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Filed Pursuant to Rule No. 424(b)(3)
Under the Securities Act of 1933, as amended.
Registration Statement No. 333-71793.
MARTIN MARIETTA MATERIALS, INC.
OFFER TO EXCHANGE
ALL OUTSTANDING 5.875% NOTES DUE DECEMBER 1, 2008
($200,000,000 AGGREGATE PRINCIPAL AMOUNT OUTSTANDING)
FOR
5.875% NOTES DUE DECEMBER 1, 2008
REGISTERED UNDER THE SECURITIES ACT OF 1933
OF
MARTIN MARIETTA MATERIALS, INC.
TERMS OF EXCHANGE OFFER
- - Expires 5:00 p.m., New York City time, Monday, March 22, 1999, unless
extended
- - Not subject to any condition other than that the Exchange Offer not violate
applicable law or any applicable interpretation of the Staff of the
Securities and Exchange Commission
- - All outstanding notes that are validly tendered and not validly withdrawn
will be exchanged
- - Tenders of outstanding notes may be withdrawn any time prior to 5:00 p.m.
on the business day prior to expiration of the Exchange Offer
- - The exchange of notes will not be a taxable exchange for United States
federal income tax purposes
- - We will not receive any proceeds from the Exchange Offer
- - The terms of the notes to be issued are substantially identical to the
outstanding notes, except for certain transfer restrictions and
registration rights relating to the outstanding notes
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CONSIDER CAREFULLY THE "RISK FACTORS" BEGINNING ON PAGE 14 OF THIS PROSPECTUS
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NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THE NOTES TO BE DISTRIBUTED IN THE
EXCHANGE OFFER, NOR HAVE ANY OF THESE ORGANIZATIONS DETERMINED THAT THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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The date of this Prospectus is February 18, 1999
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TABLE OF CONTENTS
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FORWARD-LOOKING STATEMENTS........................................................................................3
WHERE YOU CAN FIND MORE INFORMATION...............................................................................3
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE...................................................................3
SUMMARY...........................................................................................................5
The Exchange Offer.......................................................................................5
The Company..............................................................................................5
Recent Developments......................................................................................5
Principal Executive Offices..............................................................................6
Summary of the Terms of the Exchange Offer...............................................................6
Summary Description of the New Notes....................................................................10
Selected Consolidated Historical Financial Data.........................................................12
RISK FACTORS.....................................................................................................14
Cyclicality and Seasonality of Aggregates Business......................................................14
Geographic Concentration of Aggregates Business.........................................................14
Dependence of Magnesia-based Product Sales on Steel Industry; Competition...............................14
Environmental and Other Regulatory Matters; Litigation..................................................14
Liquid Trading Market for Notes May Not Develop.........................................................15
Consequences of Failure to Exchange.....................................................................15
RATIO OF EARNINGS TO FIXED CHARGES...............................................................................16
USE OF PROCEEDS..................................................................................................16
THE EXCHANGE OFFER...............................................................................................17
General.................................................................................................17
Expiration Dates; Extensions; Amendments................................................................19
Interest on the New Notes...............................................................................19
Procedure for Tendering.................................................................................19
Guaranteed Delivery Procedure...........................................................................21
Withdrawal of Tenders...................................................................................22
Termination.............................................................................................22
Exchange Agent..........................................................................................23
Fees and Expenses.......................................................................................23
Federal Income Tax Consequences.........................................................................24
CAPITALIZATION...................................................................................................25
SELECTED CONSOLIDATED HISTORICAL FINANCIAL DATA..................................................................26
BUSINESS.........................................................................................................28
Aggregates..............................................................................................28
Magnesia and Other Specialty Products...................................................................28
Recent Developments.....................................................................................29
DESCRIPTION OF THE NEW NOTES.....................................................................................30
General.................................................................................................30
Redemption; Sinking Fund................................................................................31
Amendment, Supplement and Waiver........................................................................31
Certain Covenants.......................................................................................31
Default and Remedies....................................................................................34
Defeasance..............................................................................................35
Governing Law...........................................................................................36
Trustee.................................................................................................36
Form of Notes...........................................................................................36
PLAN OF DISTRIBUTION.............................................................................................37
LEGAL MATTERS....................................................................................................37
EXPERTS..........................................................................................................38
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FORWARD-LOOKING STATEMENTS
This Prospectus includes forward-looking statements. We have based
these forward-looking statements on our current expectations and projections
about future events. These forward-looking statements are subject to risks and
uncertainties, including, among other things, those relating to political,
economic, regulatory, climatic, competitive, technological and other factors. We
undertake no obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise.
In light of these risks, uncertainties and assumptions, the forward-looking
events discussed in this Prospectus might not occur.
WHERE YOU CAN FIND MORE INFORMATION
We are subject to the informational requirements of the Securities
Exchange Act of 1934 and accordingly we file periodic reports, proxy statements
and other information with the Securities and Exchange Commission. You may
inspect and copy reports, proxy statements and other information at the public
reference facilities maintained by the Commission at Room 1024, 450 Fifth
Street, N.W., Judiciary Plaza, Washington, D.C. 20549 and at the regional
offices of the Commission located at 7 World Trade Center, 13th Floor, New York,
New York 10048 and Suite 1400, Northwestern Atrium Center, 14th Floor, 500 West
Madison Street, Chicago, Illinois 60661. You may obtain information on the
operation of the Commission's public reference facilities by calling the
Commission at 1-800-SEC-0330. You also may obtain copies of periodic reports,
proxy statements and other information at prescribed rates by writing to the
Commission, Public Reference Section, 450 Fifth Street, N.W., Washington, D.C.
20549. You also may access this information electronically through the
Commission's web site on the Internet at http://www.sec.gov. This web site
contains reports, proxy statements and other information regarding registrants
such as ourselves that have filed electronically with the Commission.
This Prospectus is a part of a Registration Statement filed by us with
the Commission under the Securities Act of 1933. As permitted by the rules and
regulations of the Commission, this Prospectus does not contain all of the
information contained in the Registration Statement and the exhibits and
schedules thereto. As such we make reference in this Prospectus to the
Registration Statement and to the exhibits and schedules thereto. For further
information about us and about the securities we hereby offer, you should
consult the Registration Statement and the exhibits and schedules thereto. You
should be aware that statements contained in this Prospectus concerning the
provisions of any documents filed as an exhibit to the Registration Statement or
otherwise filed with the Commission are not necessarily complete, and in each
instance reference is made to the copy of such document so filed. Each such
statement is qualified in its entirety by such reference.
We will file with First Union National Bank, which acts as trustee
pursuant to the indenture under which the new notes will be issued, within 15
days after we file with the Commission, copies of all of the annual reports and
of the information, documents and other reports (or copies of such portions of
any of the foregoing as the Commission may prescribe) which we are required to
file with the Commission pursuant to Section 13(a) and Section 15(d) of the
Exchange Act. We will also provide such other information as is required
pursuant to Section 314(a) of the Trust Indenture Act of 1939.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
We hereby incorporate by reference into this Prospectus the following
documents or information filed with the Commission (File No. 1-12744):
(a) the Company's Annual Report on Form 10-K for the fiscal ended
December 31, 1997 (the "1997 10-K");
(b) the Company's Quarterly Reports on Form 10-Q for the fiscal
quarters ended March 31, 1998, June 30, 1998 and September 30,
1998;
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(c) the Company's Current Reports on Form 8-K filed on October 9,
1998, December 8, 1998 (as amended by the Company's Current
Report on Form 8-K/A filed on February 17, 1999) and February
2, 1999; and
(d) all documents filed by the Company pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act subsequent to the date
of the Registration Statement of which this Prospectus is part
and prior to the effectiveness thereof or subsequent to the
date of this Prospectus and prior to the termination of the
offering made hereby.
For purposes of this Prospectus, statements contained herein (or
documents incorporated or deemed to be incorporated herein) will be considered
modified or superseded to the extent that a subsequent statement contained
herein (or a subsequently filed document incorporated or deemed to be
incorporated herein) modifies them. Statements or documents that are so modified
or superseded will not be considered part of this Prospectus, except as so
modified or superseded.
This Prospectus incorporates important business and financial
information about the Company that is not included in or delivered with the
document. This information is available to you without charge upon written or
oral request to Roselyn Bar, Corporate Secretary and Associate General Counsel,
Martin Marietta Materials, Inc., 2710 Wycliff Road, Raleigh, NC 27607-3033,
telephone number (919) 783-4603. To obtain timely delivery, you must request the
information no later than five business days before the date the Exchange Offer
expires. YOU MUST REQUEST THIS INFORMATION BY MONDAY, MARCH 15, 1999.
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This Exchange Offer is not being made to, nor will we accept surrenders
for exchange from, holders of outstanding notes in any jurisdiction in which
this Exchange Offer or the acceptance thereof would not be in compliance with
the Securities or Blue Sky laws of such jurisdiction.
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SUMMARY
This Summary may not contain all the information that may be important
to you. You should read the entire Prospectus, including the financial data and
related notes, before making an investment decision. The terms the "Company,"
"our company" and "we" as used in this Prospectus refer to "Martin Marietta
Materials, Inc." and its subsidiaries as a combined entity, except where it is
made clear that such term means only the parent company.
THE EXCHANGE OFFER
On December 7, 1998, we completed the private offering of $200 million
of 5.875% Notes due 2008. We entered into a registration rights agreement with
the initial purchasers in the private offering in which we agreed, among other
things, to deliver to you this Prospectus and to complete the Exchange Offer
within 225 days of the issuance of the 5.875% Notes due 2008. You are entitled
to exchange in the Exchange Offer your outstanding notes for registered notes
with substantially identical terms. If the Exchange Offer is not completed
within 225 days of the issuance of the 5.875% Notes due 2008, then the interest
rates on the notes will be increased by 0.25% for the first 90 days after such
time and by an additional 0.25% thereafter, until the Exchange Offer is
completed. You should read the discussion under the headings "Summary
Description of the New Notes" and "Description of the New Notes" for further
information regarding the registered notes.
We believe that the notes issued in the Exchange Offer may be resold
by you without compliance with the registration and prospectus delivery
provisions of the Securities Act, subject to certain conditions. You should read
the discussion under the headings "Summary of the Terms of Exchange Offer" and
"The Exchange Offer" for further information regarding the Exchange Offer and
resale of the notes.
THE COMPANY
We are the United States' second largest producer of aggregates and
also manufacture and market magnesia-based products. Our aggregates segment
processes and sells granite, sandstone, limestone and other aggregates products
for use in all sectors of the public infrastructure, industrial, commercial and
residential construction industries. Through our Magnesia Specialties Division,
we manufacture and market dolomitic lime and magnesia and other specialty
products, including heat-resistant refractory products for the steel industry
and magnesia and other specialty chemicals products for industrial, agricultural
and environmental uses, including wastewater treatment, sulphur dioxide
scrubbing and acid neutralization. In 1998, our aggregates business accounted
for 87% of our total revenues and our magnesia and other specialty products
segment accounted for 13% of our total revenues.
You should read the discussion under the heading "Business" for further
information regarding the Company.
RECENT DEVELOPMENTS
On December 4, 1998, we acquired the common stock of Redland Stone
Products Company from an affiliate of Lafarge SA for $272 million in cash plus
normal balance sheet liabilities, subject to certain post-closing adjustments
relating to working capital, plus approximately $8 million for certain other
assumed liabilities and transaction costs. We did not assume any long-term debt
of Redland Stone. Redland Stone is the leading producer of aggregates and
asphaltic concrete in the State of Texas and has mineral reserves which exceed
1.0 billion tons. Redland Stone serves the San Antonio, Houston and South Texas
areas. Aggregates production in 1998 for Redland Stone was approximately 14
million tons, asphaltic concrete production was approximately 3 million tons and
revenue was approximately $131 million. Redland Stone is operated as a new
division of the Company, with its headquarters in San Antonio.
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As of October 31, 1998, we purchased an initial 14% interest in the
business of Meridian Aggregates Company. The transaction provides a mechanism
for the Company to purchase the remaining interest in Meridian at a
predetermined formula price within five years, and the Meridian investors may
require the Company to purchase their interests beginning December 31, 2000,
accelerated only by the death of an investor. Meridian operates 26 aggregates
production facilities and eight rail-served distribution yards in 11 states in
the southwestern and western United States with approximately 1.4 billion tons
of mineral reserves. Meridian's revenue in 1998 was approximately $146 million
on sales of over 23 million tons.
