<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1999
Commission File Number 1-12744
MARTIN MARIETTA MATERIALS, INC.
(Exact name of registrant as specified in its charter)
North Carolina 56-1848578
(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
2710 Wycliff Road, Raleigh, NC 27607-3033
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 919-781-4550
Former name: None
Former name, former address and former fiscal year,
if changes since last report.
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes [X] No [ ]
Indicate the number of shares outstanding of each of the issuer's classes of
Common Stock, as of the latest practicable date.
Class Outstanding as of October 31, 1999
Common Stock, $.01 par value 46,709,754
Page 1 of 24
Exhibit Index is on Page 23
<PAGE> 2
MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
FORM 10-Q
For the Quarter Ended September 30, 1999
INDEX
<TABLE>
<CAPTION>
Page
----
<S> <C>
Part I. Financial Information:
Item 1. Financial Statements.
Condensed Consolidated Balance Sheets -
September 30, 1999 and December 31, 1998 3
Condensed Consolidated Statements of
Earnings Three-Months and Nine-Months
Ended September 30, 1999 and 1998 4
Condensed Consolidated Statements of Cash Flows -
Nine-Months Ended September 30, 1999 and 1998 5
Notes to Condensed Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations. 10
Part II. Other Information:
Item 1. Legal Proceedings. 19
Item 5. Other Information. 19
Item 6. Exhibits and Reports on Form 8-K. 21
Signatures 22
Exhibit Index 23
</TABLE>
Page 2 of 24
<PAGE> 3
MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
September 30, December 31,
1999 1998
----------- -----------
(Dollars in Thousands)
<S> <C> <C>
ASSETS
Current assets:
Cash & cash equivalents $ 599 $ 14,586
Accounts receivable, net 231,142 171,511
Inventories, net 172,246 157,104
Other current assets 25,762 26,187
----------- -----------
Total Current Assets 429,749 369,388
----------- -----------
Property, plant and equipment 1,596,819 1,502,512
Allowances for depreciation, depletion and
amortization (787,155) (724,984)
----------- -----------
Net property, plant and equipment 809,664 777,528
Cost in excess of net assets acquired 374,113 348,026
Other noncurrent assets 119,948 93,647
----------- -----------
Total Assets $ 1,733,474 $ 1,588,589
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Total current liabilities $ 219,390 $ 152,233
Long-term debt and commercial paper 603,290 602,113
Other noncurrent liabilities 171,065 166,544
----------- -----------
Total Liabilities 993,745 920,890
----------- -----------
Shareholders' equity:
Common stock, par value $.01 per share 466 466
Additional paid-in capital 346,316 349,245
Retained earnings 392,947 317,988
----------- -----------
Total Shareholders' Equity 739,729 667,699
----------- -----------
Total Liabilities and Shareholders' Equity $ 1,733,474 $ 1,588,589
=========== ===========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
Page 3 of 24
<PAGE> 4
MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
<TABLE>
<CAPTION>
Three-Months Ended Nine-Months Ended
September 30, September 30,
------------------------------ --------------------------------
1999 1998 1999 1998
------------ ------------ ------------ ------------
(Dollars in Thousands, Except Per Share Data)
<S> <C> <C> <C> <C>
Net sales $ 353,792 $ 312,445 $ 923,718 $ 776,717
Cost of sales 254,131 216,615 694,088 568,173
------------ ------------ ------------ ------------
Gross Profit 99,661 95,830 229,630 208,544
Selling, general & administrative expense 23,364 19,702 71,029 59,879
Research and development 685 873 2,114 2,492
------------ ------------ ------------ ------------
Earnings from Operations 75,612 75,255 156,487 146,173
Interest expense (9,797) (5,823) (28,756) (17,085)
Other income and expenses, net 2,229 422 16,261 75
------------ ------------ ------------ ------------
Earnings before Taxes on Income 68,044 69,854 143,992 129,163
Taxes on income 24,093 23,947 50,828 44,264
------------ ------------ ------------ ------------
Net Earnings $ 43,951 $ 45,907 $ 93,164 $ 84,899
============ ============ ============ ============
Net earnings per share
Basic $ 0.94 $ 0.99 $ 2.00 $ 1.83
============ ============ ============ ============
Diluted $ 0.94 $ 0.98 $ 1.98 $ 1.82
============ ============ ============ ============
Average number of common shares outstanding
Basic 46,677,260 46,536,116 46,665,751 46,410,052
============ ============ ============ ============
Diluted 46,990,461 46,841,671 46,974,517 46,695,694
============ ============ ============ ============
</TABLE>
See accompanying notes to condensed consolidated financial statements.
Page 4 of 24
<PAGE> 5
MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Nine-Months Ended
September 30,
------------------------------------
1999 1998
--------- ---------
(Dollars in Thousands)
<S> <C> <C>
Net cash provided by operating activities $ 145,224 $ 130,035
--------- ---------
Investing activities:
Additions to property, plant and equipment (102,694) (77,473)
Acquisitions, net (58,506) (65,291)
Other investing activities, net (2,000) 2,726
--------- ---------
Net cash used for investing activities (163,200) (140,038)
--------- ---------
Financing activities:
Repayments of long-term debt, net (260) (8)
Dividends paid (18,205) (17,177)
Loans payable 25,383 19,000
Issuance of common stock 3,006 1,722
Repurchase of common stock (5,935) --
--------- ---------
Net cash provided by financing activities 3,989 3,537
--------- ---------
Net decrease in cash and cash equivalents (13,987) (6,466)
Cash and cash equivalents, beginning of period 14,586 18,661
--------- ---------
Cash and cash equivalents, end of period $ 599 $ 12,195
========= =========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
Page 5 of 24
<PAGE> 6
MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
FORM 10-Q
For the Quarter Ended September 30, 1999
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. The accompanying unaudited condensed consolidated financial statements
of Martin Marietta Materials, Inc. (the "Corporation") have been
prepared in accordance with generally accepted accounting principles
for interim financial information and with the instructions to the
Quarterly Report on Form 10-Q and to Article 10 of Regulation S-X. The
Corporation has continued to follow the accounting policies set forth
in the audited consolidated financial statements and related notes
thereto included in the Corporation's Annual Report on Form 10-K for
the year ended December 31, 1998, filed with the Securities and
Exchange Commission on March 24, 1999. In the opinion of management,
the interim financial information provided herein reflects all
adjustments (consisting of normal recurring accruals) necessary for a
fair presentation of the results of operations for the interim periods.
The results of operations for the nine-months ended September 30, 1999,
are not necessarily indicative of the results to be expected for the
full year.
