<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of report (Date of earliest event reported) December 4, 1998
-------------------------------
MARTIN MARIETTA MATERIALS, INC.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
North Carolina 1-12744 56-1848578
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(State or other jurisdiction of (Commission (IRS Employer
incorporation) File Number) Identification Number)
2710 Wycliff Road, Raleigh, NC 27607-3033
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(Address of principal executive offices)
Registrant's telephone number, including area code 919-781-4550
-----------------------------
Not Applicable
- --------------------------------------------------------------------------------
Former name or former address, if changes since last report.
<PAGE> 2
Item 5. Other Events
The purpose of this Current Report of Form 8-K/A is to file the audited
financial statements for Redland Stone Products Company ("Redland Stone") as of
December 31, 1997 and for the year then ended, and the unaudited pro forma
combined condensed financial statements, for the nine-months ended September 30,
1998, and related notes thereto, both of which, are in connection with the
Registrant's acquisition in December 1998 of all the issued and outstanding
shares of capital stock of Redland Stone Products. This information serves to:
(i) comply with the requirements of Rule 3-05 and Article 11 of Regulation S-X;
and (ii) provide the required financial statements and pro forma financial
information of the business acquired amending the Current Report on Form 8-K,
dated December 4, 1998, which was filed with the Securities and Exchange
Commission on December 18, 1998.
Item 7. Financial Statements and Exhibits
(a) Financial Statements of Business Acquired
Redland Stone Products Company
Financial Statement for the Year Ended December 31, 1997
and Independent Auditors' Report
Unaudited Financial Statement for the Nine Months Ended
September 30, 1998 and 1997 and Notes to the Unaudited
Financial Statements
(b) Pro Forma Financial Information
Unaudited Pro Forma Combined Condensed Financial Statements
Notes to Unaudited Pro Forma Combined Condensed Financial
Statements
(c) Exhibits
Exhibit 23.0 Consent of PricewaterhouseCoopers LLP
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf of the
undersigned hereunto duly authorized.
MARTIN MARIETTA MATERIALS, INC.
(Registrant)
Date: February 17, 1999 By: /s/ Janice K. Henry
------------------------
Janice K. Henry
Senior Vice President, Chief Financial
Officer and Treasurer
<PAGE> 3
MARTIN MARIETTA MATERIALS, INC.
FORM 8-K/A
CURRENT REPORT
EXHIBIT INDEX
<TABLE>
<CAPTION>
Item No. Document Page
- -------- -------- ----
<S> <C> <C>
Item 7(a) Financial Statements of Business Acquired
Item 7(b) Pro Forma Financial Information
Exhibit 23.0 Consent of PricewaterhouseCoopers LLP
</TABLE>
<PAGE> 4
Item 7(a)
REDLAND STONE
PRODUCTS COMPANY
(AN INDIRECT WHOLLY-OWNED SUBSIDIARY OF LAFARGE, S.A.)
CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1997
<PAGE> 5
REDLAND STONE PRODUCTS COMPANY
(AN INDIRECT WHOLLY-OWNED SUBSIDIARY OF LAFARGE, S.A.)
CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1997
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
PAGE(S)
<S> <C>
Report of Independent Accountants 1
Consolidated Balance Sheet 2
Consolidated Statement of Operations 3
Consolidated Statement of Changes in Shareholder's Equity 4
Consolidated Statement of Cash Flows 5
Notes to Consolidated Financial Statements 6-15
</TABLE>
<PAGE> 6
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholder
of Redland Stone Products Company
In our opinion, the accompanying consolidated balance sheet and the related
consolidated statements of operations, of changes in shareholder's equity and of
cash flows present fairly, in all material respects, the financial position of
Redland Stone Products Company and its subsidiaries (the "Company", an indirect
wholly-owned subsidiary of Lafarge, S.A.) at December 31, 1997 and the results
of their operations and their cash flows for the year then ended in conformity
with generally accepted accounting principles. These financial statements are
the responsibility of the Company's management; our responsibility is to express
an opinion on these financial statements based on our audit. We conducted our
audit of these statements in accordance with generally accepted auditing
standards which 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, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for the opinion expressed above.
PricewaterhouseCoopers LLP
Philadelphia, PA
July 30, 1998
<PAGE> 7
REDLAND STONE PRODUCTS COMPANY
(AN INDIRECT WHOLLY-OWNED SUBSIDIARY OF LAFARGE, S.A.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1997
- --------------------------------------------------------------------------------
(in thousands)
<TABLE>
<CAPTION>
ASSETS
<S> <C>
Current assets:
Cash $ 3,165
Intercompany cash balances 33,122
Accounts receivable, trade (net of allowances for doubtful accounts of $385) 18,372
Due from affiliates 221
Current portion of notes receivable 420
Inventory 15,394
Deferred tax assets 3,590
Prepaid expenses and other current assets 558
========
Total current assets 74,842
Notes receivable 478
Property, plant and equipment, net 88,858
Land held for development or sale 28,158
Goodwill and other intangible assets (net of accumulated amortization of $4,532) 7,182
Other assets 265
--------
Total assets $199,783
========
LIABILITIES AND SHAREHOLDER'S EQUITY
Current liabilities:
Accounts payable, trade $ 14,459
Current portion of notes payable 100
Current portion of long-term debt with affiliates 5,000
Accrued expenses 6,555
Due to affiliates 613
Other liabilities 7,961
--------
Total current liabilities 34,688
Deferred tax liabilities 24,170
Notes payable 100
Long term debt with affiliates 90,000
Due to affiliates, noncurrent 1,313
Other long-term liabilities 3,680
--------
Total liabilities 153,951
========
Commitments and contingencies (Note 6)
Shareholder's equity:
Common stock issued and outstanding 100 shares
with no par value, authorized 100,000 shares 10
Additional paid-in capital 21,971
Retained earnings 23,851
--------
Total shareholder's equity 45,832
--------
Total liabilities and shareholder's equity $199,783
========
</TABLE>
The accompanying notes are an integral part of these financial statements.
