Good day, ladies and gentlemen, and welcome to the Martin Marietta Materials First Quarter 2014 Financial Results Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded. I'd now like to introduce your host for today's conference, Ward Nye, President and CEO. You may begin.

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. As we announced in our earnings release this morning, first quarter 2014 results reflect both sales growth and improved profitability. Aggregates product line shipments increased 8% for the quarter, with notable growth in Texas and Colorado. Importantly, despite the impact of unusually adverse winter weather, shipments for each month increased over the respective prior-year month, led by 13% growth in March. Higher net sales, coupled with diligent cost management, resulted in a 400 basis point improvement in the Aggregates business gross margin. In addition to our quarterly results, we're excited about our proposed business combination with Texas Industries. This transaction will enhance our position in Texas and provide an opportunity to serve the expanding California cement market. Most importantly, we believe the combination will create long-term value for shareholders of both Martin Marietta and TXI. As part of the combination process, we're continuing discussions with Department of Justice toward resolving our Hart-Scott-Rodino Antitrust Improvement Act filing or HSR. Although we're not yet in a position to publicly respond to any specific possible resolution, we believe any HSR issues will not be material. Accordingly, our views today regarding this aspect remained unchanged from January. We expect the combination will proceed on the original timetable, likely to close this summer. Before elaborating further on our first quarter results, let me remind you that today's 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…

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

I think the first thing, Ward, is congratulations on your new role within the company, well deserved. Could you expand a little bit, you talked about geographic issues impacting pricing and mix. Could you expand a little bit on both of those, since pricing early in the year does tend to have a fairly important impact for the overall company for the year?

Sure, Arnie. And Arnie, thanks for your comments, too. I really do appreciate that. Here's the way I think about volume -- or pricing in Q1. Look, we had strong volume increases in Rocky Mountain and we saw strong volume increases in the Southwest. So really, those are 2 of our lowest priced areas. So if we think about that in varying degrees of context, in the Southwest, we saw base sales go up by almost 1 million tons, but we saw clean stone stay relatively static from a volume perspective. Now what I'll tell you is the base stone pricing went up as did the clean stone pricing, but still that's 1 million more tons of base, which is obviously a lower priced product in a lower-priced market. Similarly, if we look in the Rocky Mountain division up and down the front range in Denver, again, if we're looking at base and fill material in that market, they are up about 2x over where they were last year in the first quarter. So again, you're looking at a lower-priced market and lower-priced products going. I actually think that's a good sign, Arnie, because what it's telling us for the first time in a long time, we are seeing new construction. And part of what I tried to spell out in the prepared remarks is that's simply going to be a driving force for more mature construction that's coming behind it. And in fact, we're seeing some of that in the pricing that we're seeing in concrete stone and asphalt stone. If we look at pricing for the quarter for concrete stone, that was up 2.9% for the quarter and pricing for asphalt stone was up 3.7%. So as we come back and revisit where we are relative to pricing, to us it is truly a geographic and a products mix issue. Our confidence around the pricing story continues to be very high and I think what we're seeing in Texas on a continuing basis and what we're seeing in Colorado are very, very good signs.

Were there any markets you didn't actually have some price increase in the materials that you were selling?

When we're going to same product, same quarry, this is not a marketplace in which we are seeing pricing retreat. Again, as we are looking at pricing, we're watching it go nicely up. There are a number of markets that we didn't put price increases in until April 1. As you recall, that's really when much of the construction season's starting in earnest anyway. But I think that answers your question. Did I hit what you needed, Arnie?

Absolutely. Very thorough. My other broad question which I'm sure is on the mind of virtually everyone on the call is you have the potential for a transformational acquisition with Texas Industries and yet we're having some issues with the DOJ. Is there a way you can perhaps expand on some of the issues you're dealing with and how this might get resolved?

Sure. Happy to do that. Actually, we are precisely where we thought we would be with DOJ right now. I mean, you're right, there's a second request. The second request is really quite narrow. We feel like the issues that are involved in the second request and we're working with DOJ staff right now are very much in line with what we had anticipated. We think this is a circumstance that's likely to be resolved in a matter of weeks. Because as you'll see, we are not changing our ideas around when the closing will occur. The other thing I will tell you, if this gives you some comfort around it, if we look at the scope of the second request, what that tells us is the view that we've long held that there should not be any quarries put up for sale in Texas is very much consistent with what we thought it would be. So from a timing perspective, Arnie, I think we're exactly where we thought we would be. Looking at the markets and anticipating what the likely result is, I think, again, we're exactly where we thought we would be. And the conversations and dialogue with DOJ staff continues to move along in what we feel like is a very constructive, very progressive way.