On January 26, 1999, we issued a press release reporting sales and
earnings for the three-month and full-year periods ended December 31, 1998. For
the full year, sales were $1.058 billion, an increase of 17% over sales of
$900.9 million in 1997. Earnings from operations rose 21% to $196.6 million,
while net earnings rose 17% to $115.6 million. Earnings per share improved to
$2.48 per diluted share from $2.13 in the prior year. At December 31, 1998,
long-term debt including current maturities on long-term debt and commercial
paper was $617.8 million and the debt to total capitalization ratio was 48%.
Shareholders' equity at December 31, 1998 was $667.7 million.
PRINCIPAL EXECUTIVE OFFICES
Our executive offices are located at 2710 Wycliff Road, Raleigh, NC
27607-3033, telephone number (919) 781-4550.
SUMMARY OF THE TERMS OF THE EXCHANGE OFFER
The Exchange Offer relates to the exchange of up to $200 million
aggregate principal amount of outstanding notes for an equal aggregate principal
amount of new notes. The new notes will be obligations of the Company entitled
to the benefits of the indenture governing the outstanding notes. The form and
terms of the new notes are identical in all material respects to the form and
terms of the outstanding notes except that the new notes have been registered
under the Securities Act, and therefore are not entitled to the benefits of the
registration rights agreement that was executed as part of the offering of the
outstanding notes. The registration rights agreement provides for registration
rights with respect to the outstanding notes and for certain contingent
increases in the interest rates of the outstanding notes if the Company fails to
meet certain registration obligations under the agreement.
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Registration Rights Agreement........... You are entitled to exchange your notes for registered notes with
substantially identical terms. The Exchange Offer is intended to satisfy
these rights. After the Exchange Offer is complete, you will no longer be
entitled to any exchange or registration rights with respect to your notes.
The Exchange Offer...................... We are offering to exchange $1,000 amount of 5.875% Notes due 2008 which
have been registered under the Securities Act for each $1,000 principal
amount of our outstanding 5.875% Notes due 2008 which were issued in
December 1998 in a private offering. In order to be exchanged, an
outstanding note must be properly tendered and accepted. All outstanding
notes that are validly tendered and not validly withdrawn will be exchanged.
As of this date there are $200 million principal amount of notes
outstanding. We will issue new notes on or promptly after the expiration the
Exchange Offer.
Resale of the New Notes................. Based on an interpretation by the staff of the Commission set forth in
no-action letters issued to third parties, including "Exxon Capital Holdings
Corporation" (available May 13, 1988), "Morgan Stanley & Co. Incorporated"
(available June 5, 1991), "Mary Kay Cosmetics, Inc." (available June 5,
1991) and "Warnaco, Inc."
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(available October 11, 1991), we believe that the notes issued in the
Exchange Offer may be offered for resale, resold and otherwise transferred
by you without compliance with the registration and prospectus delivery
provisions of the Securities Act provided that:
- the notes issued in the Exchange Offer are being acquired in the
ordinary course of business;
- you are not participating, do not intend to participate, and have no
arrangement or understanding with any person to participate, in the
distribution of the notes issued to you in the Exchange Offer;
- you are not a broker-dealer who purchased such outstanding notes directly
from us for resale pursuant to Rule 144A or any other available exemption
under the Securities Act; and
- you are not an "affiliate" of ours.
If you do not meet all of the above conditions and you transfer any note
issued to you in the Exchange Offer without delivering a prospectus meeting
the requirements of the Securities Act or without an exemption from
registration of your notes from such requirements, you may incur liability
under the Securities Act. We do not assume or indemnify you against such
liability.
Each broker-dealer that is issued notes in the Exchange Offer for its own
account in exchange for notes which were acquired by such broker-dealer as a
result of market-making or other trading activities must acknowledge that it
will deliver a prospectus meeting the requirements of the Securities Act in
connection with any resale of the notes issued in the Exchange Offer. The
Letter of Transmittal states that by so acknowledging and by delivering a
prospectus, such a broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act. A broker-dealer may
use this Prospectus for an offer to resell, resale or other retransfer of the
notes issued to it in the Exchange Offer.
We have agreed to keep the Registration Statement effective starting with the
time the new notes are first issued and ending on the earlier of 180 days
after the Exchange Offer is completed or the time when broker-dealers referred
to in the paragraph above no longer own any old notes. We believe that no
registered holder of the outstanding notes is an affiliate (as such term is
defined in Rule 405 of the Securities Act) of the Company. The Exchange Offer
is not being made to, nor will we accept surrenders for exchange from, holders
of outstanding notes in any jurisdiction in which this Exchange Offer or the
acceptance thereof would not be in compliance with the securities or blue sky
laws of such jurisdiction.
Expiration Date......................... The Exchange Offer will expire at 5:00 p.m., New York City time, Monday,
March 22, 1999, unless we decide to extend the expiration date.
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Accrued Interest on the Exchange
Notes and the Outstanding Notes......... The new notes will bear interest from December 7, 1998. Holders of outstanding
notes whose notes are accepted for exchange will be deemed to have waived the
right to receive any payment of interest on such outstanding notes accrued
from December 7, 1998 to the date of the issuance of the new notes.
Consequently, holders who exchange their outstanding notes for new notes will
receive the same interest payment on June 1, 1999 (the first interest payment
date with respect to the outstanding notes and the new notes to be issued in
the Exchange Offer) that they would have received had they not accepted the
Exchange Offer.
Termination of the Exchange
Offer................................... We may terminate the Exchange Offer if we determine that our ability to
proceed with the Exchange Offer could be materially impaired due to any legal
or governmental action, new law, statute, rule or regulation or any
interpretation of the staff of the Commission of any existing law, statute,
rule or regulation. We do not expect any of the foregoing conditions to occur,
although there can be no assurance that such conditions will not occur. You
will have certain rights against our Company under the registration rights
agreement executed when we issued the outstanding notes should we fail to
consummate the Exchange Offer.
Procedures for Tendering
Outstanding Notes....................... The outstanding notes were issued in the form of one global note which was
deposited with the Depositary Trust Company ("DTC"). Holders of the
outstanding notes own certificateless interests in the global note evidenced
by records in book-entry form maintained by DTC.
If you are a holder of an outstanding note in book-entry form and you wish to
tender your note for exchange pursuant to the Exchange Offer, you must
transmit to First Union National Bank, as exchange agent, on or prior to the
Expiration Date:
either
- a properly completed and duly executed Letter of Transmittal, which accompanies
this Prospectus, or a facsimile of the Letter of Transmittal, including all
other documents required by the Letter of Transmittal, to the Exchange Agent at
the address set forth on the cover page of the Letter of Transmittal; or
- a computer-generated message transmitted by means of the Automated Tender Offer
Program system of DTC and received by the Exchange Agent and forming a part of a
confirmation of book entry transfer in which you acknowledge and agree to be
bound by the terms of the Letter of Transmittal;
and, either
- a timely confirmation of book-entry transfer of your
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outstanding notes into the Exchange Agent's account at DTC pursuant to the
procedure for book-entry transfers described in this Prospectus under the
heading "The Exchange Offer--Procedure for Tendering," must be received by the
Exchange Agent on or prior to the Expiration Date; or
- the documents necessary for compliance with the guaranteed delivery
procedures described below.
Under certain circumstances, if you are a holder of outstanding notes in
book-entry form, you are entitled to receive certificated notes in exchange
for your book entry notes. You can find a description of these circumstances
under the heading "Description of New Notes-Form of Notes." However, as of
this date, no certificated notes were issued and outstanding. If you acquire
certificated notes prior to the Expiration Date, you must tender them in
accordance with the procedures described in this Prospectus under the heading
"Exchange Offer-Procedure for Tendering."
By executing the Letter of Transmittal, each holder will represent to us that,
among other things, (i) the notes to be issued in the Exchange Offer are being
obtained in the ordinary course of business of the person receiving such new
notes whether or not such person is the holder, (ii) neither the holder nor
any such other person has an arrangement or understanding with any person to
participate in the distribution of such new notes and (iii) neither the holder
nor any such other person is an "affiliate" of the Company as defined in Rule
405 under the Securities Act.
Special Procedures for Beneficial
Owners.................................. If you are the beneficial owner of notes and your name does not appear on a
security position listing of DTC as the holder of such notes, or if you are a
beneficial owner of notes that are registered in the name of a broker, dealer,
commercial bank, trust company or other nominee, and you wish to tender such
notes in the Exchange Offer, you should promptly contact the person in whose
name your notes are registered and instruct such person to tender on your
behalf. If you wish to tender on your own behalf you must, prior to executing
the Letter of Transmittal and delivering your outstanding notes, either make
appropriate arrangements to register ownership of the outstanding notes in
your name or obtain a properly completed bond power from the registered
holder. The transfer of record ownership may take considerable time.
Guaranteed Delivery Procedures.......... If you wish to tender your notes and time will not permit your documents to
reach the Exchange Agent by the Expiration Date, or the procedure for
book-entry transfer cannot be completed on time or certificates for your notes
cannot be delivered on time, you may tender your notes pursuant to the
procedures described in this Prospectus under the heading "The Exchange
Offer-Guaranteed Delivery Procedure."
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Withdrawal Rights....................... You may withdraw the tender of your notes at any time prior to 5:00 p.m., New
York City time, on Friday, March 19, 1999, the business day prior to the
Expiration Date.
Acceptance of Outstanding Notes
and Delivery of Exchange Notes.......... Subject to certain conditions (as summarized above in "Termination of the
Exchange Offer" and described more fully under the heading "The Exchange
Offer-Termination"), we will accept for exchange any and all outstanding notes
which are tendered in the Exchange Offer prior to 5:00 p.m., New York City
time, on the Expiration Date. The notes issued pursuant to the Exchange Offer
will be delivered promptly following the Expiration Date.
Certain United States Federal
Income Tax Consequences................. The exchange of notes in the Exchange Offer will generally not be a taxable
exchange for United States federal income tax purposes. We believe you will
not recognize any taxable gain or loss or any interest income as a result of
such exchange. However, you should consult your own tax advisor.
Use of Proceeds......................... We will not receive any proceeds from the issuance of notes pursuant to
the Exchange Offer. We will pay all expenses incident to the Exchange
Offer.
Exchange Agent.......................... First Union National Bank is serving as agent in connection with Exchange
Offer.
SUMMARY DESCRIPTION OF THE NEW NOTES
Securities Offered..................... $200 million aggregate principal amount of 5.875% Notes due 2008.
Maturity Date.......................... December 1, 2008.
Interest Payment Dates................. June 1 and December 1 of each year, commencing June 1, 1999.
Denominations.......................... $1,000 and integral multiples thereof.
Sinking Fund........................... None.
Ranking................................ The notes are unsecured obligations of the Company and will rank equally
with each other and with all other unsecured and unsubordinated debt of
the Company. See "Description of the New Notes-General".
Registration Covenant;
Exchange Offer......................... Under the registration rights agreement executed as part of the offering
of the outstanding notes, we have agreed:
- to consummate the exchange offer within 45 days of the effective
date of our registration statement; and
- to use our best efforts to cause to become effective a shelf registration
statement for the resale of the notes if applicable
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law or interpretations of the staff of the Commission are changed such that
the note to be received in the Exchange Offer would not be transferable
without restriction under the Securities Act, or if the exchange offer has not
been completed within 225 days following the issue date of the outstanding
notes, or if the Exchange Offer is not available to all holders of the
outstanding notes.
The interest rate on the notes will increase if we do not comply with
certain of our obligations under the registration rights agreement. See
"Exchange Offer".
Risk Factors........................... You should carefully consider the specific factors set forth under "Risk
Factors" as well as the other information and data included in this
Prospectus.
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SELECTED CONSOLIDATED HISTORICAL FINANCIAL DATA
The following table presents our summary of historical financial
information as of and for the fiscal years ended December 31, 1993, 1994, 1995,
1996 and 1997 and the nine-month periods ended September 30, 1997 and 1998. We
derived the information set forth below for each of the years ended December 31,
1993, 1994, 1995, 1996 and 1997 from our audited consolidated financial
statements and notes thereto incorporated by reference in the Prospectus. Ernst
& Young LLP, independent auditors, audited these consolidated financial
statements. We derived the information set forth below for the nine-month
periods ended September 30, 1997 and 1998 from our unaudited consolidated
condensed financial information. In the opinion of our management, our unaudited
consolidated condensed financial information includes all adjustments
(consisting of normal recurring adjustments) necessary for a fair presentation.
The earnings results for the nine-month period ended September 30, 1998 are not
necessarily indicative of the results that may be expected for the full year
ended December 31, 1998.
