Document/Exhibit Description Pages Size
1: 10-K Martin Marietta Corp. 1993 10-K Report 65 186K
2: EX-3.(I) Articles of Incorporation 29 129K
3: EX-3.(II) By-Laws 21 77K
4: EX-10.(III).(B) Post Retirement Income Maintenance Plan 2 16K
5: EX-10.(III).(D) Executive Incentive Plan 8 21K
7: EX-10.(III).(F) Post Retirement Death Benefit Plan 5 20K
8: EX-10.(III).(G) 1979 Stock Option Plan 9 31K
9: EX-10.(III).(H) 1984 Stock Option Plan 11 36K
10: EX-10.(III).(I) Amended Omnibus Securities Award Plan 13 40K
11: EX-10.(III).(O) Directors' Life Insurance Program Plan 1 7K
12: EX-10.(III).(Q) Executive Special Early Retirement 4 15K
13: EX-10.(III).(R) Supplementary Pension Plan -Trans Ge Empl 12 47K
6: EX-10.(III).E Deferred Compensation & Estate Supl. Plan 9 34K
14: EX-11 Statement Re Computation of Per Share Earnings 2 13K
15: EX-12 Statement Re Computation of Ratio 1 8K
18: EX-13 1993 Annual Report 72 288K
16: EX-21 List of Subsidiaries 1 7K
17: EX-24 Powers of Attorney 17 36K
1993
_________________________________________________________________________
_________________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________
Form 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1993 Commission file number 1-11810
[MARTIN MARIETTA LOGO]
MARTIN MARIETTA CORPORATION
(Exact name of registrant as specified in its charter)
_______________
Maryland 52-1801551
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
_______________
6801 Rockledge Drive, Bethesda, Maryland 20817-1877 (301/897-6000)
(Address and telephone number of principal executive offices)
_______________
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of Each Class on which registered
New York Stock Exchange, Inc.
Chicago Stock Exchange, Incorporated
Common Stock, $1 par value Pacific Stock Exchange, Incorporated
Philadelphia Stock Exchange, Inc.
7% Debentures due 2011 New York Stock Exchange, Inc.
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark whether the registrant (1) has filed all reports
required by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months, and (2) has been subject to such filing requirements
for the past 90 days. Yes [x] No [ ]
Indicate by check mark if the disclosure of delinquent files pursuant to
Item 405 or Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K [x]
State the aggregate market value of the voting stock held by non-affiliates
of the registrant. Approximately $4,281,000,000 as of January 31, 1994.
Indicate the number or shares outstanding of each of the registrant's classes
of common stock, as of the latest practicable date. Common Stock, $1 par value,
95,785,244 shares outstanding as of January 31, 1994.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Martin Marietta Corporation 1993 Annual Report to Shareowners
are incorporated by reference in Parts I, II and IV of this Form 10-K.
Portion of the Martin Marietta Corporation 1994 definitive Proxy Statement to
be filed are incorporated by reference in Part III of this Form 10-K.
_________________________________________________________________________
_________________________________________________________________________
TABLE OF CONTENTS
Page
PART I
ITEM 1. BUSINESS . . . . . . . . . . . . . . . . . . . . . . . . . 1
General . . . . . . . . . . . . . . . . . . . . . . . . . 1
Business Segment Information . . . . . . . . . . . . . . . 2
Electronics Group . . . . . . . . . . . . . . . . . . . . 2
Space Group . . . . . . . . . . . . . . . . . . . . . . . 4
Information Group . . . . . . . . . . . . . . . . . . . . 6
Services Group . . . . . . . . . . . . . . . . . . . . . . 7
Materials Group . . . . . . . . . . . . . . . . . . . . . 9
Energy and Other Operations . . . . . . . . . . . . . . . 11
Competition, Contracts and Risk . . . . . . . . . . . . . 13
Backlog . . . . . . . . . . . . . . . . . . . . . . . . . 17
Environmental Regulation . . . . . . . . . . . . . . . . 18
Research and Development . . . . . . . . . . . . . . . . 21
Employees . . . . . . . . . . . . . . . . . . . . . . . . 22
Martin Marietta Technologies, Inc.
- Reporting Status . . . . . . . . . . . . . . . . . . . 23
ITEM 2. PROPERTIES . . . . . . . . . . . . . . . . . . . . . . . . 23
ITEM 3. LEGAL PROCEEDINGS . . . . . . . . . . . . . . . . . . . . 26
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF
SECURITY HOLDERS . . . . . . . . . . . . . . . . . . . . 30
ITEM 4(a). EXECUTIVE OFFICERS OF THE REGISTRANT . . . . . . . . . . . 31
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY
AND RELATED STOCKHOLDER MATTERS . . . . . . . . . . . . 35
ITEM 6. SELECTED FINANCIAL DATA . . . . . . . . . . . . . . . . . 35
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF
OPERATIONS . . . . . . . . . . . . . . . . . . . . . . . 35
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA . . . . . . . 36
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE . . . . . . . . . 36
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PART III
Page
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF
THE REGISTRANT . . . . . . . . . . . . . . . . . . . . . 37
ITEM 11. EXECUTIVE COMPENSATION . . . . . . . . . . . . . . . . . . 37
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT . . . . . . . . . . . . . . . . . . . . . 37
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS . . . . . . 38
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES,
AND REPORTS ON FORM 8-K . . . . . . . . . . . . . . . . 42
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
CONSENT OF ERNST & YOUNG, INDEPENDENT AUDITORS . . . . . . . . . . . . 51
CONSENT OF KPMG PEAT MARWICK, INDEPENDENT AUDITORS . . . . . . . . . . 52
- ii -
PART I
ITEM 1. BUSINESS
General
Martin Marietta Corporation is a diversified enterprise
principally engaged in the conception, design, manufacture and
integration of advanced technology products and services for the
United States Government and private industry. Martin Marietta
Corporation manages significant facilities for the Department of
Energy and also produces construction aggregates and specialty
chemical products.
In April 1993, Martin Marietta Corporation consummated a
transaction in which its businesses and the Aerospace businesses of
the General Electric Company (GE) were combined (Combination). As
a result of the Combination, which was approved by Martin Marietta
Corporation's stockholders on March 25, 1993, the then existing
Martin Marietta Corporation, which was formed in 1961 by the
consolidation of the Glenn L. Martin Company (founded in 1909) and
the American-Marietta Company (founded in 1913), was renamed Martin
Marietta Technologies, Inc. (Technologies). In the Combination,
Technologies became a wholly-owned subsidiary of a new corporation
which assumed the Martin Marietta Corporation name.
Martin Marietta Corporation and Technologies, although
separate Maryland corporations, are operated functionally as an
integrated organization and this Annual Report on Form 10-K treats
them in this fashion. Unless the context otherwise requires,
references to "Martin Marietta" or the "Corporation" refer to
Martin Marietta Corporation, its consolidated subsidiaries
(including Technologies) and certain nonconsolidated associated
companies or joint ventures. See "Martin Marietta Technologies,
Inc. - Reporting Status" on page 23.
Business Segment Information
In 1993, Martin Marietta conducted business in six reportable
industry segments. These segments are: the Electronics Group, the
Space Group, the Information Group, the Services Group, the
Materials Group, and Energy and Other Operations.
Information concerning Martin Marietta's net sales, operating
profit, assets employed, and certain additional information
attributable to each reportable business segment for each year in
the three-year period ended December 31, 1993, is included in the
"Analysis of Financial Condition and Operating Results" on page 56
through page 61 of the Corporation's 1993 Annual Report to
Shareowners (1993 Annual Report) and in "Note R: Industry
Segments" of the "Notes to Financial Statements" on page 54 of the
1993 Annual Report.
Electronics Group
The Electronics Group carries out its operations through the
following organizations: Aero & Naval Systems, Armament Systems,
Defense Systems, Communications Systems, Control Systems,
Electronics & Missiles, Government Electronic Systems, and Ocean,
Radar & Sensor Systems. The Group's activities are diverse, but
- 2 -
primarily relate to the design, development, engineering and
production of electronic systems for precision guidance,
navigation, detection and tracking of threats; missiles and missile
launching systems; armaments; aircraft controls and subsystems
(thrust reversers); and secure communications systems.
The Group is the prime contractor for the United States Navy's
AEGIS fleet air-defense system and produces the AEGIS Weapon System
including the AN/SPY-1 radar. AEGIS was the Group's largest
program in 1993 and is expected to be the largest in 1994.
The Group serves as prime contractor for the development of
the AN/BSY-2 Submarine Combat System for the Navy's new Seawolf
attack submarine. The Group produces the LANTIRN system, an
advanced night vision, navigation and targeting fire control system
for fixed-wing aircraft and the Target Acquisition Designation
Sight/Pilot Night Vision Sensor (TADS/PNVS) for the Army's AH-64
Apache Attack helicopter. The Group also produces the MK 41
Vertical Launching System (VLS) for the Navy's AEGIS-equipped
Ticonderoga-class cruisers and Spruance- and Arleigh Burke-class
destroyers. The VLS is a shipboard multi-missile launching system
for various types of naval missiles.
Sales by the Group represented approximately 41% of the
Corporation's total sales in 1993. Sales to the United States
Government represented approximately 89% of the Group's sales in
1993.
- 3 -
Space Group
The Space Group's operations are carried out through three
organizations: Astronautics, Astro Space and Manned Space Systems.
The Group's activities include the design, development, engineering
and production of spacecraft, space launch vehicles and supporting
ground systems, electronics and instrumentation.
The Group serves as the prime integration, systems production
and launch contractor to the U.S. Air Force for the Titan series of
expendable space launch vehicles. These include the Titan II,
Titan III and Titan IV.
The design, development and fabrication of the Titan IV,
together with the provision of related payload integration and
launch services, was the Group's (and the Corporation's) largest
program in 1993, constituting approximately 45% of the Group's 1993
sales. The first Titan IV equipped with a newly developed Centaur
upper stage was successfully launched in February, 1994. The new
configuration allows the launching of significantly heavier
payloads to geosynchronous orbit. Titan IV is expected to continue
to be the Group's largest program over the next several years.
Affirming its commitment to remain a leading contractor in
the nation's civil and military space launch programs, on
December 22, 1993, the Corporation signed an agreement with General
Dynamics to purchase its Space Systems Division. The primary asset
of the Space Systems Division is business relating to the Atlas
series of space launch vehicles and the Centaur upper stages used
with Atlas and Titan IV launch vehicles. Acquisition of the Atlas
series of launch vehicles will allow the Corporation to enter the
- 4 -
intermediate lift launch market. Consummation of the transaction
is subject to certain regulatory approvals and the satisfaction of
certain other conditions. Assuming satisfaction of these
conditions, the transaction is expected to close during the first
half of 1994. See "Note D: Proposed Transactions" of the "Notes
to Financial Statements" on page 46 of the 1993 Annual Report.
A second focus of the Group is the design, development,
assembly and testing of expendable external fuel tanks for the
National Aeronautics and Space Administration's (NASA) Space
Shuttle program. The external tank program is expected to remain
a significant program in future years.
