Martin Marietta Materials, Inc.
Filed Pursuant to Rule 424(b)(5)
Registration No. 333-142343
The
information in this preliminary prospectus supplement is not
complete and may be changed. This preliminary prospectus
supplement and the accompanying prospectus are not an offer to
sell nor do they seek an offer to buy these securities in any
jurisdiction where the offer or sale is not permitted.
|
Subject to completion, April 16,
2008
Prospectus Supplement
(To prospectus dated
April 25, 2007)
Martin Marietta Materials,
Inc.
$ % Senior
Notes due 2018
Issue
Price: %
The notes will mature
on ,
2018. Interest on the notes will be paid
on
and
of each year. The first interest payment will
be ,
2008.
We may redeem the notes in whole or in part at any time prior to
their maturity at the make whole redemption price
described in this prospectus supplement.
Upon a change of control repurchase event, we will be required
to make an offer to repurchase all outstanding notes at a price
in cash equal to 101% of the principal amount of the notes, plus
any accrued and unpaid interest to, but not including, the
purchase date.
The notes will be unsecured and will rank equally with all our
other unsecured unsubordinated indebtedness from time to time
outstanding.
Investing in the notes involves risks. See Risk
factors beginning on
page S-6
of this prospectus supplement.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of the notes
or determined if this prospectus supplement or the accompanying
prospectus is truthful or complete. Any representation to the
contrary is a criminal offense.
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Proceeds, before
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expenses, to Martin
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Public offering
price(1)
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Underwriting discount
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Marietta
Materials(1)
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Senior note
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%
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%
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%
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Total
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$
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$
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$
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(1)
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Plus accrued interest, if any, from
April , 2008.
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The notes will not be listed on any securities exchange.
Currently there is no public market for the notes.
We expect to deliver the notes to investors in registered
book-entry form through the facilities of The Depository
Trust Company and its participants, including Clearstream
Banking, societé anonyme and the Euroclear Bank S.A./N.V.,
on or about April , 2008.
Joint Book-Running Managers
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Banc
of America Securities LLC |
JPMorgan |
Wachovia Securities |
,
2008
You should rely only on the information contained in or
incorporated by reference in this prospectus supplement and the
accompanying prospectus. We have not, and the underwriters have
not, authorized anyone to provide you with different
information. If anyone provides you with different or
inconsistent information, you should not rely on it. We are not,
and the underwriters are not, making an offer of these
securities in any state where the offer is not permitted. You
should not assume that the information contained in or
incorporated by reference in this prospectus supplement and the
accompanying prospectus is accurate as of any date other than
the date on the front of this prospectus supplement.
Table of
Contents
Prospectus
Supplement
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ii
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ii
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S-1
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S-5
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S-6
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S-14
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S-15
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S-16
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S-17
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S-33
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S-36
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S-38
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Prospectus
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1
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2
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2
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2
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4
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4
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5
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15
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16
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19
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19
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19
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19
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i
About this
prospectus supplement
You should rely only upon the information contained in this
prospectus supplement, the accompanying prospectus and the
documents they incorporate by reference. We have not authorized
any other person to provide you with different or additional
information. If anyone provides you with different or additional
information, you should not rely on it. Neither we nor the
underwriters are making an offer to sell the notes in any
jurisdiction where the offer or sale is not permitted. You
should assume the information appearing in this prospectus
supplement and the accompanying prospectus is accurate only as
of their respective dates. Our business, financial condition,
results of operations and prospects may have changed since those
dates.
This prospectus supplement contains the terms of this offering
of notes. This prospectus supplement may add, update or change
information contained or incorporated by reference in the
accompanying prospectus. In addition, the information
incorporated by reference in the accompanying prospectus may
have added, updated or changed information in the accompanying
prospectus. If information in this prospectus supplement is
inconsistent with any information in the accompanying prospectus
(or any information incorporated therein by reference), this
prospectus supplement will apply and will supersede such
information in the accompanying prospectus.
It is important for you to read and consider all information
contained in this prospectus supplement, the accompanying
prospectus and the documents they incorporate by reference in
making your investment decision.
Where you can
find more information
We file annual, quarterly and special reports, proxy statements
and other information with the SEC under the Securities Exchange
Act of 1934, as amended (the Exchange Act). You may
read and copy this information at the following location of the
SEC:
Public Reference Room
100 F Street, N.E.
Room 1580
Washington, DC 20549
You may also obtain copies of this information at prescribed
rates by mail from the Public Reference Room of the SEC,
100 F Street, N.E., Room 1580, Washington, DC
20549. You may obtain information on the operation of the Public
Reference Room by calling the SEC at
1-800-SEC-0330.
The SEC also maintains a web site that contains reports, proxy
statements and other information about issuers, like us, who
file electronically with the SEC. The address of that site is
www.sec.gov.
You can also inspect reports, proxy statements and other
information about us at the offices of the New York Stock
Exchange, 20 Broad Street, New York, New York 10005.
We incorporate by reference information into this prospectus
supplement, which means that we disclose important information
to you by referring you to another document filed separately
with the SEC. The information incorporated by reference is
deemed to be part of this prospectus supplement. Any information
contained in this prospectus supplement or any document
incorporated or deemed to be incorporated by reference in this
prospectus supplement will be
ii
deemed to be modified, superseded or updated to the extent that
information contained in this prospectus supplement or any
subsequently filed document incorporated or deemed to be
incorporated by reference in this prospectus supplement
modifies, supersedes or updates such earlier information. Any
information so modified, superseded or updated will not be
deemed, except as so modified, superseded or updated, to
constitute a part of this prospectus supplement. We incorporate
by reference the documents listed below and all future documents
that we file with the SEC under Sections 13(a), 13(c), 14
and 15(d) of the Exchange Act (other than current reports
furnished under items 2.02 and 7.01 of
Form 8-K):
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Annual Report on
Form 10-K
for the fiscal year ended December 31, 2007; and
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Current Reports on
Form 8-K
filed on February 1, 2008, March 20, 2008 and
April 14, 2008.
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You may request a copy of these filings at no cost, by writing
or telephoning us at the following address:
Martin Marietta Materials, Inc.
2710 Wycliff Road
Raleigh, North Carolina
27607-3033
Attn: Investor Relations
Telephone:
(919) 781-4550
iii
Summary
This summary highlights information contained elsewhere or
incorporated by reference in this prospectus supplement and the
accompanying prospectus. This is not intended to be a complete
description of the matters covered in this prospectus supplement
and the accompanying prospectus and is subject, and qualified in
its entirety by reference, to the more detailed information and
financial statements (including the notes thereto) included or
incorporated by reference in this prospectus supplement and the
accompanying prospectus. Unless otherwise indicated, all
references to Martin Marietta Materials, the
Company, we, us and
our refer to Martin Marietta Materials, Inc. and its
consolidated subsidiaries.
See Risk factors in this prospectus supplement
and in our annual report on
Form 10-K
for the year ended December 31, 2007 for factors that you
should consider before investing in the notes and
Information regarding forward-looking statements for
information relating to statements contained in this prospectus
supplement that are not historical facts.
Our
company
We are a leading producer of aggregates for the construction
industry, including infrastructure, commercial and residential.
We also have a specialty products segment that manufactures and
markets magnesia-based chemical products used in industrial,
agricultural, and environmental applications, dolomitic lime
sold primarily to the steel industry and structural composite
products. For the year ended December 31, 2007, our
aggregates business accounted for approximately 92% of our total
net sales and our specialty products segment accounted for
approximately 8% of our total net sales.
We were formed in 1993 as a North Carolina corporation to serve
as successor to the operations of the materials group of the
organization that is now Lockheed Martin Corporation. Our
principal executive offices are located at 2710 Wycliff Road,
Raleigh, North Carolina
27607-3033,
and our telephone number is
(919) 781-4550.
Our website is located at
http://www.martinmarietta.com.
We do not incorporate the information on our website into this
prospectus supplement or the accompanying prospectus and you
should not consider it a part of this prospectus supplement or
the accompanying prospectus.
Recent
developments
On April 10, 2008, we amended our unsecured
$250 million credit agreement to add another class of loan
commitment, which had the effect of increasing the borrowing
base under the credit agreement by $75 million. We may
borrow under our credit agreement, including the additional
funds available as a result of the increase, for general
corporate purposes, including to support our commercial paper
program.
On April 14, 2008, we announced the acquisition from Vulcan
Materials Company of six quarries in Georgia and Tennessee.
These newly acquired facilities significantly expand our
presence in high-growth areas of Georgia and Tennessee,
particularly south and west of Atlanta. These quarries will be
integrated into our Southeast Group. As a result of this
transaction, we estimate that our aggregates production in
Georgia and Tennessee will increase by nearly 30% annually.
The acquisition was partially funded with proceeds from
commercial paper borrowings. The remainder of the consideration
for the acquisition consisted of certain of our assets,
including the Table Mountain Quarry in Butte County, California,
the Loop 1604 property in Bexar County, Texas and the Greystone
property in Vance County, North Carolina.
S-1
The
offering
The following is a brief summary of some of the terms of the
notes. For a more complete description of the terms of the notes
see Description of the notes in this prospectus
supplement and Description of debt securities in the
accompanying prospectus.
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Issuer |
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Martin Marietta Materials, Inc. |
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Notes offered |
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$ aggregate principal amount
of % senior notes due 2018. |
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Issue price |
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% of principal amount, plus
accrued interest, if any, from April , 2008. |
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Maturity |
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,
2018. |
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Interest |
|
Interest on the notes will accrue at the rate
of % per year on the principal
amount and will be payable semi-annually in cash in arrears on
each and
of each year, beginning on , 2008. |
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Ranking |
|
The notes will be our unsecured and unsubordinated obligations
and will rank equal in right of payment to all of our other
existing and future unsecured and unsubordinated indebtedness.
The notes will be effectively junior to all of our existing and
future secured debt to the extent of the value of the assets
securing such debt and will be structurally subordinated to all
existing and future indebtedness and other liabilities of our
subsidiaries. |
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As of December 31, 2007, we had an aggregate of
approximately $1,124.3 million of indebtedness, excluding
intercompany liabilities. As of December 31, 2007,
excluding intercompany liabilities, our subsidiaries had no
indebtedness and, other than capital lease obligations, we had
no secured indebtedness. |
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The indenture governing the notes will not contain any
restrictions on the incurrence of indebtedness other than as
described under Description of the
notesCovenantsLimitations on liens. |
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Additional notes |
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We may from time to time, without notice to or the consent of
the holders of the notes, create and issue additional debt
securities having the same terms as and ranking equally and
ratably with the notes in all respects. |
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Sinking fund |
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None. |
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Change of control repurchase event |
|
Upon a change of control repurchase event, we will be required
to make an offer to repurchase all outstanding notes at a price
in cash equal to 101% of the principal amount of the notes, plus
any accrued and unpaid interest to, but not including the
repurchase date. See Description of the notesChange
of control repurchase event. |
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Optional redemption |
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We may redeem the notes in whole or in part at any time prior to
their maturity at the make whole redemption price
described herein. See Description of the
notesOptional redemption; no sinking fund. |
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Trustee |
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Branch Banking & Trust Company. |
S-2
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Use of proceeds |
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We estimate that the net proceeds from the offering will be
approximately $ after deducting
underwriting discounts and commissions and other expenses of the
offering. We intend to use the net proceeds from this offering
to repay indebtedness outstanding under our commercial paper
program and other short-term loans. See Use of
proceeds. |
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No listing |
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We do not intend to list the notes on any national securities
exchange. The notes will be new securities for which there is
currently no public market. See Risk factorsThere is
no public market for the notes, which could limit their market
price or your ability to sell them. |
|
Risk factors |
|
Investing in the notes involves risks. See Risk
factors and other information in this prospectus
supplement and the accompanying prospectus for a discussion of
factors you should consider carefully before deciding to invest
in the notes. |
S-3
Summary financial
data
The summary financial data set forth below for the fiscal years
ended December 31, 2007, 2006, 2005, 2004 and 2003 have
been derived from our audited consolidated financial statements.
The selected financial data should be read in conjunction with
our consolidated financial statements and
Managements Discussion and Analysis of Financial
Condition and Results of Operations included in our annual
report on
Form 10-K
for the year ended December 31, 2007, which is incorporated
by reference into this prospectus supplement and the
accompanying prospectus.
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Year Ended December 31,
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(dollars in thousands, except per share amounts)
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2007
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2006
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2005
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2004
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2003
|
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Consolidated operating results
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Net sales
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$
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1,967,612
|
|
|
$
|
1,929,666
|
|
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$
|
1,728,977
|
|
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$
|
1,489,796
|
|
|
$
|
1,385,467
|
|
Freight and delivery revenues
|
|
|
239,529
|
|
|
|
261,386
|
|
|
|
246,311
|
|
|
|
202,125
|
|
|
|
200,257
|
|
|
|
|
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Total revenues
|
|
|
2,207,141
|
|
|
|
2,191,052
|
|
|
|
1,975,288
|
|
|
|
1,691,921
|
|
|
|
1,585,724
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Cost of sales
|
|
|
1,552,704
|
|
|
|
1,551,774
|
|
|
|
1,431,407
|
|
|
|
1,268,401
|
|
|
|
1,192,280
|
|
Freight and delivery costs
|
|
|
239,529
|
|
|
|
261,386
|
|
|
|
246,311
|
|
|
|
202,125
|
|
|
|
200,257
|
|
|
|
|
|
|
|
Total cost of revenues
|
|
|
1,792,233
|
|
|
|
1,813,160
|
|
|
|
1,677,718
|
|
|
|
1,470,526
|
|
|
|
1,392,537
|
|
Other operating (income) and expenses, net
|
|
|
(18,122
|
)
|
|
|
(12,657
|
)
|
|
|
(16,231
|
)
|
|
|
(10,516
|
)
|
|
|
(6,506
|
)
|
|
|
|
|
|
|
Earnings from operations
|
|
|
433,030
|
|
|
|
390,549
|
|
|
|
313,801
|
|
|
|
231,911
|
|
|
|
199,693
|
|
Interest expense
|
|
|
60,893
|
|
|
|
40,359
|
|
|
|
42,597
|
|
|
|
42,734
|
|
|
|
42,587
|
|
Other nonoperating (income) and expenses, net
|
|
|
(6,443
|
)
|
|
|
(2,819
|
)
|
|
|
(1,483
|
)
|
|
|
(607
|
)
|
|
|
429
|
|
|
|
|
|
|
|
Earnings from continuing operations before taxes on income
|
|
|
378,580
|
|
|
|
353,009
|
|
|
|
272,687
|
|
|
|
189,784
|
|
|
|
156,677
|
|
Taxes on income
|
|
|
116,073
|
|
|
|
107,632
|
|
|
|
74,225
|
|
|
|
58,491
|
|
|
|
47,034
|
|
|
|
|
|
|
|
Earnings from continuing operations
|
|
|
262,507
|
|
|
|
245,377
|
|
|
|
198,462
|
|
|
|
131,293
|
|
|
|
109,643
|
|
Gain (loss) on discontinued operations, net of related tax
expense (benefit)
|
|
|
242
|
|
|
|
45
|
|
|
|
(5,796
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)
|
|
|
(2,130
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)
|
|
|
(9,146
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)
|
|
|
|
|
|
|
Earnings before cumulative effect of change in accounting
principle
|
|
|
262,749
|
|
|
|
245,422
|
|
|
|
192,666
|
|
|
|
129,163
|
|
|
|
100,497
|
|
Cumulative effect of change in accounting for asset retirement
obligations
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(6,874
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)
|
|
|
|
|
|
|
Net earnings
|
|
$
|
262,749
|
|
|
$
|
245,422
|
|
|
$
|
192,666
|
|
|
$
|
129,163
|
|
|
$
|
93,623
|
|
|
|
|
|
|
|
Condensed consolidated balance sheet data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current deferred income tax benefits
|
|
$
|
44,285
|
|
|
$
|
25,317
|
|
|
$
|
14,989
|
|
|
$
|
5,750
|
|
|
$
|
21,603
|
|
Current assetsother
|
|
|
581,725
|
|
|
|
567,037
|
|
|
|
587,052
|
|
|
|
618,503
|
|
|
|
589,048
|
|
Property, plant and equipment, net
|
|
|
1,433,553
|
|
|
|
1,295,491
|
|
|
|
1,166,351
|
|
|
|
1,065,215
|
|
|
|
1,042,432
|
|
Goodwill
|
|
|
574,667
|
|
|
|
570,538
|
|
|
|
569,263
|
|
|
|
567,495
|
|
|
|
577,586
|
|
Other intangibles, net
|
|
|
9,426
|
|
|
|
10,948
|
|
|
|
18,744
|
|
|
|
18,642
|
|
|
|
25,142
|
|
Other noncurrent assets
|
|
|
40,149
|
|
|
|
37,090
|
|
|
|
76,917
|
|
|
|
80,247
|
|
|
|
63,414
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
2,683,805
|
|
|
$
|
2,506,421
|
|
|
$
|
2,433,316
|
|
|
$
|
2,355,852
|
|
|
$
|
2,319,225
|
|
|
|
|
|
|
|
Current liabilitiesother
|
|
$
|
230,480
|
|
|
$
|
189,116
|
|
|
$
|
199,259
|
|
|
$
|
202,843
|
|
|
$
|
221,683
|
|
Current maturities of long-term debt and commercial paper
|
|
|
276,136
|
|
|
|
125,956
|
|
|
|
863
|
|
|
|
970
|
|
|
|
1,068
|
|
Long-term debt
|
|
|
848,186
|
|
|
|
579,308
|
|
|
|
709,159
|
|
|
|
713,661
|
|
|
|
717,073
|
|
Pension, postretirement and postemployment benefits
|
|
|
103,518
|
|
|
|
106,413
|
|
|
|
98,714
|
|
|
|
88,241
|
|
|
|
76,917
|
|
Noncurrent deferred income taxes
|
|
|
160,902
|
|
|
|
159,094
|
|
|
|
149,972
|
|
|
|
139,179
|
|
|
|
116,647
|
|
Other noncurrent liabilities
|
|
|
118,592
|
|
|
|
92,562
|
|
|
|
101,664
|
|
|
|
57,531
|
|
|
|
55,990
|
|
Shareholders equity
|
|
|
945,991
|
|
|
|
1,253,972
|
|
|
|
1,173,685
|
|
|
|
1,153,427
|
|
|
|
1,129,847
|
|
|
|
|
|
|
|
Total liabilities and shareholders equity
|
|
$
|
2,683,805
|
|
|
$
|
2,506,421
|
|
|
$
|
2,433,316
|
|
|
$
|
2,355,852
|
|
|
$
|
2,319,225
|
|
|
|
|
|
|
|
|
|
S-4
Ratio of earnings
to fixed charges
The following table shows our historical ratio of earnings to
fixed charges for each of the five most recent fiscal years.