-2-
<PAGE> 8
REDLAND STONE PRODUCTS COMPANY
(AN INDIRECT WHOLLY-OWNED SUBSIDIARY OF LAFARGE, S.A.)
CONSOLIDATED BALANCE SHEET
DECEMBER 31, 1997
- --------------------------------------------------------------------------------
(in thousands)
<TABLE>
<S> <C>
Revenues $ 146,822
Less: Freight 25,686
---------
Net revenues 121,136
Cost of goods sold 97,238
---------
Gross profit 23,898
Selling, general and administrative expense 9,919
---------
Income from operations 13,979
Other (income) expense:
Interest, net 4,735
Other, net (583)
---------
Total other expense 4,152
Income before income taxes 9,827
Provision for income taxes 3,429
---------
Net income $ 6,398
=========
</TABLE>
The accompanying notes are an integral part of these financial statements.
-3-
<PAGE> 9
REDLAND STONE PRODUCTS COMPANY
(AN INDIRECT WHOLLY-OWNED SUBSIDIARY OF LAFARGE, S.A.)
CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
- --------------------------------------------------------------------------------
(in thousands)
<TABLE>
<CAPTION>
ADDITIONAL TOTAL
COMMON STOCK PAID-IN RETAINED SHAREHOLDER'S
SHARES AMOUNT CAPITAL EARNINGS EQUITY
------ ------ ------- -------- ------
<S> <C> <C> <C> <C> <C>
BALANCE AT DECEMBER 31, 1996 100 $10 $17,134 $ 47,453 $ 64,597
Net income -- -- -- 6,398 6,398
Capital contribution -- -- 4,837 -- 4,837
Dividend paid -- -- -- (30,000) (30,000)
--- --- ------- -------- --------
BALANCE AT DECEMBER 31, 1997 100 $10 $21,971 $ 23,851 $ 45,832
=== === ======= ======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
-4-
<PAGE> 10
REDLAND STONE PRODUCTS COMPANY
(AN INDIRECT WHOLLY-OWNED SUBSIDIARY OF LAFARGE, S.A.)
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDER'S EQUITY
FOR THE YEAR ENDED DECEMBER 31, 1997
- --------------------------------------------------------------------------------
(in thousands, except for shares)
<TABLE>
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 6,398
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation, depletion and amortization 11,967
Provision for bad debts 150
Provision for inventory reserves (239)
Gain on sale of property and equipment (250)
Deferred tax provision (1,983)
Change in assets and liabilities, net of effects from acquisitions:
Receivables (2,731)
Due from affiliates 139
Inventories 1,292
Prepaid expenses and other assets 330
Accounts payable, trade and accrued expenses 9,428
Accrued liabilities 1,769
Other non-current liabilities 1,715
--------
Net cash provided by operating activities 27,985
--------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions of property and equipment (7,427)
Additions of land held for development or sale (75)
Proceeds from sale of property and equipment 271
Acquisitions (3,969)
--------
Net cash used in investing activities (11,200)
--------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of debt with affiliates 25,000
Principal repayments on long-term debt with affiliates (5,000)
Change in intercompany cash balances, net (3,719)
Principal repayments on notes payable (300)
Payment of dividend (30,000)
--------
Net cash used in financing activities (14,019)
--------
Net increase (decrease) in cash 2,766
Cash at beginning of year 399
--------
Cash at end of year $ 3,165
========
Supplemental disclosures of non-cash items:
Forgiveness of intercompany income taxes payable $ 4,837
========
</TABLE>
The accompanying notes are an integral part of these financial statements.
-5-
<PAGE> 11
REDLAND STONE PRODUCTS COMPANY
(AN INDIRECT WHOLLY-OWNED SUBSIDIARY OF LAFARGE, S.A.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1997
- --------------------------------------------------------------------------------
(in thousands)
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Redland Stone Products Company (the "Company") had been an indirect
wholly-owned subsidiary of Redland PLC (Redland) since 1989 and had been a
majority owned subsidiary since 1983. The Company is engaged in the
production and sale of construction materials, principally limestone
aggregates, base and fill, caliche base, silica sand, ready mix concrete,
asphaltic concrete and lime. The Company's principal areas of operation are
San Antonio, Houston and South Texas, where its customer base consists of
highway departments, municipalities, contractors, construction builders and
developers.
In late 1997, Redland, including the Company, was acquired by Lafarge, S.A.
(Lafarge). In early 1998, Lafarge determined that it would divest the
Company, with the exception of certain assets related to lime operations.
See Note 9. These financial statements, prepared on the Company's
historical cost, do not include any adjustments that may result from a
potential divestiture of the Company by Lafarge. See Note 13.
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of the Company
and its majority and wholly-owned subsidiaries: Redland Stone Development
Company, Redland Development Company, Eastside Development Limited
Partnership, Alamo Gulf Coast Railroad (99.5%) and Redland Park Development
Limited Partnership (87.5%). All significant intercompany accounts and
transactions have been eliminated in consolidation.
REVENUE RECOGNITION
Revenue from the sale of construction materials is recorded at the time the
products are shipped.
INTERCOMPANY CASH BALANCES
Intercompany cash balances represent the Company's net deposits in a
centralized group cash management account.
INVENTORIES
Inventories are valued at the lower of average cost or market.
PROPERTY AND EQUIPMENT
Depreciation of property, plant and equipment is computed for financial
reporting purposes using the straight-line method over the estimated useful
lives of the assets. The lives range from three to eight years on fixtures
and motor vehicles, five to twenty-five years on equipment, and five to
thirty years on buildings. Land includes depletable raw material reserves
on which depletion is recorded based on the units of production method.
-6-
<PAGE> 12
REDLAND STONE PRODUCTS COMPANY
(AN INDIRECT WHOLLY-OWNED SUBSIDIARY OF LAFARGE, S.A.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1997
- --------------------------------------------------------------------------------
(in thousands)
LAND HELD FOR DEVELOPMENT OR SALE
Land held for development or sale is stated at cost which includes direct
acquisition, development and construction costs, interest and other
indirect construction costs.
