Full-Year EBITDA Surpasses $1.0 Billion
and Net Earnings Increase to $713 MillionCompany
Delivers Record Revenues, Profitability and Earnings per Diluted
Share
Martin Marietta Materials, Inc. (NYSE:MLM) today reported record
results for the fourth quarter and full year ended December 31,
2017.
Highlights Include the Following
Records:
|
|
|
|
|
|
Quarter ended December 31, |
|
Year ended December 31, |
|
($ in millions, except per share) |
2017 |
2016 |
|
2017 |
2016 |
|
Consolidated total revenues |
$970.5 |
$948.8 |
|
$3,965.6 |
$3,818.7 |
|
Building Materials business total revenues |
$903.0 |
$884.7 |
|
$3,695.6 |
$3,561.7 |
|
Magnesia Specialties total revenues |
$67.5 |
$64.1 |
|
$270.0 |
$257.0 |
|
Consolidated gross profit |
$259.1 |
$225.8 |
|
$971.9 |
$911.7 |
|
Consolidated earnings from operations |
$183.4 |
$157.7 |
|
$700.4 |
$677.3 |
|
Net
earnings attributable to Martin Marietta 1 |
$377.2 |
$98.9 |
|
$713.3 |
$425.4 |
|
EBITDA 2 |
$262.4 |
$229.7 |
|
$1,004.4 |
$971.6 |
|
Earnings per diluted share 1 |
$5.95 |
$1.55 |
|
$11.25 |
$6.63 |
|
1 2017 fourth-quarter and full-year results
include a one-time, non-cash benefit of $258.1 million, or $4.07
per diluted share, resulting from the Tax Cuts and Jobs Act of
2017.2 See appendix to this earnings release for a reconciliation
to net earnings.
Ward Nye, Chairman, President and CEO
of Martin Marietta, stated, “By nearly all meaningful
measures, 2017 was an extraordinary year for Martin Marietta.
Among our accomplishments are two significant milestones - the best
safety performance in our history and EBITDA (Earnings Before
Interest, Taxes, Depreciation and Amortization) exceeding $1.0
billion. We also delivered record revenues, profitability and
earnings per diluted share for both the fourth quarter and full
year, building on the momentum created by record performance in
prior years.
“Even more noteworthy, we achieved these safety
and financial results despite externally-driven volume headwinds
prevalent throughout much of the year that reduced full-year
aggregates volumes by one million tons compared with 2016 and
almost nine million tons as measured against our initial 2017
guidance. Our ability to post record results despite these
external factors, among them extraordinary weather events,
contractor labor constraints, and a slower-than-expected pace of
public contract lettings, validates the successful execution of our
strategic plan and underpins our optimism for a steady and extended
cyclical recovery as we begin 2018.
“Our confidence in our 2018 outlook is
particularly strengthened by positive fourth-quarter trends.
Once again, we posted solid pricing growth across all product lines
and segments. These ongoing pricing improvements, coupled with the
benefits from the strategic deployment of capital into our
business, contributed in part to a 290-basis-point expansion in
fourth-quarter consolidated gross margin compared with the
prior-year quarter. Notably, the aggregates product line posted a
fourth-quarter incremental gross margin well in excess of
management’s targeted goal of 60 percent despite lower
volumes. These results underscore the comparative strength of
our markets and our continued focus on operational excellence.
“While employment expansion has led to continued
strength in private residential and nonresidential construction, we
have yet to see meaningful and consistent growth in public heavy
construction activity. Infrastructure projects have been hindered
by project delays and uncertainty concerning regulatory and other
related reform. We are encouraged, however, by the recent
enactment of the Tax Cuts and Jobs Act of 2017 (2017 Tax Act) and
its long-term benefits for Martin Marietta, our customers and our
industry. Importantly, passage of this legislation provides
positive momentum in Washington, D.C. to address the shortfall in
sustainable funding commensurate with the nation’s need for
infrastructure investment. The recent release of President Trump’s
Legislative Outline for Rebuilding Infrastructure in America
provides additional momentum, increasing the likelihood that both
infrastructure funding will be increased and regulatory burdens
will be lightened. While state Departments of Transportation (DOTs)
and contractors are slowly addressing their labor constraints, we
believe that were an enhanced infrastructure bill enacted, those
efforts would be more rapidly addressed. However, even in the
absence of such an enhanced infrastructure bill, strong customer
confidence and improving sentiment lead us to believe that
infrastructure activity for 2018 and beyond should benefit from the
Fixing America’s Surface Transportation Act (FAST Act), the 2017
Tax Act, and state and local infrastructure initiatives.”
Mr. Nye concluded, “Looking ahead to 2018, the
fundamental drivers for broad-based construction activity support
our optimism that we will continue to benefit from a steady
multi-year cyclical recovery across our geographic footprint. Our
leading positions in many of the nation’s most attractive and
vibrant markets should allow us to capitalize on anticipated
increased demand for infrastructure projects and private-sector
construction activity in 2018 and beyond. With a relentless focus
on world-class safety standards, diligent cost discipline,
operational excellence and prudent capital allocation, Martin
Marietta remains committed to achieving industry-leading results
and further enhancing long-term shareholder value.”
Mr. Nye’s CEO Earnings Commentary and Market
Perspective can be found on the Investor Relations
section of the Company’s website.
Operating Results(All comparisons are versus the
prior-year quarter unless noted otherwise)
Building Materials Business
Fourth-quarter total revenues for the Building
Materials business, which includes the aggregates, cement, ready
mixed concrete and asphalt and paving product lines, were $903.0
million, up 2.1 percent from $884.7 million. Average selling
prices improved across all product lines and segments during the
quarter. Aggregates product line fourth-quarter pricing
improved 4.0 percent despite lower shipment volumes. The
Mid-America Group and the Southeast Group generated aggregates
product line pricing growth of 6.9 percent and 4.2 percent,
respectively, for the fourth quarter, driven by continued price
discipline. Product mix and ongoing competitive pressures led
to relatively flat aggregates pricing for the West Group. The
cement product line generated pricing growth of 4.1 percent for the
quarter, reflecting strong ongoing construction activity in the
Dallas/Fort Worth area. Ready mixed concrete and asphalt pricing
increased 2.1 percent and 16.3 percent, respectively.
Unseasonably warm weather in Colorado and strong demand allowed for
favorable asphalt pricing during the quarter.
Overall, fourth-quarter aggregates product line
shipments decreased slightly, driven by government uncertainty,
labor constraints and ongoing project delays, particularly in the
Mid-America and West Groups. The Southeast Group reported
aggregates volume growth of 5.6 percent, driven by strong
nonresidential construction and improving public construction
activity. Total cement shipments increased 1.7 percent. Ready
mixed concrete shipments decreased 4.7 percent overall with lower
energy-sector shipments offsetting strong demand in the Dallas/Fort
Worth and Denver markets. Asphalt shipments increased
1.2 percent for the fourth quarter.