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|
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Year Ended December 31,
|
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2007
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|
2006
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|
2005
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|
2004
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|
2003
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|
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Ratio of earnings to fixed charges
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|
|
5.27
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|
|
7.01
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|
|
5.67
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|
|
4.47
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|
|
3.63
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|
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For this ratio, earnings consist of earnings before income taxes
on income, extraordinary items and net cumulative effect of
accounting changes, adjusted for undistributed earnings of
less-than-fifty-percent-owned affiliates. Fixed charges consist
of interest expensed and capitalized, plus the portion of rent
expense under operating leases deemed by us to be representative
of the interest factor.
S-5
Risk
factors
Before you invest in the notes, you should carefully consider
the following risks. The risks described below are not the only
ones facing us. Additional risks not presently known to us or
that we currently deem immaterial may also impair our business
operations. Our business, financial condition or results of
operations could be materially adversely affected by any of
these risks. You should also review the other risks contained in
our annual report on
Form 10-K
for the year ended December 31, 2007, which is incorporated
by reference into this prospectus supplement and accompanying
prospectus. This prospectus supplement, the accompanying
prospectus and the information included or incorporated by
reference also contain forward looking statements that involve
risks and uncertainties. Our actual results could differ
materially from those anticipated in these forward looking
statements as a result of certain factors, including the risks
faced by us described below and elsewhere in this prospectus
supplement, the accompanying prospectus and the information
included or incorporated by reference.
Risks Related to
our Business
Our aggregates
business is cyclical and depends on activity within the
construction industry.
We sell most of our aggregate products to the construction
industry, so our results depend on the strength of the
construction industry. Since our business depends on
construction spending, which can be cyclical, our profits are
sensitive to national, regional, and local economic conditions.
The overall economy has been hurt by mortgage security losses
and the tightening credit markets. Construction spending is
affected by economic conditions, changes in interest rates,
demographic and population shifts, and changes in construction
spending by federal, state, and local governments. If economic
conditions change, a recession in the construction industry may
occur and affect the demand for our aggregate products.
Construction spending can also be disrupted by terrorist
activity and armed conflicts.
While our aggregate operations cover a wide geographic area, our
earnings depend on the strength of the local economies in which
we operate because of the high cost to transport our products
relative to their price. If economic conditions and construction
spending decline significantly in one or more areas,
particularly in our top five revenue-generating states of North
Carolina, Texas, Georgia, Iowa and South Carolina, our
profitability will decrease.
Within the construction industry, we sell our aggregate products
for use in both commercial construction and residential
construction. Commercial and residential construction levels
generally move with economic cycles; when the economy is strong,
construction levels rise, and when the economy is weak,
construction levels fall. Commercial construction was mixed in
2007, with growth slowing during the year. In some areas we saw
declining commercial construction activity, including office and
retail space, as developers considered the impact of the current
credit markets on construction and development plans. Businesses
facing tighter credit conditions often find it difficult to
obtain financing for capital investments. The residential
construction market declined sharply in 2007 in connection with
the housing market downturn. Further, the outlook reflects
diminished demand, with recovery not expected prior to late 2009
or 2010. Approximately 12% of our aggregates shipments in 2007
were to the residential construction market.
Our aggregate products are used in public infrastructure
projects, which include the construction, maintenance, and
improvement of highways, bridges, schools, prisons, and similar
projects.
S-6
So our business is dependent on the level of federal, state, and
local spending on these projects. We cannot be assured of the
existence, amount, and timing of appropriations for spending on
these projects. For example, while the current federal highway
law passed in 2005 provides funding of $286.4 billion for
highway, transit, and highway safety programs through
September 30, 2009, Congress must pass an appropriations
bill each year to approve spending these funds. We cannot be
assured that Congress will pass an appropriations bill each year
to approve funding at the level authorized in the federal
highway law. Similarly, each state funds its infrastructure
spending from specially allocated amounts collected from various
taxes, typically gasoline taxes and vehicle fees, along with
voter-approved bond programs. Shortages in state tax revenues
can reduce the amounts spent on state infrastructure projects,
even below amounts awarded under legislative bills. Delays in
state infrastructure spending can hurt our business. For
example, we expect delays in infrastructure spending in Florida,
North Carolina, South Carolina and Texas will continue in 2008,
which will limit our business growth in those states until the
level and timing of spending improves.
Our aggregates
business is seasonal and subject to the weather.
Since the construction aggregates business is conducted
outdoors, seasonal changes and other weather conditions affect
our business. Adverse weather conditions, including hurricanes
and tropical storms, cold weather, snow, and heavy or sustained
rainfall, reduce construction activity and the demand for our
products. Adverse weather conditions also increase our costs and
reduce our production output as a result of power loss, needed
plant and equipment repairs, time required to remove water from
flooded operations, and similar events. Severe drought
conditions can restrict available water supplies and restrict
production. The construction aggregates business production and
shipment levels follow activity in the construction industry,
which typically occur in the spring, summer and fall. Because of
the weathers effect on the construction industrys
activity, the aggregates business production and shipment levels
vary by quarter. The second and third quarters are generally the
most profitable and the first quarter is generally the least
profitable.
Our aggregates
business depends on the availability of aggregate reserves or
deposits and our ability to mine them
economically.
Our challenge is to find aggregate deposits that we can mine
economically, with appropriate permits, near either growing
markets or long-haul transportation corridors that economically
serve growing markets. As communities have grown, they have
taken up attractive quarrying locations and have imposed
restrictions on mining. We try to meet this challenge by
identifying and permitting sites prior to economic expansion,
buying more land around our existing quarries to increase our
mineral reserves, developing underground mines, and developing a
distribution network that transports aggregates products by
various transportation methods, including rail and water, that
allows us to transport our products longer distances than would
normally be considered economical, but we can give no assurances
that we will be successful.
Our aggregates
business is a capital-intensive business.
The property and machinery needed to produce our products are
very expensive. Therefore, we must have access to large amounts
of cash to operate our businesses. We believe we have adequate
cash to run our businesses. Because significant portions of our
operating costs are fixed in nature, our financial results are
sensitive to production volume changes.
S-7
Our businesses
face many competitors.
Our businesses have many competitors, some of whom are bigger
and have more resources than we do. Some of our competitors also
operate on a worldwide basis. Our results are affected by the
number of competitors in a market, the production capacity that
a particular market can accommodate, the pricing practices of
other competitors, and the entry of new competitors in a market.
We also face competition for some of our products from
alternative products. For example, our magnesia specialties
business may compete with other chemical products that could be
used instead of our magnesia-based products.
Our future
growth may depend in part on acquiring other businesses in our
industry.
We expect to continue to grow, in part, by buying other
businesses. While the pace of acquisitions has slowed
considerably over the last few years, we will continue to look
for strategic businesses to acquire. In the past, we have made
acquisitions to strengthen our existing locations, expand our
operations, and enter new geographic markets. We will continue
to make selective acquisitions, joint ventures, or other
business arrangements we believe will help our company. However,
the continued success of our acquisition program will depend on
our ability to find and buy other attractive businesses at a
reasonable price and our ability to integrate acquired
businesses into our existing operations. We cannot assume there
will continue to be attractive acquisition opportunities for
sale at reasonable prices that we can successfully integrate
into our operations.
We may decide to pay all or part of the purchase price of any
future acquisition with shares of our common stock. We may also
use our stock to make strategic investments in other companies
to complement and expand our operations. If we use our common
stock in this way, the ownership interests of our shareholders
will be diluted and the price of our stock could fall.
We acquired 62 companies from 1995 through 2002. Some
of these acquisitions were more easily integrated into our
existing operations and have performed as well or better than we
expected, while others have not. We have sold underperforming
and other non-strategic assets, particularly lower margin
businesses like our asphalt plants in Houston, Texas, and our
road paving businesses in Shreveport, Louisiana, and Texarkana,
Arkansas.
Short supplies
and high costs of fuel and energy affect our
businesses.
Our businesses require a continued supply of diesel fuel,
natural gas, coal, petroleum coke and other energy. The
financial results of these businesses have been affected at
times by the short supply or high costs of these fuels and
energy. While we can contract for some fuels and sources of
energy, significant increases in costs or reduced availability
of these items have and may in the future reduce our financial
results. For example, in 2007, increases in fuel prices lowered
net earnings for the aggregates business by $0.10 per diluted
share when compared with 2006 fuel prices.
Changes in
legal requirements and governmental policies concerning zoning,
land use, the environment, and other areas of the law, and
litigation relating to these matters, affect our businesses. Our
operations expose us to the risk of material environmental
liabilities.
Many federal, state, and local laws and regulations relating to
zoning, land use, the environment, health, safety, and other
regulatory matters govern our operations. Despite our extensive
S-8
compliance efforts, risk of liabilities, particularly
environmental liabilities, is inherent in the operation of our
businesses, as it is with our competitors. We cannot assume that
these liabilities will not negatively affect us in the future.
We are also subject to future events, including changes in
existing laws or regulations or enforcement policies, or further
investigation or evaluation of the potential health hazards of
some of our products or business activities, which may result in
additional compliance and other costs. We could be forced to
invest in preventive or remedial action, like pollution control
facilities, which could be substantial.
Our operations are subject to manufacturing, operating, and
handling risks associated with the products we produce and the
products we use in our operations, including the related storage
and transportation of raw materials, products, hazardous
substances, and wastes. We are exposed to hazards including
storage tank leaks, explosions, discharges or releases of
hazardous substances, exposure to dust, and the operation of
mobile equipment and manufacturing machinery.
These risks can subject us to potentially significant
liabilities relating to personal injury or death, or property
damage, and may result in civil or criminal penalties, which
could hurt our productivity or profitability. For example, from
time to time we investigate and remediate environmental
contamination relating to our prior or current operations, as
well as operations we have acquired from others, and in some
cases we have been or could be named as a defendant in
litigation brought by governmental agencies or private parties.
We are involved from time to time in litigation and claims
arising from our operations. While we do not believe the outcome
of pending or threatened litigation will have a material adverse
effect on our operations or our financial condition, we cannot
assume that an adverse outcome in a pending or future legal
action would not negatively affect us.
Labor disputes
could disrupt operations of our businesses.
Labor unions represent 12.7% of the hourly employees of our
aggregates business and 90% of the hourly employees of our
specialty products business. Our collective bargaining
agreements for employees of our magnesia specialties business at
the Woodville, Ohio lime plant and the Manistee, Michigan
magnesia chemicals plant expire in June 2010 and August 2011,
respectively. Disputes with our trade unions, or the inability
to renew our labor agreements, could lead to strikes or other
actions that could disrupt our businesses, raise costs, and
reduce revenues and earnings from the affected locations.
Delays or
interruptions in shipping products of our businesses could
affect our operations.
Transportation logistics play an important role in allowing us
to supply products to our customers, whether by truck, rail,
barge, or ship. Any significant delays, disruptions, or the
non-availability of our transportation support system could
negatively affect our operations. For example, in 2005 and
partially in 2006, we experienced rail transportation shortages
in Texas and parts of the southeastern region of the United
States. In 2005 and 2006, following Hurricanes Katrina and Rita,
we experienced significant barge transportation problems along
the Mississippi River system.
Water levels can also affect our ability to transport our
products. High water levels limit the number of barges we can
transport and can require that we use additional horsepower to
tow barges. Low water levels can reduce the amount of material
we can transport in each barge. In
S-9
2007, dry weather caused low water levels and resulted in
reduced tonnage that could be shipped on a barge. Consequently,
the per ton cost of transporting material was higher than normal.
The availability of rail cars and barges can also affect our
ability to transport our products. Rail cars and barges can be
used to transport many different types of products. If owners
sell or lease rail cars and barges for use in other industries,
we may not have enough rail cars and barges to transport our
products. Barges have become particularly scarce, since barges
are being retired faster than new barges are being built.
Shipyards that build barges are operating at capacity, so the
lead time to buy or lease a new barge can extend many months. In
2005, we leased 780 additional rail cars. In 2006, we contracted
to buy 50 new barges that were delivered in 2007.
We have long-term agreements with shipping companies to provide
ships to transport our aggregate products from our Bahamas and
Nova Scotia operations to various coastal ports. These contracts
have varying expiration dates ranging from 2008 to 2017 and
generally contain renewal options. Our inability to renew these
agreements or enter into new ones with other shipping companies
could affect our ability to transport our products.
Our earnings
are affected by the application of accounting standards and our
critical accounting policies, which involve subjective judgments
and estimates by our management. Our estimates and assumptions
could be wrong.
The accounting standards we use in preparing our financial
statements are often complex and require that we make
significant estimates and assumptions in interpreting and
applying those standards. We make critical estimates and
assumptions involving accounting matters including our
stock-based compensation, our goodwill impairment testing, our
expenses and cash requirements for our pension plans, our
estimated income taxes, and how we account for our property,
plant and equipment, and inventory. These estimates and
assumptions involve matters that are inherently uncertain and
require our subjective and complex judgments. If we used
different estimates and assumptions or used different ways to
determine these estimates, our financial results could differ.
While we believe our estimates and assumptions are appropriate,
we could be wrong. Accordingly, our financial results could be
different, either higher or lower. We urge you to read about our
critical accounting policies in our Managements Discussion
and Analysis of Financial Condition and Results of Operations in
our 2007 Annual Report on
10-K for the
fiscal year ended December 31, 2007, which is incorporated
by reference into this prospectus supplement and the
accompanying prospectus.
The adoption
of new accounting standards may affect our financial
results.
The accounting standards we apply in preparing our financial
statements are reviewed by regulatory bodies and are changed
from time to time. New or revised accounting standards could
change our financial results either positively or negatively.
For example, beginning in 2006, we were required under new
accounting standards to expense the fair value of stock options
we award our management and key employees as part of their
compensation. This resulted in a reduction of our earnings and
made comparisons between financial periods more difficult. We
urge you to read about our accounting policies and changes in
our accounting
S-10
policies in Note A of our 2007 financial statements, which
are incorporated by reference into this prospectus supplement
and the accompanying prospectus.
We depend on
the recruitment and retention of qualified personnel, and our
failure to attract and retain such personnel could affect our
business.
Our success depends to a significant degree upon the continued
services of our key personnel and executive officers. Our
prospects depend upon our ability to attract and retain
qualified personnel for our operations. Competition for
personnel is intense, and we may not be successful in attracting
or retaining qualified personnel, which could negatively affect
our business.
Disruptions in
the credit markets could affect our business.
The current credit environment has negatively affected the
economy, and we have considered how it might affect our
business. Demand for our products, particularly in the
commercial and residential construction markets, could decline
if companies and consumers are unable to finance construction
projects or if the economic slowdown causes delays or
cancellations to capital projects. We may also have difficulty
placing our commercial paper in that it may take longer than we
have recently experienced
and/or may
cost more. We experienced such problems in August 2007 and
September 2007. We cannot assure you that we will be able to
access the capital markets at financially economical interest
rates, which could negatively affect our business.
Our specialty
products business depends in part on the steel industry and the
supply of reasonably priced fuels.
Our specialty products business sells some of its products to
companies in the steel industry. While we have reduced this risk
over the last few years, this business is still dependent, in
part, on the strength of the highly-cyclical steel industry. The
specialty products business also requires significant amounts of
natural gas, coal, and petroleum coke, and financial results are
negatively affected by high fuel prices or shortages.
Our structural
composites product line has not generated any profits since its
inception.
Our structural composites product line faces many challenges
before it becomes break-even or generates a profit. We cannot
ensure the future profitability of this product line.
Our articles
of incorporation, bylaws, and shareholder rights plan and North
Carolina law may inhibit a change in control that you may
favor.
Our articles of incorporation and bylaws, shareholder rights
plan, and North Carolina law contain provisions that may delay,
deter or inhibit a future acquisition of us not approved by our
board of directors. This could occur even if our shareholders
are offered an attractive value for their shares or if many or
even a majority of our shareholders believe the takeover is in
their best interest. These provisions are intended to encourage
any person interested in acquiring us to negotiate with and
obtain the approval of our board of directors in connection with
the
S-11
transaction. Provisions that could delay, deter, or inhibit a
future acquisition include the following:
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a classified board of directors;
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|
the requirement that our shareholders may only remove directors
for cause;
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|
specified requirements for calling special meetings of
shareholders; and
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|
the ability of our board of directors to consider the interests
of various constituencies, including our employees, customers,
and creditors and the local community.
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In addition, we have in place a shareholder rights plan that
will trigger a dilutive issuance of common stock upon
substantial purchases of our common stock by a third party that
are not approved by the board of directors.
Risks Related to
the Notes
The notes are
obligations exclusively of our company and not of our
subsidiaries, and payment to holders of the notes will be
structurally subordinated to the claims of our
subsidiaries creditors.
The notes are not guaranteed by any of our subsidiaries. As a
result, liabilities, including indebtedness or guarantees of
indebtedness, of each of our subsidiaries will rank effectively
senior to the indebtedness represented by the notes, to the
extent of such subsidiarys assets. As of December 31,
2007, excluding intercompany liabilities, our subsidiaries had
no outstanding indebtedness. In addition, the indenture
governing the notes does not restrict the future incurrence of
liabilities or issuances of preferred stock, including unsecured
indebtedness or guarantees of indebtedness, by our subsidiaries.
The notes will
be effectively junior to secured indebtedness that we may issue
in the future.
The notes are unsecured. Holders of our secured debt that we may
issue in the future may foreclose on the assets securing such
debt, reducing the cash flow from the foreclosed property
available for payment of unsecured debt, including the notes.
Holders of our secured debt also would have priority over
unsecured creditors in the event of our bankruptcy, liquidation
or similar proceeding. As a result, the notes will be
effectively junior to any secured debt that we may issue in the
future.
We may not be
able to repurchase all of the notes upon a change of control
repurchase event.
