid earlier as provided in Section 7 or Section 9 below, the Restricted Stock Units granted hereunder will vest (“Vest”) and be converted into shares of Stock and delivered to the Employee as soon as practicable following the Vesting Date (but in no event later than 60 days following the Vesting Date) provided that the Employee is employed by the Corporation on the Vesting Date. The vesting and conversion from Units to Stock will be one Unit for one share of Stock.
5. |
DIVIDEND EQUIVALENTS |
On the date that the Awards Vest, dividend equivalents will be credited to the Employee in an amount equal to the aggregate amount of dividends paid on a share of Stock during the Restriction Period multiplied by the number of Restricted Stock Units. The dividend equivalent amounts shall be paid as soon as practicable following the Vesting Date from the general assets of the Corporation and shall be treated and reported as additional compensation for the year in which payment is made.
This Restricted Stock Unit grant shall not be assignable or transferable by the Employee except by will or the laws of descent and distribution.
7. |
TERMINATION, RETIREMENT, DISABILITY OR DEATH |
|
(a) |
Termination . If the Employee’s employment with the Corporation is terminated prior to the Vesting Date for any reason other than on account of death, Disability or Retirement (in each case, as defined below), whether by the Employee or by the Corporation, and in the latter case whether with or without cause, then the Units will be forfeited upon such termination. |
|
(b) |
Retirement or Disability . If the Employee’s employment with the Corporation is terminated prior to the Vesting Date upon Retirement (as defined below) or as the result of a disability under circumstances entitling the Employee to the commencement of benefits under a long-term disability plan maintained by the Corporation (“Disability”), then the terms of all outstanding Units shall be unaffected by such Retirement or Disability; provided, however, that in the case of the Employee’s termination on account of Retirement or Disability, if the Vesting Date occurs following such termination but before the date which is six months following such termination, to the extent compliance with the requirements of Treas. Reg. § 1.409A-3(i)(2) (or any successor provision) is necessary to avoid the application of an additional tax under Section 409A of the Internal Revenue Code of 1986, as amended (“Section 409A), the date shares of Stock are delivered pursuant to Section 4 shall be postponed until the date that is six months following such termination. “Retirement” is defined as termination of employment with the Corporation after reaching age 62 under circumstances that qualify for normal retirement in accordance with the Martin Marietta Materials, Inc. Pension Plan; provided, that, the Committee may in its sole discretion classify an Employee’s termination of employment as Retirement under other circumstances. |
|
(c) |
Death . If, prior to the Vesting Date, the Employee dies while employed by the Corporation or after termination by reason of Retirement or Disability, then the Restriction Period shall lapse and the Vesting Period shall be accelerated and all outstanding Units shall be converted into shares of Stock and delivered to the Employee’s estate or beneficiary. |
|
(d) |
Committee Negative Discretion . The Committee may in its sole discretion decide to reduce or eliminate any amount otherwise payable with respect to Units under Sections 7(b) or 7(c). |
2
8. |
TAX WITHHOLDING |
At the time Units are converted into shares of Stock and delivered to the Employee, the Employee will recognize ordinary income based on the value of the Stock payable in accordance with Section 4. The Corporation shall withhold applicable taxes as required by law at the time of such Vesting by deducting shares of Stock from the payment to satisfy the obligation prior to the delivery of the certificates for shares of Stock. Withholding will be at the minimum rates prescribed by law; therefore, the Employee may owe additional taxes as a result of the distribution. The Employee may not request tax to be withheld at greater than the minimum rate. If the Employee terminates employment on account of Disability or Retirement and the Units are not forfeited, the Corporation may require the Employee to pay to the Corporation or withhold from the Employee’s compensation, by canceling Units or otherwise, an amount equal to satisfy the obligation to withhold federal employment taxes as required by law.
9. |
CHANGE IN CONTROL |
In the event of a Change in Control, the Restriction Period of all outstanding Units shall lapse and:
|
(a) |
if such Change in Control is a “change in the ownership or effective control” of the Corporation, or “in the ownership of a substantial portion of the assets of” the Corporation within the meaning of Section 409A(a)(2)(A)(v) of the Code, then, the Vesting Date shall be accelerated, all outstanding Units shall convert to shares of Stock and such shares will be distributed no later than 15 days following the date of such Change in Control; or |
|
(b) |
if such Change in Control is not a “change in the ownership or effective control” of the Corporation, or “in the ownership of a substantial portion of the assets of” the Corporation within the meaning of Section 409A(a)(2)(A)(v) of the Code, then, all outstanding Units shall vest and cease to be forfeitable (but the date shares of Stock are delivered pursuant to Section 4 shall not be accelerated) and all outstanding Units shall convert to shares of Stock and be distributed no later than 15 days following the regularly scheduled Vesting Date, without regard to the Employee’s employment status (or changes thereto) following such Change in Control. |
10. |
AMENDMENT AND TERMINATION OF PLAN OR AWARDS |
As provided in Section 7 of the Plan, subject to certain limitations contained within Section 7, the Board of Directors may at any time amend, suspend or discontinue the Plan and the Committee may at any time alter or amend all Award Agreements under the Plan. Notwithstanding Section 7 of the Plan, no such amendment, suspension or discontinuance of the Plan or alteration or amendment of this Award Agreement shall accelerate any distribution under the Plan or, except with the Employee’s express written consent, adversely affect any Restricted Stock Unit granted under this Award Agreement; provided, however, that the Board of Directors or the Committee may amend the Plan or this Award Agreement to the extent it deems appropriate to cause this Agreement or the Units hereunder to comply with Section 409A of the Code (“Section 409A”) (including the distribution requirements thereunder) or be exempt from Section 409A or the tax penalty under Section 409A(a)(1)(B). If the Plan and the Award Agreement are terminated in a manner consistent with the requirements of Treas. Reg. §
3
1.409A-3(j)(4)(ix) , the Board of Directors may, in its sole discretion, accelerate the conversion of Units to shares of Stock and immediately distribute such shares of Stock to the Employee.