Our next question comes from Todd Vencil of Sterne Agee. L. Todd Vencil - Sterne Agee & Leach Inc., Research Division: Just to kind of expand on the last set of questions. Can you talk about the range of the price increases that have gone in this -- so far this year and the timing?

Todd, they will vary. Some will have gone in on January 1, some probably would have gone in on around April 1. If I'm looking at the data that we have right now, in some markets, I'm seeing price up as much on a percentage basis as 14% in some areas. Obviously, there are going to be other areas that will not have that degree of price increase. I don't really want to go market by market for, obviously, competitive reasons and give you a sense of that. But again, if we're looking same on same, price increases are very much where we thought they would be, Todd. L. Todd Vencil - Sterne Agee & Leach Inc., Research Division: That's good. With regard to your aggregates margins, nice looking performance in the quarter, which is interesting given that price was down or the average price was down and you mentioned in the release that production was also down. So can you talk about how you were able to pull that off at the margins?

Number one, I would say we had awfully good cost control and I think that's real kudos to our team. Here's the way that I'd like to think of it for the quarter, Todd, and I think this is a story that we haven't been able to say for a long time. If you come back and take a look at the quarter and you put $9.5 million of extraordinary costs to the TXI transaction, and if you want to come back and basically say that our gross profit was hit by another $5 million, simply due to what we dealt with extraordinary weather. And the biggest component of that was felt principally in our Midwest Division right now or Mid-America. At the end of the day, that's another $5 million. You come back and take that $9.5 million on the extraordinaries with TXI and the $5 million that we feel like we were hit because of the extraordinary weather, basically we're looking at a breakeven Q1, and I think that's pretty impressive because when you go back and take a look at it, that's 24.6 million tons of sales. Back in Q1 of '12, we had 24.9 million tons of sales and on a normalized basis then probably around $0.47 per diluted share loss normalized. And if we're looking at something that feels awfully like breakeven, when you pull out these extraordinaries, I think what that tells us is the cost structure continues to be in the right place. The team is focused on the right things and what we believe we can do relative to pricing continues to be very consistent.

Todd, I think, you could almost summarize it by saying when the sun was shining, we were shipping, and that's just not very common in the first quarter.

And the odd thing, Todd, was that was true across the enterprise. I think what a lot of people would have assumed is in a market like Denver, that can be really profoundly affected by winter weather, to Ann's point, when the sun was shining in Denver, life was working pretty well there. So when we suddenly pause and come back and take a look at what was happening with respect to ready-mix in that market, ready-mix in Denver all by itself was up 35%. And asphalt remarkably up even more than that on a percentage basis in a remarkably weather impacted world. So it tells us the momentum we saw in '13 does continue into '14 right now. L. Todd Vencil - Sterne Agee & Leach Inc., Research Division: And this is probably obvious, but that's a function of underlying demand and backlog, do you think at your customers?

That's what we believe. Again, we think the momentum that we saw in Q4 last year, again, that we thought was very attractive, we think continues into Q1 and throughout the year. L. Todd Vencil - Sterne Agee & Leach Inc., Research Division: And just sticking with Colorado for a second, do you have a sense for how much of the business there is rebuilding for the floods and FEMA money versus how much is highway money and how sustainable each of those things is?

I think one of the big things that's odd about Denver right now, a lot of the flood and other Colorado DOT money has actually been a little bit slow coming out. I think we saw some of that come out quickly in Q4, simply because they had to. But I think they're looking at so much potential work there, it's coming out slowly. What that tells me is this: The private sector and, again, that's back to the commentary that we had, continues to not only be good, but continues to get better in that market. And from where we sit that's an attractive place to be because private sector work is actually more profitable work for us. So again, if we recognize there's going to be more public work coming behind that, it just continues to make us feel better about that market. L. Todd Vencil - Sterne Agee & Leach Inc., Research Division: Final question for me. Specialty Products business. So given that you had an impact on the margin from nat gas in the quarter, but given you didn't change your guidance for the year, can I assume that you're anticipating that, that impact wanes or has already begun to wane? And can you talk about the sensitivity of the gas prices there?

