Martin Marietta Materials Performance Sharing Plan
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
x ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the fiscal year ended December 31, 2006
OR
o TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from to
Commission file number: 1-12744
MARTIN MARIETTA MATERIALS, INC.
PERFORMANCE SHARING PLAN
(Full title of the plan and the address of the plan,
if different from that of the issuer named below)
MARTIN MARIETTA MATERIALS, INC.
2710 Wycliff Road
Raleigh, North Carolina 27607
(Name of issuer of the securities held pursuant to the plan and the address
of its principal executive office)
Page 1 of 14
Financial Statements and Supplemental Schedule
Martin Marietta Materials, Inc. Performance Sharing Plan
December 31, 2006 and 2005 and Year Ended December 31, 2006
Page 2 of 14
Martin Marietta Materials, Inc. Performance Sharing Plan
Audited Financial Statements
and Supplemental Schedule
December 31, 2006 and 2005 and Year Ended December 31, 2006
Contents
| |
|
|
|
|
Report of Independent Registered Public Accounting Firm |
|
|
4 |
|
|
|
|
|
|
Audited Financial Statements: |
|
|
|
|
|
|
|
|
|
Statements of Net Assets Available for Benefits |
|
|
5 |
|
Statement of Changes in Net Assets Available for Benefits |
|
|
6 |
|
Notes to Financial Statements |
|
|
7 |
|
|
|
|
|
|
Supplemental Schedule: |
|
|
|
|
|
|
|
|
|
Schedule H, Line 4(i) — Schedule of Assets (Held at End of Year) |
|
|
12 |
|
Page 3 of 14
Report of Independent Registered Public Accounting Firm
Martin Marietta Materials, Inc., as Plan Administrator
We have audited the accompanying statements of net assets available for benefits of the Martin
Marietta Materials, Inc. Performance Sharing Plan (the “Plan”) as of December 31, 2006 and 2005,
and the related statement of changes in net assets available for benefits for the year ended
December 31, 2006. These financial statements are the responsibility of Martin Marietta Materials,
Inc., as Plan Administrator. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight
Board (United States). Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material misstatement. We
were not engaged to perform an audit of the Plan’s internal control over financial reporting. Our
audits included consideration of internal control over financial reporting as a basis for designing
audit procedures that are appropriate in the circumstances, but not for the purpose of expressing
an opinion on the effectiveness of the Plan’s internal control over financial reporting.
Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing the accounting
principles used and significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in all material
respects, the net assets available for benefits of the Plan at December 31, 2006 and 2005, and the
changes in its net assets available for benefits for the year ended December 31, 2006 in conformity
with U.S. generally accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the financial statements taken
as a whole. The accompanying supplemental Schedule of Assets (Held at End of Year) as of December
31, 2006 is presented for the purpose of additional analysis and is not a required part of the
financial statements but is supplementary information required by the Department of Labor’s Rules
and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. This supplemental schedule is the responsibility of the Plan’s management. The supplemental
schedule has been subjected to the auditing procedures applied in our audit of the financial
statements and, in our opinion, is fairly stated in all material respects in relation to the
financial statements taken as a whole.
Dixon Hughes PLLC
Raleigh, NC
June 18, 2007
Page 4 of 14
Martin Marietta Materials, Inc. Performance Sharing Plan
Statements of Net Assets Available for Benefits
| |
|
|
|
|
|
|
|
|
| |
|
December 31 |
|
| |
|
2006 |
|
|
2005 |
|
| |
|
|
| |
|
(in thousands) |
|
Assets |
|
|
|
|
|
|
|
|
Interest in Master Trust, at fair value |
|
$ |
161,810 |
|
|
$ |
142,122 |
|
Participant loans |
|
|
2,596 |
|
|
|
2,546 |
|
Contributions receivable: |
|
|
|
|
|
|
|
|
Employees |
|
|
294 |
|
|
|
265 |
|
Martin Marietta Materials, Inc. |
|
|
97 |
|
|
|
92 |
|
| |
|
|
Net assets available for benefits |
|
$ |
164,797 |
|
|
$ |
145,025 |
|
| |
|
|
See accompanying notes.