As described under Description of the notesChange of
control repurchase event, we will be required to offer to
repurchase the notes upon the occurrence of a change of control
repurchase event. We may not have sufficient funds to repurchase
the notes in cash at that time or have the ability to arrange
necessary financing on acceptable terms. In addition, the terms
of our other debt agreements or applicable law may limit our
ability to repurchase the notes for cash.
S-12
The definition
of a change of control requiring us to repurchase the notes is
limited, so that the market price of the notes may decline if we
enter into a transaction that is not a change in control under
the indenture governing the notes.
The term change of control (as used in the notes and
the indenture) is limited in terms of its scope and does not
include every event that might cause the market price of the
notes to decline. In addition, we are required to repurchase the
notes upon a change of control only if such notes receive a
reduction in rating below investment grade. As a result, our
obligation to repurchase the notes upon the occurrence of a
change in control is limited and may not preserve the value of
the notes in the event of a highly leveraged transaction,
reorganization, merger or similar transaction.
There is no
public market for the notes, which could limit their market
price or your ability to sell them.
The notes are a new issue of securities for which there
currently is no trading market. As a result, we cannot provide
any assurances that a market will develop for the notes or that
you will be able to sell your notes. If any of the notes are
traded after their initial issuance, they may trade at a
discount from their initial offering price. Future trading
prices of the notes will depend on many factors, including
prevailing interest rates, the market for similar securities,
general economic conditions and our financial condition,
performance and prospects. Accordingly, you may be required to
bear the financial risk of an investment in the notes for an
indefinite period of time. We do not intend to apply for listing
or quotation of the notes on any securities exchange or
automated quotation system, respectively.
S-13
Information
regarding forward-looking statements
This prospectus supplement and the accompanying prospectus
contain statements which, to the extent they are not recitations
of historical fact, constitute forward-looking statements within
the meaning of federal securities law. Investors are cautioned
that all forward-looking statements involve risks and
uncertainties, and are based on assumptions that we believe in
good faith are reasonable, but which may be materially different
from actual results. Investors can identify these statements by
the fact that they do not relate only to historic or current
facts. The words may, will,
could, should, anticipate,
believe, estimate, expect,
forecast, intend, outlook,
plan, project, scheduled,
and similar expressions in connection with future events or
future operating or financial performance are intended to
identify forward-looking statements. Any or all of our
forward-looking statements in this prospectus supplement and the
accompanying prospectus and in other publications may turn out
to be wrong.
Statements and assumptions regarding future revenues, income and
cash flows, performance, economic trends, the outcome of
litigation, regulatory compliance, and environmental remediation
cost estimates are examples of forward-looking statements.
Numerous factors, including the risk factors described in this
prospectus supplement and the accompanying prospectus, could
affect our forward-looking statements and actual performance.
Factors that we currently believe could cause its actual results
to differ materially from those in the forward-looking
statements include, but are not limited to, those set forth
under Risk factors.
S-14
Use of
proceeds
The net proceeds from this offering, after deducting the
underwriting discount and transaction expenses, are estimated to
be approximately $ . We intend to
use the net proceeds from this offering to repay indebtedness
outstanding under our commercial paper program and other
short-term loans.
As of April 11, 2007, we had (1) approximately
$254 million outstanding under our commercial paper program
bearing a weighted average per annum interest rate of 3.10%,
with maturities of no more than 30 days and
(2) $100 million outstanding under short-term loans
bearing a weighted average per annum interest rate of 3.20%,
with maturities of no more than 90 days. These debt
repayments will create sufficient liquidity in our commercial
paper program to fund the maturity of the $200 million
aggregate principal amount of our 5.875% notes due December
2008.
S-15
Capitalization
The following table sets forth our cash and cash equivalents and
our capitalization as of December 31, 2007:
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On an actual basis;
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On a pro forma basis to give effect to (1) the settlement
of share repurchases outstanding at December 31, 2007 and
(2) the incurrence of $282,000,000 of indebtedness under
our commercial paper program and other short-term loans as of
April 11, 2008, primarily to finance the acquisition of
additional facilities announced April 14, 2008 (see
SummaryOur companyRecent developments);
and
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On a pro forma as adjusted basis to give effect to the sale of
the notes offered by this prospectus supplement and the
application of the net proceeds therefrom, assuming net proceeds
from this offering of approximately
$ .
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You should read this table in conjunction with the information
set forth under Use of proceeds and the financial
statements and notes thereto incorporated by reference into this
prospectus supplement and the accompanying prospectus.
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At December 31, 2007
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Pro forma
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(dollars in thousands)
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Actual
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Pro forma
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as adjusted
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Cash and cash equivalents
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20,038
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20,038
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20,038
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Current loans payable, current portions of long-term debt and
settlements for share repurchases:
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5.875% Notes due December 2008
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202,066
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202,066
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202,066
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Short-term loans payable
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100,000
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Short-term portion of miscellaneous notes payable
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2,070
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2,070
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2,070
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Outstanding settlements for repurchases of common shares
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24,017
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Commercial paper payable
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72,000
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254,000
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54,000
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Total
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300,153
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558,136
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258,136
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Long-term debt:
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Floating Rate Senior Notes due 2010, interest rate of 5.51%
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224,388
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224,388
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224,388
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6.875% Notes due 2011
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249,860
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249,860
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249,860
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7% Debentures due 2025
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124,331
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124,331
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124,331
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6.25% Senior Notes due 2037
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247,795
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247,795
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247,795
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Other long-term debt
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1,812
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1,812
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1,812
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% Notes
due 2018 offered by this prospectus supplement
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300,000
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Total
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848,186
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|
|
848,186
|
|
|
1,148,186
|
|
|
|
|
|
|
Shareholders equity:
|
|
|
|
|
|
|
|
|
|
Total shareholders equity
|
|
|
945,991
|
|
|
945,991
|
|
|
945,991
|
|
|
|
|
|
|
Total capitalization
|
|
|
2,070,313
|
|
|
2,352,313
|
|
|
2,352,313
|
|
|
|
|
|
|
|
|
S-16
Description of
the notes
Martin Marietta Materials will issue
$ million aggregate principal
amount of % Senior Notes due
2018 (the Notes) under a base indenture (the
Base Indenture) between Martin Marietta Materials
and Branch Banking & Trust Company, as trustee
(the Trustee), and a supplemental indenture between
itself and the Trustee (the Supplemental Indenture
and, together with the Base Indenture, the
Indenture).
The Supplemental Indenture provides for unlimited issuances of
additional Notes. All such additional Notes (including such
Notes issued hereby) will be substantially identical in all
material respects other than issuance dates and will constitute
a part of the same series, respectively, including with respect
to redemption and matters requiring approval of the holders.
There can be no assurance, however, that any additional Notes
subsequently issued under the Indenture will be treated as
fungible with the Notes offered hereby for U.S. federal
income tax or other purposes.
To the extent that there exists a conflict between the terms and
conditions of the Base Indenture and the Supplemental Indenture,
the terms of the Supplemental Indenture shall govern. The
following summary of the material provisions of the Indenture
does not purport to be complete and is subject to, and qualified
in its entirety by, reference to the provisions of the
Indenture, including the definitions of certain terms contained
therein and those terms made part of the Indenture by reference
to the Trust Indenture Act of 1939. Capitalized terms used, but
not defined in this section shall have the meanings assigned to
such terms in the Base Indenture.
General
The Notes will be unsecured obligations of Martin Marietta
Materials and will rank equally with all other unsecured and
unsubordinated debt of Martin Marietta Materials. Secured debt
of Martin Marietta Materials will be effectively senior to the
Notes to the extent of the value of the assets securing such
debt. The Notes will not be guaranteed and, therefore, will be
structurally subordinate to the debt and liabilities of any
subsidiary of Martin Marietta Materials.
The Notes will bear interest
from ,
2008 at % per annum payable
on
and
of each year,
commencing ,
2008, to the person in whose name the Notes were registered at
the close of business on the
preceding
and ,
respectively.
The Notes will be issued only in fully registered form, without
coupons, in purchase amounts of $2,000 and integral multiples of
$1,000 thereafter.
The Notes will be redeemable by us at any time prior to maturity
as described below under Optional redemption; no
sinking fund.
Principal of, premium, if any, and interest, if any, on the
Notes (other than Notes issued as Global Notes) will be payable,
and the Notes (other than Notes issued as Global Notes) will be
exchangeable and transfers thereof will be registrable, at the
office of the Trustee and at any other office maintained at that
time by us for such purpose, provided that, at our option,
payment of interest may be made by check mailed to the address
of the holder as it appears in the register of the Notes. For
certain information about Notes issued in global form, see
Form of notes below. No service charge shall
be made for any registration of transfer or
S-17
exchange of the Notes, but we may require payment of a sum
sufficient to cover any transfer tax or other governmental
charge payable in connection therewith.
The Indenture provides that the Trustee and the Paying Agent
shall promptly pay to us upon request any money held by them for
the payment of principal (and premium, if any) or interest that
remains unclaimed for two years. In the event the Trustee or the
Paying Agent returns money to us following such two-year period,
the registered holders of the Notes (the
Noteholders) thereafter shall be entitled to payment
only from us, subject to all applicable escheat, abandoned
property and similar laws.
The Indenture does not limit the amount of additional unsecured
indebtedness that we or any of our subsidiaries may incur. The
terms of the Notes and the covenants contained in the Indenture
do not afford holders of the Notes protection in the event of a
highly leveraged or other similar transaction involving Martin
Marietta Materials that may adversely affect Noteholders. See
Covenants below.
Interest
The Notes will bear interest at a fixed rate
of % per annum. The Notes will bear
interest
from ,
2008, payable semi-annually in arrears on
each
and ,
beginning
on ,
2008, to the persons in whose names the Notes are registered at
the close of business on
the
and ,
as the case may be (whether or not a business day), immediately
preceding
such
and ; provided, however, that interest payable at maturity will
be payable to the person to whom the principal is payable.
Interest on the Notes will accrue
from ,
2008, or from the most recent interest payment date to which
interest has been paid or provided for, to but excluding the
relevant interest payment date. Interest on the Notes will be
computed on the basis of a
360-day year
of twelve
30-day
months.
If an interest payment date for the Notes falls on a day that is
not a business day, the interest payment shall be postponed to
the next succeeding business day, and no interest on such
payment shall accrue for the period from and after such interest
payment date.
Change of control
repurchase event
If a Change of Control Repurchase Event (as defined herein)
occurs, we will make an offer to each Noteholder to repurchase
all or any part (in excess of $2,000 and in integral multiples
of $1,000) of that Noteholders Notes at a repurchase price
in cash equal to 101% of the aggregate principal amount of Notes
repurchased plus any accrued and unpaid interest on the Notes
repurchased to, but not including, the date of purchase.
Within 30 days following any Change of Control Repurchase
Event or, at our option, prior to any Change of Control (as
defined herein), but after the public announcement of the Change
of Control, we will mail a notice to each holder, with a copy to
the Trustee, describing the transaction or transactions that
constitute or may constitute the Change of Control Repurchase
Event and offering to repurchase Notes on the payment date
specified in the notice, which date will be no earlier than
30 days and no later than 60 days from the date such
notice is mailed. The notice shall, if mailed prior to the date
of consummation of the Change of Control, state that the offer
to purchase is conditioned on the Change of Control Repurchase
Event occurring on or prior to the payment date specified in the
notice.
S-18
We will comply with the requirements of
Rule 14e-1
under the Securities Exchange Act of 1934, as amended (the
Exchange Act), and any other securities laws and
regulations thereunder to the extent those laws and regulations
are applicable in connection with the repurchase of the Notes as
a result of a Change of Control Repurchase Event. To the extent
that the provisions of any securities laws or regulations
conflict with the Change of Control Repurchase Event provisions
of the Notes, we will comply with the applicable securities laws
and regulations and will not be deemed to have breached our
obligations under the Change of Control Repurchase Event
provisions of the Notes by virtue of such conflict.
On the Change of Control Repurchase Event payment date, we will,
to the extent lawful:
(1) accept for payment all Notes or portions of Notes
properly tendered pursuant to our offer;
(2) deposit with the Paying Agent an amount equal to the
aggregate purchase price in respect of all Notes or portions of
Notes properly tendered; and
(3) deliver or cause to be delivered to the Trustee the
Notes properly accepted, together with an officers
certificate stating the aggregate principal amount of Notes
being repurchased by us.
The Paying Agent will promptly mail to each holder of Notes
properly tendered the purchase price for such Notes, and the
Trustee will promptly authenticate and mail (or cause to be
transferred by book-entry) to each holder a new Note equal in
principal amount to any unpurchased portion of any Notes
surrendered.
We will not be required to make an offer to repurchase the Notes
upon a Change of Control Repurchase Event if a third party makes
such an offer in the manner, at the times and otherwise in
compliance with the requirements for an offer made by us and
such third party purchases all Notes properly tendered and not
withdrawn under its offer.
Below Investment Grade Rating Event means the
rating on the Notes is lowered by at least two of the three
Rating Agencies and the Notes are rated below an Investment
Grade Rating by at least two of the three Rating Agencies on any
day during the period (which period shall be extended so long as
the rating of the Notes is under publicly announced
consideration for a possible downgrade by any of the Rating
Agencies) commencing 60 days prior to the first public
notice of the occurrence of a Change of Control or our intention
to effect a Change of Control and ending 60 days following
consummation of such Change of Control.
Change of Control means (i) the
consummation of any transaction (including, without limitation,
any merger or consolidation) the result of which is that any
person or group (as used in Section 13(d)(3) of the
Exchange Act), becomes the beneficial owner, directly or
indirectly, of more than 50% of our Voting Stock (as defined
herein), measured by voting power rather than number of shares,
(ii) any sale, lease, exchange or other transfer (in one
transaction or a series of related transactions) of all or
substantially all of the assets of the Company and its
Subsidiaries, taken as a whole, to any person or group of
related persons for the purpose of Section 13(d)(3) of the
Exchange Act, together with any affiliates thereof (whether or
not otherwise in compliance with the provisions of the
Indenture), (iii) the replacement of a majority of our
board of directors over a two-year period from the directors who
constituted our board of directors at the beginning of such
period, when such replacement shall have not been approved by a
vote of at least a majority of the board of directors then still
in office who
S-19
either were members of such board of directors at the beginning
of such period or whose election as members of such board of
directors was previously so approved, or (iv) the adoption of a
plan relating to the liquidation or dissolution of the Company.
Change of Control Repurchase Event means the
occurrence of both a Change of Control and a Below Investment
Grade Rating Event.
Fitch means Fitch Inc. and its successors.
Investment Grade Rating means a rating equal
to or higher than Baa3 (or the equivalent) by Moodys,
BBB− (or the equivalent) by S&P and BBB− (or
the equivalent) by Fitch and the equivalent investment grade
credit rating from any replacement rating agency or rating
agencies selected by us.
Moodys means Moodys Investors
Service Inc. and its successors.
Rating Agency means (1) each of
Moodys, S&P and Fitch; and (2) if any of
Moodys, S&P or Fitch ceases to rate the Notes or
fails to make a rating of such Notes publicly available for
reasons outside of our control, a nationally recognized
statistical rating organization within the meaning of
Rule 15c3-1(c)(2)(vi)(F)
under the Exchange Act selected by us (as certified by a
resolution of our board of directors) to act as a replacement
agency for Moodys, S&P or Fitch, or all of them, as
the case may be.
S&P means Standard &
Poors Ratings Services, a division of The McGraw-Hill
Companies, Inc. and its successors.
Subsidiary means an entity, a majority of the
Voting Stock of which is owned by the Company
and/or one
or more Subsidiaries.
Voting Stock of any specified
person (as that term is used in
Section 13(d)(3) of the Exchange Act) as of any date means
the capital stock of such person that is at the time entitled to
vote generally in the election of the board of directors of such
person.
Optional
redemption; no sinking fund
The Notes will be redeemable at the option of Martin Marietta
Materials, in whole or in part at any time or in part from time
to time, on at least 30 days but not more than 60 days
prior written notice mailed to the registered holders thereof,
at a redemption price equal to the greater of:
(1) 100% of the principal amount of the Notes to be
redeemed; or
(2) the sum, as determined by the Quotation Agent (as
defined herein), of the present values of the principal amount
of the Notes to be redeemed and the remaining scheduled payments
of interest thereon from the redemption date to the maturity
date of the Notes to be redeemed, exclusive of interest accrued
to the redemption date (the Remaining Life),
discounted from their respective scheduled payment dates to the
redemption date on a semi-annual basis (assuming a
360-day year
consisting of
30-day
months) at the Treasury Rate (as defined herein)
plus
basis points, plus accrued and unpaid interest on the principal
amount being redeemed to the date of redemption.
Comparable Treasury Issue means the United
States Treasury security selected by the Quotation Agent as
having a maturity comparable to the Remaining Life that would be
utilized, at
S-20
the time of selection and in accordance with customary financial
practice, in pricing new issues of corporate debt securities of
comparable maturity with the Remaining Life.
Comparable Treasury Price means, with respect
to any redemption date, the average of two Reference Treasury
Dealer Quotations for such redemption date.
Quotation Agent means the Reference Treasury
Dealer appointed by Martin Marietta Materials.
Reference Treasury Dealer means each of
(1) Banc of America Securities LLC, (2) J.P. Morgan
Securities Inc. and (3) one other primary
U.S. Government securities dealer in New York City (a
Primary Treasury Dealer) selected by Wachovia
Capital Markets, LLC, and their respective successors; provided,
however, that if the foregoing ceases to be a Primary Treasury
Dealer, we will substitute therefor another Primary Treasury
Dealer.
Reference Treasury Dealer Quotations means,
with respect to each Reference Treasury Dealer and any
redemption date, the average, as determined by the Trustee, of
the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount)
quoted in writing to the Trustee by such Reference Treasury
Dealer at 5:00 p.m., New York City time, on the third
business day preceding such redemption date.
Treasury Rate means, with respect to any
redemption date, the rate per annum equal to the semi-annual
yield to maturity of the Comparable Treasury Issue, calculated
on the third business day preceding such redemption date using a
price for the Comparable Treasury Issue (expressed as a
percentage of its principal amount) equal to the Comparable
Treasury Price for such redemption date.
If money sufficient to pay the redemption price of and accrued
interest on all the Notes (or portions thereof) to be redeemed
on the redemption date is deposited with the Trustee or Paying
Agent on or before the redemption date and certain other
conditions are satisfied, then on and after such redemption
date, interest will cease to accrue on such Notes (or such
portion thereof) called for redemption.
