Good morning. My name is Andrea, and I will be your conference facilitator today. At this time, I would like to welcome everyone to the Granite Investor Relations Fourth Quarter 2023 conference call. This call is being recorded. All lines have been placed on mute to prevent any background noise and all the speaker's remarks. After the speaker's remarks, there will be a question-and-answer period. To ask a question, please press Star then One. Please note, we will take one question and one follow-up question from each participant today. It is now my pleasure to turn the floor over to your host, Granite Construction Incorporated Vice President of Investor Relations, Mike Barker. Please go ahead. Good morning, and thank you for joining us. I'm pleased to be here today with President and Chief Executive Officer, Kyle Larkin, and Executive Vice President and Chief Financial Officer, Lisa Curtis. Please note that today's earnings presentation will be available on the Events and Presentations page of our Investor Relations website. We begin today with a brief discussion regarding forward-looking statements and non-GAAP measures. Some of the discussion today may include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are estimates reflecting the current expectations and best judgment of senior management regarding future events, occurrences, opportunities, targets, growth, demand, strategic plans, circumstances, activities, performance, shareholder value, outcomes, outlook, guidance, objectives, committed and awarded projects or CAP, and results. Actual results could differ materially from statements made today. Please refer to Granite's most recent 10-K and 10-Q filings for a more complete description of risk factors that could affect these forward-looking statements. The company assumes no obligation to update forward-looking statements except as required by law. Certain non-GAAP measures may be discussed during today's call and from time to time by the company's executives. These include, but are not limited to, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income, and Adjusted Earnings Per Share. The required disclosures regarding our non-GAAP measures are included as part of our earnings press releases and in company presentation, which are available on our website, graniteconstruction.com, under Investor Relations. Now, I'd like to turn the call over to Kyle Larkin. Good morning, and welcome to our fourth quarter conference call. I'm excited to talk about how we closed the year. Across the company, our teams had an outstanding fourth quarter. But before I discuss the details and highlights of the quarter, I would like to revisit some significant accomplishments during 2023. Previously, we laid out our investment framework for growth as part of our 2024 strategic plan. Our growth strategy is built upon two pillars: support and strengthen and expand and transform. When we support and strengthen, we focus on developing and strengthening our core competencies in growing our home markets. As we work to expand and transform, we grow our business with more transformative investments, both in our home markets and new geographies. Over the course of 2022 and 2023, we worked to support and strengthen our businesses. In our construction segment, we strengthened our home markets by selecting the right owners, projects, subcontractors, and vendors, while leveraging our local market intelligence to win more projects at higher margins. We selected work suited to our core competencies, and we constructed these projects with high levels of customer satisfaction without the types of claims that plague the legacy work. In our materials segment, we invested in our home markets through bolt-on acquisitions, equipment, and plant automation projects, and by investing in additional aggregate reserves. We have had a lot of success strengthening our home markets. Texas is a good example. According to the American Road and Transportation Builders Association, Texas led the country in state and local government transportation construction contract awards at $16 billion. The next closest state, California, is at $9 billion. As discussed on previous calls, the Texas region historically chased work across the Southeast and Midwest. Since we began implementing our 2024 strategic plan several years ago, the Texas region has focused on Dallas-Fort Worth and Houston. Although Granite has been in both of these markets for more than 15 years and has strong relationships with the Texas DOT, labor pool, subcontractors, and vendors, we missed opportunities to strengthen those relationships as we pursued work across the country. Both metros are growth markets with good funding and a resilient pipeline for a range of projects in different end markets, including transportation, water, airports, and private site development. In 2023, we applied a targeted and selected bidding strategy to leverage our strengths and competitive advantages to build a de-risk portfolio of projects. These