Page 124 - Martin Marietta - 2023 Proxy Statement

NOTES TO FINANCIAL STATEMENTS (Continued)

Income Taxes. Deferred income taxes, net, on the consolidated balance sheets reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax
purposes, net of valuation allowances. Deferred tax liabilities for property, plant and equipment result from accelerated
depreciation methods being used for income tax purposes as compared with the straight‐line method for financial reporting
purposes. Deferred tax liabilities related to goodwill and other intangibles reflect the cessation of goodwill amortization for
financial reporting purposes, while amortization continued for income tax purposes. The effect of changes in enacted tax rates on
deferred income tax assets and liabilities is charged or credited to income tax expense in the period of enactment.
Uncertain Tax Positions. The Company recognizes a tax benefit when it is more‐likely‐than‐not, based on the technical merits, that
a tax position would be sustained upon examination by a taxing authority. The amount to be recognized is measured as the largest
amount of tax benefit that is greater than 50% likely of being realized upon ultimate settlement with a taxing authority that has
full knowledge of all relevant information. The Company’s unrecognized tax benefits are recorded in other liabilities on the
consolidated balance sheets or as an offset to the deferred tax asset for tax carryforwards where available.
The Company records interest accrued in relation to unrecognized tax benefits as income tax expense. Penalties, if incurred, are
recorded as operating expenses in the consolidated statements of earnings.
Sales Taxes. The Company is deemed to be an agent when collecting sales taxes from customers. Sales taxes collected from
customers are recorded as liabilities until remitted to taxing authorities and therefore are not reflected in the consolidated
statements of earnings as revenues and expenses.

Start‐Up Costs. Noncapital start‐up costs for new facilities and products are charged to operations as incurred.
Consolidated Comprehensive Earnings and Accumulated Other Comprehensive Loss. Consolidated comprehensive earnings
consist of consolidated net earnings, adjustments for the funded status of pension and postretirement benefit plans and foreign
currency translation adjustments, and are presented in the Company’s consolidated statements of comprehensive earnings.
Accumulated other comprehensive loss consists of unrecognized gains and losses related to the funded status of the pension and
postretirement benefit plans and foreign currency translation and is presented on the Company’s consolidated balance sheets.

Page 20 ♦ Annual Report