A third area of operations is the design, development,
production and integration of military, civil and commercial
spacecraft and related subsystems. Spacecraft missions include
communications (e.g., INTELSAT VIII, AsiaSat, Echostar, Inmarsat
and the Defense Satellite Communications System), global
positioning (e.g., GPS Block II), weather monitoring (e.g., the
Television Infrared Observation Satellite program and the Defense
Meteorological Satellite program), environmental/earth observing
(e.g., Global Geospace Science Satellite, EOS AM, and Landsat
satellites), and planetary exploring (e.g., Magellan and Cassini).
Sales by the Group represented approximately 36% of the
Corporation's total sales in 1993. Sales to the United States
Government represented approximately 93% of the Group's sales in
1993.
- 5 -
Information Group
The Information Group consists of four organizations:
Automation Systems, Information Systems, Internal Information
Systems and Management & Data Systems. The Group provides command
and control systems, information processing services, systems
engineering, integration, program management, software development,
computer-based simulations and training products, computer-based
test control, machinery control, and automated logistics systems to
civil, military and commercial customers.
The Group is the prime contractor for the Consolidated
Automated Support System (CASS). CASS is an automated, self
contained diagnostic unit for testing Navy electronic and avionic
systems.
The Group is the integration contractor for the Ballistic
Missile Defense organization National Test Facility (NTF) at Falcon
Air Force Base, Colorado. As part of the ballistic missile defense
initiative, the NTF tests and evaluates simulated strategic defense
concepts, architectures, battle-management plans and technologies
that would not otherwise be feasible to test.
In addition, the Group is providing systems engineering and
integration services to the U.S. Federal Aviation Administration
(FAA). These services assist the FAA in the implementation of the
FAA's Capital Investment Plan, a plan for modernizing the nation's
air traffic control system. Implementation of the FAA's plan
requires upgrading the FAA's computer, weather, navigation and
communication systems.
- 6 -
The Group is in the third year of a 12-year contract with the
U.S. Department of Housing & Urban Development (HUD) to modernize
HUD's data processing systems. In 1993, development of a
communication system linking HUD's new computer center with its
disaster-recovery facility, headquarters and 81 regional and field
offices was completed.
Sales by the Group represented approximately 13% of the
Corporation's total sales in 1993. Sales to the United States
Government represented approximately 90% of the Group's sales in
1993.
Services Group
The Services Group consists of three organizations: Martin
Marietta Services, Inc., Martin Marietta Technical Services, Inc.
and KAPL, Inc. The Group provides management, engineering,
logistics, systems software and processing support, and other
technical services to military, civil government and international
customers as well as to other organizations within the Corporation.
The Department of Defense is the Group's largest customer.
The Group is responsible for the operation of the EPA's
National Computer Center in Raleigh, North Carolina, the Washington
Information Center in Washington, D.C., and the National
Environmental Supercomputer Center in Bay City, Michigan. In
addition, the Group provides information center support and various
consulting and design services to the EPA. Work for the EPA is
expected to remain one of the Group's major sources of revenue in
1994.
- 7 -
The Group provides scientific, engineering, operations and
management services support to NASA's Johnson Space Flight Center
with respect to that organization's efforts in life sciences
experimentation. In this regard, the Group was recently selected
to provide such support on the ten upcoming Russian/American Life
Sciences Missions. The Group provides similar services supporting
NASA missions at Goddard Space Flight Center, AMES Research Center,
and the Dryden Flight Center.
The Group also provides quality control and engineering
services, training, installation and maintenance support of the
U.S. Navy's AEGIS fleet air-defense system for which the
Corporation's Electronics Group is prime contractor.
In addition, the Group presently provides operation and
maintenance support of 17 remote long-range radar sites throughout
the State of Alaska for the U.S. Air Force. The contract's period
of performance expires in September 1994 and currently the Group is
competing for a new five-year contract.
KAPL Inc., a component of the Group, provides high-level
engineering and management support to the Department of Energy's
Knolls Atomic Power Laboratory.
Sales by the Group represented approximately 4% of the
Corporation's total sales in 1993. Sales to the United States
Government represented essentially all of the Group's sales in
1993.
- 8 -
Materials Group
Historically, the Corporation's construction aggregates and
specialty chemical products businesses had been conducted through
Martin Marietta Aggregates and Martin Marietta Magnesia Specialties
Inc. In November 1993, the aggregates business and the Common
Stock of Martin Marietta Magnesia Specialties Inc. were transferred
to a new company, Martin Marietta Materials, Inc. (Materials). On
February 24, 1994, an initial public offering of Material's common
stock was consummated and 8,797,500 shares of common stock
(representing approximately 19% of the shares outstanding) were
sold at an initial offering price of $23.00 per share. The
Corporation continues to own all of the remaining shares and
presently intends to maintain such ownership. Maintenance by the
Corporation of at least an 80% ownership position will enable the
Corporation to continue to include Materials in the Corporation's
consolidated group for federal income tax purposes. See "Note D:
Proposed Transactions" of the "Notes to Financial Statements" on
page 46 of the 1993 Annual Report.
Materials carries on its operations through two divisions,
Aggregates and Magnesia Specialties. The Aggregates division is
the United States' third largest producer of aggregates for the
construction of highways and other infrastructure projects and for
the commercial and residential construction industries. In 1993,
Materials shipped approximately 65 million tons of aggregates to
customers in 24 states, generating sales of $337.5 million. In
1993, approximately 94% of the aggregates shipped by Materials were
crushed stone, primarily granite and limestone, and approximately
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6% were sand and gravel. Materials has focussed on the production
of construction aggregates and has not integrated vertically into
other construction materials businesses.
As a result of dependence upon the construction industry, the
profitability of construction aggregates producers is sensitive to
regional economic conditions, particularly to cyclical swings in
construction spending and changes in the level of infrastructure
spending funded by the public sector. The aggregates business is
also highly seasonal, due primarily to the effect of weather
conditions on construction activity in the markets served.
Materials' aggregates business is concentrated principally in the
Southeast and the Midwest and is, therefore, primarily affected by
the weather and economies in these regions. Management believes
that raw material reserves are sufficient to permit production at
present operational levels for the foreseeable future.
Through its Magnesia Specialties Division, Materials
manufactures and markets magnesia-based products, including
refractory products for the steel industry and chemical products
for industrial and agricultural uses. In 1993, the Magnesia
Specialties Division generated net sales of $115.4 million.
Magnesia Specialties' refractory and dolomitic lime products are
sold primarily to the steel industry, and such sales may be
affected by developments in that industry.
Sales by the Group represented approximately 5% of the
Corporation's total sales in 1993.
- 10 -
Energy and Other Operations
Energy Group - The Energy Group's operations are performed
through three organizations: Martin Marietta Energy Systems, Inc.,
Martin Marietta Utility Services, Inc. and Martin Marietta
Specialty Components, Inc. A primary function performed by Martin
Marietta Energy Systems, Inc. is managing the Department of
Energy's (DOE) facilities at Oak Ridge, Tennessee. The Oak Ridge
facilities include: (i) the K-25 site, which is host to a number
of environmental and other technical programs performed for the DOE
and other federal agencies, (ii) the Oak Ridge Y-12 Plant, a
manufacturing and developmental engineering facility engaged
primarily in programs vital to the national defense, and (iii) the
Oak Ridge National Laboratory, one of the nation's largest
multipurpose research centers. The Oak Ridge National Laboratory's
primary mission is the development of safe, economic and
environmentally acceptable technologies for the efficient
production and use of energy. An additional critical mission is
the transfer of technology to the private sector to enhance
national competitiveness.
In July 1993, the DOE's uranium enrichment operations were
transferred to the United States Enrichment Corporation, a
government corporation. These operations included the DOE's
Paducah and Portsmouth Gaseous Diffusion Plants which produce
enriched uranium for use as a fuel in nuclear power plants. The
Energy Group, which had managed these facilities for the DOE,
continues to perform this management role for the United States
- 11 -
Enrichment Corporation through Martin Marietta Utility Services,
Inc.
Martin Marietta Specialty Components, Inc. manages the
Pinellas electronic components plant in Largo, Florida for the DOE.
The plant manufactures electronic and electromechanical components,
primarily for nuclear weapons.
Recent defense-related budget reductions have decreased
production at some of the Energy Group's facilities and the
Secretary of the DOE recently announced that nuclear weapons
components stockpile production will cease at both the Y-12 and the
Specialty Components plants.
Sandia Corporation - In 1993, the Corporation was selected to
succeed AT&T as the operating contractor for the DOE's Sandia
National Laboratories (Sandia). The Corporation, through Sandia
Corporation (a wholly-owned subsidiary, the common stock of which
was acquired from AT&T), assumed full management and operational
responsibility for Sandia in October 1993. Sandia is a federal
government research and development laboratory with significant
responsibilities for national security programs in defense and
energy. An additional critical mission is the transfer of
technology to the private sector to enhance national
competitiveness.
Martin Marietta Overseas Corporation - Martin Marietta
Overseas Corporation (MMOC), a wholly-owned subsidiary of Martin
Marietta, is generally responsible for contracts, joint ventures,
teaming and other agreements with international customers and
parties. In recent years, the amount of business conducted by the
- 12 -
Corporation internationally (directly and through MMOC) has
increased and international business now constitutes approximately
13% of the Corporation's business. Included in this percentage are
Foreign Military Sales which, because such sales are made through
the U.S. Government, are also taken into account in calculating the
percentage of the Corporation's sales to the U.S. Government.
International business includes the production of commercial
communications satellites for customers such as AsiaSat, Japan
Broadcasting Corporation, Korea Telecom, the 52-nation Inmarsat
Consortium and the 124-nation INTELSAT consortium, and the sale of
airborne, ground and naval surveillance radars, the Patriot Missile
System, the LANTIRN system, and the TADS/PNVS system to various
allied nations.
Additional Activities - For information relating to activities
undertaken by the Corporation included within this reportable
business segment, including information pertaining to activities
not discussed above, see "Note R: Industry Segments" of the "Notes
to Financial Statements" on page 54 of the 1993 Annual Report.
Competition, Contracts and Risk
Martin Marietta competes with numerous other contractors on
the basis of price and technical capability. Its business involves
rapidly advancing technologies and is subject to many uncertainties
including, but not limited to, those resulting from changes in
federal budget priorities, particularly the size and scope of the
defense budget, and dependence on Congressional appropriations.
Within the context of the general market decline and resulting over
- 13 -
capacity and increased competition within the defense and aerospace
industries, management views the operations of the Electronics and
Space Groups as stable areas and is taking steps to maintain sales
levels by these Groups. Management views the operations of the
Information Group, Services Group, Materials Group and Energy Group
as growth areas and is seeking to increase the business of these
Groups particularly to civil, commercial and international
customers. Due to the intense competition for available government
business, the maintenance and/or expansion of government business
increasingly requires the Corporation to invest in its working
capital and fixed asset base. In addition, management continues to
review opportunities to expand the Corporation's existing
businesses and to diversify into closely related businesses through
acquisitions.