projects have an average CAP size of approximately $30 million per project as of the end of the year. Both the size and quality of the CAP is a significant improvement from the historical CAP of the Texas region. On the material side, across the company, we supported and strengthened the business with significant investments in reserves, targeted automation projects and aggregate quarries, and the consummation of bolt-on acquisitions. First, acquisitions. In 2023, we completed 2 bolt-on aggregate acquisitions that added strategic capabilities to our home markets. The first was the purchase of the Brunswick Canyon Quarry and Asphalt Plant in Carson City, Nevada. The Brunswick Canyon Quarry added 17 million tons of reserves and expanded our home market's vertically integrated reach in northern Nevada. We also purchased Coast Mountain Resources, which operates the Bamberton Quarry on Vancouver Island in British Columbia, Canada. Bamberton Quarry added 40 million tons of reserves. Granite had previously been a customer of the quarry due to its high-quality aggregates and strategic proximity to our home markets in the Pacific Northwest. We are continually evaluating bolt-on acquisition opportunities and believe we can continue to grow our home market footprint by and through similar future acquisitions. Aggregate facility automation projects have been another focus, like our recently completed Swan Aggregate Facility in Tucson, Arizona. The new plant leverages automated technology to produce aggregates at lower costs while minimizing night and weekend shifts, thereby reducing workforce challenges. The second automation project is expected to be completed at our Solari facility in Bakersfield, California, during the first quarter of 2024. While not suitable for all plants, we expect to continue to roll out automation technology to additional aggregate facilities in our network in 2024 and 2025. Moving forward, we intend to continue making investments to support and strengthen our home markets. We'll also look for growth opportunities through investments that will expand and transform our business. The acquisition of Lehman-Roberts Company and Memphis Stone & Gravel Company is a good example of such an investment. Lehman-Roberts operates 7 strategically located asphalt plants serving the Greater Memphis area in northern Mississippi, while Memphis Stone & Gravel operates 3 sand and gravel mines, with an additional mine expected to be operational during the first quarter of 2024, adding in total 82 million tons of reserves. I have previously discussed the fact that we are interested in acquiring well-run businesses that can be a platform for growth. The types of businesses that we would consider operate in a market that is healthy and growing, and that have strong leadership that will continue post-acquisition, just like Lehman and Memphis Stone. They are longstanding, well-regarded companies that are positioned for growth. The acquisition expands Granite's footprint into the Southeast and the attractive, growing Memphis metropolitan market. The leadership team is staying and will continue to lead and grow the businesses. We expect Lehman and Memphis Stone to add approximately $200 million in revenue in 2024, with consistent high profitability between 15% and 20% EBITDA margin. We are excited to build on the platform this acquisition provides in growing the Southeast in 2024 and beyond. Now, before I dive into the segments, I'd like to touch on what we are seeing related to public funding for transportation, and specifically in the state of California. As we said, throughout 2023, we believe the level of federal and state funding throughout our geographies has created a market that we have not seen since the short-lived housing bubble of the mid-2000s. This strong public market is complemented by a private market in which various industries are increasing investment in their infrastructure. Together, this benefits the civil construction industry and Granite. We believe that the robust level of funding will continue and present opportunities for revenue growth for years into the future. In California, our largest market, transportation funding has translated to high levels of project awards and record CAP. Within the California State Transportation budget, there are two areas that most correlate to future bidding opportunities for Granite: Capital Outlay projects and Local Assistance expenditure allocations. Capital Outlay projects are primarily Caltrans projects, whereas Local Assistance expenditure allocations are funding provided to local municipalities for transportation projects. Actual and estimated allocations for the previous and current fiscal years, which ended June 2023 and will end in June 2024, respectively, show a consistent allocation level for these accounts at $8.3 billion and $8.5 billion, respectively. This level of funding resulted in a 38% increase in Caltrans project awards during calendar year 2023 compared to 2022. The