Please standby, your program is about to begin. [Operator Instruction] Good morning, ladies and gentlemen, and welcome to the Vulcan Materials Company's Third Quarter Earnings Call. My name is Emma and I will be your conference call coordinator today. During the Q&A portion of this call, we may -- we ask that you limit your participation to one question. This allows everyone who wishes the opportunity to participate. Now I will turn the call over to your host, Mr. Mark Warren, Vice President of Investor Relations for Vulcan Materials. Mr. Warren, you may begin.

Good morning. And thank you for your interest in Vulcan Materials. With me today, are Tom Hill, Chairman and CEO, and Suzanne Wood, Senior Vice President and Chief Financial Officer. Today's call is accompanied by a press release and the supplemental presentation posted to our website, vulcanmaterials.com. A recording of this call will be available for replay later today at our website. Please be reminded that today's discussion may include forward-looking statements which are subject to risks and uncertainties. These risks, along with other legal disclaimers, are described in detail in the Company's earnings release, and in other filings with the Securities and Exchange Commission, reconciliations of any non-GAAP financial measures are defined and reconciled in our earnings release, our supplemental presentation, and other SEC filings. As the operator indicated, please limit your Q&A participation to 1 question. With that, I'll now turn the call over to Tom.

Thank you, Mark. And thanks to everyone for joining the call this morning. We appreciate your interest in Vulcan Materials Company and hope that you and your families continue to be safe and healthy. This is our first Earnings Call since closing the U.S. Concrete acquisition in late August. Therefore, I like to begin by welcoming the former U.S. Concrete employees and customers to our Vulcan family. Also, I want to thank our team for its continued solid execution during a quarter that was challenging due to inflationary pressures and labor constraints. Despite these challenges, our team managed a controllable costs. Moved pricing higher in all segments, and importantly, expanded our aggregates unit profitability for the 13th consecutive quarter. We generated $418 million of adjusted EBITDA this quarter, an increase of 4% as compared to last year. Profitability for the quarter, was held back by factors I mentioned earlier. Energy inflation was a significant $30 million headwind. Unit diesel prices were up over 50% leading to $14 million of additional expense. The cost of liquid Asphalt was over a $100 per ton higher than last year. This sharp increase impacted our results by $16 million. And finally, labor constraints, especially for truck drivers, have caused delays and inefficiencies in our operations, as well as those of our customers. Even with these headwinds, we improved our aggregate cash gross profit per ton by 3% to $7.74. This was achieved through consistent execution of our 4 strategic disciplines, which helped to drive volume growth, higher pricing, and improve operating efficiencies. This strong performance and momentum it provides, sets us up well for '22, especially with respect to pricing. Total aggregates volume, including U.S. Concrete, increased by 8% versus last year's quarter. On a same-store basis, volume was up 5%. This reflects continued…

Thanks, Tom. And good morning to everyone. We've covered the key financial and operational highlights already, so I'd like to speak to the following topics. First, our balance sheet strength and capital allocation priorities. Second, our return on invested capital. And finally, our financial guidance for 2021. With respect to the Balance Sheet, we will continue to prioritize sensible leverage and financial flexibility in order to support our capital allocation strategy and maintain our investment-grade rating. The structure of our debt is sound, with long maturities that makes sense for our business. Due to our strong cash generation, we were able to reduce our net debt to EBITDA leverage ratio to 2.7 times following the U.S. Concrete acquisition. This is just above our stated range of 2 to 2.5 times. And we will be focused on getting back within that range in the near term. Our capital allocation priorities remain unchanged and the consistent application of those, while maintaining a sensible leverage range, has allowed us to improve our return on investment over the past 3 years. For Legacy Vulcan, the return was 14.7% up 240 basis points from 3 years ago. With the inclusion of 1 month of U.S. Concrete earnings, and a 1/4 impact of the acquisition on average invested capital, our return was 14.2% We'll continue to focus on the sequential improvement of returns. The final topic I want to share this morning is our updated view on 2021 guidance. Our guidance incorporates U.S. Concrete 's expected EBITDA contribution since acquisition, as well as recent trends in demand, price, and costs. Our adjusted EBITDA guidance range for the full year is now $1.43 billion to $1.46 billion. This includes $50 million to $60 million EBITDA from the acquisition. But excludes $115 million gain on a land sale completed in the first quarter. I'm sure there will be a number of questions on business trends and the outlook in the Q&A section. So, I'll turn the call back over to Tom for closing remarks.

