Welcome to the Vulcan Materials Company Third Quarter Earnings Call. My name is Elaine and I will be your conference call coordinator today. As a reminder, today's call is being recorded. At this time, all participants have been placed in a listen-only mode to prevent any background noise. A question-and-answer session will follow the company's prepared remarks. And now, I would like to turn the call over to your host, Mr. Mark Warren, Director of Investor Relations for Vulcan Materials. Mr. Warren, you may begin.

Good morning, everyone. Thank you for your interest in Vulcan Materials Company. Joining me today for this call are Tom Hill, Chairman and CEO; and John McPherson, Executive Vice President, Chief Financial and Strategy Officer. Before we begin, I would like to call your attention to our quarterly supplemental materials posted at our website, vulcanmaterials.com. You can access this presentation from the Investor Relations homepage of the website. Please be reminded that comments regarding the company's results and projections may include forward-looking statements, which are subject to risks and uncertainties. These risks are described in detail in the company's SEC reports, including our earnings release and our most recent Annual Report on Form 10-K. Additionally management will refer to certain non-GAAP financial measures. You can find a reconciliation of these non-GAAP financial measures and other related information in both our earnings release and at the end of our supplemental presentation. Now, I'd like to turn the call over to Tom. Tom?

Thank you, Mark. Good morning, everyone, and thank you for joining us this morning. As you saw in our earnings release, Hurricanes Harvey and Irma had a major impact on Vulcan's operations and results and this occurred across a significant portion of our more profitable markets. Absent these hurricanes, our results would have been in line with the expectations set forth in our second quarter call. Adjusting for the extreme and prolonged bad weather, our daily shipments rates in our Aggregates segment, for example, were up at least 7% in August and September over August and September of last year. Looking ahead to 2018, we see the conditions in place for a continued gradual recovery in materials demand, for solid organic growth in our shipments and for return to the incremental flow-throughs and compounding unit margin improvements that have characterized our business for quite some time. I'll now share a bit more insight into the quarter and underlying trends and then John will touch on some preliminary perspectives as we look ahead to 2018. The quarter's extreme weather impacted our shipments and margins significantly, disrupting operations from Texas across the Southeast. This included shipments from our Calica quarry in Mexico. We estimate that the aggregates shipments were lower by at least 1.5 million tons during the quarter. In addition to the immediate impact of shipping days lost due to evacuations, storms and extended power outages, we and our customers have been working through the lingering effects of labor market disruptions, haul truck shortages and other logistical challenges. This has been in addition to the necessity of prioritizing debris removal and other recovery work. The storms also impacted our reporting pricing and margins, particularly in our Aggregates segment. Part of the effect can be attributed to geographic mix as we lost…

Thanks, Tom. Before commenting on 2018, we'd like to clarify that our planning process for next year remains in its initial stages. Right now, we're frankly focused on finishing the current year strong. So we'll give guidance for 2018 during our next earnings call and not today. But we thought it would be helpful to share some early thoughts regarding how we currently see the stage being set for next year. Starting with the demand environment, we currently see mid-single-digit growth in 2018 over 2017. The recovery in private construction activity remains strong across the vast majority of our portfolio. And public construction demand appears to be firming up with most markets poised for low single-digit growth in 2018, a clear and positive contrast with the relative weakness experienced in 2016 and 2017. With respect to public construction, a key will remain the pace at which state DOTs and contractors can start and complete planned work and work deferred from 2017. Our backlogs and our order flows relative to public construction work, particularly highways, continue to build, suggesting some upside to the current outlook if delays experienced in 2017 don't repeat in 2018. And, certainly, we'd hope for some normalization of weather in 2018 leading to an effective gain in the number of available construction and materials shipment days. Breaking it down geographically, 2018 may be a year of haves and have-nots. The have-nots would include Illinois, Kentucky and Alabama. These states combined may see modest declines in demand due primarily to weak public spending. Opportunities for price gains in these states may also be limited. Our other states, the haves, would appear poised to see growth in both private and public demand, with private being the larger driver of 2018 shipment growth. Virginia, North Carolina, South Carolina, Tennessee, Georgia,…

