FORM 10-K
2008
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(Mark One)
| |
|
|
| þ |
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the fiscal year ended December 31, 2008
OR
| |
|
|
| o |
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission file number 1-12744
MARTIN MARIETTA MATERIALS, INC.
(Exact name of registrant as specified in its charter)
| |
|
|
| North Carolina
|
|
56-1848578 |
(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification No.) |
| |
|
|
| 2710 Wycliff Road, Raleigh, North Carolina
|
|
27607-3033 |
| (Address of principal executive offices)
|
|
(Zip Code) |
(919) 781-4550
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
| |
|
|
| Title of each class |
|
Name of each exchange on which registered |
Common Stock (par value $.01 per share) (including
rights attached thereto)
|
|
New York Stock Exchange |
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule
405 of the Securities Act.
Yes þ No o
Indicate by check mark if the registrant is not required to file reports pursuant to Section
13 or Section 15(d) of the Exchange Act.
Yes o No þ
Indicate by check mark whether the registrant (1) has filed all reports required to be filed
by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
Yes þ No o
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation
S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in
definitive proxy or information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. þ
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer,
a non-accelerated filer, or a smaller reporting company.
See the definitions of “large
accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
| |
|
|
|
|
|
|
| Large accelerated filer þ |
|
Accelerated filer o |
|
Non-accelerated filer o
(Do not check if a smaller reporting company) |
|
Smaller reporting company o |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes o No þ
As of June 30, 2008, the last business day of the registrant’s most recently completed second
fiscal quarter, the aggregate market value of the registrant’s common stock held by non-affiliates
of the registrant was $1,429,037,827 based on the closing sale price as reported on the New York
Stock Exchange.
Indicate the number of shares outstanding of each of the issuer’s classes of common stock on
the latest practicable date.
| |
|
|
| Class |
|
Outstanding at February 10, 2009 |
| Common Stock, $.01 par value per share
|
|
41,406,842 shares |
DOCUMENTS INCORPORATED BY REFERENCE
| |
|
|
| Document |
|
Parts Into Which Incorporated |
Excerpts from Annual Report to Shareholders
for the Fiscal Year Ended December 31, 2008
(Annual Report)
|
|
Parts I, II, and IV |
|
|
|
Proxy Statement for the Annual Meeting of
Shareholders to be held May 27, 2009 (Proxy
Statement)
|
|
Part III |
TABLE OF CONTENTS
| |
|
|
|
|
| |
|
Page |
|
|
|
|
4 |
|
|
|
|
|
|
|
|
|
4 |
|
|
|
|
|
|
|
|
|
16 |
|
|
|
|
|
|
|
|
|
25 |
|
|
|
|
|
|
|
|
|
25 |
|
|
|
|
|
|
|
|
|
29 |
|
|
|
|
|
|
|
|
|
29 |
|
|
|
|
|
|
|
|
|
29 |
|
|
|
|
|
|
|
|
|
30 |
|
|
|
|
|
|
|
|
|
30 |
|
|
|
|
|
|
|
|
|
31 |
|
|
|
|
|
|
|
|
|
31 |
|
|
|
|
|
|
|
|
|
32 |
|
|
|
|
|
|
|
|
|
32 |
|
|
|
|
|
|
|
|
|
32 |
|
|
|
|
|
|
|
|
|
32 |
|
|
|
|
|
|
|
|
|
33 |
|
|
|
|
|
|
|
|
|
34 |
|
|
|
|
|
|
|
|
|
34 |
|
|
|
|
|
|
|
|
|
34 |
|
|
|
|
|
|
|
|
|
34 |
|
|
|
|
|
|
|
|
|
34 |
|
2
PART I
ITEM 1. BUSINESS
General
Martin Marietta Materials, Inc. (the “Company”) is a leading producer of aggregates for the
construction industry, including infrastructure, commercial, agricultural, and residential. The
Company also has a Specialty Products segment that manufactures and markets magnesia-based chemical
products used in industrial, agricultural, and environmental applications; dolomitic lime sold
primarily to the steel industry; and structural composite products. In 2008, the Company’s
Aggregates business accounted for 91% of the Company’s total net sales, and the Company’s Specialty
Products segment accounted for 9% of the Company’s total net sales.
The Company was formed in 1993 as a North Carolina corporation to serve as successor to the
operations of the materials group of the organization that is now Lockheed Martin Corporation. An
initial public offering of a portion of the Company’s Common Stock was completed in 1994, followed
by a tax-free exchange transaction in 1996 that resulted in 100% of the Company’s Common Stock
being publicly traded.
Initially, the Company’s aggregates operations were predominantly in the Southeast, with
additional operations in the Midwest. In 1995, the Company started its geographic expansion with
the purchase of an aggregates business that included an extensive waterborne distribution system
along the East and Gulf Coasts and the Mississippi River. Smaller acquisitions that year,
including the acquisition of the Company’s granite operations on the Strait of Canso in Nova
Scotia, complemented the Company’s new coastal distribution network.
Subsequent acquisitions in 1997 and 1998 expanded the Company’s Aggregates business in the
middle of the country and added a leading producer of aggregates products in Texas, which provided
the Company with access to an extensive rail network in Texas. These two transactions positioned
the Company for numerous additional expansion acquisitions in Ohio, Indiana, and the southwestern
regions of the United States, with the Company completing 29 smaller acquisitions between 1997 and
1999, which allowed the Company to enhance and expand its presence in the aggregates marketplace.
In 1998, the Company made an initial investment in an aggregates business that would later
serve as the Company’s platform for further expansion in the southwestern and western United
States. In 2001, the Company completed the purchase of all of the remaining interests of this
business, which increased its ability to use rail as a mode of transportation.
Effective January 1, 2005, the Company formed a joint venture with Hunt Midwest Enterprises to
operate substantially all of the aggregates facilities of both companies in Kansas City and
surrounding areas. The parties contributed a total of 15 active quarry operations to the joint
venture.
In 2008, the Company entered into a swap transaction with Vulcan Materials Company (“Vulcan”),
pursuant to which it acquired six quarry locations in Georgia and Tennessee. The newly
4
acquired locations significantly expanded the Company’s presence in Georgia and Tennessee,
particularly south and west of Atlanta, Georgia. The Company also acquired a land parcel
previously leased from Vulcan at the Company’s Three Rivers Quarry near Paducah, Kentucky. In
addition to a cash payment, as part of this swap, the Company divested to Vulcan its only
California quarry located in Oroville, an idle facility north of San Antonio, Texas, and land in
Henderson, North Carolina, formerly leased to Vulcan.
Between 2001 and 2008, the Company disposed of or permanently shut down a number of
underperforming operations, including aggregates, asphalt, ready mixed concrete, trucking, and road
paving operations of its Aggregates business and the refractories business of its Magnesia
Specialties business. In some of its divestitures, the Company concurrently entered into supply
agreements to provide aggregates at market rates to certain of these divested businesses. The
Company will continue to evaluate opportunities to divest underperforming assets during 2009 in an
effort to redeploy capital for other opportunities.
Business Segment Information
The Company operates in four reportable business segments: the Mideast Group, Southeast
Group, and West Group, collectively the Aggregates business, and the Specialty Products segment.
The Specialty Products segment includes the magnesia-based chemicals and dolomitic lime businesses
and the structural composites product line. Information concerning the Company’s total revenues,
net sales, earnings from operations, assets employed, and certain additional information
attributable to each reportable business segment for each year in the three-year period ended
December 31, 2008 is included in “Note O: Business Segments” of the “Notes to Financial Statements”
of the Company’s 2008 consolidated financial statements (the “2008 Financial Statements”), which
are included under Item 8 of this Form 10-K, and are part of the Company’s 2008 Annual Report to
Shareholders (the “2008 Annual Report”), which information is incorporated herein by reference.
Aggregates Business
The Aggregates business mines, processes and sells granite, limestone, sand, gravel, and other
aggregate products for use in all sectors of the public infrastructure, commercial and residential
construction industries as well as miscellaneous uses such as agriculture, railroad ballast and
chemical uses. The Aggregates business also includes the operation of other construction materials
businesses. These businesses, located primarily in the West Group, were acquired through continued
selective vertical integration by the Company, and include asphalt, ready mixed concrete, and road
paving operations.
The Company is a leading producer of aggregates for the construction industry in the United
States. In 2008, the Company’s Aggregates business shipped 159.4 million tons of aggregates
primarily to customers in 29 states, Canada, the Bahamas, and the Caribbean Islands, generating net
sales and earnings from operations of $1.7 billion and $331.0 million, respectively.
The Aggregates business markets its products primarily to the construction industry, with
approximately 50% of its shipments made to contractors in connection with highway and other public
infrastructure projects and the balance of its shipments made primarily to contractors in
connection with commercial and residential construction projects. As a result of dependence upon
the
5
construction industry, the profitability of aggregates producers is sensitive to national,
regional, and local economic conditions, and particularly to cyclical swings in construction
spending, which is affected by fluctuations in interest rates, demographic and population shifts,
and changes in the level of infrastructure spending funded by the public sector.
The American Recovery and Reinvestment Act of 2009 (“the Act” or “the Economic Stimulus Plan”) was
signed into law on February 17, 2009, for the purpose of creating jobs and restoring economic
growth through, among other things, the modernization of the United States’ infrastructure, the
enhancement of America’s energy independence and the expansion of educational opportunities. As
the Act could create significant construction spending, demand for our products could be affected
by the economic growth anticipated under the Act. We estimate that for every $1 million that is
spent directly on highways, roads and bridges, approximately 10,000 tons of construction aggregates
are required. The Act allocates $27.5 billion for highways and bridges. We also expect that other
spending components of the Act could lead to a change in construction activity including spending
allocated to the following areas: $1.1 billion for airports; $8.4 billion for mass transit; $8.0
billion for high speed rail; $4.6 billion for the Army Corps of Engineers; $6.0 billion for water
and sewer projects; $4.2 billion for United States Department of Defense facilities; $6.4 billion
to clean nuclear weapon sites; $6.0 billion to subsidize loans for renewable energy; $20 billion
for renewable energy tax incentives; $6.3 billion to states for energy efficiency and clean energy
grants; $44.5 billion for schools; and $6.6 billion for a first time homebuyer credit of $8,000.
The spending under the Act will take at least several months before Congress could appropriate such
funds and each state could take appropriate measures to take advantage of such funding. In
addition, each state would have to approve various infrastructure projects to be funded through the
Act. We cannot be assured as to the nature, extent or timing of the full impact of the spending
under the Act and our estimate of 10,000 tons per $1 million constitutes an estimate that will not
necessarily result in actual tonnage.
The Company’s
Aggregates business covers a wide geographic area, with aggregates, asphalt products, and ready
mixed concrete sold and shipped from a network of approximately 288 quarries, underground mines,
distribution facilities, and plants to customers in 29 states, Canada, the Bahamas, and the
Caribbean Islands. The Company’s five largest revenue-generating states (North Carolina, Texas,
Georgia, Iowa, and Florida) account for approximately 60% of total 2008 net sales for the
Aggregates business by state of destination. The Company’s Aggregates business is accordingly
affected by the economies in these regions and has been adversely affected in part by recessions
and weaknesses in these economies from time to time. The current economic recession nationally and
in these states has negatively impacted the Company’s Aggregates business.
The Company’s Aggregates business is also highly seasonal, due primarily to the effect of
weather conditions on construction activity within its markets. The operations of the Aggregates
business that are concentrated in the northern United States and Canada typically experience more
severe winter weather conditions than operations in the southeastern and southwestern regions of
the United States. Excessive rainfall or severe drought, however, can jeopardize shipments,
production, and profitability in all of the Company’s markets. Due to these factors, the Company’s
second and third quarters are the strongest, with the first quarter generally reflecting the
weakest results. Results in any quarter are not necessarily indicative of the Company’s annual
results. Similarly, the operations of the Aggregates business in the southeastern and Gulf Coast
regions of the United States and the Bahamas are at risk for hurricane activity and have
experienced weather-related losses in recent years. During 2008, the Company was negatively
impacted in the southwest and southeast by Hurricanes Gustav, Hannah, and Ike and also by Tropical
Storm Fay. Further, Iowa experienced severe flooding during 2008, which negatively affected both
shipments and operations.
Natural aggregates sources can be found in relatively homogeneous deposits in certain areas of
the United States. As a general rule, truck shipments from an individual quarry are limited
because the cost of transporting processed aggregates to customers is high in relation to the price
of the product itself. As described below, the Company’s distribution system mainly uses trucks,
but also has access to a river barge and ocean vessel network where the per mile unit cost of
transporting aggregates is much lower. In addition, acquisitions have enabled the Company to
extend its customer base through increased access to rail transportation. Proximity of quarry
facilities to customers or to long-haul transportation corridors is an important factor in
competition for aggregates business.
A growing percentage of the Company’s aggregates shipments are being moved by rail or water
through a distribution yard network. In 1994, 93% of the Company’s aggregates shipments were moved
by truck, the rest by rail. In contrast, in 2008, the originating mode of transportation for the
Company’s aggregates shipments was 70% by truck, 19% by rail, and 11% by water. The majority of the
rail and water movements occur in the Southeast Group and the West Group. The Company has an
extensive network of aggregates quarries and distribution centers along the Mississippi River
system throughout the central and southern United States and in the Bahamas and Canada, as well as
distribution centers along the Gulf of Mexico and Atlantic coasts. The Company has previously
brought additional capacity on line at its Bahamas and Nova Scotia locations to transport materials
via oceangoing ship. In 2006, the Company completed a highly-automated plant and barge loadout
6
system at its Three Rivers facility in Kentucky, a key site in the Company’s long-haul distribution
network, which plant is capable of producing more than 8 million tons per year for shipment to 14
states along the Ohio and Mississippi River network.
In addition, the Company’s acquisitions and capital projects have expanded its ability to ship
material by rail, as discussed in more detail below. The Company has added additional capacity in a
number of locations that can now accommodate larger unit train movements. These expansion projects
have enhanced the Company’s long-haul distribution network. The Company’s process improvement
program has also improved operational effectiveness through plant automation, mobile fleet
modernization, right-sizing, and other cost control improvements. Accordingly, the Company has
enhanced its reach through its ability to provide cost-effective coverage of coastal markets on the
east and gulf coasts, as well as geographic areas that can be accessed economically by the
Company’s expanded distribution system. This distribution network moves aggregates materials from
domestic and offshore sources, via rail and water, to markets where aggregates supply is limited.
The Company is currently focusing a significant part of its capital spending program on
locations that are part of the rail transportation network along the geological fall line. In
2008, the Company completed its new plant in Augusta, Georgia, which increased capacity from 2
million tons per year to 6 million tons per year and will help serve high-growth markets in Georgia
and Florida. However, during the current recession, the Company has scaled back its capital
program and has delayed significant projects pending recovery in the economy.
As the Company continues to move more aggregates by rail and water, embedded freight costs
have consequently reduced gross margins. This typically occurs where the Company transports
aggregates from a production location to a distribution location by rail or water, and the customer
pays a selling price that includes a freight component. Margins are negatively affected because
the Company typically does not charge the customer a profit associated with the transportation
component of the selling price. Moreover, the Company’s expansion of its rail-based distribution
network, coupled with the extensive use of rail service in the Southeast and West Groups, increase
the Company’s dependence on and exposure to railroad performance, including track congestion, crew
availability, and power availability, and the ability to renegotiate favorable railroad shipping
contracts. The waterborne distribution network, primarily located within the Southeast Group, also
increases the Company’s exposure to certain risks, including the ability to negotiate favorable
shipping contracts, demurrage costs, fuel costs, barge or ship availability, and weather
disruptions. The Company has entered into long-term agreements with shipping companies to provide
ships to transport the Company’s aggregates to various coastal ports.
