Page 182 - Martin Marietta - 2025 Proxy Statement

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)
The Company holdsequity investments in renewable energy tax credit (RETC)projects which qualify for certaintax benefits.
Allof the Company's RETC investments areaccounted forunderthe proportional amortization method.Underthe proportional
amortization method,the equity investment is amortized in proportiontothe income tax credits andother income tax benefits
e
received, with theamortizationexpense andthe income tax benefitspresented on anet basis inthe Income taxexpense or
e
benefit line item in theconsolidated statements of earnings.
Foradditional informationabout income taxes, seeNoteI to theconsolidated financialstatements.

Property, Plant and Equipment
Netproperty, plantand equipment represented 56% of totalassets at December 31,2024. Useful lives of theassetscan vary
depending on factors, including production levels,geographiclocation, portabilityand maintenance practices.Additionally,
climateand inclement weather can reducethe useful life of an asset. Historically,the Company has not recognizedsignificant
lossesonthe disposal or retirement offixedassets.
Aggregates mineral reservesand mineral interests arecomponents withinthe property, plant andequipment balance on the
consolidated balancesheets. The Company evaluatesaggregates reserves, including thoseused incement manufacturing, in
several ways,depending on the geology at aparticularlocationand whetherthe location is agreensite, anacquisition or an
existing operation. Greensites require an extensivedrillingprogram before anysignificant investment is made in termsof time,
sitedevelopment or effortstoobtainappropriate zoning and permitting (see Environmental Regulationand Litigation section).
Thedepth of overburden(thelayer of soil andother materialsthatlie abovea mineraldeposit) and the quality and quantity of
the aggregates reservesare significant factors in determining whether to pursueopening thesite. Further, theestimated
average sellingprice forproducts in a market isalsoa significant factor inconcluding that reserves areeconomically mineable.
If the Company’s analysis basedonthese factorsissatisfactory, thetotal aggregates reserves availableare calculated anda
determination is made whether to open thelocation. Reserveevaluationatexistinglocations is typically performed to evaluate
purchasing adjoiningproperties, forquality control,calculating overburden volumesand for mine planning. Reserve evaluation
of acquisitions may requirea higher degree of samplingtoverify the total reserves.
The quality ofreserves withina depositcan vary. Constructioncontracts, for the infrastructure market in particular, include
specifications related to theaggregates materialproperties. If alimitingcharacteristic inthe deposit isdiscovered, the
aggregates materialmay not meet the requiredspecifications. Although it is possiblethatthe aggregates material canstill be
used fornon-specification uses,thiscan have an adverse impactonthe Company’sability toserve certaincustomers or the
Company’sprofitability. In addition,otherfactorscan arisethat influence the Company’s ability todevelop reserves, including
geologicaloccurrences, miningpractices,environmental requirementsand zoning ordinances.
Indetermining theamount of reserves,evaluations arecompleted by or underthe supervisionof qualifiedperson(s) using
industry best practices and internalcontrolsdefined by the Company. The designations the Company uses for reserve
categories andthose recognized by theaggregate industry are summarizedas follows:
Mineral Reserves –Mineral reserves areanestimateof tonnage andgrade or quality that, in theopinion of aqualified
person, canbethe basisof aneconomically viable project. More specifically,itisthe economically mineable part of a
mineral resource, which includes diluting materialsand allowances forlossesthat may occur whenthe material is
mined or extracted. Reserves arecategorized as Proven andProbableand representnet tons afterconsideration of
applicable losses incurred during mining and plantprocessing.
Proven Reserves – Proven reservesare the portion of a mineral deposit for whichquantityand quality are estimated
on thebasis of conclusive evidence from closelyspaceddrilling and sampling.

Probable Reserves – Probable reservesare estimatedonthe basisoflessgeologicevidencebut areconsidered
adequate for determiningthe quantityand quality.
The Company’s proven andprobable reserves reflect reasonable economic andoperating constraintsand also include reserves
at the Company’s inactive andundeveloped sites, including some sites where permitting and zoning applications will not be
pursued until warranted by expected future growth.The Company has historically been successful in obtaining and maintaining
appropriate zoning and permitting (see Environmental Regulationand Litigation section). The Company bases estimatesonthe
information knownatthe time of determinationand regularlyreevaluates reserves whenevernew information indicatesa
material change in reserves at oneof the Company’ssites.
Foradditional information aboutproperty, plantand equipment, seeNote F to theconsolidated financialstatements.

Page74 ♦ 2024 Annual Report