Good day, ladies and gentlemen, and welcome to the Second Quarter 2010 Vulcan Materials Earnings Conference Call. My name is Eric. I'll be your audio coordinator for today. [Operator Instructions] I would now like to turn your presentation over to Mr. Don James, Chairman and Chief Executive Officer. Please proceed.

Good morning. Thank you for joining the conference call to discuss our second quarter results and our outlook for the second half of 2010. I'm Don James, Chairman and Chief Executive Officer of Vulcan Materials. Joining me today is Dan Sansone, our Senior Vice President and Chief Financial Officer. Before we begin, let me remind you that certain matters discussed in this conference call contain forward-looking statements which are subject to risk and uncertainties. Descriptions of these risks and uncertainties are detailed in the company's SEC reports, including our most recent report on Form 10-K. Our second quarter volume growth is encouraging as we look ahead to the second half of 2010 and continuing recovery in demand. The upward trend in aggregate shipments that started in March and continued through the second quarter led to the first year-over-year quarterly increase in shipments in four years. Improvement in the overall economy as well as higher level for contract awards for highway construction and for single-family housing starts provided the catalyst for growth and demand for our products in the second quarter. The earnings effect of higher volumes in each major product line was more than offset by the settlement of the lawsuit in Illinois, the flooding in Nashville as well as higher energy-related costs and lower pricing. In May, we reached the final settlement in a lawsuit filed in 2001 against Vulcan by the Illinois Department of Transportation. As a result, a $41 million charge was recorded in the second quarter. The suit alleged damage to a 0.9-mile section of the road that bisects our large quarry in McCook, Illinois, a Chicago suburb. Excluding this charge and related legal expenses in the second quarter, EBITDA in the second quarter was approximately $138 million versus $168 million in the prior year's quarter.…

[Operator Instructions] Your first question comes from the line of Jerry Revich with Goldman Sachs.

Don, I'm wondering if you could talk about pricing trends that you've seen in Asphalt over the couple of months? Your guidance on flat year-over-year profits in the back half appears to imply a 10% or so price increase 3Q over 2Q. Do we have that right?

Yes. We expect 3% to 4% price growth in the second half. The issue there are liquid asphalt costs, which were up about $100 a ton in the first half and will probably be up about $90 a ton in the second half based on our current outlook. So we are closing the gap on asphalt pricing versus liquid asphalt costs. But it takes a while to get that done.

And have you seen that starting to take in, in July yet? Or do you have some more work to do over the coming months to get to that price hike?

Well, a lot of the asphalt we shipped in the second quarter was priced last year. A lot of it is stimulus work, and it was priced in the period in the second half of 2009, largely, when stimulus work was about all that was out there, because the regular Federal Highway Program was in limbo. As you know, it expired September 30, and for several months prior to that and all the way up through mid-March of 2010, there was very little in our regular Federal Highway Program. So competition for asphalt as well as aggregates was about as intense as it's been in a long time in the public sector. So I believe the situation is improving from the standpoint of visibility of future demand. But liquid asphalt pricing remains a challenge.

And lastly, can you talk about aggregate pricing trends over the past couple of months? And I think your guidance implies a modest sequential increase. Have you seen early signs of sequential improvement across your markets?

Again, I think a lot of the aggregate shipped in the second quarter were priced back in the end of 2009, or the second half of 2009, when, as you can recall, housing was still very weak. Private non-res was falling sharply, and there was not lot of highway work other than the stimulus project. So we think the environment is better going forward for aggregate pricing than it certainly was in the second quarter.

And so the declines in outlook, was that driven by some incremental spot work that was shipped? Or was that driven by mix or timing of shipments? I guess, considering the good visibility you've had, I'm wondering why the pricing outlook has been reduced here.

Well, highway work, generally, is strong and improving. The offsetting factor is the continued decline in non-res construction, primarily private non-res construction. Housing is continuing to pick up in our markets, but it's a relative small portion of total demand. So the balance, here, is the relationship between the improving demand in the highway sector and the continuing decline in the private non-res sector. We are seeing signs that contract awards in the private non-res side are bottoming in the sense that the rate of decline is lessening, and we're getting closer to a bottom there, but that it's still falling. And that's offsetting the upside from the highway sector.

Your next question comes from the line of Kathryn Thompson with Thompson Research Group.

First of all, on the pricing. As you alluded to earlier, pricing was impacted by the hangover pricing in late '09. And also, you alluded to the long-haul market. Which of the two had a greater impact in the quarter? And also, do you have what percentage of aggregates shipped in Q2 was priced in late '09?