Infrastructure Market
Highlights
♦ Aggregates
product line shipments to the infrastructure market increased
slightly over the prior-year fourth quarter. Continued
underinvestment in the nation’s infrastructure, coupled with
marginal construction activity from the FAST Act and ongoing
project delays, limited the growth in overall infrastructure
shipments. However, the West Group and Southeast Group, which
include states with robust DOT budgets, reported growth in
infrastructure shipments. Overall, aggregates product line
shipments to the infrastructure market comprised 38 percent of
fourth-quarter aggregates product line volumes, well below the
Company’s most recent five-year average of 43 percent.
Nonresidential Market
Highlights
♦ Aggregates
product line shipments to the nonresidential market decreased 7
percent during the fourth quarter. While the Southeast Group
reported strong industrial construction growth, the West Group,
consistent with management’s expectations, reported a double-digit
decline in nonresidential shipments due to the completion of
several large energy-related projects in 2016 that were not
immediately replaced in 2017. Management expects the next
wave of these projects to bid in 2018. The nonresidential
market represented 31 percent of fourth-quarter aggregates product
line shipments.
Residential Market
Highlights
♦ Aggregates
product line shipments to the residential market increased 9
percent during the fourth quarter, driven by continued strength in
housing across the Company’s geographic footprint, particularly in
the western and southeastern United States. Notably, Texas,
Florida, North Carolina, Georgia, South Carolina and Colorado, key
geographies for the Building Materials business, comprised six of
the top ten states for growth in single-family housing unit starts
for the twelve months ended December 2017. The residential
market accounted for 24 percent of fourth-quarter aggregates
product line shipments.
ChemRock/Rail Market
Highlights
♦ Aggregates
product line volumes for the ChemRock/Rail market declined 10
percent versus the prior-year quarter, driven by reduced
agricultural lime shipments. The ChemRock/Rail market
accounted for the remaining 7 percent of fourth-quarter aggregates
product line shipments.
Magnesia Specialties
Business
Fourth-quarter total revenues for the Magnesia
Specialties business were $67.5 million, an increase of 5.3
percent, and gross margin expanded 50-basis-point to 34.9 percent,
driven by higher-margin specialty chemicals sales.
Consolidated Operating Results
On December 22, 2017, the President signed into
law the 2017 Tax Act, which, among other things, provides for a
permanent reduction in the federal corporate tax rate. As a
result of this legislation, the Company recorded a one-time,
non-cash income tax benefit of $258.1 million from the
remeasurement of its deferred tax assets and liabilities at the new
statutory rate of 21 percent. Excluding this one-time
benefit, which represents $4.07 per diluted share, the Company
generated earnings per diluted share of $1.88 for the fourth
quarter and $7.18 for the full year, both of which are record
results.
Liquidity and Capital Resources
Cash provided by operating activities was $657.9
million in 2017 compared with $689.2 million in 2016.
Property, plant and equipment additions for 2017
were $432.4 million, reflecting the continued strategic deployment
of capital into the business, including mobile fleet purchases that
will reduce maintenance and repair costs. Cash paid for
additions during the year was $410.3 million.
In December 2017, the Company issued $1.4
billion of debt in anticipation of closing the Bluegrass Materials
Company acquisition in the first half of 2018, which remains
subject to the customary regulatory process and other closing
conditions. The newly-issued debt reflects a weighted-average
interest rate of 3.5 percent.
At December 31, 2017, the Company’s ratio of
consolidated net debt-to-consolidated EBITDA, as defined in the
applicable credit agreement, for the trailing-12 months was 1.58
times. The ratio excludes the debt obtained to fund the
pending Bluegrass Materials acquisition.
Capital Allocation Priorities Enhance
Shareholder Value
Martin Marietta is dedicated to maintaining
disciplined capital allocation to further enhance shareholder
value. The Company’s unchanged capital allocation priorities
include the right acquisitions that enable the successful execution
of the Company’s strategic growth plan, organic capital investment,
and the return of cash to shareholders through a meaningful and
sustainable dividend and share repurchases.
Consistent with these objectives, the Company
previously announced the acquisition of Bluegrass Materials, the
largest privately-held, pure-play aggregates business in the United
States. Martin Marietta and Bluegrass Materials continue to
work closely and cooperatively with the Department of Justice in
its review of the proposed transaction.
The Company returned $1.2 billion to
shareholders, in the form of dividend payments and share
repurchases, since announcing a repurchase authorization in
February 2015 to acquire up to 20 million shares of its outstanding
common stock. At December 31, 2017, 14.7 million shares
remain under the current repurchase authorization and 62.9 million
shares of Martin Marietta common stock were outstanding.
Outlook for 2018
Martin Marietta remains optimistic about its
near-term and long-term outlook given its continued ability to
successfully execute its strategic business plan and the largely
positive trends in the markets it serves. The fundamental
drivers for the Company’s expected growth remain intact as the
current broad-based recovery continues on a steady and extended
basis. Notably:
♦ Infrastructure
construction activity should see benefits from the funding provided
by the FAST Act as state DOTs and contractors address labor
constraints and further regulatory reform emerges. Additionally,
state and local initiatives that support infrastructure funding,
including gas tax increases and other ballot initiatives passed
over the previous 24 months, continue to gain overwhelming voter
support and will play an expanded role in public-sector
activity. Third-party forecasts support increased
infrastructure spending in 2018, particularly spending for
aggregates-intensive highways and streets.
♦ Nonresidential
construction is expected to modestly increase in both the heavy
industrial and commercial sectors for the next several years as
supported by third-party forecasts. Management expects new
energy-related projects will bid in 2018 with construction activity
in 2019 and beyond as permitting and final investment decisions are
either made and/or approved.
♦ Residential
construction is expected to continue growing, particularly in key
Martin Marietta markets, driven by employment gains, historically
low levels of construction activity over the previous years, low
mortgage rates and higher lot development. Notably, six of
Martin Marietta’s key states rank in the top ten for single-family
housing unit permits.
Management’s view of 2018 anticipates growth in
all three primary construction end-use markets and faster expansion
in the West and Southeast Groups and comparatively slower growth in
the Mid-America Group, which historically has generated the
Company’s highest margins. Specifically:
♦ Aggregates
product line end-use markets compared with 2017 levels are as
follows:
- Infrastructure market to increase in the mid-single
digits.
- Nonresidential market to increase in the low- to mid-single
digits.
- Residential market to increase in the high-single digits.
- ChemRock/Rail market to remain stable.
As a result of the recent 2017 Tax Act,
management expects the Company’s effective tax rate, excluding
discrete events, to range from 20 percent to 22 percent compared
with its 2017 guidance of 28 percent.
