Good day, ladies and gentlemen, and welcome to the First Quarter 2012 Vulcan Materials Company Earnings Conference Call. My name is Erica and I'll be your coordinator for today. [Operator Instructions] I would now like to turn the presentation over to your host for today's call, Mr. Don James, Chairman and Chief Executive Officer. Please proceed.

Good morning. Thank you for joining us to discuss our results for the first quarter of 2012. I'm Don James, Chairman and Chief Executive Officer of Vulcan Materials. Joining me today are Dan Sansone, our Executive Vice President and Chief Financial Officer; Danny Shepherd, our Executive Vice President for Construction Materials; and John McPherson, Senior Vice President, Strategy and Business Development. We have posted to our website a short slide presentation that we will be referring to during the call. The 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. Description of these risk 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, including EBITDA, adjusted EBITDA and adjusted diluted EPS for continuing operations. 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 first quarter 2012 earnings release and in the Investor Relations section of Vulcan's website at vulcanmaterials.com. I would now like to walk you through our first quarter results. As you saw in the press release we issued this morning, we began 2012 with another strongly improved quarter. Our results were substantially better compared to the first quarter of last year. Net sales were approximately $500 million. This is a 10% increase from the first quarter of 2011. Although some of this year-over-year growth is attributable to milder weather, we also benefited from the continued…

Thanks, Don. Hey, now turning to Slide 6. I'd like to highlight the steady progress we've been making in the Profit Enhancement Plan that we announced in February. As you may recall, the Profit Enhancement Plan includes cost reductions and other profit enhancements to improve our run rate profitability as measured by EBITDA at current volumes by more than $100 million annually. Of that $100 million in profit enhancements, $25 million is expected to be achieved in 2012, $75 million is expected to be achieved in 2013, with the full run rate in place by mid-2013. And as a result, the full $100 million is expected to be achieved and hit the P&L in 2014. These enhancements are, and I'd like to underscore this, in addition to the $55 million in run rate overhead reductions achieved through our restructuring actions announced in 2011. Of the $100 million in profit enhancements we expect to achieve through this initiative, $55 million should be derived from savings in sourcing, $25 million from G&A and support functions and another $20 million from transportation and logistics. I'd now like to give a brief update on progress in each of these 3 areas. In sourcing, we have renegotiated vendor agreements and pricing for categories ranging from office supplies to mobile equipment. In addition, we have expanded the role of our professional procurement staff. We have strengthened certain procurement policies and programs, and we've taken steps to accelerate company-wide adoption of these programs. Initial actions have been taken to reduce spending related to outside services, a category that includes costs such as drilling and blasting, electrical, repair and maintenance, and landscaping. This category includes over $150 million in annual spending at the plant level. We will address other categories of procured goods and services over at least…

Thank you, John. Well, as John noted, we are very pleased with our progress over the last 2 months, and the organization is fully committed and engaged in the Profit Enhancement Program. We remain very optimistic that we will achieve our goals. Now if you turn to Slide 7, during the quarter, we also continued to execute on our Planned Asset Sales initiative, which was also announced in February. As previously disclosed, we'll be selling operations that are not core to our strategy. These are quality assets, many of which will have significant value to a number of potential purchasers. Thus far, we've been pleased with the level of interest and activity surrounding the process. The divested assets will include ready-mixed Concrete and Cement operations, nonstrategic Aggregates assets and real estate. This initiative is in line with our strategy to focus our capital on higher return, higher growth Aggregates positions, optimize our exposure to downstream businesses and unlock value of real estate from our portfolio. We have completed similar transactions in the past in states like Virginia, Indiana, New Mexico, Arizona and others. We are focused on optimizing value as a disciplined seller, and we continue to expect this initiative will generate net proceeds of approximately $500 million by mid-2013. Importantly, these actions will enhance our longer-term earnings growth profile, margins and return on capital employed as demand for our products improves with the economic recovery. Thank you. I will now turn the call back over to Don.