proposed budget for the fiscal year ending June 2025 shows an increase in the level of transportation funding to $8.9 billion, despite the overall budget deficit in California. This funding is supported by the transportation-specific SB1 revenue and the Federal Infrastructure Bill. We believe that these funding sources will continue to support the transportation budget in California at these levels for several more years at a minimum. As a reminder, these amounts represent allocations for construction projects, which will then need to be prepared for letting, awarded, and then released for construction. For example, an allocation made to a project in the current year budget may not turn into revenue for a contractor for several more years, based on the time period between allocation, letting, award, and construction. Moving to the construction segment, it is frustrating that our really strong fourth quarter was tempered by negative impacts from the Legacy Tappan Zee and I-64 High-Rise Bridge projects. Although a non-cash event, we adjusted our probable claim recovery estimate on the Tappan Zee project to reflect developments in the dispute review process. This resulted in a negative impact to gross profit of $19 million during the fourth quarter. In addition, even though construction activities are now substantially complete on the I-64 project, weather-related delays negatively impacted costs and fourth quarter gross profit by $14 million, or $7 million after non-controlling interest. However, it was a tremendous growth quarter for the construction segment, as revenue grew by 19% year-over-year, driven by the record CAP we carried into the fourth quarter. While CAP decreased sequentially from the third quarter, it remained higher than the prior year by $1.1 billion, or 24%. Even though this record CAP led to significant revenue growth, we were able to win work during the quarter to replace much of this revenue burn, which is a testament to the market environment and a holiday-shortened bidding quarter. Diving into our operating groups and starting with the California group, CAP increased $91 million to $2.4 billion from the third quarter, and the group enters 2024 with CAP 39% higher than the prior year. With a record CAP in California, the group experienced tremendous revenue growth in the fourth quarter of 61% year over year, and has another record CAP balance going into the first quarter of 2024. Also, and importantly, California continues to lead the company in Best Value projects, which represents $1.5 billion or 61% of its total CAP. This Best Value CAP at the end of the year includes $345 million added during the fourth quarter for a private rail facility project in the state. These collaborative delivery methods, like Construction Manager/General Contractor or Progressive Design Build, better position us for success and allow us to work together to mitigate risk with the client. Larger Best Value projects are often separated into smaller work packages, which are then reviewed through multiple project workshops, providing more opportunities to address risks than large bid build projects. In the last 15 years, we have completed or have under construction 87 Best Value projects. We have found that these projects are generally completed more quickly and with fewer claims. As mentioned, public funding remains elevated in the state, and we see continued investment and opportunities in the private sector. We believe this trend will continue for the foreseeable future. In the Mountain Group, CAP decreased slightly by $26 million from the third quarter, but ended 2023 30% higher year-over-year. The group ended the year with an impressive revenue increase of 12% year-over-year for the fourth quarter, led by increases in the Alaska and Utah regions. With budgeted spending in each state in the group expected to increase in 2024 with a higher level of CAP, I expect the Mountain Group to continue to grow revenue CAP in 2024. Finally, the Central Group. Although CAP decreased during the quarter by $104 million, the group finished with an increase of $46 million year-over-year to $1.7 billion. While the quantity of the Central Group's CAP has remained consistent, I believe the quality has increased significantly. I expect the group to return to revenue growth and be a key contributor to our expected margin expansion in 2024. I believe that our high-quality CAP, coupled with the macroeconomic construction market that is fueled by the IIJA, puts Granite in the strongest position for growth and profitability in over a decade. Moving to the Materials segment. We completed another strong performance in the fourth quarter. Over the last two years, we have taken actions across this segment in support of our 2024 gross profit margin targets of 15%-17%. Our focus on raising prices, investing in automation, purchasing reserves, bolt-on acquisitions, and geographic expansion not only gives us confidence that we will meet our financial targets, but that we will