Martin Marietta’s 2018 guidance excludes any
benefit from a potential increase in federal infrastructure funding
as well as any impact from the pending acquisition of Bluegrass
Materials which is expected to be accretive to earnings per share
and cash flow in the first full year of Martin Marietta’s
ownership.
|
|
2018 GUIDANCE |
($ and
tons in millions, except per ton) |
Low * |
|
High * |
Consolidated |
|
|
|
Total revenues 1 |
$ |
4,160 |
|
|
$ |
4,355 |
|
Gross profit |
$ |
1,040 |
|
|
$ |
1,140 |
|
|
|
|
|
SG&A |
$ |
275 |
|
|
$ |
285 |
|
Interest expense |
$ |
125 |
|
|
$ |
130 |
|
Estimated tax rate (excluding discrete events) |
|
20 |
% |
|
|
22 |
% |
Net earnings attributable to Martin Marietta |
$ |
490 |
|
|
$ |
595 |
|
EBITDA 2 |
$ |
1,075 |
|
|
$ |
1,185 |
|
Capital expenditures |
$ |
450 |
|
|
$ |
500 |
|
|
|
|
|
Building Materials Business |
|
|
|
Aggregates Product Line |
|
|
|
Volume (total tons) 3 |
|
164 |
|
|
|
167 |
|
% growth 3 |
|
4.0 |
% |
|
|
6.0 |
% |
Average selling price per ton (ASP) |
$ |
13.85 |
|
|
$ |
14.10 |
|
% growth 4 |
|
3.0 |
% |
|
|
5.0 |
% |
Total revenues |
$ |
2,490 |
|
|
$ |
2,595 |
|
Gross profit |
$ |
655 |
|
|
$ |
715 |
|
|
|
|
|
Cement Product Line |
|
|
|
Total revenues |
$ |
415 |
|
|
$ |
445 |
|
Gross profit |
$ |
140 |
|
|
$ |
160 |
|
|
|
|
|
Ready Mixed Concrete and Asphalt and Paving Product Lines |
|
|
|
Total revenues |
$ |
1,370 |
|
|
$ |
1,445 |
|
Gross profit |
$ |
160 |
|
|
$ |
175 |
|
|
|
|
|
Magnesia Specialties Business |
|
|
|
Total revenues |
$ |
265 |
|
|
$ |
270 |
|
Gross profit |
$ |
85 |
|
|
$ |
90 |
|
|
|
|
|
|
|
|
|
* Guidance range represents the low end
and high end of the respective line items provided above.
1 2018
consolidated total revenues exclude $380 million to $400 million
related to estimated interproduct sales.
2 The 2018
guidance range for EBITDA is calculated in a manner consistent with
the presentation of EBITDA. See appendix to this press
release for a reconciliation to net earnings.
3 Represents
2018 total aggregates volumes, which includes approximately 11.2
million internal tons. Volume growth ranges are in comparison to
total volumes of 157.7 million tons as reported for the full year
2017, which includes 10.9 million internal tons.
4 ASP growth
ranges are in comparison to ASP of $13.46 per ton as reported for
the full year 2017.
Risks to Outlook
The outlook includes management’s assessment of
the likelihood of certain risks and uncertainties that may affect
performance, including but not limited to: both price and volume,
and a widespread decline in aggregates volume negatively affecting
aggregates price; the termination, capping and/or reduction of the
federal and/or state gasoline tax(es) or other revenue related to
infrastructure construction; a significant change in the funding
patterns for traditional federal, state and/or local infrastructure
projects; the United States Congress’ inability to reach agreement
among themselves or with the current Administration on policy
issues that impact the federal budget; the volatility in the
commencement of infrastructure projects; a reduction in defense
spending, and the subsequent impact on construction activity on or
near military bases; a decline in nonresidential construction; a
further decline in energy-related construction activity resulting
from a sustained period of low global oil prices or changes in oil
production patterns in response to this decline and certain
regulatory or other economic factors; a slowdown in the residential
construction recovery; a sustained reduction in capital investment
by the railroads; an increase in the cost of compliance with
governmental laws, rules and regulations; construction labor
shortages and/or supply-chain challenges; and unexpected equipment
failures, unscheduled maintenance, industrial accident or other
prolonged and/or significant disruption to its cement and/or its
Magnesia Specialties production facilities. Further,
increased highway construction funding pressures resulting from
either federal or state issues can affect profitability. If
these negatively affect transportation budgets more than in the
past, construction spending could be reduced. Cement is
subject to cyclical supply and demand and price fluctuations.
The Magnesia Specialties business essentially runs at capacity;
therefore, any unplanned changes in costs or realignment of
customers introduce volatility to the earnings of this segment.
The Company’s principal business serves
customers in construction markets. This concentration could
increase the risk of potential losses on customer receivables;
however, payment bonds normally posted on public projects, together
with lien rights on private projects, mitigate the risk of
uncollectible receivables. The level of demand in the
Company’s end-use markets, production levels and the management of
production costs will affect the operating leverage of the Building
Materials business and, therefore, profitability. Production
costs in the Building Materials business are also sensitive to
energy and raw material prices, both directly and indirectly.
Diesel fuel, coal, and other consumables change production costs
directly through consumption or indirectly by increased
energy-related input costs, such as steel, explosives, tires and
conveyor belts. Fluctuating diesel fuel pricing also affects
transportation costs, primarily through fuel surcharges in the
Company’s long-haul distribution network. The Magnesia
Specialties business is sensitive to changes in domestic steel
capacity utilization as well as the absolute price and fluctuation
in the cost of natural gas.
Transportation in the Company’s long-haul
network, particularly the supply of rail cars and locomotive power
and condition of rail infrastructure to move trains, affects the
Company’s efficient transportation of aggregates products in
certain markets, most notably Texas, Colorado, Florida, North
Carolina and the Gulf Coast. In addition, availability of
rail cars and locomotives affects the Company’s movement of
essential dolomitic lime for magnesia chemicals, to both the
Company’s plant in Manistee, Michigan and its customers. The
availability of trucks, drivers and railcars to transport the
Company’s products, particularly in markets experiencing high
growth and increased demand, is also a risk and pressures the
associated costs.
All of the Company’s businesses are also subject
to weather-related risks that can significantly affect production
schedules and profitability. The first and fourth quarters
are most adversely affected by winter weather. Hurricane
activity in the Atlantic Ocean and Gulf Coast generally is most
active during the third and fourth quarters. In fact, in
August and September 2017, respectively, Hurricanes Harvey and Irma
generated winds, rainfall and flooding which disrupted operations
in Texas, Louisiana, Florida, Georgia and the Carolinas.
