Achieved Record Consolidated and Aggregates Revenues and Gross Profit
Growing Product Demand Experienced Enterprise-Wide;
Organic Aggregates Shipments Increased 6 Percent
Successfully Implemented Mid-Year Price Increases in Targeted Markets
Magnesia Specialties Delivered Double-Digit Growth in Revenues and Gross Profit
Lehigh West Region Acquisition Completed on
Third-Quarter Highlights
Quarter Ended | ||||||||
(In millions, except per share) | 2021 | 2020 | ||||||
Products and services revenues 1 | $ | 1,462.7 | $ | 1,240.7 | ||||
Building Materials business | $ | 1,390.8 | $ | 1,185.5 | ||||
Magnesia Specialties | $ | 71.9 | $ | 55.2 | ||||
Total revenues 2 | $ | 1,557.3 | $ | 1,321.4 | ||||
Gross profit | $ | 441.9 | $ | 404.5 | ||||
Adjusted gross profit 3 | $ | 450.0 | $ | 404.5 | ||||
Earnings from operations 7 | $ | 356.9 | $ | 400.6 | ||||
Adjusted earnings from operations 4 | $ | 372.4 | $ | 400.6 | ||||
Net earnings attributable to Martin Marietta 7 | $ | 254.6 | $ | 294.4 | ||||
Adjusted EBITDA 5, 7 | $ | 490.0 | $ | 501.7 | ||||
Earnings per diluted share 7 | $ | 4.07 | $ | 4.71 | ||||
Adjusted earnings per diluted share 6 | $ | 4.25 | $ | 4.71 |
- Products and services revenues include the sales of aggregates, cement, ready mixed concrete, asphalt and Magnesia Specialties products, and paving services to customers, and exclude related freight revenues.
- Total revenues include the sales of products and services to customers (net of any discounts or allowances) and freight revenues.
- 2021 adjusted gross profit excludes an increase in cost of revenues from the impact of selling acquired inventory after its markup to fair value as part of acquisition accounting. See Appendix to this earnings release for a reconciliation to reported gross profit under generally accepted accounting principles (GAAP).
- 2021 adjusted earnings from operations exclude an increase in cost of revenues from the impact of selling acquired inventory after its markup to fair value as part of acquisition accounting and acquisition-related expenses. See Appendix to this earnings release for a reconciliation to reported earnings from operations under GAAP.
- Earnings before interest; income taxes; depreciation, depletion and amortization; the earnings/loss from nonconsolidated equity affiliates; acquisition-related expenses; and an increase in cost of revenues from the impact of selling acquired inventory after its markup to fair value as part of acquisition accounting, or Adjusted EBITDA, is a non-GAAP financial measure. See Appendix to this earnings release for a reconciliation to net earnings attributable to Martin Marietta.
- 2021 adjusted earnings per diluted share excludes charges for the impact of selling acquired inventory after its markup to fair value as part of acquisition accounting and acquisition-related expenses. See appendix to this earnings release for a reconciliation to reported earnings per diluted share under GAAP.
- 2020 earnings from operations, net earnings attributable to Martin Marietta, Adjusted EBITDA and earnings per diluted share included
$69.9 million ,$54.1 million ,$69.9 million and$0.87 per diluted share, respectively, of gains on surplus land sales and divested assets. These gains were nonrecurring in nature.
“Martin Marietta is well positioned to capitalize on the secular demand trends across our geographic footprint, including single-family housing strength, expanded federal- and state-level infrastructure investment and light nonresidential recovery. These trends should support growing construction activity and contribute to attractive pricing acceleration for heavy-side building materials. Our overall confidence is augmented by our newly completed acquisition of
Third-Quarter Operating and Financial Results
(All comparisons are versus the prior-year third quarter unless noted otherwise)
Building Materials Business
The
The
Aggregates
Third-quarter aggregates shipments, including shipments from acquired operations, grew 10.2 percent. Acquired operations have selling prices below the Company’s average, which limited pricing growth to 1.2 percent.
On an organic basis, aggregates shipments increased 6.0 percent while pricing increased 2.2 percent, reflecting a higher percentage of lower-priced base stone shipments and opportunistic sales of low-priced excess fill material.
By segment:
- East Group total shipments increased 10.1 percent and benefitted from robust construction activity across all three primary end-use markets and shipments from the recently acquired
Minnesota -based operations. Pricing increased 0.4 percent, inclusive of acquisitions. On a mix-adjusted basis, East Group pricing grew 2.5 percent. West Group shipments increased 10.4 percent from strong underlying demand in bothTexas andColorado , improving energy-sector activity and shipments from a recent bolt-on acquisition inTexas . Pricing increased 2.8 percent.
Third-quarter aggregates product gross margin decreased 220 basis points to 34.2 percent, driven primarily by
Cement
Cement shipments increased 4.1 percent, benefitting from robust construction activity throughout the Texas Triangle and improving demand for specialty oil-well cement products. Pricing grew 8.4 percent, or 6.6 percent on a mix-adjusted basis, reflecting periodic price increases.
Cement product gross margin declined 250 basis points to 37.7 percent as higher energy and raw materials costs outpaced shipment and pricing gains.
Downstream businesses
Ready mixed concrete shipments increased 23.2 percent, or 20.5 percent organically, reflecting the healthy
Total asphalt shipments increased 115.9 percent as incremental volume from the acquired
Magnesia Specialties Business
Magnesia Specialties product revenues increased 30.3 percent to a record
Consolidated
For comparative purposes, third-quarter 2020 other operating income, net, included
Cash Generation, Capital Allocation and Liquidity
Cash provided by operating activities for the nine months ended
Cash paid for property, plant and equipment additions for the nine months ended
In
The Company extended the maturity of its
Through dividend payments and share repurchases, the Company returned
As of
Full-Year 2021 Guidance
Full-year 2021 guidance has been updated to reflect the Company’s year-to-date performance, continuing energy-related cost headwinds, and expected contributions from acquisitions closed in the fourth quarter.
2021 GUIDANCE | ||||||||
(Dollars in Millions) | Low * | High * | ||||||
Consolidated | ||||||||
Products and services revenues 1 | $ | 4,955 | $ | 5,050 | ||||
Gross profit 2 | $ | 1,330 | $ | 1,380 | ||||
Adjusted gross profit 3 | $ | 1,350 | $ | 1,400 | ||||
Selling, general and administrative expenses (SG&A) | $ | 340 | $ | 345 | ||||
Interest expense | $ | 140 | $ | 145 | ||||
Estimated tax rate (excluding discrete events) | 20 | % | 22 | % | ||||
Net earnings attributable to Martin Marietta 2 | $ | 680 | $ | 735 | ||||
Adjusted EBITDA 4 | $ | 1,500 | $ | 1,550 | ||||
Capital expenditures | $ | 475 | $ | 525 | ||||
Building Materials Business | ||||||||
Aggregates | ||||||||
Organic volume % growth 5 | 1.0 | % | 3.0 | % | ||||
Total volume % growth 6 | 4.5 | % | 6.5 | % | ||||
Organic average selling price per ton (ASP) % growth 7 | 2.5 | % | 3.5 | % | ||||
Total ASP growth 7 | 2.0 | % | 3.0 | % | ||||
Products and services revenues | $ | 2,985 | $ | 3,015 | ||||
Gross profit 2 | $ | 905 | $ | 930 | ||||
Adjusted gross profit 3 | $ | 920 | $ | 945 | ||||
Cement | ||||||||
Products and services revenues | $ | 525 | $ | 545 | ||||
Gross profit 2 | $ | 160 | $ | 170 | ||||
Products and services revenues | $ | 1,580 | $ | 1,625 | ||||
Gross profit 2 | $ | 160 | $ | 170 | ||||
Adjusted gross profit 3 | $ | 165 | $ | 175 | ||||
Magnesia Specialties Business | ||||||||
Products and services revenues | $ | 260 | $ | 270 | ||||
Gross profit | $ | 105 | $ | 110 |
* Guidance range represents the low end and high end of the respective line items provided above.
