<PAGE> 1
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------
FORM 11-K
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[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the fiscal year ended December 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from to
------------ ------------
Commission file number: 1-12744
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MARTIN MARIETTA MATERIALS, INC.
SAVINGS AND INVESTMENT PLAN FOR HOURLY EMPLOYEES
(Full title of the plan and the address of the plan,
if different from that of the issuer named below)
MARTIN MARIETTA MATERIALS, INC.
2710 WYCLIFF ROAD
RALEIGH, NORTH CAROLINA 27607
(Name of issuer of the securities held pursuant to the plan and the address
of its principal executive office)
- --------------------------------------------------------------------------------
<PAGE> 2
Audited Financial Statements
Martin Marietta Materials, Inc.
Savings and Investment Plan
for Hourly Employees
Martin Marietta Materials, Inc.
Defined Contribution Plans
Master Trust
Year ended December 31, 1997 and period from
October 18, 1996 (inception) through
December 31, 1996
with Report of Independent Auditors
<PAGE> 3
Martin Marietta Materials, Inc.
Savings and Investment Plan for Hourly Employees
Martin Marietta Materials, Inc.
Defined Contribution Plans Master Trust
Audited Financial Statements
Year ended December 31, 1997 and period from October 18, 1996 (inception)
through December 31, 1996
CONTENTS
<TABLE>
<S> <C>
Audited Financial Statements for the Plan
Report of Independent Auditors ............................................................. 1
Statements of Net Assets Available for Benefits, with Fund Information ..................... 2
Statements of Changes in Net Assets Available for Benefits, with Fund Information .......... 3
Notes to Financial Statements .............................................................. 5
Audited Financial Statements for the Master Trust
Report of Independent Auditors ............................................................. 10
Statements of Net Assets Available for Benefits, with Fund Information ..................... 12
Statements of Changes in Net Assets Available for Benefits, with Fund Information .......... 14
Notes to Financial Statements .............................................................. 16
</TABLE>
<PAGE> 4
[ERNST & YOUNG LLP LETTERHEAD]
Report of Independent Auditors
Martin Marietta Materials, Inc., as Plan Administrator
We have audited the accompanying statements of net assets available for benefits
of the Martin Marietta Materials, Inc. Savings and Investment Plan for Hourly
Employees (the "Plan") as of December 31, 1997 and 1996, and the related
statements of changes in net assets available for benefits for the year ended
December 31, 1997 and for the period from October 18, 1996 (inception) to
December 31, 1996. These financial statements are the responsibility of Martin
Marietta Materials, Inc., as Plan Administrator. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan at
December 31, 1997 and 1996, and the changes in the net assets available for
benefits for the year ended December 31, 1997 and for the period from October
18, 1996 (inception) to December 31, 1996, in conformity with generally accepted
accounting principles.
Our audits were performed for the purpose of forming an opinion on the financial
statements taken as a whole. The Fund Information in the statements of net
assets available for benefits and the statements of changes in net assets
available for benefits is presented for purposes of additional analysis rather
than to present the net assets available for benefits and changes in net assets
available for benefits of each fund. The Fund Information has been subjected to
the auditing procedures applied in our audits of the financial statements and,
in our opinion, is fairly stated in all material respects in relation to the
financial statements taken as a whole.
/s/ Ernst & Young LLP
Raleigh, NC
June 15, 1998
<PAGE> 5
Martin Marietta Materials, Inc.
Savings and Investment Plan for Hourly Employees
Statement of Net Assets Available for Benefits, with Fund Information
December 31, 1997
<TABLE>
<CAPTION>
YIELD-
ENHANCED MARTIN
SHORT- MARIETTA LOCKHEED
TERM S&P MATERIALS MARTIN
INVESTMENT 500 INDEX COMMON COMMON
FUND FUND STOCK FUND STOCK FUND TOTAL
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ASSETS
Interest in Master Trust $ 4,650,486 $ 2,286,822 $ 794,663 $ 2,691,890 $10,423,861
===============================================================================
Net assets available for benefits $ 4,650,486 $ 2,286,822 $ 794,663 $ 2,691,890 $10,423,861
===============================================================================
</TABLE>
December 31, 1996
<TABLE>
<CAPTION>
YIELD-
ENHANCED MARTIN
SHORT- MARIETTA LOCKHEED
TERM S&P MATERIALS MARTIN
INVESTMENT 500 INDEX COMMON COMMON
FUND FUND STOCK FUND STOCK FUND TOTAL
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ASSETS
Interest in Master Trust $ 4,009,919 $ 1,318,468 $ 129,416 $ 2,864,857 $ 8,322,660
===============================================================================
Net assets available for benefits $ 4,009,919 $ 1,318,468 $ 129,416 $ 2,864,857 $ 8,322,660
===============================================================================
</TABLE>
See accompanying notes.
2
<PAGE> 6
Martin Marietta Materials, Inc.
