Good morning, ladies and gentlemen, and welcome to the Vulcan Materials Company's third quarter earnings call. My name is Gretchen and I will be your conference call coordinator today. If you would like to ask questions, please press star one during the question-and-answer portion of this call. We ask that you limit your participation to one question. This will allow 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 Thomas Hill, Chairman and CEO, and Mary Andrews Carlisle, Senior Vice President and Chief Financial Officer. A couple of housekeeping items before I turn the call over to Tom. First, 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. In the interest of time, please limit your Q&A participation to one question. This will allow for more questions during our time together. Today's call is accompanied by a press release and a supplemental presentation posted to our website, vulcanmaterials.com. Additionally, a recording of this call will be available for replay later today at our website. With that, I'll turn the call over to Tom. Thank you, Mark, and thanks to each of you for joining the call this morning. We appreciate your interest in Vulcan Materials Company. During the third quarter, our team showcased the durable growth capabilities of our aggregates-led business model. Volumes, prices, gross profit and importantly, unit profitability improved in each of our operating segments. Widespread double-digit pricing growth across all segments outpaced continued cost pressures. Our momentum is strong. Throughout our organization, we remain focused on our strategic disciplines, 'The Vulcan Way of Operating' and 'The Vulcan Way of Selling', and the fundamental role they play as we continue to enhance our core business. We also continue to expand our reach, and we've closed several strategic acquisitions this year. Importantly, during the third quarter, we acquired strategic aggregates and downstream assets that complement our existing business in Northern California. In the third quarter, we generated $507 million of adjusted EBITDA, which is a 21% increase over the prior year. Accelerating pricing growth and higher year-over-year shipments drove earnings improvement in each product line. In aggregates, gross profit improved 17% to $436 million. Volume improved 9% or 3% on a same store basis, and it was geographically widespread. Pricing momentum continued, growing from mid-single digit in the first quarter to high single digit in the second quarter to double digits in the third quarter. Average selling prices on both a reported and mixed adjusted basis increased over 12% from the prior year's third quarter. Current pricing momentum and the visibility into future public demand growth will support a positive pricing environment for the remainder of 2022 and into 2023. As expected, our costs remained elevated in the quarter due to continued inflationary pressures. The price per gallon of diesel was more than 60% higher than the prior year, and most parts and suppliers also faced significant inflationary increases. Our focus on driving efficiencies through the Vulcan Way of Operating is critical to contending with inflationary pressures and continuing to expand our unit profitability. In the third quarter, aggregates cash gross profit per ton improved 9% to $8.41 per ton. Our asphalt segment also achieved significant improvement in the third quarter, with a $22 million year-over-year increase in cash gross profit. The average price of liquid asphalt increased by over $200 per ton compared to the prior year's third quarter. That said, continued pricing momentum and healthy volumes drove favorable results in spite of the ongoing energy related cost pressures. Asphalt volumes increased 13% and asphalt pricing improved 26%. Both volume and pricing improvements were widespread, with particular strength in Arizona and California, our two largest asphalt markets. Concrete cash gross profit in the third quarter improved $25 million due to the contribution from acquired operations as well as strong volume and price growth in our legacy operations. Now that we have briefly reviewed the results from the third quarter, let's shift to the underlying demand environment and outlook for construction activity. We see both challenges and opportunities in the future demand environment with different dynamics impacting each end use. Single family housing is facing considerable headwinds, but multi-family housing and private non-residential starts still show growth. On the public side, leading indicators for highways and other infrastructure are reflecting strong tax revenues and increased funding from the Infrastructure Investment and Jobs Act. I'll share a few highlights on each end use. Starting with residential, single-family demand is now showing the impact of rising construction inflation, home prices, and mortgage rates. Permits and starts are declining, albeit at slower rates in more constrained markets than the country as a whole. Multifamily permits and starts remain positive. It's important to remember that residential construction activity remains at high levels. Also, household formations and limited inventories may dampen the magnitude and duration of weakness in residential demand. Private non-residential demand and leading indicators are currently healthy, and the trailing 12-month private non-residential starts are up 21% over the prior year. Additionally, leading indicators remain positive, with the Architecture Billings Index, or ABI, still greater than 50, and the Dodge Momentum Index