Since the information in this table is only a summary, you should read
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and the audited consolidated financial statements and related notes
which are incorporated by reference in the Prospectus.
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NINE MONTHS
ENDED
YEARS ENDED DECEMBER 31, SEPTEMBER 30,
------------------------------------------------------ ----------------------
1993 1994 1995 1996 1997 1997(1) 1998
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(DOLLARS IN THOUSANDS) (UNAUDITED)
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STATEMENT OF EARNINGS DATA:
Net sales .................. $ 452,906 $ 501,660 $664,406 $721,947 $ 900,863 $ 662,070 $ 776,717
Gross profit ............... 121,315 139,143 167,164 182,510 235,269 175,567 208,544
Earnings from operations ... 76,395 91,887 107,565 120,676 162,770 122,758 146,173
Interest expense ........... 3,234 6,865 9,733 10,121 16,899 11,380 17,085
Earnings before taxes on
income, extraordinary item
and net cumulative effect
of accounting changes..... 74,058 90,420 103,791 118,953 151,212 116,608 129,163
Extraordinary item(2) ...... -- (4,641) -- -- -- -- --
Net cumulative effect of
accounting changes(3) ...... (17,512) -- -- -- -- -- --
Net earnings ............... 30,489 53,704 67,551 78,628 98,529 75,550 84,899
BALANCE SHEET DATA:
Working capital(4) ......... $ 89,119 $ 132,421 $141,019 $183,022 $ 213,777 $ 225,150 $ 244,524
Net property, plant and
equipment .................. 278,310 291,622 392,223 408,820 591,420 603,323 634,241
Total assets ............... 496,991 593,891 789,371 768,918 1,105,713 1,145,797 1,236,388
Long-term debt (including
current maturities of
long-term debt) ............ 235,312 108,224 228,726 127,163 312,106 353,191 334,370
Shareholders' equity ....... 145,447 376,269 423,545 480,977 561,836 544,340 641,794
FINANCIAL RATIOS:
Ratio of earnings to fixed
charges (unaudited)(5)(6) .. 16.57 12.39 10.16 11.12 8.62 10.21 7.89
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(1) The financial data for the nine months ended September 30, 1997 include the
operations of the American Aggregates Corporation business from its
acquisition by the Company on May 28, 1997.
(2) This amount represents the after tax extraordinary loss on the early
extinguishment of debt associated with the February 1994 in-substance
defeasance of $125 million of long-term indebtedness.
(3) Net cumulative effect of accounting changes reflects the 1993 adoption of
the change in methods of accounting for income taxes, postretirement
benefits other than pensions and postemployment benefits.
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<PAGE> 13
(4) Working capital at September 30, 1998 excludes $19 million of United States
commercial paper borrowings which have been included as long-term debt
(including current maturities of long-term debt).
(5) The ratio of earnings to fixed charges has been computed by dividing
earnings and fixed charges, excluding capitalized interest, by fixed
charges. For purposes of this ratio, "earnings" consist of earnings before
taxes on income, extraordinary item and net cumulative effect of
accounting changes, adjusted for undistributed earnings of less-than-
fifty-percent-owned affiliates. "Fixed charges" represent interest expense
relating to any indebtedness whether expensed or capitalized, as well as
such portion of rental expense as can be demonstrated to be representative
of an interest factor.
(6) The Company was incorporated in November 1993, at which time it assumed the
obligations with respect to certain indebtedness of its parent.
Accordingly, the ratio of earnings to fixed charges may not be comparable
in all periods presented.
13
<PAGE> 14
RISK FACTORS
An investment in the New Notes is subject to certain risks. You should
carefully consider the following factors, as well as the more detailed
descriptions elsewhere in this Prospectus in evaluating the Exchange Offer.
CYCLICALITY AND SEASONALITY OF AGGREGATES BUSINESS
Our Aggregates division markets its products primarily to the
construction industry, with approximately half of its shipments made to
contractors in connection with highway and other public infrastructure projects
and the balance of its shipments made primarily to contractors in connection
with commercial and residential construction projects. Accordingly, our
profitability is sensitive to national, as well as regional and local, economic
conditions, and particularly to cyclical swings in construction spending, which
is affected by fluctuations in interest rates, and demographic and population
shifts, and to changes in the levels of infrastructure spending funded by the
public sector. Due to our high level of fixed costs associated with aggregates
production, our operating leverage can be substantial.
In addition, our aggregates business is highly seasonal due primarily
to the effect of weather conditions on construction activity in our aggregates
markets. Accordingly, our second and third quarters are generally the strongest
and the first quarter the weakest.
GEOGRAPHIC CONCENTRATION OF AGGREGATES BUSINESS
Our aggregates business is concentrated principally in the Southeast,
Southwest, Midwest and Central states and is, therefore, dependent upon the
economies of those regions. Our distribution system uses trucks, an extensive
river barge network and ocean going capability, and our recent acquisitions have
expanded our ability to ship by rail. Accordingly, in addition to increasing our
geographic presence through acquisitions, we have also enhanced our reach
through our ability to provide cost-effective coverage of certain coastal
markets on the east coast and reaching as far as Texas, and to ship products in
and to Canada, the Caribbean and parts of South America, as well as to
additional geographic areas which can be accessed economically by our expanded
distribution system. However, our five largest shipment states account for
approximately 60% of total shipments.
DEPENDENCE OF MAGNESIA-BASED PRODUCT SALES ON STEEL INDUSTRY; COMPETITION
Our refractory and dolomitic lime products are sold primarily to the
steel industry, and such sales are highly dependent on economic conditions, the
levels of steel production and imports and price competition among suppliers to
the steel industry. We compete principally on the basis of quality, price and
technical support for our refractory and dolomitic lime products.
ENVIRONMENTAL AND OTHER REGULATORY MATTERS; LITIGATION
Our operations are subject to and affected by federal, state and local
laws and regulations relating to the environment, health and safety and other
regulatory matters. Certain of our operations may from time to time involve the
use of substances that are classified as toxic or hazardous substances within
the meaning of these laws and regulations. We believe that our operations and
facilities, both owned and leased, are in substantial compliance with applicable
laws and regulations and that any noncompliance is not likely to have a material
adverse effect on our operations or our financial condition. Despite these
compliance efforts, risk of environmental liability is inherent in the operation
of our businesses, as it is with other companies engaged in similar businesses,
and there can be no assurance that environmental liabilities will not have a
material adverse effect on us in the future. In addition, future events, such as
changes in existing laws or regulations or enforcement policies, or further
investigation or evaluation of the potential health hazards of certain of our
products or business activities, may give rise to additional compliance and
other costs that could have a material adverse effect on the Company.
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<PAGE> 15
We are involved from time to time in various legal proceedings and
claims that arise out of our operations, and are a defendant in several
lawsuits. In our opinion, the outcome of pending or threatened litigation is
unlikely to have a material adverse effect on our operations or our financial
condition; however, there can be no assurance that an adverse outcome in a
pending or future legal proceeding would not have such a material adverse
effect.
LIQUID TRADING MARKET FOR NOTES MAY NOT DEVELOP
There has not been an established trading market for the notes.
Although each initial purchaser has informed us that it currently intends to
make a market in the outstanding notes and, if issued, the new notes, which will
replace the outstanding notes, it has no obligation to do so and may discontinue
making a market at any time without notice.
The outstanding notes are eligible for trading in the Private
Offerings, Resale and Trading through the Automatic Linkage ("PORTAL") market.
However, we do not intend to apply for listing of the outstanding notes or, if
issued, the new notes, on any securities exchange or for quotation through the
National Association of Securities Dealers Automated Quotation System.
The liquidity of any market for the notes will depend upon the number
of holders of the notes, our performance, the market for similar securities, the
interest of securities dealers in making a market in the notes and other
factors. A liquid trading market may not develop for the notes.
CONSEQUENCES OF FAILURE TO EXCHANGE
Untendered outstanding notes that are not exchanged for new notes
pursuant to the Exchange Offer will remain restricted securities. Outstanding
notes will continue to be subject to the following restrictions on transfer: (i)
outstanding notes may be resold only if registered pursuant to the Securities
Act, if an exemption from registration is available thereunder, or if neither
such registration nor such exemption is required by law, (ii) outstanding notes
shall bear a legend restricting transfer in the absence of registration or an
exemption therefrom and (iii) a holder of outstanding notes who desires to sell
or otherwise dispose of all or any part of its outstanding notes under an
exemption from registration under the Securities Act, if requested by us, must
deliver to us an opinion of independent counsel experienced in Securities Act
matters, reasonably satisfactory in form and substance to us, that such
exemption is available.
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<PAGE> 16
RATIO OF EARNINGS TO FIXED CHARGES
The ratio of earnings to fixed charges for each of the periods
indicated is as follows:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------------------------------------
1993 1994 1995 1996 1997
----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges.....
16.57 12.39 10.16 11.12 8.62
===== ===== ===== ===== =====
</TABLE>
We computed the ratio of earnings to fixed charges by dividing earnings
and fixed charges, excluding capitalized interest, by fixed charges. For
purposes of this ratio, "earnings" consist of earnings before taxes on income,
extraordinary item and net cumulative effect of accounting changes, adjusted for
undistributed earnings of less-than-fifty-percent-owned affiliates. "Fixed
charges" represent interest expense relating to any indebtedness whether
expensed or capitalized, as well as such portion of rental expense as can be
demonstrated to be representative of an interest factor.
We incorporated in November 1993, at which time we assumed the
obligations with respect to certain indebtedness of our parent. Accordingly, the
ratio of earnings to fixed charges may not be comparable in all periods
presented.
USE OF PROCEEDS
We will not receive any cash proceeds from the issuance of the new
notes pursuant to the Exchange Offer. We received net proceeds from the sale of
the outstanding notes of approximately $197 million, which we used to repay a
portion of our United States commercial paper. At December 31, 1998, following
our acquisition of Redland Stone, we had outstanding $165 million of United
States commercial paper, bearing interest at effective rates ranging from 5.26%
to 5.78% and with maturity dates not exceeding 84 days from the date of offer or
sale.
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<PAGE> 17
THE EXCHANGE OFFER
GENERAL
In connection with the sale of the outstanding notes (the "Old Notes"),
the Company entered into an Exchange and Registration Rights Agreement (the
"Registration Rights Agreement") pursuant to which the Company has agreed, for
the benefit of the holders of the Notes, (i) to file with the Commission, within
60 days following the issue date of the Old Notes, a registration statement (the
"Exchange Offer Registration Statement") under the Securities Act relating to an
exchange offer (the "Exchange Offer") pursuant to which notes substantially
identical to the Old Notes (except that such notes (a) will not contain terms
with respect to transfer restrictions, (b) will have been registered under the
Securities Act, and (c) will not contain registration rights or contingent
interest reset provisions applicable to the Old Notes) (the "New Notes" and,
together with the Old Notes, the "Notes"), would be offered in exchange for the
Old Notes tendered at the option of the holders thereof and (ii) to use its best
efforts to cause the Exchange Offer Registration Statement to become effective
as soon as practicable thereafter, but in no event later than 180 days from the
issue date of the Old Notes. The Company has further agreed to commence the
Exchange Offer promptly after the Exchange Offer Registration Statement has
become effective, hold the offer open for at least 30 days and exchange New
Notes for all Old Notes validly tendered and not withdrawn before the expiration
of the Exchange Offer.
Under existing Commission interpretations, the New Notes will in
general be freely transferable after the Exchange Offer without further
registration under the Securities Act, except that broker-dealers receiving New
Notes in the Exchange Offer ("Participating Broker-Dealers") will be subject to
a prospectus delivery requirement with respect to resales of those New Notes.
The Commission has taken the position that Participating Broker-Dealers may
fulfill their prospectus delivery requirements with respect to the New Notes
(other than a resale of New Notes received in exchange for Old Notes
constituting an unsold allotment from the original sale of the Old Notes) by
delivery of the prospectus contained in the Exchange Offer Registration
Statement. Under the Registration Rights Agreement, the Company is required to
allow Participating Broker-Dealers and other persons, if any, subject to similar
prospectus delivery requirements to use the prospectus contained in the Exchange
Offer Registration Statement in connection with the resale of such New Notes.