- Consolidated products and services revenues exclude
$395 million to$405 million related to estimated interproduct sales and exclude freight revenues. - Ranges do not include estimates for the increase in cost of revenues from the impact of selling acquired inventory after its markup to fair value as part of acquisition accounting for the
Lehigh West Region transaction. - Adjusted gross profit is a non-GAAP financial measure and, in each case, excludes an increase in cost of revenues from the impact of selling acquired inventory after its markup to fair value as part of acquisition accounting.
- Adjusted EBITDA is a non-GAAP financial measure. See Appendix to this earnings release for a reconciliation to net earnings attributable to Martin Marietta.
- Organic volume % growth range is for organic aggregates shipments, inclusive of internal tons, and is in comparison with organic 2020 shipments of 185.7 million tons.
- Total volume % growth range is for total aggregates shipments, inclusive of internal tons, and is in comparison with total 2020 shipments of 186.5 million tons.
- ASP % growth range is in comparison with 2020 ASP of
$14.77 per ton.
Preliminary View of 2022
The Company’s preliminary view of 2022 anticipates organic aggregates shipments to increase in the low-to-mid-single-digits as third-party labor and logistics challenges continue to impact an otherwise robust product demand environment. Martin Marietta remains confident that favorable pricing dynamics will continue, supported by the Company’s locally-driven pricing strategy, and anticipates mid-to-high-single-digit growth in organic aggregates pricing in 2022.
Non-GAAP Financial Information
This earnings release contains financial measures that have not been prepared in accordance with generally accepted accounting principles in
Conference Call Information
The Company will discuss its third-quarter 2021 earnings results on a conference call and an online webcast today (
About Martin Marietta
Martin Marietta, a member of the S&P 500 Index, is an American-based company and a leading supplier of building materials, including aggregates, cement, ready mixed concrete and asphalt. Through a network of operations spanning 30 states,
Investor Contact:
Vice President, Investor Relations
(919) 783-4691
Suzanne.Osberg@martinmarietta.com
MLM-E.
If you are interested in Martin Marietta stock, management recommends that, at a minimum, you read the Company’s current annual report and Forms 10-K, 10-Q and 8-K reports to the
Investors are cautioned that all statements in this release that relate to the future involve risks and uncertainties, and are based on assumptions that the Company believes in good faith are reasonable but which may be materially different from actual results. These statements, which are forward-looking statements under the Private Securities Litigation Reform Act of 1995, give the investor the Company’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 “guidance”, “anticipate”, “expect”, “should”, “believe”, “will”, and other words of similar meaning in connection with future events or future operating or financial performance. Any or all of the Company’s forward-looking statements here and in other publications may turn out to be wrong.
Third-quarter results and trends described in this release may not necessarily be indicative of the Company’s future performance. The Company’s outlook is subject to various risks and uncertainties, and is based on assumptions that the Company believes in good faith are reasonable but which may be materially different from actual results. Factors that the Company currently believes could cause actual results to differ materially from the forward-looking statements in this release (including the outlook) include, but are not limited to: the ability of the Company to face challenges, including those posed by the COVID-19 pandemic and implementation of any such related response plans; the fluctuations in COVID-19 cases in
You should consider these forward-looking statements in light of risk factors discussed in Martin Marietta’s Annual Report on Form 10-K for the year ended
Unaudited Statements of Earnings
Three Months Ended | Nine Months Ended | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
(In Millions, Except Per Share Data) | ||||||||||||||||
Products and services revenues | $ | 1,462.7 | $ | 1,240.7 | $ | 3,679.9 | $ | 3,321.2 | ||||||||
Freight revenues | 94.6 | 80.7 | 237.7 | 229.1 | ||||||||||||
Total Revenues | 1,557.3 | 1,321.4 | 3,917.6 | 3,550.3 | ||||||||||||
Cost of revenues - products and services | 1,021.0 | 836.1 | 2,676.9 | 2,390.9 | ||||||||||||
Cost of revenues - freight | 94.4 | 80.8 | 239.0 | 232.0 | ||||||||||||
Total Cost of Revenues | 1,115.4 | 916.9 | 2,915.9 | 2,622.9 | ||||||||||||
Gross Profit | 441.9 | 404.5 | 1,001.7 | 927.4 | ||||||||||||
Selling, general & administrative expenses | 86.0 | 71.1 | 248.2 | 221.0 | ||||||||||||
Acquisition-related expenses | 7.4 | 0.4 | 18.0 | 1.2 | ||||||||||||
Other operating income, net | (8.4 | ) | (67.6 | ) | (28.2 | ) | (59.6 | ) | ||||||||
Earnings from Operations | 356.9 | 400.6 | 763.7 | 764.8 | ||||||||||||
Interest expense | 44.3 | 28.7 | 99.9 | 89.7 | ||||||||||||
Other nonoperating income, net | (5.6 | ) | (4.0 | ) | (23.8 | ) | (5.9 | ) | ||||||||
Earnings before income tax expense | 318.2 | 375.9 | 687.6 | 681.0 | ||||||||||||
Income tax expense | 63.6 | 81.5 | 141.7 | 143.0 | ||||||||||||
Consolidated net earnings | 254.6 | 294.4 | 545.9 | 538.0 | ||||||||||||
Less: Net earnings attributable to noncontrolling interests | — | — | 0.2 | — | ||||||||||||
Net Earnings Attributable to | $ | 254.6 | $ | 294.4 | $ | 545.7 | $ | 538.0 | ||||||||
Net Earnings Attributable to | ||||||||||||||||
Per Common Share: | ||||||||||||||||
Basic attributable to common shareholders | $ | 4.08 | $ | 4.72 | $ | 8.74 | $ | 8.63 | ||||||||
Diluted attributable to common shareholders | $ | 4.07 | $ | 4.71 | $ | 8.72 | $ | 8.61 | ||||||||
Weighted-Average Common Shares Outstanding: | ||||||||||||||||
Basic | 62.4 | 62.3 | 62.4 | 62.3 | ||||||||||||
Diluted | 62.6 | 62.4 | 62.6 | 62.4 | ||||||||||||
Dividends Per Common Share | $ | 0.61 | $ | 0.57 | $ | 1.75 | $ | 1.67 |
Unaudited Financial Highlights | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
(Dollars in Millions) | ||||||||||||||||
Total revenues: | ||||||||||||||||
Building Materials business: | ||||||||||||||||
East Group | $ | 684.1 | $ | 549.3 | $ | 1,714.4 | $ | 1,465.9 | ||||||||
794.8 | 711.2 | 1,978.2 | 1,904.2 | |||||||||||||
Total | 1,478.9 | 1,260.5 | 3,692.6 | 3,370.1 | ||||||||||||
Magnesia Specialties | 78.4 | 60.9 | 225.0 | 180.2 | ||||||||||||
