Page 136 - Martin Marietta - 2024 Proxy Statement

NOTES TO FINANCIAL STATEMENTS (Continued)
Unrecognized tax benefits are reversed as a discrete event if an examination ofapplicable tax returns is not initiated by a federal
or state tax authoritywithin the statute of limitations orupon effective settlement with federal or state tax authorities.
Management believes its accrual for unrecognized tax benefits is sufficient to cover uncertain tax positions reviewed during audits
by taxing authorities.
The Company anticipates that it is reasonably possible that its unrecognized tax benefits may decrease up to $0.3 million, excluding
interest and correlative effects, during the twelve months ending December 31, 2024, due to the expiration of the statutes of
limitations for the 2020 tax year and all prior open tax years.

The Company’s tax years subject to federal, state orforeign examinations are 2019 through 2023.

Note J: Retirement Plans, Postretirement and Postemployment Benefits
The Company sponsors defined benefit retirement plans that cover substantially all employees. Additionally, the Company
provides other postretirement benefits for certain employees, including medical benefits for retirees and their spouses and retiree
life insurance. Employees starting on or after January 1, 2002 are not eligible for postretirement welfare plans. The Company also
provides certain benefits, such as disability benefits, to former or inactive employees after employment but before retirement.

The measurement date for the Company’s defined benefit plans, postretirement benefit plans and postemployment benefit plans
is December 31. During 2022, the Company amended its qualified pension plan to provide an enhanced benefit for eligible hourly
active participants who retire subsequent to April 30, 2022, which resulted in a remeasurement of the qualified pension plan as of
February 28, 2022. The remeasurement increased the defined benefit plans’ unrecognized prior service cost by $47.6 million.

Defined Benefit Retirement Plans. Defined retirement benefits for salaried employees are based on each employee’s years of
service and average compensation for a specified period of time before retirement. Defined retirement benefits for hourly
employees are generally stated amounts for specified periods of service.
The Company sponsors a Supplemental Excess Retirement Plan (SERP) that generally provides for the payment of retirement
benefits in excess of allowable Internal Revenue Code limits. The SERP generally provides for a lump‐sum payment ofvested
benefits. When these benefit payments exceed the sum of the service and interest costs for the SERP during a year, the Company
recognizes a pro rata portion of the SERP’s unrecognized actuarial loss as settlement expense.

The net periodic benefit cost of defined benefit plans includes the following components:
years ended December 31
(in millions) 2023 2022 2021
Service cost $ 32.9 $ 48.1 $ 46.2
Interest cost 51.3 41.2 35.7
Expected return on assets (71.4) (77.3) (70.5)
Amortization of:
Prior service cost 5.9 4.9 0.8
Actuarial loss 0.6 3.9 12.2
Settlement charge — 4.6 —
Net periodic benefit cost $ 19.3 $ 25.4 $ 24.4

The components of net periodic benefit cost, other than service cost, are included in the line item Other nonoperating income, net,
e
in the consolidated statements of earnings. Based on the roles of the employees, service cost is included in Total cost of revenues
i
x
i
or Selling, general and administrative expenses line items in the consolidated statements of earnings.
The expected return on assets is calculated by applying an annually selected expected long‐term rate of return assumption to the
estimated fairvalue of the plan assets during the year, giving consideration to contributions and benefits paid.

ge 34 ♦ 2023 Annual Report