Well, it has begun to wane. I mean, steel continues to run at about 76% of capacity right now. Nat gas is back in that $5 range, which is really where we had kind of planned. Keep in mind, what we saw during Q1 was nat gas up year-over-year with the spike of 58% and usage up about 6.5%, because we had some lime constraints really because of that extraordinary weather, which made us operate our kilns in a fashion that's not optimal for running our business. So we think where we're sitting right now for the balance of the year and frankly with what we see as backlogs in the business, we have a lot of conviction around where that business will wrap up.

And Todd, that increased usage and cost, our price was about $1.8 million impact on the cost structure of mag -- the Specialty Products business, excuse me, which really essentially, if you would normalize for that, the margins would have been essentially flat with last year.

Our next question comes from Garik Shmois of Longbow Research.

First question is just on pricing in the West Group. You called out mix as a pretty sizable headwind. Just wondering if you have a line of sight as to how long mix could be a headwind this year, are we looking at another quarter, another 2 quarters or there's going to be potentially a longer run headwind until the initial base stone shipments wear off?

Garik, I think it could go for a while. And frankly, I hope that it does in many respects because if we look at the way -- let's talk about Houston for a second. Houston typically is a market that's running at around 85% clean stone. I mean, Houston is considerably below that right now on both sand and gravel and base material. But again, part of what's going on in Houston is they need base stone because they need to come back for new construction and there's been such little demolition in that market. Remember, that's one of the few markets in the United States where oftentimes recycled or crushed concrete can be used as the base product. So again, what we're seeing are some shortages on product like that. We're continuing to see new construction. And the fact is the more new construction that we see, while it may give an optical headwind on pricing, at the end of the day, Garik, that's all it is. Because even as I'm looking at these base price sales in the Southwest and in Denver, the prices are up year-over-year. And the clean stone prices will be up year-over-year. And specifically, coming back to Texas, as you recall, that was the market where last year we did see a number of midyear price increases. And I think you should expect us to come back and look for that again this year as well.

Okay. That makes sense, and I guess it's a good problem to have at this point in the cycle. But I guess just my follow-up there in the context of your pricing guidance being unchanged, just wondering if you could expand a little bit on how you're thinking about it. I can appreciate that there's -- that market volatility is not going to be uniform over the course of the year. But you can help us maybe bridge the gap between the reported price in the first quarter and what needs to happen for you to hit your guidance for this year.

Right now I think in large part, we just need to see volume return to Mid-America and Southeast. Keep in mind, if we're looking at the first quarter, volume in the West was basically up a considerable percentage point. And at the same time, we're watching volumes down in Mid-America and Southeast, particularly as Mid-America comes back, that geographic shift all by itself, Garik, I think comes back and probably fills that hole that you're wondering about.

Okay, makes sense. I guess my last question is on the volume guidance as well. Really good volumes in the quarter. But your full year guidance implies some deceleration in growth. Just wondering what you're thinking about respective volumes over the balance of the year, is it just a measure of caution with respect to the highway bill uncertainty or is there something else going on there?

Okay, Garik, you nailed it. And that's exactly where we were a couple of years ago. And you remember that as well when we were in a reauthorization year. And suddenly it seemed like some win [ph] came out of it. Frankly, it's hard to sit here right now and see that win's [ph] going to come out of it, like it did then. At the same time, it's not our first rodeo with this. So I think to your point, coming back and just remembering what history has been and approaching it in a reason [ph] manner is what we're looking to do. As a practical matter, I think we will likely have some degree of resolution on what the rest of this year looks like on the highway bill relative to funding, probably before Congress leaves for the August recess. And if that's what we have, then when we come back at half year and report our half-year results, then we can come back and revisit where we are on volume guidance.

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

The first is on volume progression and the feedback that you had with March being up low teens was very much in line with what we had heard in the market. But in terms of -- if you could maybe dig a little bit more into regional and end market differences and it's -- you're steadily moving your mix shift away from the structure being a bigger percentage of your sales and res and non-res growing to be a bigger percentage. Obviously, we've seen growth there. But if you could maybe compare and contrast, as I said, on the end market and regional differences today and what you're seeing as we go into Q2 and how is that different than what you saw a year or 2 years ago?