Savings and Investment Plan for Hourly Employees
Statement of Changes in Net Assets Available for Benefits,
with Fund Information
Year ended December 31, 1997
<TABLE>
<CAPTION>
YIELD- MARTIN
ENCHANCED MARIETTA LOCKHEED
SHORT-TERM S&P MATERIALS MARTIN
INVESTMENT 500 INDEX COMMON COMMON
FUND FUND STOCK FUND STOCK FUND TOTAL
---------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net assets available for benefits at
beginning of period $ 4,009,919 $ 1,318,468 $ 129,416 $ 2,864,857 $ 8,322,660
Additions to net assets:
Contributions:
Employees 979,270 439,344 138,953 -- 1,557,567
Rollover contributions 73 2,674 2,528 -- 5,275
---------------------------------------------------------------------------------
Total contributions 979,343 442,018 141,481 -- 1,562,842
Interest in net investment gain of
Master Trust 235,446 490,798 135,882 269,069 1,131,195
---------------------------------------------------------------------------------
Total additions 1,214,789 932,816 277,363 269,069 2,694,037
Deductions from net assets:
Distributions and withdrawals 307,012 83,739 6,103 172,402 569,256
Administrative expenses 9,945 6,475 924 6,236 23,580
---------------------------------------------------------------------------------
Total deductions 316,957 90,214 7,027 178,638 592,836
Net transfers between funds (257,265) 125,752 394,911 (263,398) --
---------------------------------------------------------------------------------
Net assets available for benefits at
end of year $ 4,650,486 $ 2,286,822 $ 794,663 $ 2,691,890 $10,423,861
=================================================================================
</TABLE>
See accompanying notes.
3
<PAGE> 7
Martin Marietta Materials, Inc.
Savings and Investment Plan for Hourly Employees
Statement of Changes in Net Assets Available for Benefits,
with Fund Information (continued)
Period from October 18, 1996 (inception)
through December 31, 1996
<TABLE>
<CAPTION>
YIELD- MARTIN
ENCHANCED MARIETTA LOCKHEED
SHORT-TERM S&P MATERIALS MARTIN
INVESTMENT 500 INDEX COMMON COMMON
FUND FUND STOCK FUND STOCK FUND TOTAL
----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net assets available for benefits at
beginning of period $ -- $ -- $ -- $ -- $ --
Additions to net assets:
Contributions:
Employees 276,270 83,664 2,068 -- 362,002
Interest in net investment gain (loss)
of Master Trust 34,540 65,480 (1,884) 72,370 170,506
----------------------------------------------------------------------------------
Total additions 310,810 149,144 184 72,370 532,508
Deductions from net assets:
Distributions and withdrawals 61,961 19,503 1,246 44,752 127,462
Administrative expenses 1,231 394 60 694 2,379
----------------------------------------------------------------------------------
Total deductions 63,192 19,897 1,306 45,446 129,841
Net transfers from other plans 3,767,369 1,185,340 110,814 2,856,470 7,919,993
Net transfers between funds (5,068) 3,881 19,724 (18,537) --
----------------------------------------------------------------------------------
Net assets available for benefits at
end of year $ 4,009,919 $ 1,318,468 $ 129,416 $ 2,864,857 $ 8,322,660
==================================================================================
</TABLE>
See accompanying notes.
4
<PAGE> 8
Martin Marietta Materials, Inc.
Savings and Investment Plan for Hourly Employees
Notes to Financial Statements
December 31, 1997
1. ACCOUNTING POLICIES
The financial statements of the Martin Marietta Materials, Inc. Savings and
Investment Plan for Hourly Employees (the "Plan") are prepared on the accrual
basis of accounting. No liability is recorded for distributions to participants
who terminated during the year but have chosen to defer payments to the
following year. The assets of the Plan are held and invested on a commingled
basis in the Martin Marietta Materials, Inc. Defined Contribution Plans Master
Trust (the "Master Trust") along with the assets of the Martin Marietta
Materials, Inc. Performance Sharing Plan and the Martin Marietta Materials, Inc.
Money Accumulation Plan for Hourly Employees. The Plan's interest in the Master
Trust is stated at the fair value of the underlying net assets in the Master
Trust. Unrealized appreciation or depreciation in the aggregate and the gain or
loss on disposition of investments during the year are determined using the
average cost of investments. The assets, realized and unrealized gains and
losses and investment income of the Master Trust are allocated among the
participating plans on a pro rata basis. All administrative expenses, a portion
of which are paid by Martin Marietta Materials, Inc. (the "Corporation"), are
otherwise paid from the Master Trust and allocated to each of the participating
plans.
Prior to October 1996, the Plan was not part of the Master Trust. Rather, the
Plan's assets were invested in a master trust arrangement established for
various plans affiliated with Lockheed Martin Corporation, the former parent of
the Corporation. During October 1996, the Plan's assets were transferred
directly from the master trust arrangement affiliated with Lockheed Martin
Corporation into the Master Trust established for the plans sponsored by the
Corporation and for certain other employees of members of the Corporation's
controlled group of companies, as defined by Section 1563(a)(1) of the Internal
Revenue Code ("IRC Section 1563(a)(1)").
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions, in
particular the determination of fair values of investments for which market
values are not readily available. Actual results could differ from those
estimates.
5
<PAGE> 9
Martin Marietta Materials, Inc.
Savings and Investment Plan for Hourly Employees
Notes to Financial Statements (continued)
2. DESCRIPTION OF THE PLAN
In October 1996, Lockheed Martin Corporation disposed of its remaining ownership
interest of the Corporation's common stock by means of a split-off, an exchange
offer whereby Lockheed Martin Corporation's shareholders were given the
opportunity to exchange some or all of their common stock of Lockheed Martin
Corporation for shares of the Corporation's common stock. The Corporation
subsequently registered its common stock for use in connection with the Plan.
