Good day, ladies and gentlemen, and welcome to the Martin Marietta Materials First Quarter 2013 Financial Results Conference Call. [Operator Instructions] As a reminder, today's conference call is being recorded. I'd now like to turn the conference over to your host, Mr. Ward Nye, President and CEO. Please go ahead.

Good afternoon, and thank you for joining Martin Marietta Materials' quarterly earnings call. With me today is Anne Lloyd, our Executive Vice President and Chief Financial Officer. We're pleased to report first quarter results and, based on strong fundamentals and positive external indicators, can reaffirm our full year 2013 guidance. As an initial reminder, this discussion may include forward-looking statements as defined by securities laws in connection with future events or future operating or financial performance. Such statements are subject to risks and uncertainties, which could cause actual results to differ materially. Except as legally required, we undertake no obligation publicly to update or revise any forward-looking statements, whether resulting from new information, future developments, or otherwise. We refer you to the legal disclaimers contained in our press release relating to our first quarter 2013 results and to our other filings with the Securities and Exchange Commission, which are available on both ours and the SEC's websites. Also, any margin references in our discussion are based on net sales excluding freight and delivery revenues. These and other non-GAAP measures are also explained in our SEC filings and on our website. Our first quarter results were in line with our expectations and guidance. As anticipated, first quarter aggregates product line shipments declined 8.8%, indicative of a more typical winter in most of our geographic areas and, in a host of instances, colder and wetter conditions than usual. Accordingly, in the majority of our markets, we're seeing a later full start to the annual construction season compared with last year, when we benefited from an unseasonably mild winter that accelerated the start of construction on many projects. To anecdotally illustrate the impact of weather, I'll cite our Des Moines, Iowa district. The average temperature in Des Moines for March this year was…

[Operator Instructions] Our first question comes from Arnold Ursaner of CJS Securities.

I guess my question again, if you could expand a little more, you spoke in some detail about why you're optimistic for the year, but you did start with a pretty big hole in the ground at the beginning, an 8.8% decline, and yet you're reiterating a 4% to 6% volume improvement. Can you highlight some of the things that give you confidence that, that will occur?

Sure. If we take a look at the way volumes went through the first quarter, they were down 5% in January, 7% in February and just about 13% in March. As you recall, Arnie, part of what we said for average, really, the last 2 weeks in March can make or break the first quarter. So if we're sitting here taking a look at this year's first quarter or, really, the history, it only ends up being around 17% of the volume that we have during the course of the full year. So if we'd look at the trends that we saw in the first quarter and then, frankly, come back and even see what the trends need to be for the next several quarters to get us to our range, I'm pretty comfortable with that. I mean, down 8.8% in Q1, for us to come out where we'd like to be, realistically, we need volumes up around 10% in the second quarter, around 15% in the third quarter, and we could actually see a flat-to-down quarter in Q4 and still be very comfortable with that range. So I think as we look at Q1 on a comparative basis and what we feel like the compares will be in Q2, 3 and 4, we feel pretty comfortable with that 2% to 4% that we have out there.

That's very helpful. My second question relates to the vertically integrated businesses. You surprisingly got some terrific price increases that I know you were hoping to get, but it seems like you've achieved them. The question I have is, as you mentioned some delays in work due to weather and some other factors, the increases that you've gotten, when are they likely to be impacting the work you have? When will you get the benefit of those price increases?

Effectively, Arnie, the increases are in now as we're looking forward to the year. So what we've talked about is what we're recognizing or realizing to date. Part of what I've indicated, I think, on the call that we had at the end of the year last year, talking about this year, is I thought we would likely see even more midyear price increases than we've seen in the last couple of years. Obviously, we'll have a better feel for that when we speak next, after the next quarter results. But I think the price increases that we're talking about now, we are clearly going to reap the benefit of here over the next several quarters. Now in fairness, we did have -- and as I said in my remarks, we did have some benefit of some mix changes in those numbers as well. To put some direction to that, it's about 150 bps worth of change in the Southeast and 200 in the West. But one reason I like that, Arnie, is I see it going, really, to more clean stone in both of those markets, which tells me that we're seeing more ready mixed concrete activity. And what I would suggest to you is that has been the single weakest part of heavy side building materials now for a number of years. And the reason that I cite that is if ready mixed continues to get more healthy, I think we'll continue to see good movement on pricing in that space. I think it also gives pricing power in the other spaces as well.