Thanks, John. Let me continue briefly on the topic of capital allocation and specifically growth investments. As we all know, our industry has seen a good bit of M&A activity recently. The long-term growth prospects for heavy materials in the U.S. attract capital from around the world. At Vulcan, we continue to evaluate a number of M&A opportunities and we're also pursuing a target set of greenfield core investments and expansions to our distribution network. But, as you heard me say before, we're going to remain disciplined. We're going to stay focused on those assets for which we are the best owner. We're going to remain patient and disciplined when it comes to valuation and we're going to create and capture the synergies. Our planned acquisition of Aggregates USA fits our criteria for investment. The DOJ review continues to move forward as expected. As we noted when the transaction was announced, we anticipate divesting the Tennessee assets. We're hopeful that the transaction will close during the fourth quarter and we look forward to discussing this transaction in more detail once it is closed. Now, I'd like to close our prepared remarks with a quick look again at the fundamentals. After a quarter so disrupted by hurricanes, it may be helpful to step back and consider the dynamics of the business we're in and where we stand currently. In the trailing 12 months, we've shipped 180 million tons. Now prior to The Great Recession, you have to go back nearly 20 years to 1998 to find a year when our shipments were so low a level. And in the meantime, we've seen nearly 20 years of economic and population growth in our markets, where we've continued to grow strategically with an eye on the long game. So, obviously, we see big upside as demand returns to levels that are defined normal consumption patterns over multiple decades. And not only do we have the benefit of our 2017 asset base, we also have the benefit of our 2017 margin structure. Our gross profit per ton today is $4.78 versus $2.11 in 1998. That's about a 4.4% compounded annual improvement in unit profitability over that nearly 20-year period. These are strong fundamentals of our basic but essential construction aggregates franchise and they haven't changed. If anything they've strengthened, thus, our focus on organic growth and discipline and local execution and our focus on continuous compounding improvements to our customer service and our unit profitability. All of the fundamentals for strengthening demand are in place. Private construction in our markets remains strong. And while public construction has been a disappointment in 2017, the need and the demand is there. And the legislation and funding is in place and growing in many of our best markets. As we head into 2018, we have more visibility regarding that demand. And now, we'll be happy to answer any of your questions.

Thank you. We will take our first question today from Garik Shmois of Longbow Research. Please go ahead.

Hi. Thank you. First question is just on the preliminary outlook for 2018 actually, just wondering on the cost side. Is it possible to quantify the costs that you believe will not repeat in 2018 and what that potential benefit might be?

Garik, it's John. I'll start, but I think right now, it's not – I think it's a little bit early to do that. We'll try to be maybe a little more clear when we gave official guidance in February. What I would say is we clearly did not see any reason that with a return to even moderate shipment growth we won't return to the 60% flow-throughs and continuous compounding improvement in unit margin that really characterize our aggregates franchise. So – and certainly there should be some opportunity for improvement. I think that goes without saying. But I think it'd be inappropriate a little bit early to try and quantify right now.

Okay. That's fair. Just wanted to -

To give total color on that. I think what we won't see is, as we said in the statements the impact of the ships – obviously we're not going to see the impact of the storms, which were very disruptive for us.

Yeah, exactly. And my question I think was trying to address, if there was a dollar amount attached to the ships and the storms and the fires in California, but understand if it's a little bit early to provide specifics around that. I guess, secondly, is on the price/mix headwinds that you called out in the third quarter. Can you help us understand a little bit more how to think about that into the fourth quarter and then maybe even to 2018? How long you would anticipate some of those headwinds to persist on the pricing side?

Yeah. I think in a short period of time, any number of things could affect pricing. That could be product mix, geographic mix, timing of jobs and even the impact of two big storms. I think the key fact when it comes to pricing is that the fundamentals of pricing of aggregates hasn't changed and it's probably better now. You've got to remember as we always say that pricing is an ultra-local business and that local pricing is a campaign that compounds over time. If you look at the slides that we had for this call we've seen price increases every month for the past five years. On a trailing 12-month basis the price has gone up. And that's just a great example of that campaign. But to put a little color on it for you, let me contrast some markets. If you look at Georgia, which is one of our strongest markets both in the public side and the private side, even though volumes have been out a little bit, we saw – due to timing of jobs and the weather impact, we've seen pricing up double-digit in 2016 and double-digit in 2017. And you contrast that to coastal Texas, where we're further along in the cycle. In fact, we saw – a number of reasons over the last 18 months we saw business probably dip some there. We've seen high single-digit pricing every year for five years till 2017, saw it tail off a little bit in 2017, but believe that it will pick right back up in 2018. And then you contrast that to California, which is in the relatively early stages of recovery with the private side healthy, the public side has not come on, but coming on, we've seen – over the last two years, we've seen high single-digit range to low double-digit pricing. And we'll see very good pricing there in 2018. So, as we always say, remember that pricing is a – it's ultra-local. It's a campaign over time. And the proof of that is that slide where you see very month pricing improvement over five years. So I think, from our perspective, we're very confident that the fundamentals of pricing improvement are sound.