We may at any time, and from time to time, purchase the Notes at
any price or prices in the open market or otherwise. The Notes
will not be entitled to the benefit of any sinking fund or other
mandatory redemption obligation prior to maturity.
Amendment,
supplement and waiver
Subject to certain exceptions, the Indenture and the Notes may
be amended or supplemented with the written consent of the
holders of not less than a majority principal amount of the then
outstanding Notes; provided that Martin Marietta Materials and
the Trustee may not without the consent of the holder of each
outstanding Note affected thereby:
(1) reduce the amount of such Notes whose holders must
consent to an amendment, supplement or waiver;
(2) reduce the rate of or extend the time for payment of
interest on such Notes;
(3) reduce the principal of or extend the fixed maturity of
such Notes; or
(4) make such Notes payable in money other than that stated
in such Notes.
S-21
Any past default or compliance with any provisions may be waived
with the consent of the holders of a majority in principal
amount of the Notes, except a default in payment of principal or
interest or in respect of other provisions requiring the consent
of the holder of each such Note in order to amend. Without the
consent of any Noteholder, the Company and the Trustee may amend
or supplement the Indenture or the Notes without notice to cure
any ambiguity, omission, defect or inconsistency, to provide for
uncertificated Notes in addition to or in place of certificated
Notes, to comply with the provisions of the Indenture concerning
mergers, consolidations and transfers of all or substantially
all of the assets of the Company, to appoint a trustee other
than the Trustee (or any successor thereto) as trustee in
respect of the Notes, or to add, change or eliminate provisions
of the Indenture as shall be necessary or desirable in
accordance with any amendment to the Trust Indenture Act of
1939. In addition, without the consent of any Noteholder, the
Company and the Trustee may amend or supplement the Indenture or
the Notes to make any change that does not materially adversely
affect the rights of any Noteholder. Whenever we request the
Trustee to take any action under the Indenture, including a
request to amend or supplement the Indenture without the consent
of any Noteholder, we are required to furnish the Trustee with
an officers certificate and an opinion of counsel to the
effect that all conditions precedent to the action have been
complied with. Without the consent of any Noteholder, the
Trustee may waive compliance with any provisions of the
Indenture or the Notes if the waiver does not materially
adversely affect the rights of any Noteholder.
Covenants
The terms of the Notes and the covenants contained in the
Indenture do not afford Noteholders protection in the event of a
highly leveraged or other similar transaction involving Martin
Marietta Materials that may adversely affect Noteholders. The
Indenture does not limit the amount of additional unsecured
indebtedness that Martin Marietta Materials or any of its
Subsidiaries may incur.
Limitations on
liens
Subject to the following three sentences, the Company will not,
and will not permit any Restricted Subsidiary to, as security
for any Debt, incur a Lien on any Restricted Property, unless
the Company or such Restricted Subsidiary secures or causes to
be secured any outstanding Notes equally and ratably with all
Debt secured by such Lien. The Lien may equally and ratably
secure such Notes and any other obligations of the Company or
its Subsidiaries that are not subordinated to any outstanding
Notes. This restriction will not apply to, among other things,
certain Liens
(1) existing at the time an entity becomes a Restricted
Subsidiary;
(2) existing at the time of the acquisition of the
Restricted Property or incurred to finance all or some of the
purchase price or cost of construction, provided that the Lien
may not extend to any other Restricted Property (other than, in
the case of construction, unimproved real property) owned by the
Company or any of its Restricted Subsidiaries at the time the
property is acquired or the Lien is incurred and provided
further that the Lien may not be incurred more than one year
after the later of the acquisition, completion of construction
or commencement of full operation of the property;
(3) in favor of the Company or another Restricted
Subsidiary;
S-22
(4) existing at the time an entity merges into,
consolidates with, or enters into a share exchange with the
Company or a Restricted Subsidiary or a person transfers or
leases all or substantially all its assets to the Company or a
Restricted Subsidiary;
(5) in favor of a government or governmental entity that
secures payment pursuant to a contract, subcontract, statute or
regulation, secure Debt guaranteed by the government or
governmental agency, secures Debt incurred to finance all or
some of the purchase price or cost of construction of goods,
products or facilities produced under contract or subcontract
for the government or governmental entity, or secures Debt
incurred to finance all or some of the purchase price or cost of
construction of the property subject to the Lien; or
(6) extends, renews or replaces in whole or in part a Lien
(existing Lien) permitted by any of clauses (l)
through (5) or a Lien existing on the date that the Notes are
first issued; provided, that such Lien may not extend beyond the
property subject to the existing Lien and the Debt secured by
the Lien may not exceed the amount of Debt secured at the time
by the existing Lien unless the existing Lien or a predecessor
Lien equally and ratably secures the Notes and the Debt.
In addition and notwithstanding the foregoing restrictions, the
Company and any of its Restricted Subsidiaries may, without
securing the Notes, incur a Lien that otherwise would be subject
to the restrictions, provided that after giving effect to such
Lien the aggregate amount of all Debt secured by Liens that
otherwise would be prohibited plus all Attributable Debt in
respect of sale-leaseback transactions that otherwise would be
prohibited by the covenant limiting sale-leaseback transactions
described below would not exceed 15% of Consolidated Net
Tangible Assets.
Limitations on
sale-leaseback transactions
Subject to the following two sentences, the Company will not,
and will not permit any Restricted Subsidiary to, sell or
transfer a Principal Property and contemporaneously lease it
back, except a lease for a period of three years or less.
Notwithstanding the foregoing restriction, the Company or any
Restricted Subsidiary may sell a Principal Property and lease it
back for a longer period if
(1) the lease is between the Company and a Restricted
Subsidiary or between Restricted Subsidiaries;
(2) the Company or such Restricted Subsidiary would be
entitled, pursuant to the provisions set forth above under the
caption Limitations on liens, to create a Lien
on the property to be leased securing Debt in an amount at least
equal in amount to the Attributable Debt in respect of the
sale-leaseback transaction without equally and ratably securing
the outstanding Notes;
(3) the Company owns or acquires other property which will
be made a Principal Property and is determined by the Board of
Directors of the Company to have a fair value equal to or
greater than the Attributable Debt incurred;
(4) within 270 days the Company makes Capital
Expenditures with respect to a Principal Property in an amount
at least equal to the amount of the Attributable Debt; or
(5) the Company or a Restricted Subsidiary makes an
optional prepayment in cash of its Debt or capital lease
obligations at least equal in amount to the Attributable Debt
for the
S-23
lease, the prepayment is made within 270 days, the Debt
prepaid is not owned by the Company or a Restricted Subsidiary,
the Debt prepaid is not subordinated to any of the Notes, and
the Debt prepaid was Long-Term Debt at the time it was created.
In addition and notwithstanding the foregoing restrictions, the
Company and any of its Restricted Subsidiaries may, without
securing the Notes, enter into a sale-leaseback transaction that
otherwise would be subject to the restrictions, provided that
after giving effect to such sale-leaseback transaction the
aggregate amount of all Debt secured by Liens that otherwise
would be prohibited by the covenant limiting Liens described
above plus all Attributable Debt in respect of sale-leaseback
transactions that otherwise would be prohibited would not exceed
15% of Consolidated Net Tangible Assets.
Consolidation,
merger, sale of assets
The Company shall not consolidate with or merge into, or
transfer all or substantially all of its assets to, another
entity unless
(1) the resulting, surviving or transferee entity assumes
by supplemental indenture all of the obligations of the Company
under the Notes and the Indenture;
(2) immediately after giving effect to the transaction no
Event of Default, and no event that, after notice or lapse of
time or both, would become an Event of Default, shall have
happened and be continuing; and
(3) the Company shall have delivered an officers
certificate and an opinion of counsel each stating that the
consolidation, merger or transfer and the supplemental indenture
comply with the Indenture.
If upon any such consolidation, merger or transfer, a Restricted
Property would become subject to an attaching Lien that secures
Debt, then, before the consolidation, merger or transfer occurs,
the Company by supplemental indenture shall secure the debt
securities by a direct lien on such Restricted Property. The
direct Lien shall have priority over all Liens on such
Restricted Property except these already on it. The direct Lien
may equally and ratably secure the debt securities and any other
obligation of the Company or a Subsidiary. However, the Company
need not comply with this provision if: upon the consolidation,
merger or transfer the attaching Lien will secure the debt
securities, equally and ratably with or prior to Debt secured by
the attaching Lien; or the Company or a Restricted Subsidiary
could create a Lien on the Restricted Property to secure Debt at
least equal in amount to that secured by the attaching Lien
pursuant to the provisions described under
Limitations on liens above.
When a successor corporation, trustee, paying agent or registrar
assumes all of the obligations of its predecessor under the debt
securities and the Indenture, the predecessor will be released
from those obligations.
Definitions
For purposes of the covenants included in the Indenture, the
following terms generally shall have the meanings provided below.
Attributable Debt for a lease means the
carrying value of the capitalized rental obligation determined
under generally accepted accounting principles whether or not
such obligation is
S-24
required to be shown on the balance sheet as a long-term
liability. The carrying value may be reduced by the capitalized
value of the rental obligations, calculated on the same basis,
that any sublessee has for all or part of the same property. A
lease obligation shall be counted only once even if the Company
and one or more of its Subsidiaries may be responsible for the
obligation.
Capital Expenditures means, for any period,
any expenditures of the Company or its Subsidiaries during such
period that, in conformity with generally accepted accounting
principles consistently applied, are required to be included in
fixed asset accounts as reflected in the consolidated balance
sheet of the Company and its Subsidiaries.
Consolidated Net Tangible Assets means total
assets less:
(1) total current liabilities (excluding any Debt which, at
the option of the borrower, is renewable or extendible to a term
exceeding 12 months and which is included in current
liabilities and further excluding any deferred income taxes
which are included in current liabilities); and
(2) goodwill, patents and trademarks,
all as stated on the Companys most recent publicly
available consolidated balance sheet preceding the date of
determination.
Debt means any debt for borrowed money which
would appear on the balance sheet as a liability or any
guarantee of such a debt and includes purchase money
obligations. A Debt shall be counted only once even if the
Company and one or more of its Subsidiaries may be responsible
for the obligation.
Lien means any mortgage, pledge, security
interest or lien.
Long-Term Debt means Debt that by its terms
matures on a date more than 12 months after the date it was
created or Debt that the obligor may extend or renew without the
obligees consent to a date more than 12 months after
the Debt was created.
Principal Property means any mining and
quarrying or manufacturing facility located in the United States
and owned by the Company or by one or more Restricted
Subsidiaries from the date the Notes are first issued and which
has, as of the date the Lien is incurred, a net book value
(after deduction of depreciation and other similar charges)
greater than 3% of Consolidated Net Tangible Assets, except:
(1) any such facility or property which is financed by
obligations of any State, political subdivision of any State or
the District of Columbia under terms which permit the interest
payable to the holders of the obligations to be excluded from
gross income as a result of the plant, facility or property
satisfying the conditions of Section 103(b)(4)(C), (D),
(E), (F) or (H) or Section 103(b)(6) of the
Internal Revenue Code of 1954 or Section 142(a) or
Section 144(a) of the Internal Revenue Code of 1986, or of
any successors to such provisions; or
(2) any such facility or property which, in the opinion of
the Board of Directors of the Company is not of material
importance to the total business conducted by the Company and
its Subsidiaries taken as a whole. However, the chief executive
officer or chief financial officer of the Company may at any
time declare any mining and quarrying or manufacturing
S-25
facility or other property to be a Principal Property by
delivering a certificate to that effect to the Trustee.
Restricted Property means any Principal
Property, any Debt of a Restricted Subsidiary owned by the
Company or a Restricted Subsidiary on the date the Notes are
first issued or secured by a Principal Property (including any
property received upon a conversion or exchange of such debt),
or any shares of stock of a Restricted Subsidiary owned by the
Company or a Restricted Subsidiary (including any property or
shares received upon a conversion, stock split or other
distribution with respect to the ownership of such stock).
Restricted Subsidiary means a Subsidiary that
has substantially all of its assets in, or carries on
substantially all of its business in, the United States and that
owns a Principal Property. Notwithstanding the preceding
sentence, a Subsidiary shall not be a Restricted Subsidiary
during such period of time as it has shares of capital stock
registered under the Exchange Act or it files reports and other
information with the Commission pursuant to Section 13 or
15(d) of the Exchange Act.
Subsidiary means an entity, a majority of the
Voting Stock of which is owned by the Company
and/or one
or more Subsidiaries.
Voting Stock means capital stock or other
equity interest having voting power under ordinary circumstances
to elect directors or managers, as applicable.
Default and
remedies
An Event of Default under the Indenture is:
(1) default for 30 days in payment of interest on the
Notes;
(2) default in payment of principal on the Notes;
(3) failure by the Company for 90 days, after notice
to it to comply with any of its other agreements in the
Indenture for the benefit of holders of the Notes; and
(4) certain events of bankruptcy or insolvency.
If an Event of Default (other than as referred to in
clause (4) above) occurs and is continuing, the Trustee or
the holders of at least 25% in principal amount of the
outstanding Notes may declare the Notes to be due and payable
immediately, but under certain conditions such acceleration may
be rescinded by the holders of a majority in principal amount of
the outstanding Notes. If an Event of Default referred to in
clause (4) above occurs and is continuing, the principal
of, premium, if any, and interest on all the Notes will become
immediately due and payable without any declaration or other act
on the part of the Trustee or the Noteholders.
No Noteholder may pursue any remedy against the Company under
the Indenture (other than with respect to the right to receive
payment of principal or interest, if any) unless such holder
previously shall have given to the Trustee written notice of
default and unless the holders of at least 25% in principal
amount of the Notes shall have requested the Trustee to pursue
the remedy and shall have offered the Trustee indemnity
satisfactory to it, the Trustee shall not have complied with the
request within 60 days of receipt of the request and the
offer of indemnity, and the Trustee shall not have received
direction inconsistent with the request during such
60-day
period from the holders of a majority in principal amount of the
Notes.
S-26
Noteholders may not enforce the Indenture or the Notes except as
provided in the Indenture. The Trustee may refuse to enforce the
Indenture or the Notes unless it receives indemnity satisfactory
to it from the Company or, under certain circumstances, the
Noteholders seeking to direct the Trustee to take certain
actions under the Indenture against any loss, liability or
expense.
Subject to certain limitations, holders of a majority in
principal amount of the Notes may direct the Trustee in its
exercise of any trust or power under the Indenture in respect of
the Notes. The Indenture provides that the Trustee will give to
the Noteholders notice of all defaults known to it, within
90 days after the occurrence of any default with respect to
the Notes unless the default shall have been cured or waived.
The Trustee may withhold from Noteholders notice of any
continuing default (except a default in payment of principal or
interest) if it determines in good faith that withholding such
notice is in the interests of such holders. The Company is
required annually to certify to the Trustee as to the compliance
by the Company with certain covenants under the Indenture and
the absence of a default thereunder, or as to any such default
that existed.
A director, officer, employee or stockholder, as such, of the
Company shall not have any liability for any obligations of the
Company under the Notes or the Indenture or for any claim based
on, in respect of, or by reason of such obligations or their
creation. By accepting a Note, each Noteholder waives and
releases all such claims and liability. This waiver and release
are part of the consideration for the issue of the Notes.
Defeasance of the
notes
The Indenture provides that the Company may, subject to certain
conditions described below, discharge its indebtedness and its
obligations or certain of its obligations under the Indenture in
respect of the Notes by depositing funds or U.S. Government
Obligations (as defined in the Indenture) or Notes with the
Trustee. The Indenture provides that:
(1) the Company will be discharged from any obligation to
comply with certain restrictive covenants of the Indenture and
certain other obligations under the Indenture and any
noncompliance with such obligations shall not be an Event of
Default in respect of the Notes; or
(2) provided that 91 days have passed from the date of
the deposit referred to below and certain specified Events of
Default have not occurred, the Company will be discharged from
any and all obligations in respect of the Notes (except for
certain obligations, including obligations to register the
transfer and exchange of the Notes, to replace mutilated,
destroyed, lost or stolen Notes, to maintain paying agencies and
to cause money to be held in trust), in either case upon the
deposit with the Trustee, in trust, of money, Notes,
and/or
U.S. Government Obligations that, through the payment of
interest and principal in accordance with their terms, will
provide money in an amount sufficient to pay the principal of
and each installment of interest on the Notes on the date when
such payments become due in accordance with the terms of the
Indenture and the Notes.
In the event of any such defeasance under clause (1) above,
the obligations of the Company under the Indenture and the
Notes, other than with respect to the covenants relating to
limitations on liens and sale-leaseback transactions and
reporting thereon, and covenants relating to consolidations,
mergers and transfers of all or substantially all of the assets
of the Company, shall remain in full such and effect. In the
event of defeasance and discharge under
S-27
clause (2) above, the Noteholders are entitled to payment
only from the trust fund created by such deposit for payment. In
the case of the Companys discharge from any and all
obligations in respect of the Notes, as described in
clause (2) above, the trust may be established only if,
among other things, the Company shall have delivered to the
Trustee an opinion of counsel to the effect that, if the Notes
are then listed on a national securities exchange, such deposit,
defeasance or discharge will not cause the Notes to be delisted.
For U.S. federal income tax purposes, defeasance and
discharge under clause (2) above may cause holders of the
Notes to recognize gain or loss in an amount equal to the
difference between the fair market value of the obligations of
the trust to the holder and such holders tax basis in the
Notes. Prospective purchasers should consult their tax advisors
as to the possible tax effects of such a defeasance and
discharge.
Pursuant to the escrow trust agreements that the Company may
execute in connection with the defeasance of all or certain of
its obligations under the Indenture as provided above, the
Company from time to time may elect to substitute
U.S. Government Obligations or the Notes of the same series
for any or all of the U.S. Government Obligations deposited
with the Trustee; provided that the money, U.S. Government
Obligations,
and/or Notes
in trust following such substitution or substitutions will be
sufficient, through the payment of interest and principal in
accordance with their terms, to pay the principal of and each
installment of interest on the Notes on the date when such
payments become due in accordance with the terms of the
Indenture and the Notes. The escrow trust agreements also may
enable the Company:
(1) to direct the Trustee to invest any money received by
the Trustee on the U.S. Government Obligations comprising
the trust in additional U.S. Government
Obligations; and
(2) to withdraw monies or U.S. Government Obligations
from the trust from time to time; provided, that the
money and/or
U.S. Government Obligations in trust following such
withdrawal will be sufficient, through the payment of interest
and principal in accordance with their terms, to pay the
principal of and each installment of interest on the Notes on
the date when such payments become due in accordance with the
terms of the Indenture and the Notes.