Our next question comes from Kathryn Thompson of Thompson Research Group.

Just to take an additional step with the pricing question, pricing, obviously, up in all markets is positive. But how much of the West pricing was driven by success in Texas versus Colorado, which has been a relatively lower price market and I know a market that you've been placing a great deal of focus and increasing overall pricing, not just in aggregates, but in your downstream products?

Kathryn, we clearly did see strength in Texas, but the good news is we're seeing strength in Colorado as well. If I'm looking on the downstream side in Colorado, we start ready mixed pricing up there 9% in Colorado, so nice strength in that, seeing asphalt up 6%. And obviously, we did have good momentum in Texas as well. So what I would suggest to you is, while Texas, in some respect, led it relative to the aggregates piece of it, the downstream activity that we're seeing and the pricing that we're seeing is pretty good in Colorado right now.

What is the likelihood of a midyear price increase for aggregates and for downstream products? And how much of this increase would be driven by a higher cost versus just an increase in overall demand?

Kathryn, I think the chances for midyear price increases are better this year than they've been in the last couple of years. Now, at the same time, we're early in the year, and part of what I always remind people, it's very difficult to take results in Q1 and try to extrapolate them to a full year. So I put that caution there. But I would still say I think they can be broader in our footprint than they were last year. If I look at the cost side, if from a practical perspective, at this point, Kathryn, the costs are remaining in pretty good shape. If you can tell me what you think is going to happen to energy, I can probably give you a better answer on what may happen with some of the pricing. But as we're looking right now, the energy piece of it has been pretty well behaved.

Our next question comes from Jack Kasprzak of BB&T. John F. Kasprzak - BB&T Capital Markets, Research Division: Your -- I guess being repetitive, but on pricing, again, your prices are up 5.7% in the quarter, and your guidance is 2% to 4% for the year still. Is part of that product mix, too, in terms of we get into the paving or the highway construction season, which is really an April-to-October season, and that's typically a lower average price? Is that part of the complexion of the pricing guidance too?

Jack, that very much is part of the complexion. The nature of some of the jobs may change as we go through the year. So keep in mind, if you see more dirt work, and you see more new construction, it will mean more base, and you'll actually have a headwind relative to mix at that point. And I think it goes back to what I've said before, it's still early in the year, and while those trends look right, right now, and I think they're going to be good, I think we're just being cautious as we go forward here, Jack.

Jack, this is Anne. If you take a look at the product mix impact for the Aggregates business as a whole, it was about 123 bps in the first quarter. John F. Kasprzak - BB&T Capital Markets, Research Division: Is that a comparison versus the first quarter last year?

Absolutely. Look at a mix -- so you got -- so that's what you picked up in the first quarter from a move from base to claims. John F. Kasprzak - BB&T Capital Markets, Research Division: Right. Got it. Okay. First -- Q1. And your guidance, too, on demand says -- or implies mid-single-digit improvement in the highway sector, public works sector. And Q1 is the throwout quarter for that sector, so volume's down 10% or 12%. It doesn't matter, but that's still a little better than what some of the industry forecasts are. Say, ARPU's [ph] up 3% or so. What gives you confidence that you guys can do a little better than sort of the industry forecasts?