Total | $ | 1,557.3 | $ | 1,321.4 | $ | 3,917.6 | $ | 3,550.3 | ||||||||
Gross profit: | ||||||||||||||||
Building Materials business: | ||||||||||||||||
East Group | $ | 231.6 | $ | 206.3 | $ | 542.1 | $ | 459.5 | ||||||||
182.8 | 177.5 | 377.9 | 401.5 | |||||||||||||
Total | 414.4 | 383.8 | 920.0 | 861.0 | ||||||||||||
Magnesia Specialties | 27.0 | 20.0 | 81.4 | 62.1 | ||||||||||||
Corporate | 0.5 | 0.7 | 0.3 | 4.3 | ||||||||||||
Total | $ | 441.9 | $ | 404.5 | $ | 1,001.7 | $ | 927.4 | ||||||||
Selling, general and administrative expenses: | ||||||||||||||||
Building Materials business: | ||||||||||||||||
East Group | $ | 26.5 | $ | 24.9 | $ | 77.0 | $ | 74.0 | ||||||||
34.2 | 34.2 | 101.1 | 100.2 | |||||||||||||
Total | 60.7 | 59.1 | 178.1 | 174.2 | ||||||||||||
Magnesia Specialties | 3.8 | 3.6 | 11.1 | 10.4 | ||||||||||||
Corporate | 21.5 | 8.4 | 59.0 | 36.4 | ||||||||||||
Total | $ | 86.0 | $ | 71.1 | $ | 248.2 | $ | 221.0 | ||||||||
Earnings (Loss) from operations: | ||||||||||||||||
Building Materials business: | ||||||||||||||||
East Group | $ | 205.8 | $ | 181.4 | $ | 465.3 | $ | 386.1 | ||||||||
150.6 | 212.3 | 284.2 | 368.2 | |||||||||||||
Total | 356.4 | 393.7 | 749.5 | 754.3 | ||||||||||||
Magnesia Specialties | 23.1 | 16.4 | 69.8 | 51.2 | ||||||||||||
Corporate | (22.6 | ) | (9.5 | ) | (55.6 | ) | (40.7 | ) | ||||||||
Total | $ | 356.9 | $ | 400.6 | $ | 763.7 | $ | 764.8 |
Unaudited Financial Highlights (Continued) | ||||||||||||||||||||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||||||||||||||||||||||
Amount | % of Revenues | Amount | % of Revenues | Amount | % of Revenues | Amount | % of Revenues | |||||||||||||||||||||||||||||
(Dollars in Millions) | ||||||||||||||||||||||||||||||||||||
Total revenues: | ||||||||||||||||||||||||||||||||||||
Building Materials business: | ||||||||||||||||||||||||||||||||||||
Products and services: | ||||||||||||||||||||||||||||||||||||
Aggregates | $ | 857.1 | $ | 766.9 | $ | 2,231.5 | $ | 2,092.1 | ||||||||||||||||||||||||||||
Cement | 132.3 | 115.6 | 358.4 | 331.7 | ||||||||||||||||||||||||||||||||
Ready mixed concrete | 320.8 | 254.6 | 824.5 | 689.4 | ||||||||||||||||||||||||||||||||
Asphalt and paving | 195.9 | 129.8 | 343.5 | 254.9 | ||||||||||||||||||||||||||||||||
Less: Interproduct sales | (115.3 | ) | (81.4 | ) | (285.1 | ) | (210.9 | ) | ||||||||||||||||||||||||||||
Products and services | 1,390.8 | 1,185.5 | 3,472.8 | 3,157.2 | ||||||||||||||||||||||||||||||||
Freight | 88.1 | 75.0 | 219.8 | 212.9 | ||||||||||||||||||||||||||||||||
Total business | 1,478.9 | 1,260.5 | 3,692.6 | 3,370.1 | ||||||||||||||||||||||||||||||||
Magnesia Specialties: | ||||||||||||||||||||||||||||||||||||
Products and services | 71.9 | 55.2 | 207.1 | 164.0 | ||||||||||||||||||||||||||||||||
Freight | 6.5 | 5.7 | 17.9 | 16.2 | ||||||||||||||||||||||||||||||||
Total Magnesia Specialties | 78.4 | 60.9 | 225.0 | 180.2 | ||||||||||||||||||||||||||||||||
Consolidated total revenues | $ | 1,557.3 | $ | 1,321.4 | $ | 3,917.6 | $ | 3,550.3 | ||||||||||||||||||||||||||||
Gross profit (loss): | ||||||||||||||||||||||||||||||||||||
Building Materials business: | ||||||||||||||||||||||||||||||||||||
Products and services: | ||||||||||||||||||||||||||||||||||||
Aggregates | $ | 292.9 | 34.2 | % | $ | 279.1 | 36.4 | % | $ | 687.7 | 30.8 | % | $ | 640.4 | 30.6 | % | ||||||||||||||||||||
Cement | 49.9 | 37.7 | % | 46.5 | 40.2 | % | 101.3 | 28.3 | % | 117.2 | 35.3 | % | ||||||||||||||||||||||||
Ready mixed concrete | 31.4 | 9.8 | % | 24.7 | 9.7 | % | 69.9 | 8.5 | % | 56.7 | 8.2 | % | ||||||||||||||||||||||||
Asphalt and paving | 38.9 | 19.9 | % | 32.6 | 25.2 | % | 59.4 | 17.3 | % | 46.4 | 18.2 | % | ||||||||||||||||||||||||
Subtotal | 413.1 | 29.7 | % | 382.9 | 32.3 | % | 918.3 | 26.4 | % | 860.7 | 27.3 | % | ||||||||||||||||||||||||
Freight | 1.3 | NM | 0.9 | NM | 1.7 | NM | 0.3 | NM | ||||||||||||||||||||||||||||
Total business | 414.4 | 28.0 | % | 383.8 | 30.4 | % | 920.0 | 24.9 | % | 861.0 | 25.5 | % | ||||||||||||||||||||||||
Magnesia Specialties: | ||||||||||||||||||||||||||||||||||||
Products and services | 28.1 | 39.0 | % | 21.0 | 38.0 | % | 84.4 | 40.7 | % | 65.3 | 39.8 | % | ||||||||||||||||||||||||
Freight | (1.1 | ) | NM | (1.0 | ) | NM | (3.0 | ) | NM | (3.2 | ) | NM | ||||||||||||||||||||||||
Total Magnesia Specialties | 27.0 | 34.4 | % | 20.0 | 32.8 | % | 81.4 | 36.2 | % | 62.1 | 34.5 | % | ||||||||||||||||||||||||
Corporate | 0.5 | NM | 0.7 | NM | 0.3 | NM | 4.3 | NM | ||||||||||||||||||||||||||||
Consolidated gross profit | $ | 441.9 | 28.4 | % | $ | 404.5 | 30.6 | % | $ | 1,001.7 | 25.6 | % | $ | 927.4 | 26.1 | % |
Balance Sheet Data | ||||||||
2021 | 2020 | |||||||
Unaudited | Audited | |||||||
(In millions) | ||||||||
ASSETS | ||||||||
Cash and cash equivalents | $ | 2,381.4 | $ | 207.3 | ||||
Restricted cash | 1.7 | 97.1 | ||||||
Accounts receivable, net | 801.9 | 575.1 | ||||||
Inventories, net | 717.5 | 709.0 | ||||||
Other current assets | 98.2 | 79.8 | ||||||
Property, plant and equipment, net | 5,610.5 | 5,242.3 | ||||||
Intangible assets, net | 3,397.8 | 2,922.0 | ||||||
Operating lease right-of-use assets, net | 417.8 | 453.0 | ||||||
Other noncurrent assets | 359.4 | 295.2 | ||||||
Total assets | $ | 13,786.2 | $ | 10,580.8 | ||||
LIABILITIES AND EQUITY | ||||||||
Current maturities of long-term debt and short-term facilities | $ | 20.1 | $ | — | ||||
Current liabilities | 581.1 | 499.3 | ||||||
Long-term debt (excluding current maturities) | 5,099.4 | 2,625.8 | ||||||
Other noncurrent liabilities | 1,727.4 | 1,562.4 | ||||||
Total equity | 6,358.2 | 5,893.3 | ||||||
Total liabilities and equity | $ | 13,786.2 | $ | 10,580.8 |
Unaudited Statements of Cash Flows
Nine Months Ended | ||||||||
2021 | 2020 | |||||||
(Dollars in Millions) | ||||||||
Cash Flows from Operating Activities: | ||||||||
Consolidated net earnings | $ | 545.9 | $ | 538.0 | ||||
Adjustments to reconcile consolidated net earnings to net cash provided by operating activities: | ||||||||
Depreciation, depletion and amortization | 320.0 | 292.2 | ||||||
Stock-based compensation expense | 33.0 | 22.4 | ||||||
Gain on divestitures and sales of assets | (26.6 | ) | (71.2 | ) | ||||
Deferred income taxes | 25.7 | 24.8 | ||||||
Other items, net | (8.3 | ) | 0.8 | |||||
Changes in operating assets and liabilities, net of effects of acquisitions and divestitures: | ||||||||
Accounts receivable, net | (218.0 | ) | (104.5 | ) | ||||
Inventories, net | 65.1 | (22.6 | ) | |||||
Accounts payable | 66.9 | (0.8 | ) | |||||
Other assets and liabilities, net | (23.4 | ) | 4.9 | |||||
Net Cash Provided by Operating Activities | 780.3 | 684.0 | ||||||
