Martin Marietta Materials, Inc. Announces Third-Quarter Results

CONFERENCE CALL INFORMATION

The Company will host an online web simulcast of its third quarter 2012 earnings conference call later today (November 6, 2012). The live broadcast of the Martin Marietta Materials, Inc. conference call will begin at 2 p.m. Eastern Time today. An online replay will be available approximately two hours following the conclusion of the live broadcast. A link to these events will be available at the Corporation’s website.

For those investors without online web access, the conference call may also be accessed by calling [phone], confirmation number 48690186.

Martin Marietta Materials, Inc. is the nation’s second largest producer of construction aggregates and a producer of magnesia-based chemicals and dolomitic lime. For more information about Martin Marietta Materials, Inc., refer to the Corporation’s website at www.martinmarietta.com.

If you are interested in Martin Marietta Materials, Inc. stock, management recommends that, at a minimum, you read the Corporation’s current annual report and Forms 10-K, 10-Q and 8-K reports to the Securities and Exchange Commission (SEC) over the past year. The Corporation’s recent proxy statement for the annual meeting of shareholders also contains important information. These and other materials that have been filed with the SEC are accessible through the Corporation’s website at www.martinmarietta.com and are also available at the SEC’s website at www.sec.gov . You may also write or call the Corporation’s Corporate Secretary, who will provide copies of such reports.

Investors are cautioned that all statements in this press release that relate to the future involve risks and uncertainties, and are based on assumptions that the Corporation believes in good faith are reasonable but which may be materially different from actual results. Forward-looking statements give the investor our expectations or forecasts of future events. You can identify these statements by the fact that they do not relate only historical or current facts. They may use words such as "anticipate," "expect," "should be," "believe," “will”, and other words of similar meaning in connection with future events or future operating or financial performance. Any or all of our forward-looking statements here and in other publications may turn out to be wrong.

Factors that the Corporation currently believes could cause actual results to differ materially from the forward-looking statements in this press release include, but are not limited to, the performance of the United States economy and the resolution of the fiscal cliff; widespread decline in aggregates pricing; the discontinuance of the federal gasoline tax or other revenue related to infrastructure construction; the level and timing of federal and state transportation funding, including federal stimulus projects and most particularly in North Carolina, one of the Corporation’s largest and most profitable states, and Texas, Iowa, Colorado and Georgia; the ability of states and/or other entities to finance approved projects either with tax revenues or alternative financing structures; levels of construction spending in the markets the Corporation serves; a reduction in defense spending, and the subsequent impact on construction activity on or near military bases, particularly if sequestration of budget programs occurs; a decline in the commercial component of the nonresidential construction market, notably office and retail space; a slowdown in residential construction recovery; unfavorable weather conditions, particularly Atlantic Ocean hurricane activity, the late start to spring or the early onset of winter and the impact of a drought or excessive rainfall in the markets served by the Corporation; the volatility of fuel costs, particularly diesel fuel, and the impact on the cost of other consumables, namely steel, explosives, tires and conveyor belts; continued increases in the cost of other repair and supply parts; transportation availability, notably the availability of railcars and locomotive power to move trains to supply the Corporation’s Texas, Florida and Gulf Coast markets; increased transportation costs, including increases from higher passed-through energy and other costs to comply with tightening regulations as well as higher volumes of rail and water shipments; availability and cost of construction equipment in the United States; weakening in the steel industry markets served by the Corporation’s dolomitic lime products; inflation and its effect on both production and interest costs; ability to successfully integrate acquisitions quickly and in a cost-effective manner and achieve anticipated profitability to maintain compliance with the Corporation’s leverage ratio debt covenant; changes in tax laws, the interpretation of such laws and/or administrative practices that would increase the Corporation’s tax rate; violation of the Corporation’s debt covenant if price and/or volumes return to previous levels of instability; downward pressure on the Corporation’s common stock price and its impact on goodwill impairment evaluations; and other risk factors listed from time to time found in the Corporation’s filings with the SEC. Other factors besides those listed here may also adversely affect the Corporation, and may be material to the Corporation. The Corporation assumes no obligation to update any such forward-looking statements.

