Page 113 - Martin Marietta - 2024 Proxy Statement
P. 113
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Because of its inherent limitations, internal control overfinancial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
C C
Critical Audit Matters
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial
statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts
or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective,
or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated
financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate
opinion on the critical audit matter or on the accounts or disclosures to which it relates.
e
e
e
Valuation of the Projected Benefit Obligation for Certain Defined Benefit Plans
V V
As described in Note J to the consolidated financial statements, the Company’s net projected benefit obligation for all defined
benefit plans was $969.2 million as of December 31, 2023. As disclosed by management, annually, as of December 31,
management remeasures the defined benefit pension plans’ projected benefit obligation based on the present value of the
projected future benefit payments to all participants for services rendered to date, reflecting expected future pay increases
through the participants’ expected retirement dates. The key assumptions used by management to estimate the projected
benefit obligation are the discount rate, the expected long‐term rate of return on pension plan assets, the mortality table and
mortality improvement scale, and the rate of increase in future compensation levels.
The principal considerations for our determination that performing procedures relating to the valuation of the projected
benefit obligation for certain defined benefit plans is a critical audit matter are the (i) significant judgment by management
when developing the estimate of the projected benefit obligation; (ii) a high degree of auditor judgment, subjectivity and effort
in performing procedures and evaluating management’s significant assumption related to the discount rate; and (iii) the audit
effort involved the use of professionals with specialized skill and knowledge.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall
opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to
the valuation of the projected benefit obligation, including controls over the discount rate assumption. These procedures also
included, among others, (i) testing the completeness and accuracy of the underlying data provided by management and (ii) the
involvement of professionals with specialized skill and knowledge to assist in evaluating the reasonableness of management’s
estimate for certain defined benefit plans by (a) evaluating the appropriateness of management’s actuarial methodologies; (b)
developing an independent range of the discount rate and comparing management's selected discount rate to the
independently developed range to evaluate the reasonableness of management’s discount rate assumption; and (c) assessing
the consistency of management’s actuarial methodologies period‐over‐period.
/s/ PricewaterhouseCoopers LLP
Raleigh, North Carolina
February 23, 2024
We have served as the Company’s auditor since 2016.
2023 Annual Report ♦ Page 11