In connection with the divestiture of Lockheed Martin Corporation's ownership
interest in the Corporation, the Plan was established effective October 18,
1996, as a defined contribution plan providing hourly paid employees of the
Corporation an opportunity to participate in an individual savings and
investment program providing tax savings and retirement incentives. Martin
Marietta Materials, Inc., is the Plan's sponsor, and also serves as the Plan
administrator. Prior to October 1996, eligible employees participated in the
Lockheed Martin Corporation Savings and Investment Plan for Hourly Employees,
which was sponsored by Lockheed Martin Corporation. Employees of the Corporation
and certain other employees of members of the Lockheed Martin Corporation
controlled group of companies, as defined by IRC Section 1563(a)(1), were
eligible to participate in the Plan.
Generally, the terms of - as well as the procedures for administering - the new
Plan did not change. However, certain investment option funds available under
the former plan were replaced with similar funds of the same type of risk and
level of return. The risk and return investment objectives for the new funds in
the Plan are similar to the investment objectives that existed in the former
plan. Additionally, the underlying investment option available in the employer's
company common stock fund was changed from Lockheed Martin Corporation common
stock to that of Martin Marietta Materials, Inc. Following the consummation date
of the split-off, Plan participants are no longer able to make any
participant-directed contributions into the Lockheed Martin Common Stock Fund
nor add to an existing balance in a Lockheed Martin Common Stock Fund by
purchasing additional shares of the underlying common stock. For the period
through October 1998, Plan participants may transfer out any balance in the
Lockheed Martin Common Stock Fund and any such balance is available for
withdrawals, as permitted under the Plan. At the end of this period,
participation in the Lockheed Martin Common Stock Fund will be terminated and
any participants' remaining balances will be liquidated and reinvested
automatically in the Yield-Enhanced Short-Term Investment Fund. No other
significant plan changes were made as a result of the split-off transaction.
6
<PAGE> 10
Martin Marietta Materials, Inc.
Savings and Investment Plan for Hourly Employees
Notes to Financial Statements (continued)
2. DESCRIPTION OF THE PLAN (CONTINUED)
All hourly employees of the Corporation meeting eligibility requirements may
participate with the exception of certain hourly employees of the former Dravo
Basic Materials' employees. These employees participate in the Martin Marietta
Materials, Inc. Money Accumulation Plan for Hourly Employees (see Note 6). Other
hourly employees of the Corporation may be extended Plan coverage through labor
negotiations or at the discretion of the Corporation.
A covered employee is eligible to enroll in the Plan after 12 months of service.
Employee participation requires employee before-tax contributions of 1% to 10%
of earnings. Participants are fully vested in their contributions at all times.
Participant directed contributions may be invested in three of the ten
investment funds available in the Master Trust, except for the restrictions in
connection with the Lockheed Martin Common Stock Fund, as discussed above.
Participants may change the overall percentage of their contributions in 1%
increments and may change investment elections for future before-tax
contributions in 5% increments, both up to two times per year. In addition,
participants may change the investment mix of the accumulated value of prior
contributions among the investment options, excluding the Lockheed Martin Common
Stock Fund, also up to twice a year. The Plan provides for in-service
withdrawals to participants that meet specific conditions of financial hardship,
as defined and in accordance with current specific regulations under the
Internal Revenue Code ("IRC"). Upon separation from the Corporation,
participants may elect to receive the full current value of their contributions.
During 1996, the Plan received $7,919,993 from the Lockheed Martin Corporation
Savings and Investment Plan for Hourly Employees. This amount represents the
transfer of account balances of eligible participants pursuant to the
establishment of the Plan.
State Street Bank and Trust Company is the trustee of the Master Trust and
recordkeeper of the Master Trust and Plan.
Although the Corporation expects to continue the Plan indefinitely, the Board of
Directors of the Corporation may terminate the Plan for any reason at any time.
If the Plan is terminated, each participant or former participant shall receive
a payment equal to the value of the participant's account.
7
<PAGE> 11
Martin Marietta Materials, Inc.
Savings and Investment Plan for Hourly Employees
Notes to Financial Statements (continued)
3. INCOME TAX STATUS
The Plan has received a favorable determination letter from the Internal Revenue
Service (IRS). The determination letter states that the Plan meets the
qualification requirements under the Internal Revenue Code (IRC) Section 401(a)
for tax-exempt status under the IRC Section 501(a). Management believes that the
Plan has been in operational compliance with the IRC Section 401(a)
requirements. Therefore, no provision has been made in the financial statements
for federal income taxes.
4. MASTER TRUST
The Plan's interest in the Master Trust's net assets as of December 31, 1997 and
1996, was 10.98% and 10.45%, respectively. The Plan's interest in the Master
Trust did not fluctuate significantly throughout the year ended December 31,
1997 or the period from October 18, 1996 (inception) through December 31, 1996.
The following audited financial statements of the Master Trust contain
additional information concerning the Plan's interest in the Master Trust.
5. YEAR 2000 ISSUE (UNAUDITED)
The Corporation has established a dedicated information technology task force to
coordinate the identification, evaluation and implementation of modifications
and replacements to the Corporation's information systems and related
applications necessary to achieve a year 2000 date conversion with no effect on
customers or disruption to its business operations. The Corporation's goal is to
be substantially year 2000 compliant on a timely basis. The major systems and
applications carrying potential business impact have been identified and are
being evaluated, and initial conversion efforts are underway. In addition, the
Corporation is communicating with suppliers, customers, financial institutions
and others with which it does business to coordinate the year 2000 conversion
process. The cost of the year 2000 initiatives is not expected to be material to
the Corporation's results of operations or financial position or to the Plan's
operations.
8
<PAGE> 12
Martin Marietta Materials, Inc.