MARTIN MARIETTA MATERIALS, INC.
Unaudited Statements of Earnings
(In millions, except per share amounts)
				Three Months Ended									Nine Months Ended
				September 30,									September 30,
				2012				2011					2012				2011
Net sales				$	539.1			$	445.0				$	1,380.9			$	1,145.2
Freight and delivery revenues					54.8				57.4					152.7				147.5
Total revenues					593.9				502.4					1,533.6				1,292.7
Cost of sales					415.5				333.1					1,131.4				913.1
Freight and delivery costs					54.8				57.4					152.7				147.5
Total cost of revenues					470.3				390.5					1,284.1				1,060.6
Gross profit					123.6				111.9					249.5				232.1
Selling, general and administrative expenses					32.1				32.8					100.4				92.4
Business development costs					-				0.7					35.1				3.4
Other operating expenses and (income), net					0.4				(1.6	)				(1.0	)			(4.0	)
Earnings from operations					91.1				80.0					115.0				140.3
Interest expense					13.2				13.4					40.0				45.3
Other nonoperating expenses and (income), net					0.6				2.1					(1.3	)			2.2
Earnings from continuing operations before taxes on income					77.3				64.5					76.3				92.8
Income tax expense					13.5				14.2					12.1				21.9
Earnings from continuing operations					63.8				50.3					64.2				70.9
Loss on discontinued operations, net of related tax benefit of $0.1, $0.6, $0.2 and $1.7, respectively					(0.1	)			-					(0.4	)			(2.4	)
Consolidated net earnings					63.7				50.3					63.8				68.5
Less: Net earnings attributable to noncontrolling interests					0.8				1.1					0.9				1.0
Net earnings attributable to Martin Marietta Materials, Inc.				$	62.9			$	49.2				$	62.9			$	67.5
Net earnings (loss) per common share:
Basic from continuing operations attributable to common shareholders				$	1.36			$	1.07				$	1.38			$	1.52
Discontinued operations attributable to common shareholders					-				-					(0.01	)			(0.05	)
				$	1.36			$	1.07				$	1.37			$	1.47
Diluted from continuing operations attributable to common shareholders				$	1.36			$	1.07				$	1.37			$	1.51
Discontinued operations attributable to common shareholders					-				-					(0.01	)			(0.05	)
				$	1.36			$	1.07				$	1.36			$	1.46
Cash dividends per common share				$	0.40			$	0.40				$	1.20			$	1.20
Average number of common shares outstanding:
Basic					45.9				45.7					45.8				45.6
Diluted					46.0				45.8					45.9				45.8

MARTIN MARIETTA MATERIALS, INC.
Unaudited Financial Highlights
(In millions)
				Three Months Ended									Nine Months Ended
				September 30,									September 30,
				2012				2011					2012				2011
Net sales:
Aggregates Business:
Mideast Group				$	118.1			$	116.6				$	305.0			$	295.3
Southeast Group					71.9				76.7					213.1				217.4
West Group					299.7				201.4					711.2				483.4
Total Aggregates Business					489.7				394.7					1,229.3				996.1
Specialty Products					49.4				50.3					151.6				149.1
Total				$	539.1			$	445.0				$	1,380.9			$	1,145.2
Gross profit (loss):
Aggregates Business:
Mideast Group				$	39.8			$	37.2				$	80.1			$	77.5
Southeast Group					6.1				8.0					13.2				17.1
West Group					57.3				49.4					98.4				82.7
Total Aggregates Business					103.2				94.6					191.7				177.3
Specialty Products					19.7				17.8					59.1				56.8
Corporate					0.7				(0.5	)				(1.3	)			(2.0	)
Total				$	123.6			$	111.9				$	249.5			$	232.1
Selling, general and administrative expenses:
Aggregates Business:
Mideast Group				$	8.9			$	9.3				$	28.0			$	27.8
Southeast Group					5.4				6.8					17.1				20.4
West Group					14.1				10.7					42.0				32.0
Total Aggregates Business					28.4				26.8					87.1				80.2
Specialty Products					2.2				2.2					6.9				6.9
Corporate					1.5				3.8					6.4				5.3
Total				$	32.1			$	32.8				$	100.4			$	92.4
Earnings (Loss) from operations:
Aggregates Business:
Mideast Group				$	31.3			$	28.1				$	54.3			$	53.2
Southeast Group					0.5				2.8					(5.5	)			(2.0	)
West Group					44.3				39.5					59.5				53.2
Total Aggregates Business					76.1				70.4					108.3				104.4
Specialty Products					17.0				15.6					52.7				50.0
Corporate					(2.0	)			(6.0	)				(46.0	)			(14.1	)
Total				$	91.1			$	80.0				$	115.0			$	140.3
Net sales by product line:
Aggregates Business:
Aggregates				$	371.1			$	362.6				$	985.4			$	916.9
Asphalt					29.2				12.3					61.9				37.5
Ready Mixed Concrete					33.1				9.8					82.6				22.3
Road Paving					56.3				10.0					99.4				19.4
Total Aggregates Business					489.7				394.7					1,229.3				996.1
Specialty Products Business:
Magnesia-Based Chemicals					32.5				32.8					96.7				94.8
Dolomitic Lime					16.5				17.1					53.6				53.3
Other					0.4				0.4					1.3				1.0
Total Specialty Products Business					49.4				50.3					151.6				149.1
Total				$	539.1			$	445.0				$	1,380.9			$	1,145.2
Depreciation				$	41.5			$	41.1				$	125.5			$	124.7
Depletion					1.5				1.3					3.5				2.6
Amortization					1.2				0.8					4.0				2.4
				$	44.2			$	43.2				$	133.0			$	129.7