I don't have that statistic, Kathryn, with any precision in front of me today. But the long-haul, our reported freight-adjusted selling price in long-haul markets was down about $1 a ton. Our actual price to our customers was only down about $0.30 a ton. The other $0.70 is the incremental freight cost that we absorbed as we freight-adjust our reported pricing. So the long-haul markets were significant. And the reality is that there is a lot more capital tied up per ton of aggregate in long-haul markets. You've got to have loading facilities at the quarry. You've got to have a distribution yard and unloading facilities and either investment in transportation assets or hiring those transportation assets. And then you've got more money tied up in working capital in both inventory and receivables. So in a rational world, margins ought to be higher in the long-haul business than in the truck-served markets. Unfortunately, in this market, there's a lot of competitive pressures along the Gulf Coast. And that's resulted in a reduction in our reported pricing. That accounts for about 27% of our volume, that is, the long-haul markets plus Florida and the Far West, being California and Arizona. The other portion of our business, our largely truck-served markets, which was about 73% of our volume in the quarter, did very well. We got, as I said, 65% of contribution margin from the volume growth there. So the challenge for us is to get our pricing caught up in the long-haul markets. And ultimately, California is in reasonably good shape to try to improve our margins in Florida.

And just to clarify. In the long-haul markets, is this a function of higher fuel? Or were there other additional competitive pricing pressures in the quarter?

Well, as I said, about $0.70 of the $1 is transportation, which is largely fuel. And $0.30 is competitive pressure.

Okay, okay. That's helpful. And how has prices overall in your aggregates group trended since the quarter end? And how much did mix or geographic differences play to the pricing trends in the quarter?

The first half of the question, about pricing trends in Q3, I won't go there at this point, because I don't want to give that information until the quarter ends. With respect to geographic mix, the higher-priced markets had relatively lower volumes. Then that would be Florida and California. And on an absolute basis, the long-haul markets, the way we reported, on a freight-adjusted basis, that would not be the case. But there was some geographic impact to the reported pricing. Some of our markets had price growth. In fact, our pricing ranged from up about 6% in some divisions to down significantly in Florida.

We're hearing from our checks that you've been attempting to push some pricing throughout much of 2010. Are you still trying to push in pricing now? And how is the market accepting any attempts to pass through pricing?

Depending upon the location and the job and the dynamics in the market, we're trying to push pricing every day. Where we're seeing competitive pressure is when an established customer is being called on by a competitor and offered lower pricing. And we have to deal with that in order to maintain the competitiveness of our customer. So we're responding to issues in the marketplace, which really are driven by weak demand in a number of markets. It's a very good correlation. Where demand is improving, pricing is improving. Where demand is weak, pricing is weak. Supply and demand in pricing are very alive and well in this industry.

Okay. Overall, just stepping back, you talked a little bit earlier in prepared comments about incremental margins. Has your position on incremental margins really changed at all?

Well, I think we've said publicly we would expect 60% incremental charges with improved volume. In markets that had 73% of our volume, we got more than 60%. We had erosion in gross profit in some of the markets where we had to absorb the additional transportation cost and where there is tremendous competitive pressure right now. We think volume growth, which is certainly available through highway construction, will allow most markets to exhibit the kind of incremental gross profit growth as a percent of revenue that we have experienced historically.

Okay. And my final question before I get in the queue is more related to volumes. We noted that in mid-May, there was an overall sentiment change in many key markets in the U.S. Maybe the fundamentals hadn't changed, but there definitely was a marked step to a more conservative outlook from a variety of different construction industries. How much did this play into, effectively, lowered guidance for the back half of the year?

Well, I would expect without knowing that if you're hearing from contractors who build non-highway, privately-funded construction, there's got to be a great deal of pessimism there. Because the contract awards for private non-res construction are weak and not yet improving. On the highway side, the contract awards are relatively robust. So I think you would get very different reports from highway contractors compared to general contractors who do civil work in the private non-res sector. If that's inaccurate from what your sources are saying, I'm surprised.

No, not necessarily. I mean, really, what we're seeing, I mean, a great example is you have an aggregate producer that's still having the same fundamentals but is scaling back on CapEx, because they're not sure about the outlook because of stimulus rolling off or the uncertainty about the new highway build. So it's not an overall market shift, and the fundamentals have changed meaningfully, but just being a little bit more conservative.

