Page 70 - 2019 Annual Report
P. 70

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)
           The Company’s consolidated operating results and operating results as a percentage of total revenues are as follows:

                                                                                 % of                    % of
            years ended December 31                                             Total                    Total
            (in millions, except for % of total revenues)           2019         revenues        2018        revenues
            Product and services revenues                         $   4,422.3                $   3,980.4




            Freight revenues                                            316.8                    263.9
            Total revenues                                            4,739.1          100.0          4,244.3          100.0
            Cost of revenues - products and services                  3,239.1                    3,009.8


            Cost of revenues - freight                                  321.0                    267.9


            Total cost of revenues                                    3,560.1          75.1          3,277.7          77.2
            Gross profit                                              1,179.0          24.9          966.6          22.8
            Selling, general and administrative expenses                302.7          6.4          280.6          6.6

            Acquisition related expenses, net                             0.5                    13.5

            Other operating income, net                                  (9.1 )                  (18.2 )


            Earnings from operations                                    884.9          18.7          690.7          16.3
            Interest expense                                            129.3                    137.1



            Other nonoperating expenses and (income), net                 7.3                    (22.5 )



            Earnings before income tax expense                          748.3                    576.1


            Income tax expense                                          136.3                    105.7
            Consolidated net earnings                                   612.0          12.9          470.4          11.1


            Less:  Net earnings attributable to noncontrolling interests          0.1                    0.4
            Net Earnings Attributable to Martin Marietta          $     611.9          12.9      $   470.0          11.1

           Earnings before  interest; income taxes; depreciation, depletion and amortization; the noncash earnings/loss from
           nonconsolidated equity affiliates; the impact of Bluegrass acquisition-related expenses, net; the impact of selling acquired
           inventory due to the markup to fair value as part of acquisition accounting; and the asset and portfolio rationalization charge
           (Adjusted EBITDA) is an indicator used by the Company and investors to evaluate the Company’s operating performance from
           period to period. Adjusted EBITDA is not defined by generally accepted accounting principles and, as such, should not be
           construed as  an alternative to net earnings, earnings  from operations  or operating cash  flow.  However, the Company’s
           management believes that Adjusted EBITDA may provide additional information with respect to the Company’s performance.
           Because Adjusted EBITDA excludes some, but not all, items that affect net earnings and may vary among companies, Adjusted
           EBITDA as presented by the Company may not be comparable to similarly titled measures of other companies.
           The following table presents a reconciliation of net earnings attributable to Martin Marietta to consolidated Adjusted EBITDA:
           Consolidated Adjusted EBITDA

            years ended December 31
            (in millions)                                                           2019             2018
            Net earnings attributable to Martin Marietta                        $        611.9      $     470.0


            Add back:
              Interest expense                                                           128.9            137.1
              Income tax expense for controlling interests                               136.3            105.6
              Depreciation, depletion and amortization expense and earnings/loss from
                 nonconsolidated equity affiliates                                       377.4            328.4
              Bluegrass acquisition-related expenses, net                                  ––              13.5
              Impact of selling acquired inventory due to the markup to fair value as part of
                 acquisition accounting                                                    ––              18.7
              Asset and portfolio rationalization charge                                   ––              18.8
            Consolidated Adjusted EBITDA                                        $      1,254.5      $    1,092.1







           Annual Report  ♦  Page 68                                            Celebrating 25 Years as a Public Company
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