Page 5 of 14
Martin Marietta Materials, Inc. Performance Sharing Plan
Statement of Changes in Net Assets Available for Benefits
Year Ended December 31, 2006
(in thousands)
| |
|
|
|
|
Net assets available for benefits at beginning of year |
|
$ |
145,025 |
|
Additions to net assets attributed to: |
|
|
|
|
Interest in net investment gain of Master Trust |
|
|
22,829 |
|
Interest on participant loans |
|
|
147 |
|
Contributions: |
|
|
|
|
Employees |
|
|
7,531 |
|
Martin Marietta Materials, Inc. |
|
|
2,464 |
|
Rollovers |
|
|
671 |
|
|
|
|
|
Total contributions |
|
|
10,666 |
|
|
|
|
|
|
Transfers in from other plans |
|
|
16 |
|
|
|
|
|
Total additions |
|
|
33,658 |
|
|
|
|
|
|
|
|
|
|
Deductions from net assets attributed to: |
|
|
|
|
Distributions and withdrawals |
|
|
13,337 |
|
Administrative expenses |
|
|
549 |
|
|
|
|
|
Total deductions |
|
|
13,886 |
|
|
|
|
|
|
|
|
|
|
Net increase in net assets available for benefits |
|
|
19,772 |
|
|
|
|
|
|
|
|
|
|
Net assets available for benefits at end of year |
|
$ |
164,797 |
|
|
|
|
|
See accompanying notes.
Page 6 of 14
Martin Marietta Materials, Inc. Performance Sharing Plan
Notes to Financial Statements
December 31, 2006 and 2005
1. Accounting Policies
The financial statements of the Martin Marietta Materials, Inc. Performance Sharing Plan (the “Plan”) are
prepared on the accrual basis of accounting. No liability is recorded for distributions to
participants who terminated during the year but have chosen to defer payments to the following
year. The assets of the Plan are held and invested on a commingled basis in the Martin Marietta
Materials, Inc. Defined Contribution Plans Master Trust (the “Master Trust”) along with the assets
of the Martin Marietta Materials, Inc. Savings and Investment Plan. The Plan’s interest in the
Master Trust is stated at the fair value of the underlying net assets in the Master Trust. Fair
values of the underlying net assets are determined by closing prices on the last business day of
the year for those securities traded on national exchanges and at the most recent sales prices for
those securities traded in over-the-counter markets. Participant loans are valued at their cost
basis, which are assumed to approximate their fair values. Purchases and sales of securities are
recorded on a trade-date basis. Dividends are recorded on the ex-dividend date. The assets,
realized and unrealized gains and losses and investment income of the Master Trust are allocated
among the participating plans on a pro rata basis based on asset balances. Substantially all
administrative expenses are paid by the Master Trust and allocated to each of the participating
plans.
The preparation of financial statements in conformity with U.S. generally accepted accounting
principles requires management to make estimates, including the determination of fair values of
investments for which market values are not readily available. Actual results could differ from
those estimates.
2. Description of the Plan
The following description of the Plan provides only general information. Participants should refer
to the summary plan description for a more complete description of the Plan’s provisions.
The Plan is a defined contribution plan providing eligible salaried employees of the Corporation an
opportunity to participate in an individual savings and investment program providing tax-deferred
savings. The Plan is subject to the provisions of the Employee Retirement Income Security Act of
1974 (ERISA). Martin Marietta Materials, Inc. (the “Corporation”) is the Plan’s sponsor and also
serves as the Plan administrator.
Page 7 of 14
Martin Marietta Materials, Inc. Performance Sharing Plan
Notes to Financial Statements (continued)
2. Description of the Plan (continued)
Employees are eligible to enroll in the Plan as soon as administratively possible upon hire.
Participants may elect to contribute basic contributions of 1% to 7% of base salary (as defined in
the Plan and subject to applicable Internal Revenue Code (the “Code”) limitations on allowable
compensation). Certain participants may also elect to make additional supplemental contributions,
which are not considered for purposes of computing the employer match. A participant’s before-tax
combined basic and supplementary contributions may not exceed 25% of that participant’s base pay.
Unless an affirmative election to not participate in the Plan is made, employees hired on or after
March 1, 2006 are automatically enrolled in the Plan and deemed to have elected to contribute 2% of
base salary. The 2% contribution increases by 1% on each anniversary date of the participants’
automatic enrollment until the before-tax contribution reaches 7% of base salary. Participants may
make an affirmative election at any time to contribute a different amount. Contributions are
automatically invested in a fund intended to preserve capital, unless otherwise designated by the
participant.
Certain participants also have the option of making after-tax contributions to the Plan, in
addition to, or in lieu of, before-tax contributions. However, the combined amount of after-tax and
before-tax contributions cannot exceed a total of 25% of base pay, subject to certain restrictions
for highly compensated employees.
The Corporation matches the participants’ annual basic contributions (the first 7% of base pay)
starting the first of the month following six months of employment. The amount of the Corporation’s
match is equal to 50% of the basic before-tax contributions and is credited to participant accounts
weekly. All participants are 100% vested in the value of their accounts, including employer
contributions.