Well, I think you can see that in our CapEx over the last 24 months. We have certainly been cautious until A) we had the need for it, which, when we are producing roughly people we were at the peak, we don't consume capital at the same rate we do at the peak. So it's natural that our CapEx would be down. I think there are, as you well know, several hurdles yet on the highway side. We've talked about the 2011 Appropriations Bill, which we were pleased with the passage last week in the House of Representatives, it's got to pass the Senate. As you know, the authorization now runs through the end of this year. And I think, most importantly is that the Congressional Budget Office is projecting that the balance in the Highway Trust Fund, given the current balance plus the projected receipts are sufficient to maintain a $41 billion regular highway program through 2012. And I think that's a very positive number that gives us optimism that highways will be strong. When you overlay that with the stimulus spending in the remainder of '10 and throughout 2011, highway spending is going to be robust. The real question, then, becomes, when does private non-res bottom so that it's no longer falling? And how quickly will residential begin to recover? But I think, our confidence is high in the highway sector over the next three years or so.

Your next question comes from the line of Garik Schmois with Longbow Research.

Just want to expand on a previous question with respect to fiscal '11 or the appropriations that passed the House. Seemed like the Senate, in recent weeks, or even going back a little bit further, has been a little bit less keen on increasing spending. Any color that you can provide on that? And any initial reads on whether or not the Senate will pass the $45 billion spending plan? That would be helpful.

I don't have a prediction. I do expect that they will take it up. We have been told by the Chair of the Environmental and Public Works Committee that they're working hard and will have hearings and try to get something done right after they come back after the August recess. I think the good news is that the Congress can appropriate the $45 billion, which is what the House appropriated, out of the balances in the Highway Trust Fund without having to increase revenue in the near term. That would likely result in the balance in the Highway Trust Fund not being sufficient to take it all the way through the end of 2012. Basically, it would accelerate some spending out of the Highway Trust Fund from 2012 into 2011. But at some point, Congress will have to take up a multi-year highway bill. The reality is that's probably going to be after the November elections. We have had several senior people in both houses indicate that they expect to get it done in 2011, that it would be a multi-year highway bill. But at this point, the thing that is, I think, tangible is that the balance in the Highway Trust Fund is sufficient to maintain a significant federal program through 2012 without any incremental tax receipts. And I think whether Congress decides to accelerate the spending or maintain level spending x the stimulus is the real question.

Okay. And just switching gears to volumes in the quarter. Can you provide a little bit more color on the year-over-year progression of volumes as you moved through April, May, June?

I think they've been relatively stable each month, in the range of our -- I guess we gave an April volume number at the end of the first quarter. And so, volumes have continued to grow in the 6% range, steadily through the quarter, if that's your question.

It is. I guess what I was trying to get at, I believe the April number was a little bit higher than the 6% that you reported.

Yes, but April's a smaller-volume month than June. So we haven't seen a material shift in monthly volumes through the second quarter. Any variation is just within the normal range of -- some months have one less shipping day, some months might have one more shipping day, and that moves the monthly numbers around. But if you're looking for a trend that shipments are way down in June compared to April, I don't think you'll find that.

Okay. And that's, I guess, what I was getting at, because the back of the year, guidance, flat to plus 5, suggests somewhat of a slowing year-over-year trend. And you did mention that there was some segments that you expected to, I guess, lag versus recover. For the full year, or at least for the second half of the year, the guidance that you provided for your various end markets were pretty similar, I believe, to what you had offered for the full year previously.

That's correct.

Okay. Any one area that you feel, I guess, better or worse about?

Well, I certainly feel better about highways. And I am less certain about private non-res, just simply because we don't see the catalyst in the near term for a change there. But on the highway side, the combination of the reauthorization of the regular Federal Highway Bill in March, the additional money going into the Highway Trust Fund, plus the overlay of the stimulus projects in 2010 and 2011, I think, are the place there's upside. Housing, if you look at housing incrementally month-to-month, you get one picture. If you we look at it this year versus last year, you get a different picture. So we're looking at it this year versus last year, and housing is up. Whether the loss of the tax credit for housing is going to cause a double dip in housing once could speculate, but we don't have that view. We think housing will be stronger in 2010 than it was in 2009, and that will continue well into the future. Housing starts are just so low relative to the amount necessary to replace obsolete housing and to deal with new household formations that we think that's got to move. Plus interest rates are at historic lows, and affordability is at historic high. So we have some optimism with housing, but it's a small part of our business relative to highways.

Okay. And just looking at the ready mix and asphalt volumes relative to aggregates. Was the underperformance there just purely geographic?