From time to time the Company has experienced rail transportation shortages, particularly in
the Southwest and Southeast. These shortages were caused by the downsizing in personnel and
equipment by certain railroads during economic downturns. Further, in response to these issues,
rail transportation providers focused on increasing the number of cars per unit train under
transportation contracts and are generally requiring customers, through the freight rate structure,
to accommodate larger unit train movements. A unit train is a freight train moving large tonnages
of a single bulk product between two points without intermediate yarding and switching. In 2006,
the Company brought a new plant online on a greensite at its North Troy operation in Oklahoma,
which is capable of producing 5 million tons per year and handling multiple 90-car unit trains.
Certain of the Company’s sales yards in the southwestern region of the United States have the
system capabilities to meet the unit
7
train requirements. Over the last few years, the Company has made capital improvements to a number
of its sales yards in this region in order to better accommodate unit train unloadings. Further,
in 2005, the Company addressed certain of its railcar needs for future shipments by leasing 780
railcars under two master lease agreements. In 2008, the Company entered into lease agreements for
additional railcars for its Southwest Division.
The Company’s management expects the multiple transportation modes that have been developed
with various rail carriers and via barges and deepwater ships should provide the Company with the
flexibility to effectively serve customers in the southeastern and southwestern regions of the
United States.
The construction aggregates industry has been in a consolidating mode. The Company’s
management expects this trend to continue but at a slower rate as the number of suitable small to
mid-sized acquisition targets in high growth markets decline. However, acquisition opportunities
may increase in the short term as large, multi-national competitors may be forced to sell assets
acquired in recent transactions to generate cash to fund debt obligations. The Company’s Board of
Directors and management continue to review and monitor the Company’s strategic long-term plans,
which include assessing business combinations and arrangements with other companies engaged in
similar businesses, increasing market share in the Company’s core businesses, investing in internal
expansion projects in high-growth markets, and pursuing new opportunities related to the Company’s
existing markets.
The Company became more vertically integrated with an acquisition in 1998 and subsequent
acquisitions, particularly in the West Group, pursuant to which the Company acquired asphalt, ready
mixed concrete, paving construction, trucking, and other businesses, which complement the Company’s
aggregates business. These vertically integrated operations accounted for approximately 5% of
revenues of the Aggregates business in 2008. These operations have lower gross margins than
aggregates products, and are affected by volatile factors, including fuel costs, operating
efficiencies, and weather, to an even greater extent than the Company’s aggregates operations. The
road paving and trucking businesses were acquired as supplemental operations that were part of
larger acquisitions. As such, they do not represent core businesses of the Company. The results
of these operations are currently insignificant to the Company as a whole. Over the last few years
the Company has disposed of some of these operations. The Company continues to review carefully
the acquired vertically integrated operations to determine if they represent opportunities to
divest underperforming assets in an effort to redeploy capital for other opportunities.
Environmental and zoning regulations have made it increasingly difficult for the aggregates
industry to expand existing quarries and to develop new quarry operations. Although it cannot be
predicted what policies will be adopted in the future by federal, state, and local governmental
bodies regarding these matters, the Company anticipates that future restrictions will likely make
zoning and permitting more difficult, thereby potentially enhancing the value of the Company’s
existing mineral reserves.
Management believes the Aggregates business’ raw materials, or aggregates reserves, are
sufficient to permit production at present operational levels for the foreseeable future. The
Company does not anticipate any material difficulty in obtaining the raw materials that it uses for
current production in its Aggregates business. The Company’s aggregates reserves on the average
exceed 60
8
years of production, based on normalized levels of production. However, certain locations may be
subject to more limited reserves and may not be able to expand. Moreover, as noted above,
environmental and zoning regulations will likely make it harder for the Company to expand its
existing quarries or develop new quarry operations. The Company generally sells products in its
Aggregates business upon receipt of orders or requests from customers. Accordingly, there is no
significant order backlog. The Company generally maintains inventories of aggregate products in
sufficient quantities to meet the requirements of customers.
Less than 2% of the revenues from the Aggregates business are from foreign jurisdictions,
principally Canada and the Bahamas, with revenues from customers in foreign countries totaling
$24.8 million, $22.3 million, and $25.0 million during 2008, 2007, and 2006, respectively.
Specialty Products Business
The Company manufactures and markets, through its Specialty Products business, magnesia-based
chemical products for industrial, agricultural, and environmental applications, and dolomitic lime
for use primarily in the steel industry. These chemical products have varying uses, including
flame retardants, wastewater treatment, pulp and paper production, and other environmental
applications. In 2008, 69% of Specialty Products’ net sales were attributable to chemical
products, 28% to lime, and 2% to stone, with the remaining 1% attributable to the structural
composite products line described below. Sales of chemical products in 2008 were enhanced by the
acquisition of the ElastomagÒ product line from Morton International, Inc.
Given the high fixed costs associated with operating this business, low capacity utilization
negatively affects its results of operations. A significant portion of the costs related to the
production of magnesia-based products and dolomitic lime is of a fixed or semi-fixed nature. In
addition, the production of certain magnesia chemical products and lime products requires natural
gas, coal, and petroleum coke to fuel kilns. Price fluctuations of these fuels affect the
profitability of this business.
In 2008, approximately 75% of the lime produced was sold to third-party customers, while the
remaining 25% was used internally as a raw material in making the business’ chemical products.
Dolomitic lime products sold to external customers are used primarily by the steel industry.
Accordingly, a portion of the profitability of the Specialty Products business is dependent on
steel production capacity utilization and the related marketplace. Products used in the steel
industry accounted for approximately 40% of the Specialty Products’ net sales in 2008, attributable
primarily to the sale of dolomitic lime products. In 2008, the severe economic decline in the
second half of the year caused a significant downturn in the manufacturing of steel. Accordingly,
the sales and earnings of the Specialty Products business were negatively affected during the
fourth quarter of 2008, and management anticipates the continued weakness in the manufacturing of
steel for much of 2009.
Management has shifted the strategic focus of this magnesia-based business to specialty
chemicals that can be produced at volume levels that support efficient operations. Accordingly,
that business is not as dependent on the steel industry as is the dolomitic lime portion of the
Specialty Products business.
9
The principal raw materials used in the Specialty Products business are dolomitic limestone
and alkali-rich brine. Management believes that its reserves of dolomitic limestone and brine are
sufficient to permit production at the current operational levels for the foreseeable future.
After the brine is used in the production process, the Specialty Products business must
dispose of the processed brine. In the past, the business did this by reinjecting the processed
brine back into its underground brine reserve network around its facility in Manistee, Michigan.
The business has also sold a portion of this processed brine to third parties. In 2003, Specialty
Products entered into a long-term processed brine supply agreement with The Dow Chemical Company
(“Dow”) pursuant to which Dow purchases processed brine from Specialty Products, at market rates,
for use in Dow’s production of calcium chloride products. Specialty Products also entered into a
venture with Dow to construct, own, and operate a processed brine supply pipeline between the
Specialty Products facility in Manistee, Michigan, and Dow’s facility in Ludington, Michigan.
Construction of the pipeline was completed in 2003, and Dow began purchasing processed brine from
Specialty Products through the pipeline.
Specialty Products generally delivers its products upon receipt of orders or requests from
customers. Accordingly, there is no significant order backlog. Inventory for products is
generally maintained in sufficient quantities to meet rapid delivery requirements of customers.
Approximately 13% of the revenues of the Specialty Products business are from foreign
jurisdictions, principally Canada, Mexico, Europe, South America, and the Pacific Rim, but no
single country accounts for 10% or more of the revenues of the business. Revenues from customers
in foreign countries totaled $24.3 million, $20.2 million, and $17.0 million in 2008, 2007, and
2006, respectively. As a result of these foreign market sales, the financial results of the
Specialty Products business could be affected by foreign currency exchange rates or weak economic
conditions in the foreign markets. To mitigate the short-term effects of currency exchange rates,
the Specialty Products business principally uses the U.S. dollar as the functional currency in
foreign transactions.
The Company also develops structural composite products, through its Specialty Products
business and its wholly-owned subsidiary, Martin Marietta Composites (“MMC”). Pursuant to various
agreements, MMC has rights to commercialize certain proprietary technologies including those
related to flat panel applications. These agreements give MMC the opportunity to pursue the use of
certain fiber-reinforced polymer composites technologies for products where corrosion resistance
and high strength-to-weight ratios are important factors. MMC continued its commercialization
during 2008 of these structural composites technologies and initiated other selected products in
related target markets. However, during 2008, the Company wrote off $1.7 million of machinery and
equipment used for the structural composite products line, as the assets had no future use to the
Company. There can be no assurance that these technologies will become profitable.
Patents and Trademarks
As of February 10, 2009, the Company owns, has the right to use, or has pending applications
for approximately 115 patents pending or granted by the United States and various countries and
approximately 80 trademarks related to business. The Company believes that its rights under its
existing patents, patent applications, and trademarks are of value to its operations, but no one
patent or trademark or group of patents or trademarks is material to the conduct of the Company’s
business as a whole.
10
Customers
No material part of the business of any segment of the Company is dependent upon a single
customer or upon a few customers, the loss of any one of which would have a material adverse effect
on the segment. The Company’s products are sold principally to commercial customers in private
industry. Although large amounts of construction materials are used in public works projects,
relatively insignificant sales are made directly to federal, state, county, or municipal
governments, or agencies thereof.
Competition
Because of the impact of transportation costs on the aggregates industry, competition in the
Aggregates business tends to be limited to producers in proximity to each of the Company’s
production facilities. Although all of the Company’s locations experience competition, the Company
believes that it is generally a leading producer in the areas it serves. Competition is based
primarily on quarry or distribution location and price, but quality of aggregates and level of
customer service are also factors.
There are over 4,000 companies in the United States that produce aggregates. The largest five
producers account for approximately 31% of the total market. The Company, in its Aggregates
business, competes with a number of other large and small producers. The Company believes that its
ability to transport materials by ocean vessels, river barges, and rail have enhanced the Company’s
ability to compete in the aggregates business. Some of the Company’s competitors in the aggregates
industry have greater financial resources than the Company.
The Company’s Specialty Products business competes with various companies in different
geographic and product areas principally on the basis of quality, price, technological advances,
and technical support for its products. The Specialty Products business also competes for sales to
customers located outside the United States, with revenues from foreign jurisdictions accounting
for approximately 13% of revenues for the Specialty Products business in 2008, principally in
Canada, Mexico, Europe, South America, and the Pacific Rim. Certain of the Company’s competitors
in the Specialty Products business have greater financial resources than the Company.
Research and Development
The Company conducts research and development activities principally for its magnesia-based
chemicals business, at its plant in Manistee, Michigan, and for its structural composites product
line, at its headquarters in Raleigh, North Carolina, and its plant in Sparta, North Carolina. In
general, the Company’s research and development efforts in 2008 were directed to applied
technological development for the use of its chemicals products and for its proprietary
technologies, including composite materials. The Company spent approximately $0.6 million in 2008,
$0.9 million in 2007, and $0.7 million in 2006 on research and development activities.
11
Environmental and Governmental Regulations
The Company’s operations are subject to and affected by federal, state, and local laws and
regulations relating to the environment, health and safety, and other regulatory matters. Certain
of the Company’s operations may from time to time involve the use of substances that are classified
as toxic or hazardous substances within the meaning of these laws and regulations. Environmental
operating permits are, or may be, required for certain of the Company’s operations, and such
permits are subject to modification, renewal, and revocation.
The Company records an accrual for environmental remediation liabilities in the period in
which it is probable that a liability has been incurred and the amounts can be reasonably
estimated. Such accruals are adjusted as further information develops or circumstances change.
The accruals are not discounted to their present value or offset for potential insurance or other
claims or potential gains from future alternative uses for a site.
The Company regularly monitors and reviews its operations, procedures, and policies for
compliance with existing laws and regulations, changes in interpretations of existing laws and
enforcement policies, new laws that are adopted, and new laws that the Company anticipates will be
adopted that could affect its operations. The Company has a full time staff of environmental
engineers and managers that perform these responsibilities. The direct costs of ongoing
environmental compliance were approximately $11.5 million in 2008 and approximately $9.1 million in
2007 and are related to the Company’s environmental staff, ongoing monitoring costs for various
matters (including those matters disclosed in this Annual Report on
Form 10-K), and asset retirement costs. Capitalized costs
related to environmental control facilities were approximately $5.8 million in 2008 and are
expected to be approximately $8.4 million in 2009 and $8.4 million in 2010. The Company’s capital
expenditures for environmental matters were not material to its results of operations or financial
condition in 2008 and 2007. However, our expenditures for environmental matters generally have
increased over time and are likely to increase in the future. Despite our compliance efforts, risk
of environmental liability is inherent in the operation of the Company’s businesses, as it is with
other companies engaged in similar businesses, and there can be no assurance that environmental
liabilities will not have a material adverse effect on the Company in the future.
Many of the requirements of the environmental laws are satisfied by procedures that the
Company adopts as best business practices in the ordinary course of its operations. For example,
plant equipment that is used to crush aggregates products may, as an ordinary course of operations,
have an attached water spray bar that is used to clean the stone. The water spray bar also
suffices as a dust control mechanism that complies with applicable environmental laws. The Company
does not break out the portion of the cost, depreciation, and other financial information relating
to the water spray bar that is only attributable to environmental purposes, as it would be derived
from an arbitrary allocation methodology. The incremental portion of such operating costs that is
attributable to environmental compliance rather than best operating practices is impractical to
quantify. Accordingly, the Company expenses costs in that category when incurred as operating
expenses.
The environmental accruals recorded by the Company are based on internal studies of the
required remediation costs and estimates of potential costs that arise from time to time under
federal, state, and/or local environmental protection laws. Many of these laws and the regulations
promulgated under them are complex, and are subject to challenges and new interpretations by
regulators and the
12
courts from time to time. In addition, new laws are adopted from time to time. It is often
difficult to accurately and fully quantify the costs to comply with new rules until it is
determined the type of operations to which they will apply and the manner in which they will be
implemented is more accurately defined. This process often takes years to finalize and changes
significantly from the time the rules are proposed to the time they are final. The Company
typically has several appropriate alternatives available to satisfy compliance requirements, which
could range from nominal costs to some alternatives that may be satisfied in conjunction with
equipment replacement or expansion that also benefits operating efficiencies or capacities and
carry significantly higher costs.
Management believes that its current accrual for environmental costs is reasonable, although
those amounts may increase or decrease depending on the impact of applicable rules as they are
finalized from time to time and changes in facts and circumstances. The Company believes that any
additional costs for ongoing environmental compliance would not have a material adverse effect on
the Company’s obligations or financial condition.
With respect to reclamation costs effective January 1, 2003, the Company adopted Statement of
Financial Accounting Standards No. 143, Accounting for Asset Retirement Obligations (“FAS 143”).
