Good morning. My name is Shay, and I will be your conference operator today. At this time, I would like to welcome everyone to the Vulcan Materials Second Quarter Earnings Call. [Operator Instructions] Mr. Don James, Chairman and CEO, you may begin your conference.

Good morning. Thank you for joining us to discuss our second quarter 2013 results. I am Don James, Chairman and Chief Executive Officer of Vulcan Materials. Joining me today are Dan Sansone, our Executive Vice President and Chief Financial Officer; and Danny Shepherd, our Executive Vice President and Chief Operating Officer. We have posted a short slide presentation to our website that we will reference during the call. These slides are also available to those of you on the webcast. Before we begin, let me remind you that certain matters discussed in this conference call, as indicated on Slide 2 of our presentation, 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. In addition, during this call, management will refer to certain non-GAAP financial measures. These measures are not prepared in accordance with U.S. Generally Accepted Accounting Principles. You can find a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP measures and other related information in Vulcan's second quarter 2013 earnings release. Turning now to Slide 3, I want to begin by briefly discussing a few highlights from the quarter. Each of our business segments reported solid growth in second quarter earnings, contributing to consolidated gross margin expansion and significant earnings per share improvement as compared to the prior year. Earnings from continuing operations were $30 million, or $0.23 per diluted share, compared to a loss of $17 million or a loss of $0.13 per diluted share in the second quarter of last year. We achieved these results despite challenging wet weather conditions. Aggregate shipments increased 2% compared to last year, despite significantly wetter weather in all of our markets in the eastern half…

Thanks, Don. As Don mentioned in his opening remarks, wet weather was a major factor in the second quarter, affecting shipments and production efficiency. Slide 5 provides some context to the amount of precipitation in the second quarter. The amount ranks the amount of precipitation in every state relative to the last 119 years of data as captured by the National Oceanic and Atmospheric Administration. The darker-green color and higher number -- higher the number, the greater the precipitation. As you can see, all of our markets in the eastern half of the U.S. were significantly impacted by rain, and in some cases, historical levels of rain. To help illustrate how to interpret this data, I'll focus on Georgia. In 2012, the map on the left, the number 38 indicates that there were only 37 years over the past 118 years when the second quarter was drier than it was in 2012. In contrast, the map indicates that there were only 5 years when the second quarter was wetter than it was in 2013. Notwithstanding the extreme weather comparison, our second quarter shipments in Georgia increased 9% in 2013. And even though we were repeatedly challenged by weather events, you'll see on Slide 6 that each of our segments increased earnings due to strong demand in some markets, and effective cost management. Our aggregate segment, which I'll cover in more detail in a minute, reported increased shipments, prices and earnings. Non-aggregates earnings increased $12 million due to improving private construction demand, which benefited concrete and cement volumes and increased material margins in asphalt due to lower liquid asphalt cost. The concrete earnings improvement reflects higher shipments and lower costs. The improvement in cement earnings is due to higher shipments, higher prices, and lower cost. Now turning to Slide 7. You…

Thanks, Danny. If you'll turn with me now to Slide 10, you'll see that strengthening our balance sheet remained probable [ph], and we are just doing just that through debt reduction and improving EBITDA. During the past 12 months, we have reduced our total debt by $190 million, while also investing $111 million in strategic assets and reserves in Georgia and Texas. Debt-to-EBITDA has improved from 6.3x 1 year ago to 5.4x as of June 30 of this year, and we expect further improvement in the coming year. Turning now to our end markets on Slide 11. As you all know, housing starts are up sharply versus last year, indicating a continuation of broad-based recovery in residential construction. In fact, most Vulcan-served states realized double-digit growth in housing starts for the trailing 12 months. More importantly, we are seeing significant growth in key Vulcan-served states including Florida, Texas, California, Georgia and Arizona. 7 of the top 10 states with the largest absolute growth in trailing 12-month housing starts at June 30 are Vulcan-served states, with Florida and Texas leading the way. We also continue to be encouraged by leading indicators of future activity for private nonresidential construction. Contract awards, as measured by fee for private nonresidential construction, are up 11% in the U.S., with Texas and Florida leading the way here, too, up 51% and 43%, respectively. Growth in stores and office buildings, which for us includes all commercial, office and lodging, is the primary driver. Growth in private construction activity in key Vulcan-served states like Florida, Texas, California, Georgia and Arizona, is important, because not only will we realize the attractive incremental margins that Danny referred to, from higher aggregates volumes, but our non-aggregates businesses in these markets will benefit as well. Our year-to-date concrete shipments are indicative of…

[Operator Instructions] And your first question comes from the line of Adam Rudiger.