Thanks Suzanne. Before we're going to Q&A, I want to again, thank the entire Vulcan team, including our newest team members from U.S. Concrete, for their hard work and their dedication to serving our customers. Our people are what makes Vulcan better every day. We have and will always operate Vulcan for the long term. This means a strong emphasis on keeping our people safe and continuously improving our already strong culture. Local execution is key to driving improvements in our business, particularly around our strategic disciplines. As we move forward, we will seek to maximize synergies with U.S. Concrete. As always, for Vulcan, we will maximize unit margin expansion, through our 4 strategic disciplines. And remember, improving financial returns is of paramount importance. And now we'll be happy to take your questions.

At this time. If you would like to ask a question [ Operators Instructions]. And as a reminder, we do ask that you limit your participation to 1 question to allow others opportunity to participate. We will take our first question from Stanley Elliott with Stifel.

Good morning, everyone. Thank you all for taking the question. Tom, I wonder if I could start off talking a little bit more about the pricing expectations for '22. Your very positive commentary about conversations, and then the comment about at least 5%? Thanks so much.

Yes, thanks. Daily is -- as I look forward, I think this is one of the most important themes. As we've said, over the past couple of quarters, the combination of visibility to growing demand, you couple that with inflationary pressures. This all bodes really good -- bodes well for aggregate prices. And our teams recognized us wholly-owned and started trying to move price in Q2. And as we predicted, our third quarter price increases were 3.1 mix just 3.5, which was up sequentially from 2.6 in Q2 and 1.3 in Q1. And that sequential improvement is really important because it illustrates the improving pricing environment. So, looking forward, I would expect that trend to continue in Q4. And then looking past that at 2022, I think we'll see bigger jumps in pricing in January and in April as the 2022 fixed prices go into effect. So, as we said before, based on trends, backlogs, and customer conversations, I'd be very surprised if our 2022 price increases don't eclipse 5%.

That's pretty encouraging. Thanks, guys. Best of luck,

Thank you.

Will go next to Trey Grooms with Stephens Inc.

Good morning Trey.

Good morning. And thank you everyone. And well done in the quarter, given the headwind, especially on the unit profitability. Well done.

Thanks.

Tom and Suzanne, my question is looking into next year as well. You mentioned solid fundamentals, positive demand trends. But you also noted labor constraints which have obviously been a challenge for everyone. But taken all those things into consideration as you look at the geographies and the end markets that you serve, can you -- could you dive in a little bit more around how you're thinking about the volume outlook for '22 and maybe some of the key drivers there? Thanks.

Let's look present and then we'll look backwards into the quarter and then we'll look forward. So, on same-store basis, volume was up north of 5%, which was strong. The vast majority of our markets experienced volume growth, which speaks to the market 's underlying growing demand and how broad based it is. We'd have a little bit of weather in Alabama, parts of Texas, Arizona really got washed out. A little bit of weather in Northern California. Now, this -- but this was more than offset with really strong shipments in the Southeast and the Eastern seaboard. As we look to 2022, 2022 may be the first year in well over a decade where we'll see growth in all 4 end users. So, it's just broad-based. Residential construction should continue to grow, non-res, it's just very important because it continues to -- we're continuing to cope through the pandemic and moves into growth into 2022. Non-power infrastructure, we think grows following the big residential growth we've seen this year and how we demand in 2022, we'll also see growth supported by improvements in state funding and some COVID relief funds. So, all that's really good news for '22. Demand however, as we talked about the awesome headwinds, and you got supply chain issues, labor shortages in the beginning that have some impact on shipments. Now, those headwinds don't make demand go away, they only push it out and extend -- it really extends the cycle if that happens. So, the fundamentals for volume growth in 2022 are in place with some headwinds. And while it's kind of early in our planning stages under the conditions, I'd be surprised if we saw our growth above 4%. At the same time, that demand -- if we did have those headwinds, demand gets drawn out and extends the cycle, and with our ability to compound margins over time, that could be very helpful. So, fundamentals are really strong -- some dampening effect with supply chain and labor. But the underlying fundamentals are really good.

