Page 176 - Martin Marietta - 2023 Proxy Statement

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

Cash on hand, along with the Company’s projected internal cash flows and availability offinancing resources, including its
access to debt and equity capital markets, is expected to continue to be sufficient to provide the capital resources necessary
to support anticipated operating needs, cover debt service requirements, meet capital expenditures and discretionary
investment needs, fund certain acquisition opportunities that may arise and allow for payment of dividends for the foreseeable
future. Borrowings under the Revolving Facility are unsecured and may be used for general corporate purposes. The Company’s
ability to borrow or issue securities is dependent upon, among other things, prevailing economic, financial and market
conditions. At December 31, 2022, the Company had $1.20 billion of unused borrowing capacity under its Revolving Facility
and Trade Receivable Facility.

The Company may be required to obtain additional financing in order to fund certain strategic acquisitions or to refinance
outstanding debt. Any strategic acquisition of size would likely require an appropriate balance of newly‐issued equity with debt
in order to maintain a composite investment‐grade credit rating. The Company is exposed to credit markets through the
interest cost related to borrowings under its Revolving Facility and Trade Receivable Facility.

Contractual and Off Balance Sheet Obligations
ostretirement medical benefits will be paid from the Company’s assets. The obligation, if any, for retiree medical payments is
subject to the terms of the plan. At December 31, 2022, the Company’s recorded benefit obligation related to these benefits
totaled $8.9 million.

The Company has other retirement benefits related to pension plans. At December 31, 2022, the fair value of the qualified
pension plans’ assets exceeded the projected benefit obligation by $295.3 million. The Company estimates that it will make
contributions of $25.0 million to qualified pension plans in 2023. Any contributions beyond 2023 are currently undeterminable
and will depend on the investment return on the related pension assets. At December 31, 2022, the Company had a total
obligation of $85.8 million related to unfunded nonqualified pension plans and expects to make contributions of $11.5 million
to these plans in 2023.

At December 31, 2022, the Company had $3.8 million accrued for uncertain tax positions, including interest of $0.2 million.
Such liabilities may become payable if the tax positions are not sustained upon examination by a taxing authority.
In connection with normal, ongoing operations, the Company enters into market‐rate leases for property, plant and equipment
and royalty commitments principally associated with leased land and mineral reserves. Additionally, the Company enters into
equipment rentals to meet shorter‐term, nonrecurring and intermittent needs. At December 31, 2022, the Company had
$388.0 million in operating lease obligations and $199.9 million in finance lease obligations, representing the present value of
future payments. The Company also had $8.6 million of lease obligations classified as held for sale. The imputed interest on
operating and finance lease obligations was $177.3 million. Management anticipates that, in the ordinary course of business,
the Company will enter into additional royalty agreements for land and mineral reserves during 2023. As permitted, short‐term
leases are excluded from ASC 842 requirements and future noncancelable obligations for these leases as of December 31, 2022
are immaterial.
As of December 31, 2022, future interest payable on the Company’s publicly traded debt through the various maturity dates
was $2.13 billion. The Company had obligations related to contracts of affreightment not accounted for as a lease and royalty
agreements totaling $97.2 million and $156.3 million, respectively, as of December 31, 2022. The Company had purchase
commitments for property, plant and equipment of $130.4 million as of December 31, 2022. In addition, during 2022, the
Company entered into a commitment for 691 railcars at an aggregate value of $75.8 million. The Company also had other
purchase obligations related to energy and service contracts which totaled $198.1 million as of December 31, 2022.

Contingent Liabilities and Commitments
The Company has entered into standby letter of credit agreements relating to certain insurance claims, contract performance
and permit requirements. At December 31, 2022, the Company had contingent liabilities guaranteeing its own performance
under these outstanding letters of credit of $21.8 million.
In the normal course of business, at December 31, 2022, the Company was contingently liable for $678.5 million in surety
bonds, which guarantee its own performance and are required by certain states and municipalities and their related agencies.
The Company has indemnified the underwriting insurance companies against any exposure under the surety bonds. In the
Company’s past experience, no material claims have been made against these financial instruments.

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