Approximately 87% of the 1993 sales of the Corporation were
made to the United States Government, either as a prime contractor
or as a subcontractor, principally to the Department of Defense
(including Foreign Military Sales) and NASA and additionally to the
U.S. Department of Energy, the U.S. Department of Housing & Urban
Development, the U.S. Environmental Protection Agency, and the U.S.
Postal Service. Accordingly, sales and earnings are subject to the
size, schedule and funding of government programs and are subject
to periodic review in light of changes in government policies and
requirements, availability of funds and technical or schedule
progress.
Earnings may vary materially depending upon the types of long-
term government contracts undertaken, the costs incurred in their
- 14 -
performance, the achievement of other performance objectives and
the stage of performance at which the right to receive fees,
particularly under incentive and award fee contracts, is finally
determined.
See "Note A: Accounting Policies" of the "Notes to Financial
Statements" on page 44 and page 45 of the 1993 Annual Report for
information concerning Martin Marietta's accounting policies
governing recognition of revenues and earnings.
All government contracts and, in general, subcontracts
thereunder are subject to termination in whole or in part at the
convenience of the United States Government as well as for default.
Long-term government contracts and related orders are subject to
cancellation if appropriations for subsequent performance periods
become unavailable. Martin Marietta generally would be entitled to
receive payment for work completed and allowable termination or
cancellation costs if any of its government contracts were to be
terminated for convenience. Upon termination for convenience of
cost-reimbursement-type contracts, the contractor is normally
entitled, to the extent of available funding, to reimbursement of
allowable costs plus a portion of the fee related to work
accomplished. Upon termination for convenience of fixed-price-type
contracts, the contractor is normally entitled, to the extent of
available funding, to receive the purchase price for delivered
items, reimbursement for allowable costs for work in process, and
an allowance for profit thereon or adjustment for loss if
completion of performance would have resulted in a loss.
- 15 -
A portion of Martin Marietta's business includes classified
programs. Although these programs are not discussed herein, the
operating results relating to those programs are included in the
Corporation's consolidated financial results. The nature of and
business risks associated with classified programs do not differ
materially from those of the Corporation's other government
programs and products.
An increasing percentage of Martin Marietta's business is
conducted internationally. While this is one of the Corporation's
objectives, international business may involve additional risks,
such as exposure to currency fluctuations, offset obligations and
changes in foreign economic and political environments. In
addition, international transactions frequently involve increased
financial and legal risks arising from stringent contractual terms
and conditions and widely differing legal systems, customs and
mores in various foreign countries.
The Corporation owns numerous patents and patent applications
some of which, together with licenses under patents owned by
others, are utilized in its operations. While such patents and
licenses are, in the aggregate, important to the operation of the
Corporation's business, no existing patent, license or other
similar intellectual property right is of such importance that its
loss or termination would, in the opinion of management, materially
affect the Corporation's business.
Certain risks inherent in the current defense and aerospace
business environment are discussed in "Analysis of Financial
- 16 -
Condition and Operating Results" on page 56 through page 61 of the
1993 Annual Report.
Backlog
Martin Marietta's backlog of orders at December 31, 1993, was
$16.7 billion compared with $8.9 billion at the end of 1992. The
1993 amount includes funded backlog of $9.3 billion compared with
$3.7 billion at the end of 1992. Martin Marietta's backlog and
funded backlog did not include $10.4 billion and $6.3 billion,
respectively, at December 31, 1992, attributable to the former GE
Aerospace businesses that was added on April 2, 1993, as a result
of the Combination. See Parent Corporation's Registration
Statement on Form S-4 (Registration No. 33-58494).
Typically, the United States Government funds its major
programs only to the dollar level appropriated annually by the
Congress despite total estimated program values being significantly
higher. Accordingly, the government funded backlog reflected in
the above amounts represents only the government's present
obligation and represents the amount from which Martin Marietta can
be reimbursed for work performed.
Backlog information and comparisons thereof as of different
dates may not be accurate indicators of future sales or the ratio
of Martin Marietta's future sales to the United States Government
versus its sales to other customers.
Of the Corporation's total 1993 year-end backlog,
approximately $10.4 billion, or 62%, is not expected to be filled
within one year.
- 17 -
Environmental Regulation
Martin Marietta's operations are subject to and affected by a
variety of federal, state, and local environmental protection laws
and regulations, including those regulating air and water quality,
hazardous materials and solid wastes. Management believes that, on
an overall basis, all of the facilities, owned or leased by the
Corporation, are currently operated in substantial compliance with
applicable statutes and regulations. Some of these facilities are
currently subject to remedial actions for removing hazardous
contamination that exists from prior operations. The Corporation
is actively involved in environmental responses at certain of its
facilities and at certain waste disposal sites not currently owned
by the Corporation (third-party sites) where the Corporation, or
its former aluminum subsidiary, or one of the GE Aerospace
businesses acquired in the Combination has been designated a
"Potentially Responsible Party" (PRP) by the U.S. Environmental
Protection Agency (EPA). At such third-party sites, the EPA or a
state agency has identified the site as requiring removal or
remedial action under the federal "Superfund" and other related
federal or state laws governing the remediation of hazardous
materials. Generally, PRPs that are ultimately determined to be
"responsible parties" are strictly liable for site clean-ups and
usually agree among themselves to share, on an allocated basis, in
the costs and expenses for investigation and remediation of the
hazardous materials. Under existing environmental laws, however,
responsible parties are jointly and severally liable and,
therefore, the Corporation is potentially liable for the full cost
- 18 -
of funding such remediation. In the unlikely event that the
Corporation were required to fund the entire cost of such
remediation, the statutory framework provides that the Corporation
may pursue rights of contribution from the other PRPs.
At third-party sites, the Corporation continues to pursue a
course of action designed to minimize and mitigate its potential
liability through assessing the legal basis for its involvement,
including an analysis of such factors as (i) the amount and nature
of materials disposed of by the Corporation, (ii) the allocation
process, if any, used to assign all costs to all involved parties,
and (iii) the scope of the response action that is or may
reasonably be required. The Corporation also continues to pursue
active participation in steering committees, consent orders and
other appropriate and available avenues. Management believes that
this approach should allow the Corporation to establish its minimum
percentage liability on an allocated or shared basis with other
PRPs.
Although the Corporation's involvement and extent of
responsibility varies at each site, management, after an assessment
of each site and consultation with environmental experts and
counsel, has concluded that the probability is remote that the
Corporation's actual or potential liability as a PRP in each or all
of these sites will have a material adverse effect on the
Corporation's financial position or results of operations. While
the possibility of insurance coverage is considered in the
Corporation's efforts to minimize and mitigate its potential
liability, this possibility is not taken into account in
- 19 -
management's assessment of whether it is likely that its actual or
potential liability will have a material adverse effect on the
Corporation's financial position or results of operations.
As part of its established environmental management program,
the Corporation is currently engaged in waste-minimization projects
designed to reduce generation of hazardous waste and to reduce
future costs associated with waste disposal. Capital investments
for environmental control purposes generally afford minimal
financial return and result in increased operating costs. New and
revised requirements are being continually imposed which may
require further investment. Such requirements add to the costs of
operations in the industries in which Martin Marietta does
business, but the amount of such costs cannot reasonably be
estimated.
In addition, Martin Marietta manages various government-owned
facilities on behalf of the government. At such facilities,
environmental compliance and remediation costs have historically
been the responsibility of the government and the Corporation
relied (and continues to rely with respect to past practices) upon
government funding to pay such costs. While the government remains
responsible for capital costs associated with environmental
compliance, responsibility for fines and penalties associated with
environmental noncompliance is being shifted from the government to
the contractor in certain instances with such fines and penalties
no longer constituting allowable costs under the contracts pursuant
to which such facilities are managed.
- 20 -
Management does not believe that adherence to presently
applicable environmental regulations at its own facilities or in
its contract management capacity at government-owned facilities
will have a material adverse effect on Martin Marietta's financial
position or results of operations. For additional details, see
"Legal Proceedings" on page 26 through page 30. See also "Note I:
Contingencies" of the "Notes to Financial Statements" on page 48
and "Analysis of Financial Condition and Operating Results" on
page 56 through page 61 of the 1993 Annual Report.
Research and Development
Martin Marietta conducts significant research and development
activities, both under contract funding and with Independent
Research and Development (IR&D) funds. A large portion of these
activities are carried out at the Corporation's Electronics Group,
Space Group and Information Group facilities. Research and
development projects at these facilities relate to such diverse
areas as sensor technologies, state-of-the-art software, expert
systems and computing technologies, space launch and space platform
technologies, and electronics. In addition, the Corporation's
Advanced Development & Technology Operations (ADTO), headquartered
in San Diego, California, is chartered to identify, develop and
demonstrate advanced technological concepts having broad
applications in space, defense, information and communications
systems, and commercial fields. An element of ADTO is Martin
Marietta Laboratories, a research and development facility near
Baltimore, Maryland. Martin Marietta Laboratories conduct basic
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scientific and engineering research projects in fields such as
advanced materials, photonics, micro-electronics and information
processing.
In addition, as a result of the Combination, the Corporation
now has an Electronics Laboratory in Syracuse, New York, which
conducts advanced research in solid-state microwave and millimeter-
wave technology, infrared sensor focal plane electronics and
specialized integrated microelectronic modules for radar, space,
communications and infrared sensor systems. The Combination also
brought to the Corporation the Advanced Technology Laboratory in
Moorestown, New Jersey, which conducts research and development in
advanced computing technologies. Finally, as a result of the
Combination, the Corporation is afforded access to the General
Electric Company's Corporate Research and Development Laboratories.
See "Note P: Research and Development Expenses" of the "Notes
to Financial Statements" on page 51 of the 1993 Annual Report.
Employees
As of January 31, 1994, Martin Marietta had approximately
92,000 employees, including approximately 22,000 persons employed
by the Energy Group, 9,000 persons employed by Sandia Corporation
and 3,000 employed by KAPL, Inc. Approximately 17,000 of Martin
Marietta's employees are covered by 68 separate collective
bargaining agreements with various international and local unions.
Of these agreements, 40, covering approximately 6,000 employees,
will expire during 1994. Management considers employee relations
generally to be good and believes that the probability is remote
- 22 -
that renegotiating these contracts will have a material adverse
effect on its business.
Martin Marietta Technologies, Inc. - Reporting Status
Martin Marietta Corporation and Martin Marietta Technologies,
Inc. each have securities registered pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934 (1934 Act). The staff
of the Securities and Exchange Commission (SEC) has taken the
position that the companies need not file separate 1934 Act reports
if those reports filed by Martin Marietta Corporation are expanded
so as to include additional information concerning Martin Marietta
Technologies, Inc. Such additional information is included in this
Annual Report on Form 10-K and in "Note J: Martin Marietta
Technologies, Inc." of the "Notes to Financial Statements" on
page 48 of the 1993 Annual Report. In addition, certain documents
required to be filed as Exhibits to this Form 10-K or incorporated
by reference to previous filings with the SEC are incorporated
herein by reference to previous SEC filings by Technologies. At
the time of such filings, Technologies was known as Martin Marietta
Corporation and filed under Commission File Number 1-4552. See
"Note B: Business Combination with GE Aerospace" of the "Notes to
Financial Statements" on page 45 and page 46 of the 1993 Annual
Report.