The Exchange Offer Registration Statement will be kept effective to permit
resales of New Notes acquired by broker-dealers pursuant to the Exchange Offer
for a period ending on the earlier of 180 days after the Exchange Offer has been
consummated or such earlier time as such broker-dealers cease to own any New
Notes. Each holder of Old Notes who wishes to exchange such Old Notes for New
Notes in the Exchange Offer will be required to represent that any New Notes to
be received by it will be acquired in the ordinary course of its business, that
at the time of the commencement of the Exchange Offer it has no arrangement with
any person to participate in the distribution (within the meaning of the
Securities Act) of the New Notes and that it is not an affiliate of the Company.
If (i) prior to completion of the Exchange Offer, existing Commission
interpretations are changed such that the New Notes would not be transferable
without restriction under the Securities Act, (ii) the Exchange Offer has not
been completed within 225 days following the issue date of the Old Notes or
(iii) the Exchange Offer is not available to any holder of the Old Notes, the
Company will, in lieu of (or, in the case of clause (iii), in addition to)
completing the Exchange Offer, file and use its best efforts to cause a
registration statement under the Securities Act relating to a shelf registration
of the Old Notes for resale by holders (the "Resale Registration") to become
effective on or prior to the applicable date set forth in the Registration
Rights Agreement (the "Resale Registration Filing Deadline") and to remain
effective until the earlier of two years following the Issue Date or such time
as there are no longer any Registrable Securities outstanding (as that term is
defined in the Registration Rights Agreement). The Company will, in the event of
the Resale Registration, provide to the holders of the applicable Old Notes
copies of the prospectus that is a part of the registration statement filed in
connection with the Resale Registration, notify such holders when the Resale
Registration for the applicable Old Notes has become effective and take certain
other actions as are required to permit unrestricted resales of the applicable
Old Notes. A holder of Old Notes that sells such Old Notes pursuant to the
Resale Registration generally would be
17
<PAGE> 18
required to be named as a selling noteholder in the related prospectus and to
deliver a prospectus to purchasers, would be subject to certain of the civil
liability provisions under the Securities Act in connection with such sales and
would be bound by the provisions of the Registration Rights Agreement that are
applicable to such a holder (including certain indemnification obligations).
If (i) the Company has not filed the Exchange Offer Registration
Statement within 60 days following the Issue Date or, if applicable, the Resale
Registration by the Resale Registration Filing Deadline or (ii) the Exchange
Offer Registration Statement has not become effective within 180 days following
the issue date of the Old Notes or, if applicable, the Resale Registration has
not become effective within 120 days after the Resale Registration is filed or
(iii) the Exchange Offer has not been completed within 45 days after the
effective date of the Exchange Offer Registration Statement or (iv) any
registration statement required by the Registration Rights Agreement is filed
and becomes effective but shall thereafter cease to be effective (except as
specifically permitted therein) without being succeeded immediately by an
additional effective registration statement (any such event referred to in
clauses (i) through (iv), a "Registration Default" and each period during which
a Registration Default has occurred and is continuing, a "Registration Default
Period"), then the per annum interest rate on the Old Notes will increase by
0.25% for the first 90 days of the Registration Default Period and by an
additional 0.25% thereafter for the remaining portion of the Registration
Default Period (at which time the interest rate will be reduced to the rate
otherwise in effect).
In the event the Exchange Offer is consummated, the Company will not be
required to file a Shelf Registration Statement relating to any outstanding Old
Notes other than those held by persons not eligible to participate in the
Exchange Offer, and the interest rate on such Old Notes will remain at its
initial level of 5.875%. The Exchange Offer shall be deemed to have been
consummated upon the earlier to occur of (i) the Company having exchanged New
Notes for all outstanding Old Notes (other than Old Notes held by persons not
eligible to participate in the Exchange Offer) pursuant to the Exchange Offer
and (ii) the Company having exchanged, pursuant to the Exchange Offer, New Notes
for all Old Notes that have been tendered and not withdrawn on the Expiration
Date. Upon consummation, holders of Old Notes seeking liquidity in their
investment would have to rely on exemptions to registration requirements under
the securities laws, including the Securities Act. See "Risk
Factors--Consequences of Failure to Exchange."
Upon the terms and subject to the conditions set forth in this
Prospectus and in the accompanying Letter of Transmittal, the Company will
accept all Old Notes validly tendered prior to 5:00 p.m., New York City time, on
the Expiration Date. The Company will issue $ 1,000 principal amount of New
Notes in exchange for each $1,000 principal amount of outstanding Old Notes
accepted in the Exchange Offer. Holders may tender some or all of their Old
Notes pursuant to the Exchange Offer in denominations of $1,000 and integral
multiples thereof.
As of the date of this Prospectus, $200 million aggregate principal
amount of the Old Notes is outstanding. In connection with the issuance of the
Old Notes, the Company arranged for the Old Notes initially purchased by
Qualified Institutional Buyers to be issued and transferable in book-entry form
through the facilities of DTC, acting as depositary. The New Notes will also be
issuable and transferable in book-entry form through DTC.
This Prospectus, together with the accompanying Letter of Transmittal,
is being sent to all registered holders as of February 12, 1999 (the "Record
Date").
The Company shall be deemed to have accepted validly tendered Old Notes
when, as and if the Company has given oral or written notice thereof to the
Exchange Agent. See "--Exchange Agent." The Exchange Agent will act as agent for
the tendering holders of Old Notes for the purpose of receiving New Notes from
the Company and delivering New Notes to such holders. If any tendered Old Notes
are not accepted for exchange because of an invalid tender or the occurrence of
certain other events set forth herein, certificates for any such unaccepted Old
Notes will be returned, without cost, to the tendering holder thereof as
promptly as practicable after the Expiration Date.
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<PAGE> 19
Holders of Old Notes who tender in the Exchange Offer will not be
required to pay brokerage commissions or fees or, subject to the instructions in
the Letter of Transmittal, transfer taxes with respect to the exchange of Old
Notes pursuant to the Exchange Offer. The Company will pay all charges and
expenses, other than certain applicable taxes, in connection with the Exchange
Offer. See "--Fees and Expenses."
EXPIRATION DATES; EXTENSIONS; AMENDMENTS
The term "Expiration Date" shall mean March 22, 1999 unless the
Company, in its sole discretion, extends the Exchange Offer, in which case the
term "Expiration Date" shall mean the latest date to which the Exchange Offer is
extended.
In order to extend the Expiration Date, the Company will notify the
Exchange Agent of any extension by oral or written notice and will mail to the
record holders of Old Notes an announcement thereof, each prior to 9:00 a.m.,
New York City time, on the next business day after the previously scheduled
Expiration Date. Such announcement may state that the Company is extending the
Exchange Offer for a specified period of time.
The Company reserves the right (i) to delay acceptance of any Old
Notes, to extend the Exchange Offer or to terminate the Exchange Offer and to
refuse to accept Old Notes not previously accepted, if any of the conditions set
forth herein under "--Termination" shall have occurred and shall not have been
waived by the Company (if permitted to be waived by the Company), by giving oral
or written notice of such delay, extension or termination to the Exchange Agent,
and (ii) to amend the terms of the Exchange Offer in any manner deemed by it to
be advantageous to the holders of the Old Notes. Any such delay in acceptance,
extension, termination or amendment will be followed as promptly as practicable
by oral or written notice thereof. If the Exchange Offer is amended in a manner
determined by the Company to constitute a material change, the Company will
promptly disclose such amendment in a manner reasonably calculated to inform the
holders of the Old Notes of such amendment.
Without limiting the manner by which the Company may choose to make
public announcements of any delay in acceptance, extension, termination or
amendment of the Exchange Offer, the Company shall have no obligation to
publish, advertise, or otherwise communicate any such public announcement, other
than by making a timely release to the Dow Jones New Service.
INTEREST ON THE NEW NOTES
The New Notes will bear interest from December 7, 1998, payable
semiannually on June 1 and December 1 of each year commencing on June 1, 1999,
at the rate of 5.875% per annum. Holders of Old Notes whose Old Notes are
accepted for exchange will be deemed to have waived the right to receive any
payment in respect of interest on the Old Notes accrued from December 7, 1998
until the date of the issuance of the New Notes. Consequently, holders who
exchange their Old Notes for New Notes will receive the same interest payment on
June 1, 1999 (the first interest payment date with respect to the Old Notes and
the New Notes) that they would have received had they not accepted the Exchange
Offer.
PROCEDURE FOR TENDERING
Any financial institution that is a participant in DTC's Book-Entry
Transfer Facility system may make book-entry delivery of the Old Notes held as
Book-Entry Interests (as defined below under the heading "Description of New
Notes-Form of Notes") by causing DTC to transfer such Old Notes into the
Exchange Agent's account in accordance with DTC's procedure for such transfer.
Although delivery of Old Notes may be effected through book-entry transfer into
the Exchange Agent's account DTC, the Letter of Transmittal (or facsimile
thereof), with any required signature guarantees and any other required
documents, must, in any case, be transmitted to and received or confirmed by the
Exchange Agent at its addresses set forth herein under "--Exchange Agent" prior
to 5:00 p.m., New York City time, on the
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<PAGE> 20
Expiration Date. DELIVERY OF DOCUMENTS TO DTC IN ACCORDANCE WITH ITS PROCEDURES
DOES NOT CONSTITUTE DELIVERY TO THE EXCHANGE AGENT.
To tender in the Exchange Offer, a holder of Certificated Notes (as
defined below under the heading "Description of New Notes-Form of Notes") must
complete, sign and date the Letter of Transmittal, or a facsimile thereof, have
the signatures thereon guaranteed if required by the Letter of Transmittal, and
mail or otherwise deliver such Letter of Transmittal or such facsimile, together
with the Old Notes (unless such tender is being effected pursuant to the
procedure for book-entry transfer described below) and any other required
documents, to the Exchange Agent prior to 5:00 p.m., New York City time, on the
Expiration Date.
The tender by a holder of Old Notes will constitute an agreement
between such holder and the Company in accordance with the terms and subject to
the conditions set forth herein and in the Letter of Transmittal.
Delivery of all documents must be made to the Exchange Agent at its
address set forth herein. Holders may also requests that their respective
brokers, dealers, commercial banks, trust companies or nominees effect such
tender for such holders.
The method of delivery of Old Notes and the Letters of Transmittal and
all other required documents to the Exchange Agent is at the election and risk
of the holders. Instead of delivery by mail, it is recommended that holders use
an overnight or hand delivery service. In all cases, sufficient time should be
allowed to assure timely delivery. No Letter of Transmittal or Old Notes should
be sent to the Company.
Only a holder of Old Notes may tender such Old Notes in the Exchange
Offer. The term "holder" with respect to the Exchange Offer means any person in
whose name Old Notes are registered on the books of the Company or any other
person who has obtained a properly completed bond power from the registered
holder, or any person whose Old Notes are held of record by DTC who desires to
deliver such Old Notes by book entry transfer at DTC.
Any beneficial holder whose Old Notes are registered in the name of his
broker, dealer, commercial bank, trust company or other nominee and who wishes
to tender should contact such registered holder promptly and instruct such
registered holder to tender on his behalf. If such beneficial holder wishes to
tender on his own behalf, such beneficial holder must, prior to completing and
executing the Letter of Transmittal and delivering his Old Notes, either make
appropriate arrangements to register ownership of the Old Notes in such holder's
name or obtain a properly completed bond power from the registered holder. The
transfer of record ownership may take considerable time.
Signatures on a Letter of Transmittal or a notice of withdrawal, as the
case may be, must be Guaranteed by a member firm of a registered national
securities exchange or of the National Association of Securities Dealers, Inc.,
a commercial bank or trust company having an office of correspondent in the
United States or an "eligible guarantor institution" within the meaning of Rule
17Ad-15 under the Exchange Act (an "Eligible Institution") unless the Old Notes
tendered pursuant thereto are tendered (i) by a registered holder who has not
completed the box entitled "Special Issuance Instructions" or "Special Delivery
Instructions" on the Letter of Transmittal or (ii) for the account of an
Eligible Institution.
If the Letter of Transmittal is signed by a person other than the
registered holder of any Old Notes listed therein, such Old Notes must be
endorsed or accompanied by appropriate bond powers which authorize such person
to tender the Old Notes on behalf of the registered holder, in either case
signed as the name of the registered holder or holders appears on the Old Notes.
If the Letter of Transmittal or any Old Notes or bond powers are signed
by trustees, executors, administrators, guardians, attorneys-in-fact, officers
of corporations or others acting in a fiduciary or representative capacity, such
persons should so indicate when signing, and unless waived by the
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<PAGE> 21
Company, evidence satisfactory to the Company of their authority to so act must
be submitted with the Letter of Transmittal.