You mentioned some pretty strong shipments in some of your key states and it suggests that in some other states you had probably a proportionate decline. So I was wondering, what do you think the disparity among the different regions says about the recovery and says about the outlook?

Well, I think in the second quarter, it has, perhaps, more to do with the absence of large projects in Virginia and in Illinois and with bad weather. As Danny Shepherd says, those 2 markets were down significantly compared to prior year. Obviously, though, the states that were hit hardest in the downturn are the ones that are coming back very strong. Clearly, Florida, Arizona, California are doing very well now. Texas is doing extremely well. As you know, it didn't have quite the downturn that some of the other states have had. But clearly, as we've indicated, our business in Florida is coming back very strongly. It's coming back very strongly in Arizona. And California's coming back nicely, and Texas is very strong. The middle part of the country is still not as strong, even though we had a lot of wet weather in the east, particularly up the East Coast, as you can see from the map that's in the slides, we actually had volume growth in several of those states. But we know that we lost a lot of volume, particularly in those markets at high-margin volume in the quarter, which we're looking forward to capturing through the remainder of the year.

Okay. And then my second question was on -- in your -- the prepared statement and the press release, you talked about the historical relationship between nonresidential and how that follows residential construction. I was wondering how tight that is? And what -- based upon your experience, what the typical timing lag is for when you see -- you think the improvement in non-res after residential improvement?

Well, we are students of economic cycles, and certainly, there is a cycle-after-cycle-after-cycle trend that residential leads nonresidential out of recession, usually with a 9-month, plus or minus, lag. As we look at the relationship now about housing starts contrasted to private non-res contract awards, we're seeing the same pattern develop. Housing starts have started up earlier, are more robust today, but private non-res is certainly recovering strongly based on contract awards. So we're, I think, cautiously optimistic that the pattern of prior recoveries in private construction led by residential, followed by private non-res is repeating itself.

[Operator Instructions] And your next question comes from the line of Jerry Revich from Goldman Sachs.

Don, can you talk about how you see the public construction cycle playing out, just to continue the discussion on your last point. I guess in prior cycles, this is about the time we would see public construction start to bottom and turn the other way? And wondering if you'd just add some context based on tax receipts or other metrics that you look at for your key states on how you think that plays out?

The relationship between public construction, particularly highways and private non-res, is certainly not as consistent. It's driven by different factors, largely by public spending. We're not looking for a substantial increase this year, in 2013, in shipments into public construction, we are looking for somewhat some growth in the highway sector, but then there's some offsetting weakness in other public infrastructure, water and sewer projects, things like that, which ought to, overtime, follow housing and private non-res construction. But the linkage is not nearly as consistent or as highly correlated as the relationship historically between housing construction and private non-res. That being said, the real wildcard here -- and we said that highway contract awards are up 10% the first half of this year compared to last year, which is clearly understandable. We didn't have a highway bill in the first half of 2012. We do have a federal highway bill, that's given stability and predictability to the states. And they started much bigger bid lettings in the first of the year based on the security of having a federal highway bill in place. But the big wildcard here of these TIFIA projects, I know you're tired of hearing us talk about those, but we're tracking about 50 or 55 big TIFIA projects in our markets. Some of those, as we said in our prepared text, have begun shipping in 2013, or will be shipping in 2013. But there's a big backlog of these projects. The Federal Highway Administration has been a little slower than anybody wanted in getting them approved and out, but they are beginning to show up. And they are going to have a very significant impact all across our footprint. I mean, I'm looking down my list, there's Illinois, Georgia, North Carolina, a lot in Virginia and Maryland and Florida, in Texas and in California. In addition to those, there are a lot of industrial projects, big industrial projects, primarily along the Gulf Coast, including refineries for Exxon and Chevron, LNG, the whole energy sector has got a big construction plan underway. And all of those things rolled up, give us lot of optimism -- give a lot of uncertainty as to the absolute level of volume in the second half of '13, but a tremendous amount of optimism about volume growth in '14 and '15.