GOODWILL
Amounts paid in excess of the fair market value of the net assets acquired
are capitalized and amortized on a straight-line basis over 40 years. The
Company continually evaluates whether events and circumstances have
occurred that indicate the remaining estimated useful lives of the
intangible assets may warrant revision or that the remaining balance of the
intangible assets may not be recoverable. The amortization recorded for
1997 was $139.
SELF-INSURANCE
The Company participates in an insurance program with certain other Lafarge
subsidiaries. Claims up to $1,000 for general liability, automobile
liability and workers compensation are covered under the Redland program,
with a $250 deductible per claim for the Company. Claims in excess of
$1,000 are covered by excess liability insurance under the program.
A liability for claims under the $250 deductible is recorded in the
Company's financial statements for general liability, automobile liability,
and workers compensation claims reported but not paid and for estimated
claims incurred but not reported based upon prior claim experience.
The Company also participates in a health insurance program with certain
other Lafarge subsidiaries. Claims up to $200 are covered under the Redland
program with a $75 deductible per claim for the Company. Claims in excess
of $200 are covered by excess liability insurance under the program.
INCOME TAXES
The Company and its subsidiaries are included in the consolidated Federal
income tax return of its U.S. parent. In accordance with a tax sharing
agreement, Federal income taxes are computed as if the Company and its
subsidiaries filed a separate consolidated return. Income taxes that would
have been payable by the Company in accordance with the tax sharing
agreement have been treated as additional capital contributions for the
year ended December 31, 1997.
Deferred income taxes are determined by the liability method in accordance
with Statement of Financial Accounting Standards No. 109, "Accounting for
Income Taxes."
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets, liabilities,
revenues and expenses and the disclosure of contingent assets and
liabilities. Actual results could differ from those estimates.
-7-
<PAGE> 13
REDLAND STONE PRODUCTS COMPANY
(AN INDIRECT WHOLLY-OWNED SUBSIDIARY OF LAFARGE, S.A.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1997
- --------------------------------------------------------------------------------
(in thousands)
2. INVENTORIES
Inventories consist of the following:
<TABLE>
<S> <C>
Crushed stone $ 12,444
Fuels and additives 1,386
Maintenance and operating supplies 1,780
--------
15,610
Provision for excess inventory (216)
========
$ 15,394
========
</TABLE>
Management estimates a reserve for what it deems to be excess inventory
quantities. Net changes in these estimates, as excess inventory is disposed
of or reserved for, favorably impacted gross profit by $102 for the year
ended December 31, 1997.
3. PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment consist of the following:
<TABLE>
<S> <C>
Land and land improvements $ 59,558
Buildings 3,505
Machinery and equipment 119,116
Construction-in-process 2,368
---------
184,547
Accumulated depreciation and depletion (95,689)
---------
$ 88,858
=========
</TABLE>
4. OTHER CURRENT LIABILITIES
Other current liabilities consist of the following:
<TABLE>
<S> <C>
Interest payable $3,459
Accrued salaries, vacation pay
and bonuses 1,657
Accrued property taxes 1,119
Other 1,726
======
$7,961
======
</TABLE>
-8-
<PAGE> 14
REDLAND STONE PRODUCTS COMPANY
(AN INDIRECT WHOLLY-OWNED SUBSIDIARY OF LAFARGE, S.A.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1997
- --------------------------------------------------------------------------------
(in thousands)
5. LONG-TERM DEBT AND NOTES PAYABLE
Long-term debt with affiliates consists of the following:
<TABLE>
<S> <C>
Unsecured note payable to Redland America Corporation; due in annual
installments of $5 million, with the remaining balance due January 2001, plus
interest at the lower of the cash management rate of Redland Credit Corporation,
or the prime rate charged by Morgan Guaranty Trust Company (average interest
rate of 5.8% for 1997) $50,000
Promissory note payable to Redland America Corporation; due January 31, 2002;
interest of 7.0% payable annually 20,000
Promissory note payable to Redland America Corporation; due April 22, 2007;
interest of 8.0% payable annually 25,000
-------
95,000
Less: Current portion 5,000
-------
$90,000
=======
</TABLE>
Notes payable consists of the following:
<TABLE>
<S> <C>
Note payable in connection with an acquisition, with an average interest rate of
8.5%. Principal payments of $100 on February 29, 1998 and 1999 with interest
payable annually $200
Less: Current portion 100
----
$100
====
</TABLE>
Interest paid in 1997 was $4,443.
-9-
<PAGE> 15
REDLAND STONE PRODUCTS COMPANY
(AN INDIRECT WHOLLY-OWNED SUBSIDIARY OF LAFARGE, S.A.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1997
- --------------------------------------------------------------------------------
(in thousands)
Maturities of debt in years subsequent to 1997 are as follows:
<TABLE>
<CAPTION>
FOR THE YEAR ENDING DECEMBER 31,
<S> <C>
1998 $ 5,100
1999 5,100
2000 5,000
2001 35,000
2002 20,000
2003 and thereafter 25,000
========
$ 95,200
========
</TABLE>
6. COMMITMENTS AND CONTINGENCIES
LEASES
The Company has entered into operating leases for property and equipment
which have initial or remaining noncancellable terms in excess of one year.
In addition, the Company operates various production facilities on leased
property, whereby the Company pays royalties to the landowners based
primarily on the tons of material produced and sold from each facility.
Royalty rates ranged from $.15 per ton to $.60 per ton in 1997. The leases,
some of which are cancelable on terms ranging from 90 to 180 days notice,
are for varying periods that end in 2034. Noncancellable royalty and lease
commitments are as follows:
<TABLE>
<CAPTION>
MINIMUM
ROYALTY AND
FOR THE YEAR ENDING DECEMBER 31, RENTAL PAYMENTS
<S> <C>
1998 $ 616
1999 597
2000 214
2001 210
2002 210
2003 and thereafter 787
======
Total minimum lease payments $2,634
======
</TABLE>
Total royalty and rental expense under operating leases for the year ended
December 31, 1997 was $872.