11. |
EXECUTION OF AWARD AGREEMENT |
No Restricted Stock Unit granted under this Award Agreement is distributable nor is this Award Agreement enforceable until this Award Agreement has been fully executed by the Corporation and the Employee. By executing this Award Agreement, the Employee shall be deemed to have accepted and consented to any action taken under the Plan by the Committee, the Board of Directors or their delegates.
12. |
MISCELLANEOUS |
|
(a) |
Nothing contained in the Award Agreement confers on the Employee the rights of a shareholder with respect to this Restricted Stock Unit award during the Restriction Period and before the Employee becomes the holder of record of the shares of Stock payable. |
|
(b) |
For purposes of this Award Agreement, the Employee will be considered to be in the employ of the Corporation during an approved leave of absence unless otherwise provided in an agreement between the Employee and the Corporation. |
|
(c) |
Nothing contained in this Award Agreement or in any Restricted Stock Unit granted hereunder shall confer upon any Employee any right of continued employment by the Corporation, express or implied, nor limit in any way the right of the Corporation to terminate the Employee’s employment at any time. |
|
(d) |
Except as provided under Section 6 herein, neither these Units nor any of the rights or obligations hereunder shall be assigned or delegated by either party hereto. |
|
(e) |
Capitalized terms used but not defined in this Award Agreement shall have the meanings assigned to such terms in the Plan. |
|
(f) |
To the extent there is a conflict between the terms of the Plan and this Award Agreement, the terms of the Plan shall govern. |
4
13. |
NOTICES |
Notices and all other communications provided for in this Award Agreement shall be in writing and shall be deemed to have been duly given when personally delivered or when mailed by overnight mail courier service, postage prepaid, addressed as follows:
If to the Employee, to the most recent address
on file with the Corporation.
If to the Corporation, to:
Martin Marietta Materials, Inc.
2710 Wycliff Road
Raleigh, NC 27607
Fax: (919) 783-4535
Attn: Corporate Secretary
or to such other address or such other person as the Employee or the Corporation shall designate in writing in accordance with this Section 13, except that notices regarding changes in notices shall be effective only upon receipt.
14. |
GOVERNING LAW |
This Award Agreement shall be governed by the laws of the State of North Carolina.
IN WITNESS WHEREOF, the Corporation has caused this Award Agreement to be executed and the Employee has hereunto set his hand as of the day and year first above written.
MARTIN MARIETTA MATERIALS, INC.
|
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By: |
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/s/ Roselyn Bar |
|
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Roselyn Bar |
|
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|
|
Executive Vice President, General Counsel and Corporate Secretary |
EMPLOYEE
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By: |
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(Employee’s Signature) |
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5
Exhibit 10.02
MARTIN MARIETTA MATERIALS, INC.
FORM OF PERFORMANCE SHARE UNIT AWARD AGREEMENT
THIS PERFORMANCE SHARE UNIT AWARD AGREEMENT, made as of [_______________] (the “ Award Agreement ”), between Martin Marietta Materials, Inc., a North Carolina corporation (the “ Company ”), _______________________ (the “ Employee ”).
1. |
GRANT |
Pursuant to the Martin Marietta Materials, Inc. Amended and Restated Stock-Based Award Plan (the “ Plan ”), the Company hereby grants the Employee __________ Performance Share Units (the “ Award ”) as the target amount of a performance-based stock unit award on the terms and conditions contained in this Award Agreement, and subject to the terms and conditions of the Plan. Depending on the Company’s performance as set forth in Section 4, the participant may earn zero percent (0%) to two hundred percent (200%) of the target number of Performance Share Units awarded. The term “ Performance Share Unit ” or “ PSU(s) ” as used in this Award Agreement refers only to the Performance Share Units awarded to the Employee under this Award Agreement.
2. |
GRANT DATE |
The Grant Date is [_______________].
3. |
MEASUREMENT PERIOD |
Subject to the terms and conditions hereof and of the Plan, the measurement period begins on [_______________] and ends on [_______________] (the “ Measurement Period ”). Except as otherwise provided in this Award Agreement or the Plan, the PSUs will become vested on December 31, [__________], at the end of the Measurement Period (the “ Vesting Date ”), as described in Section 4.
4. |
PAYMENT OF PERFORMANCE SHARE UNITS |
|
(a) |
Vesting of Award. Unless forfeited or converted and paid earlier as provided in Sections 7 and 9 below, the Performance Share Units granted hereunder will vest (“ Vest ” or “ Vesting ”) based on the achievement of the performance goals specified in Section 4(b) and, other than as provided in Sections 7 and 9 below, provided that the Employee is employed by the Company or an Affiliate on the Vesting Date. |
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determined by the Committee in its sole discretion , and (ii) the Weight applicable to such Measure , as identified in the table below ; provided that achievement below Threshold will result in an Achievement Percentage of 0% for such Measure, and achievement above Maximum will result in an Achievement Percentage of 200% for such Measure. For performance levels falling between the values as shown in the table below , the Achievement Percentage will be determined by interpolation. Payment will be made in S tock. |
[Omitted for filing purposes.]