Understood, thanks for the [Indiscernible] there and thanks for taking my question.

Sure.

We'll go next to Garik Shmois with Loop Capital.

Hi, this is Jeff Stevenson, on for Garik. Thanks for taking my questions.

Good morning.

Sure.

In the press release, you mentioned that Concrete same-store sales volumes were negatively impacted by a fewer larger projects. I'm just wondering if you could provide any more color on this and how does the U.S. Concrete look from a comp standpoint? Are they running the risk of fewer larger projects unless lumpy volumes? Any more color would be helpful.

Sure. The large projects we have finished up, we're in Northern Virginia, in the DC area, and it's just a little bit of a low in our in our backlog as we move into 2022. I think the underlying piece of Concrete improvement with the non-res piece. We see non-res growing in 2022. That's very important for ready-mix. The other thing I was encouraged within the quarter on the same-store basis and also with U.S. Concrete, you're starting to see unit margin expansion. And earlier in the year, both our Concrete business and U.S. Concrete's Concrete business got dinged from diesel and combination of diesel and what I'd call traffic inefficiencies. Last year, we just didn't have any traffic on the road so we were able to deliver concrete very effectively and efficiently. This year, not so much, and so it added some costs. While those were headwinds for '21 pricing at this point has jumped past that. It jumped past raw materials and we're seeing margin growth. So, as we move into '22 with the combined businesses, our predict, you will see volume growth really driven by non-residential construction growth, but also unit margin growth because prices have caught up in the past, cost changes from 2021. So, I'm very encouraged for our outlook in 2022 in this product line.

Great. Thank you.

We'll go next to [Indiscernible] Vish with Goldman Sachs.

Yes. Hi, good morning, everyone.

Good morning.

Good morning.

Tom, I am wondering if you'd be willing to expand on the M&A pipeline, how significant is it in terms of number of opportunities or magnitude of opportunities? And is there a time frame by which if we don't have meaningful M&A, we'd be looking to step up stock buyback. How are you Suzanne, and the Board thinking about that?

Sure. So, the pipeline, as you would expect, is a lot out there. It's not all created equal and will be, as we always are disciplined about our M&A opportunities, we'll be disciplined about the markets we want to be in, what synergies are unique to Vulcan. And then we got to be disciplined on the multiple or the amount you're willing to pay. And then once you get it integrated fast and accurately -- we got question earlier, do we have capacity? Yes, I would expect us to do some the size of U.S. Concrete, but more traditional bolt-on size deals, we'd be interested in are working on a number of them.

Perfect. Thanks.

Thank you.

Go next to Anthony Pettinari of Citigroup.

Good morning. I'm just wondering how the margin profile of the U.S. Concrete aggregates assets compares versus the Company average, as well as maybe same question on Concrete. And then is there a possibility or timeline for normalizing that difference, if any, if you could just talk about margin profile.