However, after flood waters recede, management typically expects an
increase in construction activity as roads, homes and businesses
are repaired.
Risks to the outlook also include shipment
declines resulting from economic events beyond the Company’s
control.
Non-GAAP Financial Information
This press release contains financial measures
that have not been prepared in accordance with GAAP — earnings per
diluted share excluding the impact of the 2017 Tax Act, EBITDA and
the ratio of consolidated debt-to-consolidated EBITDA, as defined
in the applicable credit agreement. Tables reconciling these
non-GAAP financial measures for the respective periods are included
in the appendix to this earnings release.
Conference Call Information
The Company will discuss its fourth-quarter and
full-year 2017 earnings results on a conference call and an online
web simulcast today February 13, 2018. The live broadcast of
the Martin Marietta conference call will begin at 11:00 a.m.
Eastern Time today. An online replay will be available
approximately two hours following the conclusion of the live
broadcast. A link to these events will be available at the
Company’s website. Additionally, the Company has posted
supplemental financial information related to its fourth-quarter
and full-year performance on its website. For those investors
without online web access, the conference call may also be accessed
by calling (970) 315-0423, confirmation number 9492577.
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 26
states, Canada and The Bahamas, dedicated Martin Marietta teams
supply the resources necessary for building the solid foundations
on which our communities thrive. Martin Marietta's Magnesia
Specialties business provides a full range of magnesium oxide,
magnesium hydroxide and dolomitic lime products. For more
information, visit www.martinmarietta.com or
www.magnesiaspecialties.com.
Investor Contact: Suzanne
Osberg Vice President, Investor Relations
(919) 783-4691
Suzanne.Osberg@martinmarietta.com
If you are interested in Martin Marietta
Materials, Inc. 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 Securities and Exchange Commission (SEC)
over the past year. The Company’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 Company’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 Company’s
Corporate Secretary, who will provide copies of such reports.
Investors are cautioned that all statements in
this press 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. Forward-looking statements
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 "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 our forward-looking statements
here and in other publications may turn out to be wrong.
Factors that the Company currently believes
could cause actual results to differ materially from the
forward-looking statements in this press release include, the
performance of the United States economy; 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 Company 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 construction activity, particularly in Texas; a
slowdown in residential construction recovery; 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
Company; 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
Company’s Magnesia Specialties 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 production
facilities; increasing governmental regulation, including
environmental laws; transportation availability, notably the
availability of railcars and locomotive power to move trains to
supply the Company’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
Company’s materials; availability and cost of construction
equipment in the United States; weakening in the steel industry
markets served by the Company’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
Company’s leverage ratio debt covenant; changes in tax laws, the
interpretation of such laws and/or administrative practices that
would increase the Company’s tax rate; violation of the
Company’s debt covenant if price and/or volumes return to previous
levels of instability; downward pressure on the Company’s common
stock price and its impact on goodwill impairment evaluations;
reduction of the Company’s credit rating to non-investment grade
resulting from strategic acquisitions; and other risk factors
listed from time to time found in the Company’s filings with the
SEC. Other factors besides those listed here may also
adversely affect the Company, and may be material to the
Company. The Company assumes no obligation to update any such
forward-looking statements.
|
|
|
|
|
|
|
|
|
MARTIN MARIETTA MATERIALS, INC. |
Unaudited Statements of Earnings |
(In millions, except per share amounts) |
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
Year Ended |
|
|
December 31, |
|
December 31, |
|
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Net sales |
|
$ |
911.3 |
|
|
$ |
889.0 |
|
|
$ |
3,721.4 |
|
|
$ |
3,576.8 |
|
Freight and delivery
revenues |
|
|
59.2 |
|
|
|
59.8 |
|
|
|