ITEM 2. PROPERTIES
At December 31, 1993, excluding Martin Marietta Materials,
Inc., the Corporation operated in approximately 186 offices,
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facilities, plants and laboratories located throughout the United
States and internationally. Of these, Martin Marietta owned
approximately 18 locations, aggregating approximately 19 million
square feet, in fee simple and leased approximately 168 locations
aggregating just over 9 million square feet. In addition, Martin
Marietta manages various government-owned facilities, including the
NASA Michoud Assembly Facility at New Orleans, Louisiana, the
Department of Energy facilities at Oak Ridge, Tennessee, and Largo,
Florida, the United States Enrichment Corporation's facilities at
Paducah, Kentucky, and Piketon, Ohio, the Sandia National
Laboratories at Albuquerque, New Mexico and Livermore, California,
the Knolls Atomic Power Laboratory at Niskayuna, New York, and an
Army ordnance plant at Milan, Tennessee. Martin Marietta
personnel also occupy government-owned facilities at Cape Canaveral
Air Force Station and Kennedy Space Center in Florida, at Marshall
Space Flight Center in Alabama, at Vandenberg Air Force Base in
California and at Jericho, Vermont; Johnson City, New York; and
Pittsfield, Massachusetts. The United States Government also
furnishes certain equipment and property used by Martin Marietta.
Martin Marietta owns its headquarters office building located
in Bethesda, Maryland in fee simple. In addition, the Corporation
owns 200 acres of land and approximately 2.1 million square feet of
buildings at Middle River, Maryland, near Baltimore; a 1.8 million
square foot office building and manufacturing park located in
Syracuse, New York; approximately 3,200,000; 3,200,000; 675,000;
500,000 and 1,200,000 square feet of office and manufacturing
facilities located in Orlando, Florida; Waterton, Colorado; East
- 24 -
Windsor, New Jersey; Utica, New York; and King of Prussia,
Pennsylvania, respectively; approximately 1,500,000 square feet of
office space in Littleton, Colorado; and approximately 700 acres of
land which could be developed in Orlando, Florida. The Syracuse
and Utica, New York facilities are occupied by the Electronics
Group while the Waterton, Colorado; East Windsor, New Jersey; and
King of Prussia, Pennsylvania facilities are occupied by the Space
Group.
In 1993, the Corporation announced a facilities consolidation
plan which is expected to reduce operating costs by $1.5 billion
over the next five years. Under this plan, approximately five
million square feet of capacity will be eliminated from the
Corporation's facilities in various locations. For additional
details, see "Analysis of Financial Condition and Operating
Results" on page 56 through page 61 of the 1993 Annual Report.
In 1993, Martin Marietta Materials, Inc. (Materials) shipped
aggregates from 140 quarries in 11 Southeastern and Midwestern
states; mining operations were conducted at 133 of these quarries,
of which 29 are located on land owned by Materials, 45 are on land
owned in part and leased in part, 54 are on leased land, and 5 are
on facilities leased on a temporary basis. Materials owns real
property with a total area of approximately 38,000 acres and leases
real property with a total area of approximately 46,000 acres.
Materials conducts its specialty chemical products operations at
facilities in Woodville, Ohio and Manistee, Michigan and at smaller
plants in Bridgeport, Connecticut and River Rouge, Michigan.
- 25 -
Management believes that all of Martin Marietta's major
physical facilities are in good condition and are adequate for
their intended use.
ITEM 3. LEGAL PROCEEDINGS
Martin Marietta is primarily engaged in providing products and
services under contracts with the United States Government and, to
a lesser degree, under foreign government contracts, some of which
are funded by the United States Government. All such contracts are
subject to extensive legal and regulatory requirements and, from
time to time, agencies of the United States Government investigate
whether Martin Marietta's operations are being conducted in
accordance with these requirements. Such investigations could
result in administrative, civil or criminal liabilities including
reimbursements, fines or penalties being imposed upon Martin
Marietta or could lead to suspension or debarment from future
government contracting by Martin Marietta. Neither management nor
counsel is aware of any such investigation presently ongoing which
is likely to result in the suspension or debarment of the
Corporation or which is likely to result in the imposition of
reimbursements, fines or penalties which would have a material
adverse effect on the Corporation's financial position. Martin
Marietta is also involved in various other legal and environmental
proceedings.
Martin Marietta Energy Systems, Inc. (MMES), a wholly-owned
subsidiary of Technologies, manages certain facilities on behalf of
the Department of Energy (DOE) under contracts with the DOE. MMES
- 26 -
is involved in proceedings arising out of work performed under
these contracts including the following:
- On June 7, 1990, Boggs, et al. v. Divested Atomic Corporation,
et al., was filed against various defendants including MMES.
Plaintiffs' request for class certification was granted and
the case is pending in the United States District Court for
the Eastern District of Ohio. Plaintiffs seek monetary
damages of $600 million based upon allegations that the
defendants discharged hazardous substances into the
environment. In the event that any damages are awarded in
these proceedings, such damages will be allowable costs under
the contracts between MMES and the DOE.
- On May 28, 1992, the Arkansas State Attorney General filed a
civil suit against MMES and the DOE relating to the shipment
of hazardous waste (which may have contained trace amounts of
radioactivity) from facilities managed for the DOE by MMES
into the State of Arkansas. The suit, which is in the United
States District Court for the Eastern District of Arkansas,
Western Division, seeks civil penalties to be set by the Court
plus an award to the State of Arkansas for the costs of its
investigation plus reasonable attorney's fees and costs. In
the event that any damages are awarded in these proceedings,
such damages will be allowable costs under the contracts
between MMES and the DOE.
- On December 28, 1993, MMES received a subpoena issued by a
Federal Grand Jury in the Eastern District of Virginia
requiring the production of documents relating to subcontracts
- 27 -
with two of MMES' suppliers. MMES has produced the documents
required. The prosecutor has informed MMES that MMES is not,
at this time, the target of the investigation.
On August 5, 1991, Technologies (then known as Martin Marietta
Corporation) was served with two subpoenas by the Department of
Defense Inspector General relating to documents pertaining to a
contract with the Navy for the full-scale development of the
Supersonic Low Altitude Target (SLAT) and documents associated with
six Independent Research and Development (IR&D) tasks, collectively
known as Navy Missile Systems. Technologies has complied with
these subpoenas. In addition, the Civil Division of the Justice
Department is conducting a civil fraud investigation dealing with
the same or similar allegations and has issued Civil Investigative
Demands for the testimony of several current and former employees.
The Inspector General of the Department of Defense has been
investigating alleged defective pricing and labor mischarging in
the Pershing II program since at least January 1987, when
Technologies (then known as Martin Marietta Corporation) was served
with an Inspector General's subpoena. Subsequently, Technologies
was served with additional Inspector General's subpoenas seeking
records relating to the Pershing II program. In addition, current
and former employees were subpoenaed to appear and have testified
before a Federal Grand Jury in Orlando, Florida. In January 1994,
the Corporation was informed that criminal prosecution had been
declined but that the Civil Division of the Justice Department
intends to pursue the matter.
- 28 -
On January 6, 1994, the Corporation's Ordnance Systems
facility at Milan, Tennessee, received a Federal Grand Jury
subpoena issued in the Western District of Tennessee. The subpoena
requested the production of certain purchase order files. On
January 20, 1994, the Corporation received a second subpoena in
this matter. The Corporation has complied with the initial
subpoena and is in the process of responding to the second. The
Corporation has not been identified as a target of the
investigation and has not been informed of its purpose.
On January 20, 1994, the Corporation received two subpoenas
issued by the Defense Investigative Service relating to the LANTIRN
program. One of the subpoenas requests documents relating to
repairs to the navigation and targeting pods and relates to the
charging of repair work under the warranty provisions of the
LANTIRN contract. The other pertains to purchases from a
subcontractor and relates to the disclosure of pricing data
concerning these purchases. The Corporation is in the process of
responding. The Corporation has been identified as a potential
target in each of the investigations.
As a result of the Combination, subject to certain limitations
and subject to certain limited rights to indemnification all as
discussed in Parent Corporation's Registration Statement on
Form S-4 (Registration No. 33-58494), Martin Marietta assumed
liabilities relating to or arising out of legal and environmental
proceedings pertaining to the GE Aerospace businesses transferred
to Martin Marietta.
- 29 -
In April 1992, GE voluntarily disclosed to the U.S. Department
of Defense a matter involving allegations concerning payments,
certifications, and acquisition of competitive information and
related claims in connection with contracts with the Arab Republic
of Egypt for the sale of radar units by one of the GE Aerospace
businesses which is now part of Martin Marietta. Martin Marietta
is cooperating, as did GE, with an ongoing Department of Defense
investigation of this matter.
Martin Marietta is involved in various other legal and
environmental litigation and proceedings arising in the ordinary
course of its business. In the opinion of management (which
opinion is based in part upon consideration of the opinion of
counsel) and in the opinion of counsel, the probability is remote
that the outcome of any litigation or proceedings, whether or not
specifically described above or otherwise referred to herein, will
have a material adverse effect on the results of Martin Marietta's
operations or its financial position.
See also "Note I: Contingencies" of the "Notes to Financial
Statements" on page 48 of the 1993 Annual Report and "Analysis of
Financial Condition and Operating Results" on page 56 through
page 61 of the 1993 Annual Report.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders during
the fourth quarter of 1993.
- 30 -
ITEM 4(a). EXECUTIVE OFFICERS OF THE REGISTRANT
The corporate officers of Martin Marietta Corporation are
listed below. The Corporation's Board of Directors has determined
that, as of February 24, 1994, the individuals whose names are
followed by an * are executive officers of Martin Marietta for the
purposes of Item 401(b) of Regulation S-K and officers for the
purposes of Rule 16a-1(f) under Section 16 of the Securities
Exchange Act of 1934. There are no family relationships among any
of the executive officers and directors of the Corporation. All
officers serve at the pleasure of the Board of Directors.