Governing
law
The Notes and the Indenture will be governed by the laws of the
State of New York.
Form of
notes
The certificates representing the Notes will be issued in fully
registered form, without coupons. Except as described in the
next paragraph, the Notes will be deposited with, or on behalf
of, The Depository Trust Company (DTC), and
registered in the name of Cede & Co., as DTCs
nominee in the form of one or more global note certificates (the
Global Notes) or will remain in the custody of the
Trustee pursuant to a FAST Balance Certificate Agreement between
DTC and the Trustee. Holders of the Notes will own
certificateless interests in the Global Notes evidenced by
records in book entry form maintained by DTC (the
Book-Entry Interests).
Except as set forth below, the Global Notes may not be
transferred except as a whole to another nominee of DTC or to a
successor of DTC or its nominee. Beneficial interests in the
Global Notes may not be exchanged for Notes in physical,
certificated form (Certificated Notes) except in
S-28
the limited circumstances described below. All interests in the
Global Notes may be subject to the procedures and requirements
of DTC.
Certain
book-entry procedures for the global notes
The descriptions of the operations and procedures of DTC set
forth below are provided solely as a matter of convenience.
These operations and procedures are solely within the control of
the DTC settlement system and are subject to change by DTC from
time to time. The Company does not take any responsibility for
these operations or procedures, and investors are urged to
contact the DTC system or its participants directly to discuss
these matters.
DTC has advised the Company that it is:
(1) a limited purpose trust company organized under the
laws of the State of New York;
(2) a banking organization within the meaning
of the New York Banking Law;
(3) a member of the Federal Reserve System;
(4) a clearing corporation within the meaning
of the Uniform Commercial Code, as amended; and
(5) a clearing agency registered pursuant to
Section 17A of the Exchange Act. DTC was created to hold
securities for its participants (collectively, the
Participants) and facilitates the clearance and
settlement of securities transactions between Participants
through electronic book-entry changes to the accounts of its
Participants, thereby eliminating the need for physical transfer
and delivery of certificates.
DTCs Participants include securities brokers and dealers
(including the Underwriters), banks and trust companies,
clearing corporations and certain other organizations. Indirect
access to DTCs system is also available to other entities
such as banks, brokers, dealers and trust companies
(collectively, the Indirect Participants) that clear
through or maintain a custodial relationship with a Participant,
either directly or indirectly. Investors who are not
Participants may beneficially own securities held by or on
behalf of DTC only through Participants or Indirect Participants.
The Company expects that pursuant to procedures established by
DTC:
(1) upon deposit of each Global Note, DTC will credit the
accounts of Participants designated by the Underwriters with an
interest in the Global Note; and
(2) ownership of such Global Notes will be shown on, and
the transfer of ownership thereof will be effected only through,
records maintained by DTC (with respect to the interests of
Participants) and the records of Participants and Indirect
Participants (with respect to the interests of persons other
than Participants).
The laws of some jurisdictions may require that in order to
effectively transfer interests in securities to certain persons,
such persons must take physical delivery of such securities in
definitive form. Accordingly, the ability to transfer interests
in the Notes represented by a Global Note to such persons may be
limited. In addition, because DTC can act only on behalf of its
Participants, who in turn act on behalf of persons who hold
interests through Participants, the ability of a person having
an interest in Notes represented by a Global Note to pledge or
transfer such interest to persons or entities that do not
participate in DTCs system, or to
S-29
otherwise take actions in respect of such interest, may be
affected by the lack of a physical definitive security in
respect of such interest.
So long as DTC or its nominee is the registered owner of a
Global Note, DTC or such nominee, as the case may be, will be
considered the sole owner or holder of the Notes represented by
the Global Note for all purposes under the Indenture. Except as
provided below, owners of beneficial interests in a Global Note
will not be entitled to have Notes represented by such Global
Note registered in their names, will not receive or be entitled
to receive physical delivery of Certificated Notes, and will not
be considered the owners or holders thereof under the Indenture
for any purpose, including with respect to the giving of any
direction, instruction or approval to the Trustee thereunder.
Accordingly, each holder owning a beneficial interest in a
Global Note must rely on the procedures of DTC and, if such
holder is not a Participant or an Indirect Participant, on the
procedures of the Participant through which such holder owns its
interest, to exercise any rights of a holder of Notes under the
Indenture with respect to such Global Note. The Company
understands that under existing industry practice, in the event
that the Company requests any action of holders of Notes, or a
holder that is an owner of a beneficial interest in a Global
Note desires to take any action that DTC, as the holder of such
Global Note, is entitled to take, DTC would authorize the
Participants to take such action and the Participants would
authorize holders owning through such Participants to take such
action or would otherwise act upon the instruction of such
holders. Neither the Company nor the Trustee will have any
responsibility or liability for any aspect of the records
relating to or payments made on account of Notes by DTC, or for
maintaining, supervising or reviewing any records of DTC
relating to such Notes.
Payments with respect to the principal of, and premium, if any,
and interest on, any Notes represented by a Global Note
registered in the name of DTC or its nominee on the applicable
record date will be payable by the Companys Paying Agent
to or at the direction of DTC or its nominee in its capacity as
the registered holder of the Global Note representing such Notes
under the Indenture. Initially, the Trustee will act as Paying
Agent and Registrar. Under the terms of the Indenture, the
Company and the Companys Paying Agent may treat the
persons in whose names the Notes, including the Global Notes,
are registered as the owners thereof for the purpose of
receiving payment thereon and for any and all other purposes
whatsoever. Accordingly, neither the Company, nor the Trustee,
nor any Paying Agent has or will have any responsibility or
liability for the payment of such amounts to owners of
beneficial interests in a Global Note (including principal,
premium, if any, liquidated damages, if any, and interest).
Payments by the Participants and the Indirect Participants to
the owners of beneficial interests in a Global Note will be
governed by standing instructions and customary industry
practice and will be the responsibility of the Participants or
the Indirect Participants and DTC.
Transfers between participants in DTC will be effected in
accordance with DTCs procedures. Neither the Company nor
the trustee will have any responsibility for the performance by
DTC or its Participants or Indirect Participants of their
obligations under the rules and procedures governing DTCs
operations.
Same-day
settlement and payment
All payments of principal and interest with respect to the Notes
will be made by the Company in immediately available funds.
S-30
Secondary trading in long-term notes and notes of corporate
issuers is generally settled in clearinghouse or
next-day
funds. In contrast, the Global Notes are expected to trade in
the Depositarys
Same-Day
Funds Settlement System until maturity, and secondary market
trading activity in the Global Notes will therefore be required
by the Depositary to settle in immediately available funds.
Secondary trading in Certificated Notes will also be required to
be settled in immediately available funds. No assurance can be
given as to the effect, if any, of settlement in immediately
available funds on trading activity in the Notes.
Euroclear and
Clearstream, Luxembourg
If the Depositary for a global security is DTC, you may hold
interests in the global notes through Clearstream Banking,
societe anonyme, which is referred to as Clearstream,
Luxembourg, or Euroclear Bank S.A./N.V., as operator of
the Euroclear System, which is referred to as
Euroclear, in each case, as a participant in DTC.
Euroclear and Clearstream, Luxembourg will hold interests, in
each case, on behalf of their participants through
customers securities accounts in the names of Euroclear
and Clearstream, Luxembourg on the books of their respective
depositaries, which in turn will hold such interests in
customers securities in the depositaries names on
DTCs books. Payments, deliveries, transfers, exchanges,
notices and other matters relating to the notes made through
Euroclear or Clearstream, Luxembourg must comply with the rules
and procedures of those systems. Those systems could change
their rules and procedures at any time. The Company has no
control over those systems or their participants, and it takes
no responsibility for their activities. Transactions between
participants in Euroclear or Clearstream, Luxembourg, on the one
hand, and other participants in DTC, on the other hand, would
also be subject to DTCs rules and procedures.
Investors will be able to make and receive through Euroclear and
Clearstream, Luxembourg payments, deliveries, transfers,
exchanges, notices and other transactions involving any
securities held through those systems only on days when those
systems are open for business. Those systems may not be open for
business on days when banks, brokers and other institutions are
open for business in the United States.
In addition, because of time-zone differences,
U.S. investors who hold their interests in the notes
through these systems and wish, on a particular day, to transfer
their interests, or to receive or make a payment or delivery or
exercise any other right with respect to their interests, may
find that the transaction will not be effected until the next
business day in Luxembourg or Brussels, as applicable. Thus,
investors who wish to exercise rights that expire on a
particular day may need to act before the expiration date. In
addition, investors who hold their interests through both DTC
and Euroclear or Clearstream, Luxembourg may need to make
special arrangements to finance any purchase or sales of their
interests between the U.S. and European clearing systems,
and those transactions may settle later than transactions within
one clearing system.
Certificated
notes
The Global Notes will be exchanged for Notes of like tenor and
an equal aggregate principal amount, in authorized denominations
and in definitive form, if:
(1) DTC notifies the Company that it is unwilling or unable
to continue as Depositary or the Company determines that DTC is
unable to continue as Depositary and the Company fails to
appoint a successor Depositary within 90 days;
S-31
(2) the Company provides for such exchange pursuant to the
terms of the applicable Indenture;
(3) the Company determines that such Notes shall no longer
be represented by Global Notes and executes and delivers to the
Trustee instructions to such effect; or
(4) an Event of Default or event which, with notice or
lapse of time or both, would constitute an Event of Default with
respect to such Notes, and which entitles the holders of such
Notes to accelerate such Notes maturity, shall have
occurred and be continuing.
Such Certificated Notes shall be registered in such name or
names as DTC shall instruct the Trustee. It is expected that
such instructions may be based upon directions received by DTC
from Participants or Indirect Participants with respect to
ownership of beneficial interests in Global Notes. Upon any such
issuance, the Trustee is required to register such definitive
Notes in the name of such person or persons (or the nominee of
any thereof) and cause the same to be delivered thereto.
Neither the Company nor the Trustee shall be liable for any
delay by DTC or any Participant or Indirect Participant in
identifying the beneficial owners of the related Notes and each
such person may conclusively rely on, and shall be protected in
relying on, instructions from DTC for all purposes (including
with respect to the registration and delivery, and the
respective principal amounts, of the Notes to be issued).
Trustee
Branch Banking & Trust Company is the trustee,
registrar and paying agent under the Indenture. Branch
Banking & Trust Company is also a lender under
our credit facility and from time to time performs other
services for us in the normal course of business.
S-32
Material U.S.
federal income tax considerations
The following is a summary of the material U.S. federal
income tax consequences to
non-U.S. holders
(as defined below) of the purchase, ownership and disposition of
the notes by an initial purchaser of the notes that purchases
the notes at the price indicated on the cover of this prospectus
supplement. This discussion is based upon the Internal Revenue
Code of 1986, as amended (the Code), the Treasury
regulations promulgated thereunder (the Treasury
Regulations), judicial decisions and current
administrative rulings and practice, all as in effect and
available as of the date hereof and all of which are subject to
differing interpretations or change, possibly with retroactive
effect. This summary does not discuss all aspects of
U.S. federal income taxation which may be important to
particular investors in light of their individual investment
circumstances, such as notes held by investors subject to
special tax rules (e.g., U.S. expatriates, financial
institutions, insurance companies, regulated investment
companies, controlled foreign corporations, broker-dealers,
partnerships and their partners and tax-exempt organizations
(including private foundations)) or to persons that will hold
the notes as part of a straddle, hedge,
conversion, constructive sale, or other
integrated security transaction for U.S. federal income tax
purposes, all of whom may be subject to tax rules that differ
significantly from those summarized below. In addition, this
summary does not discuss any federal non-income, state, local or
non-U.S. tax
considerations. This summary assumes that an investor will hold
the notes as capital assets (generally, property
held for investment) under the Code. Each prospective investor
is urged to consult its tax advisor regarding the
U.S. federal, state, local, and
non-U.S. income
and other tax considerations of the purchase, ownership and
disposition of the notes.
For the purposes of this summary, a
non-U.S. holder
is a beneficial owner of a note that is, for U.S. federal
income tax purposes, not (i) an individual citizen or
resident of the United States, (ii) a corporation (or other
entity taxable as a corporation for U.S. federal income tax
purposes) that is created in, or organized under the law of, the
United States or any state or political subdivision thereof,
(iii) an estate the income of which is subject to
U.S. federal income taxation regardless of its source,
(iv) a trust (A) the administration of which is
subject to the primary supervision of a U.S. court and
which has one or more U.S. persons who have the authority
to control all substantial decisions of the trust or
(B) that has a valid election in effect under applicable
U.S. Treasury Regulations to be treated as a
U.S. person, or (v) a partnership or other entity
taxable as a partnership for U.S. federal income tax
purposes. If a partnership (including any other entity taxable
as a partnership for U.S. federal income tax purposes)
holds notes, the tax treatment of a partner in the partnership
will depend upon the status of the partner and the activities of
the partnership. Partners in a partnership that holds notes
should consult their tax advisers as to the particular tax
consequences applicable to them.
Interest
income
A
non-U.S. holder
generally will not be subject to U.S. federal income or
withholding tax on payments of interest on the notes provided
that (i) such interest is not effectively connected with
the conduct of a trade or business within the United States by
the
non-U.S. holder
(or, if certain tax treaties apply, if such interest is not
attributable to a permanent establishment or fixed base
maintained by the
non-U.S. holder
within the United States by the
non-U.S. holder)
and (ii) the
non-U.S. holder
(A) does not actually or constructively own 10% or more of
the total combined voting power of all classes of our voting
stock, (B) is not a controlled foreign corporation related
to us directly or constructively through stock ownership,
(C) is not a bank
S-33
receiving certain types of interest, and (D) satisfies
certain certification requirements. Such certification
requirements will be met if (x) the
non-U.S. holder
provides its name and address, and certifies on an Internal
Revenue Service (IRS)
Form W-8BEN
(or appropriate substitute form), under penalties of perjury,
that it is not a U.S. person or (y) a securities
clearing organization or certain other financial institutions
holding the note on behalf of the
non-U.S. holder
certifies on IRS
Form W-8IMY,
under penalties of perjury, that the certification referred to
in clause (x) has been received by it and furnishes us or
our paying agent with a copy thereof. In addition, we or our
paying agent must not have actual knowledge or reason to know
that the beneficial owner of the notes is a U.S. person.
If interest on the notes is not effectively connected with the
conduct of a trade or business in the United States by a
non-U.S. holder
but such
non-U.S. holder
cannot satisfy the other requirements outlined in the preceding
paragraph, interest on the notes generally will be subject to
U.S. federal withholding tax (currently imposed at a 30%
rate, or a lower applicable treaty rate).
If a
non-U.S. holder
is engaged in a trade or business in the United States and
interest on a note is effectively connected with the conduct of
that trade or business (or, if certain tax treaties apply, the
interest on the note is attributable to a permanent
establishment or fixed base the
non-U.S. holder
maintains in the United States), the
non-U.S. holder
will be required to pay U.S. federal income tax on that
interest on a net income basis at regular U.S. federal
income tax rates in the same manner as if the
non-U.S. holder
were a U.S. person. In addition, a
non-U.S. holder
that is a foreign corporation may also be subject to a branch
profits tax (currently imposed at a rate of 30%, or a lower
treaty rate, if applicable) on its earnings and profits for the
taxable year, subject to adjustments, that are effectively
connected with the corporations conduct of a trade or
business in the United States. For this purpose, interest paid
on the notes will be included in the earnings and profits of the
foreign corporation. Any such interest will not also be subject
to U.S. federal withholding tax, however, if the
non-U.S. holder
delivers to us or our paying agent a properly executed IRS
Form W-8ECI
in order to claim an exemption from U.S. federal
withholding tax.
Sale, exchange,
retirement or other disposition
Any gain recognized upon the sale, exchange, redemption or other
disposition of a note (except with respect to accrued but unpaid
interest, which will be taxable as described above under
Interest Income) generally will not be subject
to U.S. federal income tax unless (i) the gain is
effectively connected with the
non-U.S. holders
conduct of a trade or business in the United States (or, if
certain tax treaties apply, the gain is attributable to a
permanent establishment or fixed base the
non-U.S. holder
maintains in the United States) or (ii) the
non-U.S. holder
is an individual who is present in the United States for
183 days or more in the taxable year of the disposition,
and certain other conditions are present.
A
non-U.S. holder
described in clause (i) above will be required to pay
U.S. federal income tax on the net gain derived from the
sale, in the same manner as if the
non-U.S. holder
were a U.S. person, and, if the
non-U.S. holder
is a foreign corporation, it may also be required to pay a
branch profits tax (currently imposed at a rate of 30%, or a
lower treaty rate, if applicable). A
non-U.S. holder
described in clause (ii) above will be subject to a flat
30% U.S. federal income tax on the gain derived from the
sale, which may be offset by U.S. source capital losses,
even though the holder is not considered a resident of the
United States.
S-34
Backup
withholding and information reporting
In general, backup withholding and information reporting will
not apply to a payment of interest on a note to a
non-U.S. holder
if such holder certifies under penalties of perjury that it is a
non-U.S. holder
and neither we nor our paying agent have actual knowledge or
reason to know to the contrary. In certain circumstances, if a
note is not held through a qualified intermediary, the amount of
payments made on the note, the name and address of the
beneficial owner and the amount, if any, of tax withheld may be
reported to the IRS.
The payment of the proceeds from the disposition of the notes by
or through the U.S. office of any broker, U.S. or
foreign, will be subject to information reporting and backup
withholding unless the holder certifies as to its
non-U.S. status
under penalties of perjury or otherwise establishes an
exemption, provided that the broker does not have actual
knowledge or reason to know that the holder is a
U.S. holder or that the conditions of any other exemption
are not, in fact, satisfied. The payment of the proceeds from
the disposition of the notes by or through a
non-U.S. office
of a
non-U.S. broker
will not be subject to information reporting or backup
withholding unless the
non-U.S. broker
has certain types of relationships with the United States (a
U.S. related person). In the case of the
payment of the proceeds from the disposition of the notes by or
through a
non-U.S. office
of a broker that is either a U.S. person or a
U.S. related person, the Treasury Regulations require
information reporting, but not backup withholding, on the
payment unless the broker has documentary evidence in its files
that the owner is a
non-U.S. holder
and the broker has no knowledge or reason to know to the
contrary.