Percentage of Target PSUs That Vest |
50% |
100% |
200% |
|
Measure |
Weight |
Threshold |
Target |
Maximum |
[Measure 1] |
[___]% |
[______] |
[______] |
[______] |
[Measure 2] |
[___]% |
[_______] |
[______] |
[______] |
[Measure 3] |
[__]% |
[_______] |
[______] |
[______ |
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|
(c) |
Shares Payable. On the Vesting Date, a number of PSUs equal to the target number of PSUs awarded in this Award Agreement multiplied by the Vesting Percentage will Vest and be converted into shares of Stock on a one-for-one basis. The resulting shares of Stock will be delivered to the Employee as soon as practicable following the Vesting Date (but in no event later than 60 days following the Vesting Date). |
|
(d) |
Payment Determination. The Committee may exercise its discretion to reduce the Vesting Percentage (but not below 100%) if the Company’s total shareholder return for the Measurement Period is less than zero (0). |
|
(e) |
Non-Recurring Events. The Committee shall exclude from the performance results any non-recurring expenses or gains/losses, such as acquisition costs. |
5. |
DIVIDEND EQUIVALENTS |
On the date that the Awards Vest, dividend equivalents will be credited to the Employee in an amount equal to the aggregate amount of dividends paid on a share of Stock during the period commencing with the Grant Date and ending on the Vesting Date multiplied by the number of PSUs that vest in accordance with this Award Agreement. The dividend equivalent amounts shall be paid as soon as practicable following the Vesting Date (but in no event later than 60 days following the Vesting Date) from the general assets of the Corporation and shall be treated and reported as additional compensation for the year in which payment is made.
6. |
TRANSFERABLE ONLY UPON DEATH |
This Performance Share Unit grant shall not be assignable or transferable by the Employee except by will or the laws of descent and distribution.
2
|
(a) |
Termination . If the Employee’s employment with the Company is terminated prior to the Vesting Date for any reason other than on account of death, Disability or Retirement (in each case, as defined below), whether by the Employee or by the Company, and in the latter case whether with or without cause, then the Performance Share Units will be forfeited upon such termination. |
|
(b) |
Retirement or Disability . If the Employee’s employment with the Company is terminated prior to the Vesting Date upon Retirement (as defined below) or as the result of a disability under circumstances entitling the Employee to the commencement of benefits under a long-term disability plan maintained by the Company (“ Disability ”), then the terms of all outstanding PSUs will be unaffected by such Retirement or Disability and the PSUs will be paid in accordance with Section 4 above. “ Retirement ” is defined as termination of employment with the Corporation after reaching age 62 under circumstances that qualify for normal retirement in accordance with the Martin Marietta Materials, Inc. Pension Plan; provided, that, the Committee may in its sole discretion classify an Employee’s termination of employment as Retirement under other circumstances. |
|
(c) |
Death . If, prior to the Vesting Date, the Employee dies while employed by the Company or after termination by reason of Retirement or Disability, then the terms of all outstanding PSUs will be unaffected by such death and the PSUs will be paid in accordance with Section 4 above to the Employee’s estate or beneficiary. |
|
(c) |
Committee Negative Discretion . The Committee may in its sole discretion decide to reduce or eliminate any amount otherwise payable with respect to an award under Sections 7(b) or 7(c). |
8. |
TAX WITHHOLDING |
At the time PSUs are converted into shares of Stock and delivered to the Employee, the Employee will recognize ordinary income based on the value of the Stock payable in accordance with Section 4. The Company shall withhold applicable taxes as required by law at the time of such Vesting by deducting shares of Stock from the payment to satisfy the obligation prior to the delivery of the certificates for shares of Stock. Withholding will be at the minimum rates prescribed by law; therefore, the Employee may owe additional taxes as a result of the distribution. The Employee may not request tax to be withheld at greater than the minimum rate. If the Employee terminates employment on account of Disability or Retirement and the PSUs are not forfeited, the Company may require the Employee to pay to the Company or withhold from the Employee’s compensation, by canceling PSUs or otherwise, an amount equal to satisfy the obligation to withhold federal employment taxes as required by law.
9. |
CHANGE IN CONTROL |
In the event of a Change in Control, all outstanding PSUs will be deemed non-forfeitable and the Vesting Percentage will be the greater of (1) the Vesting Percentage as determined by the performance during the Measurement Period up to the day before the effective date of the Change in Control, as
3
determined by the Committee in its sole discretion and (2) the target Vesting Percentage (100%). The PSUs will be distributed in shares of Stock or the consideration received in exchange for shares of Stock in connection with such Change in Control no later than 15 days following the date of such C hange in C ontrol.
10. |
AMENDMENT AND TERMINATION OF PLAN OR AWARDS |
As provided in Section 7 of the Plan, subject to certain limitations contained within Section 7, the Board of Directors may at any time amend, suspend or discontinue the Plan and the Committee may at any time alter or amend all Award Agreements under the Plan. Notwithstanding Section 7 of the Plan, no such amendment, suspension or discontinuance of the Plan or alteration or amendment of this Award Agreement shall accelerate any distribution under the Plan or, except with the Employee’s express written consent, adversely affect any PSU granted under this Award Agreement; provided, however, that the Board of Directors or the Committee may amend the Plan or this Award Agreement to the extent it deems appropriate to cause this Award Agreement or the PSUs hereunder to comply with Section 409A of the Code (including the distribution requirements thereunder) or be exempt from Section 409A of the Code or the tax penalty under Section 409A(a)(1)(B) of the Code. If the Plan and the Award Agreement are terminated in a manner consistent with the requirements of Treas. Reg. § 1.409A-3(j)(4)(ix), the Board of Directors may, in its sole discretion, accelerate the conversion of PSUs to shares of Stock and immediately distribute such shares of Stock to the Employee.