continue to sustainably grow revenue. During 2023, we added 140 million tons of reserves through bolt-on and geographic expansion transactions, including the materials-focused Lehman-Roberts and Memphis Stone & Gravel acquisition. With stabilized costs, more efficient operations, and consistently strong order volumes, when combined with further expected price increases, we anticipate growing segment revenue and profitability in 2024. Now, I'll turn it over to Lisa to review our financial performance for the quarter. Thank you, Kyle. In 2023, we made significant strides in our financial performance on our path to achieving our 2024 financial targets. We finished the year strong with fourth quarter Adjusted Net Income of $36 million and Adjusted Diluted Earnings Per Share of $0.82. For fiscal year 2023, Adjusted Net Income improved to $140 million, and Adjusted Diluted Earnings Per Share improved to $3.14. Adjusted EBITDA margin for 2023 increased to 7.7%, up from 6.4% in 2022. Excluding the impacts from Tappan Zee and I-64 in 2023, our adjusted EBITDA margin would have been 8.9%. For the year, revenue increased $208 million, or 6%, with the fourth quarter completing a strong second half of the year. In the fourth quarter and last six months of 2023, revenue increased 18% and 14%, respectively, over the comparable periods in 2022. In 2023, we began with a weather-related slow start to the year, but that changed significantly in the second half of the year, and we are poised for that growth to continue in 2024. In the construction segment, annual revenue increased $188 million, or 7% year-over-year to $3 billion, aided by a strong finish to the year in the fourth quarter with an increase of 19% year-over-year. The increase in revenue for the year and the fourth quarter was driven by significantly higher levels of CAP in the California and Mountain groups over the prior year, resulting in fourth quarter revenue increases of 61% and 12%, respectively. Annual construction segment gross profit improved to $325 million and gross profit margin of 11%, but was impacted by the Tappan Zee and I-64 projects. Excluding the impacts of these projects, annual construction gross profit margin was 13%. In the materials segment, annual revenue increased $20 million year-over-year to $517 million, with gross profit increasing $6 million to $71 million, and a gross profit margin of 14%.... In the fourth quarter, we continued the strong performance in this segment from the second and third quarters, with a gross profit margin of 16%, including the impact of newly acquired operations, which produced a gross loss of $2 million due to winter seasonality and the impact of purchase accounting. The materials segment overcame a very slow start to the year, and we are realizing the benefits of investments in the business. Another highlight was our strong cash generation in the fourth quarter, which continued from the third quarter and led to cash and marketable securities of $454 million at year-end. After the second quarter, I mentioned that the weather-delayed start to the year had impacted the timing of our cash generation, and that would change in the second half of the year. That is what we saw occur in the third and fourth quarters. I am pleased by the performance in the second half of the year that led to operating cash flow of 5.2% of revenue, or $184 million for the year. I expect our de-risked business model to drive further increases in our operating cash flow as we target 7% of revenue in 2024. Now, let's turn to our guidance in 2024. We are excited as we begin the new year and believe we are positioned to realize the benefits from all the actions taken since announcing our 2024 strategic plan. In 2024, we expect strong revenue growth to a range of $3.8 billion-$4 billion. In the second half of 2023, we demonstrated that we have the businesses in our home markets to capitalize on the positive market environment and drive organic growth. I expect that organic growth to continue in 2024 and be supplemented by our new home market in the Southeast from Lehman and Memphis Stone. SG&A continues to be a focus across the company, with an emphasis on efficiency as we grow revenue. We are taking action to improve processes and procedures in order to leverage our resources more effectively. This will result in more efficient use of our SG&A expense in 2024 to a range of 7.5%-8% of revenue, with greater impacts in following years. In 2024, we expect our Adjusted EBITDA margin range to be 9%-11% of revenue. This range is unchanged from the target we set two years ago. When we set this range, we said we were going to replace legacy projects, dragging down profitability with lower risk, higher margin projects. We also said we were going to obtain margin expansion through higher margins on bid day and through improved execution. We committed to invest and raise margins in our materials business, and we said we would be more efficient with our SG&A. We did what we said we were