Page 121 - Martin Marietta - 2023 Proxy Statement

NOTES TO FINANCIAL STATEMENTS (Continued)

Given the uncertainty of meeting the criteria until the performance obligation is completed, performance bonuses are recognized
as revenues when and if achieved. Performance bonuses were not material to the Company’s consolidated results of operations
for the years ended December 31, 2022, 2021 and 2020. When the Company arranges third‐partyfreight to deliver products to
customers, the Company has elected the delivery to be a fulfillment activity rather than a separate performance obligation.
Further, the Company acts as a principal in the delivery arrangements and, as required by Accounting Standards Codification (ASC)
606, the related revenues and costs are presented gross in the consolidated statements of earnings and are recognized consistently
with the timing of the product revenues.
Freight and Delivery Costs. Freight and delivery costs represent pass‐through transportation costs incurred and paid by the
Company to third‐party carriers to deliver products to customers. These costs are then billed to the customers.
Cash, Cash Equivalents and Restricted Cash. Cash equivalents are comprised of highly‐liquid instruments with original maturities
of three months or less from the date of purchase.

As of December 31, 2022 and 2021, the Company had $0.8 million and $0.5 million, respectively, of restricted cash, which was
invested in an account designated for the purchase of like‐kind exchange replacement assets under Section 1031 of the Internal
Revenue Code. The Company is restricted from utilizing the cash for purposes other than the purchase of qualified assets for 180
days from receipt of the proceeds from the sale of the exchanged property. Any unused cash at the end of the 180 days is
transferred to unrestricted accounts of the Company and used for general corporate purposes.
The statements of cash flows reflect cash flow changes and balances for cash, cash equivalents and restricted cash on an
aggregated basis. The following table reconciles cash, cash equivalents and restricted cash as reported on the consolidated balance
sheets to the aggregated amounts presented on the consolidated statements of cash flows:
December 31
(in millions) 2022 2021 2020
Cash and cash equivalents $ 358.0 $ 258.4 $ 207.3
Restricted cash 0.8 0.5 97.1
Total cash, cash equivalents and restricted cash
presented in the consolidated statements of cash flows $ 358.8 $ 258.9 $ 304.4

Restricted Investments. At December 31, 2022, the Company had $704.6 million of restricted investments, representing assets
irrevocably transferred to an escrow trust account during 2022 to satisfy and discharge the Company's $700 million of 0.650%
Senior Notes due 2023 (the 0.650% Senior Notes) (see Note H). The assets in the escrow trust account may not be used for any
purpose other than to satisfy the remaining interest payments and to repay the principal amount of the 0.650% Senior Notes on
the maturity date of July 15, 2023. The assets transferred to the escrow trust account are invested in a U.S. Treasury securities
fund (see Note I) and investment returns on those trust assets are for the account of the Company (after satisfaction of all amounts
payable in connection with the 0.650% Senior Notes). The Company consolidated the trust account on its consolidated balance
sheet at December 31, 2022.
Accounts Receivable. ccounts receivable are stated at cost. The Company does not typically charge interest on customer accounts
receivable. The Company records an allowance for credit losses, which includes a provision for probable losses based on historical
write‐offs, adjusted for current conditions as deemed necessary, and a specific reserve for accounts deemed at risk. The allowance
is the Company’s estimate for receivables as of the balance sheet date that ultimately will not be collected. Any changes in the
allowance are reflected in earnings in the period in which the change occurs. The Company writes‐off accounts receivable when it
becomes probable, based upon customer facts and circumstances, that such amounts will not be collected.
Inventories Valuation. Finished products and in‐process inventories are stated at the lower of cost or net realizable value using
standard costs, which approximate the first‐in, first‐out method. Carrying value for parts and supplies are determined by the
weighted‐average cost method. The Company records an allowance for finished product inventories based on an analysis offuture
demand and inventory on hand in excess of historical sales for a twelve‐month period or an annual average for a period of up to
five years. The Company also establishes an allowance for parts over five years old and supplies over a year old.
Post‐production stripping costs, which represent costs of removing overburden and waste materials to access mineral deposits,
are a component of inventory production costs and recognized as incurred.

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