Primarily, yes. Our concrete is in Florida, the larger Washington DC Metro area and all the way from Richmond up to Norfolk up to Baltimore. In San Antonio, Albuquerque, Phoenix and California, in some of those markets, housing has been hit harder than the rest of the country. Our asphalt is in Texas, California, Arizona and New Mexico. And our volume in asphalt is relatively stronger, or as strong as our volume growth in aggregates in those markets.

Okay, great.

Your next question comes from the line of Timna Tanners with UBS.

In the past, you talked a little bit about stimulus that's not related to highways. Do you have any updates on how that's tracking?

That is hard to track. We keep trying to track it, but it is much less precise than the highway side. But certainly, it is moving. I think the BRAC work, there's a little bit of that stimulus money that goes to the Base Realignment and Closure. And BRAC work is very strong right now in several of our markets. Some of the other projects, water and sewer projects, go through a far less efficient contracting and bidding and awarding process than highways. And some of that's got relatively long lead times. Our sense is the $30 billion or $32 billion of non-highway stimulus-funded heavy construction is lagging the highway side. But I can't give you a precise metric. We're pretty confident that the 38% of spending through the end of the second quarter on the highway stimulus is a very good number. That comes from the government. But on the other side, we think it's probably materially lower than that, but we don't know exactly what it is.

Okay. In the second half of this year, the 5% volume increase, that amounts to kind of a lower volume recovery than what you had signaled for the full year. And given your confidence in highways, I'm kind of trying to understand what accounts for that downgrade. I know you talked about it a little bit, but if you could help me out with that...

Private non-res.

Okay, so that's worse than you thought.

When it's going to bottom, now you can follow the contract awards, which is what it's all about. But the contract awards are still declining. The rate of decline has decreased, but it's still declining. And the lack of credit to developers is really a big part of the issue. And so, until credit becomes more accessible, it's hard to see private non-res construction turning up significantly.

Okay, great, thanks. And then final question for me is, we have modeled in a payment due by the end of the year as about $340 million. So does this bank loan then address that? Is that how that should go?

Yes, that's what it's about.

Your next question comes from the line of Brent Thielman with D. A. Davidson & Co. Brent Thielman - D.A. Davidson & Co.: I guess just maybe to summarize some previous questions and maybe it's a bit early to ask, but I guess based on some of the trends you are seeing today, I mean do you anticipate you could see some pricing growth in 2011 for aggregates?

We would certainly hope so. If highways are continuing to improve, as contract awards would certainly indicate they will; housing continues to solidify; and if the rate of decline in private non-res continues to be reduced; or if private non-res actually bottoms so that there's the down sector, there's a flat sector and two up sectors, then volume and price are pretty closely related over the long term. And we would expect opportunities for price growth. Brent Thielman - D.A. Davidson & Co.: Sure. Okay. And then I guess just given the pressures you've seen in your Concrete business, I mean has your view changed in terms of your relative exposure there, I mean particularly given some of the uncertainty around non-res? Or would you view the current downturn as an opportunity to expand some shares as some of the other suppliers out there are struggling?

We continue to look at the opportunity. I think being able to supply cement and aggregate to Ready Mix is a key factor for us. The Ready Mix business, by itself, is not something that is strategic to us. But if it is integrated with our Aggregate business and particularly, if it's integrated with our Cement business, we think it is an attractive business in a normalized market. This is a really tough market for concrete, as you can imagine. There is a fair amount of concrete in some public infrastructure projects, particularly water and sewer projects. But concrete, by itself, is not strategic to us; concrete integrated with our other products, more so. Brent Thielman - D.A. Davidson & Co.: Okay. That's helpful. And then just one last one, any additional anticipated cost associated with the flooding in Nashville? Or is that taken care of at this point?

No, that's done. We just had huge amounts of water pouring into several of our quarries and destroyed or impacted some of our equipment which we had to spend money to replace or restore. And that's essentially the gist of that. And that's behind us.

Your next question comes from the line of Ted Grace with Susquehanna.

Don, you've done a great job kind of outlining your expectations on the federal highway side, and you've obviously been quite clear on your views on non-res. I guess as we think about total call it road and highway demand, about 40% of total aggregates go to that channel. And as we think about it, about half of that funding comes from the federal government, and about half comes from states. And if you look at the spending trends to date, and it's really every month this year and it even goes back into last year, the numbers have been kind of flat to up on a total reported basis if you look at road and highway construction as the Census Bureau reports it. If you back out the spending from stimulus, it would suggest that the underlying spending is down substantially. Year-to-date, call it the underlying spend, is probably down 15%. Now we know that the federal dollars have been constant because of the extension. And so one read on this is that states are under a lot more pressure than the market may be aware, and it's something that the industry hasn't really addressed. So my first question is, could you speak to your view on the state situation as opposed to the federal highway situation because it's absolutely a huge component of overall road and highway demand for aggregates and how you're thinking about where we are now, how that trends in the second half of this year and given the budgetary pressures they're under, how that looks for 2011?