Okay. Thanks. And then my last question is just you called out California and Georgia both in the prepared remarks and just now as being strong markets. You also talked about labor constraints as impacting the level of volume growth in 2017. Just wondering if there is any risk that you could see with respect to labor in those two states as impacting demand into the next year. Or from that standpoint or from a timing standpoint, do you see relatively less risk in those states despite the growth outlook?

Garik, I'll start. On Georgia, we'll be coming off a year that had – it was very disappointing in Georgia on the public side and much of that work deferred into next year. So, assuming that some of the same extraneous events don't happen in 2018 that happened in 2017, storms, major interchange, burning down, those kind of things, I think, by the time we work it through off the lower base, we should be okay. The challenge I think in Georgia as we look at it – and I think the same is probably true for California at these levels – is less labor constraint, per se, and more about normalization of weather, a number of available days, and a little bit more just about the success the DOT and large contractors are going to have in getting scheduled work started and done. And labor is a part of that, but so is permitting, so is a variety of other things. And so that's what we'll be really keeping a close eye on in those two markets and the many others as we move between now and giving official guidance is what can we see on the public side that relates to work not just being funded, not just being scheduled, not just being slated, but actually moving dirt and taking shipments from us. And that's what we'll be keeping a close eye on.

Great. Thank you very much.

Thank you. We take our next question from Trey Grooms of Stephens, Inc. Please go ahead.

Hi. Good morning.

Good morning, Trey.

Hi. Good morning.

Good morning.

I guess my first one is on obviously the impact of the storms in the third quarter. And then you noted or I guess in the press release you noted that it's a lingering effect that you're seeing. I mean it's not surprising that that's impacting 4Q, but what's the expectation as far as how long that can kind of go on, this lingering effect that you call out? I mean you think most of it will be behind us in the 4Q or could that kind of inch its way into next year as well?

Yeah. I think let me talk a little about those effects for a minute. They're pretty hard to quantify, but I'll try to give you some color on it. We're still seeing some impact on shipments of product splits across a number of our markets and to give – really in the residential sector. So, we're just not shipping – or our customers, our ready-mix customers, aren't shipping like they were before the storm really to residential, some non-res, mainly residential. And I'm sure that's a mix of where the labor is and just getting back to normal. So some volume and some price impact there. Cost continues to be impacted. For example, we have the light load or split ships in the Houston, Beaumont today. We're waiting to dredge those two facilities from the storm. That dredging cost is going to be $2 million plus and we don't know when we're going to get them dredged just because there's that much pressure and demand to get everything dredged from the Gulf Coast. So while it's hard to quantify, we're still being impacted. I believe this will work out. I don't think it will drag much impact into 2018. I think it will be worked out in the next 60 days.

Trey, as I'm sure you and many others well know, while we are back shipping in many of these affected markets, we are not shipping the same product mix to do the same type of jobs. And so it will take a while. We think it will be mostly worked through in Q4. So we're back and operational but it's not like life is back to normal for the people who are displaced out of their homes in Houston, for example. The only thing I would say, Trey, just on guidance for the balance of the year. Those lingering effects are certainly one of the reasons that we reduced guidance. Obviously, third quarter results contributed. Q4 will be impacted. At least early October is impacted by Tropical Storm Nate. So, you take the lingering effects, you take Nate, you take the normal uncertainty around fourth quarter weather and those were all the things that kind of contributed to our lowering our guidance to the place we did.

Got it. And just – I don't know if you can give any color around this, but the guidance for volume that's implied in the 4Q kind of, I guess, low single-digit type volume. Can you take a stab at what might that have looked like excluding these things in the 4Q or the impact of these things in the 4Q? I mean you were able to kind of strip it out a little bit for August and September. Didn't know if there was any color you could give us on your -

Yeah. I think it would be back toward the guidance we gave you in the second quarter and what we saw in the first couple weeks of August. And we were excited about that, saw some of the big jobs have been waiting on start-up. So, I think we'd have been within that second quarter guidance.

Which was -

So, Trey, that's for 5% to 10% up over the prior year. That's kind of what we see is the underlying momentum in those periods of time when you can get a clean look at it.

Yeah. Got it. Okay. And then lastly for me, on the 2018 kind of outlook for the demand environment I just want to be sure. I understand mid-single-digit demand growth for aggregates. That's in your market specifically, if I understand right. Is that kind of the view there?

Yes.

Yes.