The participants’ investment options within the Master Trust include the State Street
Yield-Enhanced Short-Term Investment Fund, State Street S&P 500 Flagship Index Fund, Martin
Marietta Materials Common Stock Fund, Harbor Capital Appreciation Fund, State Street Daily Bond
Market Fund, Vanguard Windsor Fund, Vanguard Explorer Fund and Vanguard International Growth Fund.
Page 8 of 14
Martin Marietta Materials, Inc. Performance Sharing Plan
Notes to Financial Statements (continued)
2. Description of the Plan (continued)
Participants may change the overall percentage of their contributions in 1% increments and may
change investment elections for future before-tax, after-tax and matching contributions, both up to
once per month. Any changes in investment elections must be made in 5% increments. In addition,
participants may change the investment mix of the accumulated value of prior contributions among
the investment options daily, but are limited to 12 changes in a calendar year, provided that the
participant has one transfer in a calendar quarter, regardless of the limitation. The Plan also
allows for spot transfers in which a specific dollar amount may be transferred from one investment
option to another.
The Plan provides for participants to borrow from the money in his or her own investment account.
All loans must meet specific terms and conditions of the Plan and are subject to applicable
regulations of the Code. The minimum loan amount is $500. The maximum loan is the lesser of 50% of
the total account balance or $50,000 minus the highest outstanding loan balance from the past 12
months. Loans must be repaid at a minimum rate of $40 per month. Personal loans are available to
participants in terms of up to 5 years, and primary residence loans are available for terms of up
to 15 years. Such loans bear interest at a fixed rate, established upon loan request, which is
equal to the annual prime rate (based upon corporate borrowing rates posted by at least 75% of the
nation’s 30 largest banks, as reported in The Wall Street Journal on the first business day of the
calendar month before loan application) plus 1%. All loans are due in full immediately upon
termination of employment. In addition, the Plan provides for in-service withdrawals to
participants that meet specific conditions of financial hardship, as defined in the Plan and in
accordance with current specific regulations under the Code. Participants who are still working at
the age of 591/2 may qualify for special withdrawal rights and privileges as defined in the Plan.
Upon separation from the Corporation, participants may receive the full current value of their
contributions and the matching employer contributions in a lump-sum payment at any time or defer
any payment until the participant reaches the age of 701/2. Participants who have attained age 55
may receive their distributions in the form of a lump-sum payment or in annual installments over a
period of up to 25 years. The accounts of participants who receive installment payments remain
invested in the funds indicated by the participant.
State Street Bank and Trust Company, a subsidiary of State Street Corporation, is the trustee of
the Master Trust and CitiStreet LLC is the recordkeeper of the Master Trust and Plan.
Page 9 of 14
Martin Marietta Materials, Inc. Performance Sharing Plan
Notes to Financial Statements (continued)
2. Description of the Plan (continued)
Although the Corporation expects to continue the Plan indefinitely, the Board of Directors of the
Corporation may terminate the Plan for any reason at any time. If the Plan is terminated, each
participant or former participant shall receive a payment equal to the value of the participant’s
account.
3. Income Tax Status
The Plan received a determination letter from the Internal Revenue Service dated April 9, 2003,
stating that the Plan is qualified under Section 401(a) of the Code, and, therefore, the related
trust is exempt from taxation. Subsequent to this determination by the Internal Revenue Service,
the Plan was amended. Once qualified, the Plan is required to operate in conformity with the Code
to maintain its qualification. The Plan Administrator believes the Plan is being operated in
compliance with the applicable requirements of the Code and, therefore, believes that the Plan, as
amended, is qualified and the related trust is tax exempt.