All the questions as to the validity, form, eligibility (including time
of receipt), acceptance and withdrawal of the tendered Old Notes will be
determined by the Company in its sole discretion, which determinations will be
final and binding. The Company reserves the absolute right to reject any and all
Old Notes not validly tendered or any Old Notes the Company's acceptance of
which would, in the opinion of counsel for the Company, be unlawful. The Company
also reserves the absolute right to waive any irregularities or conditions of
tender as to particular Old Notes. The Company's interpretation of the terms and
conditions of the Exchange Offer (including the instructions in the Letter of
Transmittal) will be final and binding on all parties. Unless waived any defects
or irregularities in connection with tenders of Old Notes must be cured within
such time as the Company shall determine. Neither the Company, the Exchange
Agent nor any other person shall be under any duty to give notification of
defects or irregularities with respect to tenders of Old Notes nor shall any of
them incur any liability for failure to give such notification. Tenders of Old
Notes will not be deemed to have been made until such irregularities have been
cured or waived. Any Old Notes received by the Exchange Agent that are not
properly tendered and as to which the defects or irregularities have not been
cured or waived will be returned without cost by the Exchange Agent to the
tendering holder of such Old Notes unless otherwise provided in the Letter of
Transmittal, as soon as practicable following the Expiration Date.
In addition, the Company reserves the right in its sole discretion to
(a) purchase or make offers for any Old Notes that remain outstanding subsequent
to the Expiration Date, or, as set forth under "Termination," to terminate the
Exchange Offer and (b) to the extent permitted by applicable law, purchase Old
Notes in the open market, in privately negotiated transactions or otherwise. The
terms of any such purchases or offers may differ from the terms of the Exchange
Offer.
By tendering, each holder of Old Notes will represent to the Company
that among other things, the New Notes acquired pursuant to the Exchange Offer
are being obtained in the ordinary course of business of the person receiving
such New Notes, whether or not such person is the holder, that neither the
holder nor any other person has an arrangement or understanding with any person
to participate in the distribution of the New Notes and that neither the holder
nor any such other person is an "affiliate" of the Company within the meaning of
Rule 405 under the Securities Act.
GUARANTEED DELIVERY PROCEDURE
Holders who wish to tender their Old Notes and (i) whose Old Notes are
not immediately available, or (ii) who cannot deliver their Old Notes, the
Letter of Transmittal, or any other required documents to the Exchange Agent
prior to the Expiration Date, or (iii) who cannot complete the procedure for
book-entry transfer on a timely basis, may effect a tender if:
(a) The tender is made through an Eligible Institution;
(b) Prior to the Expiration Date, the Exchange Agent receives from
such Eligible Institution a properly completed and duly
executed Notice of Guaranteed Delivery (by facsimile
transmission, mail or hand delivery) setting forth the name
and address of the holder of the Old Notes, the certificate
number or numbers of such Old Notes and the principal amount
of Old Notes tendered, stating that the tender is being made
thereby, and guaranteeing that, within three business days
after the Expiration Date, the Letter of Transmittal (or
facsimile thereof), together with the certificate(s)
representing the Old Notes to be tendered in proper form for
transfer and any other documents required by the Letter of
Transmittal, will be deposited by the Eligible Institution
with the Exchange Agent; and
(c) Such properly completed and executed Letter of Transmittal (or
facsimile thereof), together with the certificate(s)
representing all tendered Old Notes in proper form for
transfer (or confirmation of a book-entry transfer into the
Exchange Agent's account at
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<PAGE> 22
DTC of Old Notes delivered electronically) and all other
documents required by the Letter of Transmittal are received
by the Exchange Agent within three business days after the
Expiration Date.
WITHDRAWAL OF TENDERS
Except as otherwise provided herein, tenders of Old Notes may be
withdrawn at any time prior to 5:00 p.m., New York City time, on the business
day prior to the Expiration Date.
To withdraw a tender of Old Notes in the Exchange Offer, a written or
facsimile transmission notice of withdrawal must be received by the Exchange
Agent at its address set forth herein prior to 5:00 p.m., New York City time, on
the business day prior to the Expiration Date. Any such notice of withdrawal
must (i) specify the name of the person having deposited the Old Notes to be
withdrawn (the "Depositor"), (ii) identify the Old Notes to be withdrawn
(including the certificate number or numbers and principal amount of such Old
Notes), (iii) be signed by the Depositor in the same manner as the original
signature on the Letter of Transmittal by which such Old Notes were tendered
(including any required signature guarantees) or be accompanied by documents of
transfers sufficient to permit the Trustee with respect to the Old Notes to
register the transfer of such Old Notes into the name of the Depositor
withdrawing the tender and (iv) specify the name in which any such Old Notes are
to be registered, if different from that of the Depositor. All questions as to
the validity, form and eligibility (including time of receipt) for such
withdrawal notices will be determined by the Company, whose determination shall
be final and binding on all parties. Any Old Notes so withdrawn will be deemed
not to have been validly tendered for purposes of the Exchange Offer and no New
Notes will be issued with respect thereto unless the Old Notes so withdrawn are
validly tendered. Any Old Notes which have been tendered but which are not
accepted for exchange will be returned to the holder thereof without cost to
such holder as soon as practicable after withdrawal, rejection of tender or
termination of the Exchange Offer. Properly withdrawn Old Notes may be tendered
by following one of the procedures described above under "--Procedures for
Tendering" at any time prior to the Expiration Date.
TERMINATION
Notwithstanding any other term of the Exchange Offer, the Company will
not be required to accept for exchange, or exchange New Notes for, any Old Notes
not therefore accepted for exchange, and may terminate or amend the Exchange
Offer as provided herein before the acceptance of such Old Notes if: (i) any
action or proceeding is instituted or threatened in any court or by or before
any governmental agency with respect to the Exchange Offer, which, in the
Company's judgment, might materially impair the Company's ability to proceed
with the Exchange Offer or (ii) any law, statute, rule or regulation is
proposed, adopted or enacted, or any existing law, statute rule or regulation is
interpreted by the staff of the Commission or court of competent jurisdiction in
a manner, which, in the Company's judgment, might materially impair the
Company's ability to proceed with the Exchange Offer.
If the Company determines that it may terminate the Exchange Offer, as
set forth above, the Company may (i) refuse to accept any Old Notes and return
any Old Notes that have been tendered to the holders thereof, (ii) extend the
Exchange Offer and retain all Old Notes tendered prior to the expiration of the
Exchange Offer, subject to the rights of such holders of tendered Old Notes to
withdraw their tendered Old Notes, or (iii) waive such termination event with
respect to the Exchange Offer and accept all properly tendered Old Notes that
have not been withdrawn. If such waiver constitutes a material change in the
Exchange Offer, the Company will disclose such change by means of a supplement
to this Prospectus that will be distributed to each registered holder of Old
Notes and the Company will extend the Exchange Offer for a period of five to ten
business days, depending upon the significance of the waiver and the manner of
disclosure to the registered holders of the Old Notes, if the Exchange Offer
would otherwise expire during such period.
22
<PAGE> 23
EXCHANGE AGENT
First Union National Bank has been appointed as Exchange Agent for the
Exchange Offer. Questions and requests for assistance and requests for
additional copies of this Prospectus or of the Letter of Transmittal should be
directed to the Exchange Agent addressed as follows:
By Mail: First Union National Bank
Corporate Trust Reorganization Dept.
1525 West W.T. Harris Blvd., 3C3
Charlotte, North Carolina 28288
Attn: Mike Klotz
By Overnight Carrier: First Union National Bank
Corporate Trust Reorganization Dept.
1525 West W.T. Harris Blvd., 3C3
Charlotte, North Carolina 28262
Attn: Mike Klotz
By Hand: First Union National Bank
40 Broad Street, 5th Floor, Suite 550
New York, New York 10004
Facsimile Transmission: (704) 590-7628
Confirm by Telephone: (704) 590-7408
FEES AND EXPENSES
The expenses of soliciting tenders pursuant to the Exchange Offer will
be borne by the Company. The principal solicitation for tenders pursuant to the
Exchange Offer is being made by mail. Additional solicitations may be made by
officers and regular employees of the Company and its affiliates in person, by
telegraph or telephone.
The Company will not make any payments to brokers, dealers or other
persons soliciting acceptances of the Exchange Offer. The Company, however, will
pay the Exchange Agent reasonable and customary fees for its services and will
reimburse the Exchange Agent for its reasonable out-of-pocket expenses in
connection therewith. The Company may also pay brokerage houses and other
custodians, nominees and fiduciaries the reasonable out-of-pocket expenses
incurred by them in forwarding copies of this Prospectus, Letters of Transmittal
and related documents to the beneficial owners of the Old Notes and in handling
or forwarding tenders for exchange.
The expenses to be incurred in connection with the Exchange Offer,
including fees and expenses of the Exchange Agent and Trustee and accounting and
legal fees, will be paid by the Company.
The Company will pay all transfer taxes, if any, applicable to the
exchange of Old Notes pursuant to the Exchange Offer. If, however, certificates
representing New Notes or Old Notes for principal amounts not tendered or
accepted for exchange are to be delivered to, or are to be registered or issued
in the name of, any person other than the registered holder of the Old Notes
tendered, or if tendered Old Notes are registered in the name of any person
other than the person signing the Letter of Transmittal, or if a transfer tax is
imposed for any reason other than the exchange of Old Notes pursuant to the
Exchange Offer, then the amount of any such transfer taxes (whether imposed on
the registered holder or any other person) will be payable by the tendering
holder. If satisfactory evidence of payment of such taxes or exemption therefrom
is not submitted with the Letter of Transmittal, the amount of such transfer
taxes will be billed directly to such tendering holder.
23
<PAGE> 24
FEDERAL INCOME TAX CONSEQUENCES
The following discussion summarizing the federal income tax
consequences of the Exchange Offer reflects the opinion of Willkie Farr &
Gallagher, counsel to the Company, as to material federal income tax
consequences expected to result from the Exchange Offer. An opinion of counsel
is not binding on the Internal Revenue Service ("IRS") or the courts, and there
can be no assurances that the IRS will not take, and that a court would not
sustain, a position to the contrary to that described below. Moreover, the
following discussion does not constitute comprehensive tax advice to any
particular Holder of Old Notes. The summary is based on the current provisions
of the Internal Revenue Code of 1986, as amended, and applicable Treasury
regulations, judicial authority and administrative pronouncements. The tax
consequences described below could be modified by future changes in the relevant
law, which could have retroactive effect. Each Holder of Old Notes should
consult its own tax advisor as to these and any other federal income tax
consequences of the Exchange Offer as well as any tax consequences to it under
foreign, state, local or other law.
In the opinion of Willkie Farr & Gallagher, exchanges of Old Notes for
New Notes pursuant to the Exchange Offer will be treated, for purposes of U.S.
federal income tax, as a modification of the Old Notes that does not constitute
a significant modification, and the Company intends to treat the exchanges in
that manner. Therefore, for purposes of U.S. federal income tax, an exchanging
Holder will not recognize any gain or loss in respect of an exchange of an Old
Note for a New Note, and such Holder's basis and holding period in the New Note
will be the same as such Holder's basis and holding period in the Old Note. The
Exchange Offer will result in no U.S. federal income tax consequences to a
non-exchanging Holder.
24
<PAGE> 25
CAPITALIZATION
The following table sets forth the short-term debt and the
capitalization of the Company at September 30, 1998 and as adjusted to give
effect to the sale by the Company of the Old Notes (before deducting expenses
associated with the offering of the Old Notes).
<TABLE>
<CAPTION>
SEPTEMBER 30, 1998
-------------------------------
ACTUAL AS ADJUSTED
--------- -----------
(IN THOUSANDS)
(UNAUDITED)
<S> <C> <C>
Current portions of long-term debt:
Loans Payable............................................. $ 1,650 $ 1,650
Commercial paper, interest rates approximately 5.7%....... 19,000 19,000
--------- ----------
20,650 20,650
Long-term obligations:
Loans Payable............................................. 4,567 4,567
6.9% Notes, due 2007...................................... 124,951 124,951
7% Debentures, due 2025................................... 124,202 124,202
Commercial paper, interest rates approximately 5.7%....... 60,000 60,000
Notes offered hereby...................................... -- 200,000
--------- ----------
Total long-term obligations....................... 313,720 513,720
Shareholders' equity:
Preferred Stock, $.01 par value; 10,000,000 shares
authorized; none issued..................................... -- --
Common Stock, $.01 par value; 100,000,000 shares authorized;
46,572,598 issued........................................... 466 466
Additional paid-in capital................................ 347,810 347,810
Retained earnings......................................... 293,518 293,518
--------- ----------
Total shareholders' equity........................ 641,794 641,794
--------- ----------
Total capitalization.............................. $ 976,164 $ 1,176,164
========== =============
</TABLE>
At December 31, 1998, long-term debt including current maturities on
long-term debt and commercial paper was $617.8 million and the debt to total
capitalization ratio was 48%. Shareholders' equity at December 31, 1998 was
$667.7 million. The Exchange Offer will have no impact on the capitalization of
the Company. See "Summary-Recent Developments" and "Business-Recent
Developments."