I guess a couple of things, Jack. One, it's where we are, so I would come back to the where. So if we begin with the notion that we're going to have $9 billion worth of bidding in Texas, I mean, that is twice what we saw last year, and people thought last year was pretty good. We had a record DOT budget in Iowa last year, and the DOT budget in Iowa this year is bigger than last year. Obviously, we talked a little bit about what the RAMP program is going to mean in Colorado. We think that's going to be a very attractive marketplace for us. We're seeing improved activity in Florida. Again, their DOT budget is up 72% year-over-year. So when we take a look at those states that can be impact states for us, it certainly gives us confidence. The other thing that's giving me some confidence are some of the McGraw-Hill numbers that, literally, have just come out this week, which I think very much reinforce the guidance. In '13, the total change in construction that they continue to speak to is around 8%. In non-res, they're seeing up 6%; and in residential, 26% up. So they're seeing housing starts very much knocking and staying at that million level this year. And what even makes me feel better, I know this isn't necessarily your question, Jack, but as I look at what their forecasts indicate for '14 and '15, I'm seeing 2014, at least according to McGraw-Hill, up 18%; and 2015, up 20%. So I think when we take a look at the states in which we have a significant presence, take a look at what we feel like it's been some of the latest forecast that have come out, literally, within the last week from McGraw-Hill and take a look at what we think the trajectory is going forward. I think that gives some nice book-ends to all of it.

Our next question comes from Jerry Revich of Goldman Sachs.

Ward, I'm wondering if you can provide some more context around what gives you the confidence around double-digit volume growth in the second and third quarter. Maybe you could step us through backlog, or maybe I'm reaching, but perhaps, you could tell us what April is looking like.

I'll tell you more about April when we're together on this next call. But what I'll say, Jerry, if you think to what last year looked like, I mean, we came out of the gate with great vigor last year in the first quarter because we really didn't have a winter, and I think therein lies the story on what the delta is this year with respect to volumes. At the same time, as you think back to what we were also faced with in the second and third quarter last year, after we got into that early spring period, we really just hit wall in large respects with respect to aggregate volume, I think, because we were suffering from last year what we're not suffering from this year, and that was -- you had an enormous overhang from the election, and you had a great deal of uncertainty, particularly around commercial construction last year. And I think people were still trying to get their head around wholly, whether housing was back or not or whether that was a head fake. So I think if we take a look at where housing is now, and of course, you saw the March number... [Audio Gap] We're seeing commercial absorption late last year at 207,000 square feet just taken during the fourth quarter. That's the best number in that respect since 2007. Industrial vacancy in that community is below 10% right now. If we take a look at what's going on in Houston, it's got faster growth in Houston than any other large metro in the United States. So if they're looking at what they anticipate their CAGR to be from 2012 to 2017, they're looking at 5%. But here's what I'm particularly bolstered by, when we start looking, too, at North Texas, Jerry, because if you think about it, so much of what's been going on in South Texas has been energy-driven. And now what we're seeing in the first quarter in North Texas, in the Metroplex, Dallas-Fort Worth, is strong office leasing with a net 1.4 million square feet let in Q1. That's versus a negative 40,000 during the same period last year. Single-family construction in Dallas is at the highest level in 5 years. So it was up 35% from the prior year quarter. And right now, even in the Metroplex, which should -- had trailed, what we're seeing in San Antonio and in Houston, there are only around 3.5 months of inventory left on housing. So as we come back and take a look at what we see in infrastructure and commercial and that type of housing growth, and we take a look at what the numbers looked like last year in Q2 and Q3, I think those are the things that gives us the type of confidence that we have that we'll hit the volume projections that we have out there.

If they're going to step up just to a little higher level, and look at volume growth or absolute volumes in the last 3 quarters of 2012 versus in 2011, that ranged from about 102 to 104 million tons that we shipped during those 3 quarters. And with the actual results in the first quarter and our guidance of 4% to 6% for the year, that infers that we need about 110 or 112 million tons to actually meet the guidance's expectations, which, as Ward indicates, really not a whole lot of volume given the strong underlying fundamentals.

And how would you characterize visibility and lead times in your business kind of compared to this time a year ago?

It feels considerably better than it did a year ago. I think when we were coming out of this period last year, there was a higher degree, in my mind, of uncertainty around where construction was. And I think, again, that's part of what's driving the reinforcement of the end-uses and forecasts that McGraw-Hill just came out with this, Jerry.

Okay. And in terms of midyear pricing, obviously, at this point in the cycle, you've -- when you've got the pricing momentum that you just reported here, presumably there are some markets where you're going to look to put in midyears in. Can you give us a sense on what proportion of your markets you're optimistic on additional pricing actions sticking at midyear?