Savings and Investment Plan for Hourly Employees
Notes to Financial Statements (continued)
6. PLAN AMENDMENTS
Effective January 1, 1998, the Corporation merged the Martin Marietta Materials,
Inc. Money Accumulation Plan for Hourly Employees into the Martin Marietta
Materials, Inc. Savings and Investment Plan for Hourly Employees to form one
defined contribution plan. The terms of the Plan were amended to include:
participation after 6 months of service; before - and after - tax participant
contributions; Corporation contributions equal to 25% of the first 7% of
participants' annual basic contributions; seven investment funds which are
available in the Master Trust; and personal loan capacity. The Plan's net assets
were increased by approximately $2,300,000, reflecting the transfer of net
assets from the Money Accumulation Plan for Hourly Employees.
Effective January 1, 1998, certain hourly employees of the former American
Aggregates Corporation, that was acquired by the Corporation during 1997, are
eligible to participate in the Plan.
9
<PAGE> 13
[ERNST & YOUNG LLP LETTERHEAD]
Report of Independent Auditors
Martin Marietta Materials, Inc., as Plan Administrator
We have audited the accompanying statements of net assets available for benefits
of the Martin Marietta Materials, Inc. Defined Contribution Plans Master Trust
(the "Master Trust") as of December 31, 1997 and 1996 and the related statements
of changes in net assets available for benefits for the year ended December 31,
1997 and for the period from October 18, 1996 (inception) through December 31,
1996. These financial statements are the responsibility of Martin Marietta
Materials, Inc., as Plan Administrator. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Master Trust
at December 31, 1997 and 1996, and the changes in the net assets available for
benefits for the year ended December 31, 1997 and for the period from October
18, 1996 (inception) through December 31, 1996, in conformity with generally
accepted accounting principles.
The accompanying statements are those of the Martin Marietta Materials, Inc.
Defined Contribution Plans Master Trust, which is established under the Martin
Marietta Materials, Inc. Performance Sharing Plan, the Martin Marietta
Materials, Inc. Savings and Investment Plan for Hourly Employees and the Martin
Marietta Materials, Inc. Money Accumulation Plan for Hourly Employees
(collectively, the "Plans"); the statements do not purport to present the
financial status of the Plans. The statements do not contain certain information
on net assets available for benefits and other disclosures necessary for a fair
presentation of the financial statements of the Plans in conformity with
generally accepted accounting principles. Furthermore, these statements do not
purport to satisfy the Department of Labor's Rules and Regulations for Reporting
and Disclosure under the Employee Retirement Income Security Act of 1974
relating to the financial statements of employee benefit plans.
10
<PAGE> 14
Our audits were performed for the purpose of forming an opinion on the financial
statements taken as a whole. The Fund Information in the statements of net
assets available for benefits and the statements of changes in net assets
available for benefits is presented for purposes of additional analysis rather
than to present the net assets available for benefits and changes in net assets
available for benefits of each fund. The Fund Information has been subjected to
the auditing procedures applied in our audit of the financial statements and, in
our opinion, is fairly stated in all material respects in relation to the
financial statements taken as a whole.
/s/ Ernst & Young LLP
Raleigh, NC
June 15, 1998
11
<PAGE> 15
Martin Marietta Materials, Inc.
Defined Contribution Plans Master Trust
Statement of Net Assets Available for Benefits, with Fund Information
December 31, 1997
(In Thousands)
<TABLE>
<CAPTION>
YIELD- MARTIN
ENHANCED MARIETTA LOCKHEED HARBOR INVESTMENT
SHORT-TERM S&P 500 MATERIALS MARTIN CAPITAL COMPANY
INVESTMENT INDEX COMMON COMMON APPRECIATION INTERMEDIATE OF AMERICA
FUND FUND STOCK FUND STOCK FUND FUND BOND FUND FUND
------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Investments at quoted fair value:
Cash and cash equivalents $24,246 $ -- $ 442 $ 439 $ -- $ -- $ --
Governmental bonds -- -- -- -- -- 232 --
Corporate bonds -- -- -- -- -- 231 --
Common stocks -- 24,734 9,344 19,356 3,565 -- 1,048
--------------------------------------------------------------------------------------
Total investments at quoted fair value 24,246 24,734 9,786 19,795 3,565 463 1,048
Investments at estimated fair value:
Participant loans -- -- -- -- -- -- --
--------------------------------------------------------------------------------------
Total investments at estimated fair
value -- -- -- -- -- -- --
Other assets:
Contributions receivable:
Employees 204 124 41 -- 14 5 10
Martin Marietta Materials, Inc. 71 19 9 -- 3 1 3
Dividends and interest receivable 116 -- 2 1 -- -- --
--------------------------------------------------------------------------------------
Total other assets 391 143 52 1 17 6 13
--------------------------------------------------------------------------------------
Total assets 24,637 24,877 9,838 19,796 3,582 469 1,061
LIABILITIES
Administrative expenses payable 44 52 11 30 3 3 3
Amounts payable for investments
purchased -- -- 121 -- -- -- --
--------------------------------------------------------------------------------------
Total liabilities 44 52 132 30 3 3 3
--------------------------------------------------------------------------------------
Net assets available for benefits $24,593 $24,825 $ 9,706 $19,766 $ 3,579 $ 466 $ 1,058
======================================================================================
<CAPTION>
DAILY VANGUARD
AMERICAN BOND VANGUARD INTERNATIONAL
BALANCED MARKET WINDSOR GROWTH LOAN
FUND FUND FUND FUND FUND TOTAL
------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Investments at quoted fair value:
Cash and cash equivalents $ 70 $ -- $ -- $ -- $ -- $25,197
Governmental bonds 104 1,228 -- -- -- 1,564
Corporate bonds 69 605 -- -- -- 905
Common stocks 336 -- 5,247 1,689 -- 65,319
------------------------------------------------------------------------
Total investments at quoted fair value 579 1,833 5,247 1,689 -- 92,985
Investments at estimated fair value:
Participant loans -- -- -- -- 1,582 1,582
------------------------------------------------------------------------
Total investments at estimated fair
value -- -- -- -- 1,582 1,582
Other assets:
Contributions receivable:
Employees 7 5 31 11 -- 452
Martin Marietta Materials, Inc. 2 1 8 3 -- 120
Dividends and interest receivable -- -- -- -- -- 119
------------------------------------------------------------------------
Total other assets 9 6 39 14 -- 691
------------------------------------------------------------------------
Total assets 588 1,839 5,286 1,703 1,582 95,258
LIABILITIES
Administrative expenses payable 1 4 7 4 -- 162
Amounts payable for investments
purchased -- -- -- -- -- 121
------------------------------------------------------------------------
Total liabilities 1 4 7 4 -- 283
------------------------------------------------------------------------
Net assets available for benefits $ 587 $ 1,835 $ 5,279 $ 1,699 $ 1,582 $94,975
========================================================================
</TABLE>
See accompanying notes.