11. |
EXECUTION OF AWARD AGREEMENT |
No PSU granted under this Award Agreement is distributable nor is this Award Agreement enforceable until this Award Agreement has been fully executed by the Company and the Employee. By executing this Award Agreement, the Employee shall be deemed to have accepted and consented to any action taken under the Plan by the Committee, the Board of Directors or their delegates.
12. |
MISCELLANEOUS |
|
(a) |
Nothing contained in the Award Agreement confers on the Employee the rights of a shareholder with respect to this Performance Share Unit award prior to Vesting and before the Employee becomes the holder of record of the shares of Stock payable. Except as provided in Section 9 of the Plan, no adjustment will be made for dividends or other rights, and grants of dividend equivalents pursuant to Section 5 will not be considered to be a grant of any other shareholder right. |
|
(b) |
For purposes of this Award Agreement, the Employee will be considered to be in the employ of the Company during an approved leave of absence unless otherwise provided in an agreement between the Employee and the Company. |
|
(c) |
Nothing contained in this Award Agreement or in any Performance Share Unit granted hereunder shall confer upon any Employee any right of continued employment by the Company, expressed or implied, nor limit in any way the right of the Company to terminate the Employee’s employment at any time. |
|
(d) |
Except as provided under Section 6 herein, neither these PSUs nor any of the rights or obligations hereunder shall be assigned or delegated by either party hereto. |
4
|
(e) |
Capitalized terms used but not defined in this Award Agreement shall have the meanings assigned to such terms in the Plan. |
|
(f) |
To the extent there is a conflict between the terms of the Plan and this Award Agreement, the terms of the Plan shall govern. |
13. |
NOTICES |
Notices and all other communications provided for in this Award Agreement shall be in writing and shall be deemed to have been duly given when personally delivered or when mailed by overnight mail courier service, postage prepaid, addressed as follows:
If to the Employee, to the most recent
address on file with the Company.
If to the Company, to:
Martin Marietta Materials, Inc.
2710 Wycliff Road
Raleigh, NC 27607
Fax: (919) 783-4535
Attn: Corporate Secretary
or to such other address or such other person as the Employee or the Company shall designate in writing in accordance with this Section 13, except that notices regarding changes in notices shall be effective only upon receipt.
14. |
GOVERNING LAW |
This Award Agreement shall be governed by the laws of the State of North Carolina.
IN WITNESS WHEREOF, the Company has caused this Award Agreement to be executed and the Employee has hereunto set his hand as of the day and year first above written.
MARTIN MARIETTA MATERIALS, INC.
|
|
By: |
|
/s/ Roselyn Bar |
|
|
|
|
Roselyn Bar |
|
|
|
|
Executive Vice President, General Counsel and Corporate Secretary |
EMPLOYEE
|
|
By: |
|
|
|
|
|
|
(Employee’s Signature) |
5
EXHIBIT 31.01
CERTIFICATION PURSUANT TO SECURITIES AND EXCHANGE ACT OF 1934 RULE 13a-14 AS ADOPTED PURSUANT TO SECTION 302 OF SARBANES-OXLEY ACT OF 2002
I, C. Howard Nye, certify that:
|
1. |
I have reviewed this Form 10-Q of Martin Marietta Materials, Inc.; |
|
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
|
3. |
Based on my knowledge, the consolidated financial statements, and other financial information included in this report, fairly present in all material respects the consolidated financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
|
4. |
The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
|
a. |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
|
b. |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with generally accepted accounting principles; |
|
c. |
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
|
d. |
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
|
5. |
The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
|
a. |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
|
b. |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: May 5, 2016 |
|
By: |
|
/s/ C. Howard Nye |
|
|
|
|
C. Howard Nye |
|
|
|
|
Chairman, President and |
|
|
|
|
Chief Executive Officer |
EXHIBIT 31.02
CERTIFICATION PURSUANT TO SECURITIES AND EXCHANGE ACT OF 1934 RULE 13a-14 AS ADOPTED PURSUANT TO SECTION 302 OF SARBANES-OXLEY ACT OF 2002
I, Anne H. Lloyd, certify that:
|
1. |
I have reviewed this Form 10-Q of Martin Marietta Materials, Inc.; |
|
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
|
3. |
Based on my knowledge, the consolidated financial statements, and other financial information included in this report, fairly present in all material respects the consolidated financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
|
4. |
The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
|
a. |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
|
b. |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with generally accepted accounting principles; |
|
c. |
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
|
d. |
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
|
5. |
The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
|
a. |
a ll significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
|
b. |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: May 5, 2016 |
|
By: |
|
/s/ Anne H. Lloyd |
|
|
|
|
Anne H. Lloyd |
|
|
|
|
Executive Vice President and |
|
|
|
|
Chief Financial Officer |
|
|
|
|
|
EXHIBIT 32.01
Written Statement Pursuant to 18 U.S.C. 1350,
As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
In connection with the Quarterly Report on Form 10-Q for the period ended March 31, 2016 (the “Report”) of Martin Marietta Materials, Inc. (the “Registrant”), as filed with the Securities and Exchange Commission on the date hereof, I, C. Howard Nye, the Chief Executive Officer of the Registrant, certify, to the best of my knowledge, that:
|
(1) |
the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
|
(2) |
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant. |
/s/ C. Howard Nye |
C. Howard Nye |
Chairman, President and |
Chief Executive Officer |
Dated: May 5, 2016
A signed original of this written statement required by Section 906 has been provided to Martin Marietta Materials, Inc. and will be retained by Martin Marietta Materials, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.