You know what Jerry, I will clearly go into more detail on that when we get to half-year. I think what's attractive about it right now is we're seeing up volume just about everywhere over the last couple of years, where it's been spottier. I would tell you to follow the volume. This year, with the volume trends that we're seeing, I do think they can be more widespread, but that's probably as specific as I want to be right now.

Our next question comes from Adam Rudiger of Wells Fargo.

It seems that these levels of production, the incremental tonnage, really, has some significant impacts on gross margin. So my question is, if you hit your guidance or the middle of the pricing and volume guidance for the year, what should we expect the full year gross margins to be around, in let's just say the aggregates business?

If we do that, depending on where the volume comes, I think we would start seeing the type of incremental volume margin expansion that we've been talking about, Adam. I think one of the biggest issues that we will face, and I think the industry will face, as volume comes back is where it's going to come back. And while volume has been good across the enterprise, what you're clearly seeing is still a much healthier business in the West right now than in the East. So if it continues to be that way, that's going -- it won't push them down, it just simply makes it more challenging. Part of what I am taking some comfort in right now, though, is relative to what's happening in jobs in a number of different markets. And I think this goes directly to your margin question. North Carolina, on unemployment rates, has been sitting at #47 in the country now for a while at 9.2%. Now for the first time here, as we're really coming into March, and I'm looking at the Martin Marietta states, I'm seeing year-over-year employment rates in North Carolina for the first time moving ahead of a national average. And if we're seeing that type of economic activity here and more tonnage here, it's going to come back and help us seriously address the margin issue.

Okay. My second question is, if I think back when we've talked about weather before, my memory seems to suggest that you may -- I think you may have said that weather -- you'd always feel that it comes back, the lost volume from weather. Does that -- am I correct in remembering that?

I think it wholly depends on the time of year. But I think when you've got a weather impact in Q1, I think all it does is it pushes it to the right. So I think we can take a high degree of confidence that we're going to have a shortened construction season, but I don't think that's going to end up being problematic for the industry this year.

Our next question comes from Ted Grace of Susquehanna.

I was hoping to touch on, first, the margins in Aggregates. Obviously, we saw a really impressive pricing, up 6%, which I think gives you $17 million of revenue and profit benefit. Revenue is down $9 million, gross profit is down $9 million, which gives you some pretty sharp decrementals, admittedly, on down volumes. But -- and could you maybe give us the bridge you've historically provided to help us understand kind of the puts and takes that drove the change in gross profit?

As you look at the aggregates product line, it's gross profit were down $9.4 million collectively, pricing strength contributed about $13 million, volume weakness took away about $22.5 million, and our costs were essentially a cush. So that $9 million, $9.4 million, essentially, just dropped straight to the bottom line, and it all came from volume.

Okay. So would my math be right to say that costs per ton were up almost 10% year-on-year?

They weren't up 10%, they were up slightly, and that would infer then that, again, our variable costs didn't move a whole lot. And the reality for the first quarter is that, for the first time in several beginnings of construction seasons, we actually did some planned grading. We uncovered and moved about 18% more, about 1 million more cubic yards of dirt actually unearthed, some reserves to be prepared for the construction season, and that did affect the cost structure in the quarter. And really, our production didn't decline either. Actually our production numbers, in preparing for what's coming up in the season, were strong. And if I go back and look at the relationship to production, to shipments, it's in line with what we had historically seen as the start of a strong volume builds. So we feel real comfortable with the cost structure. But you're right, I don't think the number was up 10%, but it was up slightly.

Ted, let me give you a little more color to that because I think this will be helpful. If you look last year, in Q1, we used about 6.1 million gallons of diesel. To Anne's point -- this quarter, around 6.9 million gallons. With basically the same tonnage, that goes to Anne's point on what we were doing, moving about a million more cubic yards in stripping activities. And importantly, when we come back and take a look at what we're doing relative to productivity on tons produced per working man-hour, they remained almost the same from Q1 last year to Q1 this year, and keep in mind, operating in a much different and better Q1 last year than this year. So to have that degree of productivity maintained, I thought it was actually quite good.

Can you probably [ph] share that tons per hour, what that metric was on year-on-year?