And Don, when you add up all the TIFIA projects that you're tracking, what's the aggregate dollar amount, how significant is that?

We don't have -- well, the project value of the 56 projects we are tracking in our markets is $65 billion. And that -- I'm sorry, that's not all TIFIA, that's all large projects. Some of those are not TIFIA and some of them are private industrial. But our tracking sheet -- and we won't get every one of these projects and we won't get all the material in every one of these projects, but there is a pretty good backlog of big projects in our footprint.

And you spoke about the weather element. Can you just step us through to what extent is that keeping you from being more aggressive on price increases, if at all? Does that impact what otherwise would have been stronger price increases into 3Q?

I don't think so. I don't think weather -- weather has had an impact on volume, it's had an impact, as Danny Shepherd said, on our production cost. I don't think we can say it's had any impact at all on pricing.

[Operator Instructions] And your next question comes from the line of Brent Thielman from Davidson. Brent Thielman - D.A. Davidson & Co., Research Division: Yes, just losses in the concrete segment narrowing at a pretty nice pace here. Are you getting some confidence you'll start to see some profitability in that business next year as you look into the various markets you're exposed to? And sort of second part to that, are you actually profiting in some specific markets and maybe that's just being offset elsewhere?

Yes and yes. We're -- volume growth is the key to -- one of the keys to profitability in the concrete business, and we are profitable in a number of our concrete markets. And we're unprofitable in some others. So it's -- but we will, overall, with particularly recovery in the private sector construction where a lot of our concrete goes, we are -- we're very happy with that. And concrete, the improvement in our profitability of our cement segment also has been very substantial. And those are clearly related because our concrete is pulling aggregates through our system as well as cement through our system. Brent Thielman - D.A. Davidson & Co., Research Division: That's encouraging. And as these larger public jobs eventually come through for you, I guess, everything else equal, should that have positive implications for your price mix?

Absolutely. A little volume momentum in this industry has very significant pricing and margin leverage. Danny Shepherd had a slide in the presentation which I think would indicate that. If you look at the margin expansion, we experienced driven -- while it's not 1 for 1 in timing, it certainly is an indicator of opportunities for margin expansion. Both in pricing, but also in terms of our cost of production. Being able to run our plants at efficient volume levels really does move the needle on cost.

And your next question comes from the line of Keith Maher from Singular Research.

Question about -- would you ever consider doing an equity offering to improve your capital structure by paying down some of the debt?

Yes.

Okay. Any thoughts on when that may occur or how serious you are about doing that?

We continue to look at various options for improving our balance sheet. The options we have are improving our EBITDA, which we clearly are doing and are very focused on doing. Assets, sales of nonstrategic assets is another way, and equity offering is yet another way. So we -- everything is on the table for us in terms of improving our balance sheet.

Okay, great. And on CapEx, I think your guidance for the year was $150 million. It looks like you spent $60 million. Do you think you'll come in under that number, and is that mainly just for maintenance and not capacity expansions?

Most of that $150 million would be for replacement CapEx. We have spent, as I indicated, over the last 12 months, we have made acquisitions totaling about $111 [ph] million. So we're in the -- continue to do bolt-on transactions. We are also very interested, as part of our asset sales, in continuing to improve our portfolio of businesses and geographies. The -- however you measure it, cash margin per ton may be one way to measure. But the assets we've sold have a dramatically lower cash margin per ton than the assets we're buying. So we are very focused on being in the right markets with the right set of assets. And that's part of our ongoing strategy, which you will be -- you've seen played out over the last 12 months and I think you'll continue to see being played out over the next 12.

Okay, do you have any target level for acquisitions and divestitures this year, just in terms of dollars or capacity?

No. We did announce that our goal was to achieve $500 million of after-tax proceeds, pretax proceeds from divestitures. We continue to look at opportunities. We're not going to sell good assets cheaply, but we may have some assets that are more valuable to other players than they are to us. If we can find those opportunities to withdraw our capital from those non-strategic assets and reinvest them either in debt reduction or in other bolt-on acquisitions, primarily aggregates-focused, we'll continue to do that.

We will now turn the conference back over to Mr. Don James.

Well, thank you, all, for being with us today. Given the weather, we are very pleased with the second quarter. I hope you are. We look forward to a positive report at the end of the third quarter, and we will talk to you then. Thank you so much.

And this concludes today's conference. You may now disconnect.