2. Acquisition of Redland Stone Products Company
As of December 4, 1998, the Corporation purchased all of the
outstanding common stock of Redland Stone Products Company ("Redland
Stone") from an affiliate of Lafarge SA. The operating results of the
acquired business have been included with those of the Corporation
since that date.
The purchase price consisted of approximately $272 million in cash plus
normal balance sheet liabilities, subject to certain post-closing
adjustments relating to working capital, and approximately $8 million
estimated for certain other assumed liabilities and transaction costs.
The acquisition has been accounted for under the purchase method of
accounting wherein the Corporation recognized approximately $165
million in costs in excess of net assets acquired after recording other
purchase adjustments necessary to allocate the purchase price to the
fair value of assets acquired and liabilities assumed. During the
second quarter, the post-closing adjustments relating to working
capital were finalized without a significant impact on the preliminary
purchase price allocation. Goodwill is being amortized over a 30-year
period. Management expects that the preliminary purchase price
allocation will be adjusted during the applicable period provided by
Accounting Principles Bulletin No. 16 Business Combinations.
For comparative purposes, the following unaudited pro forma summary
financial information presents the historical results of operations of
the Corporation and the Redland Stone business for the three-months and
nine-months ended September 30, 1998. The financial information
reflects pro forma adjustments as if the acquisition had been
consummated as of the beginning of the periods presented. The pro forma
financial information is based upon certain estimates and assumptions
that management of the Corporation believes are reasonable in the
circumstances. The unaudited pro forma information presented below is
not necessarily indicative of what results of operations actually would
have been if the acquisition had occurred on the date indicated.
Moreover, they are not necessarily indicative of future results.
Page 6 of 24
<PAGE> 7
MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
FORM 10-Q
For the Quarter Ended September 30, 1999
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
2. Acquisition of Redland Stone Products Company (continued)
<TABLE>
<CAPTION>
Pro Forma Information
Three-Months Ended Nine-Months Ended
September 30, September 30,
1998 1998
-------- --------
(Dollars in Thousands, Except Per Share Data)
<S> <C> <C>
Net sales $344,376 $873,273
Net earnings $ 46,026 $ 84,720
Net earnings per diluted share $ 0.98 $ 1.81
</TABLE>
3. Inventories
<TABLE>
<CAPTION>
September 30, December 31,
1999 1998
--------- ---------
(Dollars in Thousands)
<S> <C> <C>
Finished products $ 145,384 $ 127,904
Products in process and raw materials 10,635 12,342
Supplies and expendable parts 24,718 25,307
--------- ---------
180,737 165,553
Less allowances (8,491) (8,449)
--------- ---------
Total $ 172,246 $ 157,104
========= =========
</TABLE>
4. Long-Term Debt
<TABLE>
<CAPTION>
September 30, December 31,
1999 1998
--------- ---------
(Dollars in Thousands)
<S> <C> <C>
6.9% Notes, due 2007 $ 124,955 $ 124,952
7% Debentures, due 2025 124,212 124,204
5.875% Notes, due 2008 199,039 198,980
Commercial Paper, interest rates
approximating 5.7% 185,100 165,000
Wachovia overnight loan 5,283 --
Acquisition notes, interest rates
ranging from 5.5% to 10% 4,783 3,299
Other notes 1,112 1,335
--------- ---------
644,484 617,770
Less current maturities (41,194) (15,657)
--------- ---------
Total $ 603,290 $ 602,113
========= =========
</TABLE>
Page 7 of 24
<PAGE> 8
MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
FORM 10-Q
For the Quarter Ended September 30, 1999
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
4. Long-Term Debt (continued)
No borrowings were outstanding under either of the Corporation's
revolving credit agreements at September 30, 1999. However, these
agreements support commercial paper borrowings of $185 million
outstanding at September 30, 1999, of which $150 million has been
classified as long-term debt in the Corporation's condensed
consolidated balance sheet based on management's ability and intention
to maintain this debt outstanding for at least one year. At November 1,
1999, $180 million remained outstanding under the Corporation's
commercial borrowing obligations. See the "Liquidity and Capital
Resources" discussion contained in the "Management's Discussion and
Analysis of Financial Condition and Results of Operations" on page 15
of this Form 10-Q.
The Corporation's interest payments were approximately $24.5 million in
1999 and $16.9 million in 1998, for the nine months ended September 30.
5. Income Taxes
The Corporation's effective income tax rate for the first nine months
was 35.3% in 1999 and 34.3% in 1998. The effective rate for three
quarters of 1999 was slightly higher than the current federal corporate
income tax rate of 35% due to the effect of several offsetting factors.
The Corporation's effective tax rate reflects the effect of state
income taxes and the impact of differences in book and tax accounting
arising from the net permanent benefits associated with the depletion
allowances for mineral reserves, amortization of certain goodwill
balances, foreign operating earnings, and earnings from nonconsolidated
investments.
The Corporation's income tax payments were approximately $45.7 million
in 1999 and $32.9 million in 1998, for the nine months ended September
30.
6. Contingencies
While it is not possible to determine the ultimate outcome, in the
opinion of management and counsel, it is unlikely that the outcome of
litigation and other proceedings, including those pertaining to
environmental matters, relating to the Corporation and its
subsidiaries, will have a material adverse effect on the results of the
Corporation's operations or its financial position.
7. Other Matters
In June 1998, the FASB issued the Statement of Financial Accounting
Standards No. 133, Accounting for Derivative Instruments and Hedging
Activities ("FAS 133"), which was required to be adopted in years
beginning after June 15, 1999. The FASB amended FAS 133 to defer the
effective date of adoption until all fiscal quarters of all fiscal
years beginning after June 15, 2000.
Page 8 of 24
<PAGE> 9
MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
FORM 10-Q
For the Quarter Ended September 30, 1999
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
Statement of Financial Accounting Standards No. 137, Accounting for
Derivative Instruments and Hedging Activities Deferral of the Effective
Date of FASB Statement No. 133, was issued in June 1999. Because of the
Corporation's minimal use of derivatives, if any, management does not
anticipate that the adoption of FAS 133 will have a significant impact
on net earnings or the financial position of the Corporation.
The Corporation recently repurchased shares of its Common Stock under
its 6,007,000 share authorization from the Board of Directors for the
Stock-Based Award Plan and the Corporation's Amended Omnibus Securities
Award Plan in September and October 1999. Through November 1, 1999,
322,300 shares have been repurchased for $12.7 million at public market
prices at the various purchase dates. During 1994, the Corporation
repurchased 68,200 shares of its common stock under these and previous
authorizations. Total common shares of 390,500 have been repurchased
under these and previous authorizations.