I typically don't give the exact number on that for competitive reasons but -- I publish that very carefully, but I can tell you it was almost spot on to where it was last year, Ted.

Okay. The other thing I was hoping to touch on is, could you just help us -- and I apologize if I missed this, but maybe just walk through the volumes at the state level for your biggest states, kind of Texas, North Carolina, Colorado, at the state level, what those numbers look like?

You didn't miss anything on that, and actually, I'll give you at least a quick color on that. I'll go through some of the districts. If we're taking a look at just the Midwest Division, and really, that's important because they had a great quarter last year, that's where it was over 50 degrees, volume there for the quarter, Ted, was down about 16%. And again, that's one of those districts that I was talking about had a record DOT program last year, a bigger one this year. So volume down 16%, you feel like that's almost entirely weather-driven. At the same time, you come back and take a look at different districts in Texas, volume actually up in the Houston district all by itself, that's not surprising. You've got good weather there, volume actually up in North Texas. So we look at those as really 2 very different markets. At the same time, you come back and take a look at North Carolina West, meaning Greensboro, and that area, volumes down there, indicative of a pretty tough winter. And if we look even in North Georgia, again a very difficult winter, volumes down there around 11%. So those are the types of percentages that I very much would have expected with the weather we've had this year compared to last year. But that gives you some real specificity in some live markets.

Okay. And the last thing, I just wanted to come back to a comment I thought I heard Anne make in response to one of Jerry's questions, where you said that you thought that the implied target you'd have to hit in the remainder of the year were -- my interpretation to what you said is it really wasn't a stretch. So is there a potential we can infer that to suggest that your volume guidance, the risk bias is skewed to the upside?

I wouldn't say that. We're usually pretty pragmatic about the guidance that we give. Our view of the 4% to 6% is reasonable. But obviously, with the depth of the volume decline in the first quarter, we've wanted to relook it to make sure that not only did our forecasts hold up, but that it actually seemed logical that -- given the fundamentals of the market. So on average, we would have to see volumes up, on average, 7% to 9% through the back half, back 3 quarters of the year to meet our targeted 4% to 6%. Do I think there's a risk to the upside? I hope so, but it's still a long 5 years. We'll see.

We'll take that risk, Ted.

Yes, we'll take that risk. That's right.

Our next question comes from Trey Grooms of Stephens Inc.

When you're looking at your -- at the different states that you guys have that are disproportionately important from a margin standpoint, they've been definitely -- at least several of them have been lagging. It sounds like you're seeing some things that might point to some optimism in those states. But as you kind of look at your guidance, with the -- being decent improvement we're seeing in volume or expected to see in volume, how does that sort out for those disproportionately important states from a margin standpoint, and your expectation for those relative to the guidance you've given?

I think part of what we're seeing right now, Trey, is we think those states that are disproportionately important, at least some of them have found bottom, and we think they're improving. I think that's really important. And candidly, that's part of what we saw as we were looking at the acquisition that we made in North Georgia as well. I mean, here's some things to think about. If we look at construction employment across the United States, in Texas, which everyone gets is in a great place right now, we're seeing 5 -- 5.6% change positively year-over-year. But if I suddenly come back and take a look at South Carolina, it's 3.5% positive year-over-year, as is Georgia, as is Florida. So we're starting to see construction jobs come back in that bottom right-hand corner on the map that we keep drawing a circle around. Now North Carolina, as we said, continues to lag on construction employment. At the same time, when I'm looking at overall employment trends, North Carolina, for the first time now in years, has gone ahead of the national average. So if we look at those type of statistics, and we start looking at some of the jobs and work that's out there, particularly as we start heading into '14, it certainly gives us much greater confidence in the southeastern U.S.

Okay. So it's reasonable to think that North Carolina, for example -- that North Carolina, it's reasonable to think that it could continue to maybe trail the overall average, but maybe the expectation is to see more, maybe it outpaces as we look into '14, and that's when we could really see some big margin improvement coming from that region?

Trey, I think that's exactly the way to look at it. I mean, if you look at it right now, it has a work plan in 2013 that's 14% positive. But again, I think that's going to have more forward view to it than significant near term. So I think the way that you captured it in your words is entirely correct.