Kathryn, that's a good question, a fair one. Let's think about it this way. Let's start in Colorado and work our through the business. Here's a good way to think about what we're seeing in Colorado. I mean, we're continuing to see good residential activity there. We're seeing good commercial activity there. To give you a sense of it, last year at this time, we had 4 paving crews in place in Colorado. This year, we have 16 paving crews in place in Colorado. So again, what I would tell you, is we're watching every component of that economy hit pretty well. As we come a little bit farther south and take a look at the Midwest, again, that's never going to be a big driver on the res side, although res around Des Moines in Omaha is actually, for those markets, look pretty good. Again, what we're seeing is particularly good commercial activity there. We continue to see add-ons at data warehouses for Google, Microsoft and others in that marketplace. And again, what I would tell you on infrastructure there, it continues to be very, very steady. If we come a little bit farther south and take a look at what's going on in DFW and parts of Texas, I mean, DFW, we're looking at Interstate Highway 35 West with considerable tonnage. We're looking at State Highway 183, considerable tonnage. We're looking at homes up 60% year-over-year in DFW, now probably to a 25,000 per annum start right there. If we go down to Houston, we talked about the fact that that's usually a market that you see 85% of the market in clean stone. Base is now considerably up. We're seeing good toll road work there. We're seeing -- basically Harris County Tollway Authority now putting in a…

Yes, no, that helps. And I guess this is really a 2-part question, one more directly with pricing, the other somewhat relates to pricing. If you're able, could you parse out on a rough percentage basis how much of pricing the quarter was impacted by geography versus product mix? And then, finally, if you were to look at your markets today versus 5 years ago, how consolidated are your top markets today versus 5 years ago?

I'll let you do the math on the latter part of the question. What I'll say with respect to the geographic and the product mix, I mean, both of those issues, again, were an optical issue going in the quarter and I tried to give some very specific numbers around what we saw, particularly in Texas and Colorado. Okay, if it was same on same, Kathryn, it would have been up 1% or more. I think that's still the best way to think of it.

Yes. Kathryn, this is Anne, about, I think it was about 2% with geography, about 1.3%, 1.5% was product, from that average to be just right around 1%, the impact of it.

In fact, 1.8% was geographic and 1.3% was product.

That's helpful. And the second part of the question, which was I don't if you caught. I had -- my phone cut out, but if you were to look at your overall markets, Martin Marietta today, what percentage are fully consolidated? When I say fully consolidated, you have 3 or 4 players that account for 80-plus percent market share. What is your consolidation today versus the prior peak?

You know what, Kathryn, I think clearly, the industry has seen considerable consolidation since the prior peak. And I think that's a safe observation. I think the other thing that I would ask you to look at and I think it's better for you to look at than for me to opine on is what equals a relevant geographic market, because whether you're moving product by truck, by rail, by boat, by barge or otherwise can impact that pretty considerably as can the barriers to entry, and they're going to vary considerably across markets as well. So I'm going to artfully dodge your question on that at the end of day.

Our next question comes from Jack Kasprzak of BB&T. John F. Kasprzak - BB&T Capital Markets, Research Division: Back to pricing for a second, going back a couple of years, 2 or 3 years, there were issues with inventory imbalances in some markets. I'm just wondering where we stand today and whether any issues over inventory imbalances are having a material effect on your pricing outlook for the full year?

The short answer on that is no. They're not having a material impact on pricing for the full year. As you recall, we basically had about 60 million tons that were out there. We pulled that down a little bit quarter-over-quarter. Where we were out of balance was on base products. So the fact is, as we see base work go with greater vigor in almost every market that we're in, that goes a long way toward curing the imbalance. But no, we do not see that as a pricing issue, Jack. John F. Kasprzak - BB&T Capital Markets, Research Division: Okay. Second question is, in the risks section of the press release, you talk about fiscal issues and risks to transportation budgets and spending. And it mentions North Carolina, which of course is a very important state to you guys. Is there something specific going on there that you see that's changed in the last 3 or 6 months with regard to the outlook in North Carolina for transportation spending?