-10-
<PAGE> 16
REDLAND STONE PRODUCTS COMPANY
(AN INDIRECT WHOLLY-OWNED SUBSIDIARY OF LAFARGE, S.A.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1997
- --------------------------------------------------------------------------------
(in thousands)
LITIGATION
The Company is subject to various legal proceedings and claims which arise
in the ordinary course of its business. In the opinion of management, the
amount of ultimate liability, if any, with respect to these claims will not
materially affect the financial position or results of operations of the
Company. In 1997, the Company settled a dispute with a vendor that resulted
in a payment of $2,000 to the Company, which is included as a reduction in
cost of goods sold for the year ended December 31, 1997.
7. RETIREMENT PLANS
Through December 31, 1996, the Company maintained a defined benefit
retirement plan covering substantially all employees. The plan's benefit
formula was 1.0% of final average compensation plus 1.65% of final average
compensation in excess of covered compensation (an average of social
security wage bases) for each year of service while included in the plan.
The Company's funding policy was to make periodic contributions to the
retirement plan for normal costs plus thirty year amortization of any
unfunded past service cost.
Effective January 1, 1997, the Company's plan was merged into a single plan
with other Redland subsidiaries in North America (the RANA plan). Benefits
for the Company's employees in the RANA plan are essentially the same as
existed under the Company's plan. Pension cost, an intercompany charge
beginning in 1997, continued to be calculated under FAS87 as if the RANA
plan merger had not occurred, and the related liability is recorded in the
accompanying balance sheet at December 31, 1997.
A comparison of the actuarially computed benefit obligation and the plan's
net assets, prior to the plan merger, is presented below:
<TABLE>
<S> <C>
Actuarial present value of benefit obligation:
Vested benefits $ 3,315
Nonvested benefits 476
-------
Accumulated benefit obligation 3,791
Effect of future salary increases 1,302
-------
Projected benefit obligation for service rendered to date $ 5,093
Plan assets at fair value 2,855
-------
Projected benefit obligation in excess of plan assets 2,238
Unrecognized prior service cost (863)
Unrecognized net loss (159)
Additional liability 52
-------
Accrued pension liability $ 1,268
-------
</TABLE>
-11-
<PAGE> 17
REDLAND STONE PRODUCTS COMPANY
(AN INDIRECT WHOLLY-OWNED SUBSIDIARY OF LAFARGE, S.A.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1997
- --------------------------------------------------------------------------------
(in thousands)
Actuarial assumptions include an assumed settlement interest rate of 7.0
percent for 1997. The assumed rates of increase in future compensation
levels used in determining the actuarial present values of the projected
benefit obligations was 4.5 percent for 1997. The expected long-term rate
of investment return on pension assets was 8.5 percent for 1997.
The unrecognized prior service cost is being amortized over the average
remaining working life of covered employees of 12 years.
Net periodic pension expense consists of the following components:
<TABLE>
<S> <C>
Service cost $ 499
Interest cost 310
Return on plan assets (188)
Net amortization 123
Other 52
-----
Net periodic pension cost $ 796
-----
</TABLE>
Contributions made during the year ended December 31, 1997 to the RANA plan
were $170.
In June 1998, LaFarge sold to an affiliate the other Redland subsidiaries
that were participating employers in the RANA plan. Benefits under the RANA
plan for the Company's employees will cease to accrue on December 31, 1998,
and the Lafarge affiliate will, at Lafarge's request, transfer the assets
and liabilities of the RANA plan attributable to the Company's employees to
a successor plan designated by Lafarge. The amount of assets and
liabilities to be transferred is to be determined under Section 414(1) of
the Internal Revenue Code, which does not allow for an assessment of
liability for unfunded vested benefits upon the sponsor of a transferee
plan, unless the parties specifically agree to such an assessment. The
agreement between Lafarge and its affiliate does not provide for such an
assessment. Accordingly the liability of $1,268 recorded in the December
31, 1997 balance sheet will be treated by the Company as a capital
contribution in its year ended December 31, 1998.
SAVINGS PLAN
The Company contributes to a voluntary defined contribution plan (the Plan)
through regular contributions equal to various percentages of the amounts
invested by the participants. Effective August 1, 1997, the Plan was merged
with similar plans sponsored by other affiliated companies. All funds were
transferred to a new trustee and custodian. The Company's contributions to
these plans amounted to $320 for the year ended December 31, 1997.
-12-
<PAGE> 18
REDLAND STONE PRODUCTS COMPANY
(AN INDIRECT WHOLLY-OWNED SUBSIDIARY OF LAFARGE, S.A.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1997
- --------------------------------------------------------------------------------
(in thousands)
8. INCOME TAXES
The Company and its subsidiaries are included in the consolidated federal
income tax return of Lafarge's U.S. subsidiaries. The income tax provision
has been calculated pursuant to a tax sharing agreement as if the Company
filed a separate federal income tax return. The provision for income taxes
consists of the following:
<TABLE>
<S> <C>
Current:
Federal $ 4,837
State 575
-------
5,412
-------
Deferred:
Federal (1,780)
State (203)
-------
(1,983)
-------
Total provision for income taxes $ 3,429
=======
</TABLE>
The differences between the actual provision for income taxes and the
expected amounts determined by applying the federal statutory rate of 35%
to income before income taxes results primarily from the effects of
percentage depletion, state taxes, and goodwill amortization.
The net current deferred tax assets arose primarily from self insurance,
inventory, and compensation accruals deducted for financial reporting
purposes but not allowed currently for tax purposes.
The net noncurrent deferred tax liabilities are primarily a result of basis
differences in mineral properties originating through pushdown accounting
as a result of previous ownership changes, depreciation recognized for tax
purposes in excess of the amount recognized currently for financial
reporting purposes, and basis difference in land held for development.