Page 9 of 24
<PAGE> 10
MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
FORM 10-Q
For the Quarter Ended September 30, 1999
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Third Quarter and Nine-Months Ended September 30, 1999 and 1998
OVERVIEW Martin Marietta Materials, Inc., (the "Corporation") operates in two
principal business segments: aggregates products and magnesia-based products.
The Corporation's sales and earnings are predominately derived from its
aggregates segment which processes and sells granite, sandstone, limestone, and
other aggregates products from a network of more than 275 quarries and
distribution facilities in more than 20 states in the southeastern, midwestern
and central regions of the United States and in the Bahama Islands and Canada.
The division's products are used primarily by commercial customers principally
in domestic construction of highways and other infrastructure projects and for
commercial and residential buildings. The Corporation vertically integrated in
other construction materials businesses, in Louisiana, Arkansas and Texas, as a
result of 1998 and 1999 acquisitions of asphalt production and ready mixed
concrete operations and road construction companies. The magnesia-based products
segment produces refractory materials and dolomitic lime used in domestic and
foreign basic steel production and produces chemicals products used in
industrial, agricultural and environmental applications. The magnesia-based
products segment derives a major portion of its sales and earnings from the
products used in the steel industry.
RESULTS OF OPERATIONS Consolidated net sales for the quarter were $353.8
million, a 13% increase over 1998 third quarter sales of $312.4 million.
Earnings from operations were $75.6 million for the 1999 third quarter, a 1%
increase over the same period in 1998. Consolidated net earnings for the quarter
decreased 4% to $44.0 million, or $0.94 per diluted share, from 1998 third
quarter net earnings of $45.9 million, or $0.98 per diluted share. Sales
increased principally as a result of the Redland Stone Products Company
acquisition, and other smaller acquisitions in 1998 and 1999. The Redland Stone
impact was offset somewhat by declining sales volume directly related to the
effect of Hurricanes Dennis and Floyd primarily on our North Carolina market and
continued weaker-than-expected demand in the midwest region agricultural markets
and in the central region commercial markets. Quarterly net earnings decreased
as the Corporation absorbed hurricane-related and other increased costs at
heritage locations offset somewhat by the positive impact of the Redland Stone
acquisition.
Net sales for the first nine months of 1999 increased 19% to $923.7
million, from $776.7 million for the year-earlier period. Earnings from
operations were $156.5 million for the nine-month period ended September 30,
1999, up 7% from the comparable prior-year period. For the nine-month period
ended September 30, 1999, net earnings increased to $93.2 million, or $1.98 per
diluted share, from net earnings for the comparable prior-year period of $84.9
million, or $1.82 per diluted share. Year-to-date 1999 earnings continue to
reflect strong performance from the Redland Stone and other 1998 acquisitions;
interest expense of $28.8 million which is 68% higher than the prior year's
nine-month period and principally related to the acquisition of Redland Stone;
and $16.3 million of other income principally from non-recurring antitrust claim
settlements and planned property sales.
(Continued)
Page 10 of 24
<PAGE> 11
MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
FORM 10-Q
For the Quarter Ended September 30, 1999
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
(Continued)
Third Quarter and Nine-Months Ended September 30, 1999 and 1998
Sales for the Aggregates division increased 15% to $320.4 million for
the third quarter, compared with the year-earlier period. The division's sales
increased 23% to $825.4 million for the first nine months of 1999, compared with
the first nine months of 1998. The division's third quarter earnings from
operations of $72.6 million remained relatively flat when compared to $72.4
million in the year-earlier period. The division's earnings from operations for
the first nine months of 1999 increased 12% to $152.3 million from $136.0
million for the first nine months of 1998. Sales volume for the quarter in the
heritage aggregates operations declined 7% when compared to the year-earlier
period due to the impact of Hurricanes Floyd and Dennis and weaker than expected
building construction demand. In particular, Hurricane Floyd affected operations
in the Bahamas, the coastal areas of Georgia and South Carolina, and the eastern
portion of North Carolina. A majority of the impact on the division's business
occurred in eastern North Carolina in the area beginning west of Interstate 95
across to the east coast, where Hurricane Floyd and subsequent heavy rains
resulted in historic levels of flooding in the state. Hurricane Floyd rendered
ten quarries inoperable in its aftermath. Currently, nine quarries are
operational. The remaining inoperable quarry is flooded and water removal is
expected to be completed by mid-December 1999. While the Corporation is still
incurring additional costs for water pumping at certain locations, aggregates
shipment volume is currently returning to planned levels. The decline in sales
volume was somewhat offset by a 4.6% increase in average selling price for the
quarter at our heritage aggregates operations. However, earnings from operations
for the quarter remained flat when compared to the 1998 third quarter as
hurricane-related costs and increased costs at heritage operations offset the
positive impact of the Redland Stone acquisition.
The Aggregates division's business is significantly impacted by
seasonal changes and other weather-related conditions. Consequently, the
Aggregates division's production and shipment levels coincide with general
construction activity levels, most of which occur in the division's markets
typically during the spring, summer, and fall seasons. Management believes the
construction industry's overall aggregates annual consumption level will
experience slight growth in 1999. The Corporation's full year 1999 heritage
aggregates operations annual production and shipments, will be comparable to, or
slightly below, full year 1998, including the impact of the hurricanes and
weaker demand in the midwest region agricultural markets and the central region
commercial markets.
Management has recently completed its initial assessment of the
Corporation's one- and five-year business outlook for 2000 and beyond. Based on
currently available external forecast information, expectations of construction
activity and general economic trends, management believes that heritage
operations' aggregates shipments, which in 2000, will include Redland Stone and
other 1998 acquisitions, are expected to increase 2% to 4% in 2000. Management
expects that increased highway spending, fueled by funding from the
Transportation Equity Act for the 21st Century ("TEA-21"), will generate growth
in infrastructure aggregates shipments; commercial construction aggregates
shipments are expected to grow in 2000, but at a slower rate than in 1999; and
aggregates shipments for residential construction are expected to decline. In
addition, average selling prices for heritage aggregates operations are expected
to increase 3% to 4% outpacing potential increases in production costs in 2000.
Management also expects continued growth in its construction materials business
over the next five years. Excluding acquisitions, management expects continued
growth, over the five-year period ended December 31, 2004, as a result of
increased infrastructure construction spending generated by TEA-21 coupled with
moderate growth in residential and commercial construction.
(Continued)
Page 11 of 24
<PAGE> 12
MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
FORM 10-Q
For the Quarter Ended September 30, 1999
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
(Continued)
Third Quarter and Nine-Months Ended September 30, 1999 and 1998
Further, the Corporation's growth is expected to increase as a result of
acquisitions as the Corporation continues to participate in consolidation of the
construction materials industry over the next five years.