See “Note N: Commitments and Contingencies” of the “Notes to Financial Statements” of the 2008
Financial Statements and the 2008 Annual Report. Under FAS 143, future reclamation costs are
estimated using statutory reclamation requirements and management’s experience and knowledge in the
industry, and are discounted to their present value using a credit-adjusted, risk-free rate of
interest. The future reclamation costs are not offset by potential recoveries. The Company is
generally required by state or local laws or pursuant to the terms of an applicable lease to
reclaim quarry sites after use. The Company performs activities on an ongoing basis that may
reduce the ultimate reclamation obligation. These activities are performed as an integral part of
the normal quarrying process. For example, the perimeter and interior walls of an open pit quarry
are sloped and benched as they are developed to prevent erosion and provide stabilization. This
sloping and benching meets dual objectives — safety regulations required by the Mine Safety and
Health Administration for ongoing operations and final reclamation requirements. Therefore, these
types of activities are included in normal operating costs and are not a part of the asset
retirement obligation. Historically, the Company has not incurred substantial reclamation costs in
connection with the closing of quarries. Reclaimed quarry sites owned by the Company are available
for sale, typically for commercial development or use as reservoirs.
The Company believes that its operations and facilities, both owned or leased, are in
substantial compliance with applicable laws and regulations and that any noncompliance is not
likely to have a material adverse effect on the Company’s operations or financial condition. See
“Legal Proceedings” under Item 3 of this Form 10-K, “Note N: Commitments and Contingencies” of the
“Notes to Financial Statements” of the 2008 Financial Statements included under Item 8 of this Form
10-K and the 2008 Annual Report, and “Management’s Discussion and Analysis of Financial Condition
and Results of Operations — Environmental Regulation and Litigation” included under Item 7 of this
Form 10-K and the 2008 Annual Report. However, future events, such as changes in or modified
interpretations of existing laws and regulations or enforcement policies, or further investigation
or evaluation of the potential health hazards of certain products or business activities, may give
rise to additional compliance and other costs that could have a material adverse effect on the
Company.
13
In general, quarry and mining facilities must comply with air quality, water quality, and
noise regulations, zoning and special use permitting requirements, applicable mining regulations,
and federal health and safety requirements. As new quarry and mining sites are located and
acquired, the Company works closely with local authorities during the zoning and permitting
processes to design new quarries and mines in such a way as to minimize disturbances. The Company
frequently acquires large tracts of land so that quarry, mine, and production facilities can be
situated substantial distances from surrounding property owners. Also, in certain markets the
Company’s ability to transport material by rail and ship allows it to locate its facilities further
away from residential areas. The Company has established policies designed to minimize
disturbances to surrounding property owners from its operations.
As is the case with other companies in the same industry, some of the Company’s products
contain varying amounts of crystalline silica, a common mineral also known as quartz. Excessive,
prolonged inhalation of very small-sized particles of crystalline silica has been associated with
lung diseases, including silicosis, and several scientific organizations and some states, such as
California, have reported that crystalline silica can cause lung cancer. The Mine Safety and
Health Administration and the Occupational Safety and Health Administration have established
occupational thresholds for crystalline silica exposure as respirable dust. The Company monitors
occupational exposures at its facilities and implements dust control procedures and/or makes
available appropriate respiratory protective equipment to maintain the occupational exposures at or
below the appropriate levels. The Company, through safety information sheets and other means, also
communicates what it believes to be appropriate warnings and cautions its employees and customers
about the risks associated with excessive, prolonged inhalation of mineral dust in general and
crystalline silica in particular.
In the vicinity of and beneath the Specialty Products facility in Manistee, Michigan, there is
an underground plume of material originating from adjacent property which formerly was used by
Packaging Corporation of America (“PCA”) as a part of its operations. The Company believes the
plume consists of paper mill waste. On September 8, 1983, the PCA plume and property were listed
on the National Priorities List (“NPL”) under the authority of the Comprehensive Environmental
Response, Compensation and Liability Act (the “Superfund” statute). The PCA plume is subject to a
Record of Decision issued by the U.S. Environmental Protection Agency (“EPA”) on May 2, 1994,
pursuant to which PCA’s successor, Pactiv Corporation (“Pactiv”), is required to conduct annual
monitoring. The EPA has not required remediation of the groundwater contamination. On January 10,
2002, the Michigan Department of Environmental Quality (“MDEQ”) issued Notice of Demand letters to
the Company’s wholly-owned subsidiary, Martin Marietta Magnesia Specialties (“Magnesia
Specialties”), PCA and Pactiv indicating that it believes that Magnesia Specialties’ chloride
contamination is commingling with the PCA plume which originates upgradient from the Magnesia
Specialties property. The MDEQ is concerned about possible effects of these plumes, and designated
Magnesia Specialties, PCA and Pactiv as parties responsible for investigation and remediation under
Michigan state law. The MDEQ held separate meetings with Magnesia Specialties, PCA, and Pactiv to
discuss remediation and reimbursement for past investigation costs totaling approximately $700,000.
Magnesia Specialties entered into an Administrative Order with the MDEQ to pay for a portion of
MDEQ’s past investigation costs and thereby limit its liability for past costs in the amount of
$20,000. Michigan law provides that responsible parties are jointly and severally liable, and,
therefore, Magnesia Specialties is potentially liable for the full cost of funding future
investigative activities and any necessary remediation. Michigan law also provides a procedure
whereby liability may be apportioned among responsible parties if it is capable of division. The
Company believes that the
14
liability most likely will be apportioned and that any such costs attributed to Magnesia
Specialties’ brine contamination will not have a material adverse effect on the Company’s
operations or its financial condition, but can give no assurance that the liability will be
apportioned or that the compliance costs will not have a material adverse effect on the financial
condition or results of the operations of the Specialty Products business.
Employees
As of January 31, 2009, the Company has approximately 4,860 employees, of which 3,600 are
hourly employees and 1,260 are salaried employees. Included among these employees are 670 hourly
employees represented by labor unions (13.8% of the Company’s employees). Of such amount, 12.7% of
the Company’s Aggregates business’s hourly employees are members of a labor union, while 90.3% of
the Specialty Products segment’s hourly employees are represented by labor unions. The Company’s
principal union contracts cover employees of the Specialty Products business at the Manistee,
Michigan, magnesia-based chemicals plant and the Woodville, Ohio, lime plant. The Manistee
collective bargaining agreement expires in August 2011. The Woodville collective bargaining
agreement expires in June 2010.
Available Information
The Company maintains an Internet address at www.martinmarietta.com. The Company makes
available free of charge through its Internet web site its Annual Report on Form 10-K, Quarterly
Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to those reports, if any, filed
or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act. These reports and any
amendments are accessed via the Company’s web site through a link with the Electronic Data
Gathering, Analysis, and Retrieval (“EDGAR”) system maintained by the Securities and Exchange
Commission (the “SEC”) at www.sec.gov. Accordingly, the Company’s referenced reports and any
amendments are made available as soon as reasonably practicable after the Company electronically
files such material with, or furnishes it to, the SEC, once EDGAR places such material in its
database.
The Company has adopted a Code of Ethics and Standards of Conduct that applies to all of its
directors, officers, and employees. The Company’s code of ethics is available on the Company’s web
site at www.martinmarietta.com. The Company intends to disclose on its Internet web site any
waivers of or amendments to its code of ethics as it applies to its directors and executive
officers.
The Company has adopted a set of Corporate Governance Guidelines to address issues of
fundamental importance relating to the corporate governance of the Company, including director
qualifications and responsibilities, responsibilities of key board committees, director
compensation, and similar issues. Each of the Audit Committee, the Management Development and
Compensation Committee, and the Nominating and Corporate Governance Committee of the Board of
Directors of the Company has adopted a written charter addressing various issues of importance
relating to each committee, including the committee’s purposes and responsibilities, an annual
performance evaluation of each committee, and similar issues. These Corporate Governance
Guidelines, and the charters of each of these committees, are available on the Company’s web site
at www.martinmarietta.com.
The Company will make paper copies of its filings with the SEC, its Code of Ethics and
Standards of Conduct, its Corporate Governance Guidelines, and the charters of its key committees,
available to its shareholders free of charge upon request by writing to: Martin Marietta
Materials, Inc., Attn: Corporate Secretary, 2710 Wycliff Road, Raleigh, North Carolina 27607-3033.
15
The Company’s Chief Executive Officer and Chief Financial Officer are required to file with
the SEC each quarter and each year certifications regarding the quality of the Company’s public
disclosure of its financial condition. The annual certifications are included as Exhibits to this
Annual Report on Form 10-K. The Company’s Chief Executive Officer is also required to certify to
the New York Stock Exchange each year that he is not aware of any violation by the Company of the
New York Stock Exchange corporate governance listing standards.
ITEM 1A. RISK FACTORS
An investment in our common stock or debt securities involves risks and uncertainties. You
should consider the following factors carefully, in addition to the other information contained in
this Form 10-K, before deciding to purchase or otherwise trade our securities.
This Form 10-K and other written reports and oral statements made from time to time by the
Company contain statements which, to the extent they are not recitations of historical fact,
constitute forward-looking statements within the meaning of federal securities law. Investors are
cautioned that all forward-looking statements 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. Investors can identify these statements by the fact that they do
not relate only to historic or current facts. The words “may,” “will,” “could,” “should,”
“anticipate,” “believe,” “estimate,” “expect,” “forecast,” “intend,” “outlook,” “plan,” “project,”
“scheduled,” and similar expressions in connection with future events or future operating or
financial performance are intended to identify forward-looking statements. Any or all of the
Company’s forward-looking statements in this Form 10-K and in other publications may turn out to be
wrong.
Statements and assumptions on future revenues, income and cash flows, performance, economic
trends, the outcome of litigation, regulatory compliance, and environmental remediation cost
estimates are examples of forward-looking statements. Numerous factors, including potentially the
risk factors described in this section, could affect our forward-looking statements and actual
performance.
Factors that the Company currently believes could cause its actual results to differ
materially from those in the forward-looking statements include, but are not limited to, those set
out below. In addition to the risk factors described below, we urge you to read our Management’s
Discussion and Analysis of Financial Condition and Results of Operations.
Our aggregates business is cyclical and depends on activity within the construction industry.
The current market environment has hurt the economy, and we have considered the impact on our
business. Demand for our products, particularly in the commercial and residential construction
markets, could continue to fall if companies and consumers are unable to get credit for
construction projects or if the economic slowdown causes delays or cancellations of capital
projects. State and federal budget issues may continue to hurt the
funding available for infrastructure spending.
16
The lack of available credit has limited the
ability of states to issue bonds to finance construction projects. Several of our top sales states
have stopped bidding projects in their transportation departments.
We sell most of our aggregate products to the construction industry, so our results depend on
the strength of the construction industry. Since our business depends on construction spending,
which can be cyclical, our profits are sensitive to national, regional, and local economic
conditions. The overall economy has been hurt by mortgage security losses and the tightening
credit markets. Construction spending is affected by economic conditions, changes in interest
rates, demographic and population shifts, and changes in construction spending by federal, state,
and local governments. If economic conditions change, a recession in the construction industry may
occur and affect the demand for our aggregate products, such as is occurring with the current
economic recession. Construction spending can also be disrupted by terrorist activity and armed
conflicts.
While our aggregate operations cover a wide geographic area, our earnings depend on the
strength of the local economies in which we operate because of the high cost to transport our
products relative to their price. If economic conditions and construction spending decline
significantly in one or more areas, particularly in our top five revenue-generating states of North
Carolina, Texas, Georgia, Iowa and Florida, our profitability will decrease. We are experiencing
this situation with the current economic recession.
Moreover, infrastructure spending in 2008 was hurt by the overall weakness in the economy,
which leads to lower tax revenues and state government budget deficits. Further, rising
construction and material prices are both constraining highway budgets. Additionally, lack of
access to the capital markets has precluded many state and local governments from issuing bonds
that would provide financing for construction projects.
In
February 2009, President Obama signed into law an economic stimulus
plan, which will provide
billions of dollars in new funding for transportation infrastructure.
However, there will be a time delay of at least several months before
Congress can appropriate
such funds and each state can take appropriate measures to take advantage of such funding.
In addition, each state will have to approve various infrastructure projects to be funded through
the new federal stimulus plan. So while management believes the
federal stimulus plan
will increase the Company’s aggregates shipments in the latter half of 2009 and in 2010, we cannot
be assured of the full impact of the stimulus plan.
Within the construction industry, we sell our aggregate products for use in both commercial
construction and residential construction. Commercial and residential construction levels generally
move with economic cycles; when the economy is strong, construction levels rise, and when the
economy is weak, construction levels fall. The overall economy has been hurt by the changes in the
financial services sector, including failures of several large financial institutions, historical
merger and acquisition activity within that industry, and the resulting lack of credit
availability. The commercial construction market declined in 2008, notably from credit
availability and felt most significantly starting in September 2008. Also, continued weakness in
the residential construction market negatively affected the commercial construction market. The
residential construction market remained dismal in 2008 in connection with the housing market downtown. Further, the outlook reflects
17
diminished demand, which is further exacerbated by the overall weakness in the economy and the
financial institutions crisis. Approximately 9% of our aggregates shipments in 2008 were to the
residential construction market.
Our aggregate products are used in public infrastructure projects, which include the
construction, maintenance, and improvement of highways, bridges, schools, prisons, and similar
projects. So our business is dependent on the level of federal, state, and local spending on these
projects. We cannot be assured of the existence, amount, and timing of appropriations for spending
on these projects. For example, while the current federal highway law passed in 2005 provides
funding of $286.4 billion for highway, transit, and highway safety programs through September 30,
2009, Congress must pass an appropriations bill each year to approve spending these funds. We
cannot be assured that Congress will pass an appropriations bill each year to approve funding at
the level authorized in the federal highway law. Similarly, each state funds its infrastructure
spending from specially allocated amounts collected from various taxes, typically gasoline taxes
and vehicle fees, along with voter-approved bond programs. Shortages in state tax revenues can
reduce the amounts spent on state infrastructure projects, even below amounts awarded under
legislative bills. Delays in state infrastructure spending can hurt our business. For example, we
expect delays in infrastructure spending in Georgia, North Carolina, South Carolina, and Texas will
continue in 2009, which will limit our business growth in those states until the level and timing
of spending improves.
Our aggregates business is seasonal and subject to the weather.
Since the construction aggregates business is conducted outdoors, seasonal changes and other
weather-related conditions affect our business. Adverse weather conditions, including hurricanes
and tropical storms, cold weather, snow, and heavy or sustained rainfall, reduce construction
activity, restrict the demand for our products, and impede our ability to efficiently transport
material, particularly by barge. Adverse weather conditions also increase our costs and reduce our
production output as a result of power loss, needed plant and equipment repairs, time required to
remove water from flooded operations, and similar events. Severe drought conditions can restrict
available water supplies, restrict production, and limit movement of barge traffic. The
construction aggregates business production and shipment levels follow activity in the construction
industry, which typically occur in the spring, summer and fall. Because of the weather’s effect on
the construction industry’s activity, the aggregates business production and shipment levels vary
by quarter. The second and third quarters are generally the most profitable and the first quarter
is generally the least profitable.
Our aggregates business depends on the availability of aggregate reserves or deposits and our
ability to mine them economically.