244.2 |
|
|
|
241.9 |
|
Total
revenues |
|
|
970.5 |
|
|
|
948.8 |
|
|
|
3,965.6 |
|
|
|
3,818.7 |
|
Cost of sales |
|
|
652.2 |
|
|
|
663.2 |
|
|
|
2,749.5 |
|
|
|
2,665.1 |
|
Freight and delivery
costs |
|
|
59.2 |
|
|
|
59.8 |
|
|
|
244.2 |
|
|
|
241.9 |
|
Total
cost of revenues |
|
|
711.4 |
|
|
|
723.0 |
|
|
|
2,993.7 |
|
|
|
2,907.0 |
|
Gross
profit |
|
|
259.1 |
|
|
|
225.8 |
|
|
|
971.9 |
|
|
|
911.7 |
|
Selling, general and
administrative expenses |
|
|
67.0 |
|
|
|
68.7 |
|
|
|
262.1 |
|
|
|
241.6 |
|
Acquisition-related
expenses, net |
|
|
5.3 |
|
|
|
0.1 |
|
|
|
8.6 |
|
|
|
0.9 |
|
Other operating expense
(income), net |
|
|
3.4 |
|
|
|
(0.7 |
) |
|
|
0.8 |
|
|
|
(8.1 |
) |
Earnings
from operations |
|
|
183.4 |
|
|
|
157.7 |
|
|
|
700.4 |
|
|
|
677.3 |
|
Interest expense |
|
|
23.4 |
|
|
|
20.8 |
|
|
|
91.5 |
|
|
|
81.7 |
|
Other nonoperating
(income) expense, net |
|
|
(3.6 |
) |
|
|
0.5 |
|
|
|
(10.0 |
) |
|
|
(11.4 |
) |
Earnings
before income tax (benefit) expense |
|
|
163.6 |
|
|
|
136.4 |
|
|
|
618.9 |
|
|
|
607.0 |
|
Income tax (benefit)
expense |
|
|
(213.7 |
) |
|
|
37.6 |
|
|
|
(94.5 |
) |
|
|
181.6 |
|
Consolidated net earnings |
|
|
377.3 |
|
|
|
98.8 |
|
|
|
713.4 |
|
|
|
425.4 |
|
Less: Net
earnings (loss) attributable to noncontrolling interests |
|
|
0.1 |
|
|
|
(0.1 |
) |
|
|
0.1 |
|
|
|
- |
|
Net earnings
attributable to Martin Marietta Materials, Inc. |
|
$ |
377.2 |
|
|
$ |
98.9 |
|
|
$ |
713.3 |
|
|
$ |
425.4 |
|
|
|
|
|
|
|
|
|
|
Net earnings per common
share attributable to common shareholders: |
|
|
|
|
|
|
|
|
Basic |
|
$ |
5.98 |
|
|
$ |
1.56 |
|
|
$ |
11.30 |
|
|
$ |
6.66 |
|
Diluted |
|
$ |
5.95 |
|
|
$ |
1.55 |
|
|
$ |
11.25 |
|
|
$ |
6.63 |
|
|
|
|
|
|
|
|
|
|
Dividends per common
share |
|
$ |
0.44 |
|
|
$ |
0.42 |
|
|
$ |
1.72 |
|
|
$ |
1.64 |
|
|
|
|
|
|
|
|
|
|
Average number of
common shares outstanding: |
|
|
|
|
|
|
|
|
Basic |
|
|
62.9 |
|
|
|
63.3 |
|
|
|
62.9 |
|
|
|
63.6 |
|
Diluted |
|
|
63.2 |
|
|
|
63.5 |
|
|
|
63.2 |
|
|
|
63.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MARTIN MARIETTA MATERIALS, INC. |
Unaudited Financial Highlights |
(In millions) |
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
Year Ended |
|
|
December 31, |
|
December 31, |
|
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Total revenues: |
|
|
|
|
|
|
|
|
Building
Materials Business: |
|
|
|
|
|
|
|
|
Mid-America Group |
|
$ |
264.9 |
|
|
$ |
254.8 |
|
|
$ |
1,053.3 |
|
|
$ |
1,017.1 |
|
Southeast
Group |
|
|
85.1 |
|
|
|
78.0 |
|
|
|
362.6 |
|
|
|
321.1 |
|
West
Group |
|
|
553.0 |
|
|
|
551.9 |
|
|
|
2,279.7 |
|
|
|
2,223.5 |
|
Total
Building Materials Business |
|
|
903.0 |
|
|
|
884.7 |
|
|
|
3,695.6 |
|
|
|
3,561.7 |
|
Magnesia
Specialties |
|
|
67.5 |
|
|
|
64.1 |
|
|
|
270.0 |
|
|
|
257.0 |
|
Total |
|
$ |
970.5 |
|
|
$ |
948.8 |
|
|
$ |
3,965.6 |
|
|
$ |
3,818.7 |
|
|
|
|
|
|
|
|
|
|
Net sales: |
|
|
|
|
|
|
|
|
Building
Materials Business: |
|
|
|
|
|
|
|
|
Mid-America Group |
|
$ |
247.8 |
|
|
$ |
237.0 |
|
|
$ |
982.1 |
|
|
$ |
945.1 |
|
Southeast
Group |
|
|
81.9 |
|
|
|
74.4 |
|
|
|
348.4 |
|
|
|
304.5 |
|
West
Group |
|
|
519.9 |
|
|
|
518.2 |
|
|
|
2,142.8 |
|
|
|
2,089.2 |
|
Total
Building Materials Business |
|
|
849.6 |
|
|
|
829.6 |
|
|
|
3,473.3 |
|
|
|
3,338.8 |
|
Magnesia
Specialties |
|
|
61.7 |
|
|
|
59.4 |
|
|
|
248.1 |
|
|
|
238.0 |
|
Total |
|
$ |
911.3 |
|
|
$ |
889.0 |
|
|
$ |
3,721.4 |
|
|
$ |
3,576.8 |
|
|
|
|
|
|
|
|
|
|
Gross profit
(loss): |
|
|
|
|
|
|
|
|
Building
Materials Business: |
|
|
|
|
|
|
|
|
Mid-America Group |
|
$ |
92.6 |
|
|
$ |
82.4 |
|
|
$ |
335.4 |
|
|
$ |
306.5 |
|
Southeast
Group |
|
|
23.0 |
|
|
|
15.4 |
|
|
|
74.6 |
|
|
|
57.3 |
|
West
Group |
|
|
116.4 |
|
|
|
105.5 |
|
|
|
465.6 |
|
|
|
466.8 |
|
Total
Building Materials Business |
|
|
232.0 |
|
|
|
203.3 |
|
|
|
875.6 |
|
|
|
830.6 |
|
Magnesia
Specialties |
|
|
23.6 |
|
|
|
22.0 |
|
|
|
89.4 |
|
|
|
89.6 |
|
Corporate |
|
|
3.5 |
|
|
|
0.5 |
|
|
|
6.9 |
|
|
|
(8.5 |
) |
Total |
|
$ |
259.1 |
|
|
$ |
225.8 |
|
|
$ |
971.9 |
|
|
$ |
911.7 |
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses: |
|
|
|
|
|
|
|
|
Building
Materials Business: |
|
|
|
|
|
|
|
|
Mid-America Group |
|
$ |
14.0 |
|
|
$ |
13.5 |
|
|
$ |
53.9 |
|
|
$ |
52.7 |
|
Southeast
Group |
|
|
4.2 |
|
|
|
4.6 |
|
|
|
17.1 |
|
|
|
17.3 |
|
West
Group |
|
|
27.0 |
|
|
|
26.6 |
|
|
|
102.7 |
|
|
|
95.6 |
|
Total
Building Materials Business |
|
|
45.2 |
|
|
|
44.7 |
|
|
|
173.7 |
|
|
|
165.6 |
|
Magnesia
Specialties |
|
|
2.4 |
|
|
|
2.5 |
|
|
|
9.5 |
|
|
|
9.6 |
|
Corporate |
|
|
19.4 |
|
|
|
21.5 |
|
|
|
78.9 |
|
|
|
66.4 |
|
Total |
|
$ |
67.0 |
|
|
$ |
68.7 |
|
|
$ |
262.1 |
|
|
$ |
241.6 |
|
|
|
|
|
|
|
|
|
|
Earnings
(Loss) from operations: |
|
|
|
|
|
|
|
|
Building
Materials Business: |
|
|
|
|
|
|
|
|
Mid-America Group |
|
$ |
79.9 |
|
|
$ |
70.7 |
|
|
$ |
284.8 |
|
|
$ |
258.4 |
|
Southeast
Group |
|
|
18.9 |
|
|
|
11.1 |
|
|
|
61.2 |
|
|
|
41.7 |
|
West
Group |
|
|
90.3 |
|
|
|
79.7 |
|
|
|
360.6 |