Well, for us that's about 22 different questions, because every state is different. And within the states, the local situation is different. I think overall, the fact that for the last six months, total highway contract awards including federal, state and local in our markets are up 11%. So without regard to construction-put-in-place numbers, which are backward-looking, the contract awards are forward-looking. And they are positive. Now perhaps a greater portion of that 11% contract awards is coming from federal money contrasted to state and local than we have seen historically, but the net result for us is that total highway contract awards funded from all three sources, state, local and federal are up significantly year-over-year. And that gives us the basis for our optimism of future demand for that sector. Some states have struggled with getting state highway budgets funded and contract awards out the door. Others have done a very significant job. Some states are viewing highway construction as a state-level stimulus. I think Texas has among the largest state highway program in history. Illinois has a large program that, hopefully, will begin to roll out soon. And California's still got a very large state highway program. Notwithstanding all of the budget issues California's got, the state highway program still appears to be very robust going forward.

Let me give you just a couple of total numbers we'll be able to pull up. If you look at the total state and local awards year-to-date, and this is through June 30, so it's the first half of this year compared to the first half of last year, total state and local awards are up 11%. That excludes all the federal activity. The state-only awards, state Department of Transportation awards, are actually up in the high teens. And these are in Vulcan-served states that I'm citing. And the local awards are down 5% or 6%. And when you put the state and local together, you're up 11% first half this year versus first half last year.

Who was it, Mark Twain who said , "The story of my death has been greatly exaggerated."? That may be true about state and local highway funding.

I certainly hope so. As a follow-on to Jerry's question on pricing, can you give us any color on kind of current spot pricing versus reported either for the second quarter or at the end of second quarter? That really is [indiscernible] (1:09:38) across the whole portfolio.

As we say, we're pricing virtually every highway project separately. And there are so many factors that go into that, I don't think I can give you an answer that would be accurate that would make any sense. We haven't seen any momentum change in the quarter I guess is the best I can answer that, up or down. There's individual projects going to be bid at individual prices. And they're going to take into account all sorts of things including transportation cost. But in terms of trying to see a monthly momentum shift or even a quarterly momentum shift, that's a very subtle distinction.

Understood. And then the last question and kind of to follow on to that response. Given higher transportation expenses in the long-haul markets, higher diesel costs in local markets, across your platform. Are you undertaking or anticipating taking any more cost-cutting efforts to help on the margin side?

As I indicated in my remarks, absent the cost of diesel fuel which we have relatively little influence over, our variable production costs at our plants are actually down slightly. So our guys are doing a tremendous job at the plant. Our labor efficiency, as I indicated, is up. So cost for us is a function of volume. And if we can continue to get volume growth, that will help on our overall cost structure. And we continue to look hard in our overhead costs in trying to rationalize them as we work through this period of relatively low volume.

Your next question comes from the line of Mike Betts with Jefferies. Michael Betts - Jefferies & Company, Inc.: I had two questions. One related to California and one related to Florida. Heidelberg on their call on Friday, were indicating that they'd seen some volume improvement in California, a change in trend at the end of the quarter which continued into July. I'm wondering whether you'd seen any of that. And my second question related to Florida. CEMEX were indicating on their call that some of the pricing issues had occurred because of somebody dumping stone into the Florida market. I mean is that something you've seen? And is there any sign, if you have seen of that, of that situation coming to a conclusion, coming to an end?

California, our volumes there are down slightly in the quarter, but are stabilizing. We certainly have not seen volume growth in California in the second quarter. In Florida, there appeared to be a domestic producer with new capacity that's being aggressive in Florida, but there's many factors there. But Florida has got to get some overall volume recovery, I think, to get pricing back up. I have seen some price increase announcement by some parties in Florida. And certainly given the earnings difficulty everybody in the industry in Florida is under, I would hope that will occur. But I can't give you a projection about what we will be able to report in the second half in Florida pricing. Michael Betts - Jefferies & Company, Inc.: And how long has that new capacity in Florida being on stream? Has it been on [ph] (1:14:40) now for 12 months?

It's not in Florida. It's railing in from another state. Michael Betts - Jefferies & Company, Inc.: Okay. And just finally, just back to my first question, Don, I mean I hear what you say about California across the whole quarter. But was there any sign of improvement at the end of the quarter?