12
<PAGE> 16
Martin Marietta Materials, Inc.
Defined Contribution Plans Master Trust
Statement of Net Assets Available for Benefits, with Fund Information
December 31, 1996
(In Thousands)
<TABLE>
<CAPTION>
YIELD- MARTIN
ENHANCED MARIETTA LOCKHEED HARBOR INVESTMENT
SHORT-TERM S&P 500 MATERIALS MARTIN CAPITAL COMPANY
INVESTMENT INDEX COMMON COMMON APPRECIATION INTERMEDIATE OF AMERICA
FUND FUND STOCK FUND STOCK FUND FUND BOND FUND FUND
------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Investments at quoted fair value:
Cash and cash equivalents $25,520 $ -- $ 52 $ 1,282 $ -- $ -- $ --
Governmental bonds -- -- -- -- -- 349 --
Corporate bonds -- -- -- -- -- 669 --
Common stocks -- 17,972 2,056 22,273 1,470 -- 1,192
--------------------------------------------------------------------------------------
Total investments at quoted fair value 25,520 17,972 2,108 23,555 1,470 1,018 1,192
Investments at estimated fair value:
Participant loans -- -- -- -- -- -- --
--------------------------------------------------------------------------------------
Total investments at estimated fair
value -- -- -- -- -- -- --
Other assets:
Contributions receivable:
Employees 229 101 6 -- 7 7 7
Martin Marietta Materials, Inc. 73 15 1 -- 2 1 1
Dividends and interest receivable 117 -- -- 6 -- -- --
Receivable for investments sold -- -- 35 -- -- -- --
--------------------------------------------------------------------------------------
Total other assets 419 116 42 6 9 8 8
--------------------------------------------------------------------------------------
Total assets 25,939 18,088 2,150 23,561 1,479 1,026 1,200
LIABILITIES
Administrative expenses payable 8 6 1 6 1 1 1
Amounts payable for investments
purchased 117 -- -- -- -- -- --
--------------------------------------------------------------------------------------
Total liabilities 125 6 1 6 1 1 1
--------------------------------------------------------------------------------------
Net assets available for benefits $25,814 $18,082 $ 2,149 $23,555 $ 1,478 $ 1,025 $ 1,199
======================================================================================
<CAPTION>
DAILY VANGUARD
AMERICAN BOND VANGUARD INTERNATIONAL
BALANCED MARKET WINDSOR GROWTH LOAN
FUND FUND FUND FUND FUND TOTAL
------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Investments at quoted fair value:
Cash and cash equivalents $ 65 $ -- $ -- $ -- $ -- $26,919
Governmental bonds 120 320 -- -- -- 789
Corporate bonds 71 321 -- -- -- 1,061
Common stocks 288 -- 2,616 1,241 -- 49,108
------------------------------------------------------------------------
Total investments at quoted fair value 544 641 2,616 1,241 -- 77,877
Investments at estimated fair value:
Participant loans -- -- -- -- 1,241 1,241
------------------------------------------------------------------------
Total investments at estimated fair
value -- -- -- -- 1,241 1,241
Other assets:
Contributions receivable:
Employees 3 4 19 6 -- 389
Martin Marietta Materials, Inc. 1 1 5 3 -- 103
Dividends and interest receivable -- -- -- -- -- 123
Recievable for investments sold -- -- -- -- 35
------------------------------------------------------------------------
Total other assets 4 5 24 9 -- 650
------------------------------------------------------------------------
Total assets 548 646 2,640 1,250 1,241 79,768
LIABILITIES
Administrative expenses payable 1 1 1 1 -- 28
Amounts payable for investments
purchased -- -- -- -- -- 117
------------------------------------------------------------------------
Total liabilities 1 1 1 1 -- 145
------------------------------------------------------------------------
Net assets available for benefits $ 547 $ 645 $ 2,639 $ 1,249 $ 1,241 $79,623
========================================================================
</TABLE>
See accompanying notes.
13
<PAGE> 17
Martin Marietta Materials, Inc.