Our challenge is to find aggregate deposits that we can mine economically, with appropriate
permits, near either growing markets or long-haul transportation corridors that economically serve
growing markets. As communities have grown, they have taken up attractive quarrying locations and
have imposed restrictions on mining. We try to meet this challenge by identifying and permitting
sites prior to economic expansion, buying more land around our existing quarries to increase our
mineral reserves, developing underground mines, and developing a distribution network that
transports aggregates products by various transportation methods, including rail and water, that
allows us to transport our products longer distances than would normally be considered economical, but we can
give no assurances that we will be successful.
18
Our aggregates business is a capital-intensive business.
The property and machinery needed to produce our products are very expensive. Therefore, we
require large amounts of cash to operate our businesses. We believe that our cash on hand, along
with our projected internal cash flows and our available financing resources, will be enough to
give us the cash we need to support our anticipated operating and capital needs. Our ability to
generate sufficient cash flow depends on future performance, which will be subject to general
economic conditions, industry cycles and financial, business, and other factors affecting our
operations, many of which are beyond our control. If we are unable to generate sufficient cash to
operate our business, we may be required, among other things, to further reduce or delay planned
capital or operating expenditures.
Our businesses face many competitors.
Our businesses have many competitors, some of whom are bigger and have more resources than we
do. Some of our competitors also operate on a worldwide basis. Our results are affected by the
number of competitors in a market, the production capacity that a particular market can
accommodate, the pricing practices of other competitors, and the entry of new competitors in a
market. We also face competition for some of our products from alternative products. For example,
our magnesia specialties business may compete with other chemical products that could be used
instead of our magnesia-based products. As another example, our aggregates business may compete
with recycled asphalt and concrete products that could be used instead of new products.
Our future growth may depend in part on acquiring other businesses in our industry.
We expect to continue to grow, in part, by buying other businesses. While the pace of
acquisitions has slowed considerably over the last few years, we will continue to look for
strategic businesses to acquire. Acquisition opportunities may increase in the short term as
large, multi-national competitors may be forced to sell assets acquired in recent transactions to
generate cash to fund debt obligations. In the past, we have made acquisitions to strengthen our
existing locations, expand our operations, and enter new geographic markets. We will continue to
make selective acquisitions, joint ventures, or other business arrangements we believe will help
our company. However, the continued success of our acquisition program will depend on our ability
to find and buy other attractive businesses at a reasonable price and our ability to integrate
acquired businesses into our existing operations. We cannot assume there will continue to be
attractive acquisition opportunities for sale at reasonable prices that we can successfully
integrate into our operations.
We may decide to pay all or part of the purchase price of any future acquisition with shares
of our common stock. We may also use our stock to make strategic investments in other companies to
complement and expand our operations. If we use our common stock in this way, the ownership
interests of our shareholders will be diluted and the price of our stock could fall. We operate
our businesses with the objective of maximizing the long-term shareholder return.
We have acquired many companies since 1995. Some of these acquisitions were more easily
integrated into our existing operations and have performed as well or better than we expected,
while
others have not. We have sold underperforming and other non-strategic assets, particularly lower
margin businesses like our asphalt plants in Houston, Texas, and our road paving businesses in
Shreveport, Louisiana, and Texarkana, Arkansas.
19
Short supplies and high costs of fuel and energy affect our businesses.
Our businesses require a continued supply of diesel fuel, natural gas, coal, petroleum coke
and other energy. The financial results of these businesses have been affected by the short supply
or high costs of these fuels and energy. While we can contract for some fuels and sources of
energy, significant increases in costs or reduced availability of these items have and may in the
future reduce our financial results. For example, in 2008, increases in prices of petroleum-based
products lowered net earnings for our businesses by $0.65 per diluted share when compared with 2007
prices. We do not hedge our diesel fuel price risk, but instead focus on volume-related price
breaks, fuel efficiency, and consumption.
In addition, the price of liquid asphalt is a large part of the cost of producing hot mix
asphalt products and can cause road builders and commercial contractors to delay or defer work in
anticipation of liquid asphalt cost changes. In 2008, liquid asphalt prices more than doubled over
the prior year price, with prices in excess of $800 per ton at their peak.
Changes in legal requirements and governmental policies concerning zoning, land use, the
environment, and other areas of the law, and litigation relating to these matters, affect our
businesses. Our operations expose us to the risk of material environmental liabilities.
Many federal, state, and local laws and regulations relating to zoning, land use, the
environment, health, safety, and other regulatory matters govern our operations. We take great
pride in our operations and try to remain in strict compliance at all times with all applicable
laws and regulations. Despite our extensive compliance efforts, risk of liabilities, particularly
environmental liabilities, is inherent in the operation of our businesses, as it is with our
competitors. We cannot assume that these liabilities will not negatively affect us in the future.
We are also subject to future events, including changes in existing laws or regulations or
enforcement policies, or further investigation or evaluation of the potential health hazards of
some of our products or business activities, which may result in additional compliance and other
costs. We could be forced to invest in preventive or remedial action, like pollution control
facilities, which could be substantial.
Our operations are subject to manufacturing, operating, and handling risks associated with the
products we produce and the products we use in our operations, including the related storage and
transportation of raw materials, products, hazardous substances, and wastes. We are exposed to
hazards including storage tank leaks, explosions, discharges or releases of hazardous substances,
exposure to dust, and the operation of mobile equipment and manufacturing machinery.
These risks can subject us to potentially significant liabilities relating to personal injury
or death, or property damage, and may result in civil or criminal penalties, which could hurt our
productivity or profitability. For example, from time to time we investigate and remediate
environmental contamination relating to our prior or current operations, as well as operations we
have
acquired from others, and in some cases we have been or could be named as a defendant in
litigation brought by governmental agencies or private parties.
20
We are involved from time to time in litigation and claims arising from our operations. While
we do not believe the outcome of pending or threatened litigation will have a material adverse
effect on our operations or our financial condition, we cannot assume that an adverse outcome in a
pending or future legal action would not negatively affect us.
Labor disputes could disrupt operations of our businesses.
Labor unions represent 12.7% of the hourly employees of our aggregates business and 90.3% of
the hourly employees of our specialty products business. Our collective bargaining agreements for
employees of our magnesia specialties business at the Woodville, Ohio lime plant and the Manistee,
Michigan magnesia chemicals plant expire in June 2010 and August 2011, respectively.
Disputes with our trade unions, or the inability to renew our labor agreements, could lead to
strikes or other actions that could disrupt our businesses, raise costs, and reduce revenues and
earnings from the affected locations. We believe we have good relations with all of our employees,
including our unionized employees.
Delays or interruptions in shipping products of our businesses could affect our operations.
Transportation logistics play an important role in allowing us to supply products to our
customers, whether by truck, rail, barge, or ship. Any significant delays, disruptions, or the
non-availability of our transportation support system could negatively affect our operations. For
example, in 2005 and partially in 2006, we experienced rail transportation shortages in Texas and
parts of the southeastern region of the United States. In 2005 and 2006, following Hurricanes
Katrina and Rita, we experienced significant barge transportation problems along the Mississippi
River system.
Water levels can also affect our ability to transport our products. High water levels limit
the number of barges we can transport and can require that we use additional horsepower to tow
barges. Low water levels can reduce the amount of material we can transport in each barge. In
2007, dry weather caused low water levels and resulted in reduced tonnage that could be shipped on
a barge. Consequently, the per ton cost of transporting material was higher than normal. In 2008
high water levels from severe flooding in Iowa hurt both shipments and operations.
The availability of rail cars and barges can also affect our ability to transport our
products. Rail cars and barges can be used to transport many different types of products. If
owners sell or lease rail cars and barges for use in other industries, we may not have enough rail
cars and barges to transport our products. In 2007, barges were particularly scarce, as barges
were being retired faster than new barges were being built. In 2005, we leased 780 additional
rail cars. In 2006, we contracted to buy 50 new barges that were delivered in 2007. In 2008, we
leased additional rail cars in the Southwest.
We have long-term agreements with shipping companies to provide ships to transport our
aggregate products from our Bahamas and Nova Scotia operations to various coastal ports. These
contracts have varying expiration dates ranging from 2009 to 2017 and generally contain renewal
options. Our inability to renew these agreements or enter into new ones with other shipping
companies could affect our ability to transport our products.
21
Our earnings are affected by the application of accounting standards and our critical accounting
policies, which involve subjective judgments and estimates by our management. Our estimates and
assumptions could be wrong.
The accounting standards we use in preparing our financial statements are often complex and
require that we make significant estimates and assumptions in interpreting and applying those
standards. We make critical estimates and assumptions involving accounting matters including our
goodwill impairment testing, our expenses and cash requirements for our pension plans, our
estimated income taxes, and how we account for our property, plant and equipment, and inventory.
These estimates and assumptions involve matters that are inherently uncertain and require our
subjective and complex judgments. If we used different estimates and assumptions or used different
ways to determine these estimates, our financial results could differ.
While we believe our estimates and assumptions are appropriate, we could be wrong.
Accordingly, our financial results could be different, either higher or lower. We urge you to read
about our critical accounting policies in our Management’s Discussion and Analysis of Financial
Condition and Results of Operations.
The adoption of new accounting standards may affect our financial results.
The accounting standards we apply in preparing our financial statements are reviewed by
regulatory bodies and are changed from time to time. New or revised accounting standards could
change our financial results either positively or negatively. For example, beginning in 2006, we
were required under new accounting standards to expense the fair value of stock options we award
our management and key employees as part of their compensation. This resulted in a reduction of
our earnings and made comparisons between financial periods more difficult. We urge you to read
about our accounting policies and changes in our accounting policies in Note A of our 2008
financial statements.
We depend on the recruitment and retention of qualified personnel, and our failure to attract and
retain such personnel could affect our business.
Our success depends to a significant degree upon the continued services of our key personnel
and executive officers. Our prospects depend upon our ability to attract and retain qualified
personnel for our operations. Competition for personnel is intense, and we may not be successful
in attracting or retaining qualified personnel, which could negatively affect our business.
Disruptions in the credit markets could affect our business.
The current credit environment has negatively affected the economy, and we have considered how
it might affect our business. Demand for our products, particularly in the commercial and
residential construction markets, could continue to decline if companies and consumers are unable
to finance construction projects or if the economic slowdown continues to cause delays or
cancellations
to capital projects. State and federal budget issues may continue to negatively affect the
funding available for infrastructure spending without economic stimulus at the federal level.
22
A recessionary economy can also increase the likelihood we will not be able to collect on all
of our accounts receivable with our customers. We are protected in part, however, by payment bonds
posted by many of our customers. Nevertheless, we have experienced a delay in payment from some of
our customers during this economic downturn. Historically our bad debt write-offs have not been
significant to our operating results, and we believe our allowance for doubtful accounts is
adequate.
During this economic downturn we have been forced to shut down some of our facilities on a
temporary basis. If demand does not improve, such shutdowns could become longer-term, impairing
the value of some of the assets at those locations. The timing of increased demand will determine
when these locations will be reopened. During the shut-down time, the plant and equipment will
continue to be depreciated. If practicable, we will transfer the mobile equipment and use it
elsewhere. Because we continue to have long-term access to the aggregate reserves, these sites are
not considered impaired during temporary shutdowns.
The current credit environment has limited our ability to issue borrowings under our
commercial paper program. Additional financing or refinancing might not be available and, if
available, may not be at economically favorable terms. Interest rates on new issuances of
long-term public debt in the market have recently increased, reflecting higher credit and risk
premiums. Further, an increase in leverage could lead to deterioration in our credit ratings. A
reduction in our credit ratings, regardless of the cause, could also limit our ability to obtain
additional financing and/or increase our cost of obtaining financing. In 2008 we issued $300
million of our Senior Notes and refinanced our $200 million Notes due December 2008. There is no
guarantee we will be able to access the capital markets at financially economical interest rates,
which could negatively affect our business.
We may be required to obtain financing in order to fund certain strategic acquisitions, if
they arise, or to refinance our outstanding debt. Any large strategic acquisition would require
that we issue both newly issued equity and debt securities in order to maintain our investment
grade credit rating. We are also exposed to risks from tightening credit markets, through the
interest payable on our outstanding debt and the interest cost on our commercial paper program, to
the extent it is available to us. In 2008, Moody’s downgraded our long-term debt rating to Baa3
from Baa1 and downgraded our commercial paper rating to P-3 from P-2 with a stable outlook. In
2008, Standard & Poor’s reaffirmed our senior unsecured debt rating of BBB+ and downgraded the
outlook to negative, but left our commercial paper rating of A-2 unchanged. While management
believes our credit ratings will remain at an investment-grade level, we cannot be assured these
ratings will remain at those levels. While management believes the Company will continue to have
credit available to it adequate to meet its needs, there can be no assurance of that.
Our specialty products business depends in part on the steel industry and the supply of reasonably
priced fuels.
Our specialty products business sells some of its products to companies in the steel
industry. While we have reduced this risk over the last few years, this business is still
dependent, in part, on the strength of the highly-cyclical steel industry. The steel industry
experienced a severe downturn in the second half of 2008, which is expected to continue in 2009.
The specialty products business also
requires significant amounts of natural gas, coal, and petroleum coke, and financial results are
negatively affected by high fuel prices or shortages.
23
Our structural composites product line has not generated any profits since its inception.
Our structural composites product line faces many challenges before it becomes break-even or
generates a profit. We cannot ensure the future profitability of this product line.
Our articles of incorporation, bylaws, and shareholder rights plan and North Carolina law may
inhibit a change in control that you may favor.
Our articles of incorporation and bylaws, shareholder rights plan, and North Carolina law contain
provisions that may delay, deter or inhibit a future acquisition of us not approved by our board of
directors. This could occur even if our shareholders are offered an attractive value for their
shares or if many or even a majority of our shareholders believe the takeover is in their best
interest. These provisions are intended to encourage any person interested in acquiring us to
negotiate with and obtain the approval of our board of directors in connection with the
transaction. Provisions that could delay, deter, or inhibit a future acquisition include the
following:
| |
|
n a
classified board of directors; |
| |
| |
|
n the ability
of the board of directors to establish the terms of, and issue,
preferred stock without shareholder approval; |
| |
| |
|
n the
requirement that our shareholders may only remove directors for cause; |
| |
| |
|
n the
inability of shareholders to call special meetings of shareholders; and |
| |
| |
|
n super majority shareholder approval requirements for business combination
transactions with certain five percent shareholders. |
In addition, we have in place a shareholder rights plan that will trigger a dilutive issuance of
common stock upon acquisitions of our common stock by a third party above a threshold that are not
approved by the board of directors.
Changes in our effective tax rate may harm our results of operations.
A number of factors may increase our future effective tax rate, including:
| |
|
n
The jurisdictions in which profits are determined to be earned and taxed; |
| |
| |
|
n
The resolution of issues arising from tax audits with various tax authorities; |
| |
| |
|
n
Changes in the valuation of our deferred tax assets and liabilities; |
24
| |
|
n
Adjustments to estimated taxes upon finalization of various tax returns; |
| |
| |
|
n
Changes in available tax credits; |
| |
| |
|
n
Changes in share-based compensation; and |
| |
| |
|
n
Changes in tax laws, the interpretation of tax laws and/or administrative practices. |
Any significant increase in our future effective tax rate could reduce net earnings for future
periods.
* * * * * * * * * * * * * *
Investors are also cautioned that it is not possible to predict or identify all such factors.