at high levels. On the public side, we are in growth mode. Trailing 12-month highway starts are up 14% and other infrastructure starts are up 18%. In fact, July and August were the two largest single months for highway awards in the last 10 years. The timing of starts converting to aggregate shipments will be a critical variable impacting next year's demand for aggregates. As we look into 2023, we expect that the current strength in private non-residential construction activity and increased public funding will help to offset contracting residential demand. We also carry strong pricing momentum into 2023. Our teams will be finalizing their annual planning over the next few weeks, and we'll share with you our full year outlook on 2023 in February. Even with uncertainty in the broader economy, we're confident that we are well-positioned to capitalize on pricing opportunities, benefit from the generational increases in public funding, and continue to expand our unit profitability. I will now turn the call over to Mary Andrews to comment further on our results and full year outlook. Mary Andrews? Thanks, Tom, and good morning. Tom highlighted the strong operating results we achieved in the third quarter in both our aggregate and non-aggregate segments. I'll focus on a few other items in the P&L, the balance sheet, and our revised outlook for the full year 2022. Our SAG expenses as a percentage of revenue improved by 30 basis points versus the prior year quarter to 6.5% of revenue. Year-over-year increases in SAG were driven primarily by higher incentives consistent with improved earnings and elevated legal and professional fees related both to Mexico and business development activities. Our support teams have been focused on integration activities for acquired businesses, and we expect to reap benefits from those activities into next year. During the quarter, we recognized a pre-tax gain of $24 million on the sale of real estate in California. Also, as part of our ongoing focus on portfolio management, we are finalizing an agreement for the disposition of our ready-mix asset in New York, New Jersey, and Pennsylvania. Therefore, during the quarter, we adjusted the carrying value to fair value, resulting in a $68 million pre-tax charge. Now, turning to the balance sheet. At the end of the quarter, our net leverage was 2.5 times adjusted EBITDA and within our stated target range of 2-2.5 times. Disciplined capital management remains fundamental to our strategy, and we will continue to deploy capital consistent with our long-standing stated priorities. Through the first nine months of this year, we've deployed $378 million in operating and growth capital to support and expand our valuable franchise. $528 million in M&A to grow and strengthen our market positions, and $159 million in dividends to return cash to shareholders. Our balance sheet is strong, and during the quarter, we added another source of flexible and cost-effective capital by initiating a commercial paper program. We issued $550 million of commercial paper and used the proceeds to repay half of the outstanding $1.1 billion term loan. In conjunction with initiating the commercial paper program, we also upsized our revolving credit facility to $1.6 billion and extended its maturity to August 2027. Our investment-grade balance sheet and significant cash generation capabilities give us the capacity to continue to invest in both organic and inorganic opportunities with a focus on improving shareholder returns and return on invested capital. On a trailing 12-month basis, our return on invested capital at quarter end was 13.6%, inclusive of strategic acquisitions and ongoing investments in growth opportunities. We are focused on continuing to improve our returns. Now let me comment on the update to our full year 2022 adjusted EBITDA guidance. We now expect to generate between $1.64 billion and $1.68 billion. Continued strength in underlying demand and acquisition activity are driving aggregate shipment expectations above the upper end of our original expectations of 5%-7%. We now expect full year aggregates volume to improve between 7% and 8%. We continue to expect mid-single-digit growth in aggregates cash gross profit per ton for the full year. As expected, pricing gains continued to grow in the third quarter, and year-over-year improvement in unit profitability expanded sequentially and was in line with our second half expectations. Other updates to our guidance include full year SAG expenses of approximately $520 million. Depreciation, depletion, amortization, and accretion expenses of approximately $575 million. An effective tax rate of approximately 25%. We continue to expect to spend between $600 million and $650 million on capital expenditures in 2022. These expenditures include both maintenance and growth projects, and the higher fourth quarter pace of expenditures is reflective of expected deliveries on ordered equipment. I'll now turn the call back over to Tom for some closing remarks. Thank you, Mary Andrews. Before we go to Q&A, I want to thank our entire Vulcan team for their hard work and consistent execution. I'm proud of the results they delivered in the third quarter, and I'm excited about the operations we added through acquisitions in the quarter. I'm particularly proud of the Vulcan family members who helped to rebuild the Sanibel Causeway, while at the same time coping with the hurricane impacts on their lives. Thank all of you for your dedication to your community and to one another. We are always focused on keeping our