Principal
Positions and Occupation and
Offices Held Business
Name with Corporation** Experience**
(Age at 3/30/94) (Year Elected) (Past Five Years)
Norman R. Augustine*(58) Chairman of the Board
(1988), Chief
Executive Officer
(1987) and Director
(1986)
A. Thomas Young*(55) President and Chief Executive Vice
Operating Officer President, 1989
(1990) and Director
(1989)
Richard G. Adamson*(61) Corporate Vice Corporate Vice
President, Strategic President, Business
Development (1993) Development, 1988-1993
Joseph D. Antinucci*(53) Corporate Vice President, Martin
President (1993) and Marietta Aero & Naval
President, Electronics Systems, 1984-1993
and Missiles (1993)
Marcus C. Bennett*(58) Corporate Vice
President (1984),
Chief Financial
Officer (1988), and
Director (1993)
- 31 -
Peter A. Bracken*(52) Corporate Vice President, Martin
President (1992) and Marietta Electronics,
President, Information Information & Missiles,
Group (1993) 1992-1993; Vice
President, Technical
Operations for
Information Systems,
1986-1992
Michael F. Camardo*(52) Corporate Vice President, GE
President (1993) and Government Services,
President, Services Inc., 1990-1993;
Group (1993) President, GE
Government Services,
1988-1990
Thomas A. Corcoran*(49) Corporate Vice Vice President and
President (1993) and General Manager,
President, Electronics General Electric
Group (1993) Company, 1990-1993;
General Manager, GE
Government
Communications, 1988-
1990
James B. Feller (56) Vice President, GE Aerospace,
Research and Engineering and
Development (1993) Research, 1989-1993
Clyde C. Hopkins*(64) Corporate Vice President, Martin
President (1991) and Marietta Energy
President, Energy Systems, Inc. since
Group (1993) 1988
Alexander L. Horvath*(52) Corporate Vice President, Martin
President (1993) Marietta Ocean, Radar
& Sensor Systems since
April 1993; Vice
President and General
Manager, GE Ocean,
Radar & Sensor Systems,
1992-1993; General
Manager, GE, 1989-1992
Bobby F. Leonard*(61) Corporate Vice
President, Human
Resources (1981)
William B. Lytton (45) Corporate Vice General Counsel, GE
President (1993) and Aerospace, 1989;
Associate General Partner, Kohn, Savett,
Counsel, Operations Klein & Graf, 1983-1989
and International
(1993)
- 32 -
James W. McAnally*(57) President, Martin President, Martin
Marietta Astronautics Marietta Defense
(1993) Systems &
Communications, 1987-
1993
Janet L. McGregor*(40) Treasurer (1992) Deputy Treasurer, 1991-
1992; Assistant
Treasurer, 1984-1991
Frank H. Menaker, Jr.* Corporate Vice
(53) President (1982) and
General Counsel (1981)
Dan A. Peterson*(63) Corporate Vice President, Information
President (1986), and Systems, 1986-1989
Vice President,
Washington Operations
(1989)
Robert J. Polutchko*(56) Corporate Vice Vice President,
President (1991) and Technical Operations,
Vice President, Space 1991-1993; President,
Group Technical Information Systems
Operations (1993) Group, 1989-1991;
President, Martin
Marietta Communications
Systems, 1988-1989
Michael A. Smith*(50) Corporate Vice President, Martin
President (1993) Marietta Astro Space
since April 1993; Vice
President and General
Manager of General
Electric Company, 1989-
1993
Peter B. Teets*(52) Corporate Vice
President (1985) and
President, Space Group
(1993)
Robert H. Tieken (54) Corporate Vice Vice President, Finance
President (1993), and of GE Aerospace, 1988-
Vice President, 1993
Finance (1993)
Lillian M. Trippett (40) Corporate Secretary Counsel to the
1993 and Assistant Subcommittee on Space,
General Counsel (1993) Committee on Science,
Space and Technology,
U.S. House of
Representatives, 1986-
1989; Director
Washington, Operations,
1989-1993
- 33 -
Stephen P. Zelnak, Jr.* Corporate Vice
(49) President (1989) and
President, Materials
Group (1993)***
** In April 1993, as a result of the Combination, all of the
Executive Officers of Technologies (then known as Martin Marietta
Corporation) assumed the same offices with the new Martin Marietta
Corporation. The above listing does not distinguish between their
service with the two corporations.
*** In November 1993, the Corporation's aggregates business and
the Common Stock of Martin Marietta Magnesia Specialties Inc. were
transferred to a subsidiary, Martin Marietta Materials, Inc. On
February 24, 1994, approximately 19% of the common stock of Martin
Marietta Materials, Inc. was sold to the public. See "Materials
Group" on page 9. Mr. Zelnak is the President, Chief Executive
Officer and a Director of Martin Marietta Materials, Inc.
Effective upon the completion of the offering, Mr. Zelnak resigned
his position as a corporate officer of Martin Marietta Corporation.
- 34 -
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
There were approximately 32,644 holders of record of Martin
Marietta Corporation Common Stock, $1 par value, as of January 31,
1994. The exchanges on which the Corporation's Common Stock is
traded are listed on the cover of this Form 10-K. Information
concerning stock prices and dividends paid during the past two
years is included with "Quarterly Performance, (Unaudited)" under
the caption "Common Dividends Paid and Stock Prices" on page 62 of
the 1993 Annual Report, and that information is hereby incorporated
by reference in this Form 10-K.
ITEM 6. SELECTED FINANCIAL DATA
The information required by this Item 6 is included under the
caption "Five Year Summary" on page 63 of the 1993 Annual Report,
and that information is hereby incorporated by reference in this
Form 10-K.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The information required by this Item 7 is included under the
caption "Analysis of Financial Condition and Operating Results" on
page 56 through page 61 of the 1993 Annual Report, and that
information is hereby incorporated by reference in this Form 10-K.
- 35 -
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The information required by this Item 8 is included under the
captions "Statement of Earnings," "Balance Sheet," "Statement of
Cash Flows," "Statement of Shareowners' Equity," "Notes to
Financial Statements," "Analysis of Financial Condition and
Operating Results," and "Quarterly Performance (Unaudited)" on
pages 40, 41, 42, 43, 44-54, 56-61 and 62, respectively, of the
1993 Annual Report. This information is hereby incorporated by
reference in this Form 10-K.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
Not applicable.
- 36 -
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information concerning directors required by this Item 10,
is included under the caption "Election of Directors" in the
Corporation's definitive Proxy Statement to be filed pursuant to
Regulation 14A no later than March 28, 1994 (1994 Proxy Statement),
and that information is hereby incorporated by reference in this
Form 10-K. Information concerning executive officers required by
this Item 10 is located under Part I, Item 4(a) of this Form 10-K
on page 31 through page 34.
ITEM 11. EXECUTIVE COMPENSATION
The information required by this Item 11 is included in the
text and tables under the caption "Compensation of Executive
Officers" in the 1994 Proxy Statement and that information, except
for the information required by Item 402(k) and Item 402(l) of
Regulation S-K, is hereby incorporated by reference in this
Form 10-K.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The information required by this Item 12 is included under the
captions "Securities Owned by Management" and "Voting Securities
and Record Date" in the 1994 Proxy Statement and that information
is hereby incorporated by reference in this Form 10-K.
- 37 -
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Pursuant to the terms of the Standstill Agreement entered into
by the Corporation and GE as part of the Combination, GE is
entitled to representation upon Martin Marietta's Board of
Directors. See "General" page 1 through page 2. Messrs. Edward E.
Hood, Jr., retired Vice Chairman and a former director of GE, and
Eugene F. Murphy, President and Chief Executive Officer of GE
Aircraft Engines, currently serve as GE's representatives on Martin
Marietta's Board of Directors. The Standstill Agreement resulted
from arm's-length negotiations between the Corporation and GE.
A portion of the consideration received by GE in the
Combination consisted of 20 million shares of Martin Marietta's
Series A Preferred Stock, par value $1.00 per share, which is
convertible into Martin Marietta Common Stock and which, if
converted, would represent approximately 23% of the shares of
Common Stock outstanding after giving effect to such conversion.
Further, there are existing business relationships between the
Corporation and GE. These relationships are the product of arm's-
length negotiations between the corporations.
During part of 1993, John J. Byrne, a director of Martin
Marietta since 1978, also served on the Board of Directors of
Lehman Brothers Inc. The Corporation retained Lehman Brothers Inc.
to render financial services to the Corporation in connection with
the Combination for which Lehman Brothers Inc. was paid an advisory
fee. Lehman Brothers Inc. rendered a fairness opinion to the
Corporation in connection with the Corporation's proposed
acquisition of General Dynamics Corporation's Space Systems
- 38 -
Division for which Lehman Brothers Inc. received a fee. Finally,
Lehman Brothers Inc. served as one of the underwriters of an
initial public offering of approximately 19% of the common stock of
Martin Marietta Materials, Inc. for which Lehman Brothers Inc.
received underwriting fees. In addition, Mr. Byrne is the Chief
Executive Officer of Fund American Enterprises, Inc. (Fund
American). Hanover Advisors, Inc., formerly a wholly-owned
subsidiary of Fund American, serves as an investment manager for
the Corporation's Master Retirement Trust. Pursuant to the
arrangement, Hanover Advisors receives management fees from the
Corporation which aggregated approximately $342,000 in 1993. These
engagements resulted from arm's-length negotiations in which Mr.
Byrne played no part.
Messrs. Richard G. Adamson, Marcus C. Bennett, Bobby F.
Leonard and Frank H. Menaker, Jr., each of whom is an Executive
Officer of Martin Marietta, serve as Directors (Mr. Bennett as
Chairman) of Martin Marietta Materials, Inc. See "Materials Group"
on Page 9. A summary description of the relationship between
Martin Marietta and Martin Marietta Materials, Inc. is included
under the caption "Relationship with Martin Marietta" in the Martin
Marietta Materials, Inc. Registration Statement on Form S-1
(Registration Statement No. 33-72648) and such information is
incorporated herein by reference.
Messrs. Norman R. Augustine, Marcus C. Bennett, Peter B. Teets
and A. Thomas Young, each of whom is an Executive Officer of Martin
Marietta, borrowed $232,363, $68,447, $86,535 and $104,563,
respectively, from the Corporation in 1993. The loans were used to
- 39 -
satisfy personal income tax obligations associated with the vesting
of restricted stock previously granted to these individuals by the
Corporation. The plan under which such restricted stock was
granted envisions that recipients may satisfy such tax obligations
by instructing the Corporation to withhold the appropriate number
of shares from the certificate delivered to the recipient when the
restricted stock vests. In this instance, as a result of possible
restrictions on sales by the Corporation's Executive Officers
imposed by Section 16 of the Securities Exchange Act of 1934 and
resulting from the Combination, counsel for the Corporation
recommended that its Executive Officers not utilize this tax
withholding feature. As the restrictions on sale resulted from the
Corporation's actions in effecting the Combination which was in the
best interest of the Corporation, the Corporation offered short-
term loans to such persons to enable them to satisfy their income
tax obligations. The loans and their terms were approved by
disinterested members of the Corporation's Board of Directors. No
interest was paid on the loans. All of the loans had been repaid
in full by January 31, 1994. See the caption "Compensation of
Executive Officers" in the 1994 Proxy Statement.
Mr. Alexander, a director of the Corporation, is counsel to
Baker, Worthington, Crossley, Stansbury & Woolf, a law firm that
provides legal services to the Corporation from time to time. Mr.
Colodny, a director of the Corporation, is Of Counsel to Paul,
Hastings, Janofsky & Walker, a law firm that provides legal
services to the Corporation from time to time.
- 40 -
Allen E. Murray, a director of Martin Marietta since 1991,
also served on the Board of Directors of Morgan Stanley Group Inc.