And then with you guys and the M&A that you've done – not talking about Aggregates USA, but the other M&A that you've already closed presumably you guys would – if for no other reason simply from the M&A standpoint you should outperform the overall end market at minimum because of that, right?

Yes.

Great. That's it for me. I'll pass it on. Thanks a lot guys and good-bye.

Thank you.

Thank you. We take our next question from Jerry Revich of Goldman Sachs. Please go ahead. Jerry Revich - Goldman Sachs & Co. LLC: Hi. Good morning, everyone.

Good morning, Jerry.

Hey, Jerry. Jerry Revich - Goldman Sachs & Co. LLC: I'm wondering if you could talk about what you're seeing on the highway side. I guess overall it's our perception that activity levels in terms of capital actually getting spent this year was generally light despite very strong DOT budgets. And I'm just wondering what's your assessment on what's driving the delay in terms of appropriations translating into a meaningful pick-up in highway activity for your business. What do you expect that to look like in 2018?

Yeah. As you know, that's been a frustration for us in 2017 and one that we thought would have shift or would have flowed through the FAST Act some of the DOT funding would have flowed through earlier in 2017. Our miss in 2017 was the public work. The private side of the business was very strong, very good. It's up and will be up in 2018. If you look at the public side today, I think, our visibility is a lot better than it was a year ago. Our public backlogs are up considerably and our order flows are up and improving on public work. And we began shipping on a number of the large jobs that we had anticipated shipping much earlier in the year. So I believe and I know our visibility to public work for 2018 is much improved. I could give you a list of 10 major projects around the country, which we thought would have shipped second quarter, at least beginning of third quarter, but are now shipping. Three examples I'll give you would be I-85 widening in Charlotte, which is over 1 million tons. The much talked about 285/400 interchange in Atlanta is now shipping. That's a multi-million – that's 2 million ton job. And then we've also in the past talked about I-16 and 75 widening in Macon got delayed due to right-of-way issues and also some permitting issues. That's a 0.5 million ton done, which we now began shipping. So, with shipping all these jobs, our timing, our insight, our visibility of timing and the pace of shipping is much clearer than maybe what was six to 12 months ago. Jerry Revich - Goldman Sachs & Co. LLC: And I'm wondering if you folks can comment on California specifically where we've heard some optimism that the SB 1 bill could translate into spending sooner than initially anticipated based on how tax revenue collection is going and the urgency to put capital in the ground. Based on what you're seeing when do you think you start to see the benefit of SB 1 in your business?

Yeah. I think California really is exciting place for us and, again, the private side is strong, been strong. Both non-res and res are very healthy there. And now we've got SB 1. Back in the summer, Caltrans announced $1 billion of accelerated funding. And then, in October, they announced the 90 fix-it-first transportation, or $3.4 billion of accelerated spending. And that second announcement includes 1,200 lane miles of pavement, replacing or repairing 66 bridges, and a number of like 300 culvert and drainage repairs or replacements. Most of that will come – you'll see a little bit of that probably in 2018, most will come 2019 and 2020. Obviously overlays will go faster but I think with all of this remember it takes normally two years to flow through. We've seen it in a number of bills. Now they'll get some of that accelerated and start shipping because there's a lot of public pressure to fix the roads in California.

So, Jerry, just to help you with the math on that a little bit and others. As we look toward 2018, California shipment growth is still driven almost entirely by private growth in our current outlook. The efforts at Caltrans to pull projects forward are very good news, but pulling them forward doesn't mean we're shipping on them in early 2018. It means they're starting the work on the project. And so should benefit us maybe some late in the year. But it's not something that we have baked in for 2018, if you will. Back on California, stepping back just a little bit, we continue to think California looks a lot like Texas did four or five years ago. And as you heard Tom say and you heard me say, that's reflected in what should be a pretty darn constructive pricing climate, not only for our products, but for all heavy materials in California as we look toward next year. And it's really at that different stage of the cycle, so we're excited about it. But 2018 will still be largely private-oriented. Maybe with a little bit of upside if the public comes a little bit sooner but we think that's more 2019, 2020 and for many years beyond. Jerry Revich - Goldman Sachs & Co. LLC: Okay. Thank you very much.

Thank you.

Thank you. Phil Ng of Jefferies has our next question. Please go ahead.

Hey. Good morning, guys.

Good morning.

You called out project delays and logistical issues at the DOT last quarter. Have you seen any improvement on that front and any lift from FAST? It doesn't sound like there's much. And, separately, you're calling for a low single-digit growth in public spending next year. Is that generally in line with what you expected coming into the year? Thanks.