Yes, we did see an improvement in shipments in June, significant, offsetting -- the whole quarter was essentially flat, which meant April, May were down some and June was up. So yes, the trend is good. I would caution that we shouldn't take one month's shipments compared to a prior month's shipments and conclude that there's a trend there. Like I said, just having one or two more shipping days versus one or two fewer shipping days can move the numbers around plus or minus 10%. But I think our June shipments did improve relative to the first two months of the quarter in California.

Your next question comes from the line of Todd Vencil with Davenport & Company. Todd Vencil - Davenport & Company, LLC: Just getting a little bit of competitive dynamic a little bit, I'd just like to drill down and a few people have done it already, of course. But are you seeing more competition on Bay stone or clean stone? Or does it matter at this point?

I don't know that we see a discernible trend either way. Todd Vencil - Davenport & Company, LLC: Okay. And is there a theme with regard to -- well, first of all, I guess I should say has there been a change in sort of the tenor or the identity of the competitor or any of that? I mean have there been any changes in that way? Has it become more aggressive as the volumes have kind of started to pick up this year?

I mean every market's different. And some competitors have appeared to have one strategy and one market and a different strategy in another market. So it's so market-specific that I don't think there are any generalizations to be made. I think, as we've indicated, the markets along the Gulf coast, and Florida in particular, which have been historically high-growth markets and will again be high-growth markets, the adjustment period has been steeper and longer than in most of the rest of the country. And so the issue about volume and price, like I said earlier, in markets where volume is flat to up, pricing tends to be up. In markets where volume is down, pricing tends to be down. And the Gulf coast right now, much of the Gulf coast has lower volumes, and therefore, lower pricing. Todd Vencil - Davenport & Company, LLC: Got it. And sorry to belabor the point...

And a lot of it is the freight-adjusted piece of the pricing. As I said, 70% of the pricing off of our yards is the freight adjustment whereas once we can get that built into our ultimate selling price, then that will correct itself hopefully. Todd Vencil - Davenport & Company, LLC: So just a follow-up through that, is it fair to say that whereas you guys who are long-hauling into that market, are experiencing very significant I guess I should say net-of-freight price declines, maybe some guys who are closer aren't being as competitive on purpose, they just happen to be closer and their net [indiscernible] (1:19:39)?

Well, in the Gulf coast, nobody's closer. There's no rock down there. So it's all moving. Everybody's moving rock a relatively long distance. Todd Vencil - Davenport & Company, LLC: Do you feel like your competitors, whoever it is who's sort of driving the competition, is trying to grab share? Or are they trying to generate cash? Do you know?

I can't look into the minds of our competitors. I'm sure the need to generate cash is significant. I don't know that there's a conscious effort on the part of any particular competitor to go in and try to grab market share. I would say most competitors are probably not doing very well in long-haul movements right now and trying to grow market share in an area. The difference, there's a fundamental difference in the truck-served markets and the long-haul markets. And that is there's a big chunk of cost, ultimate cost over which you have almost no control, and that is the railroad. And so long-haul markets are tougher and riskier in that respect. Todd Vencil - Davenport & Company, LLC: Got it. On the question of stimulus and looking into the future a little bit, what do you think is the breakdown of the percentage of stimulus work for you guys that gets spent in 2010 versus 2011?

Our initial projection, which we think has proven to be reasonably accurate, is by the end of 2010, about 60% or 65% of the highway stimulus dollars would get spent. Through Q2, that's about 38% or 40%. Then in 2011, there's probably another 30% of the total highway stimulus we would expect to be spent, with a little bit of carryover to 2012. Todd Vencil - Davenport & Company, LLC: So a bit more next year than in the back half of this year?

Yes. But 2010 overall will probably be slightly larger than 2011 from the stimulus piece. Todd Vencil - Davenport & Company, LLC: Okay, thanks for that. Dan, quick question, you talked about $41 million on the legal issue up in Illinois. And I think there's $40 million on the income statement. Is there another $1 million of expense buried in somewhere else?

Yes, that's in the SAG line. It's about $1.5 million of legal fees. The $40 million was the settlement itself. And the $1.5 million were the legal fees incurred during the quarter.

Your next question comes from the line of Keith Johnson with Morgan Keegan. J. Keith Johnson - Morgan Keegan & Company, Inc.: Just a couple of quick questions. Regarding the pricing trends in your truck market. As you kind of came in the quarter, were there similar to your long-haul markets or other markets you talked about where there are contracts that were being supplied based on prices end of last year? Is there a discernible trend in the truck market specifically as you move through the quarter?