MARTIN MARIETTA MATERIALS, INC.
Balance Sheet Data
(In millions)
				September 30,			December 31,			September 30,
				2012			2011			2011
				(Unaudited)			(Audited)			(Unaudited)
ASSETS
	Cash and cash equivalents			$	35.4		$	26.0		$	56.8
	Accounts receivable, net				296.9			203.7			259.8
	Inventories, net				335.1			322.6			337.7
	Other current assets				117.7			105.6			113.1
	Property, plant and equipment, net				1,750.9			1,774.3			1,686.6
	Intangible assets, net				667.3			670.8			657.3
	Other noncurrent assets				39.9			44.8			47.3
	Total assets			$	3,243.2		$	3,147.8		$	3,158.6
LIABILITIES AND EQUITY
	Current maturities of long-term debt and short-term facilities			$	6.7		$	7.2		$	7.2
	Other current liabilities				210.4			166.5			190.5
	Long-term debt (excluding current maturities)				1,092.1			1,052.9			1,038.3
	Other noncurrent liabilities				464.0			472.3			437.0
	Total equity				1,470.0			1,448.9			1,485.6
	Total liabilities and equity			$	3,243.2		$	3,147.8		$	3,158.6

MARTIN MARIETTA MATERIALS, INC.
Unaudited Statements of Cash Flows
(In millions)
			Nine Months Ended
			September 30,
			2012				2011
Operating activities:
Consolidated net earnings			$	63.8			$	68.5
Adjustments to reconcile consolidated net earnings to net cash provided by operating activities:
Depreciation, depletion and amortization				133.0				129.7
Stock-based compensation expense				5.9				9.3
Gains on divestitures and sales of assets				(0.9	)			(3.9	)
Deferred income taxes				11.6				6.4
Other items, net				2.3				1.3
Changes in operating assets and liabilities, net of effects of acquisitions and divestitures:
Accounts receivable, net				(93.2	)			(78.0	)
Inventories, net				(12.5	)			(4.4	)
Accounts payable				7.1				26.0
Other assets and liabilities, net				4.9				25.0
Net cash provided by operating activities				122.0				179.9
Investing activities:
Additions to property, plant and equipment				(105.9	)			(93.5	)
Acquisitions, net				(0.1	)			(49.9	)
Proceeds from divestitures and sales of assets				7.8				6.1
Net cash used for investing activities				(98.2	)			(137.3	)
Financing activities:
Borrowings of long-term debt				181.0				460.0
Repayments of long-term debt				(142.6	)			(445.5	)
Change in bank overdraft				0.1				(2.1	)
Dividends paid				(55.3	)			(55.2	)
Debt issue costs				(0.3	)			(3.3	)
Issuances of common stock				3.5				1.4
Purchase of remaining interest in existing subsidiaries				-				(10.4	)
Distributions to owners of noncontrolling interests				(0.8	)			(1.0	)
Net cash used for financing activities				(14.4	)			(56.1	)
Net increase (decrease) in cash and cash equivalents				9.4				(13.5	)
Cash and cash equivalents, beginning of period				26.0				70.3
Cash and cash equivalents, end of period			$	35.4			$	56.8