As of December 31, 1997, the Company had $1,663 of minimum tax credits
available. Subsequent activities of the Company and other members of the
group may affect the availability of the minimum tax credits.
Income taxes paid in 1997 were $595.
-13-
<PAGE> 19
REDLAND STONE PRODUCTS COMPANY
(AN INDIRECT WHOLLY-OWNED SUBSIDIARY OF LAFARGE, S.A.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1997
- --------------------------------------------------------------------------------
(in thousands)
9. LIME OPERATIONS
In May 1998, Lafarge formed a new subsidiary, Lafarge Texas Lime Company.
At the same time the Company sold the tangible personal property associated
with its lime business operating in San Antonio to Lafarge Texas Lime
Company. Concurrently with the sale, the Company entered into a lease
agreement under which the Company will continue to use these assets. The
lease will terminate on the earlier of December 31, 1998 or the sale of the
Company by Lafarge. Following are certain balances as of and for the year
ended December 31, 1997 related to the lime operations and included in
these consolidated financial statements:
<TABLE>
<S> <C>
Revenues $3,540
Income from operations 553
Accounts receivable 571
Inventory 381
Property, plant and equipment, net 538
Accounts payable 208
</TABLE>
10. ACQUISITIONS
On February 5, 1997, the Company acquired certain assets of Alamo Concrete
Products, Ltd., which, among other operations, was engaged in the
manufacturing of asphaltic concrete materials. The purchase price of $3,969
allocated to the acquired assets included $596 of fixed assets and $300 of
assets held for sale. The excess of the purchase price over the
identifiable assets acquired of $3,073, less $1,000 allocated to the value
of the non-compete agreement, represents goodwill and is being amortized
over 40 years. The non-compete agreement is being amortized over five
years, the life of the agreement.
11. DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INFORMATION
The carrying amount of cash and debt approximates fair value. The Company's
debt (see Note 5) is at current market rates for similar borrowings.
12. RELATED PARTY TRANSACTIONS
In 1997, the Company paid a dividend of $30,000 to Redland.
The Company has certain long-term debt outstanding to Redland America
Corporation. Interest expense charged related to the debt was $5,761 for
the year ended December 31, 1997. See Note 5.
The Company participates in an insurance program with certain other Redland
subsidiaries. The program provides coverage to the Company for claims paid
in excess of deductible. See Note 1.
-14-
<PAGE> 20
REDLAND STONE PRODUCTS COMPANY
(AN INDIRECT WHOLLY-OWNED SUBSIDIARY OF LAFARGE, S.A.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1997
- --------------------------------------------------------------------------------
(in thousands)
In January 1997, the Company elected to participate in the RANA pension
plan. See Note 7. The Company pays an allocated portion of the plan costs,
which have not significantly changed from the expenses incurred under the
previous Company plan.
The Company and its subsidiaries are included in the consolidated Federal
income tax return of its US parent. The income taxes payable for the year
ended December 31, 1997 of $4,837 have been forgiven by Lafarge.
The Company is allocated a portion of corporate costs, for services
provided by Redland Aggregates North America. The costs incurred for the
year ended December 31, 1997 were $754.
13. SUBSEQUENT EVENTS (UNAUDITED)
On December 4, 1998, the Company was sold by Lafarge to Martin Marietta
Materials, Inc. ("Martin Marietta"). In the transaction, Martin Marietta
acquired all of the issued and outstanding shares of capital stock of the
Company. The purchase price consisted of $272,000,000 in cash plus the
assumption of normal balance sheet liabilities, subject to certain
post-closing adjustments relating to working capital. In accordance with
the Stock Purchase Agreement, Lafarge assumed certain liabilities of the
Company, principally the affiliated debt.
-15-
<PAGE> 21
REDLAND STONE
PRODUCTS COMPANY
(AN INDIRECT WHOLLY-OWNED SUBSIDIARY OF LAFARGE, S.A.)
UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1998
<PAGE> 22
REDLAND STONE PRODUCTS COMPANY
(AN INDIRECTLY WHOLLY-OWNED SUBSIDIARY OF LAFARGE, S.A.)
CONSOLIDATED BALANCE SHEET
- --------------------------------------------------------------------------------
(in thousands)
<TABLE>
<CAPTION>
September 30,
1998
------------
(Unaudited)
<S> <C>
Current assets:
Cash $ 3,655
Intercompany cash balances --
Accounts receivable trade, net 22,289
Inventory 15,368
Deferred tax assets 3,313
Other current assets 1,237
--------
Total current assets 45,862
Property, plant and equipment, net 83,670
Land held for development or sale 28,250
Other assets 10,219
--------
TOTAL ASSETS $168,001
========
Current liabilities:
Accounts payable, trade $ 12,274
Accrued expenses 12,938
Current portion of long-term debt with affiliates 5,000
Current portion of notes payable 100
--------
Total current liabilities 30,312
Deferred tax liabilities 22,090
Notes payable --
Long-term debt with affiliates 57,000
Other long-term liabilities 4,895
--------
Total liabilities 114,297
Commitments and contingencies (Note 3)
Shareholder's equity:
Common stock issued and outstanding 100 shares
with no par value, authorized 100,000 shares 10
Additional paid in capital 21,971
Retained earnings 31,723
--------
Total shareholder's equity 53,704
--------
TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY $168,001
========
</TABLE>
<PAGE> 23
REDLAND STONE PRODUCTS COMPANY
(AN INDIRECT WHOLLY-OWNED SUBSIDIARY OF LAFARGE, S. A.)
CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE NINE MONTH PERIODS ENDED SEPTEMBER 30, 1998 AND 1997
(unaudited)
- --------------------------------------------------------------------------------
(in thousands)
<TABLE>
<CAPTION>
Nine Months Nine Months
Ended Ended
September 30, September 30,
1998 1997
------------ ------------
<S> <C> <C>
Revenues $ 121,166 $ 112,837
Less: Freight 21,620 19,212
--------- ---------
Net revenues 99,546 93,625
Cost of goods sold 77,525 75,601
--------- ---------
Gross profit 22,021 18,024
Selling, general and administrative expense 7,004 7,001
--------- ---------
Income from operations 15,017 11,023
Other (income) expense:
Interest, net 3,496 3,459
Other, net (883) (489)
--------- ---------
Total other expense 2,613 2,970
--------- ---------
Income before income taxes 12,404 8,053
Provision for income taxes 4,532 2,810
--------- ---------
Net income $ 7,872 $ 5,243
========= =========
</TABLE>
<PAGE> 24
REDLAND STONE PRODUCTS COMPANY
(AN INDIRECTLY WHOLLY-OWNED SUBSIDIARY OF LAFARGE, S.A.)
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE NINE MONTH PERIODS ENDED SEPTEMBER 30, 1998 AND 1997
(unaudited)
- --------------------------------------------------------------------------------
(in thousands)
<TABLE>
<CAPTION>
Nine Months Nine Months
Ended Ended
September 30, September 30,
1998 1997
------------- -------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 7,872 $ 5,243
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation, depletion and amortization 9,326 8,999
Provision for bad debts 135 135
Provision for inventory reserve (151) (78)
Gain on disposal of property plant and equipment (674) (261)
Deferred tax provision (benefit) (1,803) (2,603)
Change in assets and liabilities, net of effects from acquisitions
Receivables (4,053) (5,042)
Due from affiliates 221 (108)
Inventories 177 2,097)
Prepaid expenses and other assets (3,114) (3,097)
Accounts payable, trade and accrued expenses (2,022) (429)
Accrued liabilities (2,354) 2,869
Other non-current liabilities (98) 1,145
------- -------
Net cash provided by operating activities 3,462 8,880
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions of property plant and equipment (4,456) (5,720)
Additions of land held for development or sale (92) (66)
Proceeds from sale of property and equipment 1,554 271
------- -------
Net cash used in investing activities (2,994) (5,515)
------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of debt with affiliates -- 20,000
Principal repayments on long-term debt with affiliates (33,000) --
Change in intercompany cash balances 33,122 8,955
Principal repayments on notes payable (100) (200)
Payment of dividend -- (30,000)
------- -------
Net cash provided by (used in) financing activities 22 (1,245)
------- -------
Net increase in cash 490 2,120
Cash at beginning of year 3,165 399
-------- --------
Cash at September 30, 1998 $ 3,655 $ 2,519
======= =======
</TABLE>
<PAGE> 25
REDLAND STONE PRODUCTS COMPANY
(AN INDIRECT WHOLLY-OWNED SUBSIDIARY OF LAFARGE, S. A.)
NOTES TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1998
(AMOUNTS IN THOUSANDS)
NOTE 1: BASIS OF PRESENTATION
The financial statements as of September 30, 1998 are unaudited and reflect all
adjustments which are, in the opinion of management, necessary for a fair
presentation of the financial position of Redland Stone Products Company (the
"Company") as of September 30, 1998 and 1997, and the results of operations and
cash flows for the periods presented. Such adjustments are of a normal and
recurring nature. The results of operations for the nine-month period may not
necessarily be indicative of the operating results for a full year or of future
operations. These unaudited financial statements should be read in conjunction
with consolidated financial statements and notes thereto included in the
Company's audited financial statements for the fiscal year ended December 31,
1997.
NOTE 2: ACQUISITION BY MARTIN MARIETTA MATERIALS, INC.
The Company had been an indirect wholly-owned subsidiary of Redland PLC
(Redland) since 1989 and had been a majority owned subsidiary since 1983. In
late 1997, Redland, including the Company, was acquired by Lafarge, S. A.
(Lafarge). In early 1998, Lafarge determined that it would divest the Company.
Effective December 4, 1998, the Company was acquired by Martin Marietta
Materials. As a result of these transactions, the Company's due from affiliates
was used to reduce long term debt with affiliates to a balance of $70 million in
May 1998. In August 1998, The Company reduced its long term debt with affiliates
to a balance of $62 million with cash from operations. In a subsequent
transaction on November 25, 1998 the Company issued 32 shares of its common
stock to Redland International Limited in exchange for $66 million. The proceeds
were used to repay the remaining long term debt with affiliates and related
accrued interest.
NOTE 3: VENDOR DISPUTE
In 1997, the Company settled a dispute with a vendor that resulted in a payment
during 1998 of $2.4 million to the Company, which is included as a reduction in
cost of goods sold for the nine months ended September 30, 1998.
NOTE 4: MINING AGREEMENT
In July 1998, the Company entered into an agreement to mine approximately 535
acres of property. This agreement provides that the Company will pay 25 cents
per ton of aggregate mined. The Company will be given credit for the aggregate
inventory on hand at the beginning of the mining period. In conjunction with
this transaction the Company had incurred $3.4 million in related costs that
were recorded as an other asset at September 30, 1998. This asset will be
amortized based on the tons sold from the property.
<PAGE> 26
Item 7(b)
UNAUDITED PRO FORMA
COMBINED CONDENSED FINANCIAL STATEMENTS
The following unaudited pro forma combined condensed financial
statements have been prepared by the management of Martin Marietta Materials,
Inc. (the "Corporation"), from the Corporation's historical consolidated
financial statements and from the historical financial statements of Redland
Stone Products Company ("Redland Stone") which are included in this Current
Report on Form 8-K/A. The unaudited pro forma combined condensed statements of
earnings reflect adjustments as if the transaction had occurred on January 1,
1997. The unaudited pro forma combined condensed balance sheet reflects
adjustments as if the transaction had occurred on September 30, 1998. See "Note
1 - Basis of Presentation." The pro forma adjustments described in the
accompanying notes are based upon preliminary estimates and certain assumptions
that management of the Corporation believes are reasonable in the circumstances.