So, their -- if you look at their aggregate unit margins, they're very respectable. They're probably a quarter less than ours. And so comparable, I think that they've done a good job with that. Their position in the markets are good, their structure of their markets is good, and it's very attractive. While they've done a really good job with that, I think that our -- and this is one of the important pieces of synergies, I think that our 4 strategic disciplines are very applicable to their business, to their aggregates business. We've already started on that. The teams have met and that's working. So, I think that as we work into 2022, the same applies both from a pricing and a demand and a unit margin growth perspective look into 2022. And we think that we can help them take steps and just like they can in Concrete. Moving to ready-mixed, I think that they are operating disciplines and efficiencies are better than ours. They have some really impressive technology and where's my Concrete? The teams have already started applying that to our ready-mixed operations. And so, I think this is very helpful for both product lines that their technology and disciplines help us. Ourselves lives in aggregates and so that was one of the strengths of the deal.

Okay. That's very helpful. I'll turn it over.

Thank you.

We'll go next to Courtney Yakavonis with Morgan Stanley.

Hi, thanks for the question, guys. If we could just maybe follow up on the comments on U.S. Concrete. I think you have laid out a $50 million run rate synergies by mid-year and next year with more details to come in February. But can you just help us understand, are you thinking about that being primarily revenue driven from additional aggregate sales or is this more going to come from some of those operational cost focus measures that you talked about. But just when we're thinking about integrating that in, help us think about that. If that's more on the top line or the cost.

Yes. I think the short answer is all of the above. You put them all pretty good, but remember it's only been 70 days. That said, I'm very impressed at how fast our land leaders are putting the businesses together. The teams in California, Texas, and Virginia work together before the end of the first week when we closed and have already made more progress on market, sales, operating procurement strategies and tactics. Which will really pay off for us.

I mean, it's still early days, as Tom said, and some of these synergies take time to develop, and realize, but as we said in the prepared remarks, we are very confident in our ability to generate at least $50 million of synergies. And that is on the 12-month run rate basis beginning midyear next year when most of the integration efforts will be complete. I think it's important to note that this $50 million that we're referring to are identifiable cost synergies and efficiency synergies. And again, I mean, we believe that there are more synergies as Tom has talked about, and we're in the process of working on those.

Yeah. We will be back in February with more details, but the symbiosis between the 2 companies, from my perspective, is appearing better than we originally thought. I had -- I'll give you some concrete examples. I had the opportunity a couple of 3 weeks ago to sit down with the combined Texas team, and was really impressed and very pleased with their focused, creative, and insightful combination of business -- combined business plans, to leverage commercial opportunities so they can improve price and volume. And their detailed plans and improving the operational execution. And we've seen the -- we're seeing the same thing with the California and Virginia teams. So, in all markets, stronger market presence, pricing, and logistics capabilities. And you've got a bit of a much better opportunity to leverage procurement opportunities. And as I said earlier, we're -- we have the ability now to use our technology and theirs to improve both the ready-mix concrete and the aggregate product lines in the -- for the for the two companies. So, it's -- for me it's just exciting to watch.

Great. Thank you.

Thank you.

We'll go next to Katherine Thompson with Thompson Research.

Hey, good morning. This is actually Brian Biros on for Katherine. Thank you for taking my question.

Good morning.

Sure.

Morning. On aggregate it seems that you're starting good cost controls, at least on the costs you can manage yourself -- so kind of ignoring diesel there. Could you just clarify the puts and takes for cost controls in the quarter around that? Thank you.

Yeah. I think this is one of the things in the quarter that I'm most proud of. It was an excellent performance by our operators. First and foremost, they kept their people safe. Cash cost was up 2.6% in the quarter. Without diesel, it was down 1%. And so, the increase was all diesel, partially offset with some efficiency savings. And year-to-date -- so this is a trend, so year-to-date that cash costs was up only 1.2%, and without diesel again, down 1%. This is a really strong performance, because while diesel is the most dramatic change, all our inputs were up. The steel is up almost 65%. And what that tells me is that our Vulcan way of operating strategic discipline is working. And our operators are making those efficiencies and those disciplines pay off. And so, while this is hard to do particularly in inflationary pressures, it's working. And as you've seen over the last 2 years with our performance, it's sticky I mean, it is there. And that kind of cost performance allows us to capture price, to maximize unit margin growth, which is our -- you'd cash -- our cash unit margin now is at $7.74 a ton. And if you look back, this is a compounded annual growth rate of 7% in unit margin growth over 8 years including diesel. So, I would tell you, I'm very proud of our operators and they and on both know they're not done.