people safe. We will continue empowering and developing our talented people and executing at a local level. We'll take advantage of the positive momentum and be nimble in addressing new challenges. I'm confident in our ability to continue driving improvement in our core business through the further development of our Vulcan Way of Selling and Vulcan Way of Operating strategic disciplines. They allow us to both take advantage of opportunities and confront challenges. Vulcan's long-term growth and value are durable because we have the right people focused on the right disciplines, offering the right products in the right markets. Now Mary Andrews and I will be happy to take your questions. At this time, if you'd like to ask a question, please press star and one on your touch- tone phone. You may remove yourself from the queue at any time by pressing star two. Once again, we ask that you limit your participation to one question. This will allow everyone who wishes the opportunity to participate. We'll take our first question from Stanley Elliott from Stifel. Morning, everyone. Thank you all for taking the question. Could you guys talk about, I mean, you got some momentum kind of exiting the year. Kind of how does this position you all kind of thinking about into next year? You know, whether, I mean, you mentioned a little bit from the end market side, but, you know, just curious to get your thoughts high level. Yeah. Good morning, first of all, and I think I'll take the fourth quarter first and then next year. If you look at the numbers in the fourth quarter, it would really show flat volumes compared to last year. That's really not a reflection on demand. It's more about comps and fourth quarter weather. We try to be thoughtful about this. Last year's November, December shipping rates were the highest in 10 years. In fact, November was the highest month of last year. You always got weather in the fourth quarter. In fact, we've seen some of that already. The hurricane that hit Florida actually impacted us the first week of the fourth quarter when it blew up through the East Coast with a lot of rain. We've been impacted with low water on the Mississippi. If you step back and look at the fundamentals, though, our leading indicators are still very positive. Bookings and backlogs are up meaningful year-over-year, and quote activity is still robust. I think we were just trying to weigh puts and takes in the fourth quarter. Looking to 2023, we're actually doing those budgets right now as we speak, and I appreciate our operators' hard work on that. At a high level, I think 2023 will depend on the magnitude of decline in single-family residential construction, that being offset by the timing and growth on infrastructure and private non-res construction. If you look at the leading indicators in private non-res and in public infrastructure, they're very positive, particularly in Vulcan markets. The starts in Vulcan markets are outpacing other markets. The non-residential indicators, the ABI and the DMI, they both point to growth. On highways, IIJA, we're starting to see that impact on DOT planning. It's really a question of the timing from starts to shipments. Quote activity in both non-res and highways is very good, and customer sentiment is positive. You've got the fundamental of construction employment growth. I think for next year it's a matter of positives in non-res and highways being offset by, you know, single family. What I do know about 2023, I think that I have confidence that we'll be able to grow our unit margins. What gives me confidence in that is the hard work that we talked about in Investor Day, what we've already done and that we're doing on our strategic disciplines, the Vulcan Way of Selling, Vulcan Way of Operating. I think we've proved that we can do that. Even with significant headwinds, we were consistent in growing unit margins in a pandemic. We were consistent in growing unit margins when we saw volumes fall. We've, you know, been pretty consistent about growing them even in the face of dramatic inflationary pressure. I'm confident we'll improve unit margins in 2023 regardless of outside forces. That's because we just wanna control our own destiny. Tom, that's great color. Thanks very much, and best of luck. Thank you. Our next question comes from Trey Grooms from Stephens. Hello, Trey. Hey. Good morning, Tom, Mary Andrews. Thank you for taking my question. Tom, you touched on this on the prior question answer, but you know, if we could get more color. I mean, you guys put up impressive improvement in aggregates unit margins. I know you spent a lot of time on the Analyst Day talking about that, and we saw that come through in the quarter, especially given the cost headwinds. But could you talk about maybe in a little bit more detail how we should be thinking about the puts and takes as we look into the 4Q and into 2023 on the cash gross profit per ton improvements? I know you mentioned the confidence there in growing, but any further color would be great. Sure. I think as I look at the fourth quarter, much like the third quarter, I think we'll continue that momentum, and I would look at it pretty much consistent with Q3. Again, you know, we carry good pricing momentum into 2023, and we'll get into that in more detail, but work to be done there. It's not. We don't have that in the bag yet, but. Then from a operating efficiencies, you saw that when we talked about that in September. It's really more throughput, less downtime, and being efficient with your labor and your inspections on