-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, VuKq76fNh1UkcuTj9M5MlKzi0T/VDhy5eyQfoo9cnsqIxuQpxtZVRWf617fDBt0D TO/45hfYpWOMaAKLmQ8k7g== 0000950144-99-012849.txt : 19991115 0000950144-99-012849.hdr.sgml : 19991115 ACCESSION NUMBER: 0000950144-99-012849 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19990930 FILED AS OF DATE: 19991112 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MARTIN MARIETTA MATERIALS INC CENTRAL INDEX KEY: 0000916076 STANDARD INDUSTRIAL CLASSIFICATION: MINING, QUARRYING OF NONMETALLIC MINERALS (NO FUELS) [1400] IRS NUMBER: 561848578 STATE OF INCORPORATION: NC FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-12744 FILM NUMBER: 99748166 BUSINESS ADDRESS: STREET 1: 2710 WYCLIFF RD CITY: RALEIGH STATE: NC ZIP: 27607 BUSINESS PHONE: 9197814550 10-Q 1 MARTIN MARIETTA MATERIALS, INC. FORM 10-Q 9/30/99 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 2 MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES FORM 10-Q For the Quarter Ended September 30, 1999 INDEX
Page ---- 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
Page 2 of 24 3 MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS
September 30, December 31, 1999 1998 ----------- ----------- (Dollars in Thousands) 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 =========== ===========
See accompanying notes to condensed consolidated financial statements. Page 3 of 24 4 MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
Three-Months Ended Nine-Months Ended September 30, September 30, ------------------------------ -------------------------------- 1999 1998 1999 1998 ------------ ------------ ------------ ------------ (Dollars in Thousands, Except Per Share Data) 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 ============ ============ ============ ============
See accompanying notes to condensed consolidated financial statements. Page 4 of 24 5 MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine-Months Ended September 30, ------------------------------------ 1999 1998 --------- --------- (Dollars in Thousands) 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 ========= =========
See accompanying notes to condensed consolidated financial statements. Page 5 of 24 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 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)
Pro Forma Information Three-Months Ended Nine-Months Ended September 30, September 30, 1998 1998 -------- -------- (Dollars in Thousands, Except Per Share Data) Net sales $344,376 $873,273 Net earnings $ 46,026 $ 84,720 Net earnings per diluted share $ 0.98 $ 1.81
3. Inventories
September 30, December 31, 1999 1998 --------- --------- (Dollars in Thousands) 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 ========= =========
4. Long-Term Debt
September 30, December 31, 1999 1998 --------- --------- (Dollars in Thousands) 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 ========= =========
Page 7 of 24 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 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 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 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 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 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:
Three-Months Ended September 30, ---------------------------------------------------------- (Dollars in Thousands) 1999 1998 ---------------------------- --------------------- % of % of Amount Net Sales Amount Net Sales ------ --------- ------ --------- 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
(Continued) Page 13 of 24 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
Nine-Months Ended September 30, ----------------------------------------------------------------- (Dollars in Thousands) 1999 1998 ---------------------------- --------------------------- % of % of Amount Net Sales Amount Net Sales ------ --------- ------ --------- 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
(Continued) Page 14 of 24 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 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 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 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 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 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 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
Exhibit No. Document - ------- -------- 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)
Page 21 of 24 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 23 MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES FORM 10-Q For the Quarter Ended September 30, 1999 EXHIBIT INDEX
Exhibit No. Document Page - ----------- -------- ---- 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)
Page 23 of 24 EX-10.01 2 AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT 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 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 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 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 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 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 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 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: 9 COMMITMENT SCHEDULE
BANK COMMITMENT - ---- ---------- 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
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 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 EX-11.01 3 CONSOLIDATED SUBSIDIARIES COMPUTATION OF EARNINGS 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)
Three-Months Ended Nine-Months Ended September 30, September 30, -------------------------------- -------------------------------- 1999 1998 1999 1998 ----------- ----------- ----------- ----------- 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 =========== =========== =========== ===========
EX-27.01 4 FINANCIAL DATA SCHEDULE
5 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. 1,000 9-MOS DEC-31-1999 JAN-01-1999 SEP-30-1999 599 0 231,142 4,527 172,246 429,749 1,596,819 787,155 1,733,474 219,390 603,290 0 0 466 739,263 1,733,474 923,718 923,718 694,088 767,231 (17,289) 1,028 28,756 143,992 50,828 93,164 0 0 0 93,164 2.00 1.98
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