I just want to add one point of clarification on the unit cost of sales increase on the same-store basis. They were up 1.7% as compared to last year's third quarter. But excluding diesel, they decreased almost 1%, and those numbers are in the press release.

Thank you.

Thank you.

We'll go next to Adam Thalhimer, Thompson Davis.

Hey, good morning, guys. Nice quarter.

Thank you.

Thanks.

Comment a little bit on the outlook for downstream margins.

I'm sorry, I didn't hear you.

Can you comment a little bit on the outlook for downstream margins?

So, if you look at Asphalt first, we took a big hit this year with liquid. And it's kind of -- you're a little bit comparing the perfect storm because last year, liquid prices plummeted and the margins went up. This year, they spiked and it took a bite out of margins. As we said in the prepared remarks, 2022 should see strong demand from improved highway work, and Asphalt prices are moving to catch liquid and you saw that start to move in the quarter. But there is a lag. So, we should see gross profit improvements in Asphalt in 2022, but I would not expect them to get back to 2020 levels. the reason why, is we had that big decrease in liquid in 2022. But I would expect profitability in the product line to improve based on volume improvements and unit margin improvements because prices are going up to catch liquid costs. Move into ready-mix, I think 2022 is set up very nicely for the combined Vulcan U.S. Concrete ready-mix businesses. And again, that non-residential demand turning to growth in 2022 is very healthy for concrete demand. Northern California saw some headwinds in '21, it's really hangover from the pandemic. It was the most severe shelter in place. And the government offices shut down so nobody could get building permits. And that air pocket is what hit us in 2021, we're past that. The permits are out there. Our backlogs are very good and growing, the same can be applied to New York exactly the same thing. And then Texas, it was good and we'll continue to grow. But the -- you couple all that with healthy pricing, price increases, which has now gotten into margin growth. I would really look forward to the 2022 Concrete business.

Great. Thank you, Tom.

Thank you.

Will go next to Keith Hughes with Chouest.

Thank you. Just a quick question on Asphalt, you've highlighted some of the issues and the quarter. I guess my question is on pricing. It seems like it would've been slated Morgan, given the whole market, isn't anything that you can talk about the path through an Asphalt and any endurance is there and any details would be very helpful.

Yeah, is this always a lag, you do have -- when you have spikes in an asphalt, you take a hit for a little bit of time until prices catch up. Again, like we saw in last year when it falls, the opposite happens and you're able to put those margins in your pocket for a well. So, liquid -- I think we'll settle down with that. We'll be able to catch it with price you sell that go up $2 in the quarter and will continue to accelerate. But it just takes time to catch up and I don't think we'll catch it all from '20 to 2022, but 2022 will be improved.

Okay. Thank you.

Thank you.

We go next to David MacGregor with Longbow Research.

Yes, good morning, everyone. Congrats on the good quarter.

Good morning.

Yeah. Good morning. I guess you've made repeated reference here to the same-store freight adjusted unit cost of sales excluding diesel, being down 1%. I'm guessing most of that would be volume leverage. So, just how should we think about the margin benefit of the improved legacy operating efficiencies and productivity you achieved through the pandemic period? And do you expect to cover next year's cost inflation with pricing, or are you expecting productivity to play a more significant role in the '22 margin progression story? Thank you.