your equipment to catch it before it breaks. I think those disciplines are in place. We're improving. We've got the automation in place now. Still work to be done on it, but it's about consistent continuous improvement. Okay. I'll leave it at that. Thank you very much for the color. Thank you. Our next question comes from Jerry Revich from Goldman Sachs. Jerry? Hi. Good morning, everyone. Hi. Can we just talk about the really strong acceleration in your aggregates organic volumes and margin improvement within the context of the headwinds that you're facing from the Mexican operations? What extent have you been able to hit the same markets from rail lines versus the prior transportation method? Can you just bridge for us the year-over-year margin improvement, given the drag having those operations down year over year had in the quarter? Thanks. Yeah. I think, you know, if you just step back and look at Mexico, nothing's changed there. We're still shut down. The impact is still gonna be that $80 million-$100 million for the full year, and that's built into our guidance. If you look at volumes, the volume growth was really widespread. It's not. You know, it's in every market we had. It was very widespread. We have not been able to make up the volumes on the coast, and just because the railroads can't, we can't mitigate it because the railroads can't pull the volume. In fact, they couldn't pull the volume we wanted to ship prior to Mexico being shut down. So, t hat has just been a loss for us and one that you've seen us made up kinda throughout our markets. And Tom, can you comment on the margin piece? Because, you know, that $80 million-$100 million run rate, that's a big headwind that you folks overcame in the quarter. Any additional context you can provide? Yeah. I mean, it's just a matter of those strategic disciplines at work. You've got price up 12.5%, and you've got you know, our operating efficiencies are in place and working and continue to improve. You know, we're at $8.41 per ton in the third quarter, so we're barreling towards that $9. This is why we placed another target of $11-$12. I think it's just fundamental solid operations and execution. Well done. Thank you. Thank you. Our next question comes from Philip Ng from Jefferies. Hey, guys. Congrats on a really strong quarter and a really good execution across the board. Thank you. Thanks. Tom, I guess, you know, you gave us some qualitative color how to think about 2023. One of your competitors guided to these flat volumes for next year. I know you guys are still kinda working through that, but can you kinda help, you know, unpack how you're thinking about, you know, some of these end markets, whether it's housing, non-res, and infrastructure? Are some of the good guys enough to offset that? Then on the DOT side, when do you start anticipating that inflection to kinda pop? Just wanted to get some color in terms of the cadence and that flow through next year. I think that you asked the right question about when does the highways pop. You know, if you look at starts and highways on a trailing six-month basis, it's up 17%. On a three-month basis, it's up 27%. You know, the fundamentals for multiyear growth in highways and infrastructure are very good. You've got substantial funding, both state, county, city. You add to that the COVID funds. You know, for example, highways funding went up in Florida $1.5 billion from COVID funds. There's substantial funding everywhere, and everywhere you're starting to see that flow into lettings. In fact, we've booked substantial highway work in the last 90 days. Biddings and bookings growth should continue, you know, through the fourth quarter and through 2023, and probably for another 5 or 6 years. At this point, it's not if but when. It's a matter of timing and, the speed to get funding to lettings, which you're starting to see, lettings to aggregate shipments. You know, admittedly, the DOTs have struggled, you know, continue to struggle a little bit to get money out, but they're obviously making progress with those trailing three-month starts up at the 27%. You know, for example, you know, Caltrans, the 2021-2022 lettings target was $4.9 billion. They fell short by $500 million, which they shifted into 2023 plans, which is now $5.4 billion, and the next year is $7.2 billion. Highways is growing. I think it's really just a matter of speed and how fast they can get to work. I think, again, what I'm encouraged at is the last 90 days, at 27% improvements on starts, that's a big deal. We're seeing it in lettings, and you can see that start to flow as people are making plans, you know, for calendar year 2023. On non-res, it's remarkably strong and growing, starts are, you know, way up, and it's widespread. Okay. Thank you, Tom. Appreciate the color. Sure. Our next question comes from Mike Dahl from RBC Capital Markets. Thanks for taking my questions. Can we talk about inflation a little bit and, you know, maybe give us a little more color on, how you're seeing that evolve into the fourth quarter, you know, where you've seen any easing, if you have seen any easing, and conversely, if there are any incremental pressures you're seeing, and a thought on, you know, if things stay the way they are, what that means for, you know, carryover inflation into the beginning of next year? Yeah, I would call the fourth quarter similar to third quarter. The cost inflation just remains stubbornly high. We're obviously offsetting that with price and operating efficiencies, or some of it. The parts and service costs are and