EXHIBIT 32.02
Written Statement Pursuant to 18 U.S.C. 1350,
As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
In connection with the Quarterly Report on Form 10-Q for the period ended March 31, 2016 (the “Report”) of Martin Marietta Materials, Inc. (the “Registrant”), as filed with the Securities and Exchange Commission on the date hereof, I, Anne H. Lloyd, the Chief Financial Officer of the Registrant, certify, to the best of my knowledge, that:
|
(1) |
the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
|
(2) |
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant. |
/s/ Anne H. Lloyd |
Anne H. Lloyd |
Executive Vice President and |
Chief Financial Officer |
Dated: May 5, 2016
A signed original of this written statement required by Section 906 has been provided to Martin Marietta Materials, Inc. and will be retained by Martin Marietta Materials, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.
EXHIBIT 95
MINE SAFETY DISCLOSURES
The operation of the Corporation’s domestic aggregates quarries and mines is subject to regulation by the federal Mine Safety and Health Administration (MSHA) under the Federal Mine Safety and Health Act of 1977 (the “Mine Act”). MSHA inspects the Corporation’s quarries and mines on a regular basis and issues various citations and orders when it believes a violation has occurred under the Mine Act. Whenever MSHA issues a citation or order, it also generally proposes a civil penalty, or fine, related to the alleged violation. Citations or orders may be contested and appealed, and as part of that process, are often reduced in severity and amount, and are sometimes dismissed.
Under the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”), the Corporation is required to present information regarding certain mining safety and health citations which MSHA has issued with respect to its aggregates mining operations in its periodic reports filed with the Securities and Exchange Commission (SEC). In evaluating this information, consideration should be given to factors such as: (i) the number of citations and orders will vary depending on the size of the quarry or mine and types of operations (underground or surface), (ii) the number of citations issued will vary from inspector to inspector and location to location, and (iii) citations and orders can be contested and appealed, and in that process, may be reduced in severity and amount, and are sometimes dismissed.
The Corporation has provided the information below in response to the SEC’s rules and regulations issued under the provisions of the Dodd-Frank Act. The disclosures reflect U.S. mining operations only, as the requirements of the Dodd-Frank Act and the SEC rules and regulations thereunder do not apply to the Corporation’s quarries and mines operated outside the United States.
The Corporation presents the following items regarding certain mining safety and health matters for the three months ended March 31, 2016:
|
• |
Total number of violations of mandatory health or safety standards that could significantly and substantially contribute to the cause and effect of a mine safety or health hazard under section 104 of the Mine Act for which the Corporation has received a citation from MSHA (hereinafter, “Section 104 S&S Citations”). If MSHA determines that a violation of a mandatory health or safety standard is likely to result in a reasonably serious injury or illness under the unique circumstance contributed to by the violation, MSHA will classify the violation as a “significant and substantial” violation (commonly referred to as a “S&S” violation). MSHA inspectors will classify each citation or order written as a “S&S” violation or not. |
|
• |
Total number of citations and orders for unwarrantable failure of the mine operator to comply with mandatory health or safety standards under Section 104(d) of the Mine Act (hereinafter, “Section 104(d) Citations and Orders”). These violations are similar to those described above, but the standard is that the violation could significantly and substantially contribute to the cause and effect of a safety or health hazard, but the conditions do not cause imminent danger, and the MSHA inspector finds that the violation is caused by an unwarranted failure of the operator to comply with the health and safety standards. |
|
• |
Total number of flagrant violations under section 110(b)(2) of the Mine Act (hereinafter, “Section 110(b)(2) Violations”). These violations are penalty violations issued if MSHA determines that violations are “flagrant”, for which civil penalties may be assessed. A “flagrant” violation means a reckless or repeated failure to make reasonable efforts to eliminate a known violation of a mandatory health or safety standard that substantially and proximately caused, or reasonably could have been expected to cause, death or serious bodily injury. |
|
• |
Total number of imminent danger orders issued under section 107(a) of the Mine Act (hereinafter, “Section 107(a) Orders”). These orders are issued for situations in which MSHA determines an imminent danger exists in the quarry or mine and results in orders of immediate withdrawal of all persons (except certain authorized persons) from the area of the quarry or mine affected by its condition until the imminent danger and the underlying conditions causing the imminent danger no longer exist. |
|
• |
Total dollar value of proposed assessments from MSHA under the Mine Act. These are the amounts of proposed assessments issued by MSHA with each citation or order for the time period covered by the reports. Penalties are assessed by MSHA according to a formula that considers a number of factors, including the mine operator’s history, size, negligence, gravity of the violation, good faith in trying to correct the violation promptly, and the effect of the penalty on the operator’s ability to continue in business. |
|
• |
Total number of mining-related fatalities. Mines subject to the Mine Act are required to report all fatalities occurring at their facilities unless the fatality is determined to be “non-chargeable” to the mining industry. The final rules of the SEC require disclosure of mining-related fatalities at mines subject to the Mine Act. Only fatalities determined by MSHA not to be mining-related may be excluded.
|
|
• |
Receipt of written notice from MSHA of a pattern (or a potential to have such a pattern) of violations of mandatory health or safety standards that are of such nature as could have significantly and substantially contributed to the cause and effect of other mine health or safety hazards under Section 104(e) of the Mine Act. If MSHA determines that a mine has a “pattern” of these types of violations, or the potential to have such a pattern, MSHA is required to notify the mine operator of the existence of such a thing. |
|
• |
Legal actions before the Federal Mine Safety and Health Review Commissions pending as of the last day of period. |
|
• |
Legal actions before the Federal Mine Safety and Health Review Commissions initiated during period. |
|
• |
Legal actions before the Federal Mine Safety and Health Review Commissions resolved during period. |
The Federal Mine Safety and Health Review Commission (the “Commission”) is an independent adjudicative agency that provides administrative trial and appellate review of legal disputes arising under the Mine Act. The cases may involve, among other questions, challenges by operators to citations, orders and penalties they have received from MSHA, or complaints of discrimination by miners under Section 105 of the Mine Act. Appendix 1 shows, for each of the Corporation’s quarries and mines identified, as of March 31, 2016, the number of legal actions pending before the Commission, along with the number of legal actions initiated before the Commission during the quarter as well as resolved during the quarter. In addition, Appendix 1 includes a footnote to the column for legal actions before the Commission pending as of the last day of the period, which footnote breaks down that total number of legal actions pending by categories according to the type of proceeding in accordance with various categories established by the Procedural Rules of the Commission.