If you look forward to 2022 obviously, prices north to 5%, that's really good and will definitely improve unit margins. We know our goal every year is through efficiencies and disciplines to offset any kind of headwinds we have in price. We've done a really good -- that operate has done a really good job with that this year, obviously, we couldn't overcome diesel, but price did. I don't think that you see the big spikes like we had with costs in diesel going forward, so for sure, price, you will see margin growth in 2022. But it's going to be the combination of price and operating efficiencies because you just got to continue to improve those to offset it. I would tell you if I looked at things like tons per man hour or footprint through a plant or plant availability across our footprint, particularly our top 50 plants, which is the most of production. It's not just volume that's covered up costs, it's also those efficiencies are improving. And that's just good, smart hard work by our operators.

Thanks very much.

Thank you.

We'll go next to Timna Tanners of Wolfe Research.

Good morning Everyone.

Good morning.

Good morning.

Wanted to follow-up on the Q4 guidance in particular, if we could. If I take the midpoint of the new guidance versus the old guidance, it's effectively a $25 million increase as I understood it. But you also talked about, about a $50 million contribution I think from USCR. If I understood that wrong, please clarify. But wanted to just make sure I understood what's driving that change, what is happening in this fourth quarter with regard to maybe picking up some of that volume that you highlighted losing because of the weather? And if anything, you can share with us on the trend in October, that'd be great. Thanks.

With respect to your question on the guidance, you're spot on. There was a $25 million net change midpoint to -- previous midpoint to current midpoint. If you just take the middle of the U.S. Concrete guidance range, we gave that's 55, so that implies a $30 million reduction otherwise. And what you're seeing there is just the rollover of the energy costs -- the energy headwinds into the 4th quarter, that's our current expectation.

Anything on October you can share?

I mean, we typically don't comment on October, on the call. I mean, it's pretty early days here in terms of closing, but I would say as we normal would at this point if we had anything materially different to say we'd say that in a press release or otherwise. So really no commentary.

Okay. Thanks, guys.

Thank you.

We'll go next. So now go Jefferies.

Hey guys. Tom, the bottlenecks you alluded to limiting volume growth in 2022 to 4%. How much of that is tied to external dynamics versus how you're set up from a labor and production standpoint? And I guess bigger picture, do you see these issue is getting cleared out by 2023, and do you see a more pronounced acceleration of volumes?

I think that, oh wait till when we call for 2023. I think it's not us. I think we've got the capacity and the firepower to produce a lot more than 4%. I think it's really an ability for number 1. To get product to market through truck drivers and truckers. Second, is our customers’ ability to get more employees and it's more to catch up as opposed to get work done. I think they get work done, but the ability if you have a week of rain and to catch that back up, now you don't have the crews to take out there for the next 2 weekends to do it because you're [Indiscernible] people too many hours, you don't have enough people in the crews. And then the last thing is with particularly in [Indiscernible], you're seeing Supply-chain issues. Windows or door knobs or there's all kinds of different things that -- and there's a whole -- you can read about them, there's a whole list of them. But as you talk to the big residential customers, they're having supply-chain issues, and you have to put that mix in there and that hits non-res also. So, I think that while the underlying demand structure is very good, as I said earlier, what's really important is it's widespread geographically, but it's also across all 4 end uses. And up until this year of -- a few up until 2022, we've always had one of those as a drag and I don't think we do in 2022. So, the fundamentals are there. I think you just have a little bit of a dampening effect with labor and supply chain. But if that clears up, we could do better at this point with work to be done and we'll come back in February with very clear guidance and the thought process behind that. But at this point, I would I would govern it to 4.

Okay, thank you.

For Lemming. I will be over 4 -- we're not trying to give guidance at 4 at this point, but I don't think you'll get over 4.

We'll go next to Josh Wilson with Raymond James.

Yes. Thanks for taking my question.

Good morning.

Just a few clarification on the modeling side, when you first announced the U.S. Concrete acquisition, you expected it to add a $190 million in EBITDA. Prior to synergies, is there been any revision to what the baseline is given recent trends?