Morgan Stanley International served as one of the underwriters of
an initial public offering of approximately 19% of the common stock
of Martin Marietta Materials, Inc. for which Morgan Stanley Group
Inc. received underwriting fees. This engagement resulted from
arm's-length negotiations in which Mr. Murray played no part.
- 41 -
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON
FORM 8-K
(a)(1) List of Financial Statements filed as part of the
Form 10-K.
The following financial statements of Martin Marietta
Corporation and consolidated subsidiaries, included in the
1993 Annual Report, are incorporated by reference into Item 8
on page 36 of this Annual Report on Form 10-K. Page numbers
refer to the 1993 Annual Report:
Page
Balance Sheet--
December 31, 1993 and 1992 41
Statement of Earnings--
Years ended December 31, 1993, 1992 and 1991 40
Statement of Shareowners' Equity--
Years ended December 31, 1993, 1992 and 1991 43
Statement of Cash Flows--
Years ended December 31, 1993, 1992 and 1991 42
Notes to Financial Statements--
Years ended December 31, 1993, 1992 and 1991 44-54
(2) List of Financial Statement Schedules filed as part
of this Form 10-K.
The following financial statement schedules of Martin Marietta
Corporation and consolidated subsidiaries are included in
Item 14(d). Page numbers refer to this Form 10-K:
Schedule II - Amounts receivable from related
parties and underwriters, promoters and employees
other than related parties 53
Schedule V - Property, plant and equipment 54-55
- 42 -
Page
Schedule VI - Accumulated depreciation,
depletion and amortization of property,
plant and equipment 56
Schedule IX - Short-term borrowings 57
Schedule X - Supplementary income
statement information 58
All other schedules have been omitted because
they are not applicable, not required, or the
information has been otherwise supplied in the
financial statements or notes to the
financial statements.
The report of Martin Marietta's independent
auditors with respect to the above-referenced
financial statements appears on page 55 of the
1993 Annual Report and that report is hereby
incorporated by reference in this Form 10-K.
The report on the financial statement schedules
and the consent of Martin Marietta's independent
auditors appear on page 51.
The report of the former GE Aerospace businesses'
independent auditors with respect to the GE Aerospace
businesses' financial statements as of December 31, 1992
and 1991, and for each of the years in the two year
period ended December 31, 1992, included in Parent
Corporation's Registration Statement on Form S-4
(Registration No. 33-58494), which report is hereby
incorporated by reference in this Form 10-K. The consent
of the former GE Aerospace businesses' independent
auditors appears on page 52.
(b) No reports on Form 8-K have been filed during the last
quarter of the period covered by this report.
(c) Exhibits
(3)(i) Articles of Incorporation.
(a) Articles of Restatement of Martin
Marietta Corporation (formerly Parent
Corporation) filed with the State
Department of Assessments and Taxation of
the State of Maryland on June 30, 1993.
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(ii) Bylaws
(a) Copy of the Bylaws of Parent Corporation
(now Martin Marietta Corporation) as
amended on January 13, 1993, effective
April 2, 1993.
(4) (a) Indenture dated April 22, 1993, between
the Corporation, Technologies, and
Continental Bank, National Association as
Trustee (incorporated by reference to
Exhibit 4 of the Corporation's filing on
Form 8-K on April 15, 1993).
No other instruments defining the rights
of holders of long-term debt are filed
since the total amount of securities
authorized under any such instrument does
not exceed 10% of the total assets of the
Corporation on a consolidated basis. The
Corporation agrees to furnish a copy of
such instruments to the Securities and
Exchange Commission upon request.
(10)(iii) (a) Directors Deferred Compensation Plan, as
amended (incorporated by reference to
Exhibit 10(iii)(a) to Technologies' Form
10-K for the fiscal year ended
December 31, 1988).
(b) Post-Retirement Income Maintenance Plan
for Directors, as amended.
(c) Financial Counseling Program for
directors, officers, company presidents,
and other key employees as amended
(incorporated by reference to Exhibit
10(iii)(c) to Technologies' Form 10-K for
the fiscal year ended December 31, 1989).
(d) Executive Incentive Plan, as amended.
(e) Deferred Compensation and Estate
Supplement Plan, as amended.
(f) Post-Retirement Death Benefit Plan for
Senior Executives, as amended
(incorporated by reference to Exhibit
(10)(iii)(f) to Technologies' Form 10-K
for the fiscal year ended December 31,
1987).
(g) 1979 Stock Option Plan for Key Employees,
as amended.
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(h) 1984 Stock Option Plan for Key Employees,
as amended.
(i) Martin Marietta Amended Omnibus
Securities Award Plan, as amended
March 25, 1993.
(j) Format of the agreements between
Technologies and its officers to provide
for continuity of management in the event
of a change in control of Technologies
(incorporated by reference to Exhibit
(10)(iii) to Technologies' Form 10-K for
the fiscal year ended December 31, 1987).
(k) Supplemental Excess Retirement Plan, as
amended (incorporated by reference to
Exhibit (10)(iii)(k) to Technologies'
Form 10-K for the fiscal year ended
December 31, 1990).
(l) Restricted Stock Award Plan (incorporated
by reference to Exhibit 10 to
Technologies' Form 10-Q for the quarter
ended June 30, 1989).
(m) Long Term Performance Incentive
Compensation Plan (incorporated by
reference to Exhibit (10)(iii)(m) to
Technologies' Form 10-K for the fiscal
year ended December 31, 1990).
(n) Amended and Restated Martin Marietta
Corporation Long Term Performance
Incentive Compensation Plan (incorporated
by reference to Exhibit 10(iii)(o) of
Technologies' Form 10-K for the fiscal
year ended December 31, 1992).
(o) Directors' Life Insurance Program.
(p) (1) Transaction Agreement dated November
22, 1992, among General Electric
Company, Technologies and the
Corporation (incorporated by
reference from Parent Corporation's
Registration Statement on Form S-4
(Registration No. 33-58494) filed
with the SEC on February 18, 1993).
(2) Form of Amendment Agreement, dated
as of February 17, 1993, among
General Electric Company,
Technologies and the Corporation
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(incorporated by reference from
Parent Corporation's Registration
Statement on Form S-4 (Registration
No. 33-58494) filed with the SEC on
February 18, 1993).
(3) Form of Amendment Agreement, dated
as of March 28, 1993, among General
Electric Company, Technologies and
the Corporation (incorporated by
reference from Parent Corporation's
Registration Statement on Form S-4
(Registration No. 33-58494) filed
with the SEC on February 18, 1993).
.
(q) Martin Marietta Executive Special Early
Retirement Option and Plant Closing
Retirement Option Plan.
(r) Martin Marietta Supplementary Pension
Plan for Employees of Transferred GE
Operations.
(11) Computation of net earnings per common
share for the years ended December 31,
1993, 1992 and 1991.
(12) Computation of ratio of earnings to fixed
charges for the year ended December 31,
1993.
(13) Martin Marietta Corporation 1993 Annual
Report to Shareowners, portions of which
are incorporated by reference in this
Form 10-K. Those portions of the 1993
Annual Report to Shareowners which are
not incorporated by reference shall not
be deemed to be "filed" as part of this
report.
(21) List of Subsidiaries of Martin Marietta
Corporation.
(23) (a) Consent of Ernst & Young, Independent
Auditors for Martin Marietta Corporation
(included in this Form 10-K at page 51).
(b) Consent of KPMG Peat Marwick, Independent
Auditors for the former GE Aerospace
businesses (included in this Form 10-K at
page 52).
(24) Powers of Attorney.
- 46 -
(27) The Financial Statement Schedules appear
on page 53 through page 58 of this
Form 10-K.
(99) Other Exhibits
(a) Assumption Agreement among Martin
Marietta Materials, Inc. and
Technologies dated as of
November 12, 1993 (incorporated by
reference to Exhibit 10.01 to Martin
Marietta Materials, Inc.'s
Registration Statement on Form S-1
(Reg. No. 33-72648). Exhibit filed
with the SEC on December 8, 1993).
(b) Transfer and Capitalization
Agreement dated as of November 12,
1993, among Technologies, Martin
Marietta Investments, Inc., and
Martin Marietta Materials, Inc.
(incorporated by reference to
Exhibit 10.02 to Martin Marietta
Materials, Inc.'s Registration
Statement on Form S-1 (Reg.
No. 33-72648). Exhibit filed with
the SEC on December 8, 1993).
(c) Form of Intercompany Services
Agreement between Martin Marietta
Materials, Inc. and the Corporation
(incorporated by reference to
Exhibit 10.03 to Martin Marietta
Materials, Inc.'s Registration
Statement on Form S-1 (Reg. No. 33-
72648). Exhibit filed with the SEC
on February 2, 1994).
(d) Form of Tax-Sharing Agreement
between Martin Marietta Materials,
Inc. and the Corporation
(incorporated by reference to
Exhibit 10.04 to Martin Marietta
Materials, Inc.'s Registration
Statement on Form S-1 (Reg. No. 33-
72648). Exhibit filed with the SEC
on February 2, 1994).
- 47 -
(e) Form of Corporate Agreement between
Martin Marietta Materials, Inc. and
the Corporation (incorporated by
reference to Exhibit 10.05 to Martin
Marietta Materials, Inc.'s
Registration Statement on Form S-1
(Reg. No. 33-72648). Exhibit filed
with the SEC on February 2, 1994).
(f) Form of Cash Management Agreement
between Martin Marietta Materials,
Inc. and Technologies (incorporated
by reference to Exhibit 10.08 to
Martin Marietta Materials, Inc.'s
Registration Statement on Form S-1
(Reg. No. 33-72648). Exhibit filed
with the SEC on February 2, 1994).
Other material incorporated by reference:
Martin Marietta Corporation's definitive Proxy
Statement to be filed pursuant to Regulation 14A no
later than March 28, 1994, portions of which are
incorporated by reference in this Form 10-K. Those
portions of the definitive Proxy Statement which
are not incorporated by reference shall not be
deemed to be "filed" as part of this report.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
MARTIN MARIETTA CORPORATION
Date: February 25, 1994 By: /s/ FRANK H. MENAKER, JR.
Frank H. Menaker, Jr.
Vice President and
General Counsel
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on
behalf of the registrant and in the capacities and on the date
indicated.