Thanks, Danny. If you will turn with me now to Slide 8. Sentiment is spreading that the worst of this economic downturn is behind us. This view appears to be supported by the U.S. contract awards for new construction projects, particularly in private construction, which bodes well for continued demand recovery in our high-growth markets. Multi-family housing starts have remained strong, growing now for 17 consecutive months. Trailing 12 months single-family housing starts turned positive in the first quarter of 2012 on the back of higher starts reported in recent months. As of March of 2012, the year-over-year change in trailing 12-month contract awards for private nonresidential construction has remained positive for the last year. This positive trend is driven by growth in contract awards for commercial and retail building. Additionally, trailing 3-month awards for Vulcan-served states are up 10% versus other states, which are down 12%. This is another positive indicator for continued demand recovery in our high growth markets. Finally, private non-highway infrastructure projects, mainly power-related projects, have been positive, although very lumpy due to the large scale and scope of these projects, which can consume large quantities of Aggregates. Trailing 12-month contract awards in Vulcan-served states are up 34% compared with other states, which are down 27%. On the public side, contract award activity has been mixed. Trailing 12-month awards for non-highway infrastructure projects are down 2% versus the prior year. In highways, trailing 12-month awards for the period ending March 2012 were $51.4 billion, down 11% from the prior year, reflecting the absence of $7.5 billion in stimulus-related project awards from last year. Prospects for the next federal highway bill are improving. At this time, we are operating under a 90-day extension at current funding levels. Last week, the House of Representatives passed by a wide…

[Operator Instructions] And our first question comes from the line of Ted Grace with Susquehanna.

Don, I apologize if I missed it, but I wanted to come back and revisit the highway contract awards. We tracked the data and I guess we've noticed a pretty sharp decline, certainly January, February, improvement on a relative basis in March. But I guess the way we tracked it across your 10 states, I have it down 12% on a trailing 12-month average basis. It's your forward contracts on highways, just federal highways. But I'm wondering if -- are we missing something? Or is there anything that's gone on that might explain the really sharp decline of January, February this year?

Ted, I think if you look at the year-over-year change in highway contract awards from the stimulus funding, that accounts for virtually all or maybe more than all of the difference year-over-year. Those stimulus projects are still largely under construction, but the contract awards coming from stimulus money have virtually come to a halt. Because that -- the contract award part had deadlines, but as you know, there are still many, many stimulus projects under construction.

Sure. Do you think there was any impact from the uncertainty on the highway bill and now that we've got the CR signed?

Absolutely. I think the DOTs are not willing to award new contracts till they see some more certainty in the Federal Highway Program. We work very closely with the Association of State Highway Transportation Officials and they are, as I indicated, lobbying as hard as we are to convince their congressmen and senators from all of their states that we need to quit quibbling and get something in place that will allow the state DOTs to move forward with the backlog of projects.

Okay, that's helpful. And so as you guys kind of look at April and the trends you've noticed that you might be willing to talk about through this month, is it your sense that contract awards are starting to improve on that basis? And then I was wondering if you could also just talk about pricing that you've seen, March versus April.

I haven't seen any April contract award data yet, so I really can't comment on that. Pricing, our guidance for pricing for the full year is up 1% to 3%. That's down a notch from our guidance beginning earlier in the year. And that's really because of 2 or 3 big large projects where we sold some, essentially, by-product or fill product at relatively low prices to some large construction projects, particularly in Virginia. So it's really on that basis that we ratcheted down our pricing assumption for the full year. But as I said, there is stability in pricing in the sense that we don't have wide swings from -- and price changes from market to market. And we're optimistic that we'll be able to report price improvement as the year moves forward.

Okay, that's really helpful. The last thing I was hoping to ask you or Danny is on the asset sales. And I know Danny reaffirmed confidence and the slide deck said that you can get $500 million announced by the middle of 2013. Just given the progress you've had to date on that process, should we look for this to come in chunkier transactions? Will there be more kind of one-off transactions? And any more color you might provide on the process would be super.

I think the way I would answer your question, Ted, is some of it would be one-off transactions, but we do have a combination of ready-mixed assets or assets that could be sold in a single transaction. I will add that we are encouraged or we're early in the process, but the interest that we're receiving from interested parties has been very, very encouraging, and hopefully, we'll have something positive to report in the near future.