Currently, while management believes that its expectations are
reasonable based on currently available information, there is no assurance that
such expectations will be achieved.
The Magnesia Specialties division had third quarter 1999 sales of $33.4
million, a 3% decrease compared to the third quarter sales of 1998, and had nine
month 1999 sales of $98.4 million as compared with $105.5 million in the
prior-year period. The Magnesia Specialties division's earnings from operations
for the third quarter were $3.0 million as compared to $2.9 million in the
year-earlier period. Earnings from operations for the first nine-months of 1999
decreased to $4.2 million from $10.2 million in 1998. The division is highly
dependent on the steel industry and foreign steel imports continue to adversely
affect sales and earnings of the refractories, periclase and dolomitic lime
products areas. Inventory levels have been reduced and selective reductions will
continue throughout the year, however, production rates for all product areas
have stabilized to a level that better matches current sales volume. As
expected, third-quarter's 1999 earnings from operations exceeded the performance
for the first six-months of 1999. Management continues to believe that the
division will show improvement for the remainder of 1999 as compared to first
half 1999.
Management continues to look at various alternatives related to this
business which may present opportunities to create additional value for the
Corporation. However, there are no guarantees that value will be created from
the alternatives being explored at the Magnesia Specialties division.
(Continued)
Page 12 of 24
<PAGE> 13
MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
FORM 10-Q
For the Quarter Ended September 30, 1999
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
(Continued)
Third Quarter and Nine-Months Ended September 30, 1999 and 1998
The following tables present net sales, gross profit, selling, general
and administrative expense, and earnings from operations data for the
Corporation and each of its divisions for the three and nine months ended
September 30, 1999 and 1998. In each case, the data is stated as a percentage of
net sales, of the Corporation or the relevant division, as the case may be:
<TABLE>
<CAPTION>
Three-Months Ended
September 30,
----------------------------------------------------------
(Dollars in Thousands)
1999 1998
---------------------------- ---------------------
% of % of
Amount Net Sales Amount Net Sales
------ --------- ------ ---------
<S> <C> <C> <C> <C>
Net sales:
Aggregates $320,436 100.0 $278,009 100.0
Magnesia Specialties 33,356 100.0 34,436 100.0
-------- ------- -------- -------
Total $353,792 100.0 $312,445 100.0
Gross profit:
Aggregates $ 91,692 28.6 $ 88,165 31.7
Magnesia Specialties 7,969 23.9 7,665 22.3
-------- ------- -------- -------
Total $ 99,661 28.2 $ 95,830 30.7
Selling, general & administrative expense:
Aggregates $ 18,986 5.9 $ 15,513 5.6
Magnesia Specialties 4,378 13.1 4,189 12.2
-------- ------- -------- -------
Total $ 23,364 6.6 $ 19,702 6.3
Earnings from operations:
Aggregates $ 72,631 22.7 $ 72,395 26.0
Magnesia Specialties 2,981 8.9 2,860 8.3
-------- ------- -------- -------
Total $ 75,612 21.4 $ 75,255 24.1
</TABLE>
(Continued)
Page 13 of 24
<PAGE> 14
MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
FORM 10-Q
For the Quarter Ended September 30, 1999
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
(Continued)
Third Quarter and Nine-Months Ended September 30, 1999 and 1998
<TABLE>
<CAPTION>
Nine-Months Ended
September 30,
-----------------------------------------------------------------
(Dollars in Thousands)
1999 1998
---------------------------- ---------------------------
% of % of
Amount Net Sales Amount Net Sales
------ --------- ------ ---------
<S> <C> <C> <C> <C>
Net sales:
Aggregates $825,357 100.0 $671,211 100.0
Magnesia Specialties 98,361 100.0 105,506 100.0
-------- ------- -------- -------
Total $923,718 100.0 $776,717 100.0
Gross profit:
Aggregates $210,643 25.5 $182,817 27.2
Magnesia Specialties 18,987 19.3 25,727 24.4
-------- ------- -------- -------
Total $229,630 24.9 $208,544 26.9
Selling, general & administrative expense:
Aggregates $ 58,043 7.0 $ 46,123 6.9
Magnesia Specialties 12,986 13.2 13,756 13.0
-------- ------- -------- -------
Total $ 71,029 7.7 $ 59,879 7.7
Earnings from operations:
Aggregates $152,262 18.4 $135,957 20.3
Magnesia Specialties 4,225 4.3 10,216 9.7
-------- ------- -------- -------
Total $156,487 16.9 $146,173 18.8
</TABLE>
(Continued)
Page 14 of 24
<PAGE> 15
MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
FORM 10-Q
For the Quarter Ended September 30, 1999
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
(Continued)
Third Quarter and Nine-Months Ended September 30, 1999 and 1998
Other income and expenses, net, for the quarter ended September 30,
were $2.2 million in income in 1999 compared with $0.4 million in income in
1998. In addition to several offsetting amounts, other income and expenses, net,
is comprised generally of interest income, gains and losses associated with the
disposition of certain assets, gains and losses related to certain amounts
receivable, income from non-operating services, costs associated with the
commercialization of certain new technologies, and net equity earnings from
non-consolidated investments. Other income and expenses, net, for the
nine-months ended September 30, were $16.3 million in income in 1999 compared
with $0.1 million in income in 1998. The 1999 year-to-date other income and
expenses, net, includes non-recurring settlements from antitrust claims. Income
from certain non-operating services was recorded as operating income beginning
in the third quarter of 1999, as the activities associated with these services
became a recurrent feature of business operations. The reclassification between
operating and non-operating income did not materially affect earnings from
operations.
Interest expense was $9.8 million in the third quarter, approximately
$4.0 million above the third quarter of 1998. The increased interest expense in
1999 resulted from the effect of additional indebtedness and borrowings incurred
by the Corporation associated primarily with its acquisition of the Redland
Stone business in December 1998.
The Corporation's estimated effective income tax rate for the first
nine months was 35.3% in 1999 and 34.3% in 1998. See Note 5 of the Notes to
Condensed Consolidated Financial Statements.