Cash Flows from Investing Activities: | ||||||||
Additions to property, plant and equipment | (321.3 | ) | (250.8 | ) | ||||
Acquisitions, net of cash acquired | (792.9 | ) | (64.0 | ) | ||||
Proceeds from divestitures and sales of assets | 41.4 | 141.2 | ||||||
Investments in life insurance contracts, net | 13.9 | (12.7 | ) | |||||
Other investing activities, net | — | (5.4 | ) | |||||
(1,058.9 | ) | (191.7 | ) | |||||
Cash Flows from Financing Activities: | ||||||||
Borrowings of debt | 2,896.6 | 628.1 | ||||||
Repayments of debt | (400.0 | ) | (777.0 | ) | ||||
Payments on financing leases | (7.6 | ) | (2.3 | ) | ||||
Debt issuance costs | (6.1 | ) | (2.0 | ) | ||||
Distributions to owners of noncontrolling interest | (0.5 | ) | — | |||||
Repurchases of common stock | — | (50.0 | ) | |||||
Dividends paid | (109.7 | ) | (104.8 | ) | ||||
Proceeds from exercise of stock options | 1.1 | 1.4 | ||||||
Shares withheld for employees' income tax obligations | (16.5 | ) | (13.0 | ) | ||||
Net Cash Provided by (Used for) Financing Activities | 2,357.3 | (319.6 | ) | |||||
Net Increase in Cash, Cash Equivalents and Restricted Cash | 2,078.7 | 172.7 | ||||||
Cash, Cash Equivalents and Restricted Cash, beginning of period | 304.4 | 21.0 | ||||||
Cash, Cash Equivalents and Restricted Cash, end of period | $ | 2,383.1 | $ | 193.7 |
Unaudited Operational Highlights
Three Months Ended | Nine Months Ended | |||||||||||||||
Volume | Pricing | Volume | Pricing | |||||||||||||
Volume/Pricing variance(1) | ||||||||||||||||
East Group | 10.1 | % | 0.4 | % | 6.5 | % | 2.4 | % | ||||||||
10.4 | % | 2.8 | % | 0.0 | % | 1.9 | % | |||||||||
Total aggregates operations(2) | 10.2 | % | 1.2 | % | 4.1 | % | 2.4 | % | ||||||||
Organic aggregates operations(3) | 6.0 | % | 2.2 | % | 2.0 | % | 2.9 | % |
Three Months Ended | Nine Months Ended | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
(Tons in Millions) | (Tons in Millions) | |||||||||||||||
Shipments | ||||||||||||||||
East Group | 37.1 | 33.7 | 95.2 | 89.4 | ||||||||||||
19.9 | 18.1 | 51.8 | 51.8 | |||||||||||||
Total aggregates operations(2) | 57.0 | 51.8 | 147.0 | 141.2 |
(1) Volume/pricing variances reflect the percentage increase from the comparable period in the prior year.
(2) Total aggregates operations include acquisitions from the date of acquisition and divestitures through the date of disposal.
(3) Organic aggregates operations exclude volume and pricing data for acquisitions that have not been included in prior-year operations for the comparable period and divestitures.
Three Months Ended | Nine Months Ended | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
Shipments (in millions) | ||||||||||||||||
Aggregates tons - external customers | 52.0 | 48.1 | 135.2 | 131.9 | ||||||||||||
Internal aggregates tons used in other product lines | 5.0 | 3.7 | 11.8 | 9.3 | ||||||||||||
Total aggregates tons | 57.0 | 51.8 | 147.0 | 141.2 | ||||||||||||
Cement tons - external customers | 0.7 | 0.7 | 1.8 | 2.0 | ||||||||||||
Internal cement tons used in other product lines | 0.4 | 0.3 | 1.1 | 0.9 | ||||||||||||
Total cement tons | 1.1 | 1.0 | 2.9 | 2.9 | ||||||||||||
Ready mixed concrete - cubic yards | 2.7 | 2.2 | 7.2 | 6.1 | ||||||||||||
Asphalt tons - external customers | 2.0 | 0.3 | 3.3 | 0.6 | ||||||||||||
Internal asphalt tons used in road paving business | 0.8 | 1.0 | 1.5 | 2.0 | ||||||||||||
Total asphalt tons | 2.8 | 1.3 | 4.8 | 2.6 | ||||||||||||
Average unit sales price by product line (including internal sales): | ||||||||||||||||
Aggregates (per ton) | $ | 14.93 | $ | 14.75 | $ | 15.08 | $ | 14.73 | ||||||||
Cement (per ton) | $ | 122.91 | $ | 113.41 | $ | 120.29 | $ | 113.83 | ||||||||
Ready mixed concrete (per cubic yard) | $ | 116.75 | $ | 114.15 | $ | 114.59 | $ | 113.75 | ||||||||
Asphalt (per ton) | $ | 48.72 | $ | 49.56 | $ | 48.77 | $ | 47.99 |
Non-GAAP Financial Measures
Earnings before interest; income taxes; depreciation, depletion and amortization expense; the earnings/loss from nonconsolidated equity affiliates; acquisition-related expenses; and the impact of selling acquired inventory after its markup to fair value as part of acquisition accounting (Adjusted EBITDA) is an indicator used by the Company and investors to evaluate the Company’s operating performance from period to period. Adjusted EBITDA is not defined by generally accepted accounting principles and, as such, should not be construed as an alternative to earnings from operations, net earnings or operating cash flow. For further information on Adjusted EBITDA, refer to the Company’s website at www.martinmarietta.com.
A Reconciliation of Net Earnings Attributable to Martin Marietta to Adjusted EBITDA is as follows:
Three Months Ended | Nine Months Ended | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
(Dollars in Millions) | ||||||||||||||||
Net Earnings Attributable to Martin Marietta | $ | 254.6 | $ | 294.4 | $ | 545.7 | $ | 538.0 | ||||||||
Add back: | ||||||||||||||||
Interest expense, net of interest income | 44.2 | 28.6 | 99.6 | 89.3 | ||||||||||||
Income tax expense for controlling interests | 63.6 | 81.5 | 141.7 | 143.0 | ||||||||||||
Depreciation, depletion and amortization and earnings/loss from nonconsolidated equity affiliates | 112.1 | 97.2 | 314.2 | 287.5 | ||||||||||||
Acquisition-related expenses | 7.4 | — | 18.0 | — | ||||||||||||
Impact of selling acquired inventory after markup to fair value as a part of acquisition accounting | 8.1 | — | 15.7 | — | ||||||||||||
Adjusted EBITDA | $ | 490.0 | $ | 501.7 | $ | 1,134.9 | $ | 1,057.8 |
A Reconciliation of the GAAP Measure to 2021
(Dollars in Millions) | ||||||
Net earnings attributable to Martin Marietta | $ | 680.0 | $ | 735.0 | ||
Add back: | ||||||
Interest expense | 145.0 | 140.0 | ||||
Taxes on income | 185.0 | 185.0 | ||||
Depreciation, depletion and amortization expense and noncash earnings/loss from nonconsolidated equity affiliates | 445.0 | 445.0 | ||||
Acquisition-related expenses | 25.0 | 25.0 | ||||
Impact of selling acquired inventory after its markup to fair value as part of acquisition accounting | 20.0 | 20.0 | ||||
Adjusted EBITDA | $ | 1,500.0 | $ | 1,550.0 |
Non-GAAP Financial Measures (Continued)
Adjusted gross profit and adjusted gross margin represent non-GAAP financial measures and exclude the impact of selling acquired inventory after its markup to fair value as part of acquisition accounting. Management presents these measures for investors and analysts to evaluate and forecast the Company’s results, as the impact of selling acquired inventory after its markup to fair value as part of acquisition accounting is nonrecurring.