Jack, this is Anne. There's not. I mean, that really we're -- that is a pretty standard issue. As you know, North Carolina disproportionately affects profitability. And so we make sure that we highlight that. And back to our whole commentary as the southeastern corner of the United States begins to recover, then you get a disproportionate impact on profit. John F. Kasprzak - BB&T Capital Markets, Research Division: Okay. And there's another comment about some markets in the West being now in growth mode when you kind of look at the cycle from bigger picture perspective and we know Texas has been and still is a great market. And I guess you're calling out some improvements in Colorado. Is that where the change is coming in terms of more markets being in growth mode?

I think that's entirely what we are seeing there. I mean, part of what we anticipate in Colorado, for example, Jack, is we're looking to put a midyear price increase in ready-mix in Denver of $6 a cubic yard. That's already be sent to the marketplace. But again, if you're looking at that type of a midyear price increase on ready-mix in a market like Denver, and I think that gives you a pretty good sense of what that growth looks like. And based on a Colorado budget, based on what their RAMP program is doing and based on what the flood relief dollars will look like in that market, we anticipate that market being pretty strong, not for a matter of months but rather for a matter of years.

Our next question comes from Chris Olin of Cleveland Research.

Just wanted to talk a little bit 2 big picture questions. The first is the TIFIA spending contribution. I guess, I'm just wondering how you're thinking about that going forward and how your assets may be positioned. Are you winning some of these projects that are getting released?

Look, I think we look at it the same way we talked about it for a while in that is we think it's going to make a profound difference. We have been disappointed, as I'm sure you have been too, at a pace with which it's come out. Given the pacing at least relative to 2014, we put our plan together as if there would be no TIFIA activity in our plans. So to the extent TIFIA really starts hitting it hard this year, frankly, it will hit it harder next year, it would simply be an upside. I mean here's what we know. Look, all the awards are likely to be done or -- well, they had to be done before the expiration of the highway bill. The total applications right now exceed $51 billion. If we look at the states in which we participate, ongoing applications right now are $18.5 billion. If we look at places that it's been approved, northwest Carter [ph] in Atlanta; downtown Richardson, Kentucky; and The Grand Parkway in Texas, my guess is you're going to see TIFIA dollars go into the hot lanes on I-77 and Charlotte. You're likely to see TIFIA dollars go into the ultimate I-4 in Florida, that's just been let. And again, these are states in which our infrastructure presence tends to be pretty profound. So again, if you're seeing Texas come back with $35 billion with the TIFIA applications, North Carolina over $1 billion and Florida with several billion, with the footprint that we have in those states and our ability to supply, particularly in those granted markets, good quality DOT stone, we feel like it will make a nice difference for us. And again, we feel like we are disproportionately located in areas that will benefit from that. I think whether it's TIFIA or whether it's residential or whether it's non-res, this is a year and I think next year will too where, where you are matters disproportionately. And I think our where is in our favor.

Good. That is helpful. And then secondly, I know it's somewhat early, but looking at the potential impact of the investment in port capacity, port expansion related to the Panama Canal, I mean, how do you think about that? Do you think you're positioned well? Are you seeing anything?

I do think we're positioned well because, remember, a lot of stone in those markets will end up coming in by rails to different areas. And we're the largest movers -- so if you think about the markets that can be impacted, it's going to be going from South Texas across the gulf and into Florida. And we are, of course, the largest mover of stone by rail on the Burlington Northern Santa Fe, the Union Pacific and the Kansas City Southern, #1 on CSX and #2 on NS. So our ability to move stone to those markets in what we feel like are importantly strategically placed sales yards is very attractive. And of course we're also coming out of Bahamas by boat and Nova Scotia by boat. So our ability to hit it by water and by land is very impressive, and we like where we are there, too.

Our next question comes from Jerry Revich of Goldman Sachs.

I'm wondering if you could talk about the, I guess, range of areas where you're putting in an April 1 price increase, if you could just quantify it as what proportion of your served markets and how is that different this year versus last year? It sounds like you may have more gotten more Jan 1 than April 1 increases last year which maybe is driving the variance this quarter. Is that the right, Ward? Can you just frame that for us?

I think the variance for the quarter is really -- it's geography and it's product, Jerry. And I think that was really more the story than anything else. And candidly, I don't think the April to January delta was really that much different this year than last year because it tends to be, oddly enough, in more the cold-weather states anyway. So at the end of the day, I'm not sure really going in April puts you behind in any meaningful way. So I continue to believe the pricing story this quarter is just what we've outlined. It's a mix issue on both sides of the mix debate.

