Martin Marietta Materials, Inc.
 


SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549


FORM 11-K


     
x   ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)

For the fiscal year ended December 31, 2002

OR

     
o   TRANSITION REPORT PURSUANT TO SECTION 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)

For the transition period from _________________ to ________________

Commission file number: 1-12744

MARTIN MARIETTA MATERIALS, INC.

SOUTHWEST DIVISION 401(K) PLAN
(Full title of the plan and the address of the plan,
if different from that of the issuer named below)

MARTIN MARIETTA MATERIALS, INC.
2710 Wycliff Road
Raleigh, North Carolina 27607

(Name of issuer of the securities held pursuant to the plan and the address
of its principal executive office)


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Financial Statements and Supplemental Schedule

Martin Marietta Materials, Inc. Southwest Division 401(k) Plan

December 31, 2002 and 2001 and year ended December 31, 2002
with Report of Independent Auditors

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Martin Marietta Materials, Inc. Southwest Division 401(k) Plan

Audited Financial Statements and Supplemental Schedule

December 31, 2002 and 2001 and year ended December 31, 2002

Contents

         
Report of Independent Auditors
    4  
 
       
Financial Statements:
       
 
       
Statements of Net Assets Available for Benefits
    5  
Statement of Changes in Net Assets Available for Benefits
    6  
Notes to Financial Statements
    7  
 
       
Supplemental Schedule:
       
 
       
Schedule H, Line 4(i) — Schedule of Assets (Held at End of Year)
    11  

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Report of Independent Auditors

Martin Marietta Materials, Inc., as Plan Administrator

We have audited the accompanying statements of net assets available for benefits of Martin Marietta Materials, Inc. Southwest Division 401(k) Plan as of December 31, 2002 and 2001, and the related statement of changes in net assets available for benefits for the year ended December 31, 2002. These financial statements are the responsibility of Martin Marietta Materials, Inc., as Plan Administrator. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan at December 31, 2002 and 2001, and the changes in its net assets available for benefits for the year ended December 31, 2002, in conformity with accounting principles generally accepted in the United States.

Our audits were performed for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying supplemental Schedule of Assets (Held at End of Year) as of December 31, 2002 is presented for the purpose of additional analysis and is not a required part of the financial statements but is supplementary information required by the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. This supplemental schedule is the responsibility of the Plan’s management. The supplemental schedule has been subjected to the auditing procedures applied in our audits of the financial statements and, in our opinion, is fairly stated in all material respects in relation to the financial statements taken as a whole.

  /s/ ERNST & YOUNG

May 28, 2003

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Martin Marietta Materials, Inc. Southwest Division 401(k) Plan

Statements of Net Assets Available for Benefits

                   
      December 31
     
      2002   2001
     
 
Assets
               
Investments, at fair value
  $ 12,501,606     $ 12,903,877  
Contributions receivable:
               
 
Employees
    40,902       40,560  
 
Martin Marietta Materials, Inc.
    17,094       16,682  
 
   
     
 
Total contributions receivable
    57,996       57,242  
 
   
     
 
Net assets available for benefits
  $ 12,559,602     $ 12,961,119  
 
   
     
 

See accompanying notes.

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Martin Marietta Materials, Inc. Southwest Division 401(k) Plan

Statement of Changes in Net Assets Available for Benefits

Year ended December 31, 2002

             
Net assets available for benefits at beginning of year
  $ 12,961,119  
Additions to net assets attributed to:
       
Interest and dividend income
    424,673  
 
Contributions:
       
   
Employees
    1,233,468  
   
Martin Marietta Materials, Inc.
    502,021  
 
   
 
 
Total contributions
    1,735,489  
 
   
 
Total additions
    2,160,162  
 
Deductions from net assets attributed to:
       
 
Distributions and withdrawals
    804,593  
 
Net depreciation in fair value of investments
    1,751,211  
 
Loan administrative expenses
    5,875  
 
   
 
Total deductions
    2,561,679  
 
   
 
Net assets available for benefits at end of year
  $ 12,559,602  
 
   
 

See accompanying notes.

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Martin Marietta Materials, Inc. Southwest Division 401(k) Plan

Notes to Financial Statements

December 31, 2002

1. Accounting Policies

The financial statements of the Martin Marietta Materials, Inc. Southwest Division 401(k) Plan (the “Plan”) are prepared on the accrual basis of accounting. No liability is recorded for distributions to participants who terminated during the year but have chosen to defer payments to the following year. All administrative expenses, except for loan application and maintenance fees, are paid by Martin Marietta Materials Southwest, Ltd. (the “Company”), which is a wholly owned subsidiary of Martin Marietta Materials, Inc. (“Martin Marietta”).

The Plan’s investments are stated at fair value. Shares of registered investment companies are valued at quoted market prices, which represent the net asset value of shares held by the Plan at year-end. Shares of Martin Marietta common stock are valued at quoted market prices. Participant loans are valued at their outstanding balances, which approximate fair value. Purchases and sales are recorded on a trade-date basis. Interest income is recorded on the accrual basis. Dividends are recorded on the ex-dividend date.

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

2. Description of the Plan

The following description of the Plan provides only general information. Participants should refer to the plan agreement for a more complete description of the Plan’s provisions.

The Plan is a defined contribution plan providing substantially all employees of the Company, Alamo Gulf Coast Railroad Company and Materials Producers, Inc., an opportunity to participate in an individual savings and investment program providing tax-deferred savings and retirement incentives. Martin Marietta is the Plan’s sponsor and also serves as the Plan Administrator. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (“ERISA”).