A Reconciliation of Gross Profit in Accordance with GAAP to Adjusted Gross Profit is as follows:
Three Months Ended | Nine Months Ended | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
(Dollars in Millions) | ||||||||||||||||
Consolidated gross profit in accordance with GAAP | $ | 441.9 | $ | 404.5 | $ | 1,001.7 | $ | 927.4 | ||||||||
Add back: | ||||||||||||||||
Impact of selling acquired inventory after its markup to fair value as part of acquisition accounting | 8.1 | — | 15.7 | — | ||||||||||||
Adjusted consolidated gross profit | $ | 450.0 | $ | 404.5 | $ | 1,017.4 | $ | 927.4 |
A Reconciliation of Aggregates Product Gross Profit in Accordance with GAAP to Adjusted Aggregates Product Gross Profit and Adjusted Aggregates Product Gross Margin is as follows:
Three Months Ended | Nine Months Ended | ||||||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||||||
(Dollars in Millions) | |||||||||||||||||||
Aggregates product gross profit in accordance with GAAP | $ | 292.9 | $ | 279.1 | $ | 687.7 | $ | 640.4 | |||||||||||
Add back: | |||||||||||||||||||
Impact of selling acquired inventory after its markup to fair value as part of acquisition accounting | 5.9 | — | 12.0 | — | |||||||||||||||
Adjusted aggregates product gross profit | $ | 298.8 | $ | 279.1 | $ | 699.7 | $ | 640.4 | |||||||||||
Aggregates products and services revenues | $ | 857.1 | $ | 766.9 | $ | 2,231.5 | $ | 2,092.1 | |||||||||||
Adjusted aggregates product gross margin | 34.9 | % | 36.4 | % | 31.4 | % | 30.6 | % |
Non-GAAP Financial Measures (Continued)
Adjusted earnings from operations and adjusted earnings per diluted share represent non-GAAP financial measures and exclude the impact of selling acquired inventory after its markup to fair value as part of acquisition accounting and acquisition-related expenses. Management presents these measures for investors and analysts to evaluate and forecast the Company’s results, as the impact of selling acquired inventory after its markup to fair value as part of acquisition accounting and acquisition-related expenses are nonrecurring.
A Reconciliation of Consolidated Earnings from Operations in Accordance with GAAP to Adjusted Consolidated Earnings from Operations is as follows:
Three Months Ended | Nine Months Ended | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
(Dollars in Millions) | ||||||||||||||||
Consolidated earnings from operations in accordance with GAAP | $ | 356.9 | $ | 400.6 | $ | 763.7 | $ | 764.8 | ||||||||
Add back: | ||||||||||||||||
Impact of selling acquired inventory after its markup to fair value as part of acquisition accounting | 8.1 | — | 15.7 | — | ||||||||||||
Acquisition-related expenses | 7.4 | — | 18.0 | — | ||||||||||||
Adjusted consolidated earnings from operations | $ | 372.4 | $ | 400.6 | $ | 797.4 | $ | 764.8 |
A Reconciliation of Earnings Per Diluted Share in Accordance with GAAP to Adjusted Earnings Per Diluted Share is as follows:
Three Months Ended | Nine Months Ended | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
Earnings per diluted share in accordance with GAAP | $ | 4.07 | $ | 4.71 | $ | 8.72 | $ | 8.61 | ||||||||
Add back: | ||||||||||||||||
Earnings per diluted share impact of selling acquired inventory after its markup to fair value as part of acquisition accounting | 0.09 | — | 0.18 | — | ||||||||||||
Earnings per diluted share impact of acquisition-related expenses | 0.09 | — | 0.22 | — | ||||||||||||
Adjusted earnings per diluted share | $ | 4.25 | $ | 4.71 | $ | 9.12 | $ | 8.61 |
Non-GAAP Financial Measures (Continued)
Reconciliations of GAAP Measures to 2021 Guidance Ranges are as follows:
2021 Guidance - Consolidated Gross Profit | ||||||||
(Dollars in Millions) | ||||||||
Consolidated gross profit | $ | 1,330.0 | $ | 1,380.0 | ||||
Add back: | ||||||||
Impact of selling acquired inventory after its markup to fair value as part of acquisition accounting | 20.0 | 20.0 | ||||||
Adjusted consolidated gross profit | $ | 1,350.0 | $ | 1,400.0 | ||||
2021 Guidance - Aggregates Product Gross Profit | ||||||||
(Dollars in Millions) | ||||||||
Aggregates product gross profit | $ | 905.0 | $ | 930.0 | ||||
Add back: | ||||||||
Impact of selling acquired inventory after its markup to fair value as part of acquisition accounting | 15.0 | 15.0 | ||||||
Adjusted aggregates product gross profit | $ | 920.0 | $ | 945.0 | ||||
2021 Guidance - | ||||||||
(Dollars in Millions) | ||||||||
Ready mixed concrete and asphalt and paving products and services gross profit | $ | 160.0 | $ | 170.0 | ||||
Add back: | ||||||||
Impact of selling acquired inventory after its markup to fair value as part of acquisition accounting | 5.0 | 5.0 | ||||||
Adjusted ready mixed concrete and asphalt and paving products and services gross profit | $ | 165.0 | $ | 175.0 |
Non-GAAP Financial Measures (Continued)
Mix-adjusted average selling price (mix-adjusted ASP) is a non-GAAP measure that excludes the impact of period-over-period product, geographic and other mix on the average selling price. Mix-adjusted ASP is calculated by comparing current-period shipments to like-for-like shipments in the comparable prior period. Management uses this metric to evaluate the realization of pricing increases and believes this information is useful to investors. The following reconciles reported average selling price to mix-adjusted ASP and corresponding variances.
Three Months Ended | ||||||||
2021 | 2020 | |||||||
East Group - Aggregates: | ||||||||
Reported average selling price | $ | 15.25 | $ | 15.19 | ||||
Adjustment for unfavorable impact of product, geographic and other mix | 0.31 | |||||||
Mix-adjusted ASP | $ | 15.56 | ||||||
Reported average selling price variance | 0.4 | % | ||||||
Mix-adjusted ASP variance | 2.5 | % | ||||||
Cement: | ||||||||
Reported average selling price | $ | 122.91 | $ | 113.41 | ||||
Adjustment for favorable impact of product, geographic and other mix | (1.97 | ) | ||||||
Mix-adjusted ASP | $ | 120.94 | ||||||
Reported average selling price variance | 8.4 | % | ||||||
Mix-adjusted ASP variance | 6.6 | % |
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Unaudited Statements of Earnings
Three Months Ended | Nine Months Ended | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
(In Millions, Except Per Share Data) | ||||||||||||||||
Products and services revenues | $ | 1,462.7 | $ | 1,240.7 | $ | 3,679.9 | $ | 3,321.2 | ||||||||
Freight revenues | 94.6 | 80.7 | 237.7 | 229.1 | ||||||||||||
Total Revenues | 1,557.3 | 1,321.4 | 3,917.6 | 3,550.3 | ||||||||||||
Cost of revenues - products and services | 1,021.0 | 836.1 | 2,676.9 | 2,390.9 | ||||||||||||
