Page 177 - Martin Marietta - 2025 Proxy Statement

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)
In connection withnormal, ongoingoperations, the Company enters into market-rateleases for property, plant andequipment
and royalty commitments principallyassociated with leased land and mineral reserves.Additionally,the Company enters into
equipment rentals to meet shorter-term,nonrecurring and intermittent needs. At December 31,2024, the Company had$391
million inoperating leaseobligations and$221 million in finance leaseobligations, representingthe present value offuture
payments. The imputed interest on operating and finance leaseobligations was$189 million. Management anticipatesthat, in
the ordinary course of business,the Companywill enter intoadditional royaltyagreements forlandand mineral reservesduring
2025.Aspermitted, short-term leases areexcluded fromAccountingStandards Codification842, Leases (ASC 842)
requirementsand future noncancelableobligations forthese leases as of December 31, 2024 are immaterial.
As of December 31, 2024, future interest payableonthe Company’spublicly-tradeddebtthrough the various maturity dates
was $3.4 billion. The Company had obligations relatedtoa contract of affreightmentnot accounted forasa lease, and royalty
agreements,totaling$52 millionand $165 million, respectively, asofDecember31, 2024. The Company had purchase
commitments forproperty, plantand equipmentof $162 millionasofDecember31, 2024 andother purchaseobligations
related to energy andservice contractstotaling$158 millionasofDecember31, 2024.
The Company invests in renewable energy investment entities whichqualify for tax credits andother tax benefits. As of
December31, 2024, the Company hascommittedtoanadditional $44 millionof tax equity investments related to renewable
energy tax creditprojects. Theseamounts areexpectedtobe paid in2025and are recorded inthe Othercurrent liabilities line
itemonthe consolidated balancesheet.

Contingent Liabilities and Commitments

The Company hasentered into standby letter of credit agreements relating to certain insurance claims,contractperformance
and permit requirements. At December 31,2024, the Company hadcontingentliabilitiesguaranteeing itsown performance
underthese outstanding lettersof creditof $37 million.
In thenormalcourseof business, at December 31, 2024, the Company wascontingently liable for $818 million insurety bonds,
whichguarantee itsown performanceand are requiredby certain states and municipalitiesand their related agencies. The
Company has indemnified theunderwriting insurance companiesagainst any exposureunderthe surety bonds. In the
Company’s experience,no materialclaimshavebeen made againstthese financial instruments.
OTHER FINANCIAL INFORMATION

Critical Accounting Policies and Estimates
The Company uses certainsignificant accounting policiestoprepare itsauditedconsolidated financial statements and related
disclosures in conformity with U.S. generally accepted accountingprinciples. Theseaccounting policiesare described in Note
A: Accounting Policies of the Notes to Financial Statements of the Company’s consolidated financialstatements includedunder
Item 8, Financial Statements and Supplemental Data of this Form 10-K.
The Company’s auditedconsolidated financial statements include certaincriticalestimates regardingthe effect of matters that
are inherently uncertain. Management bases its estimatesonhistoricalexperienceand on variousother assumptions it believes
tobe reasonableunderthe circumstances, the results of which formthe basis for making subjective andcomplex judgments
aboutthe carrying values of assets andliabilities. Amounts reported inthe Company’sconsolidated financialstatementscould
differ materially if management used different assumptions in makingthese estimates, resulting inactual results differing from
those estimates. Methodologiesusedand assumptionsselectedbymanagement in makingthese estimates, as well as the
relateddisclosures,havebeen reviewedbyand discussed withthe Company’sAudit Committee. Management’s determination
of thecriticalnatureof accountingestimates andjudgments may change fromtimetotimedepending on factsand
circumstances that management cannot currently predict.

2024 Annual Report ♦ Page 69