Signature Title Date
/s/ Norman R. Augustine Chairman of the February 25, 1994
Norman R. Augustine* Board, Chief
Executive Officer
/s/ Marcus C. Bennett Director, Vice February 25, 1994
Marcus C. Bennett* President, Chief
Financial and
Chief Accounting
Officer
/s/ A. James Clark Director February 25, 1994
A. James Clark*
/s/ James L. Everett, III Director February 25, 1994
James L. Everett, III*
/s/ Edward L. Hennessy, Jr. Director February 25, 1994
Edward L. Hennessy, Jr.*
- 49 -
Signature Title Date
/s/ Edward E. Hood, Jr. Director February 25, 1994
Edward E. Hood, Jr.*
/s/ Caleb B. Hurtt Director February 25, 1994
Caleb B. Hurtt*
/s/ Gwendolyn S. King Director February 25, 1994
Gwendolyn S. King*
/s/ Melvin R. Laird Director February 25, 1994
Melvin R. Laird*
/s/ Gordon S. Macklin Director February 25, 1994
Gordon S. Macklin*
/s/ Eugene F. Murphy Director February 25, 1994
Eugene F. Murphy*
/s/ Allen E. Murray Director February 25, 1994
Allen E. Murray*
/s/ John W. Vessey, Jr. Director February 25, 1994
John W. Vessey, Jr.*
/s/ A. Thomas Young Director February 25, 1994
A. Thomas Young*
*By: /s/ STEPHEN M. PIPER February 25, 1994
(Stephen M. Piper, Attorney-in-fact**)
_____________________
**By authority of Powers of Attorney filed with this Annual
Report on Form 10-K.
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CONSENT OF ERNST & YOUNG, INDEPENDENT AUDITORS
We consent to the incorporation by reference in this Annual
Report on Form 10-K of Martin Marietta Corporation of our report
dated January 21, 1994, included on page 55 of the Martin
Marietta Corporation 1993 Annual Report to Shareowners.
Our audits also included the financial statement schedules of
Martin Marietta Corporation listed in Item 14(a). These
schedules are the responsibility of the Corporation's management.
Our responsibility is to express an opinion based on our audits.
In our opinion, the financial statement schedules referred to
above, when considered in relation to the basic financial
statements taken as a whole, present fairly in all material
respects the information set forth therein.
We also consent to the incorporation by reference of our report
dated January 21, 1994, with respect to the consolidated
financial statements incorporated herein by reference, and our
report included in the preceding paragraph with respect to the
financial statement schedules included in the Annual Report on
Form 10-K of Martin Marietta Corporation, in the following
Registration Statements:
(1) Pre-Effective Amendment No. 1, dated April 18, 1988, to
Registration Statement Number 33-20931 of Martin Marietta
Technologies, Inc. on Form S-3;
(2) Registration Statement Number 33-59466-01 of Martin Marietta
Corporation and Martin Marietta Technologies, Inc. on
Form S-3, dated March 12, 1993;
(3) Registration Statement Number 33-61210 of Martin Marietta
Corporation on Form S-3, dated April 16, 1993;
(4) Registration Statement Number 33-58494 of Parent Corporation
(now known as Martin Marietta Corporation) on Form S-4,
dated February 19, 1993;
(5) Registration Statement Number 33-60476 of Martin Marietta
Corporation on Form S-8, dated April 2, 1993;
(6) Registration Statement Number 33-60478 of Martin Marietta
Corporation on Form S-8, dated April 2, 1993;
(7) Registration Statement Number 33-60480 of Martin Marietta
Corporation on Form S-8, dated April 2, 1993;
(8) Registration Statement Number 33-60484 of Martin Marietta
Corporation on Form S-8, dated April 2, 1993;
(9) Registration Statement Number 33-60486 of Martin Marietta
Corporation on Form S-8, dated April 2, 1993; and
(10) Registration Statement Number 33-60782 of Martin Marietta
Corporation on Form S-8, dated April 2, 1993.
/s/ Ernst & Young
ERNST & YOUNG
Washington, D.C.
February 23, 1994
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CONSENT OF KPMG PEAT MARWICK, INDEPENDENT AUDITORS
The Board of Directors
General Electric Company:
The Board of Directors
Martin Marietta Corporation:
We consent to the incorporation by reference of our report dated
February 3, 1993 relating to the consolidated financial statements
of GE Aerospace Businesses as of December 31, 1992 and 1991 and for
each of the years in the two-year period ended December 31, 1992,
which report is incorporated by reference in the December 31, 1993
annual report on Form 10-K of Martin Marietta Corporation, in the
following Registration Statements:
(1) Pre-Effective Amendment No.1, dated April 18, 1988, to
Registration Statement Number 33-20931 of Martin Marietta
Technologies, Inc. on Form S-3;
(2) Registration Statement Number 33-59466-01 of Martin Marietta
Corporation and Martin Marietta Technologies, Inc. on Form S-
3, dated March 12, 1993;
(3) Registration Statement Number 33-61210 of Martin Marietta
Corporation on Form S-3, dated April 16, 1993;
(4) Registration Statement Number 33-58494 of Parent Corporation
(now known as Martin Marietta Corporation) on Form S-4, dated
February 19, 1993;
(5) Registration Statement Number 33-60476 of Martin Marietta
Corporation on Form S-8, dated April 2, 1993;
(6) Registration Statement Number 33-60478 of Martin Marietta
Corporation on Form S-8, dated April 2, 1993;
(7) Registration Statement Number 33-60480 of Martin Marietta
Corporation on Form S-8, dated April 2, 1993;
(8) Registration Statement Number 33-60484 of Martin Marietta
Corporation on Form S-8, dated April 2, 1993;
(9) Registration Statement Number 33-60486 of Martin Marietta
Corporation on Form S-8, dated April 2, 1993; and
(10) Registration Statement Number 33-60782 of Martin Marietta
Corporation on Form S-8, dated April 2, 1993.
/s/ KPMG PEAT MARWICK
Philadelphia, PA
February 23, 1994
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SCHEDULE II - AMOUNTS RECEIVABLE FROM RELATED PARTIES AND
UNDERWRITERS, PROMOTERS, AND EMPLOYEES OTHER THAN RELATED PARTIES
MARTIN MARIETTA CORPORATION AND CONSOLIDATED SUBSIDIARIES
COL. A COL. B COL. C COL. D COL. E
Deductions Balance at End of Period
Balance at (1) (2) (1) (2)
Beginning Amounts Amounts
Name of Debtor of Period Additions Collected Written Off Current Not Current
Interest Due
Rate Date
Year ended December 31, 1993
Notes Receivable*
Norman R. Augustine 0% 1994 -0- $232,000 -0- -0- $232,000 -0-
A. Thomas Young 0% 1994 -0- $105,000 -0- -0- $105,000 -0-
Year ended December 31, 1992 - - -0- -0- -0- -0- -0- -0-
Year ended December 31, 1991 - - -0- -0- -0- -0- -0- -0-
<FN>
* The notes are in connection with the vesting
of restricted stock awards previously granted
to these individuals by the Corporation. No
interest was paid on the loans. Income was
imputed for personal income tax purposes at the
applicable federal rate.
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SCHEDULE V - PROPERTY, PLANT, AND EQUIPMENT
MARTIN MARIETTA CORPORATION AND CONSOLIDATED SUBSIDIARIES
COL. A COL. B COL. C COL. D COL. E COL. F
Balance At Other Changes Balance At
Beginning Additions Add (Deduct) End
CLASSIFICATION of Period at Cost Retirements Describe of Period
Year ended December 31, 1993
Land $ 77,062,000 $ 2,930,000 $ 1,827,000 $( 88,000) A $ 117,394,000
39,317,000 B
Land improvements 73,816,000 2,913,000 515,000 ( 1,000) A 78,004,000
1,791,000 B
Mineral deposits 35,343,000 3,320,000 88,000 - 38,575,000
Buildings and improvements 696,077,000 31,578,000 39,059,000 626,000 A 836,694,000
147,472,000 B
Machinery and equipment 2,148,520,000 196,627,000 120,880,000 ( 415,000) A 2,615,871,000
392,019,000 B
Construction in progress 113,425,000 (13,925,000) C 908,000 ( 3,237,000) A 117,796,000
22,441,000 B
$3,144,243,000 $223,443,000 D $163,277,000 $599,925,000 $3,804,334,000
Year ended December 31, 1992
Land $ 75,857,000 $ 2,141,000 $ 936,000 $ - $ 77,062,000
Land improvements 68,364,000 5,546,000 100,000 6,000 A 73,816,000
Mineral deposits 30,743,000 4,709,000 109,000 - 35,343,000
Buildings and improvements 671,434,000 28,923,000 4,121,000 ( 159,000) A 696,077,000
Machinery and equipment 2,052,025,000 179,080,000 85,928,000 3,343,000 A 2,148,520,000
Construction in progress 150,840,000 (38,875,000) C 140,000 1,600,000 A 113,425,000
$3,049,263,000 $181,524,000 D $ 91,334,000 $ 4,790,000 $3,144,243,000
Year ended December 31, 1991
Land $ 72,248,000 $ 3,980,000 $ 1,002,000 $ 269,000 A $ 75,857,000
362,000 F
Land improvements 64,907,000 4,078,000 1,925,000 ( 55,000) A 68,364,000
1,359,000 F
Mineral deposits 34,131,000 1,005,000 4,202,000 ( 191,000) A 30,743,000
Buildings and improvements 641,727,000 22,702,000 8,873,000 1,288,000 A 671,434,000
14,590,000 F
Machinery and equipment 1,875,362,000 192,484,000 80,551,000 ( 472,000) A 2,052,025,000
65,202,000 F
Construction in progress 154,707,000 ( 6,143,000) C 184,000 ( 791,000) A 150,840,000
3,251,000 F
$2,843,082,000 $ 218,106,000 D $ 96,737,000 E $84,812,000 $3,049,263,000
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SCHEDULE V - PROPERTY, PLANT, AND EQUIPMENT
For the Year Ended December 31, 1993
MARTIN MARIETTA CORPORATION AND CONSOLIDATED SUBSIDIARIES
Notes:
A Transfers, reclassifications, and adjustments.
B Property, plant and equipment of the aerospace and other businesses of General Electric Company
which were combined with the businesses of Martin Marietta Corporation on April 2, 1993.
C Additions of $108,570,000 in 1993, $142,008,000 in 1992, and $183,034,000 in 1991 were net of
transfers to other classifications.
D Property, plant, and equipment of other acquired businesses was $8,633,000 in 1993, $10,635,000
in 1992, and $5,780,000 in 1991.
E Retirements resulting from the sales of assets were $28,410,000 in 1991.
F Property, plant and equipment of International Light Metals which became wholly owned by Martin
Marietta Corporation on December 9, 1991.
See Note A to financial statements for methods used to compute depreciation, depletion, and
amortization.