will probably stay high. I would think that would be for sure in the fourth quarter, and I would expect it into 2023. You know, obviously, energy headwinds have been, you know, particularly diesel has been extremely tough year-to-date. That's just under $100 million headwind for us. So I think we should expect, you know, most of the cost inflation to remain elevated, for sure in the fourth quarter, and I would expect it into 2023. Okay. That helps. Thanks. My second question is just on the sale of the ready-mix assets into the tri-state area in Pennsylvania. Can you just walk us through that a little bit more, kind of rationale and then, you know, any comments on, you know, as you've evaluated the portfolio post the U.S. Concrete deal, is this kind of the last chunky thing or are there other things potentially on the horizon? You know, when we bought this, we said we'd take a year to evaluate and look at our hand. Us selling the ready-mix business is. Well, we're selling the ready-mix business up there, we're keeping the aggregates business. This is us just optimizing our portfolio. We felt like that after looking at it, the ready-mix business up there fit others better than it did us, and we had plenty of suitors. Again, we like the aggregates business. It's a good infrastructure play, and it's a well-structured aggregate market, which we think is a platform for growth. All you're seeing there is us optimizing our portfolio. Got it. Okay, thank you. Sure. Our next question comes from Michael Feniger from Bank of America. Morning. Yeah, thank you. Morning, Tom. Thanks for taking my questions. Obviously, the concern on demand has been around housing and the implications there. Tom, I believe your shipments peaked last cycle in 2005 with housing, yet you were able to really grow strongly in 2006 and 2007. I believe shipments were still kind of flat to down in that period. Could we see a similar playbook here for 2023, 2024, with housing down and resi down, yet infrastructure strong and pricing? Maybe you can kind of just talk through the similarities from what we're seeing now compared to that 2005 period, you know, when housing started to turn. Yeah, you know, housing has turned. We know that. I think that, you know, the starts point to it, as do permits. I think what you got to step back and remember what's very different this time is it's the fundamentals for single-family residential growth in our markets still are, they're still there. You've got extremely low inventories, you've got good employment, and you know, you've got population growth. So the underlying fundamentals, we're not overbuilt like we were, you know, when housing went down the last time. So I would expect it to have, you know, less depth and less length of time. That being said, I think what really is different for me is the non-res side. It is very strong. All end uses are up. That's, you know, offices and stores, warehouses, manufacturing, industrial, and institutional. The leading indicators show growth. For example, if you look at square footage, which is how we have to look at it, trailing 12-month starts are up 29% in our markets versus 11% in others, and trailing three-month is up 47% in our markets versus 9% in non-Vulcan markets. Again, it's widespread, it's across all end uses. What stands out for me also is the manufacturing growth in the Southeast. These are big jobs that we've built on. Let me take a few of those. You've got, for example, Big River Steel in Arkansas. It's probably 500,000 tons. You've got Universal Epic Park in Orlando, Smith Farms Industrial Park in South Carolina, the big Ford Electric Vehicle Center in Tennessee, and the Samsung chip plant in Texas. The list keeps going. I guess I'm a little bit surprised but very pleased with the rate of growth we're seeing in non-res. Yeah. I think one other thing as we think about, you know, kind of 2005 era versus now, more internally. You know, I think we're in a different place with the focus that we've put on our strategic disciplines and the Vulcan Way of Selling and the Vulcan Way of Operating, which we're confident will be helpful, you know, regardless of the macro environment. Helpful. Thank you. Just my second question. On the aggregate side, you reported an incremental margin of 21%, 31% ex freight. Just bigger picture, I know we're not guiding here, but if we turn to next year and you're getting double-digit growth, which is all price or price-led, you know, you don't have another $100 million headwind from energy. Let's say, you don't have a headwind there. What's the right incremental operating margin we could kind of expect on that aggregate side, if we don't have that cost or inflationary headwind? Thank you. Yeah. You know, on the incrementals, as we always do, we'll guide you back to, you know, over the long term and on a same store basis to that kind of, you know, 60%. Obviously, the dynamics in these, you know, volatile inflationary times, make those numbers jump all over the place. We always take you back to that 60% over the long term. Thank you. Our next question comes from Garik Shmois from Loop Capital Markets. Thanks for taking my question. Was wondering if you could talk a bit about how much pricing you expect to carry over into 2023 from some of the big year actions you took this year in aggregate, and just how to, you know, think about pricing broadly, moving forward, given some of the demand uncertainty. If you could maybe give us some color on how the discussions are going around your early next year price increases at this