going to do in all these areas, and we believe that we will realize our margin targets as a result. In 2024, we expect to continue to invest in our business through CapEx in the range of $130 million-$150 million. This higher range is driven by strategic materials investments of approximately $50 million for a new aggregate plant, reserve expansion, and further automation projects, as well as a project-specific tunnel boring machine, totaling approximately $20 million. Now, I'll turn it back over to Kyle. Thanks, Lisa. I'll close with the following points. We finished 2023 with a strong fourth quarter that continued to build on momentum from the third quarter. We demonstrated our ability to drive strong organic revenue growth with higher levels of profitability than Granite has seen in many years. I'm also very happy to say that construction work and paving is substantially complete on I-64, and I want to thank our team for working diligently to put this project behind us. I'm also impressed not only with the end-of-the-year CAP, but the quality of the CAP, with 47% of the CAP being Best Value work, in which we were selected by the owner based on our qualifications. It is truly a testament to Granite's strength in our home markets, our experienced teams, and a strong public and private market environment. The positive impact of the IIJA will be felt by Granite and industry for many years, as projects continue to be programmed, funded, designed, led, awarded, and constructed. Our acquisition of Lehman and Memphis Stone is a transformational event for Granite. Not only does it provide Granite with a high-performing, materials-focused business with significant aggregate positions in the area, but it also provides Granite a platform from which to expand. With our de-risked business model, we are seeing the positive effects on our ability to generate cash. We saw the results of our efforts in the second half of 2023, and I expect further gains in 2024. Finally, along with the significant revenue growth expected in 2024, I believe we will achieve our Adjusted EBITDA margin range of 9%-11%. Operator, I will now turn it back to you for questions. We will now begin the question and answer session. To ask a question, please press star, then one. Please limit yourself to one question and one follow-up question, and feel free to jump back in the queue if you have additional questions. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star, then two.... Our first question will come from Steven Ramsey of Thompson Research Group. Please go ahead. Hi, everybody. It's John calling in for Steven. Can you maybe dig into the material segment a little bit more, talk about organic growth next year and kind of how you expect volume and price to contribute? Sure. Yeah, good morning. So I think we'll start with the volume side of things. Certainly, as we look into 2024, from an aggregate side, I think the volume is going to be pretty consistent with what we saw in 2023, which was a healthy market for us. We do see pricing on the aggregates up around 10% going into 2024. That's our expectations for the year. On the asphalt side, that's where we see a volume increase in 2024 versus 2023, and I would say most of that is going to be seen in California, and we expect pricing increases to be somewhere close to around 5% in 2024. Got you. Okay, and then just one more on the construction CAP side. Is there an area or region that we can think about driving, you know, further than others, or we kind of think about it broad-based? I would think about it broad-based. I think all of our markets are healthy. Certainly, the IIJA funds are helping contribute to that, and we spoke about that in the prepared remarks. So we got a healthy market, both on the public side and the private side, that we're excited about. I mean, one of the highlights certainly was what we saw in California, and we know there's been a lot of discussions around what's going on in California overall with its budget. Yet the transportation and highway infrastructure spending in California is really strong, and I think our CAP really reflects that today, and so we're really excited about what we see out in the West. That's great. Thanks so much. Thank you. Thank you. The next question comes from Brian Russo of Sidoti. Please go ahead. Yeah. Hi, good morning. Hi, Brian. Just to follow up on... Good morning. Just to follow up on California. You know, obviously a lot of extreme weather and flooding in late January and through the month of February. I'm just wondering how that's impacting your business, et cetera, considering what occurred in the first quarter of 2023. Yeah. So in 2024, actually, the beginning of this year, January was very dry out in the west, so we're very fortunate to have good weather. You know, our team has been busy, so we're already off to a really strong start in Q1 of this year. You know, last year, obviously, we had a really tough quarter weather-wise. We did get some emergency work last