Cost of revenues - freight | 94.4 | 80.8 | 239.0 | 232.0 | ||||||||||||
Total Cost of Revenues | 1,115.4 | 916.9 | 2,915.9 | 2,622.9 | ||||||||||||
Gross Profit | 441.9 | 404.5 | 1,001.7 | 927.4 | ||||||||||||
Selling, general & administrative expenses | 86.0 | 71.1 | 248.2 | 221.0 | ||||||||||||
Acquisition-related expenses | 7.4 | 0.4 | 18.0 | 1.2 | ||||||||||||
Other operating income, net | (8.4 | ) | (67.6 | ) | (28.2 | ) | (59.6 | ) | ||||||||
Earnings from Operations | 356.9 | 400.6 | 763.7 | 764.8 | ||||||||||||
Interest expense | 44.3 | 28.7 | 99.9 | 89.7 | ||||||||||||
Other nonoperating income, net | (5.6 | ) | (4.0 | ) | (23.8 | ) | (5.9 | ) | ||||||||
Earnings before income tax expense | 318.2 | 375.9 | 687.6 | 681.0 | ||||||||||||
Income tax expense | 63.6 | 81.5 | 141.7 | 143.0 | ||||||||||||
Consolidated net earnings | 254.6 | 294.4 | 545.9 | 538.0 | ||||||||||||
Less: Net earnings attributable to noncontrolling interests | — | — | 0.2 | — | ||||||||||||
Net Earnings Attributable to | $ | 254.6 | $ | 294.4 | $ | 545.7 | $ | 538.0 | ||||||||
Net Earnings Attributable to | ||||||||||||||||
Per Common Share: | ||||||||||||||||
Basic attributable to common shareholders | $ | 4.08 | $ | 4.72 | $ | 8.74 | $ | 8.63 | ||||||||
Diluted attributable to common shareholders | $ | 4.07 | $ | 4.71 | $ | 8.72 | $ | 8.61 | ||||||||
Weighted-Average Common Shares Outstanding: | ||||||||||||||||
Basic | 62.4 | 62.3 | 62.4 | 62.3 | ||||||||||||
Diluted | 62.6 | 62.4 | 62.6 | 62.4 | ||||||||||||
Dividends Per Common Share | $ | 0.61 | $ | 0.57 | $ | 1.75 | $ | 1.67 |
Unaudited Financial Highlights | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
(Dollars in Millions) | ||||||||||||||||
Total revenues: | ||||||||||||||||
Building Materials business: | ||||||||||||||||
East Group | $ | 684.1 | $ | 549.3 | $ | 1,714.4 | $ | 1,465.9 | ||||||||
794.8 | 711.2 | 1,978.2 | 1,904.2 | |||||||||||||
Total | 1,478.9 | 1,260.5 | 3,692.6 | 3,370.1 | ||||||||||||
Magnesia Specialties | 78.4 | 60.9 | 225.0 | 180.2 | ||||||||||||
Total | $ | 1,557.3 | $ | 1,321.4 | $ | 3,917.6 | $ | 3,550.3 | ||||||||
Gross profit: | ||||||||||||||||
Building Materials business: | ||||||||||||||||
East Group | $ | 231.6 | $ | 206.3 | $ | 542.1 | $ | 459.5 | ||||||||
182.8 | 177.5 | 377.9 | 401.5 | |||||||||||||
Total | 414.4 | 383.8 | 920.0 | 861.0 | ||||||||||||
Magnesia Specialties | 27.0 | 20.0 | 81.4 | 62.1 | ||||||||||||
Corporate | 0.5 | 0.7 | 0.3 | 4.3 | ||||||||||||
Total | $ | 441.9 | $ | 404.5 | $ | 1,001.7 | $ | 927.4 | ||||||||
Selling, general and administrative expenses: | ||||||||||||||||
Building Materials business: | ||||||||||||||||
East Group | $ | 26.5 | $ | 24.9 | $ | 77.0 | $ | 74.0 | ||||||||
34.2 | 34.2 | 101.1 | 100.2 | |||||||||||||
Total | 60.7 | 59.1 | 178.1 | 174.2 | ||||||||||||
Magnesia Specialties | 3.8 | 3.6 | 11.1 | 10.4 | ||||||||||||
Corporate | 21.5 | 8.4 | 59.0 | 36.4 | ||||||||||||
Total | $ | 86.0 | $ | 71.1 | $ | 248.2 | $ | 221.0 | ||||||||
Earnings (Loss) from operations: | ||||||||||||||||
Building Materials business: | ||||||||||||||||
East Group | $ | 205.8 | $ | 181.4 | $ | 465.3 | $ | 386.1 | ||||||||
150.6 | 212.3 | 284.2 | 368.2 | |||||||||||||
Total | 356.4 | 393.7 | 749.5 | 754.3 | ||||||||||||
Magnesia Specialties | 23.1 | 16.4 | 69.8 | 51.2 | ||||||||||||
Corporate | (22.6 | ) | (9.5 | ) | (55.6 | ) | (40.7 | ) | ||||||||
Total | $ | 356.9 | $ | 400.6 | $ | 763.7 | $ | 764.8 |
Unaudited Financial Highlights (Continued) | ||||||||||||||||||||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||||||||||||||||||||||
Amount | % of Revenues | Amount | % of Revenues | Amount | % of Revenues | Amount | % of Revenues | |||||||||||||||||||||||||||||
(Dollars in Millions) | ||||||||||||||||||||||||||||||||||||
Total revenues: | ||||||||||||||||||||||||||||||||||||
Building Materials business: | ||||||||||||||||||||||||||||||||||||
Products and services: | ||||||||||||||||||||||||||||||||||||
Aggregates | $ | 857.1 | $ | 766.9 | $ | 2,231.5 | $ | 2,092.1 | ||||||||||||||||||||||||||||
Cement | 132.3 | 115.6 | 358.4 | 331.7 | ||||||||||||||||||||||||||||||||
Ready mixed concrete | 320.8 | 254.6 | 824.5 | 689.4 | ||||||||||||||||||||||||||||||||
Asphalt and paving | 195.9 | 129.8 | 343.5 | 254.9 | ||||||||||||||||||||||||||||||||
Less: Interproduct sales | (115.3 | ) | (81.4 | ) | (285.1 | ) | (210.9 | ) | ||||||||||||||||||||||||||||
Products and services | 1,390.8 | 1,185.5 | 3,472.8 | 3,157.2 | ||||||||||||||||||||||||||||||||
Freight | 88.1 | 75.0 | 219.8 | 212.9 | ||||||||||||||||||||||||||||||||
Total business | 1,478.9 | 1,260.5 | 3,692.6 | 3,370.1 | ||||||||||||||||||||||||||||||||
Magnesia Specialties: | ||||||||||||||||||||||||||||||||||||
Products and services | 71.9 | 55.2 | 207.1 | 164.0 | ||||||||||||||||||||||||||||||||
Freight | 6.5 | 5.7 | 17.9 | 16.2 | ||||||||||||||||||||||||||||||||
Total Magnesia Specialties | 78.4 | 60.9 | 225.0 | 180.2 | ||||||||||||||||||||||||||||||||
Consolidated total revenues | $ | 1,557.3 | $ | 1,321.4 | $ | 3,917.6 | $ | 3,550.3 | ||||||||||||||||||||||||||||
Gross profit (loss): | ||||||||||||||||||||||||||||||||||||
Building Materials business: | ||||||||||||||||||||||||||||||||||||
Products and services: | ||||||||||||||||||||||||||||||||||||
Aggregates | $ | 292.9 | 34.2 | % | $ | 279.1 | 36.4 | % | $ | 687.7 | 30.8 | % | $ | 640.4 | 30.6 | % | ||||||||||||||||||||
Cement | 49.9 | 37.7 | % | 46.5 | 40.2 | % | 101.3 | 28.3 | % | 117.2 | 35.3 | % | ||||||||||||||||||||||||
Ready mixed concrete | 31.4 | 9.8 | % | 24.7 | 9.7 | % | 69.9 | 8.5 | % | 56.7 | 8.2 | % | ||||||||||||||||||||||||
Asphalt and paving | 38.9 | 19.9 | % | 32.6 | 25.2 | % | 59.4 | 17.3 | % | 46.4 | 18.2 | % | ||||||||||||||||||||||||
Subtotal | 413.1 | 29.7 | % | 382.9 | 32.3 | % | 918.3 | 26.4 | % | 860.7 | 27.3 | % | ||||||||||||||||||||||||
Freight | 1.3 | NM | 0.9 | NM | 1.7 | NM | 0.3 | NM | ||||||||||||||||||||||||||||
Total business | 414.4 | 28.0 | % | 383.8 | 30.4 | % | 920.0 | 24.9 | % | 861.0 | 25.5 | % | ||||||||||||||||||||||||
Magnesia Specialties: | ||||||||||||||||||||||||||||||||||||
Products and services | 28.1 | 39.0 | % | 21.0 | 38.0 | % | 84.4 | 40.7 | % | 65.3 | 39.8 | % | ||||||||||||||||||||||||
Freight | (1.1 | ) | NM | (1.0 | ) | NM | (3.0 | ) | NM | (3.2 | ) | NM | ||||||||||||||||||||||||
Total Magnesia Specialties | 27.0 | 34.4 | % | 20.0 | 32.8 | % | 81.4 | 36.2 | % | 62.1 | 34.5 | % | ||||||||||||||||||||||||
Corporate | 0.5 | NM | 0.7 | NM | 0.3 | NM | 4.3 | NM | ||||||||||||||||||||||||||||
Consolidated gross profit | $ | 441.9 | 28.4 | % | $ | 404.5 | 30.6 | % | $ | 1,001.7 | 25.6 | % | $ | 927.4 | 26.1 | % |