The unaudited pro forma combined condensed financial statements are not
necessarily indicative of what the financial position or results of operations
actually would have been if the transaction had occurred on the applicable dates
indicated. Moreover, they are not intended to be indicative of future results of
operations or financial position. The unaudited pro forma combined condensed
financial statements should be read in conjunction with the historical
consolidated financial statements of the Corporation and the related notes
thereto which are included in the Corporation's Quarterly Report on Form 10-Q
for the quarter ended September 30, 1998, which was filed with the Securities
and Exchange Commission (the "Commission") on November 16, 1998, and in the
Corporation's Annual Report on Form 10-K for the fiscal year ended December 31,
1997, which was filed with the Commission on March 27, 1998. In addition, the
unaudited pro forma combined condensed financial statements should be read in
conjunction with the historical financial statements of Redland Stone which are
included in this Current Report on Form 8-K/A.
<PAGE> 27
UNAUDITED PRO FORMA COMBINED
CONDENSED STATEMENT OF EARNINGS
(Dollars in Thousands)
<TABLE>
<CAPTION>
For The Nine Months Ended
September 30, 1998
------------------------------------------------------------------
Martin Redland Pro Forma Pro Forma
Marietta Stone Adjustments Combined
-------- ----- ----------- --------
<S> <C> <C> <C> <C>
Net sales $ 776,717 $ 99,546 $ (2,990)(2d) $873,273
Cost of sales 568,173 77,525 (4,889)(2d) 645,511
4,161 (2g)
541 (2f)
--------- -------- -------- --------
Gross profit 208,544 22,021 (2,803) 227,762
Selling, general & administrative expense 59,879 7,004 (1,262) (2d) 65,621
Research and development 2,492 -- -- 2,492
--------- -------- -------- ---------
Earnings from operations 146,173 15,017 (1,541) 159,649
Interest expense (17,085) (3,496) 12,600 (2e) (29,685)
(3,496) (2d)
Other income (expenses), net 75 883 -- 958
--------- -------- -------- ---------
Earnings before taxes on income 129,163 12,404 (10,645) 130,922
Taxes on income (44,264) (4,532) (2,594)(2h) (46,202)
--------- -------- -------- ---------
Net earnings $ 84,899 $ 7,872 $ (8,051) $ 84,720
========= ======== ======== =========
Net earnings per share - Basic $1.83 N/A $1.83
==== =====
- Diluted $1.82 N/A $1.81
==== =====
Average number of common shares
outstanding
- Basic 46,410,052 N/A 46,410,052
========== ==========
- Diluted 46,695,694 N/A 46,695,694
========== ==========
</TABLE>
See accompanying notes.
<PAGE> 28
UNAUDITED PRO FORMA COMBINED
CONDENSED STATEMENT OF EARNINGS
(Dollars in Thousands)
<TABLE>
<CAPTION>
For The Nine Months Ended
September 30, 1997
-----------------------------------------------------------
Martin Redland Pro Forma Pro Forma
Marietta Stone Adjustments Combined
-------- ----- ----------- --------
<S> <C> <C> <C> <C>
Net sales $ 662,070 $ 93,625 $ (2,645)(2d) $ 753,050
Cost of sales 486,503 75,601 (4,360)(2d) 562,392
4,161 (2g)
487 (2f)
--------- -------- -------- --------
Gross profit 175,567 18,024 (2,933) 190,658
Selling, general & administrative expense 50,486 7,001 (1,951) (2d) 55,536
Research and development 2,323 -- -- 2,323
--------- -------- -------- --------
Earnings from operations 122,758 11,023 (982) 132,799
Interest expense (11,380) (3,459) 12,600 (2e) (23,980)
(3,459) (2d)
Other income (expenses), net 5,230 489 -- 5,719
--------- -------- -------- --------
Earnings before taxes on income 116,608 8,053 (10,123) 114,538
Income tax expense (41,058) (2,810) (2,385) (2h) (41,483)
--------- -------- -------- --------
Net earnings $ 75,550 $ 5,243 $ (7,738) $ 73,055
========= ======== ======== ========
Net earnings per share - Basic $1.64 N/A $ 1.58
==== ======
- Diluted $1.63 N/A $ 1.58
==== ======
Average number of common shares
outstanding
- Basic 46,092,078 N/A 46,092,078
========== ==========
- Diluted 46,189,742 N/A 46,189,742
========== ==========
</TABLE>
See accompanying notes.
<PAGE> 29
UNAUDITED PRO FORMA COMBINED
CONDENSED STATEMENT OF EARNINGS
(Dollars in Thousands)
<TABLE>
<CAPTION>
For The Year Ended
December 31, 1997
----------------------------------------------------------
Martin Redland Pro Forma Pro Forma
Marietta Stone Adjustments Combined
-------- ----- ----------- --------
<S> <C> <C> <C> <C>
Net sales $ 900,863 $ 121,136 $ (3,540) (2d) $1,018,459
Cost of sales 665,594 97,238 (5,826) (2d) 763,192
5,547 (2g)
639 (2f)
---------- --------- --------- ----------
Gross profit 235,269 23,898 (3,900) 255,267
Selling, general & administrative expense 69,093 9,919 (2,601) (2d) 76,411
Research and development 3,406 -- -- 3,406
--------- --------- --------- ----------
Earnings from operations 162,770 13,979 (1,299) 175,450
Interest expense (16,899) (4,735) 16,800 (2e) (33,699)
(4,735) (2d)
Other income (expenses), net 5,341 583 -- 5,924
--------- --------- --------- ----------
Earnings before taxes on income 151,212 9,827 (13,364) 147,675
Income tax expense (52,683) (3,429) (3,127) (2h) (52,985)
--------- --------- --------- ----------
Net earnings $ 98,529 $ 6,398 $ (10,237) $ 94,690
========= ========= ========= ==========
Net earnings per share - Basic $2.14 N/A $2.05
===== =====
- Diluted $2.13 N/A $2.05
===== =====
Average number of common shares
outstanding
- Basic 46,121,775 N/A 46,121,775
========== ==========
- Diluted 46,237,821 N/A 46,237,821
========== ==========
</TABLE>
See accompanying notes.