Our next question comes from the line of Todd Vencil with Sterne Agee. L. Todd Vencil - Sterne Agee & Leach Inc., Research Division: I had a handful of questions, but let's stick on that question about mix there for a second and the big projects in Virginia and other places. I mean, is this the kind of thing that you expect to persist for a little while? This sort of newly -- I think, you described that the volumes of those products is above average.

I think this is -- the contract awards indicate that private sector construction is well on its way to recovery, office buildings and other large private construction. These sales in Virginia were to large, private construction projects, manufacturing facilities, distribution facilities. But the kind of material we sold in the first quarter is really sort of a one-off. That's not a routine part of our business. We'll, in the course of production, put finds aside and then a big project will come along and take several hundred thousand tons for one project. And that's what happened in the first quarter. I don't see that being a continuing trend, if I'm understanding your question. L. Todd Vencil - Sterne Agee & Leach Inc., Research Division: No, that was the question. And this -- and thanks to that. I did have one -- I was going to follow up and ask if that was a private job or a highway job, so it's interesting that it was on the private side. To the extent you can tell, and I'm sure it's probably hard given the lumpiness of the transactions, but can you tell what the price trend on that sort of lower-priced material is? I mean, is it pretty aggressively bid right now or is the price for that product sort of firm enough?

Well, it's just a very low-priced product. I mean, it's a fraction of our average selling price. That's why I pulled the reported freight-adjusted selling price down to minus 1%. Absent that, we were flat. We certainly believe we'll have opportunities through the year in our normal product mix, normal geographic mix, that we'll see pricing improvement as the year moves on. L. Todd Vencil - Sterne Agee & Leach Inc., Research Division: Got it. On that point, last year, around midyear, I guess, there were price increases in Aggregates put through in a lot of places, driven by the increase in diesel cost. Obviously, diesel’s back up again this year. I mean is there any outlook to kind of go for a second round, if we can think about it that way, this summer?

Well, certainly, higher diesel costs support higher Aggregate pricing for at least 2 reasons. One is it increases production costs in the plants, and secondly, it increases delivery cost, which shrinks the shipping radius, and therefore, gives an individual quarry typically more pricing power. The -- our full year -- the big increase in diesel cost occurred second half of last year. And as I -- as we indicated, we think diesel cost increases for full year 2012 will be in the 5% to 10% range, which will be substantially lower increase than we saw last year. But nevertheless, they're still up. Most of our cost elements are down. Our labor productivity is better. Our energy, our electricity consumption and energy conversion is better. So we're doing -- our guys in the plants are doing a super job on cost management and cost control. The one place we have higher cost is in diesel fuel. I believe it was up 11% in the quarter over last year's first quarter. But we're offsetting that with other productivities. So if we get some moderation in diesel fuel cost, it will certainly help us as the year moves forward. L. Todd Vencil - Sterne Agee & Leach Inc., Research Division: Got it. On the activity in D.C. with the conference committee around the highway bill, can you kind of walk us through what you're hearing? I mean obviously, there's -- in terms of the annual funding level, I guess the House and the Senate have been pretty close to one another barring recent...

Which is stable, stable to up slightly. L. Todd Vencil - Sterne Agee & Leach Inc., Research Division: Right. But there's been a spread there on -- in terms of the duration and in terms of how to pay for it. Do you have any -- is there any conversation as to how they might bridge the gaps there?

Well, as you know, the Senate, the Senate EPW Committee reported its bill out 18 to 0, all Democrats, all Republicans fully aligned. It had offsets from other spending cuts of $12 billion plus or minus, which funded, in addition to the regular Highway Trust Fund and the receipts in the Highway Trust Fund, it fully funded the Senate bill through the end of FY '13. The House bill, really wasn't a bill. It was something that was passed by leadership in order to get to a conference committee. There is no funding mechanism per se in the House side. The -- I think as we read the tea leaves, you have a lot of Democrats, in both the House and the Senate, willing to support the Senate bill. You've got Senate Republicans, by and large, supporting the Senate bill, and you have a substantial portion of House Republicans, including all the leadership who, I think, will coalesce around the Senate bill. The problem, of course, are the same group that's opposed to a lot of other things in the House. But our view is that the leadership in both House and the Senate is committed to getting this thing passed so it is not an issue in the election. And in order to do that, they need to do it by June 30. And they seem to be fully committed to doing that. You've got the Keystone Pipeline in the House bill that's not in the Senate bill. We don't know where that goes, but that's really not relevant, of course, to highway funding, at least directly. So we're probably more optimistic today than we've been in several years that something is about to happen with respect to a formal highway bill, albeit, probably only through the end of FY '13 at this point.