Backup withholding is not an additional tax. Any amounts
withheld under the backup withholding rules from a payment to a
non-U.S. holder
may be refunded or credited against the
non-U.S. holders
U.S. federal income tax liability, if any, if the
non-U.S. holder
provides, on a timely basis, the required information to the IRS.
S-35
Underwriting
Under the terms and subject to the conditions contained in an
underwriting agreement dated as of the date of this prospectus
supplement, the underwriters named below, for which Banc of
America Securities LLC, J.P. Morgan Securities Inc. and
Wachovia Capital Markets, LLC are acting as representatives,
have severally agreed to purchase, and Martin Marietta Materials
has agreed to sell to them, severally, the principal amount of
notes set forth opposite its name below:
|
|
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|
|
|
|
|
|
Principal
|
|
Underwriter
|
|
amount of notes
|
|
|
|
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Banc of America Securities LLC
|
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$
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J.P. Morgan Securities Inc.
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Wachovia Capital Markets, LLC
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|
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Total
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$
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|
|
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The underwriters are offering the notes subject to their
acceptance of the notes from us and subject to prior sale. The
underwriting agreement provides that the obligations of the
several underwriters to pay for and accept delivery of the notes
offered by this prospectus supplement are subject to the
approval of certain legal matters by their counsel and to
certain other conditions. The underwriters are obligated to take
and pay for all of the notes offered by this prospectus
supplement if any such notes are taken.
The underwriters initially propose to offer part of the notes
directly to the public at the offering prices described on the
cover page of this prospectus supplement. In addition, the
underwriters initially propose to offer the notes to certain
dealers at prices that represent a concession not in excess
of % of the principal amount of the
notes. Any underwriter may allow, and any such dealer may
reallow, a concession not in excess
of % off the principal amount of
the notes to certain other dealers. After the initial offering
of the notes, the underwriters may from time to time vary the
offering prices and other selling terms.
The following table shows the underwriting discount that we will
pay to the underwriters in connection with the offering of the
notes:
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Paid by Us
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Per Note
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%
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Total
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$
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We have agreed to indemnify the underwriters against certain
liabilities, including liabilities under the Securities Act of
1933, as amended, or to contribute to payments which the
underwriters may be required to make in respect of any such
liabilities.
In connection with the offering of the notes, the underwriters
may engage in transactions that stabilize, maintain or otherwise
affect the price of the notes. Specifically, the underwriters
may overallot in connection with the offering of the notes,
creating syndicate short positions. In addition, the
underwriters may bid for and purchase notes in the open market
to cover syndicate short positions or to stabilize the price of
the notes. Finally, the underwriting syndicate may reclaim
selling concessions allowed for distributing the notes in the
offering of the notes, if
S-36
the syndicate repurchases previously distributed notes in
syndicate covering transactions, stabilization transactions or
otherwise. Any of these activities may stabilize or maintain the
market price of the notes above independent market levels. The
underwriters are not required to engage in any of these
activities, and may end any of them at any time.
The notes are a new issue of securities and there is currently
no established trading market for the notes. We do not intend to
apply the notes for listing on any securities exchange or
quotation on an automated dealer quotation system. Accordingly,
there can be no assurance as to the development or liquidity of
any market for the notes. The underwriters have advised us that
they currently intend to make a market in the notes. However,
they are not obligated to do so, and any market making with
respect to the notes may be discontinued at any time without
notice.
Expenses associated with this offering to be paid by us, other
than underwriting discounts, are estimated to be approximately
$ .
From time to time in the ordinary course of their respective
businesses, certain of the underwriters and their affiliates
have engaged in and may in the future engage in commercial
banking, derivatives
and/or
financial advisory, investment banking and other commercial
transactions and services with us and our affiliates. An
affiliate of J.P. Morgan Securities Inc. is a dealer in our
commercial paper program. In addition, affiliates of the
underwriters are lenders and J.P. Morgan Securities Inc.
serves as administrative agent under our outstanding credit
agreement and have been paid customary fees. Our outstanding
credit agreement supports our commercial paper program,
outstanding amounts of which will be paid with a portion of the
proceeds of this offering.
European Economic
Area
In relation to each Member State of the European Economic Area
which has implemented the Prospectus Directive, each underwriter
has represented and agreed that, with effect from and including
the date on which the Prospectus Directive is implemented in
that Member State, it has not made and will not make an offer of
notes to the public in that Member State except that it may,
with effect from and including such date, make an offer of notes
to the public in that Member State at any time:
(a) to legal entities which are authorized or regulated to
operate in the financial markets or, if not so authorized or
regulated, whose corporate purpose is solely to invest in
securities;
(b) to any legal entity which has two or more of
(1) an average of at least 250 employees during the
last financial year; (2) a total balance sheet of more than
EUR43,000,000 and (3) an annual net turnover of more than
EUR50,000,000, as shown in its last annual or consolidated
accounts;
(c) to fewer than 100 natural or legal persons (other than
qualified investors as defined in the Prospectus Directive)
subject to obtaining the prior consent of the representatives
for any such offer; or
(d) in any other circumstances which do not require the
publication by us of a prospectus pursuant to Article 3 of
the Prospectus Directive.
S-37
For the purposes of the above, the expression an offer of
notes to the public in relation to any notes in any Member
State means the communication in any form and by any means of
sufficient information on the terms of the offer and the notes
to be offered so as to enable an investor to decide to purchase
or subscribe the notes, as the same may be varied in that Member
State by any measure implementing the Prospectus Directive in
that Member State, and the expression Prospectus Directive means
Directive 2003/7I/EC and includes any relevant implementing
measure in that Member State.
United
Kingdom
Each underwriter has represented and agreed that it has only
communicated or caused to be communicated and will only
communicate or cause to be communicated an invitation or
inducement to engage in investment activity (within the meaning
of Section 21 of the Financial Services and Markets Act
2000) in connection with the issue or sale of the notes in
circumstances in which Section 21(1) of such Act does not
apply to us and it has complied and will comply with all
applicable provisions of such Act with respect to anything done
by it in relation to any notes in, from or otherwise involving
the United Kingdom.
Legal
matters
Skadden, Arps, Slate, Meagher & Flom LLP, New York,
New York, and Robinson, Bradshaw & Hinson, P.A.,
Charlotte, North Carolina, are representing Martin Marietta
Materials, Inc. in connection with this offering. Richard A.
Vinroot, Esq., a shareholder of Robinson,
Bradshaw & Hinson, P.A., is one of our directors.
Certain members of Robinson, Bradshaw & Hinson, P.A.
beneficially owned less than 1% of our outstanding shares of
common stock as of the date of this prospectus supplement.
Simpson Thacher & Bartlett LLP, New York, New York,
will pass on the validity of the notes to the underwriters.
S-38
Prospectus
Martin Marietta
Materials, Inc.
Senior Debt
Securities
We may offer to sell from time to time in one or more offerings
senior debt securities consisting of debentures, notes
and/or other
unsecured evidences of indebtedness, which may be offered in
separate classes or series and which will rank on a parity with
all of our other unsecured and unsubordinated debt.
This prospectus describes some of the general terms that may
apply to the offered securities. The specific terms and amounts
of the offered securities will be fully described in supplements
to this prospectus, which may add, update or change information
in this prospectus. Please read carefully any prospectus
supplements and this prospectus and any information incorporated
herein or therein by reference carefully before you invest in
these securities.
Investing in our securities involves risks. See Risk
Factors on page 2.
Neither the Securities and Exchange Commission nor any
state securities commission has approved or disapproved of these
securities or passed upon the adequacy or accuracy of this
prospectus. Any representation to the contrary is a criminal
offense.
We may offer and sell these securities to or through one or more
underwriters, dealers and agents, or directly to purchasers, on
a continuous or delayed basis. The names of any underwriters or
agents and the terms of the arrangements with such entities will
be stated in an accompanying prospectus supplement.
The date of this prospectus is April 25, 2007
Table of
contents
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About this
prospectus
This prospectus is part of a Registration Statement that we
filed with the Securities and Exchange Commission, or SEC,
utilizing a shelf registration process. Under this
shelf process, we may, from time to time, sell the securities
described in this prospectus in one or more offerings. We have
omitted parts of the registration statement in accordance with
the rules and regulations of the SEC. This prospectus provides
you only with a general description of the securities we may
offer. Each time we sell securities, we will provide a
prospectus supplement or prospectus supplements containing
specific information about the terms of that offering. The
prospectus supplement may also add to, update or change
information contained in this prospectus. You should read both
this prospectus and any prospectus supplement together with
additional information described under the heading Where
you can find more information and Incorporation by
reference before purchasing any of our securities.
You should rely only on the information contained or
incorporated by reference in this prospectus or applicable
prospectus supplement or free writing prospectus.
Incorporated by reference means that we can disclose
important information to you by referring you to another
document filed separately with the SEC. We have not authorized
anyone to provide you with different or additional information.
We are not making an offer to sell these securities in any
jurisdiction where the offer or sale of these securities is not
permitted. You should assume that the information in this
prospectus or any prospectus supplement, as well as the
information incorporated by reference herein or therein, is
accurate only as of the date of the documents containing the
information. Our business, financial condition, results of
operations and prospects may have changed since those dates.
In this prospectus and any prospectus supplement, unless
otherwise indicated, the terms Company,
we, us and our refer and
relate to Martin Marietta Materials, Inc. and its consolidated
subsidiaries.
1
About the
registrant
We are the United States second largest producer of
aggregates for the construction industry, including
infrastructure, commercial and residential. We also have a
specialty products segment that manufactures and markets
magnesia-based chemical products used in industrial,
agricultural, and environmental applications, and dolomitic lime
sold primarily to the steel industry. For the year ended
December 31, 2006, our aggregates business accounted for
approximately 92% of our total net sales and our specialty
products segment accounted for approximately 8% of our total net
sales.
We were formed in 1993 as a North Carolina corporation to serve
as successor to the operations of the materials group of the
organization that is now Lockheed Martin Corporation. Our
principal executive offices are located at 2710 Wycliff Road
Raleigh, North Carolina
27607-3033,
and our telephone number is
(919) 781-4550.
Our website is located at http://www.martinmarietta.com. We do
not incorporate the information on our website into this
prospectus and you should not consider it a part of this
prospectus.
Risk
factors
Investment in the offered securities involves risks. Before
acquiring any offered securities pursuant to this prospectus,
you should carefully consider the information contained or
incorporated by reference in this prospectus or in any
accompanying prospectus supplement, including, without
limitation, the risks of an investment in our company under the
captions Item 1A. Risk Factors and
Item 7. Managements Discussion and Analysis of
Financial Condition and Results of Operations in our
Annual Report on
Form 10-K
for the fiscal year ended December 31, 2006, as the same
may be updated from time to time by our future filings with the
SEC. The occurrence of any of these risks might cause you to
lose all or a part of your investment in the offered securities.
Please also refer to the section below entitled
Forward-Looking Statements.
Forward-looking
statements
This prospectus contains or incorporates forward-looking
statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. Generally, you can
identify these statements because they use words like
anticipates, believes,
expects, future, intends,
plans, and similar terms. These statements are only
our current expectations. Although we do not make
forward-looking statements unless we believe we have a
reasonable basis for doing so, we cannot guarantee their
accuracy, and actual results may differ materially from those we
anticipated due to a number of uncertainties and risks,
including the risks described or incorporated by reference in
this prospectus and other unforeseen risks. You should not place
undue reliance on these forward-looking statements, which apply
only as of the date of this prospectus or the incorporated
documents.
We believe it is important to communicate our expectations to
our investors. There may be events in the future, however, that
we are unable to predict accurately or over which we have no
control. The factors listed in the section titled Risk
factors, as well as any cautionary
2
language in, or incorporated by reference into, this prospectus,
provide examples of risks, uncertainties and events that may
cause our actual results to differ materially from the
expectations we describe in our forward-looking statements.
Before you invest in our securities, you should be aware that
the occurrence of the events described in the risk factors and
elsewhere in this prospectus and in the documents incorporated
by reference herein could negatively impact our business,
operating results, financial condition and stock price.
You should not rely upon forward-looking statements as
predictions of future events. We cannot assure you that the
events and circumstances reflected in the forward-looking
statements will be achieved or occur and actual results could
differ materially from those projected in the forward-looking
statements.
3
Use of
proceeds
Unless otherwise indicated in a prospectus supplement, the net
proceeds from the sale of securities offered by this prospectus
will be used for general corporate purposes, including, without
limitation, the repayment and the refinancing of indebtedness,
repurchases of our outstanding common stock, capital
expenditures, future acquisitions and working capital. If net
proceeds from a specific offering will be used to repay
indebtedness, the applicable prospectus supplement will describe
the relevant terms of the debt to be repaid. Until we apply the
proceeds from a sale of securities to their intended purposes,
we may invest those proceeds in short-term investments,
including repurchase agreements, some or all of which may not be
investment grade.
Ratio of earnings
to fixed charges
The following table shows our historical ratio of earnings to
fixed charges for each of the five most recent fiscal years.
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Year ended December 31,
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2006
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2005
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2004
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2003
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2002
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Ratio of earnings to fixed charges
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7.01
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5.67
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4.47
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3.63
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3.58
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For this ratio, earnings consist of earnings before income taxes
on income, extraordinary items and net cumulative effect of
accounting changes, adjusted for undistributed earnings of
less-than-fifty-percent-owned
affiliates. Fixed charges consist of interest expensed and
capitalized, plus the portion of rent expense under operating
leases deemed by us to be representative of the interest factor.
4
Description of
debt securities
We may issue debt securities. The prospectus supplement relating
to any offering of debt securities will describe more specific
terms of the debt securities being offered, including the
designation of the series, the aggregate principal amount being
offered, the initial offering price, the interest rate and any
redemption, purchase or conversion rights and any general terms
described in this section that will not apply to those debt
securities.
The summary set forth below does not purport to be complete and
is subject to and qualified in its entirety by reference to the
base indenture referred to below and the supplemental indenture
or board resolution (including the form of debt security)
relating to the applicable series of debt securities, the form
of each of which is or will be filed or incorporated by
reference as an exhibit to the registration statement of which
this prospectus is a part and incorporated herein by reference.
The debt securities will be our direct unsecured general
obligations and may include debentures, notes, bonds
and/or other
evidences of indebtedness. The debt securities will be issued
under an indenture among us and Branch Banking & Trust
Company, as the initial trustee, which we refer to herein as
base indenture. The base indenture does not limit the aggregate
principal amount of debt securities that may be issued
thereunder.
Debt securities will be issued under a senior indenture, in one
or more series established pursuant to a supplemental indenture
or a resolution duly adopted by our board of directors or a duly
authorized committee thereof. We refer to the base indenture
(together with each applicable supplemental indenture or
resolution establishing the applicable series of debt
securities) collectively in this prospectus as the indenture.
The indenture will be subject to and governed by the Trust
Indenture Act of 1939.
General
The debt securities will be our unsecured obligations and will
rank equally with all of our other unsecured and unsubordinated
debt from time to time outstanding. Our secured debt will be
effectively senior to the debt securities to the extent of the
value of the assets securing such debt. There is no requirement
that our future issues of debt securities offered pursuant to
the Registration Statement of which this prospectus forms a part
be issued under the indenture, and we are free to employ other
indentures or documentation, containing provisions different
from those included in the indenture or applicable to one or
more issues of debt securities issued under the indenture, in
connection with future issues of such other debt securities. The
debt securities will be exclusively our obligations and not of
our subsidiaries and therefore the debt securities will be
structurally subordinate to the debt and liabilities of any of
our subsidiaries.
The applicable prospectus supplement will describe the specific
terms of each series of debt securities being offered, including
some or all of the following:
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the title of the debt securities;
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the price at which the debt securities will be issued;
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any limit on the aggregate principal amount of the debt
securities;
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the date or dates (or manner of determining the same) on which
the debt securities will mature;
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the rate or rates (which may be fixed or variable) per annum (or
the method or methods by which such rate or rates will be
determined) at which the debt securities will bear interest, if
any, and the date or dates from which such interest will accrue;
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the date or dates on which such interest will be payable and the
record dates for such interest payment dates and the basis upon
which interest shall be calculated if other than that of a
360-day year
of twelve
30-day
months;
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if the trustee in respect of the debt securities is other than
Branch Banking & Trust Company (or any successor
thereto), the identity of the trustee;
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any mandatory or optional sinking fund or purchase fund or
analogous provision;
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any provisions relating to the date after which, the
circumstances under which, and the price or prices at which the
debt securities may, pursuant to any optional or mandatory
redemption provisions, be redeemed at our option or of the
holder thereof and certain other terms and provisions of such
optional or mandatory redemption;
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if the debt securities are denominated in other than United
States dollars, the currency or currencies (including composite
currencies) in which the debt securities are denominated;
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if payments of principal (and premium, if any) or interest, if
any, in respect of the debt securities are to be made in a
currency other than United States dollars or the amounts of such
payments are to be determined with reference to an index based
on a currency or currencies other than that in which the debt
securities are denominated, the currency or currencies
(including composite currencies) or the manner in which such
amounts are to be determined, respectively;
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if other than or in addition to the events of default described
in the base indenture, the events of default with respect to the
debt securities of that series;
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if the amount payable upon acceleration of the debt securities
is other than the full principal amount, the portion of the
principal amount payable upon acceleration;
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any provisions relating to the conversion of debt securities
into debt securities of another series or shares of our capital
stock;
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any provisions restricting defeasance of the debt securities;
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if the debt securities will be issued, in whole or in part, in
the form of one or more temporary or permanent global
securities, the identity of the depositary for such global
securities, if other than The Depository Trust Company; and
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any other terms of the debt securities not inconsistent with the
provisions of the base indenture.
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Unless otherwise indicated in a prospectus supplement in respect
of which this prospectus is being delivered, principal of,
premium, if any, and interest, if any, on the debt securities
(other than debt securities issued as global securities) will be
payable, and the debt securities (other than debt securities
issued as global securities) will be exchangeable and transfers
thereof will be registrable, at the office of the trustee with
respect to such series of debt securities and at any other
office maintained at that time by us for such purpose, provided
that, at our option, payment of interest may be made by check
mailed to the address of the holder as it appears in the
register of the debt securities.