4. Master Trust
The Plan’s interest in the Master Trust’s net assets as of December 31, 2006 and 2005 was 65.57%
and 66.49%, respectively. An analysis of investments and related investment income for the Master
Trust is as follows:
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
2006 |
|
|
2005 |
|
| |
|
|
|
|
|
Net |
|
|
|
|
|
|
|
| |
|
Interest |
|
|
Appreciation in |
|
|
Fair Value |
|
|
Fair Value |
|
| |
|
and |
|
|
Fair Value |
|
|
at End of |
|
|
at End of |
|
| |
|
Dividends |
|
|
During Year |
|
|
Year |
|
|
Year |
|
| |
|
|
|
|
|
| |
|
(in thousands) |
|
Cash and cash
equivalents |
|
$ |
2,732 |
|
|
$ |
— |
|
|
$ |
59,740 |
|
|
$ |
55,581 |
|
Government bonds |
|
|
— |
|
|
|
413 |
|
|
|
9,946 |
|
|
|
8,719 |
|
Corporate bonds |
|
|
— |
|
|
|
233 |
|
|
|
5,594 |
|
|
|
4,904 |
|
Common stocks |
|
|
5,787 |
|
|
|
25,100 |
|
|
|
171,485 |
|
|
|
144,555 |
|
| |
|
|
|
|
|
|
|
$ |
8,519 |
|
|
$ |
25,746 |
|
|
$ |
246,765 |
|
|
$ |
213,759 |
|
| |
|
|
|
|
|
Page 10 of 14
Martin Marietta Materials, Inc. Performance Sharing Plan
Notes to Financial Statements (continued)
4. Master Trust (continued)
The investments for the Master Trust are invested as follows:
| |
|
|
|
|
|
|
|
|
| |
|
December 31, |
|
| |
|
2006 |
|
|
2005 |
|
| |
|
(in thousands) |
|
| |
Vanguard Explorer Fund |
|
$ |
10,712 |
|
|
$ |
9,220 |
|
Vanguard Windsor Fund |
|
|
24,424 |
|
|
|
20,150 |
|
Vanguard International Growth Fund |
|
|
20,190 |
|
|
|
12,173 |
|
* State Street Yield-Enhanced Short-Term
Investment Fund |
|
|
59,740 |
|
|
|
55,581 |
|
* State Street Daily Bond Market Fund |
|
|
15,540 |
|
|
|
13,623 |
|
* State
Street S&P 500 Flagship Index Fund |
|
|
53,017 |
|
|
|
46,289 |
|
Harbor Capital Appreciation Fund |
|
|
12,314 |
|
|
|
13,502 |
|
* Martin Marietta Materials, Inc. Common Stock |
|
|
50,828 |
|
|
|
43,221 |
|
|
|
|
|
|
|
|
|
|
$ |
246,765 |
|
|
$ |
213,759 |
|
|
|
|
|
|
|
|
* Indicates party-in-interest to the Plan.
5. Risks and Uncertainties
The Plan invests in various investment securities. Investment securities are exposed to various
risks such as interest rate, market and credit risks. Due to the level of risk associated with
certain investment securities, it is at least reasonably possible that changes in the values of
investment securities will occur in the near term and that such changes could materially affect
participants’ account balances and the amounts reported in the statements of net assets available
for benefits.
Page 11 of 14
Martin Marietta Materials, Inc. Performance Sharing Plan
EIN: 56-1848578 Plan Number: 005
Schedule H, Line 4i — Schedule of Assets
(Held at End of Year)
December 31, 2006
| |
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
(c) |
|
|
|
|
| |
|
(b) |
|
Description of Investment |
|
|
|
|
| |
|
Identity of Issue, |
|
Including Maturity Date, |
|
|
|
(e) |
| |
|
Borrower, Lessor, or |
|
Rate of Interest, Collateral, |
|
|
|
Current |
| (a) |
|
Similar Party |
|
Par or Maturity Value |
|
(d) |
|
Value |
| |
| |
|
|
|
|
|
|
|
(in thousands) |
| |
*
|
|
Interest in Master Trust
|
|
Martin Marietta Materials, Inc. Defined
Contribution Plans Master Trust
|
|
|
|
$ |
161,810 |
|
| |
*
|
|
Participant loans
|
|
Interest rates ranging from 5% to 10%
|
|
|
|
|
2,596 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
164,406 |
|
|
|
|
|
|
|
|
|
|
|
|
Note: Cost information has not been included in column (d) because all investments are participant directed.
* Indicates party-in-interest to the Plan.
Page 12 of 14
SIGNATURES
THE PLAN. Pursuant to the requirements of the Securities Exchange Act of 1934, the plan
administrator of the below named plan has duly caused this annual report to be signed on its behalf
by the undersigned hereunto duly authorized.
| |
|
|
|
|
|
|
|
|
MARTIN MARIETTA MATERIALS, INC.
PERFORMANCE SHARING PLAN |
|
|
|
|
|
|
|
|
|
By:
|
|
Martin Marietta Materials, Inc.
Plan Administrator |
|
|
|
|
|
|
|
|
|
By:
|
|
Benefit Plan Committee |
|
|
|
|
|
|
|
|
|
|
|
By:
|
|
/s/ Anne H. Lloyd |
|
|
|
|
|
|
|
|
|
|
|
|
|
Anne H. Lloyd |
|
|
|
|
|
|
|
Date:
June 20, 2007 |
|
|
|
|
|
|
Page 13 of 14
EXHIBIT INDEX
| |
|
|
| Exhibit No. |
|
Document |
|
|
|
23.01
|
|
Consent of Dixon Hughes PLLC |
Page 14 of 14