Okay. And you've outlined a pickup in the Southeast would be pretty positive from a mix standpoint. Can you just talk about the lead times that you see in your business by each of your 3 reported geographies? Are you seeing that manifest itself in the backlog? Do you have more visibility in that market than the 2 other reported regions?

I think we are clearly having more visibility into a res market, because there is a res market now. And we're having more visibility into a non-res market. I think both of those. And now I'm not necessarily talking about reporting units; I'm just talking broadly geographically. I think both of those are much clearer and better for us now in the Southeastern United States, and by that I mean Virginia all the way through to Carolinas and into Georgia and Alabama, than it's been for a while. We also are not seeing anything that feels like it's taking a step backward in any of those states relative to infrastructure either and I think that's an important piece of it. So as we're looking at what's going on in those states in our business, really across the board, it feels considerably better. I think part of what I've been particularly moved by as we come back and take a look at Florida, which was such a tough state for everybody through the downturn. I mean, right now, Florida is #4 in the United States on pure growth that it's seeing. And Governor Rick Scott has just announced an $8.8 billion DOT budget for fiscal year '15 and they have also just finished awarding the ultimate I-4 bid in Seminole County to the Skanska Granite and Lane [ph] team. That's a $2.3 billion project that they'll get a notice to proceed on later this summer. I mean, that's the type of visibility that we're seeing on res, non-res and these large infrastructure projects in that part of the world that we haven't seen for a while, Jerry.

And you mentioned you're shipping on any day that you could in the first quarter and you still had really excellent year-over-year volume performance. I'm wondering if the momentum is continuing to a similar extent in 2Q. Could you see double-digit volume growth in 2Q in this business based on what you're seeing today?

Well, I would tell you all about Q2 when we come back at half year. But again, we've talked about momentum building from Q4 into Q1. So I think the primary swing factor is going to be what either does happen or doesn't happen in Washington D.C. If Washington doesn't get in the way, I think it could be pretty impressive.

So and just a reminder, we have -- the second quarter 2013 volumes were down almost 2%, and they picked up pretty strong in April but then deteriorated very quickly in May and June, so -- because of the rain we had last year. So the comps in the second quarter, assuming we have a normal spring as opposed to a rainy, rainy spring, are pretty helpful.

Our next question comes from Trey Grooms of Stephens.

Real quick, Ward. I think you were saying that you expect a geographic shift as we go throughout the year, which you mentioned will help to bridge that gap on overall pricing. And then also, Anne, you touched on Southeast markets, and North Carolina having disproportionate impact to profits. With your outlook for kind of a geographic mix shift here kind of as we look in the next few quarters, how should we be thinking about the impact to incremental margins in that scenario?

Clearly, it's going to be very kind to incremental margins in that scenario. The fact is, if we go back and take a look at what incremental margins are, really just for the aggregates product line, if we go back and really normalize for that $5 million of extra expense that we felt like we had because of the extraordinary weather, I mean, the odd thing is even with a pretty challenged volume quarter, what I'll tell you is we comfortably outperformed the target that we have out there for incremental margins. So we feel pretty good about it and, again, that's just normalizing for the $5 million, Trey.

And Trey, we've said incremental margins we think are in the 60% on average, which means that those markets in that southeastern quadrant of the U.S. likely have incrementals in excess of that.

Great. That's encouraging. Lastly, res strength that you're seeing, Ward, it's kind of what we've seen from the builders and starts and orders have kind of been kind of lackluster the last few months at least. And it sounds like you're seeing a little bit of a different story here. Is that more of the, what you're seeing, more of the infrastructure side of res, like the streets and the sidewalks within the new neighborhood? Or more of the kind of leading indicator to starts type work? Or is this just your typical slabs, driveways, that sort of thing?