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Martin Marietta Materials, Inc. Southwest Division 401(k) Plan

Notes to Financial Statements (continued)

2. Description of the Plan (continued)

Employees are eligible to enroll in the Plan after six months of service. An employee may elect to defer from 1% up to 15% of compensation (as defined in the Plan and subject to applicable Internal Revenue Code (“IRC”) limitations on allowable compensation).

The Company matches a participant’s salary deferral contribution in an amount equal to 50% of the participant’s salary deferral contribution, but not to exceed 7% of the participant’s compensation. All participants are 100% vested in their salary deferral contributions plus actual earnings thereon. Vesting in the Company’s contribution portion of their accounts plus actual earnings thereon is based on years of continuous service. A participant is 100% vested after three years of credited service. Forfeited nonvested accounts are used to reduce future employer contributions.

Participants may change the overall percentage of their contributions in 1% increments and may change investment elections for future salary deferral and matching contributions at any time. Any changes in investment elections must be made in 5% increments. In addition, participants may change the investment mix of the accumulated value of prior contributions among the investment options at any time.

The Plan provides for participants to borrow from the money in their own investment accounts. All loans must meet specific terms and conditions of the Plan and are subject to applicable IRC regulations. Personal loans are available to participants in terms of up to 5 years, and primary residence loans are available for terms of up to 15 years. Such loans bear interest at a rate commensurate with local prevailing rates. In addition, the Plan provides for in-service withdrawals to participants that meet specific conditions of financial hardship, as defined in the Plan and in accordance with current specific regulations under the IRC. Participants who are still working at the age of 59-1/2 may qualify for special withdrawal rights and privileges as defined in the Plan.

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Martin Marietta Materials, Inc. Southwest Division 401(k) Plan

Notes to Financial Statements (continued)

2. Description of the Plan (continued)

Upon separation from the Company, participants may receive the full current value of their contributions and the vested portion of their matching employer contributions in the form of a lump-sum payment.

Vanguard Fiduciary Trust Company is the trustee and recordkeeper of the Plan.

The Board of Directors of Martin Marietta may terminate the Plan, subject to provisions of ERISA, for any reason at any time. If the Plan is terminated, each participant or former participant shall become 100% vested in his or her account.

3. Investments

During 2002, the Plan’s investments (including investments purchased, sold and held for the year) depreciated in fair value as determined by quoted market prices as follows:

           
Registered investment companies
  $ (1,679,988 )
Martin Marietta common stock
    (71,223 )
 
   
 
 
Total net depreciation in fair value of investments
  $ (1,751,211 )
 
   
 

The fair values of individual investments that represent 5% or more of the Plan’s assets at December 31 are as follow:

                 
    2002   2001
   
 
Vanguard Explorer Fund
  $ 1,461,693     $ 1,847,995  
Vanguard 500 Index Fund
    2,615,566       3,276,971  
Vanguard Wellington Fund
    2,274,833       2,355,047  
Vanguard Retirement Savings Trust
    3,586,693       2,895,426  
Participant loans
    1,318,436       1,308,708  

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Martin Marietta Materials, Inc. Southwest Division 401(k) Plan

Notes to Financial Statements (continued)

4. Income Tax Status

The Plan received a determination letter from the Internal Revenue Service dated May 28, 2003, stating that the Plan is qualified under Section 401(a) of the Internal Revenue Code (the “Code”) and, therefore, the related trust is exempt from taxation. Once qualified, the Plan is required to operate in conformity with the Code to maintain its qualification. The Plan Administrator believes the Plan is being operated in compliance with the applicable requirements of the Code and, therefore, believes that the Plan, as amended, is qualified and the related trust is tax exempt.

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Martin Marietta Materials, Inc. Southwest Division 401(k) Plan

EIN: 74-0774830 Plan No: 009
Schedule H, Line 4(i)

Schedule of Assets (Held at End of Year)

December 31, 2002

                     
        (c)            
    (b)   Description of Investment,            
    Identity of Issue,   Including Maturity Date,       (e )
    Borrower, Lessor, or   Rate of Interest, Collateral,       Current
(a)   Similar Party   Par or Maturity Value   (d)   Value

 
 
 
 
*   Vanguard Explorer Fund   Registered investment company       $ 1,461,693  
*   Vanguard International Growth Fund   Registered investment company         287,769  
*   Vanguard 500 Index Fund   Registered investment company         2,615,566  
*   Vanguard Long-Term Corporate Fund   Registered investment company         264,071  
*   Vanguard Wellington Fund   Registered investment company         2,274,833  
*   Vanguard Windsor II Fund   Registered investment company         476,115  
*   Vanguard Retirement Savings Trust   Common/collective trust         3,586,693  
*   Martin Marietta Materials, Inc.   Shares of common stock         216,430  
    Participant loans   Interest rates ranging from 5.8% to 7.5%         1,318,436  
                 
 
                     
                $ 12,501,606  
                 
 

* Indicates party-in-interest to the Plan.

     
Note:   Cost information has not been included in column (d) because all investments are participant directed.

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SIGNATURES

     THE PLAN. Pursuant to the requirements of the Securities Exchange Act of 1934, the trustee of the below named plan has duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized.

             
    MARTIN MARIETTA MATERIALS, INC.
    SOUTHWEST DIVISION 401(K) PLAN
             
    By:   Martin Marietta Materials, Inc.
        Plan Administrator
             
    By:   Benefit Plan Committee
             
        By:   /s/ Janice K. Henry
           
            Janice K. Henry
             
Date: June 25, 2003            

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EXHIBIT INDEX

     
Exhibit No.   Document

 
23   Consent of Ernst & Young LLP
     
99.1   Certification

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