Service lives for each class of property, plant, and equipment are deemed to be appropriate to allocate
the cost of the respective assets over their estimated useful lives. The range of service lives for certain
major classifications follows:
Years
Land improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 to 20
Buildings and improvements:
Electronics, Space, Information and Services facilities . . . . . . . . . . . . . . . . . . . . . 10 to 40
Materials facilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 to 50
Machinery and equipment:
Electronics, Space, Information and Services facilities . . . . . . . . . . . . . . . . . . . . . 5 to 20
Materials facilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 to 20
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SCHEDULE VI - ACCUMULATED DEPRECIATION, DEPLETION, AND AMORTIZATION
OF PROPERTY, PLANT, AND EQUIPMENT
MARTIN MARIETTA CORPORATION AND CONSOLIDATED SUBSIDIARIES
COL. A COL. B COL. C COL. D COL. E COL. F
Balance At Additions Other Changes Balance At
Beginning Charged to Costs Add (Deduct) End
DESCRIPTION of Period and Expenses Retirements Describe of Period
Year ended December 31, 1993
Land improvements $ 41,594,000 $ 4,428,000 $ 316,000 $ - $ 45,706,000
Mineral deposits 6,076,000 575,000 12,000 - 6,639,000
Buildings and improvements 321,277,000 57,608,000 7,500,000 5,773,000 A 377,158,000
Machinery and equipment 1,518,157,000 287,371,000 116,464,000 (6,986,000) A 1,682,078,000
$1,887,104,000 $349,982,000 $124,292,000 $ (1,213,000) $2,111,581,000
Year ended December 31, 1992
Land improvements $ 37,552,000 $ 4,564,000 $ 528,000 $ 6,000 A $ 41,594,000
Mineral deposits 5,678,000 442,000 14,000 (30,000) A 6,076,000
Buildings and improvements 292,909,000 31,047,000 2,571,000 (108,000) A 321,277,000
Machinery and equipment 1,397,652,000 190,094,000 69,885,000 296,000 A 1,518,157,000
$1,733,791,000 $226,147,000 $72,998,000 $ 164,000 $1,887,104,000
Year ended December 31, 1991
Land improvements $ 32,993,000 $ 4,354,000 $ 983,000 $ (18,000) A $ 37,552,000
1,206,000 C
Mineral deposits 5,563,000 591,000 476,000 - 5,678,000
Buildings and improvements 255,142,000 29,903,000 3,309,000 (53,000) A 292,909,000
11,226,000 C
Machinery and equipment 1,208,696,000 190,224,000 65,527,000 86,000 A 1,397,652,000
64,173,000 C
$1,502,394,000 $225,072,000 $70,295,000 B $ 76,620,000 $1,733,791,000
<FN>
A Transfers, reclassifications and adjustments.
B Retirements resulting from the sales of assets were $17,405,000 in 1991.
C Accumulated depreciation, depletion and amortization of International Light Metals which became wholly owned by
Martin Marietta Corporation on December 9, 1991.
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SCHEDULE IX - SHORT-TERM BORROWINGS
MARTIN MARIETTA CORPORATION AND CONSOLIDATED SUBSIDIARIES
COL. A COL. B COL. C COL. D COL. E COL. F
Maximum Average Weighted
Category of Amount Amount Average
Aggregate Balance Weighted Outstanding Outstanding Interest Rate
Short-term at End of Average During the During the During the
Borrowings Period Interest Rate Period Period Period
Year ended December 31, 1993
Commercial Paper -0- - $695,000,000 $ 62,500,000 (B) 3.16% (C)
Revolving Credit Facility -0- - $500,000,000 $500,000,000 (B) 6.00% (C)
Year ended December 31, 1992
Money Market Loan Facilities (A) -0- - $198,000,000 $ 84,130,000 (B) 3.80% (C)
Year ended December 31, 1991
Money Market Loan Facilities (A) -0- - $150,000,000 $ 75,270,000 (B) 6.70% (C)
<FN>
(A) Money Market Loan Facilities represent unsecured borrowings from banks with maturities
generally seven days or less with no provision for extension of the maturity period.
(B) The average amount outstanding was computed on an average daily balance method over the
period for which borrowings were outstanding.
(C) The weighted average interest rate was computed on an annualized interest method.
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SCHEDULE X - SUPPLEMENTARY INCOME STATEMENT INFORMATION
MARTIN MARIETTA CORPORATION AND CONSOLIDATED SUBSIDIARIES
COL. A COL. B
Item Charged to Costs and Expenses
Year Ended December 31,
1993 1992 1991
Maintenance and repairs . . . . . . . . . . . . . . . . . . . . . . . . $128,728,000 $ 98,348,000 $104,119,000
- 58 -
INDEX TO THE EXHIBITS
TO
THE ANNUAL REPORT ON FORM 10-K
FOR FISCAL YEAR ENDED DECEMBER 31, 1993
(3)(i) Articles of Incorporation.
(a) Articles of Restatement of Martin Marietta
Corporation (formerly Parent Corporation) filed
with the State Department of Assessments and
Taxation of the State of Maryland on June 30,
1993.
(ii) Bylaws
(a) Copy of the Bylaws of Parent Corporation (now
Martin Marietta Corporation) as amended on
January 13, 1993, effective April 2, 1993.
(4) (a) Indenture dated April 22, 1993, between the
Corporation, Technologies, and Continental Bank,
National Association as Trustee (incorporated by
reference to Exhibit 4 of the Corporation's filing
on Form 8-K on April 15, 1993).
No other instruments defining the rights of
holders of long-term debt are filed since the
total amount of securities authorized under any
such instrument does not exceed 10% of the total
assets of the Corporation on a consolidated basis.
The Corporation agrees to furnish a copy of such
instruments to the Securities and Exchange
Commission upon request.
(10)(iii) (a) Directors Deferred Compensation Plan, as amended
(incorporated by reference to Exhibit 10(iii)(a)
to Technologies' Form 10-K for the fiscal year
ended December 31, 1988).
(b) Post-Retirement Income Maintenance Plan for
Directors, as amended.
(c) Financial Counseling Program for directors,
officers, company presidents, and other key
employees as amended (incorporated by reference to
Exhibit 10(iii)(c) to Technologies' Form 10-K for
the fiscal year ended December 31, 1989).
(d) Executive Incentive Plan, as amended.
(e) Deferred Compensation and Estate Supplement Plan,
as amended.
(f) Post-Retirement Death Benefit Plan for Senior
Executives, as amended (incorporated by reference
to Exhibit (10)(iii)(f) to Technologies' Form 10-K
for the fiscal year ended December 31, 1987).
(g) 1979 Stock Option Plan for Key Employees, as
amended.
(h) 1984 Stock Option Plan for Key Employees, as
amended.
(i) Martin Marietta Amended Omnibus Securities Award
Plan, as amended March 25, 1993.
(j) Format of the agreements between Technologies and
its officers to provide for continuity of
management in the event of a change in control of
Technologies (incorporated by reference to
Exhibit (10)(iii) to Technologies' Form 10-K for
the fiscal year ended December 31, 1987).
(k) Supplemental Excess Retirement Plan, as amended
(incorporated by reference to Exhibit (10)(iii) to
Technologies' Form 10-K for the fiscal year ended
December 31, 1991).
(l) Restricted Stock Award Plan (incorporated by
reference to Exhibit 10 to Technologies' Form 10-Q
for the quarter ended June 30, 1989).
(m) Long Term Performance Incentive Compensation Plan
(incorporated by reference to Exhibit (10)(iii) to
Technologies' Form 10-K for the fiscal year ended
December 31, 1991).
(n) Amended and Restated Martin Marietta Corporation
Long Term Performance Incentive Compensation Plan
(incorporated by reference to Exhibit 10(iii)(o)
of Technologies' Form 10-K for the fiscal year
ended December 31, 1992).
(o) Directors' Life Insurance Program.
(p) (1) Transaction Agreement dated November 22,
1992, among General Electric Company,
Technologies and the Corporation
(incorporated by reference from Parent
Corporation's Registration Statement on
Form S-4 (Registration No. 33-58494) filed
with the SEC on February 18, 1993).
- ii -
(2) Form of Amendment Agreement, dated as of
February 17, 1993, among General Electric
Company, Technologies and the Corporation
(incorporated by reference from Parent
Corporation's Registration Statement on
Form S-4 (Registration No. 33-58494) filed
with the SEC on February 18, 1993).
(3) Form of Amendment Agreement, dated as of
March 28, 1993, among General Electric
Company, Technologies and the Corporation
(incorporated by reference from Parent
Corporation's Registration Statement on
Form S-4 (Registration No. 33-58494) filed
with the SEC on February 18, 1993).
(q) Martin Marietta Executive Special Early Retirement
Option and Plant Closing Retirement Option Plan.
(r) Martin Marietta Supplementary Pension Plan for
Employees of Transferred GE Operations.
(11) Computation of net earnings per common share for the years
ended December 31, 1993, 1992 and 1991.
(12) Computation of ratio of earnings to fixed charges for the
year ended December 31, 1993.
(13) Martin Marietta Corporation 1993 Annual Report to
Shareowners, portions of which are incorporated by reference
in this Form 10-K. Those portions of the 1993 Annual Report
to Shareowners which are not incorporated by reference shall
not be deemed to be "filed" as part of this report.
(21) List of Subsidiaries of Martin Marietta Corporation.
(23) (a) Consent of Ernst & Young, Independent Auditors for
Martin Marietta Corporation (included in this
Form 10-K at page 47).
(b) Consent of KPMG Peat Marwick, Independent Auditors
for the former GE Aerospace businesses (included
in this Form 10-K at page 48).
(24) Powers of Attorney.
(27) The Financial Statement Schedules appear on page 53 through
page 58 of this Form 10-K.
(99) Other Exhibits
(a) Assumption Agreement among Martin Marietta
Materials, Inc. and Technologies dated as of
November 12, 1993 (incorporated by reference to
- iii -
Exhibit 10.01 to Martin Marietta Materials, Inc.'s
Registration Statement on Form S-1 (Reg.
No. 33-72648) filed with the SEC on December 8,
1993).
(b) Transfer and Capitalization Agreement dated as of
November 12, 1993, among Technologies, Martin
Marietta Investments, Inc. and Martin Marietta
Materials, Inc. (incorporated by reference from
Martin Marietta Materials, Inc.'s Registration
Statement on Form S-1 (Reg. No. 33-72648) filed
with the SEC on December 8, 1993).
(c) Form of Intercompany Services Agreement between
Martin Marietta Materials, Inc. and the
Corporation (incorporated by reference from Martin
Marietta Materials, Inc.'s Registration Statement
on Form S-1 (Reg. No. 33-72648) filed with the SEC
on December 8, 1993).
(d) Form of Tax-Sharing Agreement between Martin
Marietta Materials, Inc. and the Corporation
(incorporated by reference from Martin Marietta
Materials, Inc.'s Registration Statement on
Form S-1 (Reg. No. 33-72648) filed with the SEC on
December 8, 1993).
(e) Form of Corporate Agreement between Martin
Marietta Materials, Inc. and the Corporation
(incorporated by reference from Martin Marietta
Materials, Inc.'s Registration Statement on
Form S-1 (Reg. No. 33-72648) filed with the SEC on
December 8, 1993).
(f) Form of Cash Management Agreement between Martin
Marietta Materials, Inc. and Technologies
(incorporated by reference from Martin Marietta
Materials, Inc.'s Registration Statement on
Form S-1 (Reg. No. 33-72648) filed with the SEC on
December 8, 1993).
Other material incorporated by reference:
Martin Marietta Corporation's definitive Proxy
Statement to be filed pursuant to Regulation 14A no
later than March 28, 1994, portions of which are
incorporated by reference in this Form 10-K. Those
portions of the definitive Proxy Statement which are
not incorporated by reference shall not be deemed to be
"filed" as part of this report.
- iv -
Dates Referenced Herein and Documents Incorporated by Reference
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