Appendix 1
Location |
MSHA ID |
Section 104 S&S Citations (#) |
Section 104(b) Orders (#) |
Section 104(d) Citations and Orders (#) |
Section 110(b)(2) Violations (#) |
Section 107(a) Orders (#) |
Total Dollar Value of MSHA Assessment/$ Proposed |
|
Total Number of Mining Related Fatalities (#) |
Received Notice of Pattern of Violation Under Section 104(e) (yes/no) |
Received Notice of Potential to have Pattern under Section 104(e) (yes/no) |
Legal Actions Pending as of Last Day of Period (#)* |
Legal Actions Instituted During Period (#) |
Legal Actions Resolved During Period (#) |
|
Alexander Quarry |
BN5 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
American Stone Quarry |
3100189 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Anderson Creek |
4402963 |
0 |
0 |
0 |
0 |
0 |
$ |
200 |
|
0 |
no |
no |
0 |
0 |
0 |
Arrowood Quarry |
3100059 |
1 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Asheboro Quarry |
3100066 |
1 |
0 |
0 |
0 |
0 |
$ |
263 |
|
0 |
no |
no |
0 |
0 |
0 |
Bakers Quarry |
3100071 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Belgrade Quarry |
3100064 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Benson Quarry |
3101979 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Berkeley Quarry |
3800072 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Bessemer City Quarry |
3101105 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Black Ankle Quarry |
3102220 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Bonds Gravel Pit |
3101963 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Boonsboro Quarry |
1800024 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Burlington Quarry |
3100042 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Caldwell Quarry |
3101869 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Carmel Church Quarry |
4405633 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Castle Hayne Quarry |
3100063 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Cayce Quarry |
3800016 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Central Rock Quarry |
3100050 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Charlotte Quarry |
3100057 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Chesterfield Quarry |
3800682 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Clarks Quarry |
3102009 |
0 |
0 |
0 |
0 |
0 |
$ |
150 |
|
0 |
no |
no |
0 |
0 |
0 |
Cumberland Quarry |
3102237 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Denver |
3101971 |
0 |
0 |
0 |
0 |
0 |
$ |
200 |
|
0 |
no |
no |
0 |
0 |
0 |
Appendix 1
4400045 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
|
East Alamance |
3102021 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Fountain Quarry |
3100065 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Franklin Quarry |
3102130 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Fuquay Quarry |
3102055 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Garner Quarry |
3100072 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Georgetown ll Quarry |
3800525 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Hickory Quarry |
3100043 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Hicone Quarry |
3102088 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Jamestown Quarry |
3100051 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Kannapolis Quarry |
3100070 |
0 |
0 |
0 |
0 |
0 |
$ |
217 |
|
0 |
no |
no |
0 |
0 |
0 |
Kings Mountain Quarry |
3100047 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Lemon Springs Quarry |
3101104 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Loamy Sand and Gravel |
3800721 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Maiden Quarry |
3102125 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Mallard Creek Quarry |
3102006 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Matthews Quarry |
3102084 |
1 |
0 |
0 |
0 |
0 |
$ |
2,333 |
|
0 |
no |
no |
0 |
0 |
0 |
Midlothian Quarry |
4403767 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
North Columbia Quarry |
3800146 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Onslow Quarry |
3102120 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Pinesburg |
1800021 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Pomona Quarry |
3100052 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Raleigh Durham Quarry |
3101941 |
1 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Red Hill Quarry |
4400072 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Reidsville Quarry |
3100068 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Rock Hill Quarry |
3800026 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
2 |
0 |
0 |
Rocky Point Quarry |
3101956 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Rocky River Quarry |
3102033 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Appendix 1
3102038 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
|
Siler City Quarry |
3100044 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Statesville Quarry |
3100055 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Thomasville Quarry |
3101475 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Wilson Quarry |
3102230 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Woodleaf Quarry |
3100069 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
(45) North Indianapolis SURFACE |
1200002 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Apple Grove |
3301676 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Belmont Sand |
1201911 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Blue Rock |
3300016 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Burning Springs |
4608862 |
3 |
0 |
0 |
0 |
0 |
$ |
100 |
|
0 |
no |
no |
0 |
0 |
0 |
Carmel SandG |
1202124 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Cedarville |
3304072 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Cloverdale |
1201744 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Cook Road |
3304534 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
E-Town SandG |
3304279 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Fairborn Gravel |
3301388 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Fairfield |
3301396 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Franklin Gravel |
3302940 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Hamilton Gravel |
3301394 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Harrison |
3301395 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Kentucky Ave Mine |
1201762 |
1 |
0 |
0 |
0 |
0 |
$ |
2,127 |
|
0 |
no |
no |
2 |
2 |
1 |
Kokomo Mine |
1202105 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
1 |
Kokomo Sand |
1202203 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Kokomo Stone |
