Page 126 - Martin Marietta - 2023 Proxy Statement

NOTES TO FINANCIAL STATEMENTS (Continued)

Earnings Per Common Share. The Company computes earnings per common share (EPS) pursuant to the two‐class method. The
two‐class method determines EPS for common stock and participating securities according to dividends or dividend equivalents
and their respective participation rights in undistributed earnings. The Company paid nonforfeitable dividend equivalents during
the vesting period on its restricted stock awards and incentive stock awards made prior to 2016, which results in these being
considered participating securities.
The numerator for basic and diluted earnings per common share is net earnings attributable to Martin Marietta, reduced by
dividends and undistributed earnings attributable to the Company’s participating securities. The denominator for basic earnings
per common share is the weighted‐average number of common shares outstanding during the period. Diluted earnings per
common share is computed assuming that the weighted‐average number of common shares is increased by the conversion, using
the treasury stock method, of awards issued to employees and nonemployee members of the Company’s Board of Directors under
certain stock‐based compensation arrangements if the conversion is dilutive.
The following table reconciles the numerator and denominator for basic and diluted earnings from continuing operations per
common share:

years ended December 31
(in millions) 2022 2021 2020
Net earnings from continuing operations attributable to
Martin Marietta $ 856.3 $ 702.0 $ 721.0
Less: distributed and undistributed earnings attributable to
unvested participating securities — 0.2 0.6
Basic and diluted net earnings from continuing operations attributable
to common shareholders attributable to Martin Marietta $ 856.3 $ 701.8 $ 720.4

Basic weighted‐average common shares outstanding 62.3 62.4 62.3
Effect of dilutive employee and director awards 0.2 0.2 0.1
Diluted weighted‐average common shares outstanding 62.5 62.6 62.4

Note B: Revenue Recognition
Performance Obligations. Performance obligations are contractual promises to transfer or provide a distinct good or service for a
stated price. The Company’s product sales agreements are single‐performance obligations that are satisfied at a point in time.
Performance obligations within paving service agreements are satisfied over time, primarily ranging from one day to two years.
For product revenues and freight revenues, customer payment terms are generally 30 days from invoice date. Customer payments
for the paving operations are based on a contractual billing schedule and are due 30 days from invoice date.
Future revenues from unsatisfied performance obligations at December 31, 2022, 2021 and 2020 were $239.2 million, $153.9
million and $110.1 million, respectively, where the remaining periods to complete these obligations ranged from two months to
34 months at December 31, 2022 and three months to 12 months at December 31, 2021 and 2020.

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