All right. And then I guess the last question is more kind of longer term, how to think about pricing. Given all the changes that we've seen in the industry throughout the last 10 years and through this downturn, and I understand it's early, but I mean, next year, in some of the numbers you threw out there, it's reasonable to expect some pretty significant volume improvements as we look at '14 and beyond. But in that kind of environment, with some of those numbers, just hypothetically, if those numbers kind of shake out, what could we or should we be thinking about? I mean, if you guys are putting up this kind of price through this downturn, what should we be thinking about as a pricing range in a much more robust type of environment for as far as demand goes?

Trey, that's a great question. And part of what I celebrate is I think we finally have put it to the acid test with respect to pricing historically. So I think we'll celebrate that here for a moment. Here's the way that I think I'd think about that, Trey, and I think we're seeing it to a degree with what we've put up this year. Part of what we have really given some thought to, is as these volumes continue to grow, particularly as they grow in advance of 5% per annum, I don't think it's going to be unusual for you to have pricing that's on a percentage basis. It's going to stick relatively close to that with a bit of a lag. So let's talk about -- let's use easy math. Let's say volume is up 10% next year. If the theory is correct, you could see them 7.5%, 8%, that's the type of lag that I'm talking about. So I think depending on how you think volumes will be and how elastic you feel like that may be, that's how I would be working with that model.

Our next question comes from Todd Vencil from Sterne Agee. L. Todd Vencil - Sterne Agee & Leach Inc., Research Division: I don't think you gave the actual number for the decline in infrastructure. Maybe I missed it, and by the way, I apologize I got cut off for a minute. Can you give me that number in the first quarter?

As far as the tonnage that went to infrastructure, the down, it was also less [ph] than 5%. So it was 42% of our volumes. Commercial was 33%, Res was 14% and ChemRock/Rail was 11%. L. Todd Vencil - Sterne Agee & Leach Inc., Research Division: Got it. And on the -- just to comment at a question that a couple of people would follow up on different ways, you talked about how you can still get to the annual volume guidance despite the first quarter being soft. And you talked about that if you're up 10% in the second quarter, up 15% in the third quarter, you can be flat to down in the fourth quarter. Is there a reason to actually think that you're going to be flat to down in the fourth quarter? Or is that just sort of giving an example?

That's really just more using an example. If you think about it, last year, Todd, Q4 actually went on pretty long. So actually, the way that I've just kind of modeled it out of my head, we could be down as much as 3% in Q4 if you wanted to say, winter would come in early, if you had a good Q2 and a good Q3. So I think it just depends on how you want to really put the numbers at the end of those rather than in the middle. But I think you're clearly looking at double digits up in Q2 and Q3 if you want to make the 4% to 6% up. And again, based on what those quarters look like, I don't think that's a huge stretch, Todd.

Just as a reminder, Todd, remember volumes were actually down in the third quarter last year because of all the uncertainties surrounding the economy. L. Todd Vencil - Sterne Agee & Leach Inc., Research Division: Sure. Okay. On the pricing side -- and again, I was cut off, so if I missed this, I apologize -- but I can't help but notice that the 5.7% increase in price in the first quarter is a larger numeral than 2% to 4%, which is your guidance for the full year. I mean, was there that much mix in there? You talked some about the mix effect. But was there that much of a mix effect in there?

First of all, I complement you, you don't miss a thing. Todd, no, I mean, there was some mix effect. And to give you, it was 123 bps rolled up. If you want to break it down, it's about 150 for the Southeast and 200 in the West. And to really give you some sense on the way that the mix worked, in the Southeast, we went from 40% base last year to around 30% base this year. And in the West, we went from 49% clean stone last year to 56% clean stone this year. So that, at least, was the mix play that was in there. Even if you take that mix number out, I mean, still, pricing was very healthy for the quarter. I will certainly concede that. I would simply come back and say it's the first quarter. It's January, February, March. Do I like what I've seen on pricing? Yes. Do I think it could be awfully good? Yes, I think I probably do. Am I going to be cautious and say let's give this some time? You bet. L. Todd Vencil - Sterne Agee & Leach Inc., Research Division: Understood. Understood all that. And then switching gears talking about Specialty Products. Can you quantify the impact of that customer bankruptcy just in terms of -- with however you want to look at it?