LIQUIDITY AND CAPITAL RESOURCES Net cash flow provided by operating activities
during the first nine months of 1999 was $145.2 million, compared with $130.0
million in the comparable period of 1998. The cash flow from operating
activities for both 1999 and 1998 was principally from earnings, before
deducting depreciation, depletion and amortization, offset by working capital
requirements. Depreciation, depletion and amortization was $89.9 million and
$70.6 million at September 30, 1999 and 1998, respectively. Amortization of
intangibles of $13.7 million and $8.1 million at September 30, 1999 and 1998,
respectively, is included in total depreciation, depletion and amortization. The
seasonal nature of the construction aggregates business impacts quarterly net
cash provided by operating activities when compared with the year. Accordingly,
full year 1998 net cash provided by operating activities was $222.6 million,
compared with the $130.0 million provided by operations in the first nine months
of 1998. For 1999, capital expenditures, exclusive of acquisitions, are expected
to be approximately $130.0 million. Comparable capital expenditures were $123.9
million in 1998.
(Continued)
Page 15 of 24
<PAGE> 16
MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
FORM 10-Q
For the Quarter Ended September 30, 1999
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
(Continued)
Third Quarter and Nine-Months Ended September 30, 1999 and 1998
During the quarter, the Corporation repurchased in market transactions
the Corporation's common stock under its 6,007,000 share authorization from the
Board of Directors for the Stock-Based Award Plan and the Corporation's Amended
Omnibus Securities Award Plan. For the quarter and nine-months ended September
30, 1999 the Corporation repurchased 149,800 shares of common stock for $5.9
million at public market prices at the various purchase dates. Through November
1, 1999, the Corporation has purchased an additional 172,500 shares for $6.8
million. During 1994, the Corporation repurchased 68,200 shares of its common
stock under these authorizations for a total of 390,500 shares repurchased.
The Corporation continues to rely upon internally generated funds and
access to capital markets, including funds obtained under its two revolving
credit agreements and cash management facility to meet its liquidity
requirements, finance its operations, and fund its capital requirements. With
respect to the Corporation's ability to access the public market, currently the
Corporation has an effective shelf registration on file with the Securities and
Exchange Commission (the "Commission") for the offering of up to $50 million of
debt securities, which may be issued from time to time. Presently, management
has the authority to file another shelf registration statement with the
Commission. It should be noted, however, that the Corporation has not determined
the timing when, or the amount for which, it may file such shelf registration.
The Corporation's ability to borrow or issue debt securities is
dependent, among other things, upon prevailing economic, financial and market
conditions.
Based on prior performance and current expectations, the Corporation's
management believes that cash flows from internally generated funds and its
access to capital markets are expected to continue to be sufficient to provide
the capital resources necessary to fund the operating needs of its existing
businesses, cover debt service requirements, and allow for payment of dividends
in 1999. The Corporation may be required to obtain additional levels of
financing in order to fund certain strategic acquisitions if any such
opportunities arise. Currently, the Corporation's senior unsecured debt has been
reaffirmed and rated "A" by Standard & Poor's and "A3" by Moody's. The
Corporation's commercial paper obligations are rated "A-1" by Standard & Poor's,
"P-2" by Moody's and "F-1" by Fitch IBCA, Inc. While management believes its
credit ratings will remain at an investment-grade level, no assurance can be
given that these ratings will remain at the above-mentioned levels.
(Continued)
Page 16 of 24
<PAGE> 17
MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
FORM 10-Q
For the Quarter Ended September 30, 1999
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
(Continued)
Third Quarter and Nine-Months Ended September 30, 1999 and 1998
YEAR 2000 ISSUE As more fully described in the Corporation's Annual Report on
Form 10-K for the year-ended December 31, 1998, and the Corporation's Quarterly
Reports on Form 10-Q for the quarters and three- and six-month periods ended
March 31, 1999, and June 30, 1999, respectively, the Corporation, with the
exception of its Southwest Division (formerly Redland Stone) and its recently
acquired Marock, Inc. ("Marock") and L.J. Earnest, Inc. ("L.J. Earnest"), has
completed the remediation, testing and implementation of its information systems
critical to ongoing operations and its non-critical information systems,
including its legacy accounting and reporting information systems software, to
enable operations beyond December 31, 1999. Management expects that its
Southwest Division, including Marock, and L.J. Earnest financial and operating
systems will be year 2000 compliant by the end of the year. The Corporation has
no significant single supplier, vendor or customer ("external agents") that is
critical to ongoing operations. Further, while the Corporation has no means of
ensuring that its external agents will be year 2000 ready, all significant
external agents have been queried and no major issues requiring additional
follow-up by the Corporation were identified.
The Corporation continues to estimate that the total costs of the Year
2000 Issue will approximate $4.1 million, including $500,000 for the Southwest
Division and L.J. Earnest. To date, the Corporation has spent $3.5 million, $0.9
million in 1999 and $2.6 million in 1998, all funded from operating cash flows.
The Corporation is formally assessing the need for development of a
contingency plan to address possible disruption of processes critical to ongoing
operations immediately after December 31, 1999. The potential operating
disruption to the Corporation is somewhat mitigated by the winter seasonality of
its normal operations, the ability to build inventory to supply winter and early
spring demands and the fact that the operations do not require significant raw
materials from external agents. However, management is evaluating the
alternatives available for the Corporation to continue to execute critical
processes, including the 1999 financial statement close and reporting process,
plant operations and daily processing of 2000 financial transactions, should
temporary disruptions occur. A formal contingency plan will be developed as
necessary based on the critical process assessment.
Management of the Corporation believes it has an effective program in
place to resolve the impact of the Year 2000 Issue in a timely manner and does
not expect the Year 2000 Issue to have a material adverse effect on the
Corporation. However, the ultimate effectiveness of the remediated information
technology throughout the Corporation will be unknown until January 1, 2000 and
there is no assurance that there will not be a material adverse effect. Further,
management can give no assurance that disruptions in the economy generally
resulting from Year 2000 Issues will not have a material adverse effect on the
Corporation.
(Continued)
Page 17 of 24
<PAGE> 18
MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
FORM 10-Q
For the Quarter Ended September 30, 1999
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
(Continued)
Third Quarter and Nine-Months Ended September 30, 1999 and 1998
ACCOUNTING CHANGES The accounting changes that currently impact the Corporation
are included in Note 7 to the Condensed Consolidated Financial Statements.
OTHER MATTERS Investors are cautioned that statements in this Quarterly Report
on Form 10-Q which relate to the future are, by their nature, uncertain and
dependent upon numerous contingencies - including political, economic,
regulatory, climatic, competitive, and technological - any of which could cause
actual results and events to differ materially from those indicated in such
forward-looking statements. Additional information regarding these and other
risk factors and uncertainties may be found in the Corporation's other filings
which are made from time to time with the Securities and Exchange Commission.