Our next question comes from the line of Garik Shmois with Longbow Research.

First question is for John. I was wondering if you could identify how much of the $25 million in the Profit Enhancement program for 2012 has been realized so far. Maybe it's a little bit too early to see the full benefit, obviously, but can you identify how much was in the first quarter numbers?

It is a bit early to figure out exactly how much of the first quarter and to hit the first quarter numbers, but let me answer you this way. We are well on track to the $25 million target for the current year. A number of those actions have not only been identified but are already put into place. The only thing that's slightly difficult in the first quarter is tracking how much each one has hit the P&L so far. That will become much easier in the second quarter. And that's simply a function of things like renegotiating vendor contracts or certain other internal practice changes that take some time to flow through our operations and hit the P&L. It's a timing question, that's all. But we are very much on track for the big goals that we've set.

Okay. So we should see maybe a more concrete number after the second quarter?

I think so. And I think with each quarter succeeding that also.

Great. And then just my last question, just for clarification. The $6 million in asset gains, is that part of the $29 million that you had identified as part of your EBITDA?

It is.

Yes, it is.

That is a -- that's the sale of a parcel of the California real estate. We have another parcel of California real estate for about $23 million in gain, which accounts for the $29 million that's in the $500 million of EBITDA for the year. But those are outside the Planned Assets Sales group because those things were well underway last year.

Yes, that makes sense. And then, I guess just looking at the cash flow statement, there was about $17.9 million in net gain of sale property. Can you just provide a bit more color what that was?

Garik, the biggest piece of that is the cash payment we received on the earn-out from the sale of our chemicals business. That was about $12 million or $13 million that came in the first quarter. Under the accounting rules, the payment of that earn-out gets categorized on the cash flow statement as cash proceeds from the sale of the business even though we actually sold the business in 2005. We have one more year under that earn-out, so there should hopefully be a payment in the first quarter of 2013, then that will go way.

Great.

And that flows through discontinued operations.

The income effect of it flows through discontinued ops.

It's not in our continuing ops.

Our next question comes from the line of Rodny Nacier with KeyBanc Capital Markets.

Thanks for the update on the federal funding picture. Looking more at the local level, muni bond issues across the state, they increased about 60% in the first quarter. And that was up 100% for transportation. From your perspective, are those capital raises offsetting declines in other revenue sources? Or are they adding to state and local budgets? And when could we see that start to trickle through to your business?

Well, I think the way many state and local governments, but particularly states, are now funding really critical highway needs are through bond issues. California, obviously, has been doing that for several years now. And as I indicated, our volumes for going into highway construction in California have been strong for several consecutive quarters. As you go state-by-state, I think we are seeing states, in many cases, not all, but in many cases, stepping up to address the lack of certainty in federal funding, and they are doing that through municipal bond issues. As you know, 100% of the proceeds of bond issues have to go to capital projects. They can't be used for operating. So it's virtually all construction. Every dollar from bond issues goes into some form of capital project, the vast majority of that being construction, whether it's highways or water and sewer or transit or public buildings. But that's a very positive sign. Whether -- and I -- you probably see the Rockefeller numbers, but state and local tax receipts, I think, are now back to where they were at the peak of the last cycle, which is helping. That’s certainly -- not every state and local government is that way, but on balance, on average, that's improving. And I think we'll probably see a slightly larger proportion of highway work being funded by state and local sources than we have seen over the last 3 or 4 years.

Okay. And I mean with some of the strength then that we're seeing just from the state and local funding sources, did it diminish, in your perspective, the lack of agreement coming out of D.C. around the federal funding picture?