1200142 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Lynchburg Quarry |
3304281 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Noblesville SandG |
1201994 |
0 |
0 |
0 |
0 |
0 |
$ |
300 |
|
0 |
no |
no |
0 |
0 |
0 |
Noblesville Stone |
1202176 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
2 |
2 |
1 |
North Indianapolis |
1201993 |
0 |
0 |
0 |
0 |
0 |
$ |
100 |
|
0 |
no |
no |
0 |
0 |
2 |
Ohio Recycle |
3304394 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Petersburg |
1516895 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Phillipsburg |
3300006 |
0 |
0 |
0 |
0 |
0 |
$ |
117 |
|
0 |
no |
no |
0 |
0 |
0 |
Appendix 1
3301587 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
|
Shamrock SG |
3304011 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Troy Gravel |
3301678 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Waverly Sand |
1202038 |
0 |
0 |
0 |
0 |
0 |
$ |
100 |
|
0 |
no |
no |
0 |
0 |
0 |
Xenia |
3301393 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Alabaster Quarry Co19 |
103068 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Appling Quarry |
901083 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Auburn Al Quarry |
100006 |
0 |
0 |
0 |
0 |
0 |
$ |
200 |
|
0 |
no |
no |
0 |
0 |
0 |
Auburn GA Quarry |
900436 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Augusta Quarry-GA |
900065 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Birmingham Shop |
102096 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Cabbage Grove Quarry |
800008 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Camak Quarry |
900075 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Chattanooga Quarry |
4003159 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Forsyth Quarry |
901035 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Jefferson Quarry |
901106 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Junction City Quarry |
901029 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Lithonia Quarry |
900023 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Maylene Quarry |
100634 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Morgan Co Quarry |
901126 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Newton Quarry |
900899 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
ONeal Quarry Co19 |
103076 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Paulding Quarry |
901107 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Perry Quarry |
801083 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Red Oak Quarry |
900069 |
0 |
0 |
0 |
0 |
0 |
$ |
100 |
|
0 |
no |
no |
0 |
0 |
0 |
R-S Sand and Gravel |
2200381 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Ruby Quarry |
900074 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Shorter Sand and Gravel |
102852 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Six Mile Quarry |
901144 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Tyrone Quarry |
900306 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Vance Quarry Co19 |
103022 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Warrenton Quarry |
900580 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Appendix 1
1302037 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
|
Alden Portable Plant 1 |
1302031 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Alden Portable Plant 2 |
1302033 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Alden Portable Wash |
1302122 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Alden Quarry - Shop |
1300228 |
1 |
0 |
0 |
0 |
0 |
$ |
338 |
|
0 |
no |
no |
0 |
0 |
0 |
Alden Shop |
1302320 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Ames Mine |
1300014 |
1 |
0 |
0 |
0 |
0 |
$ |
1,895 |
|
0 |
no |
no |
1 |
0 |
0 |
Beaver Lake Quarry |
4503347 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Cedar Rapids Quarry |
1300122 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Des Moines Portable |
1300150 |
1 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Des Moines Shop |
1300932 |
1 |
0 |
0 |
0 |
0 |
$ |
385 |
|
0 |
no |
no |
0 |
0 |
0 |
Dubois Quarry |
2501046 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Durham Mine |
1301225 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Earlham Quarry |
1302123 |
1 |
0 |
0 |
0 |
0 |
$ |
- |
|
1 |
no |
no |
0 |
0 |
0 |
Environmental Crew (Plant 854) |
1302126 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Ferguson Quarry |
1300124 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Fort Calhoun |
2500006 |
3 |
0 |
0 |
0 |
0 |
$ |
1,286 |
|
0 |
no |
no |
0 |
0 |
0 |
Fort Dodge Mine |
1300032 |
0 |
0 |
0 |
0 |
0 |
$ |
300 |
|
0 |
no |
no |
0 |
0 |
1 |
Greenwood |
2300141 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Iowa Grading |
1302316 |
2 |
0 |
0 |
0 |
0 |
$ |
1,201 |
|
0 |
no |
no |
0 |
0 |
0 |
LeGrand Portable |
1302317 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Linn County Sand |
1302208 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Malcom Mine |
1300112 |
1 |
0 |
0 |
0 |
0 |
$ |
995 |
|
0 |
no |
no |
0 |
0 |
0 |
Marshalltown Sand |
1300718 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Moore Quarry |
1302188 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
New Harvey Sand |
1301778 |
0 |
0 |
0 |
0 |
0 |
$ |
100 |
|
0 |
no |
no |
0 |
0 |
0 |
Northwest Division OH |
A2354 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Ottawa Quarry |
1401590 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Pacific Quarry |
4500844 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Parkville Mine |
2301883 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Pederson Quarry |
1302192 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Appendix 1
1302315 |
2 |
0 |
0 |
0 |
0 |
$ |
352 |
|
0 |
no |
no |
0 |
0 |
0 |
|
Randolph Deep Mine |
2302308 |
4 |
0 |
0 |
0 |
0 |
$ |
1,638 |
|
0 |
no |
no |
0 |
0 |
0 |
Reasnor Sand |
1300814 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Saylorville Sand |
1302290 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Springfield Quarry |
2501103 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
St Cloud Quarry |
2100081 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Stamper Mine |
2302232 |
0 |
0 |
0 |
0 |
0 |
$ |
200 |
|
0 |
no |
no |
1 |
1 |
0 |
Sully Mine |
1300063 |
0 |
0 |
0 |
0 |
0 |
$ |
250 |
|
0 |
no |
no |
0 |
0 |
0 |
Sunflower |
1401556 |
2 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Weeping Water Mine |
2500998 |
5 |
0 |
0 |
0 |
1 |
$ |
6,658 |
|
0 |
no |
no |
2 |
1 |
0 |
Yellow Medicine Quarry |
2100033 |
1 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
211 Quarry |
4103829 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Augusta Quarry-KS |
1400126 |
0 |
0 |
0 |
0 |
0 |
$ |
217 |
|
0 |
no |
no |
0 |
0 |