Yes, it was Feris Point [ph]. And here's the way to think about it, Todd. They went into bankruptcy last year in May, which tells you that, as a practical matter from a month's perspective, we've already weathered, really, the worst of that. From a sales perspective, call it, probably $3 million worth of sales last year. L. Todd Vencil - Sterne Agee & Leach Inc., Research Division: For the sales last year, not in the first quarter?

In the quarter.

In the quarter. L. Todd Vencil - Sterne Agee & Leach Inc., Research Division: Okay. Got it. So is this -- is the quarterly -- the first quarter number that I realize you have some guidance out there, but is it sort of the run rate to anticipate? Or how is the kiln running? Is that a factor at this point to just run a full out?

The kiln is running well. It's been debugged. It's running at a rate that we anticipated that it would. We feel very good about the way our business is looking right now in Woodville and Manistee. Our teams have done exactly what we would have hoped to and 10% more.

Our next question comes from Garik Shmois of Longbow Research.

Just given the slow start to the year in the downstream businesses, in part, because of weather. If my math is right, I think you need about 70% incremental margins to hit the midpoint of your full year profit guidance for the downstream businesses. So generally, these are lower incremental businesses. The way that we think about it, I was just wondering if you could walk us through a little bit on how you're thinking about the profit ramp in the downstream businesses. And is this mainly pricing-dependent given the strength in pricing that you're getting? Or is this something along the lines of a better operating leverage? Or is the plant level that's going to drive these incrementals higher?

It's going to be both, Garik. I mean, clearly, we are anticipating that volumes would be better. I mean, so let's begin with that notion. At the same time, when we're sitting here right now with ASP up in ready mixed 9% and ASP up in hot mixed 6%, even the pace of, candidly, liquid moving down, those are pretty good numbers. To go back and give you a sense of at least what those volumes looked like last year, in San Antonio, on hot mixed, we did about 1 million tons; and in Denver last year, around 1.7 million. So that will -- and then do some rounding for the Arkansas business. If you think about what the ready mixed yards looked like in Colorado last year, around 1 -- almost 1.5 million. And in San Antonio -- I'm sorry, it's 1.5 million rolled up. In Rocky Mountain, it's around 930,000; and in San Antonio, around 0.5 million; and then call it 125,000-ish in Arkansas. That gives you a pretty good roll on the way those volumes will work. Obviously, the pricing isn't going to be the same in all of those markets, and we feel like some of those are more attractive than others. But again, the biggest single downstream component that we have right now is what we have in Colorado. And as we take a look at the way that, that business is performing right now and the way that we feel like that's going to work going forward, we've got a pretty high degree of confidence that Colorado is going to be where we'd like it to be here by the end of the year. We've got good bidding activity there, and we're seeing good residential activity, we're seeing good commercial activity, and we like the mix of business as well, separate and distinct from what's going on with the RAMP program in Colorado DOT.

And Garik, I would add that I think what you're referring to is incremental margin there is -- remember a lot of that comes from the seasonality of the earnings pattern in that business because it is -- it is so Colorado in focused. You generally have losses that you carry in that business through probably the first 4, 5 months of the year, and you make all of your money in the last 6 or 7. So I think it's really more the seasonality of the earnings pattern that you're seeing as opposed to an incremental margin concept.

Okay. That makes sense. Some companies have been talking about ready mixed truck shortages. Some mentioned last week on their call. Other companies have been pointing to that as well. Just wondering if we can get your view on -- this could be a potential risk to your volume guidance. And the trucking shortages downstream might delay the timing of projects. And in turn, that might back up when you'll be shipping into some of these projects throughout the balance of the year. Is that a potential risk at all?