<PAGE> 30
UNAUDITED PRO FORMA COMBINED
CONDENSED BALANCE SHEET
(Dollars in Thousands)
<TABLE>
<CAPTION>
September 30, 1998
--------------------------------------------------------------
Martin Redland Pro Forma Pro Forma
Marietta Stone Adjustments Combined
-------- ----- ----------- --------
<S> <C> <C> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $ 12,195 $ 3,655 $ (3,655)(2a) $ 12,195
Accounts receivable, net 193,936 22,289 601 (2c) 216,826
Inventories, net 145,947 15,368 (3,259)(2c) 158,056
Deferred income tax benefit 17,539 3,313 (3,313)(2a) 22,759
5,220 (2c)
Other current assets 4,164 1,237 431 (2c) 5,832
---------- -------- -------- ----------
Total Current Assets 373,781 45,862 (3,975) 415,668
Property, plant and equipment, net 634,241 111,920 11,699 (2c) 757,860
Other noncurrent assets 46,169 10,219 (9,494)(2a) 46,326
(568)(2c)
Costs in excess of net assets acquired 182,197 -- 166,421 (2c) 348,618
---------- -------- -------- ----------
Total Assets $1,236,388 $168,001 $164,083 $1,568,472
========== ======== ======== ==========
</TABLE>
See accompanying notes.
<PAGE> 31
UNAUDITED PRO FORMA COMBINED
CONDENSED BALANCE SHEET
(Dollars in Thousands)
<TABLE>
<CAPTION>
September 30, 1998
-----------------------------------------------------------
Martin Redland Pro Forma Pro Forma
Marietta Stone Adjustments Combined
-------- ----- ----------- --------
<S> <C> <C> <C> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities $ 148,257 $ 30,312 $ (5,000)(2a) $ 164,013
(9,556)(2c)
Long-term debt, less current maturities 313,720 57,000 (57,000)(2a) 588,220
274,500 (2b)
Other noncurrent liabilities 80,643 4,895 (1,787)(2c) 91,751
8,000 (2c)
Deferred taxes liabilities 51,974 22,090 (22,090)(2a) 82,694
30,720 (2c)
---------- -------- --------- ----------
Total Liabilities 594,594 114,297 217,787 926,678
Total Shareholders' Equity 641,794 53,704 (121,332)(2c) 641,794
67,628 (2a)
---------- -------- --------- ----------
Total Liabilities and Shareholders'
Equity $1,236,388 $168,001 $ 164,083 $1,568,472
========== ======== ========= ==========
</TABLE>
See accompanying notes.
<PAGE> 32
NOTES TO UNAUDITED PRO FORMA
COMBINED CONDENSED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
The accompanying unaudited pro forma combined condensed
statements of earnings present the historical results of operations of
the Corporation and Redland Stone for the nine months ended September
30, 1998 and 1997, and for the year ended December 31, 1997, with pro
forma adjustments as if the transaction had taken place on January 1,
1997. The unaudited pro forma combined condensed balance sheet presents
the historical balance sheets of the Corporation and Redland Stone as
of September 30, 1998, with pro forma adjustments as if the transaction
had been consummated as of September 30, 1998, in a transaction
accounted for as a purchase in accordance with generally accepted
accounting principles.
Certain reclassifications have been made to the historical
financial statements of the Corporation and Redland Stone to conform to
the pro forma combined condensed financial statement presentation.
2. PRO FORMA ADJUSTMENTS
The following adjustments give pro forma effect to the transaction
(Dollars in Thousands):
(a) To reflect excluded assets and liabilities at
closing. The Corporation did not assume the long-term
indebtedness of Redland Stone.
(b) To record the cash consideration:
Payment of cash which was financed by long-term
borrowings assuming a 6% effective interest rate on
$280,000,000.
(c) To adjust the acquired assets and assumed liabilities
to their estimated fair values, including the
recording of the cost in excess of net assets
acquired of approximately $166.4 million. Included in
this adjustment is a provision for estimated
transaction costs and other assumed liabilities of
approximately $8 million.
(d) To reflect adjustments for various items which would
not have been incurred or earned by Redland Stone if
the transaction had occurred on January 1, 1997 and
1997. These items include amortization of intangible
assets, allocated overhead charges, cost of sales
adjustments, selling, general and administrative
expenses, interest expense, and elimination of the
profit of the lime business which was not acquired
from Redland Stone.
(Continued)
<PAGE> 33
NOTES TO UNAUDITED PRO FORMA
COMBINED CONDENSED FINANCIAL STATEMENTS
2. PRO FORMA ADJUSTMENTS (continued)
(e) Adjustments which represent additional estimated
interest expense resulting from the use of borrowings
to finance the transaction.
(f) Adjustment for additional depletion expense
(unit-of-production method) on the net step-down of
mineral reserves to fair value. Such depletion
expense is subject to possible adjustment resulting
from completion of the valuation analyses.
(g) To record the amortization of the cost in excess of
acquired net assets over an estimate life of 30
years. Such amortization expense is subject to
possible adjustment resulting from completion of
valuation analyses and final post-closing
adjustments.
(h) To reflect the tax effect, using a 40% statutory
rate, on the net pro forma adjustments.
The pro forma combined condensed statements of earnings do not reflect
the total cost savings or economies of scale that the Corporation's
management believes would have been achieved had the transaction
occurred on January 1, 1997.
<PAGE> 1
EXHIBIT 23.0
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of the Registration Statement on Form S-3 (No. 33-99082), to
the incorporation by reference in the Registration Statements on Form S-8 (Nos.
33-83516 and 333-15429), and to the incorporation by reference in the
Registration Statement on Form S-4 (filed on February 4, 1999) of Martin
Marietta Materials, Inc. of our report dated July 30, 1998 relating to the
consolidated financial statements of Redland Stone Products Company which
appears in the Current Report on Form 8-K/A of Martin Marietta Materials, Inc.
dated February 17, 1999.
PricewaterhouseCoopers LLP
Philadelphia, PA
February 15, 1999
