Page 78 - 2019 Annual Report
P. 78

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)
           Capital Structure and Resources
           Long-term debt, including current maturities, was $2.77 billion at December 31, 2019, and was principally in the form of
           publicly-issued long-term notes and debentures.
           The Company, through a wholly-owned special-purpose subsidiary, has a $400.0 million trade receivable securitization facility
           (the “Trade Receivable Facility”). In September 2019, the Company extended the maturity of the Trade Receivable Facility to
           September 23, 2020. The Trade Receivable Facility is backed by eligible trade receivables, as defined. Borrowings are limited
           to the lesser of the facility limit or the borrowing base, as defined. These receivables are originated by the Company and then
           sold to the wholly-owned special-purpose subsidiary.  The Company  continues to  be responsible for  the  servicing and
           administration of the receivables purchased by the wholly-owned special-purpose subsidiary. The Trade Receivable Facility
           contains a cross-default provision to the Company’s other debt agreements.
           The $700.0 million five-year senior unsecured revolving facility (the “Revolving Facility”), which matures in December 2024,
           requires the Company’s ratio of consolidated debt-to-consolidated EBITDA, as defined, for the trailing twelve month period
           (the “Ratio”) to not exceed 3.50x as of the end of any fiscal quarter, provided that the Company may exclude from the Ratio
           debt incurred in connection with certain acquisitions during the quarter or the three preceding quarters so long as the Ratio
           calculated without such exclusion does not exceed  3.75x. Additionally, if there are no amounts  outstanding under the
           Revolving  Facility and the Trade  Receivable Facility,  consolidated debt, including  debt for which the Company is a  co-
           borrower, may  be reduced by the  Company’s unrestricted cash and cash equivalents in excess of  $50.0  million, such
           reduction not to exceed $200.0 million, for purposes of the covenant calculation.

           At  December 31, 2019, the Company’s ratio of  consolidated debt-to-consolidated  EBITDA, as defined  in the agreement
           governing the Revolving Facility (the “Credit Agreement”), for the trailing  twelve  month EBITDA was 2.16 times and was
           calculated as follows:

                                                                                              Twelve-Month
                                                                                                  Period
                                                                                             January 1, 2019 to
            (dollars in millions)                                                           December 31, 2019
            Net earnings attributable to Martin Marietta                                   $               611.9

            Add back:
               Interest expense                                                                            129.3
               Income tax expense                                                                          136.3
               Depreciation, depletion and amortization expense and nonconsolidated equity
                  affiliate adjustment                                                                     383.4
               Stock-based compensation expense                                                             34.1
            Deduct:

               Interest income                                                                              (0.4 )
            Consolidated EBITDA, as defined by the Company's Credit Agreement              $             1,294.6
            Consolidated debt, as defined and including debt for which the Company is a
               co-borrower, at December 31, 2019                                           $             2,793.8
            Consolidated debt-to-consolidated EBITDA, as defined by the Company's
               Credit Agreement, at December 31, 2019 for trailing twelve month EBITDA                     2.16x

           Total equity was $5.35 billion at December 31, 2019. At that date, the Company had an accumulated other comprehensive
           loss of $145.8 million, primarily resulting from unrecognized actuarial losses related to pension benefits.
           Pursuant to authority granted by its Board of Directors, the Company can repurchase up to 20 million shares of common
           stock. As of December 31, 2019, the Company had 13.7 million shares remaining under the repurchase authorization. The
           Company expects to allocate capital for additional share repurchases based on available excess free cash flow, defined as
           operating cash flow less capital expenditures and dividends, subject to a leverage target (consolidated debt-to-consolidated
           EBITDA) of 2.0 times to 2.5 times and with consideration of other capital needs. Future repurchases are expected to be
           carried out through a variety of methods, which may include open market purchases, privately negotiated transactions, block
           trades, accelerated share purchase transactions or any combination of such methods. Share repurchases will be executed
           based on then-current  business and market factors so the actual return of  capital in  any single quarter may  vary. The
           repurchase program may be modified, suspended or discontinued by the Board of Directors at any time without prior notice.


           Annual Report  ♦  Page 76                                            Celebrating 25 Years as a Public Company
   73   74   75   76   77   78   79   80   81   82   83