Garik, I think it is a potential risk. I'm not sure I'd highlight this as an enormous risk right now, but I think it is a potential risk. In fact, if you take a look at the areas at which we actually produced more this year than last year, it was really in 2 pretty distinct places. We did that in South Texas, and we did that in portions of Colorado. Our sense was having that material on the ground and in a position to ship it earlier rather than later might be helpful for a variety of reasons, including trucking. So that inventory build was not accidental.

Okay. That makes sense. And then I guess just lastly, you mentioned the pending deal with Lafarge in Atlanta. Just wondering if you can comment, Ward, just on your interest in the future acquisitions, specifically your interest at this point in smaller deals versus larger deals, potentially revisiting bulk-in or other large comparable bids at this point in time, Ward.

Garik, the primary thing we're focused on right now is running our business exceptionally well, and I think our teams are doing that. And to the extent that we find transactions that we think build shareholder value, we're certainly going to look at those. I mean, one of the issues that we recognize is we do want to bring down our debt-to-EBITDA ratio, and we've been very transparent about that. And if we can have that at a range of, say, 2.5x by year-end, I certainly wouldn't have my feelings hurt if that's where we found ourselves. Obviously, I think doing this Lafarge transaction makes an enormous amount of sense for us. If you take a look at the locations that we have in that Atlanta market and think of Atlanta as a clock, we've really bought some operations that are really between, say, 2:00 and 5:00 on that clock and over to the East. So if you remember what our strategic objectives are, and that's to find attractive markets and to have the #1 or #2 position in those markets, we think that's what we're accomplishing with this Lafarge transaction. And again, I think that's wholly consistent with entirely what we have been talking with the analyst and investment community about. And I think to the extent that we can do more of that, that's what you should expect us to do.

Our next question comes from Keith Hughes of SunTrust.

Most of my questions have been answered. But just quickly on the Lafarge deal, can you give us some sort of indication as how large the revenue, what the profitability of those units would be?

Keith, really, right now, pending the closing of it, I'm not in a position that I can do that. But I can tell you, it's Lithonia and it's Newton and it's Morgan County quarries, and you can probably get a sense of what volumes look like there.

And the close date, again, I think you mentioned it earlier.

Actually, we didn't mention the actual date. We're looking to do that sometime very early in Q3.

Our next question comes from Mike Betts of Jefferies. Michael Betts - Jefferies & Company, Inc., Research Division: Just 2 questions for me. The first one is a follow-up on that Lafarge thing. I mean, they put out a press release in early January saying they were selling 6 quarries for $160 million in Georgia. Is your purchase part of that? And 800 million tons of assets, if it is, that seems a pretty attractive purchase price. Is any of these aggregates reserve not permitted or in a particular big block in one location?

Number one, it was not part of that release, as I understand it, Mike. So this is separate, so it's not in those numbers. It is 3 locations. And the Lithonia location has the biggest single block of reserves, and I don't think there's any question about that. But the 800 million number that I've put out is the permitted reserves number. Michael Betts - Jefferies & Company, Inc., Research Division: Okay. And then maybe just one for Anne on the SG&A and the IT cost of $4.6 million or so. Correct me if I'm wrong because I probably am, I thought the additional cost of that program was running at kind of like $1 million a quarter. Was it something specific exceptional in Q1 or if you brought the cost forward? Or maybe like a bit more explanation on that would be useful.

Yes, Mike. The core information systems upgrade project is about running at $1 million a quarter, plus or minus a couple hundred thousand, every quarter, depending on the timing. So we did have a renegotiation of our Oracle license in the first quarter of 2013. That was a onetime charge of $2 million that you'll see. That is -- part of those costs. That will provide us with a platform that is much more scalable. But that won't recur in the second quarter. You should see it get back to about $1 million a quarter.

In fact, Mike, it shouldn't recur anytime soon for a while.

Not for a while.

I'm showing no further questions at this time. And I'd like to turn the conference back over to Mr. Ward Nye for any closing remarks.

Again, thanks for joining our first quarter earnings call and for your interest in our company. We are optimistic about our business opportunities for the rest of this year, and we really look forward to discussing second quarter 2012 results with you in July. Thanks for your time and your continued support of Martin Marietta.

Ladies and gentlemen, this does conclude today's conference call. You may now disconnect.