		MARTIN MARIETTA MATERIALS, INC.
		Unaudited Operational Highlights
						Three Months Ended						Nine Months Ended
						September 30, 2012						September 30, 2012
						Volume			Pricing			Volume			Pricing
		Volume/Pricing Variance (1)
		Heritage Aggregates Product Line: (2)
		Mideast Group				(2.6	%)		3.5	%		2.1	%		0.7	%
		Southeast Group				(10.7	%)		5.1	%		(6.0	%)		4.0	%
		West Group				(2.3	%)		4.8	%		5.4	%		5.2	%
		Heritage Aggregates Operations				(3.8	%)		4.1	%		2.2	%		3.0	%
		Aggregates Product Line (3)				(2.9	%)		1.8	%		1.7	%		1.2	%
						Three Months Ended						Nine Months Ended
						September 30,						September 30,
		Shipments (tons in thousands)				2012			2011			2012			2011
		Heritage Aggregates Product Line: (2)
		Mideast Group				10,694			10,977			26,961			26,416
		Southeast Group				5,495			6,154			16,413			17,454
		West Group				18,416			18,840			48,874			46,366
		Heritage Aggregates Operations				34,605			35,971			92,248			90,236
		Acquisitions				2,068			-			4,497			-
		Divestitures (4)				1			1,785			24			4,898
		Aggregates Product Line (3)				36,674			37,756			96,769			95,134
(1	)	Volume/pricing variances reflect the percentage increase (decrease) from the comparable period in the prior year.
(2	)	Heritage Aggregates product line excludes volume and pricing data for acquisitions that have not been included in prior-year operations for the comparable period and divestitures.
(3	)	Aggregates product line includes all acquisitions from the date of acquisition and divestitures through the date of disposal.
(4	)	Divestitures include the tons related to divested aggregates product line operations up to the date of divestiture.

MARTIN MARIETTA MATERIALS, INC.
Non-GAAP Financial Measures
(Dollars in millions)
Gross margin as a percentage of net sales and operating margin as a percentage of net sales represent non-GAAP measures. The Corporation presents these ratios calculated based on net sales, as it is consistent with the basis by which management reviews the Corporation's operating results. Further, management believes it is consistent with the basis by which investors analyze the Corporation's operating results, given that freight and delivery revenues and costs represent pass-throughs and have no profit markup. Gross margin and operating margin calculated as percentages of total revenues represent the most directly comparable financial measures calculated in accordance with generally accepted accounting principles ("GAAP"). The following tables present the calculations of gross margin and operating margin for the three and nine months ended September 30, 2012, and 2011, in accordance with GAAP and reconciliations of the ratios as percentages of total revenues to percentages of net sales:
Gross Margin in Accordance with Generally Accepted		Three Months Ended								Nine Months Ended
Accounting Principles		September 30,								September 30,
			2012				2011				2012				2011
Gross profit		$	123.6			$	111.9			$	249.5			$	232.1
Total revenues		$	593.9			$	502.4			$	1,533.6			$	1,292.7
Gross margin			20.8	%			22.3	%			16.3	%			18.0	%
		Three Months Ended								Nine Months Ended
		September 30,								September 30,
Gross Margin Excluding Freight and Delivery Revenues		2012				2011				2012				2011
Gross profit		$	123.6			$	111.9			$	249.5			$	232.1
Total revenues		$	593.9			$	502.4			$	1,533.6			$	1,292.7
Less: Freight and delivery revenues			(54.8	)			(57.4	)			(152.7	)			(147.5	)
Net sales		$	539.1			$	445.0			$	1,380.9			$	1,145.2
Gross margin excluding freight and delivery revenues			22.9	%			25.1	%			18.1	%			20.3	%
Operating Margin in Accordance with Generally Accepted		Three Months Ended								Nine Months Ended
Accounting Principles		September 30,								September 30,
		2012				2011				2012				2011
Earnings from operations		$	91.1			$	80.0			$	115.0			$	140.3
Total revenues		$	593.9			$	502.4			$	1,533.6			$	1,292.7
Operating margin			15.3	%			15.9	%			7.5	%			10.9	%
		Three Months Ended								Nine Months Ended
Operating Margin Excluding Freight and Delivery Revenues		September 30,								September 30,
		2012				2011				2012				2011
Earnings from operations		$	91.1			$	80.0			$	115.0			$	140.3
Total revenues		$	593.9			$	502.4			$	1,533.6			$	1,292.7
Less: Freight and delivery revenues			(54.8	)			(57.4	)			(152.7	)			(147.5	)
Net sales		$	539.1			$	445.0			$	1,380.9			$	1,145.2
Operating margin excluding freight and delivery revenues			16.9	%			18.0	%			8.3	%			12.2	%
Consolidated gross margin excluding freight and delivery revenues and excluding the effect of businesses acquired in the Denver, Colorado, area in December 2011 represents a non-GAAP financial measure. Management presents this measure to provide more consistent information for investors and analysts to use when comparing gross margin excluding freight and delivery revenues for the quarter ended September 30, 2012, with the respective prior-year quarter.
The following reconciles consolidated total revenues and consolidated gross profit in accordance with generally accepted accounting principles to consolidated net sales and consolidated gross profit, both excluding the impact of businesses acquired in the Denver, Colorado, area in December 2011. These adjusted amounts are then used to calculate consolidated gross margin excluding freight and delivery revenues and excluding the impact of these acquired businesses:
		Three Months Ended
		September 30, 2012
Consolidated total revenues		$ 593.9
Less: Freight and delivery revenues		54.8
Less: Net sales at businesses acquired in Denver, Colorado area in December 2011		91.7
Consolidated net sales excluding net sales at business acquired in Denver, Colorado area in December 2011		$ 447.4
Consolidated gross profit		$ 123.6
Gross profit at businesses acquired in Denver, Colorado, area in December 2011		9.1
Consolidated gross profit excluding gross profit at business acquired in Denver, Colorado area in December 2011		$ 114.5
Consolidated gross margin excluding freight and delivery revenues and excluding impact of businesses acquired in Denver, Colorado, area in December 2011		25.6						%