6
Unless otherwise indicated in a prospectus supplement relating
thereto, the debt securities will be issued only in fully
registered form, without coupons, in denominations of $1,000 and
integral multiples of $1,000 thereafter. For certain information
about debt securities issued in global form, see
Global Securities below. No service
charge shall be made for any registration of transfer or
exchange of the Securities, but we may require payment of a sum
sufficient to cover any transfer tax or other governmental
charge payable in connection therewith.
Debt securities bearing no interest or interest at a rate that
at the time of issuance is below the prevailing market rate will
be sold at a discount below their stated principal amount.
Special U.S. federal income tax considerations applicable
to any such discounted debt securities or to certain debt
securities issued at par which are treated as having been issued
at a discount for U.S. federal income tax purposes will be
described in the prospectus supplement in respect of which this
prospectus is being delivered, if applicable.
Debt securities may be issued, from time to time, with the
principal amount payable on the applicable principal payment
date, or the amount of interest payable on the applicable
interest payment date, to be determined by reference to one or
more currency exchange rates, commodity prices, equity indices
or other factors. In such cases, holders of such debt securities
may receive a principal amount on any principal payment date, or
a payment of interest on any interest payment date, that is
greater than or less than the amount of principal or interest
payable on such dates, depending upon the value on such dates of
the applicable currency, commodity, equity index or other
factor. Information, if any, as to the methods for determining
the amount of principal or interest payable on any date, the
currencies, commodities, equity indices or the factors to which
the amount payable on such date is linked and certain additional
tax considerations applicable to the debt securities will be set
forth in a prospectus supplement in respect of which this
prospectus is being delivered.
The indenture provides that the trustee and the paying agent
shall promptly pay to us upon request any money held by them for
the payment of principal (and premium, if any) or interest that
remains unclaimed for two years. In the event the trustee or the
paying agent returns money to us following such two-year period,
the holders of the debt securities thereafter shall be entitled
to payment only from us, subject to all applicable escheat,
abandoned property and similar laws.
The indenture does not limit the amount of additional unsecured
indebtedness that we or any of our subsidiaries may incur.
Unless otherwise specified in the resolutions or any
supplemental indenture establishing the terms of the debt
securities, the terms of the debt securities or the covenants
contained in the indenture do not afford holders of the debt
securities protection in the event of a highly leveraged or
other similar transaction involving us that may adversely affect
the holders of the debt securities. See
Certain covenants below. Debt securities
of any particular series need not be issued at the same time
and, unless otherwise provided, a series may be re-opened,
without the consent of the holders of such debt securities, for
issuances of additional debt securities of that series, unless
otherwise specified in the resolutions or any supplemental
indenture establishing the terms of the debt securities.
Global
securities
The debt securities of a series may be issued in whole or in
part in the form of one or more global securities that will be
deposited with the depositary identified in the applicable
prospectus supplement. Unless it is exchanged in whole or in
part for debt securities in definitive form,
7
a global security may not be transferred. However, transfers of
the whole security between the depositary for that global
security and its nominees or their respective successors are
permitted.
Unless otherwise provided in the applicable prospectus
supplement, The Depository Trust Company, New York, New York,
which we refer to in this prospectus as DTC,
will act as depositary for each series of global securities.
Beneficial interests in global securities will be shown on, and
transfers of global securities will be effected only through,
records maintained by DTC and its participants.
DTC has provided the following information to us. DTC is a:
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limited-purpose trust company organized under the New York
Banking Law;
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banking organization within the meaning of the New York Banking
Law;
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member of the U.S. Federal Reserve System;
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clearing corporation within the meaning of the New York Uniform
Commercial Code; and
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clearing agency registered under the provisions of
Section 17A of the Securities Exchange Act of 1934, as
amended.
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DTC holds securities that its direct participants deposit with
DTC. DTC also facilitates the settlement among direct
participants of securities transactions, in deposited securities
through electronic computerized book-entry changes in the direct
participants accounts. This eliminates the need for
physical movement of securities certificates. Direct
participants include securities brokers and dealers, banks,
trust companies, clearing corporations and certain other
organizations. DTC is owned by a number of its direct
participants and by the New York Stock Exchange, Inc., the
American Stock Exchange, Inc. and the National Association of
Securities Dealers, Inc. Access to DTCs book-entry system
is also available to indirect participants such as securities
brokers and dealers, banks and trust companies that clear
through or maintain a custodial relationship with a direct
participant. The rules applicable to DTC and its direct and
indirect participants are on file with the SEC.
Principal and interest payments on global securities registered
in the name of DTCs nominee will be made in immediately
available funds to DTCs nominee as the registered owner of
the global securities. We and the trustee will treat DTCs
nominee as the owner of the global securities for all other
purposes as well. Accordingly, we, the trustee and any paying
agent will have no direct responsibility or liability to pay
amounts due on the global securities to owners of beneficial
interests in the global securities. It is DTCs current
practice, upon receipt of any payment of principal or interest,
to credit direct participants accounts on the payment date
according to their respective holdings of beneficial interests
in the global securities. These payments will be the
responsibility of the direct and indirect participants and not
of DTC, the trustee or us.
Debt securities represented by a global security will be
exchangeable for debt securities in definitive form of like
amount and terms in authorized denominations only if:
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DTC notifies us that it is unwilling or unable to continue as
depositary;
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DTC ceases to be a registered clearing agency and a successor
depositary is not appointed by us within 120 days; or
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we determine not to require all of the debt securities of a
series to be represented by a global security and notify the
applicable trustee of our decision.
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Amendment,
supplement and waiver
Subject to certain exceptions, the indenture or the debt
securities of any series may be amended or supplemented with the
written consent of the holders of not less than a majority in
principal amount of the then outstanding debt securities of the
affected series; provided that we and the trustee may not,
without the consent of the holder of each outstanding debt
security of such series affected thereby, (a) reduce the
amount of debt securities of such series whose holders must
consent to an amendment, supplement or waiver, (b) reduce
the rate of or extend the time for payment of interest on any
debt security of such series, (c) reduce the principal of
or extend the fixed maturity of any debt security of such
series, (d) reduce the portion of the principal amount of a
discounted security of such series payable upon acceleration of
its maturity or (e) make any debt security of such series
payable in money other than that stated in such debt security.
Any past default or compliance with any provisions may be waived
with the consent of the holders of a majority in principal
amount of the debt securities of the affected series, except a
default in payment of principal or interest or in respect of
other provisions requiring the consent of the holder of each
such debt security of that series in order to amend. Without the
consent of any holder of debt securities of such series, we and
the trustee may amend or supplement the indenture or the debt
securities without notice to cure any ambiguity, omission,
defect or inconsistency, to provide for uncertificated debt
securities in addition to or in place of certificated debt
securities, to comply with the provisions of the indenture
concerning mergers, consolidations and transfers of all or
substantially all of our assets, to appoint a trustee other than
Branch Banking & Trust Company (or any successor
thereto) as trustee in respect of one or more series of debt
securities, or to add, change or eliminate provisions of the
indenture as shall be necessary or desirable in accordance with
any amendment to the Trust Indenture Act of 1939. In addition,
without the consent of any holder of debt securities, we and the
trustee may amend or supplement the indenture or the debt
securities to make any change that does not materially adversely
affect the rights of any holder of that series of debt
securities. Whenever we request the trustee to take any action
under the indenture, including a request to amend or supplement
the indenture without the consent of any holder of debt
securities, we are required to furnish the trustee with an
officers certificate and an opinion of counsel to the
effect that all conditions precedent to the action have been
complied with. Without the consent of any holder of debt
securities, the trustee may waive compliance with any provisions
of the indenture or the debt securities if the waiver does not
materially adversely affect the rights of any such holder.
Certain
covenants
Unless otherwise specified in resolutions adopted by our board
of directors or any supplemental indenture establishing the
terms of the debt securities of any series, the terms of the
debt securities of any series or the covenants contained in the
indenture do not afford holders of debt securities protection in
the event of a highly leveraged or other similar transaction
involving us that may adversely affect such holders. If the debt
securities contain, or a future supplemental indenture contains,
covenants to afford holders of debt securities protection in the
event of a highly leveraged or similar transaction, the
prospectus supplement relating to the debt securities (or an
applicable pricing supplement) will provide a brief description
of such
9
protective covenants. The indenture does not limit the amount of
additional unsecured indebtedness that we or any of our
subsidiaries may incur.
Certain Definitions. For purposes of the covenants
included in the indenture, the following terms generally shall
have the meanings provided below.
Attributable Debt for a lease means the
carrying value of the capitalized rental obligation determined
under generally accepted accounting principles whether or not
such obligation is required to be shown on the balance sheet as
a long-term liability. The carrying value may be reduced by the
capitalized value of the rental obligations, calculated on the
same basis, that any sublessee has for all or part of the same
property. A lease obligation shall be counted only once even if
the Company and one or more of its Subsidiaries may be
responsible for the obligation.
Capital Expenditures means, for any period,
any expenditures of the Company or its Subsidiaries during such
period that, in conformity with generally accepted accounting
principles consistently applied, are required to be included in
fixed asset accounts as reflected in the consolidated balance
sheet of the Company and its Subsidiaries.
Company means Martin Marietta Materials, Inc.
Consolidated Net Tangible Assets means total
assets less (1) total current liabilities (excluding any
Debt which, at the option of the borrower, is renewable or
extendable to a term exceeding 12 months and which is
included in current liabilities and further excluding any
deferred income taxes which are included in current liabilities)
and (2) goodwill, patents and trademarks, all as stated on
the Companys most recent publicly available consolidated
balance sheet preceding the date of determination.
Debt means any debt for borrowed money which
would appear on the balance sheet as a liability or any
guarantee of such a debt and includes purchase money
obligations. A Debt shall be counted only once even if the
Company and one or more of its Subsidiaries may be responsible
for the obligation.
Lien means any mortgage, pledge, security
interest or lien.
Long-Term Debt means Debt that by its terms
matures on a date more than 12 months after the date it was
created or Debt that the obligor may extend or renew without the
obligees consent to a date more than 12 months after
the Debt was created.
Principal Property means, as to any
particular series of debt securities, any mining and quarrying
or manufacturing facility located in the United States and owned
by the Company or by one or more Restricted Subsidiaries from
the date debt securities of that series are first issued and
which has, as of the date the Lien is incurred, a net book value
(after deduction of depreciation and other similar charges)
greater than 3% of Consolidated Net Tangible Assets, except
(1) any such facility or property which is financed by
obligations of any State, political subdivision of any State or
the District of Columbia under terms which permit the interest
payable to the holders of the obligations to be excluded from
gross income as a result of the plant, facility or property
satisfying the conditions of Section 103(b)(4)(C), (D),
(E), (F) or (H) or Section 103(b)(6) of the
Internal Revenue Code of 1954 or Section 142(a) or
Section 144(a) of the Internal Revenue Code of 1986, or of
any successors to such provisions, or (2) any such facility
or property which, in the opinion of the Board of Directors of
the Company, is not of material importance to the total business
conducted by the Company and its Subsidiaries taken as a
10
whole. However, the chief executive officer or chief financial
officer of the Company may at any time declare any mining and
quarrying or manufacturing facility or other property to be a
Principal Property by delivering a certificate to that effect to
the Trustee.
Restricted Property means, as to any
particular series of debt securities, any Principal Property,
any Debt of a Restricted Subsidiary owned by the Company or a
Restricted Subsidiary on the date debt securities of that series
are first issued or secured by a Principal Property (including
any property received upon a conversion or exchange of such
debt), or any shares of stock of a Restricted Subsidiary owned
by the Company or a Restricted Subsidiary (including any
property or shares received upon a conversion, stock split or
other distribution with respect to the ownership of such stock).
Restricted Subsidiary means a Subsidiary that
has substantially all its assets located in, or carries on
substantially all its business in, the United States and that
owns a Principal Property. Notwithstanding the preceding
sentence, a Subsidiary shall not be a Restricted Subsidiary
during such period of time as it has shares of capital stock
registered under the Securities Exchange Act of 1934, as
amended, or it files reports and other information with the SEC
pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934, as amended.
Subsidiary means an entity a majority of the
Voting Stock of which is owned by the Company
and/or one
or more Subsidiaries.
Voting Stock means capital stock or other
equity interest having voting power under ordinary circumstances
to elect directors or managers, as applicable.
Limitations on Liens. Unless otherwise specified in
a prospectus supplement in respect of which this prospectus is
being delivered and subject to the following three sentences,
the Company will not, and will not permit any Restricted
Subsidiary to, as security for any Debt, incur a Lien on any
Restricted Property, unless the Company or such Restricted
Subsidiary secures or causes to be secured any outstanding debt
securities equally and ratably with all Debt secured by such
Lien. The Lien may equally and ratably secure such debt
securities and any other obligations of the Company or its
Subsidiaries that are not subordinated to any outstanding debt
securities. This restriction will not apply to, among other
things, certain Liens (i) existing at the time an entity
becomes a Restricted Subsidiary; (ii) existing at the time
of the acquisition of the Restricted Property or incurred to
finance all or some of the purchase price or cost of
construction, provided that the Lien may not extend to any other
Restricted Property (other than, in the case of construction,
unimproved real property) owned by the Company or any of its
Restricted Subsidiaries at the time the property is acquired or
the Lien is incurred and provided further that the Lien may not
be incurred more than one year after the later of the
acquisition, completion of construction or commencement of full
operation of the property; (iii) in favor of the Company or
another Restricted Subsidiary; (iv) existing at the time an
entity merges into or consolidates with or enters into a share
exchange with the Company or a Restricted Subsidiary or
transfers or leases all or substantially all its assets to the
Company or a Restricted Subsidiary; (v) in favor of a
government or governmental entity that secure payment pursuant
to a contract, subcontract, statute or regulation, secure Debt
guaranteed by the government or governmental agency, secure Debt
incurred to finance all or some of the purchase price or cost of
construction of goods, products or facilities produced under
contract or subcontract for the government or governmental
entity, or secure Debt incurred to finance all or some of the
purchase price or cost of construction of the property subject
to the Lien; or (vi) extends, renews or replaces in whole
or in part a Lien (existing Lien) permitted by any
of the clauses (i) through (v) or a Lien existing on
the date that the notes are first issued; provided, that
such Lien may not extend
11
beyond the property subject to the existing Lien and the Debt
secured by the Lien may not exceed the amount of Debt secured at
the time by the existing Lien unless the existing Lien or a
predecessor Lien equally and ratably secures the notes and the
Debt. In addition and notwithstanding the foregoing
restrictions, the Company and any of its Restricted Subsidiaries
may, without securing the debt securities, incur a Lien that
otherwise would be subject to the restrictions, provided that
after giving effect to such Lien the aggregate amount of all
Debt secured by Liens that otherwise would be prohibited plus
all Attributable Debt in respect of sale-leaseback transactions
that otherwise would be prohibited by the covenant limiting
sale-leaseback transactions described below would not exceed 15%
of Consolidated Net Tangible Assets.
Limitations on Sale-Leaseback Transactions. Unless
otherwise specified in the prospectus supplement in respect of
which this prospectus is being delivered and subject to the
following two sentences, the Company will not, and will not
permit any Restricted Subsidiary to, sell or transfer a
Principal Property and contemporaneously lease it back, except a
lease for a period (including extensions or renewals at the
option of the Company or the Restricted Subsidiary) of three
years or less. Notwithstanding the foregoing restriction, the
Company or any Restricted Subsidiary may sell a Principal
Property and lease it back for a longer period if (i) the
lease is between the Company and a Restricted Subsidiary or
between Restricted Subsidiaries; (ii) the Company or such
Restricted Subsidiary would be entitled, pursuant to the
provisions set forth above under the caption Limitations
on Liens, to create a Lien on the property to be leased
securing Debt in an amount at least equal in amount to the
Attributable Debt (as hereinafter defined) in respect of the
sale-leaseback transaction without equally and ratably securing
the outstanding debt securities; (iii) the Company owns or
acquires other property which will be made a Principal Property
and is determined by the board of directors of the Company to
have a fair value equal to or greater than the Attributable Debt
incurred; (iv) within 270 days the Company makes
Capital Expenditures with respect to a Principal Property in an
amount at least equal to the amount of the Attributable Debt; or
(v) the Company or a Restricted Subsidiary makes an
optional prepayment in cash of its Debt or capital lease
obligations at least equal in amount to the Attributable Debt
for the lease, the prepayment is made within 270 days, the
Debt prepaid is not owned by the Company or a Restricted
Subsidiary, the Debt prepaid is not subordinated to any of the
debt securities, and the Debt prepaid was Long-Term Debt or
capital lease obligations at the time it was created. In
addition and notwithstanding the foregoing restrictions, the
Company and any of its Restricted Subsidiaries may, without
securing the debt securities, enter into a sale-leaseback
transaction that otherwise would be subject to the restrictions,
provided that after giving effect to such sale-leaseback
transaction the aggregate amount of all Debt secured by Liens
that otherwise would be prohibited by the covenant limiting
Liens described above plus all Attributable Debt in respect of
sale-leaseback transactions that otherwise would be prohibited
would not exceed 15% of Consolidated Net Tangible Assets.
Consolidation, Merger, Sale of Assets. The Company
shall not consolidate with or merge into, or transfer all or
substantially all of its assets to, another entity unless
(1) the resulting, surviving or transferee entity assumes
by supplemental indenture all of the obligations of the Company
under the debt securities and the indenture,
(2) immediately after giving effect to the transaction no
event of default, and no event that, after notice or lapse of
time or both, would become an event of default, shall have
happened and be continuing, and (3) the Company shall have
delivered an officers certificate and an opinion of
counsel each stating that the consolidation, merger or transfer
and the supplemental indenture comply with the indenture.
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If upon any such consolidation, merger or transfer, a Restricted
Property would become subject to an attaching Lien that secures
Debt, then, before the consolidation, merger or transfer occurs,
the Company by supplemental indenture shall secure the debt
securities by a direct lien on such Restricted Property. The
direct Lien shall have priority over all Liens on such
Restricted Property except these already on it. The direct Lien
may equally and ratably secure the debt securities and any other
obligation of the Company or a Subsidiary. However, the Company
need not comply with this provision if: upon the consolidation,
merger or transfer the attaching Lien will secure the debt
securities, equally and ratably with or prior to Debt secured by
the attaching Lien; or the Company or a Restricted Subsidiary
could create a Lien on the Restricted Property to secure Debt at
least equal in amount to that secured by the attaching Lien
pursuant to the provisions described under
Limitations on Liens above.