Yeah. I'll kind of play back the story on expectations because again, I think, the theme is that in 2017 public has been the disappointment. At the beginning of 2017, we and others would have expected mid-single digit growth in public demand. What we have seen in 2017 and probably will have seen by the end of the year is mid-single digit decline in demand. So, as Tom said, that's where the miss is. The important thing is as we look to 2018 we actually see firming up and a return to growth in public spending and public demand across really all of our footprint, with the exceptions that I noted of Alabama, Kentucky, and Illinois.

Got you.

And that's very good for the overall health of our business. We don't have in that mid-single digit growth outlook for next year, which again preliminary. We'll revise it between now and when we give official guidance. As you noted, that's not predicated on a huge jump in public spending. That's predicated on stabilized, low-mid, low-single-digit growth in public spending. So if people are able to get projects out the door more quickly, when that begins to accelerate, there could be a little bit of upside to that. But we don't see it happening certainly in the first half of 2018 yet. Something we'll keep a close eye on.

Yeah. I think back to our earlier comments is the visibility of the jobs that we've got started and that we know we're going to ship. And the ones that we haven't, we don't know yet. We just don't know the timing of them.

Got you. And then I guess just one last one. I mean coming into the year, there's certainly a lot of euphoria with this administration pushing through an infrastructure bill. But just given some of the delays in – whether it's healthcare, tax reform, has that lack of clarity in D.C. led to any delays in projects and funding getting pushed out? Thanks.

No, it hasn't. And as we said before, this is something this country needs, and it's not a matter of if, but when. But in the meantime, we've got very good business. The private side has been growing, will continue to grow. We're starting to see the highway work flow through finally, and we're starting to see the FAST Act funding flow through. So when that comes, we'll welcome it with open arms, but in the meantime, I think, demand on both the private and the public side is helping.

Okay. Thanks a lot.

Thank you. Kathryn Thompson from Thompson Research Group has our next question. Please go ahead.

Hi. Thank you for taking my questions today. I just want to first focus on gross margins. Could you walk through the puts and takes on the quarters? Really trying to get a better sense of what more is one-time versus the ongoing managed cost, particularly as related to storms. And I know you talked about it in the prepared commentary, but if you could put it around – some metrics that we can better understand for modeling purposes. Thank you.

I think just some color on that. Those storms were really disruptive. We've talked about it. From an operating perspective, you've got to remember. We had – operations were shut down days, even weeks. For example, the West Coast of Florida, our operations over there were shut down two or three weeks. Some of Georgia operations were shut down a week. And when you're down for that long, the costs don't go away. I mean we paid our folks during the evacuation just because it was the right thing to do. But those costs kept building up. So, anything specific we talk about is going to be conservative. I think that we're slowly getting back to normal on that. We'll work that through over the next couple of months, but that's really hard to quantify. John?

Kathryn, I'll try and give a little bit more quantification and color, but let me first say to everybody it's just inherently very difficult to quantify precisely because the nature of the impacts were so widespread and on so many aspects of the operations. But to try and give you a rough feel the way we look at it. You saw us note that we think we lost at least 1.5 million tons of production deferred, of shipments deferred. Just on the increment given where those are coming from, the nature of it, we think that's probably a $15 million to $20 million hit to EBITDA in the quarter. But then let me go to the profitability of our Aggregates segments and to your point about margins. We think the hit there was probably of a equal and maybe larger size than just the straight volume loss. And this is a function of changes in product mix, changes in production efficiency, again in some cases having fully staff facilities where we kept everybody on the payroll that had no production for a couple weeks, which is very much the right thing to do, freight and logistics costs, unique spikes in diesel, unique spikes in freight costs, which in some cases we ate because we chose not to pass through to customers in the middle of a crisis, repair costs, lower fixed cost absorption, the spike in diesel and its usage in our facilities that you've seen, et cetera, et cetera. So, on the cost side, we'd estimate that's another $15 million to $20 million. But that's an estimate in the quarter. When I say cost, I really mean profitability. Absent that effect, we probably would have grown unit margins, unit gross profit in our Ag segment another 5% to 8% quarter-over-quarter. Then if we go to our non-ag segments, probably about a $7 million to $8 million impact, particularly in our asphalt segment, particularly in San Antonio, which was hit hard economically. So that, I hope, gives you a feel, Kathryn. I just would underscore that it's more difficult than the average one or two items to quantify just because of the very nature of how disruptive this was.

Absolutely understand and I think you've seen us write about that too.

Yeah.