MARTIN MARIETTA MATERIALS, INC.
Non-GAAP Financial Measures (continued)
(Dollars in millions)
The ratio of Consolidated Debt-to-Consolidated EBITDA, as defined, for the trailing twelve months is a covenant under the Corporation's revolving credit facility, term loan facility and accounts receivable securitization facility. Under the terms of these agreements, as amended, the Corporation's ratio of Consolidated Debt-to-Consolidated EBITDA as defined, for the trailing twelve months can not exceed 3.75 times as of September 30, 2012, with certain exceptions related to qualifying acquisitions, as defined.
The following presents the calculation of Consolidated Debt-to-Consolidated EBITDA, as defined, for the trailing-twelve months at September 30, 2012. For supporting calculations, refer to Corporation's website at www.martinmarietta.com.
								Twelve-Month Period
								October 1, 2011 to
								September 30, 2012
Earnings from continuing operations attributable to Martin Marietta Materials, Inc.								$	72.3
Add back:
Interest expense									53.3
Income tax expense									11.1
Depreciation, depletion and amortization expense									170.5
Stock-based compensation expense									8.2
Deduct:
Interest income									(0.5	)
Consolidated EBITDA, as defined								$	314.9
Consolidated Debt, including debt guaranteed by the Corporation, at September 30, 2012								$	1,126.5
Less: Unrestricted cash and cash equivalents in excess of $50 at September 30, 2012									-
Consolidated Net Debt, as defined, at September 30, 2012								$	1,126.5
Consolidated Debt-to-Consolidated EBITDA, as defined, at September 30, 2012 for the trailing twelve-month EBITDA								3.58 times
Net cash provided by operating activities excluding the impact of business development expenses represents a non-GAAP financial measure. Management presents this measure to provide more consistent information for investors and analysts to use when comparing net cash provided by operating activities for the nine months ended September 30, 2012, with the respective prior-year period.
The following reconciles net cash provided by operating activities in accordance with generally accepted accounting principles to net cash provided by operating activities excluding the impact of business development expenses:
								Nine Months Ended
								September 30, 2012
Net cash provided by operating activities in accordance with generally accepted accounting principles								$ 122.0
Add back: Impact of business development expenses on operating cash flow								38.0
Net cash provided by operating activities excluding the impact of business development expenses								$ 160.0
EBITDA is a widely accepted financial indicator of a company's ability to service and/or incur indebtedness. EBITDA is not defined by generally accepted accounting principles and, as such, should not be construed as an alternative to net earnings or operating cash flow. For further information on EBITDA, refer to the Corporation's website at www.martinmarietta.com. EBITDA is as follows for the three and nine months ended September 30, 2012, and 2011.
		Three Months Ended						Nine Months Ended
		September 30,						September 30,
		2012			2011			2012				2011
Earnings Before Interest, Income Taxes, Depreciation, Depletion and Amortization (EBITDA)		$	133.3		$	118.9		$	246.4			$	261.5
A reconciliation of Net Earnings Attributable to Martin Marietta Materials, Inc. to EBITDA is as follows:
		Three Months Ended						Nine Months Ended
		September 30,						September 30,
		2012			2011			2012				2011
Net Earnings Attributable to Martin Marietta Materials, Inc.		$	62.9		$	49.2		$	62.9			$	67.5
Add back:
Interest Expense			13.2			13.4			40.0				45.3
Income Tax Expense for Controlling Interests			13.3			13.5			11.9				20.2
Depreciation, Depletion and Amortization Expense			43.9			42.8			131.6				128.5
EBITDA		$	133.3		$	118.9		$	246.4			$	261.5

MLM-E

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