Consequently, the reader should not consider any such list to be a complete statement of all
potential risks or uncertainties. Other factors besides those listed may also adversely affect the
Company and may be material to the Company. The Company has listed all known material risks it
considers relevant in evaluating the Company and its operations. The forward-looking statements in
this document are intended to be subject to the safe harbor protection provided by Sections 27A and
21E. These forward-looking statements are made as of the date hereof based on management’s current
expectations, and the Company does not undertake an obligation to update such statements, whether
as a result of new information, future events, or otherwise.
For a discussion identifying some important factors that could cause actual results to vary
materially from those anticipated in the forward-looking statements, see the Company’s Securities
and Exchange Commission filings, including, but not limited to, the discussion under the heading
“Risk Factors and Forward-Looking Statements” under Item 1A of this Form 10-K, the discussion of
“Competition” under Item 1 on Form 10-K, “Management’s Discussion and Analysis of Financial
Condition and Results of Operations” under Item 7 of this Form 10-K and the 2008 Annual Report, and
“Note A: Accounting Policies” and “Note N: Commitments and Contingencies” of the “Notes to
Financial Statements” of the 2008 Financial Statements included under Item 8 of this Form 10-K and
the 2008 Annual Report.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
ITEM 2. PROPERTIES
Aggregates Business
As of December 31, 2008, the Company processed or shipped aggregates from 273 quarries,
underground mines, and distribution yards in 26 states and in Canada and the Bahamas, of which 101
are located on land owned by the Company free of major encumbrances, 58 are on land owned in part
and leased in part, 110 are on leased land, and 4 are on facilities neither owned nor leased, where
raw materials are removed under an agreement. The Company’s aggregates reserves on the average
exceed 60 years of production, based on normalized levels of production. However, certain locations may
be
25
subject to more limited reserves and may not be able to expand. In addition, as of December 31,
2008, the Company processed and shipped ready mixed concrete and/or asphalt products from 15
properties in 3 states, of which 11 are located on land owned by the Company free of major
encumbrances and 4 are on leased land.
The Company uses various drilling methods, depending on the type of aggregate, to estimate
aggregates reserves that are economically mineable. The extent of drilling varies and depends on
whether the location is a potential new site (greensite), an existing location, or a potential
acquisition. More extensive drilling is performed for potential greensites and acquisitions, and
in rare cases the Company may rely on existing geological data or results of prior drilling by
third parties. Subsequent to drilling, selected core samples are tested for soundness, abrasion
resistance, and other physical properties relevant to the aggregates industry. If the reserves
meet the Company’s standards and are economically mineable, then they are either leased or
purchased.
The Company estimates proven and probable reserves based on the results of drilling. Proven
reserves are reserves of deposits designated using closely spaced drill data, and based on that
data the reserves are believed to be relatively homogenous. Proven reserves have a certainty of
85% to 90%. Probable reserves are reserves that are inferred utilizing fewer drill holes and/or
assumptions about the economically mineable reserves based on local geology or drill results from
adjacent properties. The degree of certainty for probable reserves is 70% to 75%. In determining
the amount of reserves, the Company’s policy is to not include calculations that exceed certain
depths, so for deposits, such as granite, that typically continue to depths well below the ground,
there may be additional deposits that are not included in the reserve calculations. The Company
also deducts reserves not available due to property boundaries, set-backs, and plant
configurations, as deemed appropriate when estimating reserves. For additional information on the
Company’s assessment of reserves, see “Management’s Discussion and Analysis of Financial Condition
and Results of Operations – Other Financial Information — Critical Accounting Policies and
Estimates- Property, Plant and Equipment” under Item 7 of this Form 10-K and the 2008 Annual Report
for discussion of reserves evaluation by the Company.
Set forth in the tables below are the Company’s estimates of reserves of recoverable
aggregates of suitable quality for economic extraction, shown on a state-by-state basis, and the
Company’s total annual production for the last 3 years, along with the Company’s estimate of years
of production available, shown on a segment-by-segment basis. The number of producing quarries
shown on the table include underground mines. The Company’s reserve estimates for the last 2 years
are shown for comparison purposes on a state-by-state basis. The changes in reserve estimates at a
particular state level from year to year reflect the tonnages of reserves on locations that have
been opened or closed during the year, whether by acquisition, disposition, or otherwise;
production and sales in the normal course of business; additional reserve estimates or refinements
of the Company’s existing reserve estimates; opening of additional reserves at existing locations;
the depletion of reserves at existing locations; and other factors. The Company evaluates its
reserve estimates primarily on a Company-wide, or segment-by-segment basis, and does not believe
comparisons of changes in reserve estimates on a state-by-state basis from year to year are
particularly meaningful.
26
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percentage |
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
of aggregate |
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Tonnage of Reserves for |
|
|
|
|
|
|
|
|
|
Percentage of aggregate |
|
reserves |
|
|
| |
|
|
|
|
|
Tonnage of Reserves for |
|
each general type of |
|
|
|
|
|
|
|
|
|
reserves located at an |
|
on land |
|
|
| |
|
Number of |
|
each general type of |
|
aggregate at |
|
|
Change in Tonnage |
|
existing quarry, and |
|
that has |
|
Percent of reserves |
| |
|
Producing |
|
aggregate at 12/31/07 |
|
12/31/08 |
|
|
from 2007 |
|
reserves not located at an |
|
not been |
|
owned and percent |
| |
|
Quarries |
|
(Add 000) |
|
(Add 000) |
|
(Add 000) |
|
existing quarry. |
|
zoned for |
|
leased |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| State |
|
2008 |
|
Hard Rock |
|
S & G |
|
Hard Rock |
|
S & G |
|
Hard Rock |
|
S & G |
|
At Quarry |
|
Not at Quarry |
|
quarrying. |
|
Owned |
|
Leased |
Alabama |
|
|
7 |
|
|
|
87,505 |
|
|
|
11,049 |
|
|
|
85,112 |
|
|
|
10,337 |
|
|
|
(2,393 |
) |
|
|
(712 |
) |
|
|
100 |
% |
|
|
0 |
% |
|
|
0 |
% |
|
|
22 |
% |
|
|
78 |
% |
Arkansas |
|
|
3 |
|
|
|
272,198 |
|
|
|
0 |
|
|
|
213,591 |
|
|
|
0 |
|
|
|
(58,607 |
) |
|
|
0 |
|
|
|
95 |
% |
|
|
5 |
% |
|
|
0 |
% |
|
|
56 |
% |
|
|
44 |
% |
Florida |
|
|
2 |
|
|
|
92,013 |
|
|
|
0 |
|
|
|
120,543 |
|
|
|
0 |
|
|
|
28,530 |
|
|
|
0 |
|
|
|
100 |
% |
|
|
0 |
% |
|
|
0 |
% |
|
|
0 |
% |
|
|
100 |
% |
Georgia |
|
|
14 |
|
|
|
686,925 |
|
|
|
0 |
|
|
|
1,165,596 |
|
|
|
0 |
|
|
|
478,671 |
|
|
|
0 |
|
|
|
100 |
% |
|
|
0 |
% |
|
|
0 |
% |
|
|
70 |
% |
|
|
30 |
% |
Illinois |
|
|
2 |
|
|
|
662,072 |
|
|
|
0 |
|
|
|
809,494 |
|
|
|
0 |
|
|
|
147,422 |
|
|
|
0 |
|
|
|
55 |
% |
|
|
45 |
% |
|
|
0 |
% |
|
|
56 |
% |
|
|
44 |
% |
Indiana |
|
|
10 |
|
|
|
487,149 |
|
|
|
36,625 |
|
|
|
482,464 |
|
|
|
35,042 |
|
|
|
(4,685 |
) |
|
|
(1,583 |
) |
|
|
100 |
% |
|
|
0 |
% |
|
|
15 |
% |
|
|
41 |
% |
|
|
59 |
% |
Iowa |
|
|
28 |
|
|
|
673,381 |
|
|
|
44,197 |
|
|
|
658,531 |
|
|
|
54,953 |
|
|
|
(14,850 |
) |
|
|
10,756 |
|
|
|
99 |
% |
|
|
1 |
% |
|
|
1 |
% |
|
|
12 |
% |
|
|
88 |
% |
Kansas |
|
|
10 |
|
|
|
221,737 |
|
|
|
0 |
|
|
|
123,122 |
|
|
|
0 |
|
|
|
(98,615 |
) |
|
|
0 |
|
|
|
100 |
% |
|
|
0 |
% |
|
|
0 |
% |
|
|
35 |
% |
|
|
65 |
% |
Kentucky |
|
|
3 |
|
|
|
569,979 |
|
|
|
45,832 |
|
|
|
562,614 |
|
|
|
45,626 |
|
|
|
(7,365 |
) |
|
|
(206 |
) |
|
|
100 |
% |
|
|
0 |
% |
|
|
0 |
% |
|
|
36 |
% |
|
|
64 |
% |
Maryland |
|
|
2 |
|
|
|
97,460 |
|
|
|
0 |
|
|
|
96,173 |
|
|
|
0 |
|
|
|
(1,287 |
) |
|
|
0 |
|
|
|
100 |
% |
|
|
0 |
% |
|
|
0 |
% |
|
|
100 |
% |
|
|
0 |
% |
Minnesota |
|
|
2 |
|
|
|
348,306 |
|
|
|
0 |
|
|
|
449,185 |
|
|
|
0 |
|
|
|
100,879 |
|
|
|
0 |
|
|
|
77 |
% |
|
|
23 |
% |
|
|
0 |
% |
|
|
69 |
% |
|
|
31 |
% |
Mississippi |
|
|
1 |
|
|
|
0 |
|
|
|
92,238 |
|
|
|
0 |
|
|
|
83,861 |
|
|
|
0 |
|
|
|
(8,377 |
) |
|
|
100 |
% |
|
|
0 |
% |
|
|
0 |
% |
|
|
100 |
% |
|
|
0 |
% |
Missouri |
|
|
5 |
|
|
|
526,246 |
|
|
|
0 |
|
|
|
371,240 |
|
|
|
0 |
|
|
|
(155,006 |
) |
|
|
0 |
|
|
|
78 |
% |
|
|
12 |
% |
|
|
0 |
% |
|
|
25 |
% |
|
|
75 |
% |
Montana |
|
|
0 |
|
|
|
50,000 |
|
|
|
0 |
|
|
|
50,000 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
100 |
% |
|
|
0 |
% |
|
|
0 |
% |
|
|
100 |
% |
|
|
0 |
% |
Nebraska |
|
|
3 |
|
|
|
80,615 |
|
|
|
0 |
|
|
|
77,484 |
|
|
|
0 |
|
|
|
(3,131 |
) |
|
|
0 |
|
|
|
100 |
% |
|
|
0 |
% |
|
|
0 |
% |
|
|
15 |
% |
|
|
85 |
% |
Nevada |
|
|
1 |
|
|
|
161,546 |
|
|
|
0 |
|
|
|
158,502 |
|
|
|
0 |
|
|
|
(3,044 |
) |
|
|
0 |
|
|
|
100 |
% |
|
|
0 |
% |
|
|
0 |
% |
|
|
83 |
% |
|
|
17 |
% |
North Carolina |
|
|
43 |
|
|
|
2,971,758 |
|
|
|
0 |
|
|
|
3,281,063 |
|
|
|
0 |
|
|
|
309,305 |
|
|
|
0 |
|
|
|
76 |
% |
|
|
24 |
% |
|
|
3 |
% |
|
|
63 |
% |
|
|
37 |
% |
Ohio |
|
|
15 |
|
|
|
192,315 |
|
|
|
200,111 |
|
|
|
181,939 |
|
|
|
194,897 |
|
|
|
(10,376 |
) |
|
|
(5,214 |
) |
|
|
100 |
% |
|
|
0 |
% |
|
|
3 |
% |
|
|
92 |
% |
|
|
8 |
% |
Oklahoma |
|
|
9 |
|
|
|
648,223 |
|
|
|
38,790 |
|
|
|
736,185 |
|
|
|
38,174 |
|
|
|
87,962 |
|
|
|
(616 |
) |
|
|
100 |
% |
|
|
0 |
% |
|
|
0 |
% |
|
|
82 |
% |
|
|
18 |
% |
South Carolina |
|
|
6 |
|
|
|
411,231 |
|
|
|
0 |
|
|
|
405,842 |
|
|
|
0 |
|
|
|
(5,389 |
) |
|
|
0 |
|
|
|
100 |
% |
|
|
0 |
% |
|
|
19 |
% |
|
|
12 |
% |
|
|
88 |
% |
Tennessee |
|
|
1 |
|
|
|
0 |
|
|
|
13,769 |
|
|
|
38,167 |
|
|
|
0 |
|
|
|
38,167 |
|
|
|
(13,769 |
) |
|
|
100 |
% |
|
|
0 |
% |
|
|
0 |
% |
|
|
100 |
% |
|
|
0 |
% |
Texas |
|
|
9 |
|
|
|
1,128,696 |
|
|
|
113,616 |
|
|
|
991,042 |
|
|
|
111,369 |
|
|
|
(137,654 |
) |
|
|
(2,247 |
) |
|
|
93 |
% |
|
|
7 |
% |
|
|
33 |
% |
|
|
19 |
% |
|
|
81 |
% |
Virginia |
|
|
4 |
|
|
|
417,958 |
|
|
|
0 |
|
|
|
408,569 |
|
|
|
0 |
|
|
|
(9,389 |
) |
|
|
0 |
|
|
|
89 |
% |
|
|
11 |
% |
|
|
1 |
% |
|
|
77 |
% |
|
|
23 |
% |
Washington |
|
|
2 |
|
|
|
47,252 |
|
|
|
0 |
|
|
|
47,300 |
|
|
|
0 |
|
|
|
48 |
|
|
|
0 |
|
|
|
60 |
% |
|
|
40 |
% |
|
|
0 |
% |
|
|
42 |
% |
|
|
58 |
% |
West Virginia |
|
|
1 |
|
|
|
59,363 |
|
|
|
0 |
|
|
|
59,204 |
|
|
|
0 |
|
|
|
(159 |
) |
|
|
0 |
|
|
|
100 |
% |
|
|
0 |
% |
|
|
0 |
% |
|
|
90 |
% |
|
|
10 |
% |
Wyoming |
|
|
1 |
|
|
|
71,480 |
|
|
|
0 |
|
|
|
68,944 |
|
|
|
0 |
|
|
|
(2,536 |
) |
|
|
0 |
|
|
|
100 |
% |
|
|
0 |
% |
|
|
0 |
% |
|
|
100 |
% |
|
|
0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U. S. Total |
|
|
184 |
|
|
|
10,965,408 |
|
|
|
596,227 |
|
|
|
11,641,906 |
|
|
|
574,259 |
|
|
|
676,498 |
|
|
|
(21,968 |
) |
|
|
|
|
|
|
|
|
|
|
9 |
% |
|
|
56 |
% |
|
|
44 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-U. S. |
|
|
2 |
|
|
|
923,170 |
|
|
|
0 |
|
|
|
916,445 |
|
|
|
0 |
|
|
|
(6,725 |
) |
|
|
0 |
|
|
|
100 |
% |
|
|
0 |
% |
|
|
0 |
% |
|
|
99 |
% |
|
|
1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Grand Total |
|
|
186 |
|
|
|
11,888,578 |
|
|
|
596,227 |
|
|
|
12,558,351 |
|
|
|
574,259 |
|
|
|
669,773 |
|
|
|
(21,968 |
) |
|
|
96 |
% |
|
|
4 |
% |
|
|
8 |
% |
|
|
57 |
% |
|
|
43 |
% |
27
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Total Annual Production (in tons) (add 000) |
|
|
Number of years of production |
|
| |
|
For year ended December 31 |
|
|
available at December 31, 2008 |
|
| Reportable Segment |
|
2008 |
|
|
2007 |
|
|
2006 |
|
|
|
|
|
Mideast Group |
|
|
46,578 |
|
|
|
63,420 |
|
|
|
70,939 |
|
|
|
110.5 |
|
Southeast Group |
|
|
39,574 |
|
|
|
44,710 |
|
|
|
47,729 |
|
|
|
97.0 |
|
West Group |
|
|
69,439 |
|
|
|
72,832 |
|
|
|
76,648 |
|
|
|
59.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Aggregates
Business |
|
|
155,591 |
|
|
|
180,962 |
|
|
|
195,316 |
|
|
|
84.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Specialty Products Business
The Specialty Products business currently operates major manufacturing facilities in Manistee,
Michigan, and Woodville, Ohio. Both of these facilities are owned.