25
<PAGE> 26
SELECTED CONSOLIDATED HISTORICAL FINANCIAL DATA
The Statement of Earnings Data set forth below for each of the years in
the three-year period ended December 31, 1997 and the Balance Sheet Data set
forth below as of December 31, 1996 and 1997, are derived from the audited
consolidated financial statements of the Company and notes thereto incorporated
by reference in the Offering Circular. These consolidated financial statements
have been audited by Ernst & Young LLP, independent auditors. The Statement of
Earnings Data set forth below for each of the years in the two-year period ended
December 31, 1994 and the Balance Sheet Data set forth below as of December 31,
1993, 1994 and 1995 are derived from the audited consolidated financial
statements of the Company, which also have been audited by Ernst & Young LLP.
The Statement of Earnings Data for the nine-month periods ended September 30,
1997 and 1998, and the Balance Sheet Data as of September 30, 1997 and 1998, are
derived from the Company's unaudited consolidated condensed financial
information and include, in the opinion of management, all adjustments
(consisting of normal recurring adjustments) necessary for a fair presentation.
The earnings results for the nine-month period ended September 30, 1998 are not
necessarily indicative of the results that may be expected for the full year
ended December 31, 1998.
The selected financial data presented below should be read in
conjunction with Management's Discussion and Analysis of Financial Condition and
Results of Operations and the audited consolidated financial statements and
related notes thereto which are incorporated by reference in this Prospectus.
<TABLE>
<CAPTION>
NINE MONTHS
ENDED
YEARS ENDED DECEMBER 31, SEPTEMBER 30,
------------------------------------------------------ ----------------------
1993 1994 1995 1996 1997 1997(1) 1998
--------- --------- -------- -------- ---------- ---------- ----------
(DOLLARS IN THOUSANDS) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF EARNINGS DATA:
Net sales .................. $ 452,906 $ 501,660 $664,406 $721,947 $ 900,863 $ 662,070 $ 776,717
Gross profit ............... 121,315 139,143 167,164 182,510 235,269 175,567 208,544
Earnings from operations ... 76,395 91,887 107,565 120,676 162,770 122,758 146,173
Interest expense ........... 3,234 6,865 9,733 10,121 16,899 11,380 17,085
Earnings before taxes on
income, extraordinary
item and net cumulative
effect of accounting
changes .................. 74,058 90,420 103,791 118,953 151,212 116,608 129,163
Extraordinary item(2) ...... -- (4,641) -- -- -- -- --
Net cumulative effect of
accounting changes(3) .... (17,512) -- -- -- -- -- --
Net earnings ............... 30,489 53,704 67,551 78,628 98,529 75,550 84,899
BALANCE SHEET DATA:
Working capital(4) ......... $ 89,119 $ 132,421 $141,019 $183,022 $ 213,777 $ 225,150 $ 244,524
Net property, plant and
equipment ................ 278,310 291,622 392,223 408,820 591,420 603,323 634,241
Total assets ............... 496,991 593,891 789,371 768,918 1,105,713 1,145,797 1,236,388
Long-term debt (including
current maturities of
long-term debt) ............ 235,312 108,224 228,726 127,163 312,106 353,191 334,370
Shareholders' equity ....... 145,447 376,269 423,545 480,977 561,836 544,340 641,794
FINANCIAL RATIOS:
Ratio of earnings to fixed
charges (unaudited)(5)(6)
16.57 12.39 10.16 11.12 8.62 10.21 7.89
</TABLE>
- ----------
26
<PAGE> 27
(1) The financial data for the nine months ended September 30, 1997 include the
operations of the American Aggregates Corporation business from its
acquisition by the Company on May 28, 1997.
(2) This amount represents the after tax extraordinary loss on the early
extinguishment of debt associated with the February 1994 in-substance
defeasance of $125 million of long-term indebtedness.
(3) Net cumulative effect of accounting changes reflects the 1993 adoption of
the change in methods of accounting for income taxes, postretirement
benefits other than pensions and postemployment benefits.
(4) Working capital at September 30, 1998 excludes $19 million of United States
commercial paper borrowings which have been included as long-term debt
(including current maturities of long-term debt).
(5) The ratio of earnings to fixed charges has been computed by dividing
earnings and fixed charges, excluding capitalized interest, by fixed
charges. For purposes of this ratio, "earnings" consist of earnings before
taxes on income, extraordinary item and net cumulative effect of accounting
changes, adjusted for undistributed earnings of
less-than-fifty-percent-owned affiliates. "Fixed charges" represent
interest expense relating to any indebtedness whether expensed or
capitalized, as well as such portion of rental expense as can be
demonstrated to be representative of an interest factor.
(6) The Company was incorporated in November 1993, at which time it assumed the
obligations with respect to certain indebtedness of its parent.
Accordingly, the ratio of earnings to fixed charges may not be comparable
in all periods presented.
27
<PAGE> 28
BUSINESS
The following description of the Company's business is qualified in its
entirety by and should be read together with the more detailed information and
financial statements incorporated by reference in this Prospectus.
The Company is the United States' second largest producer of aggregates
for the construction industry, including highways, infrastructure, commercial
and residential. The Company also manufactures and markets magnesia and other
specialty products, including heat-resistant refractory products for the steel
industry, chemicals products for industrial, agricultural and environmental uses
and dolomitic lime. In 1998, the Company's aggregates business accounted for 87%
of the Company's total revenues and the Company's magnesia and other specialty
products segment accounted for 13% of the Company's total revenues.
AGGREGATES
The Company's aggregates segment processes and sells granite,
sandstone, limestone and other aggregates products for use in all sectors of the
public infrastructure, industrial, commercial and residential construction
industries. The Company is the United States' second largest producer of
aggregates. In 1998, the Company shipped approximately 149 million tons of
aggregates primarily to customers in more than 20 southeastern, southwestern,
midwestern and central states, generating net sales and earnings from operations
of $920.8 million and $184.7 million, respectively.
The Company's aggregates business is concentrated principally in the
southeast, southwest, midwest and central states. Aggregate products are sold
and shipped from a network of more than 250 quarries and distribution facilities
in more than 20 states and in the Bahama Islands and Canada via truck, rail and
water-based transportation systems. Aggregates can be found in abundant
quantities throughout the United States, and there are many producers
nationwide. However, as a general rule, the size of the market area of an
aggregates quarry is limited because the cost of transporting processed
aggregates to customers is high in relation to the value of the product itself.
As a result, proximity of quarry facilities to customers is the most important
factor in competition for aggregates business and helps explain the highly
fragmented nature of the aggregates industry. Access to lower-cost water
distribution and increased access to rail transportation as a result of certain
acquisitions made by the Company enables the Company to extend its market.
The Company's aggregates business is also highly seasonal, due
primarily to the effect of weather conditions on construction activity within
its markets. Accordingly, the Company's second and third quarters are generally
the strongest, with the first quarter generally reflecting the weakest results.
MAGNESIA AND OTHER SPECIALTY PRODUCTS
The Company also manufactures and markets dolomitic lime and magnesia
and other specialty products, including heat-resistant refractory products for
the steel industry and magnesia and other specialty chemicals products for
industrial, agricultural and environmental uses, including wastewater treatment,
sulphur dioxide scrubbing and acid neutralization. In 1998, the Company's
Magnesia Specialties Division generated net sales of $136.9 million and earnings
from operations of $11.9 million. Magnesia Specialties' refractory and dolomitic
lime products are sold primarily to the steel industry. For a discussion of the
results of Magnesia Specialties for the period ended September 30, 1998 and the
Company's expectations for Magnesia Specialties' markets for the remainder of
1998 and for 1999, see "Management's Discussion and Analysis of Financial
Condition and Results of Operations" on page 11 of the Company's Quarterly
Report on Form 10-Q for the three and nine-month periods ended September 30,
1998 and the Company's Current Report on Form 8-K filed with the Commission on
February 2, 1999, incorporated by reference in this Prospectus.
28
<PAGE> 29
RECENT DEVELOPMENTS
On December 4, 1998, the Company acquired the common stock of Redland
Stone from an affiliate of Lafarge SA for $272 million in cash plus normal
balance sheet liabilities, subject to certain post-closing adjustments relating
to working capital, plus approximately $8 million for certain other assumed
liabilities and transaction costs. The Company did not assume any long-term debt
of Redland Stone. Redland Stone is the leading producer of aggregates and
asphaltic concrete in the State of Texas and has mineral reserves which exceed
1.0 billion tons. Redland Stone serves the San Antonio, Houston and South Texas
areas. Aggregates production in 1998 for Redland Stone was approximately 14
million tons, asphaltic concrete production was approximately 3 million tons and
revenue was approximately $131 million. Redland Stone is operated as a new
division of the Company, with its headquarters in San Antonio.
As of October 31, 1998, the Company purchased an initial 14% interest
in the business of Meridian. The transaction provides a mechanism for the
Company to purchase the remaining interest in Meridian at a predetermined
formula price within five years, and the Meridian investors may require the
Company to purchase their interests beginning December 31, 2000, accelerated
only by the death of an investor. Meridian operates 26 aggregates production
facilities and eight rail-served distribution yards in 11 states in the
southwestern and western United States with approximately 1.4 billion tons of
mineral reserves. Meridian's revenue in 1998 was approximately $146 million on
sales of over 23 million tons.
On January 26, 1999, the Company issued a press release reporting sales
and earnings for the three-month and full-year periods ended December 31, 1998.
For the full year, sales were $1.058 billion, an increase of 17% over sales of
$900.9 million in 1997. Earnings from operations rose 21% to $196.6 million,
while net earnings rose 17% to $115.6 million. Earnings per share improved to
$2.48 per diluted share from $2.13 in the prior year. At December 31, 1998,
long-term debt including current maturities on long-term debt and commercial
paper was $617.8 million and the debt to total capitalization ratio was 48%.
Shareholders' equity at December 31, 1998 was $667.7 million.
29
<PAGE> 30
DESCRIPTION OF THE NEW NOTES
The Old Notes were issued under an indenture dated as of December 7,
1998 (the "Indenture") between the Company, as issuer, and First Union National
Bank, as trustee (the "Trustee"), a copy of which will be made available upon
request to the Company. Upon the issuance of the New Notes the Indenture will be
subject to and governed by the Trust Indenture Act of 1939, as amended (the
"Trust Indenture Act"). The following summary of the material provisions of the
Indenture does not purport to be complete and is subject to, and qualified in
its entirety by, reference to the provisions of the Indenture, including the
definitions of certain terms contained therein and those terms made part of the
Indenture by reference to the Trust Indenture Act. Unless otherwise indicated,
the description set forth below applies to both the Old Notes and the New Notes
(collectively, the "Notes").
GENERAL
The New Notes offered hereby will be limited to $200,000,000 aggregate
principal amount at any time (less the principal amount of any Old Notes that
remain outstanding at such time) outstanding and will mature on December 1,
2008. The New Notes will be unsecured obligations of the Company and will rank
equally with all other unsecured and unsubordinated debt of the Company. The New
Notes will be issued solely in exchange for an equal principal amount of Old
Notes pursuant to the Exchange Offer. The form and terms of the New Notes will
be identical in all material respects to the form and terms of the Old Notes
except that: (i) the New Notes will not contain terms with respect to transfer
restrictions, (ii) the New Notes will have been registered under the Securities
Act and (iii) the Registration Rights and contingent interest reset provisions
applicable to the Old Notes are not applicable to the New Notes.
The Notes will bear interest at 5.875% per annum payable on June 1 and
December 1 of each year, commencing June 1, 1999, to the person in whose name
the Notes were registered at the close of business on the preceding May 15 and
November 15, respectively, subject to certain exceptions. The Notes will be
issued only in fully registered form, without coupons, in purchase amounts of
$1,000 and integral multiples thereof.