|
|
|
379.4 |
|
Total
Building Materials Business |
|
|
189.1 |
|
|
|
161.5 |
|
|
|
706.6 |
|
|
|
679.5 |
|
Magnesia
Specialties |
|
|
20.8 |
|
|
|
19.0 |
|
|
|
79.4 |
|
|
|
79.3 |
|
Corporate |
|
|
(26.5 |
) |
|
|
(22.8 |
) |
|
|
(85.6 |
) |
|
|
(81.5 |
) |
Total |
|
$ |
183.4 |
|
|
$ |
157.7 |
|
|
$ |
700.4 |
|
|
$ |
677.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MARTIN MARIETTA MATERIALS, INC. |
Unaudited Financial Highlights
(Continued) |
(In millions) |
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
Year Ended |
|
|
December 31, |
|
December 31, |
|
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Total revenues by
product line: |
|
|
|
|
|
|
|
|
Building
Materials Business: |
|
|
|
|
|
|
|
|
Aggregates |
|
$ |
565.2 |
|
|
$ |
552.1 |
|
|
$ |
2,341.5 |
|
|
$ |
2,267.6 |
|
Ready
Mixed Concrete |
|
|
231.9 |
|
|
|
237.3 |
|
|
|
937.0 |
|
|
|
903.8 |
|
Cement |
|
|
93.6 |
|
|
|
87.9 |
|
|
|
384.1 |
|
|
|
375.8 |
|
Asphalt
and Paving |
|
|
77.7 |
|
|
|
70.9 |
|
|
|
297.0 |
|
|
|
261.6 |
|
Less: Interproduct revenues |
|
|
(65.4 |
) |
|
|
(63.5 |
) |
|
|
(264.0 |
) |
|
|
(247.1 |
) |
Total
Building Materials Business |
|
|
903.0 |
|
|
|
884.7 |
|
|
|
3,695.6 |
|
|
|
3,561.7 |
|
Magnesia
Specialties Business |
|
|
67.5 |
|
|
|
64.1 |
|
|
|
270.0 |
|
|
|
257.0 |
|
Total |
|
$ |
970.5 |
|
|
$ |
948.8 |
|
|
$ |
3,965.6 |
|
|
$ |
3,818.7 |
|
|
|
|
|
|
|
|
|
|
Net sales by product
line: |
|
|
|
|
|
|
|
|
Building
Materials Business: |
|
|
|
|
|
|
|
|
Aggregates |
|
$ |
516.3 |
|
|
$ |
501.2 |
|
|
$ |
2,137.2 |
|
|
$ |
2,060.9 |
|
Ready
Mixed Concrete |
|
|
231.6 |
|
|
|
237.1 |
|
|
|
936.1 |
|
|
|
902.6 |
|
Cement |
|
|
90.2 |
|
|
|
85.4 |
|
|
|
371.5 |
|
|
|
364.5 |
|
Asphalt
and Paving |
|
|
76.9 |
|
|
|
69.4 |
|
|
|
292.5 |
|
|
|
257.9 |
|
Less: Interproduct sales |
|
|
(65.4 |
) |
|
|
(63.5 |
) |
|
|
(264.0 |
) |
|
|
(247.1 |
) |
Total
Building Materials Business |
|
|
849.6 |
|
|
|
829.6 |
|
|
|
3,473.3 |
|
|
|
3,338.8 |
|
Magnesia
Specialties Business |
|
|
61.7 |
|
|
|
59.4 |
|
|
|
248.1 |
|
|
|
238.0 |
|
Total |
|
$ |
911.3 |
|
|
$ |
889.0 |
|
|
$ |
3,721.4 |
|
|
$ |
3,576.8 |
|
|
|
|
|
|
|
|
|
|
Gross profit (loss) by
product line: |
|
|
|
|
|
|
|
|
Building
Materials Business: |
|
|
|
|
|
|
|
|
Aggregates |
|
$ |
161.3 |
|
|
$ |
137.3 |
|
|
$ |
601.9 |
|
|
$ |
558.3 |
|
Ready
Mixed Concrete |
|
|
21.1 |
|
|
|
23.1 |
|
|
|
91.7 |
|
|
|
99.0 |
|
Cement |
|
|
29.4 |
|
|
|
26.7 |
|
|
|
117.3 |
|
|
|
120.2 |
|
Asphalt
and Paving |
|
|
20.2 |
|
|
|
16.2 |
|
|
|
64.7 |
|
|
|
53.1 |
|
Total
Building Materials Business |
|
|
232.0 |
|
|
|
203.3 |
|
|
|
875.6 |
|
|
|
830.6 |
|
Magnesia
Specialties Business |
|
|
23.6 |
|
|
|
22.0 |
|
|
|
89.4 |
|
|
|
89.6 |
|
Corporate |
|
|
3.5 |
|
|
|
0.5 |
|
|
|
6.9 |
|
|
|
(8.5 |
) |
Total |
|
$ |
259.1 |
|
|
$ |
225.8 |
|
|
$ |
971.9 |
|
|
$ |
911.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MARTIN MARIETTA MATERIALS, INC. |
Balance Sheet Data |
(In millions) |
|
|
|
|
|
|
|
|
December 31, |
|
December 31, |
|
|
|
2017 |
|
2016 |
|
|
|
(Unaudited) |
|
(Audited) |
|
ASSETS |
|
|
|
|
|
Cash and
cash equivalents |
|
$ |
1,446.4 |
|
$ |
50.0 |
|
Accounts
receivable, net |
|
|
487.2 |
|
|
457.9 |
|
Inventories, net |
|
|
600.6 |
|
|
521.6 |
|
Other
current assets |
|
|
97.0 |
|
|
56.9 |
|
Property,
plant and equipment, net |
|
|
3,592.8 |
|
|
3,423.4 |
|
Intangible assets, net |
|
|
2,666.6 |
|
|
2,670.7 |
|
Other
noncurrent assets |
|
|
101.9 |
|
|
120.4 |
|
Total
assets |
|
$ |
8,992.5 |
|
$ |
7,300.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
EQUITY |
|
|
|
|
|
Current
maturities of long-term debt and short-term facilities |
|
$ |
299.9 |
|
$ |
180.0 |
|
Other
current liabilities |
|
|
394.3 |
|
|
366.6 |
|
Long-term
debt (excluding current maturities) |
|
|
2,727.3 |
|
|
1,506.2 |
|
Other
noncurrent liabilities |
|
|
888.5 |
|
|
1,105.5 |
|
Total
equity |
|
|
4,682.5 |
|
|
4,142.6 |
|
Total
liabilities and equity |
|
$ |
8,992.5 |
|
$ |
7,300.9 |
|
|
|
|
|
|
|
|
|
|
|
|
MARTIN MARIETTA MATERIALS, INC. |
Unaudited Statements of Cash
Flows |
(In millions) |
|
|
Twelve Months Ended |
|
|
December 31, |
|
|
2017 |
|
2016 |
Operating
activities: |
|
|
|
|
Consolidated net earnings |
|
$ |
713.4 |
|
|
$ |
425.4 |
|
Adjustments to reconcile consolidated net earnings to net cash
provided by operating activities: |
|
|
|
|
Depreciation, depletion and amortization |
|
|
297.2 |
|
|
|
285.3 |
|
Stock-based compensation expense |
|
|
30.5 |
|
|
|
20.5 |
|
(Gain)
Loss on divestitures and sales of assets |
|
|
(19.4 |
) |
|
|
0.4 |
|
Deferred
income taxes |
|
|
(239.1 |
) |
|
|
67.1 |
|
Other
items, net |
|
|
(13.1 |
) |
|
|
(17.8 |
) |
Changes
in operating assets and liabilities, net of effects of acquisitions
and divestitures: |
|
|
|
|
Accounts
receivable, net |
|
|
(29.3 |
) |
|
|
(25.1 |
) |
Inventories, net |
|
|
(79.0 |
) |
|
|
(47.4 |
) |
Accounts
payable |
|
|
(17.9 |
) |
|
|
(8.1 |
) |
Other
assets and liabilities, net |
|
|
14.6 |
|
|
|
(11.1 |
) |
Net cash provided by