year, but it wasn't enough to really offset the weather that we had and we were impacted by. So this year we are off to a better and stronger start. And, you know, 2023 really kind of created a low bar, I would say, year over year, so we have that going for us from a comparison perspective. But I think our materials business is where we're going to see the impact probably the greatest. In Q1 of this year, where with the emergency work there last year, there wasn't a lot of materials opportunities for us. This year, having better weather, our materials teams are getting out of the gate faster than they did last year. Okay, great. And just curious, could you just talk more about the water and wastewater business, your outlook there? What's the, you know, financial contribution now? I think it's just embedded in the construction segment and then the strategy as well. Yeah, I mean, I think nothing's really changed for us except that, that we've been able to take that business, incorporate it into our construction business, and create some efficiencies, as part of that, that business. Obviously, we do a lot of repair and installation work. We work for municipal clients, and the market is strong. A little bit on the higher end of the range that we have for construction in 2024, 14%-16%. So we feel really good about the opportunities there, and an opportunity to continue to grow that, that business for us. Great. Thank you. The next question comes from Michael Dudas of Vertical Research. Please go ahead. Good morning, Lisa, Mike, Kyle. Good morning. Good morning. I want to follow up on your comments in the prepared remarks about execution and the strong markets that you see across the board. How did that translate, as you saw in 2023, on bid day margins relative to what you'd been booking in the past? And on the execution front, when you, you know, your 13% gross margin construction is very helpful, how that could combine to impact and help you achieve the 2024 type targets, relative to the better, more higher quality book of business. And is there a burn rate, you know, because of the Best Value practice contracts may be a little bit more delayed or may not flow through as quickly as some of your normal brick-and-burn business? How will that translate on the cadence through the year? Yeah, thanks, Mike. So I think, I think maybe how I'll address the question is really how do we bridge between our 2023 results on margins, performance, and, and how do we get to that 14%-16% in 2024? And, and I think, there's a few things that, that we're looking at. One, if you, if you adjust out the Tappan Zee and the I-64 project, we're, we're sitting right around 13.3%, so we're not quite up to that 14%-16%, gross profit margin that, that we are expecting in 2024. And I think your comment around the pipeline on projects is important, because the pipeline of, of projects we have in, in the company today are much better, higher quality margins type projects than we had coming to 2023. So you kind of think about that pipeline of work coming through. In 2023, we're still burning through some of that work we picked up in 2021 and 2022. There was a little bit more, tougher market, I should say, than what we have historically seen and what we have in the last couple of years. So the pipeline has gotten stronger, our margins have gotten better, and I think those projects are going to really start to hit our books in 2024. So I think that's going to help. Our execution hasn't changed around what our focus is. We have our construction playbook. We're focused on operational excellence. We continue to see opportunities to get better, year-over-year, and we're focused on that. And I can tell you the market's still healthy. We talked about that. So our margins are getting better, if not pretty consistent with what we saw last year, which are really healthy margins in the market. I can tell you, the first month or so, we're seeing the bid volumes very consistent with what we saw last year, and margins are very consistent as well, and our hit rate's been strong. So we feel like we have the market, we have the work on the books today to hit those margin expectations of 14%-16% in 2024. Appreciate that, Kyle. My follow-up is, you know, back to talking about your recent acquisition in the Southeast. Maybe you can look at that business characterized to what Granite's like-for-like business would be on the materials front, and, and is that an area that when you went into you're looking towards, you know, going vertically integrating and moving into the construction phase more dramatically? Is that kind of how you're thinking about it? Is that where some of your attention might be placed on some of the acquisition opportunities that may come up for you, as you move through 2024, relative to what Lisa talked about in, in some of the targets? Well, I, I think when we looked at the acquisition with Lehman-Roberts and then to Stone and Gravel, I look at it like we were getting back to