Balance Sheet Data | ||||||||
2021 | 2020 | |||||||
Unaudited | Audited | |||||||
(In millions) | ||||||||
ASSETS | ||||||||
Cash and cash equivalents | $ | 2,381.4 | $ | 207.3 | ||||
Restricted cash | 1.7 | 97.1 | ||||||
Accounts receivable, net | 801.9 | 575.1 | ||||||
Inventories, net | 717.5 | 709.0 | ||||||
Other current assets | 98.2 | 79.8 | ||||||
Property, plant and equipment, net | 5,610.5 | 5,242.3 | ||||||
Intangible assets, net | 3,397.8 | 2,922.0 | ||||||
Operating lease right-of-use assets, net | 417.8 | 453.0 | ||||||
Other noncurrent assets | 359.4 | 295.2 | ||||||
Total assets | $ | 13,786.2 | $ | 10,580.8 | ||||
LIABILITIES AND EQUITY | ||||||||
Current maturities of long-term debt and short-term facilities | $ | 20.1 | $ | — | ||||
Current liabilities | 581.1 | 499.3 | ||||||
Long-term debt (excluding current maturities) | 5,099.4 | 2,625.8 | ||||||
Other noncurrent liabilities | 1,727.4 | 1,562.4 | ||||||
Total equity | 6,358.2 | 5,893.3 | ||||||
Total liabilities and equity | $ | 13,786.2 | $ | 10,580.8 |
Unaudited Statements of Cash Flows
Nine Months Ended | ||||||||
2021 | 2020 | |||||||
(Dollars in Millions) | ||||||||
Cash Flows from Operating Activities: | ||||||||
Consolidated net earnings | $ | 545.9 | $ | 538.0 | ||||
Adjustments to reconcile consolidated net earnings to net cash provided by operating activities: | ||||||||
Depreciation, depletion and amortization | 320.0 | 292.2 | ||||||
Stock-based compensation expense | 33.0 | 22.4 | ||||||
Gain on divestitures and sales of assets | (26.6 | ) | (71.2 | ) | ||||
Deferred income taxes | 25.7 | 24.8 | ||||||
Other items, net | (8.3 | ) | 0.8 | |||||
Changes in operating assets and liabilities, net of effects of acquisitions and divestitures: | ||||||||
Accounts receivable, net | (218.0 | ) | (104.5 | ) | ||||
Inventories, net | 65.1 | (22.6 | ) | |||||
Accounts payable | 66.9 | (0.8 | ) | |||||
Other assets and liabilities, net | (23.4 | ) | 4.9 | |||||
Net Cash Provided by Operating Activities | 780.3 | 684.0 | ||||||
Cash Flows from Investing Activities: | ||||||||
Additions to property, plant and equipment | (321.3 | ) | (250.8 | ) | ||||
Acquisitions, net of cash acquired | (792.9 | ) | (64.0 | ) | ||||
Proceeds from divestitures and sales of assets | 41.4 | 141.2 | ||||||
Investments in life insurance contracts, net | 13.9 | (12.7 | ) | |||||
Other investing activities, net | — | (5.4 | ) | |||||
(1,058.9 | ) | (191.7 | ) | |||||
Cash Flows from Financing Activities: | ||||||||
Borrowings of debt | 2,896.6 | 628.1 | ||||||
Repayments of debt | (400.0 | ) | (777.0 | ) | ||||
Payments on financing leases | (7.6 | ) | (2.3 | ) | ||||
Debt issuance costs | (6.1 | ) | (2.0 | ) | ||||
Distributions to owners of noncontrolling interest | (0.5 | ) | — | |||||
Repurchases of common stock | — | (50.0 | ) | |||||
Dividends paid | (109.7 | ) | (104.8 | ) | ||||
Proceeds from exercise of stock options | 1.1 | 1.4 | ||||||
Shares withheld for employees' income tax obligations | (16.5 | ) | (13.0 | ) | ||||
Net Cash Provided by (Used for) Financing Activities | 2,357.3 | (319.6 | ) | |||||
Net Increase in Cash, Cash Equivalents and Restricted Cash | 2,078.7 | 172.7 | ||||||
Cash, Cash Equivalents and Restricted Cash, beginning of period | 304.4 | 21.0 | ||||||
Cash, Cash Equivalents and Restricted Cash, end of period | $ | 2,383.1 | $ | 193.7 |
Unaudited Operational Highlights
Three Months Ended | Nine Months Ended | |||||||||||||||
Volume | Pricing | Volume | Pricing | |||||||||||||
Volume/Pricing variance(1) | ||||||||||||||||
East Group | 10.1 | % | 0.4 | % | 6.5 | % | 2.4 | % | ||||||||
10.4 | % | 2.8 | % | 0.0 | % | 1.9 | % | |||||||||
Total aggregates operations(2) | 10.2 | % | 1.2 | % | 4.1 | % | 2.4 | % | ||||||||
Organic aggregates operations(3) | 6.0 | % | 2.2 | % | 2.0 | % | 2.9 | % |
Three Months Ended | Nine Months Ended | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
(Tons in Millions) | (Tons in Millions) | |||||||||||||||
Shipments | ||||||||||||||||
East Group | 37.1 | 33.7 | 95.2 | 89.4 | ||||||||||||
19.9 | 18.1 | 51.8 | 51.8 | |||||||||||||
Total aggregates operations(2) | 57.0 | 51.8 | 147.0 | 141.2 |
(1) Volume/pricing variances reflect the percentage increase from the comparable period in the prior year.
(2) Total aggregates operations include acquisitions from the date of acquisition and divestitures through the date of disposal.
(3) Organic aggregates operations exclude volume and pricing data for acquisitions that have not been included in prior-year operations for the comparable period and divestitures.
Three Months Ended | Nine Months Ended | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
Shipments (in millions) | ||||||||||||||||
Aggregates tons - external customers | 52.0 | 48.1 | 135.2 | 131.9 | ||||||||||||
Internal aggregates tons used in other product lines | 5.0 | 3.7 | 11.8 | 9.3 | ||||||||||||
Total aggregates tons | 57.0 | 51.8 | 147.0 | 141.2 | ||||||||||||
Cement tons - external customers | 0.7 | 0.7 | 1.8 | 2.0 | ||||||||||||
Internal cement tons used in other product lines | 0.4 | 0.3 | 1.1 | 0.9 | ||||||||||||
Total cement tons | 1.1 | 1.0 | 2.9 | 2.9 | ||||||||||||
Ready mixed concrete - cubic yards | 2.7 | 2.2 | 7.2 | 6.1 | ||||||||||||
Asphalt tons - external customers | 2.0 | 0.3 | 3.3 | 0.6 | ||||||||||||
Internal asphalt tons used in road paving business | 0.8 | 1.0 | 1.5 | 2.0 | ||||||||||||
Total asphalt tons | 2.8 | 1.3 | 4.8 | 2.6 | ||||||||||||
Average unit sales price by product line (including internal sales): | ||||||||||||||||
Aggregates (per ton) | $ | 14.93 | $ | 14.75 | $ | 15.08 | $ | 14.73 | ||||||||
Cement (per ton) | $ | 122.91 | $ | 113.41 | $ | 120.29 | $ | 113.83 | ||||||||
Ready mixed concrete (per cubic yard) | $ | 116.75 | $ | 114.15 | $ | 114.59 | $ | 113.75 | ||||||||
Asphalt (per ton) | $ | 48.72 | $ | 49.56 | $ | 48.77 | $ | 47.99 |
Non-GAAP Financial Measures
Earnings before interest; income taxes; depreciation, depletion and amortization expense; the earnings/loss from nonconsolidated equity affiliates; acquisition-related expenses; and the impact of selling acquired inventory after its markup to fair value as part of acquisition accounting (Adjusted EBITDA) is an indicator used by the Company and investors to evaluate the Company’s operating performance from period to period. Adjusted EBITDA is not defined by generally accepted accounting principles and, as such, should not be construed as an alternative to earnings from operations, net earnings or operating cash flow. For further information on Adjusted EBITDA, refer to the Company’s website at www.martinmarietta.com.