point, that'll be helpful. Sure. You know, the pricing environment continues to be very good and really driven by visibility to growth in infrastructure and inflation. As we said last quarter, we're gonna see prices sequentially grow. We saw it grow from Q1 to Q2, and then it really jumped from Q2 to Q3. I would have said Q4 similar to Q3. That growth has really supported the big jump from two to three by the July price increases and higher priced bid work. That pricing is widespread across all of our markets. Importantly, we're able to take it to the bottom line through the Vulcan Way of Selling and the Vulcan Way of Ops. If you look at next year, we carry a lot of that momentum into 2023, as do our ready-mix asphalt and contractor customers. The work we're bidding now will ship in 2023, so we're setting the table right now. We're having our January pricing conversations for fixed plants, and I think those have gone well. Remember, work to be done. The second half comps are gonna be a lot tougher. While we got good momentum and have a good start to 2023, we still have to do work to earn that price, particularly in the second half. Got it. Thanks for that. Our next question comes from Kathryn Thompson from Thompson Research Group. Thank you for taking my question today. You've been spending time cleaning up portfolio with the assets in the Northeast. As we look forward, you've also mentioned focusing on M&A and growth, particularly in a market that is a bit uncertain right now. Where do you focus on growing your portfolio in light of the current dynamic? Thank you. Yeah. I mean, you saw us do some of that this year. We bought some very strategic assets in Northern California and Coastal Texas that fit us well and fit our network and expanded our network. You know, I think that as we look at acquisitions, you probably see a little bit, maybe a little bit of slowing, which usually happens in times of uncertainty. I think our position here is to be opportunistic and disciplined as always, particularly what markets you wanna be in. To your point, you gotta be very disciplined about what markets you wanna be in, what you don't, and what product lines you wanna be in in those markets. We'll continue that. I think, you know, this was a typical year with a number of strategic aggregate bolt-ons, and I think you'll continue to see us do that. Okay, great. Thank you very much. Thank you. Our next question comes from Anthony Pettinari from Citigroup. Good morning. Good morning. Morning. You know, over the past year, we've heard about tight cement and RMC markets being a bottleneck for ag volumes. As the housing market has softened, you know, have you seen that start to loosen, or is that something that you anticipate to see in 2023? Just wondering if you could talk a little bit about those downstream markets. Yeah, it has been tight. I mean, maybe a little bit of a headwind on aggregates. I'm not sure drivers and trucks wouldn't have been a headwind anyway with that. We've really not seen a lot of the housing market tighten in our markets yet. Maybe a little bit in Northern California and North Texas, but really we've not seen it yet. We know with leading indicators, we know it's gonna come. I would expect most markets to continue to be somewhat tight on cement, even with the loosening of residential starts. Okay, that's helpful. I'll turn it over. Thank you. Our next question comes from Adam Thalhimer from Thompson Davis & Co. Hey, good morning, guys. Congrats on a great quarter. Thank you. Good morning. Thank you. I wanted to zero in on the Northeast concrete sale. What was the impact to that, in terms of Q3 gross profit? 'Cause I guess you put that into assets held for sale, so you took that out of the concrete segment before Q3. Then what would be the total impact to the back half of the year, vis-à-vis taking that out versus your guidance? Yeah. Adam, you're right, we did reclassify the assets as held for sale on the balance sheet. Those operations are still reflected in the P&L in continuing ops. In terms of, you know, the rest of the year, we've taken that into account in the updated guidance that we provided. You know, once it closes, we can, you know, comment more on the details of that transaction. Okay. For Q3, Northeast is in the concrete gross profit numbers? That's correct. Okay. Thank you very much. Thank you. Our next question comes from Timna Tanners from Wolfe Research. Hey, good morning, guys. Good morning. Morning. I just wanted to follow up, and I know this is tricky, but on the Mexican quarry, if you were in our shoes, how would you think about one, the timing of any restart or ability to restart, and two, any compensation for lost revenue? Any updated thoughts there or any progress would be great. Thanks. I wouldn't count on a restart. I would, you know, count on that the $80 million-$100 million is built into our guidance. It's, you know, the volume's in our volumes and that has all the earnings. You know, we filed an application with the NAFTA arbitration to seek additional claims because of the closure. In July, we were very pleased the tribunal granted our application to seek further claims. We're pleased with that decision. We hope to know a lot more in 2023, but these things take time. We've not made the claim public, mainly because we're still working on the magnitude of the ancillary claim. So, work to be done on that one, but we do feel like we'll be compensated. We do feel like we have a good case, and we felt like the tribunal recognized that with letting us open that back