The other thing – and it's extremely helpful in terms of that quantification. In terms of the optics for pricing in the quarter and once again this may be difficult to quantify, but when you look at your 3% pricing, what – any impact to that? Did the storms have effect to the optics of pricing understanding that you're shipping more base and fines versus clean stone into the affected markets?

Yeah. I think that it was definitely impacted. We just called out mix being about 1%, but that's – on the surface there was for price, other impacts with the storm that aren't seen there. And, again, we were very careful with our pricing, just because it was the wrong time to raise prices during when people are hurt and in trouble. So that probably had some drag on us also.

Okay. Perfect.

Kathryn, we can cover this offline if you wanted. But if you looked at our non-freight adjusted pricing, just total revenue per unit in ags, it was up probably 5% or 6%

Yeah. Saw that -

Relative to our freight adjusted pricing up 3%. And, again, a lot of that was in a lot of these disruptive markets where we had kind of a spike in freight related cost, like an immediate spike that wasn't passed through the way it normally would be. So, there's also a little bit of cost and price impact there in some of these markets that's transitory. I think we'd probably say the overall pricing climate and trend – and, again, you know very well how variable it is by market. It's incredibly variable by market, but total, total across the portfolio tracking between 4% and 5%.

Perfect. Yeah. No, definitely understand that, and just really wanted to get a better understanding of that mix impact from the storm, so -

Yeah.

Helpful. And then finally -

And that mix impact – a question was asked earlier, that mix impact is not over. We'll still see some of that in Q4.

Okay. And final question and I promise to get off the storm train. Just when you look at your recovery in Texas and Florida, we've gotten mixed feedbacks from a wide variety of different construction value-chain participants, be it ready-mix truck drivers to building project distributor in terms of the pace of recovery in each of the respective markets. But maybe could you frame a little bit more – are you seeing a fast recovery or a slow recovery you thought in Florida and in Texas, because that will help us? We think that the lingering effect could go beyond Q4 and so this is kind of what we were trying to get some comfort around. Thank you very much.

I think it's actually – I would tell you pretty slow, and it's dragging. I think that every day we get a little better with this. Labor markets get a little more normalized, debris gets picked up, and you start to have trucks available. Homebuilders and the thing that concerns us is probably the res side and when we start – when our ready – when our customers in the ready-mix business start shipping to residential. And I'm sure that there's no question there's labor constraints there with repairs and rebuilds to homes as well as new construction. So we're hoping that we get past this in 60 days, but you may be right there. We don't know. And I think like I said the biggest concern is what happens to shipments to res and the timing of that.

And in some markets -

Thank you very much.

Like Florida, asphalt paving is not really picked back up either. So, Kath, I think, it's fair to say that just to underscore that that there's certainly a degree of uncertainty. I'm not sure anybody knows. It's just a little bit the nature of what these communities are working out of. It's not about our quarry operations, but it can sometimes be about our customers operations.

Thanks very much.

Thank you.

Thank you. Thank you. Our next question today comes from Bob Wetenhall of RBC Capital Markets. Please go ahead.

I swear to God I'm not going to ask a single question about the hurricane, okay. Enough of hurricane. Let's move into 2018, all right.

All right.

So, a lot of detail, forward-looking. I'm kind of feeling like we're 180 million shipment tons for this year and last year. I'm kind of understanding if there's pent-up demand and you're talking like mid-single-digit volume growth next year, that kind of gets me to 190 million tons. You've got some nice M&A that closes I guess end of 4Q, first quarter of 2018, maybe a couple million tons, maybe 5 million tons. Just for thinking and I'm not asking for an estimate or a crystal ball, is like 190 million to 200 million tons like a good conceptual starting point for 2018 given all of the issues we had this year with weather and hurricanes and all that stuff? And some of the comments you made about kind of widespread recovery except John's point there's three states which are kind of struggling. Is that the right way from a bookend perspective, big picture?

I think, first of all, we're still working through that and we're still working on the plan. Some of that, as John said earlier, will depend on what happens with the public sector, how fast it goes, do some of those bottlenecks get cleared up? I think as far as the mid-single digit, we're very comfortable with that based on the projects we've seen start and the ones that we know and the timing of the ones that we know are going to go. A lot better than we were a year ago. But I think we're still working through that and trying to get out of the hurricane and into normal business.

Got you.