operating activities |
|
|
657.9 |
|
|
|
689.2 |
|
|
|
|
|
|
Investing
activities: |
|
|
|
|
Additions
to property, plant and equipment |
|
|
(410.3 |
) |
|
|
(387.3 |
) |
Acquisitions, net |
|
|
(12.1 |
) |
|
|
(178.8 |
) |
Cash
received in acquisition |
|
|
- |
|
|
|
4.3 |
|
Proceeds
from divestitures and sales of assets |
|
|
36.0 |
|
|
|
6.5 |
|
Payment
of railcar construction advances |
|
|
(43.6 |
) |
|
|
(82.9 |
) |
Reimbursement of railcar construction advances |
|
|
43.6 |
|
|
|
82.9 |
|
Net cash used for
investing activities |
|
|
(386.4 |
) |
|
|
(555.3 |
) |
|
|
|
|
|
Financing
activities: |
|
|
|
|
Borrowings of long-term debt |
|
|
2,408.8 |
|
|
|
560.0 |
|
Repayments of long-term debt |
|
|
(1,065.0 |
) |
|
|
(449.3 |
) |
Payments
on capital leases |
|
|
(3.5 |
) |
|
|
(3.4 |
) |
Debt
issue costs |
|
|
(2.2 |
) |
|
|
(2.3 |
) |
Change in
bank overdraft |
|
|
- |
|
|
|
(10.2 |
) |
Contributions by noncontrolling interest to joint venture |
|
|
0.2 |
|
|
|
- |
|
Distributions to owners of noncontrolling interests |
|
|
- |
|
|
|
(0.4 |
) |
Payments
of deferred acquisition consideration |
|
|
(2.8 |
) |
|
|
- |
|
Repurchases of common stock |
|
|
(100.0 |
) |
|
|
(259.2 |
) |
Dividends
paid |
|
|
(108.9 |
) |
|
|
(105.0 |
) |
Proceeds
from exercise of stock options |
|
|
10.1 |
|
|
|
27.2 |
|
Shares
withheld for employees' income tax obligations |
|
|
(11.8 |
) |
|
|
(9.7 |
) |
Net cash provided by
(used for) financing activities |
|
|
1,124.9 |
|
|
|
(252.3 |
) |
|
|
|
|
|
Net increase (decrease)
in cash and cash equivalents |
|
|
1,396.4 |
|
|
|
(118.4 |
) |
Cash and cash
equivalents, beginning of period |
|
|
50.0 |
|
|
|
168.4 |
|
Cash and cash
equivalents, end of period |
|
$ |
1,446.4 |
|
|
$ |
50.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MARTIN MARIETTA MATERIALS, INC. |
Unaudited Operational Highlights |
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
Year Ended |
|
|
December 31, 2017 |
|
December 31, 2017 |
|
|
Volume |
|
Pricing |
|
Volume |
|
Pricing |
Volume/Pricing
Variance (1) |
|
|
|
|
|
|
|
|
Mid-America Group |
|
|
(1.9 |
%) |
|
|
6.9 |
% |
|
|
(0.7 |
%) |
|
|
5.0 |
% |
Southeast Group |
|
|
5.6 |
% |
|
|
4.2 |
% |
|
|
5.3 |
% |
|
|
8.7 |
% |
West
Group |
|
|
(1.5 |
%) |
|
|
(0.2 |
%) |
|
|
(2.2 |
%) |
|
|
1.7 |
% |
Total Aggregates
Product Line (2) |
|
|
(0.9 |
%) |
|
|
4.0 |
% |
|
|
(0.6 |
%) |
|
|
4.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
Year Ended |
|
|
December 31, |
|
December 31, |
Shipments (tons in thousands) |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Mid-America Group |
|
|
17,915 |
|
|
|
18,269 |
|
|
|
72,539 |
|
|
|
73,060 |
|
Southeast Group |
|
|
4,849 |
|
|
|
4,594 |
|
|
|
20,429 |
|
|
|
19,396 |
|
West
Group |
|
|
15,094 |
|
|
|
15,324 |
|
|
|
64,730 |
|
|
|
66,170 |
|
Total Aggregates
Product Line (2) |
|
|
37,858 |
|
|
|
38,187 |
|
|
|
157,698 |
|
|
|
158,626 |
|
|
|
|
|
|
|
|
|
|
(1) Volume/pricing variances reflect the percentage
increase (decrease) from the comparable period in the prior
year. |
(2) Aggregates Product Line includes acquisitions from the
date of acquisition and divestitures through the date of
disposal. |
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
Year Ended |
|
|
December 31, |
|
December 31, |
|
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Shipments (in thousands) |
|
|
|
|
|
|
|
|
Aggregates tons - external customers |
|
|
35,201 |
|
|
|
35,677 |
|
|
|
146,818 |
|
|
|
148,198 |
|
Internal
aggregates tons used in other product lines |
|
|
2,657 |
|
|
|
2,510 |
|
|
|
10,880 |
|
|
|
10,428 |
|
Total
aggregates tons |
|
|
37,858 |
|
|
|
38,187 |
|
|
|
157,698 |
|
|
|
158,626 |
|
|
|
|
|
|
|
|
|
|
Ready
Mixed Concrete - cubic yards |
|
|
2,116 |
|
|
|
2,220 |
|
|
|
8,559 |
|
|
|
8,490 |
|
|
|
|
|
|
|
|
|
|
Cement
tons - external customers |
|
|
524 |
|
|
|
496 |
|
|
|
2,271 |
|
|
|
2,331 |
|
Internal
cement tons used in other product lines |
|
|
300 |
|
|
|
314 |
|
|
|
1,196 |
|
|
|
1,194 |
|
Total
Cement tons |
|
|
824 |
|
|
|
810 |
|
|
|
3,467 |
|
|
|
3,525 |
|
|
|
|
|
|
|
|
|
|
Asphalt
tons - external customers |
|
|
260 |
|
|
|
268 |
|
|
|
1,123 |
|
|
|
1,023 |
|
Internal
asphalt tons used in road paving business |
|
|
552 |
|
|
|
534 |
|
|
|
2,167 |
|
|
|
2,131 |
|
Total
asphalt tons |
|
|
812 |
|
|
|
802 |
|
|
|
3,290 |
|
|
|
3,154 |
|
|
|
|
|
|
|
|
|
|
Average unit
sales price by product line (including internal
sales): |
|
|
|
|
|
|
|
|
Aggregates (per ton) |
|
$ |
13.55 |
|
|
$ |
13.03 |
|
|
$ |
13.46 |
|
|
$ |
12.88 |
|
Ready
Mixed Concrete (per cubic yard) |
|
$ |
107.07 |
|
|
$ |
104.84 |
|
|
$ |
107.27 |
|
|
$ |
104.26 |
|
Cement
(per ton) |
|
$ |
108.23 |
|
|
$ |
103.94 |
|
|
$ |
105.97 |
|
|
$ |
101.96 |
|
Asphalt
(per ton) |
|
$ |
44.42 |
|
|
$ |
38.21 |
|
|
$ |
43.41 |
|
|
$ |
39.20 |
|
|
|
|
|
|
|
|
|
|
MARTIN MARIETTA MATERIALS, INC. |
Non-GAAP Financial
Measures |
(Dollars in millions) |
|
|
|
|
|
|
|
|
|
The ratio of Consolidated Debt-to-Consolidated EBITDA, as