Yes. I think on balance, a driver for many states is that they have needs. And there's not enough money coming out of the federal program to meet those needs, and the states are coming up with their own funding mechanisms, and it's all over the board to try to address the infrastructure needs in those locations, particularly highway congestion and poor highway conditions.

And you mentioned California. And we've seen for several quarters now, you've had some strength in that state. Focusing on your Asphalt business, which I believe is mostly in California as well, you're expecting modest volume growth this year and volumes only grew modestly last year. When can we start to see perhaps some acceleration in demand for your Asphalt business out of California, given some of the strength we've seen on the Aggregates side?

Well, our Asphalt business in California has continued to grow. It hasn't grown as fast as our Aggregates business, but certainly, it has been growing over time. But the big, as you point out, the big jump in demand has been in Aggregates and -- but a corresponding growth in Asphalt. We have a very good Asphalt business in California. I don't -- we're not projecting a large growth in volume in California this year, but we certainly believe that we will improve our material margins there as our pricing for asphalt mix begins to catch up with the higher costs of liquid asphalt that we have incurred over the past 9 months or so.

Okay. And I have one last question, then I'll jump back in queue. The $500 million EBITDA number, would that compare to the $46 million adjusted this quarter or the $42 million GAAP?

I think the $40 million -- yes, if you take the $46 million and add back the $6 million real estate gain, that's in the $500 million.

Yes.

Our next question comes from the line of Trey Grooms with Stephens, Inc.

A couple of questions. On Asphalt, your guidance is looking for improved profitability there. Are the price increases in place now to kind of start to kind of catch up with what we've seen in liquid asphalt? Or how quickly should we expect to see kind of pricing catch up there with those costs?

Well, we, certainly, as we are bidding work and as we have bid work over the last quarter or 2, are certainly taking into account the much higher cost of liquid asphalt. So I think the basic answer to your question is yes, those price increases are in place. Obviously, a lot of asphalt is actually shipped months after it is bid and quoted just because of the sequencing and the duration of large highway projects. But we are, as you know, and Trey, you've followed us for a long time, our material margins in Asphalt tend to shrink as liquid asphalt prices move up. And then as they turn down, our margin, material margins, tend to grow because there's a lag in -- we're paying essentially spot prices for liquid asphalt and we are contracting, in advance, prices for asphalt mix.

Sure, yes. I was just kind of trying to -- for modeling purposes, trying to figure out the best way to kind of approach the -- how that will roll out.

Well, I think if you look at our full year guidance for our Asphalt business, it's probably -- it just probably takes all that into account, the ebbs and flows of liquid asphalt versus our settling price.

Okay. And then volumes, Aggregate shipments up 10% in the first quarter. You moved the full year guidance up some, a couple of percentage points I believe, but is it safe to kind of look at 1Q as being, okay, this is a big quarter, there definitely was some weather impact, but as we kind of look into 2Q, you expect improvements but not the type that we saw in the first quarter. And is that going to kind of roll off as the year kind of progresses? Or is that kind of a quick kind of pullback in 2Q as far as the rate of growth?

Well, let me answer it this way. The first quarter is so much more weather sensitive than Q2 and Q3, and to some extent, more weather sensitive than Q4. We can't quantify what the -- how many tons were sold in the first quarter because of good weather. I mean that's -- we just -- that's really impossible for us to do. We know there was a weather effect. The second fact is that the number of tons in the first quarter is substantially less than the number of tons sold in Q2 and Q3. So a lot fewer tons can account for a 10% bump, whereas when you go in Q2 and Q3, you can have the same earnings impact on a much lower percentage increase in shipments, if you're following where I'm trying to go.

Absolutely.

And so our full year guidance is 2% to 4% increase in Aggregates shipments, including the 10% we got in the first quarter. But the earnings effect is -- since the tonnage is so much higher in Q2 and Q3, and the leverage we get from even a 2% to 4% volume gain is very significant for us. As you saw, literally, almost 100% of our revenue increase flowed through in gross profit. That's a combination of a lot of things, but we have a lot of leverage to volume and we're looking forward to enjoying that as the year moves forward.

