Item 7.01 Regulation FD Disclosure.
The following information is furnished pursuant to Item 7.01 Regulation FD Disclosure.
As previously announced, on
January 27, 2014, Martin Marietta Materials, Inc., a North Carolinacorporation ("Martin Marietta"), Texas Industries, Inc., a Delawarecorporation ("TXI"), and Project Holdings, Inc., a North Carolinacorporation and a wholly owned subsidiary of Martin Marietta ("Merger Sub"), entered into an Agreement and Plan of Merger, pursuant to which Merger Sub will merge with and into TXI (the "Merger"), with TXI surviving the Merger as a wholly owned subsidiary of Martin Marietta. Upon consummation of the Merger, Martin Marietta currently expects to redeem TXI's 9 ¼% Senior Notes due 2020 (the "TXI Notes") and to satisfy and discharge the related indenture. Martin Marietta expects to finance such redemption, satisfaction and discharge with a combination of the net proceeds from the proposed private notes offering described under Item 8.01 of this Current Report on Form 8-K, cash on hand and drawings under its trade receivables facility and/or revolving credit facility. In a preliminary offering memorandum dated June 23, 2014(the "Preliminary Offering Memorandum"), distributed to prospective investors in connection with the proposed private notes offering, Martin Marietta disclosed certain information to prospective investors. The following information, excerpted from the Preliminary Offering Memorandum, is furnished to this report under Item 7.01: Use of proceeds Martin Marietta estimates that the net proceeds from the offering will be approximately $694.9 million, after deducting the initial purchasers' discounts and Martin Marietta's estimated offering expenses, and assuming an aggregate issue price of par. Absent any special mandatory redemption of the Notes, Martin Marietta intends to use the net proceeds from the offering, along with cash on hand and drawings under its trade receivables facility, to redeem all $650.0 millionin principal amount of the TXI Notes at a redemption price equal to 100% of the principal amount thereof plus a specified "make-whole premium" and unpaid interest accrued thereon (estimated to be approximately $765.5 million). Martin Marietta currently expects to redeem, and satisfy and discharge the indenture governing, the TXI Notes upon consummation of the Merger. Although Martin Marietta expects to finance the redemption of the TXI Notes with a combination of the net proceeds from the offering, cash on hand and drawings under its trade receivables facility, if the borrowing base under its trade receivables facility is not fully available upon consummation of the Merger, Martin Marietta expects to borrow under its revolving credit facility to finance a portion of such redemption. Pending final use, Martin Marietta expects to invest the net proceeds in short-term investments, including repurchase agreements, some or all of which may not be investment grade. As of March 31, 2014(subject to the following sentence), after giving pro forma effect to the offering, the incremental $100.0 milliondraw on its trade receivables facility (as described below), the consummation of the Merger and the redemption of the TXI Notes as described in the above paragraph, (a) Martin Marietta would have had consolidated outstanding indebtedness of $1,876.7 million, of which $250.0 millionwould have represented secured indebtedness, (b) Martin Marietta's subsidiaries other than TXI and its subsidiaries would have had no outstanding indebtedness or preferred equity, and (c) TXI and its subsidiaries would have had $8.8 millionof outstanding indebtedness and no preferred equity. Such as adjusted pro forma amounts as of March 31, 2014include TXI's balance sheet information as of February 28, 2014; Martin Marietta is not aware of any significant transactions outside the ordinary course of business for TXI in the month ended March 31, 2014. Recent developments Martin Marietta has a trade receivables securitization facility backed by trade receivables originated by Martin Marietta and certain of its subsidiaries. On April 18, 2014, Martin Marietta and its wholly owned subsidiary, Martin Marietta Funding LLC("MM Funding"), entered into the Second Amendment to its Credit and Security Agreement with SunTrust Bankdated as of April 19, 2013, to extend the termination date of the facility to September 30, 2014. The facility bears interest at one-month LIBOR plus a margin. As of March 31, 2014, the trade receivables facility was fully drawn. On June 20, 2014, MM Funding received a commitment letter from SunTrust Bankagreeing to increase the amount of the facility by an additional $100.0 millionto a total of $250.0 millionon July 1, 2014. Martin Marietta expects to fully draw the incremental $100.0 millionon or before the date it consummates the Merger in order to partially fund the redemption of the TXI Notes, and for general working capital purposes. Additionally, on June 20, 2014, Martin Marietta entered into an amendment to the credit agreement governing its revolving credit facility in order to (i) amend the definition of "Consolidated EBITDA" therein to permit certain Merger-related transaction expenses to be added back in the determination of Consolidated EBITDA and (ii) amend the required levels in the leverage ratio financial covenant therein, which is tested as of the last day of each fiscal quarter.