(Continued)
Page 18 of 24
<PAGE> 19
MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
FORM 10-Q
For the Quarter Ended September 30, 1999
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
Reference is made to Part I Item 3. Legal Proceedings of the Martin Marietta
Materials, Inc. Annual Report on Form 10-K for the year-ended December 31, 1998.
Item 5. Other Information
On August 20, 1999, the Corporation announced that the Board of Directors had
declared a regular quarterly cash dividend of $0.13 per share on the
Corporation's common stock. This dividend, which represents a cash payout of
$0.52 per share on an annualized basis, is payable September 30, 1999, to
shareholders of record at the close of business on September 1, 1999.
On August 26, 1999, the Corporation announced the election of seven senior
managers as Vice Presidents of the Corporation. This election reflects the
growth of the Corporation in recent years and particularly the increased
responsibilities and contributions of those elected. The newly elected officers
are: Geoffrey C. Harris (51), President of the MidAmerica Division; Robert C.
Meskimen (54), President of the Midwest Division; Donald M. Moe (54), Senior
Vice President-Aggregates and President of the Carolina Division; J. Michael
Pertsch (53), President of the Southeast Division; H. Donovan Ross (58),
President of the Central Division; George S. Seamen, Jr. (47), President of the
Mideast Division and Vice President, Operations Services; and Bruce A. Vaio
(38), President of the Southwest Division. The Board of Directors also elected
R. Paxton Badham (49) as Assistant Secretary.
On September 2, 1999, the Corporation announced that it expects earnings for the
third quarter and the year to be below current First Call consensus estimates.
The earnings shortfall related primarily to weaker-than-expected
non-infrastructure construction demand in certain areas of the country
(particularly affecting the farm belt states and the central region of the
country) and the effects of Hurricane Dennis on coastal quarries in North and
South Carolina. It was estimated that the combination of these factors could
impact 1999 annual earnings in the range of $0.10 to $0.15 per share. The
Corporation also announced that it expected to repurchase its common stock
pursuant to authority previously granted to it by the Board of Directors.
On September 7, 1999, the Corporation announced the acquisition of the stock of
Marock, Inc. Marock principally serves the Dallas/Ft. Worth area from a large
limestone quarry near Bridgeport, Texas, and a sand and gravel operation in the
same area. Annual production capacity of aggregates is approximately 4.5 million
tons, and mineral reserves exceed 150 million tons. The purchase also includes
three asphalt plants with capacity of approximately 700,000 tons per year. The
cash purchase price for the stock and certain other ancillary agreements is
approximately $41 million, subject to certain post-closing adjustments relating
to working capital. The purchase price is approximately five times fiscal year
1999 pro forma earnings before interest, income taxes, depreciation, depletion
and amortization of intangibles (EBITDA).
Page 19 of 24
<PAGE> 20
MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
FORM 10-Q
For the Quarter Ended September 30, 1999
PART II - OTHER INFORMATION
Item 5. Other Information (continued)
On September 21, 1999, the Corporation indicated that its operations in the
Bahamas, the coastal areas of Georgia and South Carolina and the eastern portion
of North Carolina were significantly impacted by Hurricane Floyd. Although no
major facilities damage occurred, heavy rainfall and extensive flooding had
interrupted production and sales at ten plants and six distribution yards. In
connection with Hurricane Floyd the Corporation announced that a reasonable
expectation of third quarter earnings could be between $0.91 and $0.93 per share
and, fourth quarter per share earnings could be between $0.64 to $0.66. The
Corporation further announced that it was repurchasing common shares under the
existing repurchase authorization from the Board of Directors.
On September 24, 1999, the Corporation announced it had completed the purchase
of a limestone quarry near Nashville, Tennessee from Menefee Crushed Stone
Company, Inc. The Menefee location has production capacity of about 900,000 tons
annually with mineral reserves in excess of 30 million tons. The transaction was
for cash with the purchase price not announced.
October 18, 1999, the Corporation announced the purchase of the stock of L.J.
Earnest, Inc., in an exchange of approximately 300,000 restricted shares of
Martin Marietta common stock, along with a promissory note and cash
consideration. The purchase price for the stock and certain other agreements of
approximately $40 million equates to about five times prior year EBITDA. L.J.
Earnest operates a major aggregates distribution yard in Shreveport, Louisiana,
three asphalt plants in Shreveport and Texarkana, Arkansas, and two ready mixed
concrete plants in Shreveport and Texarkana. The asphalt plants have in excess
of 800,000 tons of annual capacity. The company is also a major paving
contractor. Total revenue for all product lines in fiscal 1999 exceeded $56
million.
Page 20 of 24
<PAGE> 21
MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
FORM 10-Q
For the Quarter Ended September 30, 1999
PART II - OTHER INFORMATION
(Continued)
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
<TABLE>
<CAPTION>
Exhibit
No. Document
- ------- --------
<S> <C>
10.01 Amended and Restated Revolving Credit Agreement dated as of August 11, 1999
11.01 Martin Marietta Materials, Inc. and Consolidated Subsidiaries Computation of
Earnings Per Share for the Quarter and Nine-Months Ended September 30, 1999 and 1998
27.01 Financial Data Schedule (for Securities and Exchange Commission use only)
</TABLE>
Page 21 of 24
<PAGE> 22
MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
FORM 10-Q
For the Quarter Ended September 30, 1999
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
MARTIN MARIETTA MATERIALS, INC.
(Registrant)
Date: November 12, 1999 By: /s/ JANICE K. HENRY
------------------------------
Janice K. Henry
Senior Vice President, Chief
Financial Officer and Treasurer
Page 22 of 24
<PAGE> 23
MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
FORM 10-Q
For the Quarter Ended September 30, 1999
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Document Page
- ----------- -------- ----
<S> <C> <C>
10.01 Amended and Restated Revolving Credit Agreement dated as of
August 11, 1999
11.01 Martin Marietta Materials, Inc. and Consolidated Subsidiaries 24
Computation of Earnings Per Share for the Quarter and Nine-
Months Ended September 30, 1999 and 1998
27.01 Financial Data Schedule (for Securities and Exchange Commission
use only)
</TABLE>
Page 23 of 24
<PAGE> 1
Exhibit 10.01
CONFORMED COPY
AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT
AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT dated as of August 11,
1999 among MARTIN MARIETTA MATERIALS, INC. (the "Borrower"), the BANKS listed
on the signature pages hereof (the "Banks") and MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Agent (the "Agent").
W I T N E S S E T H:
WHEREAS, certain of the parties hereto have heretofore entered into a
Revolving Credit Agreement dated as of December 3, 1998 (the "Agreement");
WHEREAS, at the date hereof, there are no Loans outstanding under the
Agreement; and
WHEREAS, the parties hereto desire to make the amendments specified below
and to restate the Agreement in its entirety to read as set forth in the
Agreement with the amendments specified below;
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. Definitions; References.