Principal of, premium, if any, and interest, if any, on the Notes
(other than Notes issued as Global Notes) will be payable, and the Notes (other
than Notes issued as Global Notes) will be exchangeable and transfers thereof
will be registrable, at the office of the Trustee and at any other office
maintained at that time by the Company for such purpose, provided that, at the
option of the Company, payment of interest may be made by check mailed to the
address of the holder as it appears in the register of the Notes. For certain
information about Notes issued in global form, see "-- Form of Notes" below. No
service charge shall be made for any registration of transfer or exchange of the
Notes, but the Company may require payment of a sum sufficient to cover any
transfer tax or other governmental charge payable in connection therewith.
The Indenture provides that the Trustee and the Paying Agent shall
promptly pay to the Company upon request any money held by them for the payment
of principal (and premium, if any) or interest that remains unclaimed for two
years. In the event the Trustee or the Paying Agent returns money to the Company
following such two-year period, the registered holders of the Notes (the
"Noteholders") thereafter shall be entitled to payment only from the Company,
subject to all applicable escheat, abandoned property and similar laws.
The Indenture does not limit the amount of additional unsecured
indebtedness that the Company or any of its Subsidiaries may incur. The terms of
the Notes and the covenants contained in the Indenture do not afford holders of
the Notes protection in the event of a highly leveraged or other similar
transaction involving the Company that may adversely affect Noteholders. See "--
Certain Covenants" below.
30
<PAGE> 31
REDEMPTION; SINKING FUND
The Notes will not be subject to redemption by the Company prior to
maturity and will not be entitled to the benefit of any sinking fund or other
mandatory redemption obligation prior to maturity.
AMENDMENT, SUPPLEMENT AND WAIVER
Subject to certain exceptions, the Indenture and the Notes may be
amended or supplemented with the written consent of the holders of not less than
a majority principal amount of the then outstanding Notes; provided that the
Company and the Trustee may not without the consent of the holder of each
outstanding Note affected thereby
(a) reduce the amount of Notes whose holders must consent to an
amendment, supplement or waiver,
(b) reduce the rate of or extend the time for payment of interest on
the Notes,
(c) reduce the principal of or extend the fixed maturity of the Notes,
or
(d) make the Notes payable in money other than that stated in the
Notes.
Any past default or compliance with any provisions may be waived with
the consent of the holders of a majority in principal amount of the Notes,
except a default in payment of principal or interest or in respect of other
provisions requiring the consent of the holder of each Note in order to amend.
Without the consent of any Noteholder, the Company and the Trustee may amend or
supplement the Indenture or the Notes without notice to cure any ambiguity,
omission, defect or inconsistency, to provide for uncertificated Notes in
addition to or in place of certificated Notes, to comply with the provisions of
the Indenture concerning mergers, consolidations and transfers of all or
substantially all of the assets of the Company, to appoint a trustee other than
the Trustee (or any successor thereto) as trustee in respect of the Notes, or to
add, change or eliminate provisions of the Indenture as shall be necessary or
desirable in accordance with any amendment to the Trust Indenture Act of 1939.
In addition, without the consent of any Noteholder, the Company and the Trustee
may amend or supplement the Indenture or the Notes to make any change that does
not materially adversely affect the rights of any Noteholder. Whenever the
Company requests the Trustee to take any action under the Indenture, including a
request to amend or supplement the Indenture without the consent of any
Noteholder, the Company is required to furnish the Trustee with an officers'
certificate and an opinion of counsel to the effect that all conditions
precedent to the action have been complied with. Without the consent of any
Noteholder, the Trustee may waive compliance with any provisions of the
Indenture or the Notes if the waiver does not materially adversely affect the
rights of any Noteholder.
CERTAIN COVENANTS
The terms of the Notes and the covenants contained in the Indenture do
not afford holders of the Notes protection in the event of a highly leveraged or
other similar transaction involving the Company that may adversely affect
Noteholders. The Indenture does not limit the amount of additional unsecured
indebtedness that the Company or any of its Subsidiaries may incur.
Certain Definitions. For purposes of the covenants included in the
Indenture, the following terms generally shall have the meanings provided below.
"Attributable Debt" for a lease means the carrying value of the
capitalized rental obligation determined under generally accepted accounting
principles whether or not such obligation is required to be shown on the balance
sheet as a long-term liability. The carrying value may be reduced by the
capitalized value of the rental obligations, calculated on the same basis, that
any sublessee has for all or part of the same property. "Attributable Debt" does
not include any obligation to make payments arising
31
<PAGE> 32
from the transfer of tax benefits under the Economic Recovery Tax Act of 1981
(as it may from time to time be amended, or any successor statute) to the extent
such obligation is offset by or conditioned upon receipt of payments from
another person.
"Capital Expenditures" means, for any period, any expenditures of the
Company or its Subsidiaries during such period that, in conformity with
generally accepted accounting principles consistently applied, are required to
be included in fixed asset accounts as reflected in the consolidated balance
sheet of the Company and its Subsidiaries.
"Consolidated Net Tangible Assets" means total assets less (1) total
current liabilities (excluding any Debt which, at the option of the borrower, is
renewable or extendible to a term exceeding 12 months and which is included in
current liabilities and further excluding any deferred income taxes which are
included in current liabilities) and (2) goodwill, patents and trademarks, all
as stated on the Company's most recent consolidated balance sheet preceding the
date of determination.
"Debt" means any debt for borrowed money which would appear on the
balance sheet as a liability or any guarantee of such a debt and includes
purchase money obligations. "Debt" does not include any obligation to make
payments arising from the transfer of tax benefits under the Economic Recovery
Tax Act of 1981 (as it may from time to time be amended, or any successor
statute) to the extent such obligation is offset by or conditioned upon receipt
of payments from another person.
"Lien" means any mortgage, pledge, security interest or lien. "Lien"
does not include any obligation arising from the transfer of tax benefits under
the Economic Recovery Tax Act of 1981 (as it may from time to time be amended,
or any successor statute) to the extent such obligation is offset by or
conditioned upon receipt of payments from another person.
"Long-Term Debt" means Debt that by its terms matures on a date more
than 12 months after the date it was created or Debt that the obligor may extend
or renew without the obligee's consent to a date more than 12 months after the
Debt was created.
"Principal Property" means any mining and quarrying or manufacturing
facility located in the United States and owned by the Company or by one or more
Restricted Subsidiaries from the date the Notes are first issued and which has,
as of the date the Lien is incurred, a net book value (after deduction of
depreciation and other similar charges) greater than 3% of Consolidated Net
Tangible Assets, except (1) any such facility or property which is financed by
obligations of any State, political subdivision of any State or the District of
Columbia under terms which permit the interest payable to the holders of the
obligations to be excluded from gross income as a result of the plant, facility
or property satisfying the conditions of Section 103(b)(4)(C), (D), (E), (F) or
(H) or Section 103(b)(6) of the Internal Revenue Code of 1954 or Section 142(a)
or Section 144(a) of the Internal Revenue Code of 1986, or of any successors to
such provisions, or (2) any such facility or property which, in the opinion of
the Board of Directors of the Company, is not of material importance to the
total business conducted by the Company and its Subsidiaries taken as a whole.
However, the chief executive officer or chief financial officer of the Company
may at any time declare any mining and quarrying or manufacturing facility or
other property to be a Principal Property by delivering a certificate to that
effect to the Trustee.
"Restricted Property" means any Principal Property, any Debt of a
Restricted Subsidiary owned by the Company or a Restricted Subsidiary on the
date the Notes are first issued or secured by a Principal Property (including
any property received upon a conversion or exchange of such debt), or any shares
of stock of a Restricted Subsidiary owned by the Company or a Restricted
Subsidiary (including any property or shares received upon a conversion, stock
split or other distribution with respect to the ownership of such stock).
"Restricted Subsidiary" means a Subsidiary that has substantially all
its assets located in, or carries on substantially all its business in, the
United States and that owns a Principal Property. Notwithstanding the preceding
sentence, a Subsidiary shall not be a Restricted Subsidiary during such
32
<PAGE> 33
period of time as it has shares of capital stock registered under the Exchange
Act or it files reports and other information with the Commission pursuant to
Section 13 or 15(d) of the Exchange Act.
"Subsidiary" means a corporation, a majority of the Voting Stock of
which is owned by the Company and/or one or more Subsidiaries.
"Voting Stock" means capital stock having voting power under ordinary
circumstances to elect directors.
Limitations on Liens. Subject to the following three sentences, the
Company will not, and will not permit any Restricted Subsidiary to, as security
for any Debt, incur a Lien on any Restricted Property, unless the Company or
such Restricted Subsidiary secures or causes to be secured any outstanding Notes
equally and ratably with all Debt secured by such Lien. The Lien may equally and
ratably secure such Notes and any other obligations of the Company or its
Subsidiaries that are not subordinated to any outstanding Notes. This
restriction will not apply to, among other things, certain Liens
(i) existing at the time a corporation becomes a Restricted
Subsidiary;
(ii) existing at the time of the acquisition of the Restricted
Property or incurred to finance all or some of the purchase
price or cost of construction, provided that the Lien may not
extend to any other Restricted Property (other than, in the
case of construction, unimproved real property) owned by the
Company or any of its Restricted Subsidiaries at the time the
property is acquired or the Lien is incurred and provided
further that the Lien may not be incurred more than one year
after the later of the acquisition, completion of construction
or commencement of full operation of the property;
(iii) in favor of the Company or another Restricted Subsidiary;
(iv) existing at the time a corporation merges into, consolidates
with, or enters into a share exchange with the Company or a
Restricted Subsidiary or a person transfers or leases all or
substantially all its assets to the Company or a Restricted
Subsidiary; or
(v) in favor of a government or governmental entity that secure
payment pursuant to a contract, subcontract, statute or
regulation, secure Debt guaranteed by the government or
governmental agency, secure Debt incurred to finance all or
some of the purchase price or cost of construction of goods,
products or facilities produced under contract or subcontract
for the government or governmental entity, or secure Debt
incurred to finance all or some of the purchase price or cost
of construction of the property subject to the Lien.
In addition and notwithstanding the foregoing restrictions, the Company
and any of its Restricted Subsidiaries may, without securing the Notes, incur a
Lien that otherwise would be subject to the restrictions, provided that after
giving effect to such Lien the aggregate amount of all Debt secured by Liens
that otherwise would be prohibited plus all Attributable Debt in respect of
sale-leaseback transactions that otherwise would be prohibited by the covenant
limiting sale-leaseback transactions described below would not exceed 10% of
Consolidated Net Tangible Assets.
Limitations on Sale-Leaseback Transactions. Subject to the following
two sentences, the Company will not, and will not permit any Restricted
Subsidiary to, sell or transfer a Principal Property and contemporaneously lease
it back, except a lease for a period (including extensions or renewals at the
option of the Company or the Restricted Subsidiary) of three years or less.
Notwithstanding the foregoing restriction, the Company or any Restricted
Subsidiary may sell a Principal Property and lease it back for a longer period
if
(i) the lease is between the Company and a Restricted Subsidiary
or between Restricted Subsidiaries;
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(ii) the Company or such Restricted Subsidiary would be entitled,
pursuant to the provisions set forth above under the caption
"Limitations on Liens," to create a Lien on the property to be
leased securing Debt in an amount at least equal in amount to
the Attributable Debt in respect of the sale-leaseback
transaction without equally and ratably securing the
outstanding Notes;
(iii) the Company owns or acquires other property which will be made
a Principal Property and is determined by the Board of
Directors of the Company to have a fair value equal to or
greater than the Attributable Debt incurred;
(iv) within 270 days the Company makes Capital Expenditures with
respect to a Principal Property in an amount at least equal to
the amount of the Attributable Debt; or
(v) the Company or a Restricted Subsidiary makes an optional
prepayment in cash of its Debt or capital lease obligations at
least equal in amount to the Attributable Debt for the lease,
the prepayment is made within 270 days, the Debt prepaid is
not owned by the Company or a Restricted Subsidiary, the Debt
prepaid is not subordinated to any of the Notes, and the Debt
prepaid was Long-Term Debt at the time it was created.
In addition and notwithstanding the foregoing restrictions, the Company
and any of its Restricted Subsidiaries may, without securing the Notes, enter
into a sale-leaseback transaction that otherwise would be subject to the
restrictions, provided that after giving effect to such sale-leaseback
transaction the aggregate amount of all Debt secured by Liens that otherwise
would be prohibited by the covenant limiting Liens described above plus all
Attributable Debt in respect of sale-leaseback transactions that otherwise would
be prohibited would not exceed 10% of Consolidated Net Tangible Assets.