Defined Contribution Plans Master Trust
Statement of Changes in Net Assets Available for Benefits, with Fund Information
Year ended December 31, 1997
(In Thousands)
<TABLE>
<CAPTION>
YIELD- MARTIN
ENHANCED MARIETTA LOCKHEED
SHORT- S&P MATERIALS MARTIN HARBOR INVESTMENT
TERM 500 COMMON COMMON CAPITAL COMPANY OF
INVESTMENT INDEX STOCK STOCK APPRECIATION INTERMEDIATE AMERICA
FUND FUND FUND FUND FUND BOND FUND FUND
----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net assets available for benefits
at beginning of period: $ 25,814 $ 18,082 $ 2,149 $ 23,555 $ 1,478 $ 1,025 $ 1,199
Additions to net assets:
Contributions:
Employees 2,410 1,490 516 -- 169 60 124
Employer 832 228 119 -- 41 13 33
Rollover contributions 229 80 57 -- 27 -- 12
--------------------------------------------------------------------------------------
Total contributions 3,471 1,798 692 -- 237 73 169
Investment income:
Dividends and interest 1,386 -- 106 371 482 -- 132
Net realized and unrealized gain (loss) -- 5,956 2,023 1,839 20 70 250
--------------------------------------------------------------------------------------
Total investment income 1,386 5,956 2,129 2,210 502 70 382
--------------------------------------------------------------------------------------
Total additions 4,857 7,754 2,821 2,210 739 143 551
Deductions from net assets:
Distributions and withdrawals 3,633 866 72 832 25 71 35
Administrative expenses 59 75 14 48 4 6 3
--------------------------------------------------------------------------------------
Total deductions 3,692 941 86 880 29 77 38
Net transfers from other plans -- 21 -- 154 19 -- 36
Net transfers between funds (2,386) (91) 4,822 (5,273) 1,372 (625) (690)
--------------------------------------------------------------------------------------
Net assets available for benefits at
end of year $ 24,593 $ 24,825 $ 9,706 $ 19,766 $ 3,579 $ 466 $ 1,058
=====================================================================================
<CAPTION>
DAILY VANGUARD
AMERICAN BOND VANGUARD INTERNATIONAL
BALANCED MARKET WINDSOR GROWTH LOAN
FUND FUND FUND FUND FUND TOTAL
-----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net assets available for benefits
at beginning of period: $ 547 $ 645 $ 2,639 $ 1,249 $ 1,241 $ 79,623
Additions to net assets:
Contributions:
Employees 83 53 372 138 -- 5,415
Employer 21 15 92 32 -- 1,426
Rollover contributions 2 -- 24 4 -- 435
-----------------------------------------------------------------------
Total contributions 106 68 488 174 -- 7,276
Investment income:
Dividends and interest 92 -- 805 73 -- 3,447
Net realized and unrealized gain (loss) 71 83 (113) (27) 116 10,288
-----------------------------------------------------------------------
Total investment income 163 83 692 46 116 13,735
-----------------------------------------------------------------------
Total additions 269 151 1,180 220 116 21,011
Deductions from net assets:
Distributions and withdrawals 15 12 48 35 91 5,735
Administrative expenses 1 5 9 4 -- 228
-----------------------------------------------------------------------
Total deductions 16 17 57 39 91 5,963
Net transfers from other plans 16 -- 22 36 -- 304
Net transfers between funds (229) 1,056 1,495 233 316 --
-----------------------------------------------------------------------
Net assets available for benefits at
end of year $ 587 $ 1,835 $ 5,279 $ 1,699 $ 1,582 $ 94,975
=======================================================================
</TABLE>
See accompanying notes.
14
<PAGE> 18
Martin Marietta Materials, Inc.
Defined Contribution Plans Master Trust
Statement of Changes in Net Assets Available for Benefits, with Fund Information
For the Period from October 18, 1996 (inception) through December 31, 1996
(In Thousands)
<TABLE>
<CAPTION>
YIELD- MARTIN
ENHANCED MARIETTA LOCKHEED
SHORT- S&P MATERIALS MARTIN HARBOR
TERM 500 COMMON COMMON CAPITAL
INVESTMENT INDEX STOCK STOCK APPRECIATION INTERMEDIATE
FUND FUND FUND FUND FUND BOND FUND
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net assets available for benefits
at beginning of period: $ -- $ -- $ -- $ -- $ -- $ --
Additions to net assets:
Contributions:
Employees 746 326 18 -- 26 19
Employer 233 47 4 -- 6 3
Rollover contributions -- -- 1 -- 2 --
------------------------------------------------------------------------------
Total contributions 979 373 23 -- 34 22
Investment income:
Dividends and interest 230 -- 11 108 45 --
Net realized and unrealized gain (loss) -- 961 (44) 485 (3) 6
------------------------------------------------------------------------------
Total investment income 230 961 (33) 593 42 6
------------------------------------------------------------------------------
Total additions 1,209 1,334 (10) 593 76 28
Deductions from net assets:
Distributions and withdrawals 693 286 20 411 -- --
Administrative expenses 8 6 1 6 1 1
------------------------------------------------------------------------------
Total deductions 701 292 21 417 1 1
Net transfers from other plans 25,442 17,511 2,009 23,694 939 928
Net transfers between funds (136) (471) 171 (315) 464 70
------------------------------------------------------------------------------
Net assets available for benefits at
end of year $ 25,814 $ 18,082 $ 2,149 $ 23,555 $ 1,478 $ 1,025
==============================================================================
<CAPTION>
INVESTMENT DAILY VANGUARD
COMPANY OF AMERICAN BOND VANGUARD INTERNATIONAL
AMERICA BALANCED MARKET WINDSOR GROWTH LOAN
FUND FUND FUND FUND FUND FUND TOTAL
--------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net assets available for benefits
at beginning of period: $ -- $ -- $ -- $ -- $ -- $ -- $ --
Additions to net assets:
Contributions:
Employees 22 11 13 58 20 -- 1,259
Employer 6 2 3 15 5 -- 324
Rollover contributions -- -- -- -- 2 -- 5
-------------------------------------------------------------------------------------
Total contributions 28 13 16 73 27 -- 1,588
Investment income:
Dividends and interest 52 31 -- 225 51 8 761
Net realized and unrealized gain (loss) -- (16) 5 (60) 14 -- 1,348
-------------------------------------------------------------------------------------
Total investment income 52 15 5 165 65 8 2,109
-------------------------------------------------------------------------------------
Total additions 80 28 21 238 92 8 3,697
Deductions from net assets:
Distributions and withdrawals -- -- 1 1 -- 24 1,436
Administrative expenses 1 1 1 1 1 -- 28
-------------------------------------------------------------------------------------
Total deductions 1 1 2 2 1 24 1,464
Net transfers from other plans 966 476 608 2,461 1,102 1,254 77,390
Net transfers between funds 154 44 18 (58) 56 3 --
-------------------------------------------------------------------------------------
Net assets available for benefits at
end of year $ 1,199 $ 547 $ 645 $ 2,639 $ 1,249 $ 1,241 $ 79,623
=====================================================================================
</TABLE>
See accompanying notes.