Sure, okay. And my last question is, Don, if I heard you right, I think you said more than half of the -- half of your markets, I guess, realized the price improvements in the quarter. Can you talk, number one, just specifically where you're seeing the most strength? If I missed it, I apologize. And then secondly, is -- you saw more than half with improvements, but your pricing was down a little bit. And you pointed to the Virginia, the more fill material with that large project or projects. But is that -- the strength in those more than half, is that just offsetting the Virginia fill material more or are you -- or is there some markets that are actually seeing some softness in price?

Well, I think our pricing in Virginia was down. It was in the top 1 or 2 markets in the average selling price being lower, and that was all driven by those sales of what I'll call non-spec product. I think there are 2 points, Trey. One is that the range of increase and decrease is narrowing, meaning there's more stability in pricing, both up and down, across most of our markets, which, on balance, at this point in the cycle, we think is a good thing. Clearly, if we -- if you factor out Virginia and get to neutral, we had as much downside in pricing across some markets as we had in upside. But we think coming out of the first quarter, for us to get to the full year 1 to 3 price improvement, we're going to see price improvement across many of our markets, the majority of our markets. But still, it's an ebb and flow from quarter-to-quarter, really month-to-month, on what is shipped. And there are thousands of individual pricing decisions that are made every quarter. We're confident that pricing, overall, will move up instead of down. But there's still -- we need some additional volume growth before we start seeing a significant real price growth. And hopefully, that's coming with improved private sector construction as we look at these contract awards.

Our next question comes from the line of Mike Betts with Jefferies. Michael Betts - Jefferies & Company, Inc., Research Division: I've got a number of questions, if I could. I'll try and limit it, but the first one, just a follow-on from that last answer. I'm looking at the CEMEX numbers today. They reported a 6% increase in Aggregate prices, Q1-on-Q1 last year. I mean, I gather or presume you don't want to give us the detailed pricing by state, but from when you look at that, can you see any reason why they should be so different given they're very California and Florida biased as well?

Mike, I haven't studied their release yet, but I don't have an answer to your question. Michael Betts - Jefferies & Company, Inc., Research Division: Okay, no worries. My second question, just on the operating leverage, which obviously was very good in Q1 on the Aggregates business, as you said, almost 100%, was any of that benefiting from the fact that some of the stone that was more than 12 months in inventory, some of this base fill, you were able to put through the books at almost nothing? Was that a factor at all in that very high operating leverage in Q1?

Mike, this is Dan. No, that -- the level of that was consistent with prior periods. That has not been -- that was not an issue for us as volumes were declining because we managed our inventories and production rates down accordingly, and we do not expect that to be a distortive impact on the uptick either. Michael Betts - Jefferies & Company, Inc., Research Division: Okay. Thank you for that. And then just maybe a final one on Cement, that nobody's talked about yet. I realize it's small, but it was a very good result in Q1. The volumes were particularly high. Were there any exceptionals or one-offs in that?

I'll let Danny Shepherd take that.

Yes. Actually, our sales volumes were up, Mike. But at the same time, we had a good quarter from a cost point of view. And we anticipate our Cement business this year showing improvement, a slight improvement. Michael Betts - Jefferies & Company, Inc., Research Division: Was the plant down for maintenance last year and not down for maintenance this year, for example?

It was down partially in the first quarter of last year. This year, we didn't have an outage. But we believe our kilns are well maintained and we’re pleased that we didn't have to take an outage in the first quarter.

We have built in an outage in our full year projection.

We have.

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

Just really one question for today related to your Aggregate margins. Once again, just trying to get a better understanding of how much did volume versus pricing versus cost cutting impact the quarter. I know you addressed some on the cost-cutting side earlier in the call, but maybe a better understanding of what, for the second quarter in a row, is helping to drive margin improvement.

It is in the operating leverage of our business. That is being able to run our plants at higher volumes really has a significant impact on our productivity, labor productivity, energy productivity. Obviously, selling prices didn't have a positive effect on Aggregates earnings, but costs and so much of cost is tied to volume. I think the volume increase was the real driver for our improved -- and the flow-through of revenue to gross profit.