The Company leases a 185,000 square foot facility in Sparta, North Carolina, which serves as
the assembly and manufacturing hub for the structural composites product line of Martin Marietta
Composites.
Other Properties
The Company’s principal corporate office, which it owns, is located in Raleigh, North
Carolina. The Company owns and leases various administrative offices for its four reportable
business segments.
The Company’s principal properties, which are of varying ages and are of different
construction types, are believed to be generally in good condition, are generally well maintained,
and are generally suitable and adequate for the purposes for which they are used. During 2008, the
principal properties were believed to be utilized at average productive capacities of approximately
80% and were capable of supporting a higher level of market demand. However, due to the current
economic recession, the Company has adjusted its production schedules to meet reduced demand for
its products. For example, the Company has reduced operating hours at a number of its facilities,
closed some of its facilities, and shut down some of its facilities on a temporary basis. If
demand does not improve over the near term, such reductions and shutdowns could continue. The
Company expects, however, as the economy recovers, it will be able to resume production at its
normalized levels and increase production again as demand for its products increases.
28
ITEM 3. LEGAL PROCEEDINGS
From time to time claims of various types are asserted against the Company arising out of its
operations in the normal course of business, including claims relating to land use and permits,
safety, health, and environmental matters (such as noise abatement, blasting, vibrations, air
emissions, and water discharges). Such matters are subject to many uncertainties, and it is not
possible to determine the probable outcome of, or the amount of liability, if any, from, these
matters. In the opinion of management of the Company (which opinion is based in part upon
consideration of the opinion of counsel), it is unlikely that the outcome of these claims will have
a material adverse effect on the Company’s operations or its financial condition. However, there
can be no assurance that an adverse outcome in any of such litigation would not have a material
adverse effect on the Company or its operating segments.
The Company was not required to pay any penalties in 2008 for failure to disclose certain
“reportable transactions” under Section 6707A of the Internal Revenue Code.
See also “Note N: Commitments and Contingencies” of the “Notes to Financial Statements” of
the 2008 Financial Statements included under Item 8 of this Form 10-K and the 2008 Annual Report
and “Management’s Discussion and Analysis of Financial Condition and Results of Operations -
Environmental Regulation and Litigation” under Item 7 of this Form 10-K and the 2008 Annual
Report.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders during the fourth quarter of 2008.
EXECUTIVE OFFICERS OF THE REGISTRANT
The following sets forth certain information regarding the executive officers of Martin
Marietta Materials, Inc. as of February 10, 2009:
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
Year Assumed |
|
Other Positions and Other Business |
| Name |
|
Age |
|
Present Position |
|
Present Position |
|
Experience Within the Last Five Years |
Stephen P. Zelnak, Jr. |
|
64 |
|
Chairman of the Board of Directors; |
|
1997
|
|
President (1993-2006) |
|
|
|
|
Chief Executive Officer; |
|
1993
|
|
|
|
|
|
|
President of Aggregates Business; |
|
1993
|
|
|
|
|
|
|
Chairman of Magnesia Specialties Business |
|
2005 |
|
|
|
|
|
|
|
|
|
|
|
C. Howard Nye |
|
46 |
|
President and Chief Operating
Officer |
|
2006 |
|
Executive Vice President, Hanson |
|
|
|
|
|
|
|
|
Aggregates North America (2003-2006)* |
|
|
|
|
|
|
|
|
|
Daniel G. Shephard |
|
50 |
|
Executive Vice President; |
|
2005 |
|
Vice President-Business Development |
|
|
|
|
Chief Executive Officer |
|
2005 |
|
and Capital Planning (2002-2005); |
|
|
|
|
of Magnesia Specialties Business |
|
|
|
Senior Vice President (2004-2005); |
|
|
|
|
|
|
|
|
Regional Vice President and General |
|
|
|
|
|
|
|
|
Manager-MidAmerica Region (2003-2005); |
|
|
|
|
|
|
|
|
President of Magnesia Specialties Business |
|
|
|
|
|
|
|
|
(1999-2005); |
|
|
|
|
|
|
|
|
Vice President-Marketing (2002-2004) |
29
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
Year Assumed |
|
Other Positions and Other Business |
| Name |
|
Age |
|
Present Position |
|
Present Position |
|
Experience Within the Last Five Years |
|
|
|
|
|
|
|
|
|
Philip J. Sipling |
|
61 |
|
Executive Vice President; |
|
1997 |
|
Chairman of Magnesia Specialties |
|
|
|
|
Executive Vice President of |
|
1993 |
|
Business (1997-2005) |
|
|
|
|
Aggregates Business |
|
|
|
|
|
|
|
|
|
|
|
|
|
Bruce A. Vaio |
|
48 |
|
President – Martin Marietta
Materials West; |
|
2006 |
|
President – Southwest Division (1998-2006) |
|
|
|
|
|
|
|
|
Senior Vice President (2002-2005) |
|
|
|
|
Executive Vice President |
|
2005 |
|
|
|
|
|
|
|
|
|
|
|
Roselyn R. Bar |
|
50 |
|
Senior Vice President; |
|
2005 |
|
Vice President (2001-2005) |
|
|
|
|
General Counsel; |
|
2001 |
|
|
|
|
|
|
Corporate Secretary |
|
1997 |
|
|
|
|
|
|
|
|
|
|
|
Anne H. Lloyd |
|
47 |
|
Treasurer; |
|
2006 |
|
Vice President and Controller (1998-2005); |
|
|
|
|
Senior Vice President and |
|
2005 |
|
Chief Accounting Officer (1999-2006) |
|
|
|
|
Chief Financial Officer |
|
|
|
|
|
|
|
|
|
|
|
|
|
Jonathan T. Stewart |
|
60 |
|
Senior Vice President, Human Resources |
|
2001 |
|
|
|
|
|
| * |
|
Prior to his employment with the Company in 2006, Mr. Nye was Executive Vice President of Hanson
Aggregates North America, a producer of construction aggregates, since 2003. |
PART II
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF
EQUITY SECURITIES
Market Information, Holders, and Dividends
The Company’s Common Stock, $.01 par value, is traded on the New York Stock Exchange (“NYSE”)
(Symbol: MLM). Information concerning stock prices and dividends paid is included under the
caption “Quarterly Performance (Unaudited)” of the 2008 Annual Report, and that information is
incorporated herein by reference. There were 826 holders of record of the Company’s Common Stock
as of February 10, 2009. As required by Section 3.03A.12(a) of the NYSE listing standards, the
Company filed with the NYSE the certification of its Chief Executive Officer that he is not aware
of any violation by the Company of NYSE corporate governance listing standards.
Recent Sales of Unregistered Securities
None.
30
Securities Authorized for Issuance Under Equity Compensation Plans
The information required in response to this subsection of Item 5 is included in Part III,
under the heading “Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters,” of this Form 10-K.
Issuer Purchases of Equity Securities
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
Total Number of |
|
Maximum Number |
| |
|
|
|
|
|
|
|
|
|
Shares Purchased as |
|
of Shares that May |
| |
|
|
|
|
|
|
|
|
|
Part of Publicly |
|
Yet be Purchased |
| |
|
Total Number of Shares |
|
Average Price |
|
Announced Plans or |
|
Under the Plans or |
| Period |
|
Purchased |
|
Paid per Share |
|
Programs(1) |
|
Programs |
October 1, 2008 –
October 31, 2008 |
|
|
0 |
|
|
$ |
— |
|
|
|
0 |
|
|
|
5,041,871 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
November 1, 2008 –
November 30, 2008 |
|
|
0 |
|
|
$ |
— |
|
|
|
0 |
|
|
|
5,041,871 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 1, 2008 –
December 31, 2008 |
|
|
0 |
|
|
$ |
— |
|
|
|
0 |
|
|
|
5,041,871 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
0 |
|
|
$ |
— |
|
|
|
0 |
|
|
|
5,041,871 |
|
|
|
|
| (1) |
|
The Company’s initial stock repurchase program, which authorized the repurchase of 2.5
million shares of common stock, was announced in a press release dated May 6, 1994, and has
been updated as appropriate. The program does not have an expiration date. The Company
announced in a press release dated February 22, 2006 that its Board of Directors had
authorized the repurchase of an additional 5 million shares of common stock. The Company
announced in a press release dated August 15, 2007 that its Board of Directors had authorized
the repurchase of an additional 5 million shares of common stock. |
ITEM 6. SELECTED FINANCIAL DATA
The information required in response to this Item 6 is included under the caption “Five Year
Summary” of the 2008 Annual Report, and that information is incorporated herein by reference.
|
|
|
| ITEM 7. |
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
The following is management’s discussion and analysis of certain significant factors that have
affected our consolidated financial condition and operating results during the periods included in
the accompanying consolidated financial statements and the related notes. You should read the
following discussion in conjunction with our audited consolidated financial statements and the
related notes, which are included under Item 8 of this Form 10-K.
The information required in response to this Item 7 is included under the caption
“Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the
2008 Annual Report, and that information is incorporated herein by reference, except that the
information contained under the caption “Management’s Discussion and Analysis of Financial
Condition and Results of Operations—Outlook 2009” in the 2008 Annual Report is not incorporated
herein by reference.
31
|
|
|
| ITEM 7A. |
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
The information required in response to this Item 7A is included under the caption
“Management’s Discussion and Analysis of Financial Condition and Results of Operations-Quantitative
and Qualitative Disclosures About Market Risk” of the 2008 Annual Report, and that information is
incorporated herein by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The information required in response to this Item 8 is included under the caption
“Consolidated Statements of Earnings,” “Consolidated Balance Sheets,” “Consolidated Statements of
Cash Flows,” “Consolidated Statements of Shareholders’ Equity,” “Notes to Financial Statements,”
“Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and
“Quarterly Performance (Unaudited)” of the 2008 Annual Report, and that information is incorporated
herein by reference.
|
|
|
| ITEM 9. |
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE |
None.
ITEM 9A. CONTROLS AND PROCEDURES
As of December 31, 2008, an evaluation was performed under the supervision and with the
participation of the Company’s management, including the Chief Executive Officer (“CEO”) and Chief
Financial Officer (“CFO”), of the effectiveness of the design and operation of the Company’s
disclosure controls and procedures and the Company’s internal control over financial reporting.
Based on that evaluation, the Company’s management, including the CEO and CFO, concluded that the
Company’s disclosure controls and procedures were effective in ensuring that all material
information required to be disclosed is made known to them in a timely manner as of December 31,
2008 and further concluded that the Company’s internal control over financial reporting was
effective in providing reasonable assurance regarding the reliability of financial reporting and
the preparation of the Company’s financial statements for external purposes in accordance with generally accepted
accounting principles as of December 31, 2008. There were no changes in the Company’s internal control over financial reporting during the most
recently completed fiscal quarter that materially affected, or are reasonably likely to materially
affect, the Company’s internal control over financial reporting.
The foregoing evaluation of the Company’s disclosure controls and procedures was based on the
definition in Exchange Act Rule 13a-15(e), which requires that disclosure controls and procedures
are effectively designed to ensure that information required to be disclosed by an issuer in the
reports
32
that it files or submits with the Securities and Exchange Commission under the Exchange Act
is recorded, processed, summarized, and reported, within the time periods specified in the
Securities and Exchange Commission’s rules and forms, and is accumulated and communicated to the
issuer’s management, including its principal executive and principal financial officers, or persons
performing similar functions, as appropriate to allow timely decisions regarding required
disclosure.
The Company’s management, including the CEO and CFO, does not expect that the Company’s
control system will prevent all error and all fraud. A control system, no matter how well
conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of
the control system are met. Further, the design of a control system must reflect the fact that
there are resource constraints, and the benefits of controls must be considered relative to their
costs. Because of the inherent limitations in all control systems, no evaluation of controls can
provide absolute assurance that all control issues and instances of fraud, if any, within the
Company have been detected. These inherent limitations include the realities that judgments in
decision-making can be faulty and that breakdowns can occur because of simple error or mistake.
Additionally, controls can be circumvented by the individual acts of some persons, by collusion of
two or more people, or by management override of the control. The design of any system of controls
also is based in part upon certain assumptions about the likelihood of future events, and there can
be no assurance that any design will succeed in achieving its stated goals under all potential
future conditions. Over time, control may become inadequate because of changes in conditions, or
the degree of compliance with the policies or procedures may deteriorate. Because of the inherent
limitations in a cost-effective control system, misstatements due to error or fraud may occur and
not be detected.
The Company’s management has issued its annual report on the Company’s internal control over
financial reporting, which included management’s assessment that the Company’s internal control
over financial reporting was effective at December 31, 2008. The Company’s independent registered
public accounting firm has issued an attestation report that the Company’s internal control over
financial reporting was effective at December 31, 2008. Management’s report on the Company’s
internal controls and the attestation report of the Company’s independent registered public
accounting firm are included in the 2008 Financial Statements, included under Item 8 of this Form
10-K and the 2008 Annual Report. See also “Management’s Discussion and Analysis of Financial
Condition and Results of Operations — Internal Control and Accounting and Reporting Risk” under
Item 7 of this Form 10-K and the 2008 Annual Report.
Included among the Exhibits to this Form 10-K are forms of “Certifications” of the Company’s
CEO and CFO as required in accordance with Section 302 of the Sarbanes-Oxley Act of 2002 (the
“Section 302 Certification”). The Section 302 Certifications refer to this evaluation of the
Company’s disclosure policies and procedures and internal control over financial reporting. The
information in this section should be read in conjunction with the Section 302 Certifications for a
more complete understanding of the topics presented.
ITEM 9B. OTHER INFORMATION
None.
33
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
The information concerning directors of the Company, the Audit Committee of the Board of
Directors, and the Audit Committee financial expert serving on the Audit Committee, all as required
in response to this Item 10, is included under the captions “Corporate Governance Matters” and
“Section 16(a) Beneficial Ownership Reporting Compliance” in the Company’s definitive proxy
statement to be filed with the Securities and Exchange Commission pursuant to Regulation 14A within
120 days after the close of the Company’s fiscal year ended December 31, 2008 (the “2009 Proxy
Statement”), and that information is hereby incorporated by reference in this Form 10-K.
Information concerning executive officers of the Company required in response to this Item 10 is
included in Part I, under the heading “Executive Officers of the Registrant,” of this Form 10-K.