And, Bob, we don't want to slide in to giving a number or giving guidance before we give guidance too much. I think I'll come back to private demand climate. It's still quite strong in Vulcan markets. By the way, if somebody wants to ask that includes non-res and non-res backlogs in our markets, certainly through 2018, res very strong across the entire footprint, public transportation, public highway work, strong across – well, not strong – strengthening after a period of lull and what we think is the beginning of a long wave of growth on the public transportation side. The public – what we call public other infrastructure, water, sewer, some other things – not as strong and conspicuously weak throughout this entire recovery. But that's now 10% of our business, when it would normally be 15%. So it's not the big thing. So we absolutely see return to at least moderate growth with some upside. And I'd underscore that we haven't seen anything change in our view regarding our ability to convert that growth into good growth in operating earnings and cash flows.

Yeah. I mean you guys have had a couple years where you've been growing volumes 15 million or 20 million tons. So I mean there is no question about your ability to leverage yourself when the demand returns. Maybe we could talk for a second about gross profit per ton. And obviously this year has had some disruption, which has weighed on that and impacted incremental margin performance. How do you feel what's – like, where can you take this, Tom, in terms if we get normalized demand patterns, what kind of gross margin per ton can we start looking for on a dollar basis?

You'll hear us talk about the flow-throughs of 60% and that's what we'd tell you over time. Nothing has changed with that. We have confidence in that. I think we won't see some of the cost headwinds that we saw this year. John talked about those with the ships, some of the fuel spikes and obviously the cost of the storms and the destruction of the storms. So I think back to our normal flow-through.

So you feel good about continued improvement in profitability. Final question and pass it on. Am I right to detect a subtle shift in your capital allocation strategy? Because you guys spoke more and focused more on it during your prepared remarks. Is there any kind of tilt to how you're putting money back to work? And how should we be thinking about that for next year, 2018? Thanks and good luck.

Good question, Bob. John. I don't think there is any change in strategy. In fact, it's very consistent with what we've been on for a long time. We did just want to note that on – we're still very focused on a free cash flow generation, and we think we should have accelerating free cash flow generation over time. As you hear Tom say all the time, we're going to stay disciplined on our deployment of capital back into M&A and other growth with an underscore of discipline. But we do think that we've caught up on some amount of our, I'm going to call it, core maintenance and operating CapEx investments. We've made some very good investments there. And we'll talk about this more when we give guidance next year, but we'd expect our core maintenance operating CapEx number to maybe even next year be down a little bit despite production being up a little bit. We think that number will kind of moderate, but no change to our long-term outlook or certainly no change to the capital allocation disciplines we've been following for some time.

So you're saying EBITDA grows potentially but CapEx goes lower, so free cash flow strengthens, correct?

Yes.

That's awesome. Good luck. Thank you.

Thank you.

Thank you. Adam Thalhimer of Thompson Davis has our next question. Please go ahead. Adam Robert Thalhimer - Thompson Davis & Co., Inc.: Hey. Good morning, guys.

Good morning. Adam Robert Thalhimer - Thompson Davis & Co., Inc.: I wanted to ask first – you said mid-single digit volume growth expected for next year. Could pricing also be up mid-single digits or those three states you mentioned, does that drag down the average a bit?

I think as you look at it, we're not there. We actually couldn't give you guidance, because we're still doing the work. But what I would repeat is that the environment for price increases is very healthy. We've got population growth. We've got employment growth. Our customers are growing their pricing and everybody recognizes that our business – we need to add to the profitability of it. So the environment is good. People see work out ahead of them. The visibility is very good, so they can take a risk on price all the way through the construction business, not just aggregates. So, while we won't put a number on that at this point, I'd tell you that the environment is good for price increases. Adam Robert Thalhimer - Thompson Davis & Co., Inc.: Okay. Thanks for that, Tom. And as a follow up I'm just curious. What's your view on the M&A landscape in 2018? Do you see a moderation of the large deals and maybe just a few comments on your priorities for M&A?

Those deals will come and go, and you never can predict them. I mean we're working on a number of M&A opportunities as we speak, and they'll be all shapes and sizes, and you just can't predict that. When someone gets ready to sell, they're available. As always, I think, we're focused on the discipline about what markets we want to be in, what synergies do we have and are unique to us, and how we put them to work. Obviously, you've got to be disciplined on what you're willing to pay for an acquisition. And then as important as anything, once you get it, you have to be disciplined about integrating it and making it profitable as fast as you can and make it a part of the Vulcan franchise and part of the Vulcan family as fast as you can. So, we're busy with that. There is deals working right now, but to predict size and number for 2018, really tough to do. I can tell you right now that the M&A part of our business is very busy.

Thank you. We'll take our next question from Scott Schrier of Citi. Please go ahead.