15
<PAGE> 19
Martin Marietta Materials, Inc.
Defined Contribution Plans Master Trust
Notes to Financial Statements
December 31, 1997
1. ACCOUNTING POLICIES
The Martin Marietta Materials, Inc. Defined Contribution Plans Master Trust (the
"Master Trust") was created on October 18, 1996, to hold the assets of the
Martin Marietta Materials, Inc. Performance Sharing Plan, the Martin Marietta
Materials, Inc. Savings and Investment Plan for Hourly Employees and the Martin
Marietta Money Accumulation Plan for Hourly Employees (collectively, the
"Plans") on a commingled basis. All plans are defined contribution plans of
Martin Marietta Materials, Inc. (the "Corporation"). State Street Bank and Trust
Company ("State Street") is the trustee and record keeper for the Master Trust.
Each plan owns the following share of the entire Master Trust.
<TABLE>
<CAPTION>
INTEREST IN MASTER TRUST AS
PLAN OF DECEMBER 31,
NAME OF PLAN NUMBER 1997 1996
- ------------ -----------------------------------------
<S> <C> <C> <C>
Martin Marietta Materials, Inc. Performance
Sharing Plan
EIN #56-1848578 005 86.55% 87.21%
Martin Marietta Materials, Inc. Savings and
Investment Plan for Hourly Employees
EIN #56-1848578 006 10.98% 10.45%
Martin Marietta Money Accumulation Plan
for Hourly Employees
EIN #56-1848578 007 2.47% 2.34%
------------------------
100.00% 100.00%
========================
</TABLE>
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions, in
particular the determination of fair values of investments for which market
values are not readily available. Actual results could differ from those
estimates.
16
<PAGE> 20
Martin Marietta Materials, Inc.
Defined Contribution Plans Master Trust
Notes to Financial Statements (continued)
2. DESCRIPTION OF THE MASTER TRUST
Plan assets held by the Master Trust are invested in eleven funds. The
Yield-Enhanced Short-Term Investment Fund, which is managed by the trustee, is
invested in high-quality money market instruments, corporate equity and debt
instruments and U.S. Government secured notes and bonds. The S&P 500 Index Fund,
which is managed by the trustee, invests in the same individual common stocks in
identical proportions to the S&P 500 index. The Martin Marietta Materials Common
Stock Fund is composed of the Corporation's common stock. The Lockheed Martin
Common Stock Fund is composed of the common stock of Lockheed Martin
Corporation. The Harbor Capital Appreciation Fund is designed to seek long-term
growth of capital by investing in stocks of domestic and foreign companies with
high equity capitalization with above average prospects for growth. The
Intermediate Bond Fund, which is managed by the trustee, invests primarily in
U.S. Treasury, Agency, corporate and asset backed bonds. The Investment Company
of America Fund is designed to achieve long-term growth of capital and income by
investing in stocks of well-established "blue-chip" companies of both the U.S.
and abroad, as well as, in U.S. Government securities. The American Balanced
Fund is designed to seek conservation of capital, current income and long-term
growth of capital by investing in a blend of stocks, bonds and other fixed
income securities. The Daily Bond Market Fund, which is managed by the trustee,
invests primarily in U.S. Treasury, Agency, corporate, mortgage backed and asset
backed securities. The Vanguard Windsor Fund is a capital growth and income fund
that will invest primarily in a diversified portfolio of U.S. common stocks
thought to be undervalued. The Vanguard International Growth Fund is designed to
achieve long-term growth of capital by investing in equity securities of
non-U.S. Companies. Effective January 1, 1998, the following investment options
were eliminated: Intermediate Bond Fund, Investment Company of America and
American Balanced Fund.