Summary Financial Data Summary historical financial data of Martin Marietta The following table sets forth summary historical consolidated financial information for Martin Marietta. The historical annual consolidated financial information for Martin Marietta is derived from the audited consolidated financial statements of Martin Marietta as of and for each of the years in the five-year period ended
December 31, 2013. The historical consolidated financial information for Martin Marietta as of and for the three months ended March 31, 2014and 2013 has been derived from the unaudited interim consolidated financial statements of Martin Marietta and, in the opinion of Martin Marietta's management, includes all normal and recurring adjustments that are considered necessary for the fair presentation of the results for the interim periods. The following information should be read together with Martin Marietta's consolidated financial statements and the notes related to those financial statements. Martin Marietta's historical consolidated financial information may not be indicative of future performance. As of and for the three months ended March 31, As of and for the year ended December 31, (in thousands) 2014 2013 2013 2012 2011 2010 2009 Statement of Earnings Data:(1) Consolidated Operating Results Net sales $ 379,678 $ 344,059 $ 1,943,218 $ 1,832,957 $ 1,519,754 $ 1,475,638 $ 1,419,604Freight and delivery revenues 48,951 39,850 212,333 198,944 193,862 177,168 153,648 Total revenues 428,629 383,909 2,155,551 2,031,901 1,713,616 1,652,806 1,573,252 Cost of sales 353,843 331,238 1,579,261 1,505,823 1,217,752 1,153,987 1,088,091 Freight and delivery costs 48,951 39,850 212,333 198,944 193,862 177,168 153,648 Total cost of revenues 402,794 371,088 1,791,594 1,704,767 1,411,614 1,331,155 1,241,739 Gross Profit 25,835 12,821 363,957 327,134 302,002 321,651 331,513 Selling, general and administrative expenses 34,247 37,648 150,091 138,398 124,138 130,422 135,881 Business development costs 9,512 307 671 35,140 18,575 1,220 2,199 Other operating (income) and expenses, net (2,026 ) (1,814 ) (4,793 ) (2,574 ) (1,720 ) (8,298 ) 10,586 (Loss) Earnings from Operations (15,898 ) (23,320 ) 217,988 156,170 161,009 198,307 182,847 Interest expense 12,201 13,496 53,467 53,339 58,586 68,440 73,455 Other nonoperating expenses and (income),net 3,463 623 295 (1,299 ) 1,834 198 (1,165 ) (Loss) Earnings from continuing operations before taxes on income (31,562 ) (37,439 ) 164,226 104,130 100,589 129,669 110,557 Taxes on income (8,424 ) (8,398 ) 44,045 17,431 21,003 30,913 25,981 (Loss) Earnings from Continuing Operations (23,138 ) (29,041 ) 120,181 86,699 79,586 98,756 84,576 Less: Net (loss) earnings attributable to noncontrolling interests (1,535 ) (1,490 ) (1,905 ) 1,053 1,194 1,652 2,705 Net (Loss) Earnings From Continuing Operations Attributable to Controlling Interests $ (21,603 ) $ (27,551 ) $ 122,086 $ 85,646 $ 78,392 $ 97,104 $ 81,871Item 8.01 Other Events. On June 23, 2014, Martin Marietta issued a press release announcing its intention to offer $700 millionaggregate principal amount of senior notes, comprised of floating rate senior notes due 2017 and fixed rate senior notes due 2024 (together, the "Notes"). The Notes will be offered in the United Statesonly to qualified institutional buyers in reliance on Rule 144A under the Securities Act, and outside the United Statesonly to non-U.S. investors pursuant to Regulation S under the Securities Act. The Notes will be offered subject to prevailing market conditions, and there is no assurance that the offering will be completed or, if completed, as to the terms on which it will be completed. The Notes will not initially be registered under the Securities Act or any state securities laws and may not be offered or sold in the United Statesabsent an effective registration statement or an applicable exemption from registration requirements or a transaction not subject to the registration requirements of the Securities Act or any state securities laws. The text of such June 23, 2014press release, which is attached hereto as Exhibit 99.1, is incorporated by reference herein. Also on June 23, 2014, Martin Marietta issued a press release announcing that it expects to enter into an agreement with the U.S. Department of Justicethat will resolve all competition issues with respect to Martin Marietta's proposed acquisition of TXI. The text of such June 23, 2014press release, which is attached hereto as Exhibit 99.2, is incorporated by reference herein. --------------------------------------------------------------------------------
Cautionary Statements Regarding Forward-Looking Statements
Certain statements in this communication regarding the proposed acquisition of TXI by Martin Marietta, the expected timetable for completing the transaction, benefits and synergies of the transaction, future opportunities for the combined company and products and any other statements regarding Martin Marietta's and TXI's future expectations, beliefs, plans, objectives, financial conditions, assumptions or future events or performance that are not historical facts are "forward-looking" statements made within the meaning of Section 21E of the Securities Exchange Act of 1934. These statements are often, but not always, made through the use of words or phrases such as "may", "believe," "anticipate," "could", "should," "intend," "plan," "will," "expect(s)," "estimate(s)," "project(s)," "forecast(s)", "positioned," "strategy," "outlook" and similar expressions. All such forward-looking statements involve estimates and assumptions that are subject to risks, uncertainties and other factors that could cause actual results to differ materially from the results expressed in the statements. Among the key factors that could cause actual results to differ materially from those projected in the forward-looking statements are the following: the parties' ability to consummate the transaction; the conditions to the completion of the transaction, including