Hi. Good morning. I wanted to talk specifically about Virginia a little bit. You continue to have a lot of strength and the right mix and I just want to see what you're seeing in the state both on the public and private side, whether you think that's going to continue and how you look at the pricing environment there? And I guess as a follow-up to the last question, how you'd view the M&A environment in the state of Virginia?

Yeah. Virginia is strong. I think if we talk to you – in 2016, our weakness in Virginia was non-res. We predicted it coming back. It has come back. That has really added to our growth in ready-mix in Virginia. Res continues to be healthy and the public side is healthy. So really good market both from demand perspective and also from a pricing environment, both in all the way through the construction materials mix. I think aggregates prices have gone up for Virginia and will go up healthy in 2018 and we continue to see ready-mix prices and unit profitability grow in Virginia. It's a good market for us. And I think our folks are doing a really good job there.

Thanks. And I wanted to touch real quick on the SAG expense. It looks pretty low. Just wanted to see if there is anything there and how you're looking at progress in SAG as we head into 2018.

Say, if I'll start on SAG, I don't know that we'd say it's low. We're never – we're always looking at it. It's an area of continued focus for us, both in leveraging at the sales going forward as we've talked about a good bit but also in terms of making sure SAG dollars are deployed against those things that better serve our customers, better serve our people and just drive productivity and performance over time. So, it's something we are intensively focused on here. We'd read it as good discipline, good focus in line, but I wouldn't say that our job in SAG is anywhere near done. We're going to continue to focus on it. We're making investments on the sales side, the S part of SAG, particularly to serve our customers better and to grow with the small private work we see and to make sure we participate in that part of the growth in the market fully and to do so at a full value for our products. And we're continuing to be very efficient on all of, what I'll call, the support function aspects of SAG. So, good result in the quarter, but an ongoing area of focus.

Thank you.

Thank you. Our final question today comes from Stanley Elliott of Stifel. Please go ahead. Stanley Stoker Elliott - Stifel, Nicolaus & Co., Inc.: Good morning, guys. Thank you for fitting me in. Before I ask question, one just on clarification, so far as the Ag USA deal expecting to close kind of fourth quarter. I apologize if you have said it, but the level of divestiture that you were contemplating or discussing, all of that is kind of within that framework, meaning, just increasing the likelihood of getting that closed by year-end.

We can't say a lot about Ag USA. The DOJ process continues to move forward as expected. We believe we'll close it in the – we believe we'll close Ag USA in the fourth quarter. Divestitures will be a part of that. We're also working really hard – and this is most important to us, pre-closing integration and what we can do to make sure we execute on the integration of that business. It is a very good business. We're excited about it. It's great assets in really good markets with really good market positions. They have really talented people and we're ready to get them on board with Vulcan.

And, Stan, just given the way you asked the question. We said when we announced that we didn't expect to be able to keep all the assets in Tennessee and we still don't expect to be able to keep all the assets in Tennessee. So no change really. Stanley Stoker Elliott - Stifel, Nicolaus & Co., Inc.: No. It sounds like it's moving according to plan.

Yeah. Stanley Stoker Elliott - Stifel, Nicolaus & Co., Inc.: And I guess lastly you talked a little bit about some of the internal investments and then some of the new site developments. Is it easier to greenfield a quarry or to kind of work within on an organic basis in that regard? Has anything changed on that or is it just kind of more opportunistic kind of something you guys have been doing for a while?

Thanks for the question. We are doing greenfields and M&A. Greenfields are very important part of our business. It is part of our strategic planning, something where we execute on and have been executing on over the last couple years. We have a number of greenfields working – quarries working right now and a even bigger number of distribution greenfield sites that we're working on or are finished. We don't talk a lot about those because of the strategy and the confidentiality of that but it is absolutely part of our business and a very important part of our strategy.

Stan, I think it's fair to say that it's harder not easier. And when we talk about things that are coming to fruition, almost without exception, they've been in the works for a decade. So, just keep that in mind if we're making announcement in 2018 about greenfield development that they've been in the works for a very long time. It is very hard to do. Stanley Stoker Elliott - Stifel, Nicolaus & Co., Inc.: Great, guys. Thanks and best of luck.

Thank you.

Thank you for your time this morning. Thank you for your interest in Vulcan Materials. We are excited about the growth opportunities we see ahead of us and we look forward to sharing that with you in our next call, another topic. So, again thank you for your time.

Thank you. Ladies and gentlemen that will conclude today's conference call. Thank you for your participation. You may now disconnect.