Pricing in our truck markets on a freight-adjusted basis is relatively stronger than in our long-haul markets. J. Keith Johnson - Morgan Keegan & Company, Inc.: Okay. And as you moved through the quarter, did it continue to show strength?

Yes. J. Keith Johnson - Morgan Keegan & Company, Inc.: Sequentially?

Yes. J. Keith Johnson - Morgan Keegan & Company, Inc.: Okay, so continual. And then when we look at results I guess for the second quarter, maybe help me understand how big of an effect that weather pattern that we experienced in the first quarter, did it kind of shift the demand patterns into 2Q?

I'm certain there was some effect. It's very difficult to quantify. As we reported at the end of the Q1, we saw improvement in March. January and February were a complete washout. We saw improvement in March. We saw improvement in April. I would imagine the largest impact from the terrible weather in January and February was seen in March and April, maybe a little bit of carryover later in the quarter. But I would think whatever we reported, April numbers were up maybe 9%. I would think that's where you saw the carryover. That was in the first quarter. J. Keith Johnson - Morgan Keegan & Company, Inc.: Okay, so that's helpful. So when you think of seasonal movements from Q2 to Q3, we're not...

Well Q3 is historically our largest shipping quarter because we have more of the construction season. Throughout our footprint in virtually all of our markets, it's a full three months of good construction weather.

Your next question comes from the line of Chase Jacobson with Sterne Agee. Chase Jacobson - Sterne Agee & Leach Inc.: I was just wondering if you could give us some insight into what your strategy in the markets that are more competitive, in terms of how you're maybe going to combat the pressure that you're seeing from your competitors. Also, if you have had to take pricing down, how long do you think it takes to be able to regain that pricing?

Chase, I think one of the facts of life in this industry is that there is a -- changing the price doesn't create or destroy demand in the marketplace. Put another way, there's very little price elasticity to demand in our markets for our products because our products are a relatively small portion of the total cost of a construction project. That being said, in markets where volumes are down and there is stress on pricing, we have to focus on cost. We have to focus on serving our customers and keeping them competitive. And basically, volume recovery from improvements in the overall demand is really the thing that will allow us to improve price and margin. So our strategy is to keep our customers competitive, be very diligent on cost and be well positioned to take advantage of volume recovery when it occurs. The only place we can affect demand for our product is through public infrastructure funding. And that's an industry effort. But we work very hard in that regard. And we have virtually no impact on demand for our products in the housing and private non-res. But the public infrastructure side is hugely important for us. And we spend a lot of time and energy as a company and as a participant in the larger industry, in trying to build the public policy case for improved infrastructure spending. You may have seen, I believe, there's an article in this week's Time magazine, in fact, talking about how much sense does it make to continue to allow the U.S. infrastructure to decline. And the question is which is more dangerous for the future of the U.S., higher deficits or declining quality of infrastructure? So there's a significant public-policy case to be made. There's got to be an election in November before there's a real opportunity to get anybody to listen to that case. Chase Jacobson - Sterne Agee & Leach Inc.: So do you think that there's a chance that just given the cost-cutting across the industry, that maybe some of your less-disciplined competitors keep pricing lower even if demand does return given the incremental margins you can get on the higher volume?

We study history. We study markets. Every market's are different. Generally, in this industry, as volumes recover, pricing improves. Will there be an exception to that somewhere? Absolutely. But as a general principle over the hundred markets we participate in, there's a price/volume relationship: the stronger the volume, the greater the pricing power, the weaker the volume, the less pricing power. And that's not going to change, I don't believe, in this cycle.

Your final question comes from the line of Trey Grooms with Stephens.

Just two questions left that I have. Don, you mentioned that 73% of your markets actually saw the 65% incremental margin that you kind of expected. So that means 27% of aggregates markets are kind of dragging on the margin. And has there been something or anything that has fundamentally changed in your opinion in those markets that are going to make those more difficult to kind of turn the corner, as the volume improves? Or is this just simply these are the hardest hit markets for volume and price and therefore, they're going to take longer to come around?