The information concerning the Company’s code of ethics required in response to this Item 10 is
included in Part I, under the heading “Available Information,” of this Form 10-K.
ITEM 11. EXECUTIVE COMPENSATION
The information required in response to this Item 11 is included under the captions “Executive
Compensation,” “Compensation Discussion and Analysis,” “Corporate Governance Matters,” “Management
Development and Compensation Committee Report,” and “Compensation Committee Interlocks and Insider
Participation” in the Company’s 2009 Proxy Statement, and that information is hereby incorporated
by reference in this Form 10-K.
|
|
|
| ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER
MATTERS |
The information required in response to this Item 12 is included under the captions “General
Information,” “Security Ownership of Certain Beneficial Owners and Management,” and “Securities
Authorized for Issuance Under Equity Compensation Plans” in the Company’s 2009 Proxy Statement, and
that information is hereby incorporated by reference in this Form 10-K.
|
|
|
| ITEM 13. |
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE |
The information required in response to this Item 13 is included under the captions
“Compensation Committee Interlocks and Insider Participation in Compensation Decisions” and
“Corporate Governance Matters” in the Company’s 2009 Proxy Statement, and that information is
hereby incorporated by reference in this Form 10-K.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
The information required in response to this Item 14 is included under the caption
“Independent Auditors” in the Company’s 2009 Proxy Statement, and that information is hereby
incorporated by reference in this Form 10-K.
34
PART IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) (1) List of financial statements filed as part of this Form 10-K.
The following consolidated financial statements of Martin Marietta Materials, Inc. and
consolidated subsidiaries, included in the 2008 Annual Report and incorporated by reference
under Item 8 of this Form 10-K:
Consolidated Statements of Earnings—
for years ended December 31, 2008, 2007, and 2006
Consolidated Balance Sheets—
at December 31, 2008 and 2007
Consolidated Statements of Cash Flows—
for years ended December 31, 2008, 2007, and 2006
Consolidated Statements of Shareholders’ Equity—
Balance at December 31, 2008, 2007, and 2006
Notes to Financial Statements
(2) List of financial statement schedules filed as part of this Form 10-K
The following financial statement schedule of Martin Marietta Materials, Inc. and
consolidated subsidiaries is included in Item 15(c) of this Form 10-K.
Schedule II — Valuation and Qualifying Accounts
All other schedules have been omitted because they are not applicable, not required, or the
information has been otherwise supplied in the financial statements or notes to the
financial statements.
The report of the Company’s independent registered public accounting firm with respect to
the above-referenced financial statements is included in the 2008 Annual Report, and that
report is hereby incorporated by reference in this Form 10-K. The report on the financial
statement schedule and the consent of the Company’s independent registered public accounting
firm are attached as Exhibit 23.01 to this Form 10-K.
35
(3) Exhibits
The list of Exhibits on the accompanying Index of Exhibits included in Item 15(b) of this
Form 10-K is hereby incorporated by reference. Each management contract or compensatory
plan or arrangement required to be filed as an exhibit is indicated by asterisks.
(b) Index of Exhibits
| |
|
|
| Exhibit |
|
|
| No. |
|
|
3.01
|
— |
Restated Articles of Incorporation of the Company, as amended (incorporated by reference to Exhibits 3.1 and 3.2 to
the Martin Marietta Materials, Inc. Current Report on Form 8-K, filed on October 25, 1996) (Commission File No.
1-12744) |
|
|
|
3.02
|
— |
Articles of Amendment with Respect to the Junior Participating Class B Preferred Stock
of the Company, dated as of October 19, 2006 (incorporated by reference to Exhibit 3.1 to
the Martin Marietta Materials, Inc. Current Report on Form 8-K, filed on October 19, 2006) (Commission
File No. 1-12744) |
|
|
|
3.03
|
— |
Restated Bylaws of the Company (incorporated by reference to Exhibit 3.01 to the Martin Marietta
Materials, Inc. Current Report on Form 8-K, filed on November 8, 2007) (Commission File No. 1-12744) |
|
|
|
4.01
|
— |
Specimen Common Stock Certificate (incorporated by reference to Exhibit 4.01 to the Martin
Marietta Materials, Inc. Annual Report on Form 10-K for the fiscal year ended December 31,
2003) (Commission File No. 1-12744) |
|
|
|
4.02
|
— |
Articles 2 and 8 of the Company’s Restated Articles of
Incorporation, as amended (incorporated by reference to Exhibit 4.02
to the Martin Marietta Materials, Inc. Annual Report on Form 10-K for
the fiscal year ended December 31, 1996) (Commission File No.
1-12744) |
|
|
|
4.03
|
— |
Article I of the Company’s Restated Bylaws (incorporated by reference to Exhibit 3.01 to the
Martin Marietta Materials, Inc. Current Report on Form 8-K, filed on November 8, 2007) (Commission File No. 1-12744) |
|
|
|
4.04
|
— |
Indenture dated as of December 1, 1995 between Martin Marietta Materials, Inc. and First
Union National Bank of North Carolina (incorporated by reference to Exhibit 4(a) to the Martin
Marietta Materials, Inc. registration statement on Form S-3 (SEC Registration No. 33-99082)) |
|
|
|
4.05
|
— |
Form of Martin Marietta Materials, Inc. 7% Debenture due 2025 (incorporated by reference to
Exhibit 4(a)(i) to the Martin Marietta Materials, Inc. registration statement on Form S-3 (SEC
Registration No. 33-99082)) |
|
|
|
4.06
|
— |
Indenture dated as of December 7, 1998 between Martin Marietta Materials, Inc. and First
Union National Bank (incorporated by reference to Exhibit 4.08 to the Martin Marietta
Materials, Inc. registration statement on Form S-4 (SEC Registration No. 333-71793)) |
|
|
|
4.07
|
— |
Form of Martin Marietta Materials, Inc. 6.875% Note due April 1, 2011 (incorporated by
reference to Exhibit 4.12 to the Martin Marietta Materials, Inc. registration statement on
Form S-4 (SEC Registration No. 333-61454)) |
|
|
|
4.08
|
— |
Indenture dated as of April 30, 2007 between Martin Marietta Materials, Inc. and Branch
Banking and Trust Company, Inc., as trustee (incorporated by reference to Exhibit 4.1 to the
Martin Marietta Materials, Inc. Current Report on Form 8-K, filed on April 30, 2007
(Commission File No. 1-12744) |
|
|
|
4.09
|
— |
First Supplemental Indenture, dated as of April 30, 2007, between Martin Marietta
Materials, Inc. and Branch Banking and Trust Company, Inc., as trustee, to that certain
Indenture dated as of April 30, 2007 between Martin Marietta Materials, Inc. and Branch
Banking and Trust Company, Inc., as trustee, pursuant to which were issued $225,000,000
aggregate principal amount of Floating Rate Senior Notes due 2010 of Martin Marietta
Materials, Inc. |
36
| |
|
|
| Exhibit |
|
|
| No. |
|
|
|
|
(incorporated by reference to Exhibit 4.2 to the Martin Marietta Materials,
Inc. Current Report on Form 8-K, filed on April 30, 2007 (Commission File No. 1-12744) |
|
|
|
4.10
|
— |
Second Supplemental Indenture, dated as of April 30, 2007, between Martin Marietta
Materials, Inc. and Branch Banking and Trust Company, Inc., as trustee, to that certain
Indenture dated as of April 30, 2007 between Martin Marietta Materials, Inc. and Branch
Banking and Trust Company, Inc., as trustee, pursuant to which were issued $250,000,000
aggregate principal amount of 6 1/4% Senior Notes due 2037 of Martin Marietta Materials, Inc.
(incorporated by reference to Exhibit 4.3 to the Martin Marietta Materials, Inc. Current
Report on Form 8-K, filed on April 30, 2007 (Commission File No. 1-12744) |
|
|
|
4.11
|
— |
Third Supplemental Indenture, dated as of April 21, 2008, between Martin Marietta
Materials, Inc. and Branch Banking and Trust Company, Inc., as trustee, to that certain
Indenture dated as of April 30, 2007 between Martin Marietta Materials, Inc. and Branch
Banking and Trust Company, Inc., as trustee, pursuant to which were issued $300,000,000
aggregate principal amount of 6.60% Senior Notes due 2018 of Martin Marietta Materials, Inc.
(incorporated by reference to Exhibit 4.1 to the Martin Marietta Materials, Inc. Current
Report on Form 8-K, filed on April 21, 2008 (Commission File No. 1-12744) |
|
|
|
10.01
|
— |
Rights Agreement, dated as of September 27, 2006, by and between Martin Marietta
Materials, Inc. and American Stock Transfer & Trust Company, as Rights Agent, which includes
the Form of Articles of Amendment With Respect to the Junior Participating Class B Preferred
Stock of Martin Marietta Materials, Inc., as Exhibit A, and the Form of Rights Certificate, as
Exhibit B (incorporated by reference to Exhibit 4.1 of the Company’s Current Report on Form
8-K, filed on September 28, 2006) |
|
|
|
10.02
|
— |
$325,000,000 Second Amended and Restated Credit Agreement dated as of October 24, 2008,
among Martin Marietta Materials, Inc., the banks parties thereto, and JP Morgan Chase Bank,
N.A., as Administrative Agent (incorporated by reference to Exhibit 10.01 to the Martin
Marietta Materials, Inc. Quarterly Report on Form 10-Q for the quarter ended September 30,
2008) (Commission File No. 1-12744) |
|
|
|
10.03
|
— |
Form of Martin Marietta Materials, Inc. Third Amended and Restated Employment Protection
Agreement (incorporated by reference to Exhibit 10.01 to the Martin Marietta Materials, Inc.
Current Report on Form 8-K, filed on August 19, 2008) (Commission File No. 1-12744)** |
|
|
|
*10.04
|
— |
Amended and Restated Martin Marietta Materials, Inc. Common Stock Purchase Plan for Directors** |
|
|
|
*10.05
|
— |
Martin Marietta Materials, Inc. Amended and Restated Executive Incentive Plan** |
|
|
|
*10.06
|
— |
Martin Marietta Materials, Inc. Incentive Stock Plan, as Amended** |
|
|
|
10.07
|
— |
Martin Marietta Materials, Inc. Amended and Restated Stock-Based Award Plan dated April
3, 2006 (incorporated by reference to Exhibit 10.01 to the Martin Marietta Materials, Inc.
Quarterly Report on Form 10-Q for the quarter ended June 30, 2006) (Commission File No.
1-12744)** |
|
|
|
10.08
|
— |
Amended and Restated Consulting Agreement dated June 26, 2006, between Janice Henry and
Martin Marietta Materials, Inc. (incorporated by reference to Exhibit 10.02 to the Martin
Marietta Materials, Inc. Quarterly Report on Form 10-Q for the quarter ended June 30, 2006)
(Commission File No. 1-12744)** |
|
|
|
10.09
|
— |
Martin Marietta Materials, Inc. Amended Omnibus Securities Award Plan (incorporated by
reference to Exhibit 10.16 to the Martin Marietta Materials, Inc. Annual Report on Form 10-K
for the fiscal year ended December 31, 2000) (Commission File No. 1-12744)** |
|
|
|
10.10
|
— |
Martin Marietta Materials, Inc. Amended and Restated Supplemental Excess Retirement Plan
(incorporated by reference to Exhibit 10.2 to the Martin Marietta Materials, Inc. Current
Report on Form 8-K, filed on August 19, 2008 ) (Commission File No. 1-12744)** |
37
| |
|
|
| Exhibit |
|
|
| No. |
|
|
*10.11
|
— |
Form of Option Award Agreement under the Martin Marietta Materials, Inc. Amended and Restated Stock-Based Award Plan ** |
|
|
|
*10.12
|
— |
Form of Restricted Stock Unit Agreement under the Martin Marietta Materials, Inc. Amended and Restated Stock-Based
Award Plan ** |
|
|
|
*10.13
|
— |
Form of
Amendment to the Stock Unit Agreement under the Martin Marietta Materials, Inc. Amended and Restated Stock-Based
Award Plan ** |
|
|
|
*12.01
|
— |
Computation of ratio of earnings to fixed charges for the year ended December 31, 2008 |
|
|
|
*13.01
|
— |
Excerpts from Martin Marietta Materials, Inc. 2008 Annual Report to Shareholders, portions of which are incorporated
by reference in this Form 10-K. Those portions of the 2008 Annual Report to Shareholders that are not incorporated by
reference shall not be deemed to be “filed” as part of this report. |
|
|
|
*21.01
|
— |
List of subsidiaries of Martin Marietta Materials, Inc. |
|
|
|
*23.01
|
— |
Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm for Martin Marietta Materials, Inc. and
consolidated subsidiaries |
|
|
|
*24.01
|
— |
Powers of Attorney (included in this Form 10-K immediately following Signatures) |
|
|
|
*31.01
|
— |
Certification dated February 17, 2009 of Chief Executive Officer pursuant to Securities and Exchange Act of 1934, rule
13a-14, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
|
|
|
*31.02
|
— |
Certification dated February 17, 2009 of Chief Financial Officer pursuant to Securities and Exchange Act of 1934, rule
13a-14, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
|
|
|
*32.01
|
— |
Certification dated February 17, 2009 of Chief Executive Officer required by 18 U.S.C. 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002 |
|
|
|
*32.02
|
— |
Certification dated February 17, 2009 of Chief Financial Officer required by 18 U.S.C. 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002 |
|
|
|
| Other material incorporated by reference: |
|
|
|
|
|
Martin Marietta Materials, Inc.’s 2009 Proxy Statement filed pursuant to Regulation 14A,
portions of which are incorporated by reference in this Form 10-K. Those portions of the
2009 Proxy Statement which are not incorporated by reference shall not be deemed to be
“filed” as part of this report. |
|
|
|
| * |
|
Filed herewith |
| |
| ** |
|
Management contract or compensatory plan or arrangement required to be filed as an exhibit
pursuant to Item 14(c) of Form 10-K |
38
(c) Financial Statement Schedule
SCHEDULE II — VALUATION AND QUALIFYING ACCOUNTS
MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Col A |
|
Col B |
|
Col C |
|
Col D |
|
Col E |
| |
|
|
|
|
|
Additions |
|
|
|
|
|
|
| |
|
|
|
|
|
(1) |
|
(2) |
|
|
|
|
|
|
| |
|
|
|
|
|
Charged |
|
Charged to |
|
|
|
|
|
|
| |
|
Balance at |
|
to costs |
|
other |
|
|
|
|
|
Balance at |
| |
|
beginning |
|
and |
|
accounts— |
|
Deductions— |
|
end of |
| Description |
|
of period |
|
expenses |
|
describe |
|
describe |
|
period |
| |
|
(Amounts in Thousands) |
|
|
|
|
Year ended December 31, 2008 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for doubtful accounts |
|
$ |
3,661 |
|
|
$ |
1,035 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
4,696 |
|
Allowance for uncollectible
notes receivable |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Inventory valuation allowance |
|
|
19,136 |
|
|
|
— |
|
|
|
— |
|
|
|
117 |
(a) |
|
|
19,019 |
|
Accumulated amortization of
intangible assets |
|
|
18,816 |
|
|
|
1,886 |
|
|
|
— |
|
|
|
8,058 |
(b) |
|
|
12,644 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31, 2007 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for doubtful accounts |
|
$ |
4,905 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
1,244 |
(a) |
|
$ |
3,661 |
|
Allowance for uncollectible
notes receivable |
|
|
853 |
|
|
|
— |
|
|
|
— |
|
|
|
853 |
(a) |
|
|
— |
|
Inventory valuation allowance |
|
|
14,221 |
|
|
|
4,915 |
|
|
|
— |
|
|
|
|
|
|
|
19,136 |
|
Accumulated amortization of
intangible assets |
|
|
20,670 |
|
|
|
1,947 |
|
|
|
— |
|
|
|
3,801 |
(b) |
|
|
18,816 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31, 2006 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for doubtful accounts |
|
$ |
5,545 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
640 |
(a) |
|
$ |
4,905 |
|
Allowance for uncollectible
notes receivable |
|
|
795 |
|
|
|
58 |
|
|
|
— |
|
|
|
|
|
|
|
853 |
|
Inventory valuation allowance |
|
|
12,101 |
|
|
|
3,093 |
|
|
|
— |
|
|
|
973 |
(c) |
|
|
14,221 |
|
Accumulated amortization of intangible assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
213 |
(d) |
|
|
|
|
|
|
|
29,399 |
|
|
|
3,858 |
|
|
|
— |
|
|
|
12,374 |
(b) |
|
|
20,670 |
|
|
|
|
| (a) |
|
To adjust allowance for change in estimates.