Trey, I think it's better across the entire spectrum and we are seeing more subdivisions. So are lots being built out? Yes. And we saw some of that last year. Are we now seeing more subdivisions? I think the answer to that is yes too. Here's where I think the difference is on housing. We are back to that notion we discussed before about being where you are. If I look at Denver, housing is good in Denver, and it's going to stay good in Denver. Housing is really attractive in DFW, it's attractive in San Antonio, it's attractive in Houston, it's recovering in Atlanta, it's nice in Charlotte, it's recovering in Raleigh. That's the March that we had. I think if we had a much more Midwest/Northeast-based business, we would probably have a very different story. So I think on the story on housing and frankly on non-res I think that Southeast/Southwest predominant footprint right now is our friend. I think that's the delta in the story.

Trey, I think if you listen closely to the mortgage lenders and home builders, they will echo a very similar finding, that it really is a very regional market right now. Fortunately, we're in those regions that are seeing the improvement.

Good. And I do have one last one if I could slip it in. Ward, on your mention earlier of a lot of base rock in the mix. You said that seems to be a good indicator of new work starting. But what is the typical lag between seeing the increase in base rock like we did in 1Q, the lag before it starts to shift to the work that is behind it as you said that would likely be higher ASP rock?

And I think it's going to vary by what the end use is. If it's going to an infrastructure job that's a big new job, it's going to be longer than it's going to be if it's going to a non-res job. So again, if you come back and take a look at how nicely non-res moved, those projects tend to be of shorter duration. You will see the base rock go down, you will see the clean stone come back on top of it, all very much typically within a construction season or maybe within a quarter or 2. So I think the fact that you're seeing non-res move actually in a very positive fashion is more helpful toward compression -- compressing the time constraint that you're talking about.

Our next question comes from Ted Grace of Susquehanna.

I was hoping to ask you a question on the Western region. Volume was up 21%, 22%. And Ward, that was really helpful, the laundry list of items that you kind of walked through. But few of those numbers struck me as being even at 20%. So is that an apples-to-apples number? Is that organic growth? Are there a couple onetime projects? I know you talked about strength in Texas and Colorado in energy. But I'm just trying to help square up 21.5% growth.

Ted, it's all apples to apples, and there is nothing particularly special in there other than I think really watching nice South Texas, good San Antonio, good Houston, much improved DFW. And then coming back to it just being a much better business year-over-year in Colorado. I think Colorado was really the sleeper because the notion I think that a lot of the people had is it's winter, it's snowing and not much is going to happen there. And we actually saw very attractive activity there. I mean, we're seeing ready-mix numbers nicely up year-over-year. We're seeing asphalt numbers nicely up year-over-year and aggregates as well. So I think it's pretty much across the spectrum in that market.

Ted, we're -- I think we're seeing backlogs there 3 and 4x above this time prior year.

It's up 3 or 4x in South Texas?

So generally in that group, not specific region, but in that group.

Okay. And then you mentioned that one of the keys to hitting the pricing target will be an improvement in Mid-America. Could you just talk about which states in particular you need to see that kind of that improvement to kind of realize the mix we're looking for?

Look, I think if we see what we believe we're going to see North Carolina, with Charlotte having the type of recovery it's having, with the type of infrastructure work that we're seeing in Greensboro, with the improving economy that we're seeing in Raleigh East, clearly, North Carolina is going to be a disproportionate driver in that marketplace. And again, in what we're seeing in North Carolina right now, it feels pretty good to us.

Okay. That's great. The last thing I was hoping to ask you is, Anne, you're always kind enough to give us kind of an EBITDA bridge, walk through the headwinds and tailwinds, I know you mentioned weather as being a $5 million headwind is the estimate. But could we just walk through that bridge and I'll jump back in queue there?

Absolutely. For the aggregates product line, that's excluding the vertical businesses, volume contributed -- I'm rounding these numbers, volume contributed $17 million, pricing took away $1 million, cost increases took away $8 million, $5 million of that was weather. Our vertical businesses improved close to $4.5 million. Specialty Products was down about $1 million, mostly natural gas and weather-related. And then the corporate line was about $1.5 million. That's your bridge.

Okay. And then just so we understand, how do you calculate the $5 million weather? Or just how you come up with that proxy?

We actually look at the production cost increase that occurred just -- with market by market working with our teams there locally. We also -- and principally, what was happening is, normally, during a cold winter, you don't do a lot of production. We had some markets where regardless of whether they wanted to do production or not, they needed to, to be able to be ready for the backlog and to meet the shipment demand. So your cost of doing business and operating in that extremely cold weather increase. So that was part of it. We also looked at projects that were deferred into the second quarter and looked at that impact on both the profitability and cost structure. So we just did a market-by-market build.