the receipt of approval of both Martin Marietta's shareholders and TXI's stockholders; the regulatory approvals required for the transaction not being obtained on the terms expected or on the anticipated schedule; the parties' ability to meet expectations regarding the timing, completion and accounting and tax treatments of the transaction; the possibility that the parties may be unable to achieve expected synergies and operating efficiencies in connection with the transaction within the expected time-frames or at all and to successfully integrate TXI's operations into those of Martin Marietta; the integration of TXI's operations into those of Martin Marietta being more difficult, time-consuming or costly than expected; operating costs, customer loss and business disruption (including, without limitation, difficulties in maintaining relationships with employees, customers, clients or suppliers) being greater than expected following the transaction; the retention of certain key employees of TXI being difficult; Martin Marietta's and TXI's ability to adapt its services to changes in technology or the marketplace; Martin Marietta's and TXI's ability to maintain and grow its relationship with its customers; levels of construction spending in the markets; a decline in the commercial component of the nonresidential construction market and the subsequent impact on construction activity; a slowdown in residential construction recovery; unfavorable weather conditions; a widespread decline in aggregates pricing; changes in the cost of raw materials, fuel and energy and the availability and cost of construction equipment in
the United States; the timing and amount of federal, state and local transportation and infrastructure funding; the ability of states and/or other entities to finance approved projects either with tax revenues or alternative financing structures; and changes to and the impact of the laws, rules and regulations (including environmental laws, rules and regulations) that regulate Martin Marietta's and TXI's operations. Additional information concerning these and other factors can be found in Martin Marietta's and TXI's filings with the Securities and Exchange Commission("SEC"), including Martin Marietta's and TXI's most recent Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. These risks, as well as other risks associated with Martin Marietta's proposed acquisition of TXI are also more fully discussed in the definitive joint proxy statement/prospectus that Martin Marietta and TXI filed with the SECon Form 424B3 and Schedule 14A, respectively, on May 30, 2014in connection with the proposed acquisition. Martin Marietta and TXI assume no obligation to update or revise publicly the information in this communication, whether as a result of new information, future events or otherwise, except as otherwise required by law. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date hereof.
Additional Information and Where to Find It
In connection with the proposed transaction between Martin Marietta and TXI, Martin Marietta filed with the
SECa registration statement on Form S-4 that includes a joint proxy statement of Martin Marietta and TXI and that also constitutes a prospectus of Martin Marietta (which registration statement was declared effective on May 30, 2014). INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE JOINT PROXY STATEMENT/PROSPECTUS AND ANY OTHER RELEVANT DOCUMENTS FILED OR TO BE FILED WITH THE SEC BY MARTIN MARIETTA OR TXI, BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION ABOUT MARTIN MARIETTA, TXI AND THE PROPOSED TRANSACTION. The joint proxy statement/prospectus and other documents relating to the proposed transaction can be obtained free of charge from the SEC'swebsite at www.sec.gov. These documents can also be obtained free of charge from Martin Marietta upon written request to the Corporate Secretary at Martin Marietta Materials, Inc., 2710 Wycliff Road, Raleigh, NC27607, telephone number (919) 783-4540 or from Martin Marietta's website, http://ir.martinmarietta.com or from TXI upon written request to TXI at Investor Relations, Texas Industries, Inc., 1503 LBJ Freeway, Suite 400, Dallas, Texas75234, telephone number (972) 647-6700 or from TXI's website, http://investorrelations.txi.com. --------------------------------------------------------------------------------
Participants in Solicitation
This communication is not a solicitation of a proxy from any investor or security holder. However, Martin Marietta, TXI and certain of their respective directors and executive officers may be deemed to be participants in the solicitation of proxies in connection with the proposed transaction under the rules of the
SEC. Information regarding Martin Marietta's directors and executive officers may be found in its Annual Report for the year ended December 31, 2013on Form 10-K filed with the SECon February 24, 2014and the definitive proxy statement relating to its 2014 Annual Meeting of Shareholders filed with the SECon April 17, 2014. Information regarding TXI's directors and executive officers may be found in its Annual Report for the year ended May 31, 2013on Form 10-K filed with the SECon July 22, 2013and the definitive proxy statement relating to its 2013 Annual Meeting of Shareholders filed with the SECon August 23, 2013. These documents can be obtained free of charge from the sources indicated above. Additional information regarding the interests of these participants is also included in the joint proxy statement/prospectus.
This communication shall not constitute an offer to sell or the solicitation of an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits. Exhibit Number Description 99.1 Press release dated
June 23, 2014, titled " Martin Marietta Materials, Inc.Announces Private Offering of Senior Notes". 99.2 Press release dated June 23, 2014, titled " Martin Marietta Materials, Inc.Expects to Enter into Agreement with U.S. Department of Justice Regarding Proposed Acquisition of Texas Industries".