A Reconciliation of Net Earnings Attributable to Martin Marietta to Adjusted EBITDA is as follows:
Three Months Ended | Nine Months Ended | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
(Dollars in Millions) | ||||||||||||||||
Net Earnings Attributable to Martin Marietta | $ | 254.6 | $ | 294.4 | $ | 545.7 | $ | 538.0 | ||||||||
Add back: | ||||||||||||||||
Interest expense, net of interest income | 44.2 | 28.6 | 99.6 | 89.3 | ||||||||||||
Income tax expense for controlling interests | 63.6 | 81.5 | 141.7 | 143.0 | ||||||||||||
Depreciation, depletion and amortization and earnings/loss from nonconsolidated equity affiliates | 112.1 | 97.2 | 314.2 | 287.5 | ||||||||||||
Acquisition-related expenses | 7.4 | — | 18.0 | — | ||||||||||||
Impact of selling acquired inventory after markup to fair value as a part of acquisition accounting | 8.1 | — | 15.7 | — | ||||||||||||
Adjusted EBITDA | $ | 490.0 | $ | 501.7 | $ | 1,134.9 | $ | 1,057.8 |
A Reconciliation of the GAAP Measure to 2021
(Dollars in Millions) | ||||||
Net earnings attributable to Martin Marietta | $ | 680.0 | $ | 735.0 | ||
Add back: | ||||||
Interest expense | 145.0 | 140.0 | ||||
Taxes on income | 185.0 | 185.0 | ||||
Depreciation, depletion and amortization expense and noncash earnings/loss from nonconsolidated equity affiliates | 445.0 | 445.0 | ||||
Acquisition-related expenses | 25.0 | 25.0 | ||||
Impact of selling acquired inventory after its markup to fair value as part of acquisition accounting | 20.0 | 20.0 | ||||
Adjusted EBITDA | $ | 1,500.0 | $ | 1,550.0 |
Non-GAAP Financial Measures (Continued)
Adjusted gross profit and adjusted gross margin represent non-GAAP financial measures and exclude the impact of selling acquired inventory after its markup to fair value as part of acquisition accounting. Management presents these measures for investors and analysts to evaluate and forecast the Company’s results, as the impact of selling acquired inventory after its markup to fair value as part of acquisition accounting is nonrecurring.
A Reconciliation of Gross Profit in Accordance with GAAP to Adjusted Gross Profit is as follows:
Three Months Ended | Nine Months Ended | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
(Dollars in Millions) | ||||||||||||||||
Consolidated gross profit in accordance with GAAP | $ | 441.9 | $ | 404.5 | $ | 1,001.7 | $ | 927.4 | ||||||||
Add back: | ||||||||||||||||
Impact of selling acquired inventory after its markup to fair value as part of acquisition accounting | 8.1 | — | 15.7 | — | ||||||||||||
Adjusted consolidated gross profit | $ | 450.0 | $ | 404.5 | $ | 1,017.4 | $ | 927.4 |
A Reconciliation of Aggregates Product Gross Profit in Accordance with GAAP to Adjusted Aggregates Product Gross Profit and Adjusted Aggregates Product Gross Margin is as follows:
Three Months Ended | Nine Months Ended | ||||||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||||||
(Dollars in Millions) | |||||||||||||||||||
Aggregates product gross profit in accordance with GAAP | $ | 292.9 | $ | 279.1 | $ | 687.7 | $ | 640.4 | |||||||||||
Add back: | |||||||||||||||||||
Impact of selling acquired inventory after its markup to fair value as part of acquisition accounting | 5.9 | — | 12.0 | — | |||||||||||||||
Adjusted aggregates product gross profit | $ | 298.8 | $ | 279.1 | $ | 699.7 | $ | 640.4 | |||||||||||
Aggregates products and services revenues | $ | 857.1 | $ | 766.9 | $ | 2,231.5 | $ | 2,092.1 | |||||||||||
Adjusted aggregates product gross margin | 34.9 | % | 36.4 | % | 31.4 | % | 30.6 | % |
Non-GAAP Financial Measures (Continued)
Adjusted earnings from operations and adjusted earnings per diluted share represent non-GAAP financial measures and exclude the impact of selling acquired inventory after its markup to fair value as part of acquisition accounting and acquisition-related expenses. Management presents these measures for investors and analysts to evaluate and forecast the Company’s results, as the impact of selling acquired inventory after its markup to fair value as part of acquisition accounting and acquisition-related expenses are nonrecurring.
A Reconciliation of Consolidated Earnings from Operations in Accordance with GAAP to Adjusted Consolidated Earnings from Operations is as follows:
Three Months Ended | Nine Months Ended | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
(Dollars in Millions) | ||||||||||||||||
Consolidated earnings from operations in accordance with GAAP | $ | 356.9 | $ | 400.6 | $ | 763.7 | $ | 764.8 | ||||||||
Add back: | ||||||||||||||||
Impact of selling acquired inventory after its markup to fair value as part of acquisition accounting | 8.1 | — | 15.7 | — | ||||||||||||
Acquisition-related expenses | 7.4 | — | 18.0 | — | ||||||||||||
Adjusted consolidated earnings from operations | $ | 372.4 | $ | 400.6 | $ | 797.4 | $ | 764.8 |
A Reconciliation of Earnings Per Diluted Share in Accordance with GAAP to Adjusted Earnings Per Diluted Share is as follows:
Three Months Ended | Nine Months Ended | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
Earnings per diluted share in accordance with GAAP | $ | 4.07 | $ | 4.71 | $ | 8.72 | $ | 8.61 | ||||||||
Add back: | ||||||||||||||||
Earnings per diluted share impact of selling acquired inventory after its markup to fair value as part of acquisition accounting | 0.09 | — | 0.18 | — | ||||||||||||
Earnings per diluted share impact of acquisition-related expenses | 0.09 | — | 0.22 | — | ||||||||||||
Adjusted earnings per diluted share | $ | 4.25 | $ | 4.71 | $ | 9.12 | $ | 8.61 |
Non-GAAP Financial Measures (Continued)
Reconciliations of GAAP Measures to 2021 Guidance Ranges are as follows:
2021 Guidance - Consolidated Gross Profit | ||||||||
(Dollars in Millions) | ||||||||
Consolidated gross profit | $ | 1,330.0 | $ | 1,380.0 | ||||
Add back: | ||||||||
Impact of selling acquired inventory after its markup to fair value as part of acquisition accounting | 20.0 | 20.0 | ||||||
Adjusted consolidated gross profit | $ | 1,350.0 | $ | 1,400.0 | ||||
2021 Guidance - Aggregates Product Gross Profit | ||||||||
(Dollars in Millions) | ||||||||
Aggregates product gross profit | $ | 905.0 | $ | 930.0 | ||||
Add back: | ||||||||
Impact of selling acquired inventory after its markup to fair value as part of acquisition accounting | 15.0 | 15.0 | ||||||
Adjusted aggregates product gross profit | $ | 920.0 | $ | 945.0 | ||||
2021 Guidance - | ||||||||
(Dollars in Millions) | ||||||||
Ready mixed concrete and asphalt and paving products and services gross profit | $ | 160.0 | $ | 170.0 | ||||
Add back: | ||||||||
Impact of selling acquired inventory after its markup to fair value as part of acquisition accounting | 5.0 | 5.0 | ||||||
Adjusted ready mixed concrete and asphalt and paving products and services gross profit | $ | 165.0 | $ | 175.0 |
Non-GAAP Financial Measures (Continued)
Mix-adjusted average selling price (mix-adjusted ASP) is a non-GAAP measure that excludes the impact of period-over-period product, geographic and other mix on the average selling price. Mix-adjusted ASP is calculated by comparing current-period shipments to like-for-like shipments in the comparable prior period. Management uses this metric to evaluate the realization of pricing increases and believes this information is useful to investors. The following reconciles reported average selling price to mix-adjusted ASP and corresponding variances.
Three Months Ended | ||||||||
2021 | 2020 | |||||||
East Group - Aggregates: | ||||||||
Reported average selling price | $ | 15.25 | $ | 15.19 | ||||
Adjustment for unfavorable impact of product, geographic and other mix | 0.31 | |||||||
Mix-adjusted ASP | $ | 15.56 | ||||||
Reported average selling price variance | 0.4 | % | ||||||
Mix-adjusted ASP variance | 2.5 | % | ||||||
Cement: | ||||||||
Reported average selling price | $ | 122.91 | $ | 113.41 | ||||
Adjustment for favorable impact of product, geographic and other mix | (1.97 | ) | ||||||
Mix-adjusted ASP | $ | 120.94 | ||||||
Reported average selling price variance | 8.4 | % | ||||||
Mix-adjusted ASP variance | 6.6 | % |
Source:
2021 GlobeNewswire, Inc., source