our roots as an organization. You know, we hadn't done a, a vertically integrated deal since 2008, and it was really important for us to get back to, to doing the types of businesses and deals that, that we were comfortable with and how we grew our organization historically over time. And so if you kind of go back to 2023, we were very intentional about supporting and strengthening our existing home markets and reinvesting in those. They were underinvested from a reserve perspective. We saw some bolt-on opportunities, ways we could preserve the market position we had, and so we did that. You know, Lehman-Roberts was an opportunity for us to get outside of our existing footprint and create that real platform for growth. And as I mentioned on our last call, we were looking for really strong leadership, we're looking for a healthy growing market, and, and we're looking for a really good business. And we found that with Lehman-Roberts, and that's going to provide that platform for us to continue to grow in the South, Southeast, and where we can grow that business and, and really leverage the team to find other opportunities in that marketplace to grow our company. So this is a big, a big shift for us, and we're excited about it. We, we haven't done a vertically integrated deal since... Again, it's been 15 years, and so, so quite a while. So that's, that was really kind of our thoughts behind the Lehman-Roberts acquisition. As we look to 2024, you know, I think our investment thoughts are very, very similar. We're going to continue to reinvest in our existing businesses, support and strengthen, but we are looking for other opportunities like, like Lehman Roberts, so we can, we can grow our business. It could be part of the platform of Lehman Roberts or find other, other areas that we can expand and transform our company. And I think you look at that positive cash flow that we generated on Q3 and Q4 and what we expect in 2024, we're going to have the ability to do it. Okay. Kudos to Lisa on that cash flow generation. Thanks. Thanks, Kyle. Thank you. Thank you, Mike. The next question comes from Jean Ramirez of D.A. Davidson. Please go ahead. Hi, good morning. Good morning. Good morning. I'll start with a question about the projects you guys bid. Under the new discipline, say, for the types of jobs you guys go after, could you discuss the progress you are seeing on the larger projects under your portfolio? The progress on the larger projects? Yeah. Yeah. You know, Yeah. So I would say, you know, we've been through this transformational journey as an organization for quite some time now. We really don't bid the mega projects that we historically had bid, and it caused us a lot of challenges in our organization. We do pursue projects that we would call larger projects that would be in the, say, $150 million-$250 million range. But the big shift for us has been the contract method in which we do that work. So most of our larger projects now that are more complex or even longer in duration tend to be the best value type projects. They're CMGC or progressive design build. If you look at the pie chart that has the breakdown of our CAP, around almost half of our CAP now is that Best Value type projects. So we've been able to deliver larger, more complex projects very successfully under that contracting method. So it's really a very big difference. It's an entirely different business model than what we were doing several years ago, and that's really why we're excited about our transformation. I think the other thing that's really important is these projects are also being built in markets that we know. These are home markets for us. We're not chasing work into markets with clients that we don't understand or don't have a really strong relationship with. That allows us to be more successful, but it also does something really important: it allows us to avoid claims. And so that's certainly something we want to get away from as an organization: having these contract claims. They're a distraction, they're a challenge, and frankly, they're a drag on our cash. And so one of the things you're seeing with our new business model is: if we don't have these claims on our books, we can actually drive a lot higher operating cash flow. So, in short, we're doing very well on the larger projects that we're procuring today. Great. I appreciate the other color there. Just, shifting focus on California, could you address if you have any concerns around the budget deficit in the state and whether you're, you know, either seeing or kind of forecasting the impact projects to schedules or planning for any future work you'll be pursuing? Not at all. Yeah, what we really wanted to make sure that everybody understood is the Caltrans three-year expenditure allocations are only going up. We're excited about the opportunities we see in the state of California, certainly on the public side. If you look at the SB1 monies that are out there, they continue to grow. And so we think California