The Martin Marietta Materials, Inc. Performance Sharing Plan has a loan program
whereby eligible participants may borrow up to the lesser of 50% of their total
account balance less the highest outstanding loan balance from the past twelve
months, or $50,000 with a minimum loan of $500. Loans are repaid monthly over a
term of up to 4 1/2 years for personal loans and up to 15 years for a
residential loan at an interest rate of one percent over the prime rate reported
by at least 75% of the nation's 30 largest banks as reported in The Wall Street
Journal on the first business day of the month before loan application. All
loans are due in full immediately upon termination of employment. Approximately
$1,582,000 and $1,241,000 was loaned to participants at December 31, 1997 and
1996, respectively. Participant loan activity and the net outstanding loan
balances are reflected in the Loan Fund in the accompanying financial
statements.
17
<PAGE> 21
Martin Marietta Materials, Inc.
Defined Contribution Plans Master Trust
Notes to Financial Statements (continued)
2. DESCRIPTION OF THE MASTER TRUST (CONTINUED)
Fair values of the underlying securities in the Yield-Enhanced Short-Term
Investment Fund, the S&P 500 Index Fund, the Intermediate Bond Fund, and the
Daily Bond Market Fund are determined by closing prices on the last business day
of the year for those securities traded on national exchanges, at the most
recent sales prices for those securities traded in over-the-counter markets and
at fair value as determined by the Trustee for securities for which there is not
an established market. The fair value of Martin Marietta Materials common stock
and Lockheed Martin Corporation common stock is determined by the closing price
per share on the last business day of the year as reported for New York Stock
Exchange Composite Transactions. Fair values of the Harbor Capital Appreciation
Fund, the Investment Company of America Fund, the American Balanced Fund, the
Vanguard Windsor Fund, and the Vanguard International Growth Fund are determined
by the closing prices on the last business day of the year.
Following the creation of the Master Trust, the Plans' participants are no
longer able to make any participant-directed contributions into the Lockheed
Martin Common Stock Fund nor add to an existing balance in a Lockheed Martin
Common Stock Fund by purchasing additional shares of the underlying common
stock. For the period through October 1998, the Plans' participants may transfer
out any balance in the Lockheed Martin Common Stock Fund and any such balance is
available for withdrawals, as permitted under the Plans. At the end of this
period, participation in the Lockheed Martin Common Stock Fund will be
terminated and any participants' remaining balances will be liquidated and
reinvested automatically in the Yield-Enhanced Short-Term Investment Fund.
Administrative expenses, a portion of which are paid by the Corporation, are
otherwise paid from the Trust and allocated to the Plans on a pro rata basis.
3. INVESTMENTS
The fair values of individual investments that represent 5% or more of the
Master TrustOs net assets at December 31, 1997 are as follows (in thousands):
<TABLE>
<S> <C>
Yield-Enhanced Short-Term Investment Fund $24,246
S&P 500 Index Fund $24,734
Martin Marietta Materials Stock Fund $ 9,786
Lockheed Martin Common Stock Fund $19,795
Vanguard Windsor Fund $ 5,247
</TABLE>
18
<PAGE> 22
Martin Marietta Materials, Inc.
Defined Contribution Plans Master Trust
Notes to Financial Statements (continued)
4. INCOME TAXES
The Master Trust was created to hold the assets of the various defined
contribution plans of the Corporation which are listed as participating plans in
the Master Trust Agreement. As Plans participating in the Master Trust have
received favorable determination letters from the Internal Revenue Service that
they are qualified under Section 401(a) of the Internal Revenue Code, and
management believes the Plans to be operating in compliance with all applicable
requirements, there has been no provision for federal income taxes in the
financial statements.
5. YEAR 2000 ISSUE (UNAUDITED)
The Corporation has established a dedicated information technology task force to
coordinate the identification, evaluation and implementation of modifications
and replacements to the Corporation's information systems and related
applications necessary to achieve a year 2000 date conversion with no effect on
customers or disruption to its business operations. The Corporation's goal is to
be substantially year 2000 compliant on a timely basis. The major systems and
applications carrying potential business impact have been identified and are
being evaluated, and initial conversion efforts are underway. In addition, the
Corporation is communicating with suppliers, customers, financial institutions
and others with which it does business to coordinate the year 2000 conversion
process. The cost of the year 2000 initiatives is not expected to be material to
the Corporation's results of operations or financial position or to the Plans'
operations.
19
<PAGE> 23
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act
of 1934, the trustee of the below named plan has duly caused this annual report
to be signed on its behalf by the undersigned hereunto duly authorized.
MARTIN MARIETTA MATERIALS, INC.
SAVINGS and INVESTMENT PLAN for
HOURLY EMPLOYEES
By: Martin Marietta Materials, Inc.
Plan Administrator
By: Benefit Plan Committee
By: /s/ Janice K. Henry
----------------------------
Janice K. Henry
Date: June 29, 1998
<PAGE> 24
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Document
----------- -----------------------------------
<S> <C>
23 Consent of Ernst & Young LLP
</TABLE>
<PAGE> 1
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement (Form
S-8 No. 33-83516) pertaining to the Martin Marietta Materials, Inc. Amended
Omnibus Securities Award Plan and in the Registration Statement (Form S-3 No.
33-99082) pertaining to the Martin Marietta Materials, Inc. shelf registration,
of our report dated June 15, 1998, with respect to the financial statements of
the Martin Marietta Materials, Inc. Savings and Investment Plan for Hourly
Employees and Martin Marietta Materials, Inc. Defined Contribution Plans Master
Trust included in this Annual Report (Form 11-K) for the year ended December 31,
1997.
/s/ Ernst & Young LLP
Raleigh, NC
June 25, 1998