0 |
Beckman Quarry |
4101335 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Bedrock Plant |
4103283 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Bells Savoy SG TXI |
4104019 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Black Rock Quarry |
300011 |
0 |
0 |
0 |
0 |
0 |
$ |
100 |
|
0 |
no |
no |
0 |
0 |
0 |
Black Spur Quarry |
4104159 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Blake Quarry |
1401584 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Bridgeport Stone TXI |
4100007 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Broken Bow SandG |
3400460 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Chico |
4103360 |
0 |
0 |
0 |
0 |
0 |
$ |
324 |
|
0 |
no |
no |
0 |
0 |
0 |
Cobey |
4104140 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Davis |
3401299 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
2 |
0 |
0 |
Garfield SG TXI |
4103909 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Garwood |
4102886 |
0 |
0 |
0 |
0 |
0 |
$ |
200 |
|
0 |
no |
no |
0 |
0 |
0 |
GMS - TXI |
C335 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Hatton Quarry |
301614 |
1 |
0 |
0 |
0 |
0 |
$ |
224 |
|
0 |
no |
no |
0 |
0 |
0 |
Helotes |
4103137 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Hondo |
4104708 |
1 |
0 |
0 |
0 |
0 |
$ |
190 |
|
0 |
no |
no |
0 |
0 |
0 |
Hondo-1 |
4104090 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Hugo |
3400061 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Idabel |
3400507 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Appendix 1
1601298 |
0 |
0 |
0 |
0 |
0 |
$ |
200 |
|
0 |
no |
no |
0 |
0 |
0 |
|
Jones Mill Quarry |
301586 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Koontz McCombs Pit |
4105048 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Mill Creek |
3401285 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Mill Creek TXI |
3401859 |
3 |
0 |
0 |
0 |
0 |
$ |
602 |
|
0 |
no |
no |
0 |
0 |
0 |
New Braunfels Quarry |
4104264 |
1 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
1 |
0 |
0 |
Perryville Aggregates TXI |
1601417 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Poteet (Sand Plant) |
4101342 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Rio Medina |
4103594 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
S.T. Porter Pit |
4102673 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
San Pedro Quarry |
4101337 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Sawyer |
3401634 |
0 |
0 |
0 |
0 |
0 |
$ |
100 |
|
0 |
no |
no |
0 |
0 |
0 |
Snyder |
3401651 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
South Texas Port No.2 |
4104204 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Tin Top SG TXI |
4102852 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Washita Quarry |
3402049 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Webberville TXI |
4104363 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
1 |
0 |
0 |
Woodworth Aggregates TXI |
1601070 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Northern Portable Plant #3 |
504361 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Northern Portable Plant #19 |
504382 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Cottonwood Sand and Gravel |
504418 |
0 |
0 |
0 |
0 |
0 |
$ |
200 |
|
0 |
no |
no |
0 |
0 |
0 |
Fountain Sand and Gravel |
503821 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Granite Canyon Quarry |
4800018 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Greeley 35th Ready Mix |
503215 |
0 |
0 |
0 |
0 |
0 |
$ |
624 |
|
0 |
no |
no |
0 |
0 |
0 |
Greeley 35th Sand and Gravel |
504613 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Guernsey |
4800004 |
0 |
0 |
0 |
0 |
0 |
$ |
100 |
|
0 |
no |
no |
0 |
0 |
0 |
Appendix 1
504320 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
|
Mamm Creek Portable 15 |
504647 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Milford |
4202177 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Mustang Quarry |
2602484 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Parkdale Quarry |
504635 |
7 |
0 |
0 |
0 |
0 |
$ |
1,763 |
|
0 |
no |
no |
0 |
0 |
0 |
Portable Crushing |
503984 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Portable Plant 10 |
503984 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Portable Recycle 18 |
501057 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Portable Recycle 2 |
504360 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Portable Recycle 21 |
504520 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Powers Portable |
504531 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Red Canyon Quarry |
504136 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Riverbend Sand and Gravel |
504841 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Sievers Portable 19 - 20 |
504531 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Spanish Springs Co 2 |
2600803 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Spec Agg Quarry |
500860 |
0 |
0 |
0 |
0 |
0 |
$ |
100 |
|
0 |
no |
no |
0 |
0 |
0 |
Table Mountain Quarry |
404847 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Taft Sand and Gravel |
504526 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Taft Shop |
504735 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
California District |
400011 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Hunter Cement TXI |
4102820 |
2 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
5 |
Midlothian Cement TXI |
4100071 |
3 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Riverside Cement - OG Distrib |
400011 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Riverside CMT - Crestmore TXI |
400010 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Riverside CMT - Oro Grande TXI |
400011 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Salisbury Shop |
3101235 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
North Troy |
3401905 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
Appendix 1
3401949 |
0 |
0 |
0 |
0 |
0 |
$ |
- |
|
0 |
no |
no |
0 |
0 |
0 |
|
Woodville |
3300156 |
1 |
0 |
0 |
0 |
0 |
$ |
2,193 |
|
0 |
no |
no |
0 |
0 |
0 |
TOTALS: |
|
52 |
0 |
0 |
0 |
1 |
$ |
29,242 |
|
1 |
|
|
14 |
6 |
11 |
*Of the 14 legal actions pending on March 31, 2016, 10 were contests of citations or orders referenced in Subpart B of CFR Part 2700, which includes contests of citations and orders issued under Section 104 of the Mine Act and contests of imminent danger orders under Section 107 of the Mine Act and four were contests of proposed penalties referenced in Subpart C of 29 CFR Part 2700, which are administrative proceedings before the Commission challenging a civil penalty that MSHA has proposed for the violation contained in a citation or order.