There's some of that, Trey. I think the freight rates have spiked up with fuel costs. And that's been a factor. That's a significant factor. As I've said, 70% of the freight-adjusted decline in selling prices is freight. Only 30% is what I'll call market factors or competitive factors. Although the competitive factors have made passing through the higher freight cost take a little more time than we would like. Part of the issue in the second quarter, and I can't quantify this, but if you think about what's been going on in the Gulf of Mexico throughout the significant portion of the second quarter, the whole oil spill has not enhanced private construction in the Gulf coast markets. That's a big tourism area. And while I don't think we can attribute the totality of weakness in the Gulf to the economic impacts of the oil spill, it nevertheless is there. And I can't quantify it. But if you're somebody thinking about building something on the Texas Gulf coast or the Louisiana or Mississippi or Alabama or Florida Gulf coast, you aren't terribly enthusiastic with this oil spill going on and with the huge drop in tourism and economic activity from fishing and everything else. So there's some piece of that in there. Hopefully, we are getting very close to being past that. I can't tell you that that's 2% or 20% of the issue in the Gulf. But it's an issue.

Sure. How much of your shipments were long haul in the quarter? Do you have that?

Generally, they're about 15%. I don't know that I have -- I guess we said the 27% includes Florida, some of which is long haul, some of which is local. It includes California and Arizona. Most of which are truck-served markets. So I'm guessing it's in the 10% to 15% range for the quarter, but that's an estimate.

Okay, that's real helpful. And then you had mentioned earlier kind of just looking into 2011 when you were asked the question if pricing should improve. And you said you were hopeful that it would, given kind of what you're looking for from a demand standpoint. Do you think that, that would include these hardest hit states? Or are they going to be more of a lag than the rest of the business, do you think?

I think the reality is that markets where volume and price fall more sharply tend to have sharper recoveries once recovery begins. That's certainly been the historical pattern. Time will tell whether that repeats itself here. But the markets that have been hardest hit on pricing are the markets that generally had the most robust growth in pricing up through 2007. California and Florida, they're the ones where pricing has been hit the hardest in the downturn. History says they'll be the ones that will recover both in price and volume most robustly once the economy begins to recover.

Right. I mean I guess what I'm just really trying to get at here is at what point are we going to start to see the outstanding incremental margin that this business has really start to take shape for the overall business and when we kind of start baking that into our thoughts?

Well I think in a large part of our footprint, that's happened. It's happening. We've very pleased with that. In order for the weaker markets to exhibit that kind of recovery, there's got to be some improvement in demand from whatever source. We think public infrastructure is alive and well in Florida and California, as it is in our other markets. The problem is the private side. And once we see some bottoming of particularly private non-res in those markets and some recovery beginning, then I think we'll certainly see the escalation in margins from the higher volume. But it's on the private side and that's what it's going to take to move those markets. In Florida and California. The Gulf coast is a little different, a little different dynamic and it may correct itself soon.

Okay. And my last question, and this is the one that I think has a lot of people kind of scratching their heads now. I mean this is your first quarter to ever announce a down price, or a down year-over-year price, that I could ever find. And there is very little price elasticity with aggregates et cetera. And what I'd love to get your view on is why now that volumes are just now starting to really improve for the first time in 16 quarters, are we finally starting to see people in this industry getting more aggressive with price? And this is an industry that thus far has had incredible pricing power.

I think the answer to that question, Trey, is twofold. Number one, in none of the periods you have looked at historically has the construction economy in the U.S. been as stressed as it has been recently. But I think perhaps more importantly is that the reported pricing in Q2, for us and perhaps everyone else in our industry, is based on price quotes made in the second half of 2009. And if you remember what was happening to volume in the second half of 2009 and, more importantly, what the future prospects for volume were in the second half of 2009, it was a pretty grim situation. Private non-res was falling. Housing was beginning to bottom, but hadn't quite yet bottomed. And there was no Federal Highway bill. All we had was some stimulus work. Hopefully, what you're seeing in Q2 pricing is a result of the economic stresses in the marketplace in the second half of '09. Those aren't behind us fully yet, because private non-res contract awards are still falling, albeit at a lower rate. But the thing that's going to pull us out of this, both volume and price, is the highway programs, to a much lesser extent, housing. And then the real kicker's going to be when private non-res finally bottoms and has some upside. So I don't think this quarter's pricing, and we've tried to indicate this in our press release and in our comments, is it is not a step change or a functional change. It is the result of really tough markets back in the second half of 2009.

Ladies and gentlemen, this concludes our Q&A. I would like to turn the call over to Don James for closing remarks.

Well thank you for being with us today. We do appreciate your questions and more importantly, your interest in Vulcan. Hopefully, we have seen the worst of this downturn in our industry. And we're looking forward to talking with you again at the end of the third quarter. Have a good day.

Ladies and gentlemen, thank you for your participation in today's conference. This concludes the presentation. You may now disconnect. Have a good day.