defined, for the trailing-12 months is a covenant under the
Company's revolving credit facility and accounts receivable
securitization facility. Under the terms of these agreements,
as amended, the Company's ratio of Consolidated
Debt-to-Consolidated EBITDA as defined, for the trailing-12 months
cannot exceed 3.50 times as of December 31, 2017, with certain
exceptions related to qualifying acquisitions, as
defined. |
|
The following presents the calculation of Consolidated
Debt-to-Consolidated EBITDA, as defined by the Company's Credit
Agreement, at December 31, 2017, for the trailing-12 months
EBITDA. For supporting calculations, refer to Company's website at
www.martinmarietta.com. |
|
|
|
|
|
|
|
|
|
Twelve Month Period |
|
|
|
|
|
|
|
|
January 1, 2017
to |
|
|
|
|
|
|
|
|
December 31, 2017 |
|
|
|
|
|
|
Earnings from
continuing operations attributable to Martin Marietta Materials,
Inc. |
|
$ |
713.3 |
|
|
|
|
|
|
|
Add back: |
|
|
|
|
|
|
|
|
Interest
expense |
|
|
91.5 |
|
|
|
|
|
|
|
Depreciation, depletion and amortization expense |
|
|
294.0 |
|
|
|
|
|
|
|
Stock-based compensation expense |
|
|
30.5 |
|
|
|
|
|
|
|
Acquisition-related expenses |
|
|
8.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deduct: |
|
|
|
|
|
|
|
|
Income
tax benefit |
|
|
(94.6 |
) |
|
|
|
|
|
|
Interest
income |
|
|
(0.7 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated EBITDA, as
defined by the Company's Credit Agreement |
|
$ |
1,042.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Net Debt,
as defined and including debt for which the Company is a
co-borrower, at December 31, 2017 |
|
$ |
1,643.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
Debt-to-Consolidated EBITDA, as defined by the Company's Credit
Agreement, |
|
|
|
|
|
|
|
|
at
December 31, 2017, for the trailing-12 months EBITDA |
|
1.58 times |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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. For further information on EBITDA, refer
to the Company's website at www.martinmarietta.com. EBITDA is
as follows: |
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
Year Ended |
|
|
December 31, |
|
December 31, |
|
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Consolidated Earnings
Before Interest, Income Taxes, Depreciation, Depletion and
Amortization (EBITDA) |
|
$ |
262.4 |
|
|
$ |
229.7 |
|
|
$ |
1,004.4 |
|
|
$ |
971.6 |
|
|
|
|
|
|
|
|
|
A
Reconciliation of Net Earnings Attributable to Martin Marietta
Materials, Inc. to Consolidated EBITDA is as follows: |
|
|
|
Three Months
Ended |
|
Year Ended |
|
|
December 31, |
|
December 31, |
|
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Net Earnings
Attributable to Martin Marietta Materials, Inc. |
|
$ |
377.2 |
|
|
$ |
98.9 |
|
|
$ |
713.3 |
|
|
$ |
425.4 |
Add back: |
|
|
|
|
|
|
|
|
Interest Expense |
|
|
23.4 |
|
|
|
20.8 |
|
|
|
91.5 |
|
|
|
81.7 |
Income Tax
(Benefit) Expense for Controlling Interests |
|
|
(213.6 |
) |
|
|
37.6 |
|
|
|
(94.4 |
) |
|
|
181.5 |
Depreciation,
Depletion and Amortization Expense |
|
|
75.4 |
|
|
|
72.4 |
|
|
|
294.0 |
|
|
|
283.0 |
Consolidated
EBITDA |
|
$ |
262.4 |
|
|
$ |
229.7 |
|
|
$ |
1,004.4 |
|
|
$ |
971.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
A
reconciliation of Net Earnings Attributable to Martin Marietta
Materials, Inc. to the midpoint of the range for consolidated
EBITDA included in the full-year 2018 outlook is as
follows: |
|
|
|
|
|
|
|
|
|
|
|
Midpoint of Full-Year 2018
Outlook |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Earnings
Attributable to Martin Marietta Materials, Inc. |
|
$ |
542.5 |
|
|
|
|
|
|
|
Add back: |
|
|
|
|
|
|
|
|
Interest Expense |
|
|
127.5 |
|
|
|
|
|
|
|
Income Tax
Expense for Controlling Interests |
|
|
145.0 |
|
|
|
|
|
|
|
Depreciation,
Depletion and Amortization Expense |
|
|
315.0 |
|
|
|
|
|
|
|
Consolidated
EBITDA |
|
$ |
1,130.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per diluted share excluding the impact of the Tax
Cuts and Jobs Act of 2017 (2017 Tax Act) is a non-GAAP
measure. The Company presents this measure to provide an
earnings per diluted share measure that is comparable to prior
periods as the impact of the 2017 Tax Act is a nonrecurring,
non-cash benefit. The following reconciles earnings per
diluted share in accordance with generally accepted accounting
principles to earnings per diluted share excluding the impact of
the 2017 Tax Act for the quarter and year ended December 31,
2017: |
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
Year Ended |
|
|
|
|
|
|
December 31,2017 |
|
December 31, 2017 |
|
|
|
|
Earnings per diluted
share in accordance with generally accepted accounting
principles |
|
$ |
5.95 |
|
|
$ |
11.25 |
|
|
|
|
|
Less: Per diluted
share impact of the 2017 Tax Act |
|
|
(4.07 |
) |
|
|
(4.07 |
) |
|
|
|
|
Earnings per diluted
share excluding the impact of the 2017 Tax Act |
|
$ |
1.88 |
|
|
$ |
7.18 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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