(a) Unless otherwise specifically defined herein, each term used herein
which is defined in the Agreement shall have the meaning assigned to such term
in the Agreement. Each reference to "hereof", "hereunder," "herein" and
"hereby" and each other similar reference and each reference to "this
Agreement" and each other similar reference contained in the Agreement shall
from and after the date hereof refer to the Agreement as amended hereby.
(b) The following definitions are added to Section 1.01 of the Agreement,
in appropriate alphabetical order:
"YEAR 2000 COMPLIANT" means the ability to perform properly
date-sensitive functions for all dates before and from and after January 1,
2000.
"YEAR 2000 PROBLEM" means the risk that computer applications used by the
Borrower, its Subsidiaries, or the suppliers and vendors of the Borrower and
<PAGE> 2
its Subsidiaries may be unable to recognize and perform properly date sensitive
functions involving certain dates prior to and any date after December 31,
1999.
SECTION 2. Extension of Facility. The date "December 2, 1999" in the
definition of "Termination Date" in Section 1.01 of the Agreement is changed to
"August 9, 2000."
SECTION 3. New Pricing Schedule. The Schedule annexed hereto is hereby
substituted for the Pricing Schedule as annexed to the Agreement.
SECTION 4. Change in Conditions to Borrowing. Section 3.02(e) of the
Agreement is amended to read as follows:
(e) the fact that, except as otherwise described by the Borrower in a
writing to the Agent and waived by the Required Banks, the
representations and warranties of the Borrower contained in this
Agreement (except, in the case of any Borrowing subsequent to the
Closing Date, the representations and warranties set forth in Sections
4.04(c), 4.05, 4.06, 4.08, 4.13, 4.14 and 4.16) shall be true on and
as of the date of such Borrowing.
SECTION 5. Updated Representations. (a) Each reference to "1997" in
Section 4.04(a) of the Agreement is replaced with "1998."
(b) Each reference to "September 30, 1998" in Section 4.04(b) and Section
4.04(c) of the Agreement is replaced with "March 31, 1999."
(c) Each reference to "nine months" in Section 4.04(b) in the Agreement is
replaced with "three months."
(d) Each reference to "September 30, 1998" in the definition of
"Borrower's Latest Form 10-Q" is replaced with "March 31, 1999."
(e) The following new Section 4.16 is added to the Agreement:
SECTION 4.16. Year 2000 Compliance. The Borrower has (i) initiated a review
and assessment of all areas within its and each of its Subsidiaries'
business and operations (including those affected by suppliers and vendors)
that could be adversely affected by the Year 2000 Problem, (ii) developed a
plan and timeline for addressing the Year 2000 Problem on a timely basis
and (iii) to date, implemented such plan in accordance with such timetable.
The Borrower is exercising commercially reasonable efforts to cause the
computer hardware and software within the critical
2
<PAGE> 3
business systems of the Borrower and its Subsidiaries to be Year 2000
Compliant. The Borrower has no reason to believe that such critical
business systems will not function on any given date in a manner which
would be reasonably likely to have a Material Adverse Effect.
SECTION 6. Change in Commitments. With effect from and including the
date this Amendment and Restatement becomes effective in accordance with
Section 8 hereof, (i) each Person listed on the signature pages hereof which is
not a party to the Agreement shall become a Bank party to the Agreement and
(ii) the Commitment of each Bank shall be the amount set forth opposite the
name of such Bank in the Commitment Schedule annexed hereto. Any Bank whose
Commitment is changed to zero shall upon such effectiveness cease to be a Bank
party to the Agreement, and all accrued fees and other amounts payable under
the Agreement for the account of such Bank shall be due and payable on such
date; provided that the provisions of Sections 8.03 and 9.03 of the Agreement
shall continue to inure to the benefit of each such Bank.
SECTION 7. Representations and Warranties. The Borrower hereby
represents and warrants that as of the date hereof and after giving effect
hereto:
(a) no Default has occurred and is continuing; and
(b) each representation and warranty of the Borrower set forth in the
Agreement after giving effect to this Amendment and Restatement is true and
correct as though made on and as of such date.
SECTION 8. Governing Law. This Amendment and Restatement shall be
governed by and construed in accordance with the laws of the State of New York.
SECTION 9. Counterparts; Effectiveness. This Amendment and Restatement
may be signed in any number of counterparts, each of which shall be an
original, with the same effect as if the signatures thereto and hereto were
upon the same instrument. This Amendment and Restatement shall become effective
as of the date hereof when the Agent shall have received:
(a) duly executed counterparts hereof signed by the Borrower and the
Banks (or, in the case of any party as to which an executed counterpart shall
not have been received, the Agent shall have received telegraphic, telex or
other written confirmation from such party of execution of a counterpart hereof
by such party);
(b) an opinion of Willkie Farr & Gallagher, counsel for the Borrower (or
such other counsel for the Borrower as may be acceptable to the Agent)
3
<PAGE> 4
substantially to the effect of Exhibit E to the Agreement with reference to this
Amendment and Restatement and the Agreement as amended and restated hereby; and
(c) all documents it may reasonably request relating to the existence of
the Borrower, the corporate authority for and the validity of this Agreement,
and any other matters relevant hereto, all in form and substance satisfactory to
the Agent;
provided that this Amendment and Restatement shall not become effective or
binding on any party hereto unless all of the foregoing conditions are satisfied
not later than August 15, 1999. The Agent shall promptly notify the Borrower and
the Banks of the effectiveness of this Amendment and Restatement, and such
notice shall be conclusive and binding on all parties hereto.
4
<PAGE> 5
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
MARTIN MARIETTA MATERIALS, INC.
By: /s/ Stephen P. Zelnak, Jr.
--------------------------------------
Name: Stephen P. Zelnak, Jr.
Title: Chairman & CEO
Address:
Facsimile:
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By: /s/ Robert Bottamedi
--------------------------------------
Name: Robert Bottamedi
Title: Vice President
FIRST UNION NATIONAL BANK
By: /s/ G. Mendel Lay, Jr.
--------------------------------------
Name: G. Mendel Lay, Jr.
Title: Senior Vice President
WACHOVIA BANK, N.A.
By: /s/ Keith A. Sherman
--------------------------------------
Name: Keith A. Sherman
Title: Senior Vice President
<PAGE> 6
BANK OF AMERICA, N.A.
