Page 174 - Martin Marietta - 2024 Proxy Statement

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)
solvency risk. Money market demand deposit accounts are FDIC insured up to $250,000. The Company’s investments in bank funds
generally exceed the FDIC insurance limit.
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 orissue
securities is dependent upon, among other things, prevailing economic, financial and market conditions. At December 31, 2023,
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. 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
Postretirement 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, 2023, the Company’s recorded benefit obligation related to these benefits
totaled $8.3 million.
The Company has other retirement benefits related to pension plans. At December 31, 2023, the fairvalue of the qualified pension
plans’ assets exceeded the projected benefit obligation by $307.8 million. The Company estimates that it will make contributions
of $25.0 million to qualified pension plans in 2024. Any contributions beyond 2024 are currently undeterminable and will depend
on the investment return on the related pension assets. At December 31, 2023, the Company had a total obligation of $100.2
million related to unfunded nonqualified pension plans and expects to make contributions of $7.7 million to these plans in 2024.

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, 2023, the Company had $395.5
million in operating lease obligations and $200.4 million in finance lease obligations, representing the present value offuture
payments, which include $16.3 million of lease obligations classified as held for sale. The imputed interest on operating and finance
lease obligations was $175.3 million. Management anticipates that, in the ordinary course of business, the Company will enter into
additional royalty agreements for land and mineral reserves during 2024. As permitted, short‐term leases are excluded from
Accounting Standards Codification 842, Leases (ASC 842) requirements and future noncancelable obligations for these leases as of
December 31, 2023 are immaterial.
As of December 31, 2023, future interest payable on the Company’s publicly‐traded debt through the various maturity dates was
$1.97 billion. The Company had obligations related to contracts of affreightment not accounted for as a lease and royalty
agreements totaling $69.1 million and $148.8 million, respectively, as of December 31, 2023. The Company had purchase
commitments for property, plant and equipment of $162.1 million as of December 31, 2023. In addition, as of December 31, 2023,
the Company has a purchase commitment for 394 railcars at an aggregate value of $42.7 million. The Company also had other
purchase obligations related to energy and service contracts which totaled $233.1 million as of December 31, 2023.

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, 2023, the Company had contingent liabilities guaranteeing its own performance under
these outstanding letters of credit of $32.2 million.
In the normal course of business, at December 31, 2023, the Companywas contingently liable for $698.3 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.

Page 72 ♦ 2023 Annual Report