When a successor corporation, trustee, paying, agent or
registrar assumes all of the obligations of its predecessor
under the debt securities and the Indenture, the predecessor
will be released from those obligations.
Default and
remedies
An event of default under the indenture in respect of any series
of debt securities is: default for 30 days in payment of
interest on the debt securities of that series; default in
payment of principal on the debt securities of that series;
failure by us for 90 days after notice to us to comply with
any of our other agreements in the indenture for the benefit of
holders of debt securities of that series; certain events of
bankruptcy or insolvency; and any other event of default
specifically provided for by the terms of such series, as
described in the related prospectus supplement.
If an event of default occurs and is continuing, the trustee or
the holders of at least 25% in principal amount of the
outstanding debt securities of the affected series may declare
the debt securities of that series to be due and payable
immediately, but under certain conditions such acceleration may
be rescinded by the holders of a majority in principal amount of
the outstanding debt securities of the affected series. No
holder of debt securities may pursue any remedy against us under
the indenture (other than with respect to the right to receive
payment of principal (and premium, if any) or interest, if any)
unless such holder previously shall have given to the trustee
written notice of default and unless the holders of at least 25%
in principal amount of the debt securities of the affected
series shall have requested the trustee to pursue the remedy and
shall have offered the trustee indemnity satisfactory to it, the
trustee shall not have complied with the request within
60 days of receipt of the request and the offer of
indemnity, and the trustee shall not have received direction
inconsistent with the request during such
60-day
period from the holders of a majority in principal amount of the
debt securities of the affected series.
Holders of debt securities may not enforce the indenture or the
debt securities except as provided in the indenture. The trustee
may refuse to enforce the indenture or the debt securities
unless it receives indemnity satisfactory to it from us or,
under certain circumstances, the holders of debt securities
seeking to direct the trustee to take certain actions under the
indenture against any loss, liability or expense. Subject to
certain limitations, holders of a majority in principal amount
of the debt securities of any series may direct the trustee in
its exercise of any trust or power under the indenture in
respect of that series. The indenture provides that the trustee
will give to the holders of debt securities of any particular
series notice of all defaults known to it, within 90 days
after the occurrence of any default with respect to
13
such debt securities, unless the default shall have been cured
or waived. The trustee may withhold from holders of debt
securities notice of any continuing default (except a default in
payment of principal or interest) if it determines in good faith
that withholding such notice is in the interests of such
holders. We are required annually to certify to the trustee as
to the compliance by us with all conditions and covenants under
the indenture and the absence of a default thereunder, or as to
any such default that existed.
Our directors, officers, employees and stockholders, as such,
shall not have any liability for any of our obligations under
the debt securities or the indenture or for any claim based on,
in respect of, or by reason of such obligations or their
creation. By accepting a debt security, each holder of such debt
security waives and releases all such claims and liability. This
waiver and release are part of the consideration for the issue
of the debt securities.
Satisfaction,
discharge and defeasance
The indenture provides, unless such provision is made
inapplicable to the debt securities of any series issued
pursuant to the indenture, that we may, subject to certain
conditions described below, discharge our indebtedness and our
obligations or certain of our obligations under the indenture in
respect of debt securities of a series by depositing funds or,
in the case of debt securities payable in United States dollars,
U.S. government obligations, or debt securities of the same
series with the trustee. The indenture provides that (1) we
will be discharged from any obligation to comply with certain
restrictive covenants of the indenture and certain other
obligations under the indenture and any noncompliance with such
obligations shall not be an event of default in respect of the
series of debt securities or (2) provided that 91 days
have passed from the date of the deposit referred to below and
certain specified events of default have not occurred, we will
be discharged from any and all obligations in respect of the
series of debt securities (except for certain obligations,
including obligations to register the transfer and exchange of
the debt securities of such series, to replace mutilated,
destroyed, lost or stolen debt securities of such series, to
maintain paying agencies and to cause money to be held in
trust), in either case upon the deposit with the trustee, in
trust, of money, debt securities of the same series,
and/or
U.S. government obligations that, through the payment of
interest and principal in accordance with their terms, will
provide money in an amount sufficient to pay the principal of
and each installment of interest on the series of debt
securities on the date when such payments become due in
accordance with the terms of the indenture and the series of
debt securities. In the event of any such defeasance under
clause (1) above, our obligations under the indenture and
the debt securities of the affected series, other than with
respect to the covenants relating to limitations on liens and
sale-leaseback transactions and reporting thereon, and covenants
relating to consolidations, mergers and transfers of all or
substantially all of our assets, shall remain in full force and
effect. In the event of defeasance and discharge under
clause (2) above, the holders of debt securities of the
affected series are entitled to payment only from the trust fund
created by such deposit for payment. In the case of our
discharge from any and all obligations in respect of a series of
debt securities as described in clause (2) above, the trust
may be established only if, among other things, we shall have
delivered to the trustee an opinion of counsel to the effect
that, if the subject debt securities are then listed on a
national securities exchange, such deposit, defeasance or
discharge will not cause the debt securities to be delisted. For
U.S. federal income tax purposes, defeasance and discharge under
clause (2) above may cause holders of the debt securities
to recognize gain or loss in an amount equal to the difference
between the fair market value of the obligations of the trust to
the holder and such holders tax basis in the debt
securities. Prospective purchasers
14
should consult their tax advisors as to the possible tax effects
of such a defeasance and discharge.
Pursuant to the escrow trust agreements that we may execute in
connection with the defeasance of all or certain of its
obligations under the indenture as provided above, we from time
to time may elect to substitute U.S. government obligations
or debt securities of the same series for any or all of the
U.S. government obligations deposited with the trustee;
provided that the money, U.S. government obligations,
and/or debt
securities of the same series in trust following such
substitution or substitutions will be sufficient, through the
payment of interest and principal in accordance with their
terms, to pay the principal of and each installment of interest
on the series of debt securities on the date when such payments
become due in accordance with the terms of the indenture and the
series of debt securities. The escrow trust agreements also may
enable us (1) to direct the trustee to invest any money
received by the trustee in the U.S. government obligations
comprising the trust in additional U.S. government
obligations, and (2) to withdraw monies or
U.S. government obligations from the trust from time to
time; provided that the money
and/or
U.S. government obligations in trust following such
withdrawal will be sufficient, through the payment of interest
and principal in accordance with their terms, to pay the
principal of and each installment of interest on the series of
debt securities on the date when such payments become due in
accordance with the terms of the Indenture and the series of
debt securities.
Governing
law
The debt securities and the indenture will be governed by the
laws of the State of New York.
Trustee
Branch Banking & Trust Company is a lender under our
credit facility and from time to time performs other services
for us in the normal course of business.
Additional
information
The indenture is an exhibit to the registration statement of
which this prospectus is a part. Any person who receives this
prospectus may obtain a copy of the indenture without charge by
writing to us at the address listed under the caption
Incorporation by reference.
Taxation
Any material U.S. federal income tax consequences relating
to the purchase, ownership and disposition of any of the
securities offered by this prospectus will be set forth in the
prospectus supplement offering those securities.
15
Plan of
distribution
We may offer and sell the offered securities in any one or more
of the following ways from time to time on a delayed or
continuous basis:
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to or through underwriters;
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to or through dealers;
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through agents; or
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directly to purchasers, including our affiliates.
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The prospectus supplement with respect to any offering of our
securities will set forth the terms of the offering, including:
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the name or names of any underwriters, dealers or agents;
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the purchase price of the securities and the proceeds to us from
the sale;
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any underwriting discounts and commissions or agency fees and
other items constituting underwriters or agents
compensation; and
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any delayed delivery arrangements.
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The distribution of the securities may be effected from time to
time in one or more transactions at a fixed price or prices,
which may be changed, at market prices prevailing at the time of
sale, at prices related to the prevailing market prices or at
negotiated prices.
If securities are sold by means of an underwritten offering, we
will execute an underwriting agreement with an underwriter or
underwriters, and the names of the specific managing underwriter
or underwriters, as well as any other underwriters, and the
terms of the transaction, including commissions, discounts and
any other compensation of the underwriters and dealers, if any,
will be set forth in the prospectus supplement which will be
used by the underwriters to sell the securities. If underwriters
are utilized in the sale of the securities, the securities will
be acquired by the underwriters for their own account and may be
resold from time to time in one or more transactions, including
negotiated transactions, at fixed public offering prices or at
varying prices determined by the underwriters at the time of
sale.
Our securities may be offered to the public either through
underwriting syndicates represented by managing underwriters or
directly by the managing underwriters. If any underwriter or
underwriters are utilized in the sale of the securities, unless
otherwise indicated in the prospectus supplement, the
underwriting agreement will provide that the obligations of the
underwriters are subject to conditions precedent and that the
underwriters with respect to a sale of securities will be
obligated to purchase all of those securities if they purchase
any of those securities.
We may grant to the underwriters options to purchase additional
securities to cover over-allotments, if any, at the public
offering price with additional underwriting discounts or
commissions. If we grant any over-allotment option, the terms of
any over-allotment option will be set forth in the prospectus
supplement relating to those securities.
If a dealer is utilized in the sales of securities in respect of
which this prospectus is delivered, we will sell those
securities to the dealer as principal. The dealer may then
resell those securities to
16
the public at varying prices to be determined by the dealer at
the time of resale. Any reselling dealer may be deemed to be an
underwriter, as the term is defined in the Securities Act of
1933, as amended, of the securities so offered and sold. The
name of the dealer and the terms of the transaction will be set
forth in the related prospectus supplement.
Offers to purchase securities may be solicited by agents
designated by us from time to time. Any agent involved in the
offer or sale of the securities in respect of which this
prospectus is delivered will be named, and any commissions
payable by us to the agent will be set forth, in the applicable
prospectus supplement. Unless otherwise indicated in the
prospectus supplement, any agent will be acting on a reasonable
best efforts basis for the period of its appointment. Any agent
may be deemed to be an underwriter, as that term is defined in
the Securities Act of 1933, as amended, of the securities so
offered and sold.
Offers to purchase securities may be solicited directly by us
and the sale of those securities may be made by us directly to
institutional investors or others, who may be deemed to be
underwriters within the meaning of the Securities Act of 1933,
as amended, with respect to any resale of those securities. The
terms of any sales of this type will be described in the related
prospectus supplement.
Underwriters, dealers, agents and remarketing firms may be
entitled under relevant agreements entered into with us to
indemnification by us against certain civil liabilities,
including liabilities under the Securities Act of 1933, as
amended, that may arise from any untrue statement or alleged
untrue statement of a material fact or any omission or alleged
omission to state a material fact in this prospectus, any
supplement or amendment hereto, or in the registration statement
of which this prospectus forms a part, or to contribution with
respect to payments which the agents, underwriters or dealers
may be required to make.
If so indicated in the prospectus supplement, we will authorize
underwriters or other persons acting as our agents to solicit
offers by institutions to purchase securities from us pursuant
to contracts providing for payments and delivery on a future
date. Institutions with which contracts of this type may be made
include commercial and savings banks, insurance companies,
pension funds, investment companies, educational and charitable
institutions and others, but in all cases those institutions
must be approved by us. The obligations of any purchaser under
any contract of this type will be subject to the condition that
the purchase of the securities shall not at the time of delivery
be prohibited under the laws of the jurisdiction to which the
purchaser is subject. The underwriters and other persons acting
as our agents will not have any responsibility in respect of the
validity or performance of those contracts.
One or more firms, referred to as remarketing firms,
may also offer or sell the securities, if the prospectus
supplement so indicates, in connection with a remarketing
arrangement upon their purchase. Remarketing firms will act as
principals for their own accounts or as our agents. These
remarketing firms will offer or sell the securities in
accordance with a redemption or repayment pursuant to the terms
of the securities. The prospectus supplement will identify any
remarketing firm and the terms of its agreement, if any, with us
and will describe the remarketing firms compensation.
Remarketing firms may be deemed to be underwriters in connection
with the securities they remarket. Remarketing firms may be
entitled under our agreements to indemnification by us against
certain civil liabilities, including liabilities under the
Securities Act of 1933, as amended, and may engage in
transactions with or perform services for us in the ordinary
course of business.
17
Disclosure in the prospectus supplement of our use of delayed
delivery contracts will include the commission that underwriters
and agents soliciting purchases of the securities under delayed
contracts will be entitled to receive in addition to the date
when we will demand payment and delivery of the securities under
the delayed delivery contracts. These delayed delivery contracts
will be subject only to the conditions that we describe in the
prospectus supplement.
In connection with the offering of securities, persons
participating in the offering, such as any underwriters, may
purchase and sell securities in the open market. These
transactions may include over-allotment and stabilizing
transactions and purchases to cover syndicate short positions
created in connection with the offering. Stabilizing
transactions consist of bids or purchases for the purpose of
preventing or retarding a decline in the market price of the
securities, and syndicate short positions involve the sale by
underwriters of a greater number of securities than they are
required to purchase from any issuer in the offering.
Underwriters also may impose a penalty bid, whereby selling
concessions allowed to syndicate members or other broker-dealers
in respect of the securities sold in the offering for their
account may be reclaimed by the syndicate if the securities are
repurchased by the syndicate in stabilizing or covering
transactions. These activities may stabilize, maintain or
otherwise affect the market price of the securities, which may
be higher than the price that might prevail in the open market,
and these activities, if commenced, may be discontinued at any
time.
Any underwriters or agents to or through which securities are
sold by us may make a market in the securities, but these
underwriters or agents will not be obligated to do so and any of
them may discontinue any market-making at any time without
notice. No assurance can be given as to the liquidity of or
trading market for any securities sold by us.
Any lock-up
arrangements will be set forth in a prospectus supplement.
Underwriters, dealers and agents may engage in transactions
with, or perform services for, us and our affiliates in the
ordinary course of business. Underwriters have from time to time
in the past provided, and may from time to time in the future
provide, investment banking services to us for which they have
in the past received, and may in the future receive, customary
fees.
This prospectus and the accompanying prospectus supplement or
supplements may be made available in electronic format on the
Internet sites of, or through online services maintained by, the
underwriter, dealer, agent
and/or
selling group members participating in connection with any
offering, or by their affiliates. In those cases, prospective
investors may view offering terms online and, depending upon the
particular underwriter, dealer, agent or selling group member,
prospective investors may be allowed to place orders online. The
underwriter, dealer or agent may agree with us to allocate a
specific number of shares for sale to online brokerage account
holders. Any such allocation for online distributions will be
made by the underwriter, dealer or agent on the same basis as
other allocations.
Other than the prospectus and accompanying prospectus supplement
or supplements in electronic format, the information on the
underwriters, dealers, agents or any selling
group members web site and any information contained in
any other web site maintained by the underwriter, dealer, agent
or any selling group member is not part of this prospectus, the
prospectus supplement or supplements or the registration
statement of which this prospectus forms a part, has not been
approved
and/or
endorsed by us or the underwriters, dealers, agents or any
selling group member in its capacity as underwriter, dealer,
agent or selling group member and should not be relied upon by
investors.
18
Legal
matters
In connection with particular offerings of the securities in the
future, and if stated in the applicable prospectus supplements,
the validity of those securities may be passed upon for us by
Willkie Farr & Gallagher LLP, New York, New York and
for any underwriters or agents by counsel named in the
applicable prospectus supplement.
Experts
Ernst & Young LLP, independent registered public
accounting firm, has audited our consolidated financial
statements included in our Annual Report on
Form 10-K
for the year ended December 31, 2006, and managements
assessment of the effectiveness of internal control over
financial reporting as of December 31, 2006, as set forth
in their reports, which are incorporated by reference in this
prospectus and elsewhere in the registration statement. Our
consolidated financial statements and schedule are incorporated
by reference in reliance on Ernst & Young LLPs
reports, given on their authority as experts in accounting and
auditing.
Where you can
find more information
We are required to file annual, quarterly and current reports,
proxy statements and other information with the SEC. You may
read and copy any document that we file with the SEC at the
SECs Public Reference Room at 100 F Street, N.E.,
Washington, D.C. 20549. You may obtain information about
the Public Reference Room by calling the SEC for more
information at
1-800-SEC-0330.
Our SEC filings are also available at the SECs web site at
http://www.sec.gov.
Our common stock is listed on the New York Stock Exchange under
the symbol MLM and we are required to file reports,
proxy statements and other information with the New York Stock
Exchange. You may read any document we file with The New York
Stock Exchange at the offices of the New York Stock Exchange at
20 Broad Street, New York, New York 10005.
Information about us is also available on our website at
http://www.martinmarietta.com. Such information on our website
is not part of this prospectus.
Incorporation by
reference
The rules of the SEC allow us to incorporate by reference
information into this prospectus. The information incorporated
by reference is considered to be a part of this prospectus, and
information that we file later with the SEC will automatically
update and supersede this information.
The following documents filed with the SEC are incorporated by
reference in this prospectus:
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Our Annual Report on
Form 10-K
for the fiscal year ended December 31, 2006; and
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Our Proxy Statement filed on April 18, 2007 for the 2007
Annual Meeting of Shareholders.
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All reports and other documents filed by us pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Securities
Exchange Act of 1934, as amended, subsequent to the date hereof
and prior to the filing of a post-effective amendment which
indicates that all the securities offered hereby have
19
been sold or which deregisters all securities then remaining
unsold, shall be deemed to be incorporated by reference in this
prospectus and to be part of this prospectus from the date of
filing of such reports and documents.
Any statement contained in a document incorporated or deemed to
be incorporated by reference shall be deemed to be modified or
superseded for purposes of this registration statement to the
extent that a statement in this prospectus or in any other
subsequently filed document which is incorporated or deemed to
be incorporated by reference modifies or supersedes such
statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to
constitute a part of this registration statement.
You may request a copy of these filings at no cost, by writing
or telephoning us at the following address:
Martin Marietta Materials, Inc.
2710 Wycliff Road
Raleigh, North Carolina
27607-3033
Attn: Investor Relations
Telephone:
(919) 781-4550
20
$
Martin Marietta Materials,
Inc.
% Senior
Notes due 2018
Prospectus Supplement
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Banc
of America Securities LLC |
JPMorgan |
Wachovia Securities |