By: /s/ Kathryn W. Robinson
--------------------------------
Name: Kathryn W. Robinson
Title: Managing Director
BANQUE NATIONALE DE PARIS,
HOUSTON AGENCY
By: /s/ Henry F. Setina
------------------------------
Name: Henry F. Setina
Title: Vice President
BRANCH BANKING & TRUST COMPANY
By: /s/ Richard E. Fowler
--------------------------------
Name: Richard E. Fowler
Title: Senior Vice President
CENTURA BANK
By: /s/ J. Michael Dickinson
--------------------------------
Name: J. Michael Dickinson
Title: Corporate Banking Officer
<PAGE> 7
STATE STREET BANK
By: /s/ Jacqueline Kuss
------------------------------
Name: Jacqueline Kuss
Title: Vice President
NORTHWEST BANK COLORADO,
NATIONAL ASSOCIATION
By: /s/ Carol A. Ward
------------------------------
Name: Carol A. Ward
Title: Vice President
<PAGE> 8
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Agent
By: /s/ Robert Bottamedi
------------------------------
Name: Robert Bottamedi
Title: Vice President
Address: Morgan Guaranty Trust
Company of New York
60 Wall Street
New York, New York 10260
Facsimile:
<PAGE> 9
COMMITMENT SCHEDULE
<TABLE>
<CAPTION>
BANK COMMITMENT
- ---- ----------
<S> <C>
Morgan Guaranty Trust Company of New York $ 44,500,000
First Union National Bank 43,500,000
Wachovia Bank, N.A. 43,500,000
Bank of America, N.A. 43,500,000
Banque Nationale de Paris, Houston Agency 25,000,000
Branch Banking & Trust Company 25,000,000
Centura Bank 25,000,000
State Street Bank 25,000,000
Norwest Bank Colorado, National Association 25,000,000
TOTAL $300,000,000
</TABLE>
<PAGE> 10
PRICING SCHEDULE
Each of "Facility Fee Rate" and "Euro-Dollar Margin" means, for any day,
the rate set forth below (in basis points per annum) in the row opposite such
term and in the column corresponding to the Pricing Level that apply for such
day:
PRICING LEVEL LEVEL I LEVEL II LEVEL III
Facility Fee Rate 7.0 8.0 11.0
Euro-Dollar Margin
if Utilization [less sign] 25% 18.0 27.0 39.0
if Utilization [greater than or
equal to sign] 25% 38.0 47.0 64.0
For purposes of this Schedule, the following terms have the following meanings,
subject to the further provisions of this Schedule:
"LEVEL I PRICING" applies at any date if, at such date, the Borrower's
long-term debt is rated A or higher by S&P and no lower than A3 by Moody's or
A2 or higher by Moody's and no lower than A- by S&P.
"LEVEL II PRICING" applies at any date if, at such date, (i) the
Borrower's long-term debt is rated A- or higher by S&P and no lower than Baa1
by Moody's or A3 or higher by Moody's and no lower than BBB+ by S&P and (ii)
Level I Pricing does not apply.
"LEVEL III PRICING" applies at any date if, at such date, neither Level I
Pricing nor Level II Pricing applies.
"MOODY'S" means Moody's Investors Service, Inc.
"PRICING LEVEL" refers to the determination of which of Level I, Level II
or Level III applies at any date.
"S&P" means Standard & Poor's Ratings Group.
"UTILIZATION" means, at any date, the percentage equivalent of a fraction
the numerator of which is the aggregate outstanding principal amount of the
Loans at such date and the denominator of which is the aggregate amount of the
Commitments at such date. If for any reason any Loans remain outstanding
<PAGE> 11
following termination of the Commitments, Utilization shall be deemed to be in
excess of 25%.
The credit ratings to be utilized for purposes of this Schedule are those
assigned to the senior unsecured long-term debt securities of the Borrower
without third-party credit enhancement, and any rating assigned to any other
debt security of the Borrower shall be disregarded. The ratings in effect for
any day are those in effect at the close of business on such day. The ratings
in effect for any day are those in effect at the close of business on such day,
and the Euro-Dollar Margin and Facility Fee Rate may change from time to time
during any Interest Period as a result of changes in the Pricing Level during
such Interest Period.
2
<PAGE> 1
Exhibit 11.01
MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
COMPUTATION OF EARNINGS PER SHARE
For the Quarter and Nine-Months Ended September 30, 1999 and 1998
(Dollars in Thousands, Except Per Share Data)
<TABLE>
<CAPTION>
Three-Months Ended Nine-Months Ended
September 30, September 30,
-------------------------------- --------------------------------
1999 1998 1999 1998
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net earnings $ 43,951 $ 45,907 $ 93,164 $ 84,899
=========== =========== =========== ===========
Weighted average number of
shares outstanding:
Basic earnings per share 46,677,260 46,536,116 46,665,751 46,410,052
Effect of dilutive securities 313,201 305,555 308,766 285,642
----------- ----------- ----------- -----------
Diluted earnings per share 46,990,461 46,841,671 46,974,517 46,695,694
=========== =========== =========== ===========
Net earnings per share - Basic $ 0.94 $ 0.99 $ 2.00 $ 1.83
=========== =========== =========== ===========
- Diluted $ 0.94 $ 0.98 $ 1.98 $ 1.82
=========== =========== =========== ===========
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONDENSED CONSOLIDATED BALANCE SHEET AS OF 9/30/99 AND THE RELATED
CONDENSED CONSOLIDATED STATEMENT OF EARNINGS FOR THE THREE- AND NINE-MONTH
PERIODS ENDED 9/30/99 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTERLY PERIOD ENDED 9/30/99.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> SEP-30-1999
<CASH> 599
<SECURITIES> 0
<RECEIVABLES> 231,142
<ALLOWANCES> 4,527
<INVENTORY> 172,246
<CURRENT-ASSETS> 429,749
<PP&E> 1,596,819
<DEPRECIATION> 787,155
<TOTAL-ASSETS> 1,733,474
<CURRENT-LIABILITIES> 219,390
<BONDS> 603,290
0
0
<COMMON> 466
<OTHER-SE> 739,263
<TOTAL-LIABILITY-AND-EQUITY> 1,733,474
<SALES> 923,718
<TOTAL-REVENUES> 923,718
<CGS> 694,088
<TOTAL-COSTS> 767,231
<OTHER-EXPENSES> (17,289)
<LOSS-PROVISION> 1,028
<INTEREST-EXPENSE> 28,756
<INCOME-PRETAX> 143,992
<INCOME-TAX> 50,828
<INCOME-CONTINUING> 93,164
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 93,164
<EPS-BASIC> 2.00
<EPS-DILUTED> 1.98
</TABLE>