Okay. And then the last thing is just production volumes. Were production volumes up year-on-year or sequentially?

They were actually down year-over-year. They were down about 2.4% so production was 23.8 million tons versus 24.4 million.

Our next question comes from Brent Thielman of D.A. Davidson. Brent Thielman - D.A. Davidson & Co., Research Division: Ward, your comments about some of the states taking a more cautious approach toward kind of project commitments on the public sector side. It wasn't clear to me, have you seen the impact of that in some of those markets in terms of release of new work or is this kind of more of an expectation in the coming months?

We have not seen it. It's something that they have said that they may be thinking about in the coming months. And here's the odd component of it. For example, one of the states that has said it is Colorado. If we go back to some of the comments that I shared with you, we're seeing so much private work in Colorado right now. Number one, we're not sure if they are going to have a slowdown. If they did have a slowdown, I don't think it affects us in that state in any meaningful way. So I think from the perspective of having caution out there, it's important for us to articulate to you that DOTs have said that. At the same time, when we come back and look at different marketplaces, the private side is so strong right now. I'm not sure that it's going to be particularly moving in a negative way for us in the states that are more impactful. Brent Thielman - D.A. Davidson & Co., Research Division: Okay. And then this might be a little bit more difficult to answer at this stage, but I'll ask anyway. Any view on the kind of proposed Lafarge combination and in particular, what could be implications to MLM down the road within any adjacent markets you guys compete in?

I'll probably just take a pass on that. But what I'll say is, clearly, I think there will be some overlap in some discrete markets in the United States. They're probably more concerned in other markets around the world, including Canada. So we'll see what comes out of that. But at the same time, we're a company that's always looking to responsibly grow its footprint, and you know what our style is, so if there's opportunity there, we would certainly like to be a part of it.

Our final question comes from Sam Dubinsky of Wells Fargo.

Just a couple of housekeeping ones. Shipments went up 8% in Q1, but you saw a 13% increase in March. How much of that 13% increase do you think is pent up demand from weather improving versus organic growth? And maybe could you comment on how April is shaping out?

What we -- we'll tell you more about April later in the year. And look, I think if you really look at it, weather, I think, clearly had an impact in certain parts of the country where it was just bitterly cold. I mean, to put no finer point on it, they had a frost in parts of the Midwest that went down deeper than 3 feet if you can even imagine that. So work in really an Omaha or a Des Moines was going to be very difficult to get. Work in Texas, because weather permitted it, worked pretty well. And work in Colorado, when it was clear, worked pretty well. So I do think, again, back to the word that we used before, there was momentum coming out of Q4. And I think January and February just really were what they were.

Sam, we actually saw volume growth each month during the quarter. It accelerated as we got to March, but that is not uncommon.

So if you look at it, January was up actually 2%, February was up for us 8% and March was up 13.4%. So to Anne's point, it was a slow, steady build and not really that big of a surprise.

Okay. Great. And just my last question is, and I know you talked about, I think, 60% incremental margins, but if we were to sort of extrapolate this year's growth in volumes, and let's say we get somewhere halfway between now and sort of the last peak cycle, where do you think cost per ton is? Do you think it would be comparable or has there been any escalators over the past several years in the cost side?

With cost per ton, if we have that kind of volume recovery, it's actually going to be pretty attractive because we're not going to add a lot of headcount to it. And remember, that's going to be 25% of your cost of goods sold. So if you go back to that notion of recovering half the volume that we've lost, and keep in mind, if we did that, that's 40 million tons of stone. Look, if we pick up 40 million tons of stone on the cost profile that we have today, the cost per ton is going to be going nicely down. And what I would tell you under that kind of volume recovery, I think the average selling price is going to be a great story again, too.

That concludes the Q&A session. I'd like to turn the call back over to Ward Nye for any further remarks.

Thanks again for joining our first quarter earnings call and for your interest in Martin Marietta. We are committed to executing our strategic initiatives and increasing long-term shareholder value for all of our shareholders. We look forward to discussing our second quarter results with you in July. Have a nice day.

Ladies and gentlemen, thanks for participating in today's conference. This concludes today's program. You may all disconnect. Everyone, have a great day.