Page 147 - Martin Marietta - 2024 Proxy Statement

NOTES TO FINANCIAL STATEMENTS (Continued)
Other Environmental Matters. The Company’s operations are subject to and affected byfederal, state and local laws and
regulations relating to the environment, health and safety, and other regulatory matters. Certain of the Company’s operations
may, from time to time, involve the use of substances that are classified as toxic or hazardous within the meaning of these laws
and regulations. Environmental operating permits are, or may be, required for certain of the Company’s operations, and such
permits are subject to modification, renewal and revocation. The Company regularly monitors and reviews its operations,
procedures and policies for compliance with these laws and regulations. Despite these compliance efforts, risk of environmental
remediation liability is inherent in the operation of the Company’s businesses, as it is with other companies engaged in similar
businesses. The Company has no material provisions for environmental remediation liabilities and does not believe such liabilities
will have a material adverse effect on the Companyin the future.
Insurance Reserves. At December 31, 2023 and 2022, reserves of $46.9 million and $48.2 million, respectively, were recorded for
insurance claims.

Letters of Credit. In the normal course of business, the Company provides certain third parties with standby letter of credit
agreements guaranteeing its payment for certain insurance claims, contract performance and permit requirements. At
December 31, 2023, the Company was contingently liable for $32.2 million in letters of credit.
Surety Bonds. At December 31, 2023, the Company was contingently liable for $698.3 million in surety bonds required by certain
states and municipalities and their related agencies. The bonds are provided in the normal course of business and are principally
for certain insurance claims, construction contracts, reclamation obligations and mining permits guaranteeing the Company’s own
performance. The Company has indemnified the underwriting insurance company against any exposure under the surety bonds.
In the Company’s past experience, no material claims have been made against these financial instruments.
Borrowing Arrangement with Affiliate. December 31, 2022, the Company had a $6.0 million interest‐only note receivable
outstanding from an unconsolidated affiliate. The note receivable was repaid in full by the unconsolidated affiliate during 2023.
Purchase Commitments. The Company had purchase commitments for property, plant and equipment of $162.1 million as of
December 31, 2023. The Company also had other purchase obligations related to energy and service contracts of $233.1 million
as of December 31, 2023. The Company’s contractual purchase commitments as of December 31, 2023 are as follows:

(in millions)
2024 $ 247.2
2025 39.1
2026 28.7
2027 14.1
2028 14.4
Thereafter 51.7
Total $ 395.2

Of the total contractual purchase commitments, $50.7 million was for the Company's South Texas cement business and related
ready mixed concrete operations that are classified as assets held for sale as of December 31, 2023.

Capital expenditures in 2023, 2022 and 2021 that were purchase commitments as of the prior year end were $111.4 million, $89.6
million and $99.0 million, respectively.
Additionally, the Company has a purchase commitment for 394 railcars at an aggregate value of $42.7 million as of December 31,
2023.

23 Annual Report ♦ Page 45