Consolidation, Merger, Sale of Assets. The Company shall not
consolidate with or merge into, or transfer all or substantially all of its
assets to, another corporation unless
(i) the resulting, surviving or transferee corporation assumes by
supplemental indenture all of the obligations of the Company
under the Notes and the Indenture,
(ii) immediately after giving effect to the transaction no Event of
Default, and no event that, after notice or lapse of time or
both, would become an Event of Default, shall have happened
and be continuing, and
(iii) the Company shall have delivered an officers' certificate and
an opinion of counsel each stating that the consolidation,
merger or transfer and the supplemental indenture comply with
the Indenture.
When a successor corporation, trustee, paying, agent or registrar
assumes all of the obligations of its predecessor under the Notes and the
Indenture, the predecessor will be released from those obligations.
DEFAULT AND REMEDIES
An Event of Default under the Indenture in respect of the Notes is:
- default for 30 days in payment of interest on the Notes;
- default in payment of principal on the Notes;
- failure by the Company for 90 days, after notice to it to comply
with any of its other agreements in the Indenture for the benefit
of holders of the Notes; and
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<PAGE> 35
- certain events of bankruptcy or insolvency.
If an Event of Default occurs and is continuing, the Trustee or the
holders of at least 25% in principal amount of the outstanding Notes may declare
the Notes to be due and payable immediately, but under certain conditions such
acceleration may be rescinded by the holders of a majority in principal amount
of the outstanding Notes. No holder of Notes may pursue any remedy against the
Company under the Indenture (other than with respect to the right to receive
payment of principal or interest, if any) unless such holder previously shall
have given to the Trustee written notice of default and unless the holders of at
least 25% in principal amount of the Notes shall have requested the Trustee to
pursue the remedy and shall have offered the Trustee indemnity satisfactory to
it, the Trustee shall not have complied with the request within 60 days of
receipt of the request and the offer of indemnity, and the Trustee shall not
have received direction inconsistent with the request during such 60-day period
from the holders of a majority in principal amount of the Notes.
Noteholders may not enforce the Indenture or the Notes except as
provided in the Indenture. The Trustee may refuse to enforce the Indenture or
the Notes unless it receives indemnity satisfactory to it from the Company or,
under certain circumstances, the holders of the Notes seeking to direct the
Trustee to take certain actions under the Indenture against any loss, liability
or expense. Subject to certain limitations, holders of a majority in principal
amount of the Notes may direct the Trustee in its exercise of any trust or power
under the Indenture in respect of the Notes. The Indenture provides that the
Trustee will give to the holders of the Notes notice of all defaults known to
it, within 90 days after the occurrence of any default with respect to the
Notes, unless the default shall have been cured or waived. The Trustee may
withhold from Noteholders notice of any continuing default (except a default in
payment of principal or interest) if it determines in good faith that
withholding such notice is in the interests of such holders. The Company is
required annually to certify to the Trustee as to the compliance by the Company
with certain covenants under the Indenture and the absence of a default
thereunder, or as to any such default that existed.
A director, officer, employee or stockholder, as such, of the Company
shall not have any liability for any obligations of the Company under the Notes
or the Indenture or for any claim based on, in respect of, or by reason of such
obligations or their creation. By accepting a Note, each Note holder waives and
releases all such claims and liability. This waiver and release are part of the
consideration for the issue of the Notes.
DEFEASANCE
The Indenture provides that the Company may, subject to certain
conditions described below, discharge its indebtedness and its obligations or
certain of its obligations under the Indenture in respect of the Notes by
depositing funds or U.S. Government Obligations (as defined in the Indenture) or
Notes of the same series with the Trustee. The Indenture provides that
(1) the Company will be discharged from any obligation to comply
with certain restrictive covenants of the Indenture and
certain other obligations under the Indenture and any
noncompliance with such obligations shall not be an Event of
Default in respect of the Notes or
(2) provided that 91 days have passed from the date of the deposit
referred to below and certain specified Events of Default have
not occurred, the Company will be discharged from any and all
obligations in respect of the Notes (except for certain
obligations, including obligations to register the transfer
and exchange of the Notes, to replace mutilated, destroyed,
lost or stolen Notes, to maintain paying agencies and to cause
money to be held in trust), in either case upon the deposit
with the Trustee, in trust, of money, Notes of the same
series, and/or U.S. Government Obligations that, through the
payment of interest and principal in accordance with their
terms, will provide money in an amount sufficient to pay the
principal
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<PAGE> 36
of and each installment of interest on the Notes on the date
when such payments become due in accordance with the terms of
the Indenture and the Notes.
In the event of any such defeasance under clause (1) above, the obligations of
the Company under the Indenture and the Notes, other than with respect to the
covenants relating to limitations on liens and sale-leaseback transactions and
reporting thereon, and covenants relating to consolidations, mergers and
transfers of all or substantially all of the assets of the Company, shall remain
in full force and effect. In the event of defeasance and discharge under clause
(2) above, the holders of the Notes are entitled to payment only from the trust
fund created by such deposit for payment. In the case of the Company's discharge
from any and all obligations in respect of the Notes as described in clause (2)
above, the trust may be established only if, among other things, the Company
shall have delivered to the Trustee an opinion of counsel to the effect that, if
the Notes are then listed on a national securities exchange, such deposit,
defeasance or discharge will not cause the Notes to be delisted. For federal
income tax purposes, defeasance and discharge under clause (2) above may cause
holders of the Notes to recognize gain or loss in an amount equal to the
difference between the fair market value of the obligations of the trust to the
holder and such holder's tax basis in the Notes. Prospective purchasers should
consult their tax advisors as to the possible tax effects of such a defeasance
and discharge.
Pursuant to the escrow trust agreements that the Company may execute in
connection with the defeasance of all or certain of its obligations under the
Indenture as provided above, the Company from time to time may elect to
substitute U.S. Government Obligations or Notes of the same series for any or
all of the U.S. Government Obligations deposited with the Trustee; provided that
the money, U.S. Government Obligations, and/or Notes of the same series in trust
following such substitution or substitutions will be sufficient, through the
payment of interest and principal in accordance with their terms, to pay the
principal of and each installment of interest on the Notes on the date when such
payments become due in accordance with the terms of the Indenture and the Notes.
The escrow trust agreements also may enable the Company (1) to direct the
Trustee to invest any money received by the Trustee on the U.S. Government
Obligations comprising the trust in additional U.S. Government Obligations, and
(2) to withdraw monies or U.S. Government Obligations from the trust from time
to time; provided that the money and/or U.S. Government Obligations in trust
following such withdrawal will be sufficient, through the payment of interest
and principal in accordance with their terms, to pay the principal of and each
installment of interest on the Notes on the date when such payments become due
in accordance with the terms of the Indenture and the Notes.
GOVERNING LAW
The Notes and the Indenture will be governed by the laws of the State
of New York.
TRUSTEE
First Union National Bank from time to time performs other services for
the Company in the normal course of business.
FORM OF NOTES
The certificates representing the Notes will be issued in fully
registered form, without coupons. Except as described in the next paragraph, the
Notes will be deposited with, or on behalf of, DTC, and registered in the name
of Cede & Co., as DTC's nominee in the form of a global Note certificate (the
"Global Note") or will remain in the custody of the Trustee pursuant to a FAST
Balance Certificate Agreement between DTC and the Trustee. Holders of the Notes
will own certificateless interests in the Global Note evidenced by records in
book entry form maintained by DTC (the "Book-Entry Interests").
Book-Entry Interests may be exchanged for Notes of like tenor and equal
aggregate principal amount, in authorized denominations and in definitive form
("Certificated Notes"), if (i) DTC notifies the Company that it is unwilling or
unable to continue as Depositary or the Company determines that DTC is
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<PAGE> 37
unable to continue as Depositary and the Company fails to appoint a successor
Depositary within 90 days, (ii) the Company provides for such exchange pursuant
to the terms of the Indenture, (iii) the Company determines that such Book-Entry
Interests will no longer be represented by Global Notes and executes and
delivers to the Trustee instructions to such effect or (iv) an Event of Default
or event which, with notice or the lapse of time or both, would constitute an
Event or Default with respect to the Notes, and which entitles the holders of
the Notes to accelerate the Notes' maturity, shall have occurred and be
continuing. However, as of this date, no Certificated Notes were issued and
outstanding.
PLAN OF DISTRIBUTION
Each broker-dealer that receives New Notes for its own account pursuant
to the Exchange Offer must acknowledge that it will deliver a prospectus in
connection with any resale of such New Notes. This Prospectus, as it may be
amended or supplemented from time to time, may be used by a broker-dealer in
connection with resales of New Notes received in exchange for Old Notes where
such Old Notes were acquired as a result of market-making activities or other
trading activities. The Company has agreed to keep the Registration Statement
effective from the time the New Notes are first issued and ending on the earlier
of 180 days after the Exchange Offer is completed or the time when such
broker-dealers no longer own any Old Notes. In addition, the Company agreed
that, for a period of 90 days from December 2, 1998, the date of the Offering
Circular distributed in connection with the sale of the Old Notes, none of the
Company, any of its subsidiaries, other affiliates over which any of them
exercises management or voting control, or any person acting on their behalf
will, without the prior written consent of Goldman, Sachs & Co., offer, sell,
contract to sell or otherwise dispose of any securities substantially similar to
the Notes other than in connection with this Exchange Offer.
The Company will not receive any proceeds from any sale of New Notes by
broker-dealers. New Notes received by broker-dealers for their own account
pursuant to the Exchange Offer may be sold from time to time in one or more
transactions in the over-the-counter market, in negotiated transactions, through
the writing of options on the New Notes or a combination of such methods of
resale, at market prices prevailing at the time of resale, at prices related to
such prevailing market prices or negotiated prices. Any such resale may be made
directly to purchasers or to or through brokers or dealers who may receive
compensation in the form of commissions or concessions from any such
broker-dealer and/or the purchasers of any such New Notes. Any broker-dealer
that resells New Notes that were received by it for its own account pursuant to
the Exchange Offer and any broker or dealer that participates in a distribution
of such New Notes may be deemed to be an "underwriter" within the meaning of the
Securities Act and any profit on any such resale of New Notes and any
commissions or concessions received by any such persons may be deemed to be
underwriting compensation under the Securities Act. The Letter of Transmittal
states that by acknowledging that it will deliver and by delivering a
prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.
We have been advised by Goldman, Sachs & Co., J.P. Morgan Securities,
Inc. and Morgan Stanley & Co. Incorporated, the Initial Purchasers of the Old
Notes, that following completion of the Exchange Offer they intend to make a
market in the New Notes to be issued in the Exchange Offer; however, such
entities are under no obligation to do so and any market activities with respect
to the New Notes may be discontinued at any time.
LEGAL MATTERS
Certain legal matters with respect to the issuance of the New Notes
offered hereby will be passed upon for the Company by Willkie Farr & Gallagher,
787 Seventh Avenue, New York, New York and Robinson, Bradshaw & Hinson, P.A.,
101 North Tryon Street, Suite 1900, Charlotte, North Carolina. Richard A.
Vinroot, a shareholder of Robinson, Bradshaw & Hinson, P.A., is a director of
the Company. Certain members of Robinson, Bradshaw & Hinson, P.A. beneficially
owned approximately 2,267 shares of the Company's common stock as of the date of
this Prospectus.
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EXPERTS
The consolidated financial statements of Martin Marietta Materials,
Inc. incorporated by reference in the Company's Annual Report on Form 10-K for
the year ended December 31, 1997, have been audited by Ernst & Young LLP,
independent auditors, as set forth in their report thereon incorporated by
reference therein and incorporated herein by reference. Such consolidated
financial statements are incorporated herein by reference in reliance upon such
report given upon the authority of such firm as experts in accounting and
auditing.
The consolidated financial statements of American Aggregates
Corporation and Subsidiary for the years ended March 31, 1997 and 1996, included
in the Company's Current Report on Form 8-K/A, dated August 4, 1997, and
incorporated in this Prospectus by reference from the Company's Annual Report on
Form 10-K for the year ended December 31, 1997, have been audited by Deloitte &
Touche LLP, independent auditors, as stated in their report, which is
incorporated herein by reference, and have been so incorporated in reliance upon
the report of such firm given upon their authority as experts in auditing and
accounting.
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================================================================================
$200,000,000
MARTIN MARIETTA
MATERIALS, INC.
5.875% NOTES DUE DECEMBER 1, 2008
----------------
PROSPECTUS
----------------
FEBRUARY 18, 1999
================================================================================