|
| |
| (b) |
|
Write off of fully amortized intangible assets.
|
| |
| (c) |
|
Write off of fully reserved inventory.
|
| |
| (d) |
|
Divestitures. |
39
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
| |
|
|
|
|
|
|
|
|
| |
|
MARTIN MARIETTA MATERIALS, INC. |
|
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
|
|
|
/s/ Roselyn R. Bar |
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
Roselyn R. Bar |
|
|
|
|
|
|
|
|
Senior Vice President, General Counsel
and Corporate Secretary |
|
|
|
|
|
|
|
|
|
|
|
Dated: February 17, 2009 |
|
|
|
|
|
|
|
|
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below appoints
Roselyn R. Bar and M. Guy Brooks, III, jointly and severally, as his or her true and lawful
attorney-in-fact, each with full power of substitution and resubstitution, for him or her and in
his or her name, place and stead, in any and all capacities, to sign any and all amendments to this
Annual Report on Form 10-K, and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact, jointly and severally, full power and authority to do and perform each in
connection therewith, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact, jointly and severally, or
their or his or her substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
40
Pursuant to the requirements of the Securities and Exchange Act of 1934, this report has been
signed by the following persons on behalf of the registrant and in the capacities and on the dates
indicated:
| |
|
|
|
|
| Signature |
|
Title |
|
Date |
| |
/s/ Stephen P. Zelnak, Jr.
|
|
Chairman of the Board and Chief Executive Officer
|
|
February 17, 2009 |
Stephen P. Zelnak, Jr.
|
|
|
|
|
|
|
|
|
|
|
|
Senior Vice President, Chief Financial Officer and Treasurer
|
|
February 17, 2009 |
Anne H. Lloyd
|
|
|
|
|
|
|
|
|
|
|
|
Vice President, Controller and Chief Accounting Officer
|
|
February 17, 2009 |
Dana F. Guzzo
|
|
|
|
|
|
|
|
|
|
|
|
Director
|
|
February 17, 2009 |
Sue W. Cole |
|
|
|
|
|
|
|
|
|
|
|
Director
|
|
February 17, 2009 |
David G. Maffucci |
|
|
|
|
|
|
|
|
|
|
|
Director
|
|
February 17, 2009 |
William E. McDonald |
|
|
|
|
|
|
|
|
|
/s/ Frank H. Menaker, Jr.
|
|
Director
|
|
February 17, 2009 |
Frank H. Menaker, Jr. |
|
|
|
|
|
|
|
|
|
|
|
Director
|
|
February 17, 2009 |
Laree E. Perez |
|
|
|
|
|
|
|
|
|
|
|
Director
|
|
February 17, 2009 |
Michael J. Quillen |
|
|
|
|
41
| |
|
|
|
|
| Signature |
|
Title |
|
Date |
| |
|
|
Director
|
|
February 17, 2009 |
Dennis L. Rediker |
|
|
|
|
|
|
|
|
|
|
|
Director
|
|
February 17, 2009 |
Richard A. Vinroot |
|
|
|
|
42
EXHIBITS
| |
|
|
| Exhibit |
|
|
| No. |
|
|
| |
3.01
|
— |
Restated Articles of Incorporation of the Company, as amended (incorporated by reference to Exhibits 3.1 and 3.2 to the
Martin Marietta Materials, Inc. Current Report on Form 8-K, filed on October 25, 1996) (Commission File No. 1-12744) |
|
|
|
3.02
|
— |
Articles of Amendment with Respect to the
Junior Participating Class B Preferred Stock
of the Company, dated as of October 19, 2006
(incorporated by reference to Exhibit 3.1 to
the Martin Marietta Materials, Inc.
Current Report on Form 8-K, filed on October 19, 2006) (Commission
File No. 1-12744) |
|
|
|
3.03
|
— |
Restated Bylaws
of the Company
(incorporated by
reference to
Exhibit 3.01 to the
Martin Marietta
Materials, Inc.
Current Report on
Form 8-K, filed on November 8, 2007) (Commission File No. 1-12744) |
|
|
|
4.01
|
— |
Specimen Common Stock Certificate (incorporated by reference to Exhibit 4.01 to the Martin
Marietta Materials, Inc. Annual Report on Form 10-K for the fiscal year ended December 31,
2003) (Commission File No. 1-12744) |
|
|
|
4.02
|
— |
Articles 2 and 8 of the Company’s Restated Articles of Incorporation, as amended (incorporated by reference to Exhibit
4.02 to the Martin Marietta Materials, Inc. Annual Report on Form 10-K for the fiscal year ended December 31, 1996)
(Commission File No. 1-12744) |
|
|
|
4.03
|
— |
Article I of the
Company’s Restated
Bylaws, as amended
(incorporated by
reference to
Exhibit 4.03 to the
Martin Marietta
Materials, Inc. Annual Report on Form 10-K for the fiscal year ended December 31, 1996) (Commission File No. 1-12744) |
|
|
|
4.04
|
— |
Indenture dated as of December 1, 1995 between Martin Marietta Materials, Inc. and First
Union National Bank of North Carolina (incorporated by reference to Exhibit 4(a) to the Martin
Marietta Materials, Inc. registration statement on Form S-3 (SEC Registration No. 33-99082)) |
|
|
|
4.05
|
— |
Form of Martin Marietta Materials, Inc. 7% Debenture due 2025 (incorporated by reference to
Exhibit 4(a)(i) to the Martin Marietta Materials, Inc. registration statement on Form S-3 (SEC
Registration No. 33-99082)) |
|
|
|
4.06
|
— |
Indenture dated as of December 7, 1998 between Martin Marietta Materials, Inc. and First
Union National Bank (incorporated by reference to Exhibit 4.08 to the Martin Marietta
Materials, Inc. registration statement on Form S-4 (SEC Registration No. 333-71793)) |
|
|
|
4.07
|
— |
Form of Martin Marietta Materials, Inc. 6.875% Note due April 1, 2011 (incorporated by
reference to Exhibit 4.12 to the Martin Marietta Materials, Inc. registration statement on
Form S-4 (SEC Registration No. 333-61454)) |
|
|
|
4.08
|
— |
Indenture dated as of April 30, 2007 between Martin Marietta Materials, Inc. and Branch
Banking and Trust Company, Inc., as trustee (incorporated by reference to Exhibit 4.1 to the
Martin Marietta Materials, Inc. Current Report on Form 8-K, filed on April 30, 2007
(Commission File No. 1-12744) |
|
|
|
4.09
|
— |
First Supplemental Indenture, dated as of April 30, 2007, between Martin Marietta
Materials, Inc. and Branch Banking and Trust Company, Inc., as trustee, to that certain
Indenture dated as of April 30, 2007 between Martin Marietta Materials, Inc. and Branch
Banking and Trust Company, Inc., as trustee, pursuant to which were issued $225,000,000
aggregate principal amount of Floating Rate Senior Notes due 2010 of Martin Marietta
Materials, Inc. (incorporated by reference to Exhibit 4.2 to the Martin Marietta Materials,
Inc. Current Report on Form 8-K, filed on April 30, 2007 (Commission File No. 1-12744) |
| |
|
|
| Exhibit |
|
|
| No. |
|
|
| |
4.10
|
— |
Second Supplemental Indenture, dated as of April 30, 2007, between Martin Marietta
Materials, Inc. and Branch Banking and Trust Company, Inc., as trustee, to that certain
Indenture dated as of April 30, 2007 between Martin Marietta Materials, Inc. and Branch
Banking and Trust Company, Inc., as trustee, pursuant to which were issued $250,000,000
aggregate principal amount of 6 1/4% Senior Notes due 2037 of Martin Marietta Materials, Inc.
(incorporated by reference to Exhibit 4.3 to the Martin Marietta Materials, Inc. Current
Report on Form 8-K, filed on April 30, 2007 (Commission File No. 1-12744) |
|
|
|
4.11
|
— |
Third Supplemental Indenture, dated as of April 21, 2008, between Martin Marietta
Materials, Inc. and Branch Banking and Trust Company, Inc., as trustee, to that certain
Indenture dated as of April 30, 2007 between Martin Marietta Materials, Inc. and Branch
Banking and Trust Company, Inc., as trustee, pursuant to which were issued $300,000,000
aggregate principal amount of 6.60% Senior Notes due 2018 of Martin Marietta Materials, Inc.
(incorporated by reference to Exhibit 4.1 to the Martin Marietta Materials, Inc. Current
Report on Form 8-K, filed on April 21, 2008 (Commission File No. 1-12744) |
|
|
|
10.01
|
— |
Rights Agreement, dated as of September 27, 2006, by and between Martin Marietta
Materials, Inc. and American Stock Transfer & Trust Company, as Rights Agent, which includes
the Form of Articles of Amendment With Respect to the Junior Participating Class B Preferred
Stock of Martin Marietta Materials, Inc., as Exhibit A, and the Form of Rights Certificate, as
Exhibit B (incorporated by reference to Exhibit 4.1 of the Company’s Current Report on Form
8-K, filed on September 28, 2006) |
|
|
|
10.02
|
— |
$325,000,000 Second Amended and Restated Credit Agreement dated as of October 24, 2008,
among Martin Marietta Materials, Inc., the banks parties thereto, and JP Morgan Chase Bank,
N.A., as Administrative Agent (incorporated by reference to Exhibit 10.01 to the Martin
Marietta Materials, Inc. Quarterly Report on Form 10-Q for the quarter ended September 30,
2008) (Commission File No. 1-12744) |
|
|
|
10.03
|
— |
Form of Martin Marietta Materials, Inc. Third Amended and Restated Employment Protection
Agreement (incorporated by reference to Exhibit 10.01 to the Martin Marietta Materials, Inc.
Current Report on Form 8-K, filed on August 19, 2008) (Commission File No. 1-12744)** |
|
|
|
*10.04
|
— |
Amended and Restated Martin Marietta Materials, Inc. Common Stock Purchase Plan for Directors** |
|
|
|
*10.05
|
— |
Martin Marietta Materials, Inc. Amended and Restated Executive Incentive Plan** |
|
|
|
*10.06
|
— |
Martin Marietta Materials, Inc. Incentive Stock Plan, as Amended** |
|
|
|
10.07
|
— |
Martin Marietta Materials, Inc. Amended and Restated Stock-Based Award Plan dated April
3, 2006 (incorporated by reference to Exhibit 10.01 to the Martin Marietta Materials, Inc.
Quarterly Report on Form 10-Q for the quarter ended June 30, 2006) (Commission File No.
1-12744)** |
|
|
|
10.08
|
— |
Amended and Restated Consulting Agreement dated June 26, 2006, between Janice Henry and
Martin Marietta Materials, Inc. (incorporated by reference to Exhibit 10.02 to the Martin
Marietta Materials, Inc. Quarterly Report on Form 10-Q for the quarter ended June 30, 2006)
(Commission File No. 1-12744)** |
|
|
|
10.09
|
— |
Martin Marietta Materials, Inc. Amended Omnibus Securities Award Plan (incorporated by
reference to Exhibit 10.16 to the Martin Marietta Materials, Inc. Annual Report on Form 10-K
for the fiscal year ended December 31, 2000) (Commission File No. 1-12744)** |
|
|
|
10.10
|
— |
Martin Marietta Materials, Inc. Amended and Restated Supplemental Excess Retirement Plan
(incorporated by reference to Exhibit 10.2 to the Martin Marietta Materials, Inc. Current
Report on Form 8-K, filed on August 19, 2008 ) (Commission File No. 1-12744)** |
|
|
|
*10.11
|
— |
Form of Option Award Agreement under the Martin Marietta Materials, Inc. Amended and Restated Stock-Based Award Plan** |
| |
|
|
| Exhibit |
|
|
| No. |
|
|
| |
*10.12
|
— |
Form of Restricted Stock Unit Agreement under the Martin Marietta Materials, Inc. Amended and Restated Stock-Based
Award Plan** |
|
|
|
*10.13
|
— |
Form of
Amendment to the Stock Unit Agreement under the Martin Marietta Materials, Inc. Amended and Restated Stock-Based
Award Plan ** |
|
|
|
*12.01
|
— |
Computation of ratio of earnings to fixed charges for the year ended December 31, 2008 |
|
|
|
*13.01
|
— |
Excerpts from Martin Marietta Materials, Inc. 2008 Annual Report to Shareholders, portions of which are incorporated
by reference in this Form 10-K. Those portions of the 2008 Annual Report to Shareholders that are not incorporated by
reference shall not be deemed to be “filed” as part of this report. |
|
|
|
*21.01
|
— |
List of subsidiaries of Martin Marietta Materials, Inc. |
|
|
|
*23.01
|
— |
Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm for Martin Marietta Materials, Inc. and
consolidated subsidiaries |
|
|
|
*24.01
|
— |
Powers of Attorney (included in this Form 10-K immediately following Signatures) |
|
|
|
*31.01
|
— |
Certification dated February 17, 2009 of Chief Executive Officer pursuant to Securities and Exchange Act of 1934, rule
13a-14, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
|
|
|
*31.02
|
— |
Certification dated February 17, 2009 of Chief Financial Officer pursuant to Securities and Exchange Act of 1934, rule
13a-14, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
|
|
|
*32.01
|
— |
Certification dated February 17, 2009 of Chief Executive Officer required by 18 U.S.C. 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002 |
|
|
|
*32.02
|
— |
Certification dated February 17, 2009 of Chief Financial Officer required by 18 U.S.C. 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002 |
|
|
|
| Other material incorporated by reference: |
|
|
|
|
|
Martin Marietta Materials, Inc.’s 2009 Proxy Statement filed pursuant to Regulation 14A,
portions of which are incorporated by reference in this Form 10-K. Those portions of the
2009 Proxy Statement which are not incorporated by reference shall not be deemed to be
“filed” as part of this report. |
|
|
|
| * |
|
Filed herewith |
| |
| ** |
|
Management contract or compensatory plan or arrangement required to be filed as an exhibit
pursuant to Item 14(c) of Form 10-K |