Well, when we talked about that, we were basing that really on trailing 12 months through the end of March, and I would say that since that time, U.S. Concrete has experienced some of the same energy headwinds that we've experienced and others in the industry have experienced. So, it will -- we'll see where that leads. We've given -- we've given you guidance for the period of time since we've owned them through the end of the year, and we'll comment further on what we expect them to contribute in February.

I think they experienced headwinds we talked about with the recover from the pandemic and Northern California and New York. Obviously, they had the inefficiency cost headwinds with traffic getting back on the road. And the energy cost as Suzanne mentioned. As I said earlier, I think the market and demand headwinds are behind us. The permitting is strong, the backlogs are strong. Work is happening in the 2 coastal markets that we had concerns about in '21. And really Importantly, at this point, price has moved past cost and showing growth in unit margin. And obviously like the rest of the construction material sector, they'll have price increases in -- all these markets will have price increases in ready-mix between January and April. I think '22 sets up really well for the Concrete business on the aggregates piece of it, much like ours. It's the same comments we said about 2022 with price and volume and cost would apply to the previous U.S. Concrete aggregates businesses.

Thanks so much.

Thank you.

We'll go next to Brent Thielman with D.A. Davidson.

Hey, great, thank you. Hey, Tom, I know it's been a short period of time since ownership USCR, but any change to your collective, go-to-market, or overall strategy in the market so you already overlap the business, I'm thinking particularly California and if it is too early, maybe you can just talk about what gets you excited about controlling the upstream capacity, and frankly, the downstream capacity you now have in that region because that all seems pretty attractive.

Yeah, it sits very well. It's a little too early to call the detail, and we'd like to do that in February, we'll do that in February. But I think what, as I said earlier, what really gets me excited is Those teams in California, Texas, and Virginia, we're together within days of the closing. They knew each other well, they were big customer virus, so they had relationships and they had their strategies and their tactics to improve volume, price, and leverage operating efficiencies and share information and assets and equipment. Before -- they had it together before, we could go back and review and we're executing. So, it happened really fast, more to come. We'll put a lot of detail on that, but I'm very pleased with what those combined Lawn (ph) managers have already put in place and what -- how quickly and smoothly that's gone. I think they are coming out -- the culture is being so much like each other. And our previous relationship has helped us. And I think I underestimated the speed at which that would impact the line in businesses. So progressive [Indiscernible] great work.

Okay. Thank you.

We'll, go next to Michael Dudas with Vertical Research.

Good morning, gentlemen, Suzanne.

Good morning.

Good morning.

When you're looking at your -- I know you have your capex budget for this year, but just as a preliminary thought for '22, and talking about your maintenance and your growth side, how's it looked just preliminarily? And looking at the USC assets that the capitalization of those assets, do they need to be caught up? Is there any special opportunities that you're seeing early on there? And I'm assuming you're probably going to budget a little bit more for inflationary contractor issues that probably haven't seen in the last several years. Thank you.

You're right. Clearly, the prices of everything is going up across the board. And when we also there as well have some supply chain issues to manage. But I'll just touch on this year first and then comment on next year. You'll note we kept our CapEx guidance for 2021 the same. And that's really as a result of reviewing U.S. Concrete 's needs for the period of ownership. We were able to fold that within the guidance range that we had. So really no big issues there. As we look forward to next year. Typically, we will spend somewhere between $450 million, $475 million give or take. I wouldn't expect that to be vastly different. We're obviously still in the early days, and in terms of putting together the 2 capital plans and the 2 budgets and having a really good look at that, but I haven't seen anything so far that makes me or us believe that we need to significantly pick up that capex guide.

Excellent. Thank you. Suzanne.

That concludes the Q&A portion of today's call. I will now turn the call over to Tom for closing remarks.

Thank you for your interest in Vulcan. We look forward to talking to you throughout the quarter. Obviously, we're looking forward to 2022 in the meantime, please stay safe and healthy and keep your family safe and healthy. Thank you.

Thanks.

This does conclude today's program. Thank you for your participation. You may disconnect at any time.