is going to be a healthy market for years to come. So yeah, we don't have any concerns. Okay, I appreciate it. Thank you so much. Thank you. Thank you. Our last question will come from Jerry Revich of Goldman Sachs. Please go ahead. Yes, hi, good morning, everyone, and nice cash flow this quarter. I just wanted to ask at the EBITDA outlook that you folks outlined for 2024, what level of free cash flow conversion do you folks expect? I know it can be a wide range of outcomes, but would love to hear how you're thinking about it. And similar question for longer term as you continue to work off the prior projects. And then, Lisa, can I just ask factually, where did claim recovery estimates on billed receivables end the quarter? Thank you. Yeah. Thank you, Jerry. So yeah, let me talk about free cash flow. Cash generation, you know, we're excited with our cash generation for 2023. You know, last year, 2023, we talked about cash generation and generating positive free cash flow, was really the last major area that we needed to improve upon. And so we made nice strides with that for 2023, and we see that continuing into 2024. You know, we've intentionally changed our business model over the past three years with de-risking the portfolio from anywhere from project procurement methods, which Kyle was talking about, to not entering into non-sponsor joint ventures. You know, so our model was really broken historically, from a risk perspective, and so we're getting to see the benefit of that because obviously, that not only impacted our bottom line, but really our ability to generate cash. And so from an EBITDA to free cash flow conversion, you know, when we look at 2024, and as I said in my opening remarks, that we're targeting OCF as a percentage of revenue of around 7%. And so with our EBITDA projections, that would be a ratio conversion of about 35%-40% for 2024. And if we look out further, let's say, to 2026, you know, our operating cash flow as a percentage of revenue, we'll be moving closer, looking to move closer to a target of 9%-10%, which would be closer to a 50% conversion ratio. So that is what we're looking at from a free cash flow conversion perspective. As far as unbilled receivables, go ahead, I'm sorry. No, no, please. Yeah, thank you, Lisa. Yeah, so, you know, claim recoveries, I mean, we do, we do, disclose that in our Qs and Ks, related to what we, what we have recorded, and that will be coming out, later today. For unbilled receivables, we, Q4 was a very, strong quarter for us for reduction of unbilled receivables. You know, our DSO, we continue to maintain DSO. We do not have issues for our collections. You know, our, our 2023, Q3 and Q4 were very high activity levels, which generated, very nice cash generation, obviously, in Q3 and Q4. A big portion of that was our receivables, which isn't unusual, which is actually what we expected, due to the strong second half of the year since the first half of the year was delayed due to the wet weather. Yeah, making good progress. You know, contract assets have gone down, and our contract liabilities have increased. All of those points are moving in the right direction. That 7% target- I appreciate you. Yeah, the claim, there isn't any claim recovery in that 7% target in 2024? Correct. Super. And can we shift gears and talk about the pricing opportunity that you're seeing in the materials business? I mean, we've seen pretty heavy M&A, particularly in California, across the materials spectrum. Is there opportunity for pricing to be stronger than what you laid out, Kyle, in terms of, you know, 10% for aggregates? Is there a potential for a mid-year price increase? And, you know, similar question for asphalt, given all the industry consolidation in your markets, is there an opportunity for additional price increases over the course of the year? Perhaps. I mean, I think it's probably early, too early to tell, for us in that regard, but I think we still feel good about the 10%, and the 5%. So, I guess we'll see. Okay, and just, sorry, clarification, 10% and 5%, that's the January 1 price increase that you're embedding. You're not embedding anything for mid-years? Yeah. You know, I think that's kind of an average. I mean, every market is going to be a little bit different, but those are, those are averages over the year. Thank you. Thank you. Thank you. This concludes our question and answer session. I would like to turn the conference back over to Mr. Larkin for closing remarks. Okay. Well, thank you for joining the call today. As always, we want to thank all of our employees for the work they do every day. Most importantly, in 2023, we had the best stage results in Granite's history for a second consecutive year. You keep raising the bar and should be proud of this achievement. Thank you again for joining the call and your interest in Granite. We look forward to speaking with you all soon. The conference is now concluded. Thank you for attending today's presentation, and you may now disconnect.