Kathryn, let me try to just provide a little more color on that. If you look at our variable costs of production in the quarter, they declined as compared -- on a unit basis as compared to our variable costs of production in the first quarter of last year. And as Don mentioned, that was predominantly labor efficiency offsetting diesel fuel. Our cash period costs, and period costs in our way of -- in our terminology is your fixed costs. Those -- the spending at the cash period costs level was flat year-over-year, so we've got 10% additional volume. So that same level of cash spending is being spread over more tons. And if you look at the supplemental schedules, you'll see that our depreciation expense in the various business segments is declining as well. So the dollars of non-cash fixed expense are being -- are not only declining, but being spread over a larger amount of tons. I should also point out that in the quarter, we also reduced our units of Aggregates inventory as well by several million tons. So we got this level of operating leverage on a level of production that was less, that increased less than the increase in the level of sales. So again, I think it's a further illustration of both the disciplined working capital management by our operating guys and the inherent profitability of this business as it comes into recovery.

Of that inventory that was reduced, could you describe, is it more base-type rock or other...

It would be across the board. It would represent the full array of product mix in kind of normal production splits. No single category jumped out.

Okay. And also in terms of weather certainly has helped the last couple of quarters, how much do you think mild weather has pulled forward demand and what are trends then as we've gone into April? And would that give any indication of a pull forward of demand?

Kathryn, I don't think we have good metrics on that. It is -- we do believe there was a weather effect in the fourth quarter last year and the first quarter this year. I don't think -- it's too early to say whether it's going to have a chilling effect on second quarter volume at this point. We don't think so because we think the underlying demand is improving, particularly in the private sector. And that's really the reason that volumes are moving up.

Our next question comes from the line of Keith Hughes with SunTrust.

Actually, this is Judy Merrick for Keith. And just to clarify on your EBITDA guidance, you talked about that all excluding the gains from the asset sales. Will you give us any information on the impact of the EBITDA contribution from these asset sales? Or what sort of matter -- the mix of what's real estate and what's not going forward?

The EBITDA contribution from asset sales would vary greatly depending upon what we sell. And so for -- and as Danny Shepherd and others have talked about previously, we have a large portfolio of assets that we would be willing to sell. We are really looking for the right buyer at the right price. You saw that our ready-mixed business in the quarter, I think, operated at a $12 million loss. So if we sell ready-mixed assets, we could get a double pickup on EBITDA. That is by avoiding loss, as well as if we have a gain on sale. So it's too early for us to give you predictions as to that, but we will certainly give you, as transactions close, we will give you the specifics of the EBITDA and EPS impact of those transactions, as we do with our routine real estate transactions.

Our next question comes from the line of Brent Thielman with D.A. Davidson. Brent Thielman - D.A. Davidson & Co., Research Division: Just quickly on California as a follow-up to a previous question. But how much of that improvement you're seeing as there is being driven by highway sort of infrastructure work versus private sector activities?

I think most of it is highways. But our volumes in California are up substantially and have been for the last year or so, and it's largely highways. Brent Thielman - D.A. Davidson & Co., Research Division: Okay. So still waiting for that next leg on the private sector?

Yes. Brent Thielman - D.A. Davidson & Co., Research Division: Okay. And then I apologize if you've answered this before. But on the portfolio of sort of Planned Asset Sales that you have, when that's completed, should that change how we sort of currently think about your more key states and exposure?

To the extent we sell ready-mixed assets, it could reduce the revenue from large states. If, for example, we sold some Concrete assets in California, since Concrete sells for a much higher unit price than Aggregates, yes, it could change the revenue. But that's really not important as to our market presence and our market penetration. We would continue to sell Aggregates to Concrete if we sold the Concrete. And our profitability per dollar revenue would be enhanced, if that gets to your question. Brent Thielman - D.A. Davidson & Co., Research Division: That's what I needed.

I will now turn the call back over to Don James for any closing remarks.

Well, thank you very much for joining us today. We appreciate your interest in Vulcan. As I indicated, we look forward to updating you with our progress in our earnings improvement as we go forward, and particularly, to updating you with respect to our Profit Enhancement Plan, as well as our Planned Asset Sales as we move forward through the course of the year. Thank you so much and have a good day.

Thank you for your participation in today's conference. This concludes the presentation. Everyone may now disconnect and have a great day.