up in July. Okay. Any, like, things to watch for, like any upcoming court dates or time frames to watch for that could be road, you know, further progress? It'll be next year, and again, it takes time. I would say as things come, as we know, we'll let you know. No, no hard dates at this point. Okay. Appreciate the update. Thanks. Thank you. Our next question comes from Dillon Cumming from Morgan Stanley. Hey, good morning. Thanks for the question. Sorry to ask another one on Mexico, but just, you know, you kind of noted in your release that you had acquired a quarry in Honduras, I believe, which I think was serving some of those same Gulf Coast markets. You know, just kinda wanted to ask if there were any kind of like less obvious ways, you know, South American or otherwise, you know, that you might be able to actually fill in those volumes that we should be watching for into next year as well. No, I mean, that was a business we had already been associated with. We had a distribution agreement in place for that quarry for four years. We've been selling those materials as a complementary product to our Blue Water network since 2019. It's not additive volume. It's substantially lower margins than Mexico. You know, we've gotten the question, "Well, can you expand it?" It would be logistically really difficult to considerably increase the volumes from where they are today because of where that quarry is and some of the shipping constraints. It was, you know, we had it in business for the last few years really as a complementary source to supply those coastal markets. It's really not a replacement for tons in Mexico or profitability in Mexico. Great. Thank you. Thank you. Our next question comes from Keith Hughes from Truist. Thank you. Just within the fourth quarter kind of implied guide, do you think in the aggregate segment we'd be able to grow margins, in other words, get, you know, ahead of the cost curve? Or is there still gonna be a drag? On the fourth quarter, I would expect a very similar performance to what you saw in Q3. You know, we've gotten our price out ahead of cost, where I don't expect costs, the inflationary pressures to go down either in Q4 or 2023. That's kinda how I look at it. Mary Andrews? Yeah. Keith, I think on a gross margin basis, kind of what we discussed at the second quarter was we expected in the back half that, you know, the margins would squeeze closer to the prior year. You saw that in the third quarter. The delta was about half of what it was in the second quarter, and I think that will continue to improve in the fourth quarter. Okay. You had a really nice improvement in concrete in the third. Would we expect similar types of improvement in the fourth? I think I would expect a similar performance in the quarter. I'd expect it to start going up again first quarter of next year as we have price increases the first year in concrete. All right. Thank you. Thank you. Our next question comes from Tyler Brown from Raymond James. Hey, good morning. Morning. Morning. Hey, Mary Andrews. I know it's a bit early, but I wanna start thinking about the building blocks on the free cash flow side for next year. I think that bonus depreciation actually steps down in 2023. That may put some pressure on cash taxes. I think cash interest is probably a headwind. Just any color on those two items specifically and the magnitude and what that might mean for free cash? You know, we'll obviously give more guidance on that when we get to February. I think, you know, you're thinking about the interest component correctly. You know, our conversion ratios have remained at really, really healthy levels, and I don't think we'd expect that to change materially in 2023. Okay. All right. Perfect. Thanks. The next question comes from David MacGregor from Longbow Research. Yes. Good morning, everyone. Good morning. Good morning. Great quarter, c ongratulations on the results. I wanted to ask you about the revised shipment guidance and going from 5%-7%, up to 7%-8%. And how much of this would you relate to improving demand versus maybe easing constraints? I guess with respect to some of those constraints, are they evolving in a favorable way as economic growth eases in this country, and will 2023 be any different? Yeah. I think you've seen a little bit of easing in constraints in construction, but there's still substantial. The railroad constraints, we're still. While they've improved a little bit, we still got bottlenecks. On a good shipping day, you still have trucking constraints, albeit both of them are a little bit better than maybe they were a year ago. Same thing with builders. You know, they're still having problems getting supplies and getting parts and get them in a timely manner, and they're holding up construction. Again, maybe a little better. Remember we said at the beginning of the year that the underlying demand was better than what we had predicted, and we continue to see that, you know, that underlying demand be pretty good, albeit up. Starting to see some softness in leading indicators in single family. I think it's a combination of demand remains very good and some easing of bottlenecks, although they're still there. Thoughts with respect to whether it gets any better in 2023? Yeah, I think it continues to improve. I think it's slow. I think the railroads are adding people. Obviously, we're getting more efficient with our trucking through the Vulcan Way of Selling. I think in supplies for construction continue to slowly improve as we go through 2023. Another impact, you know, on the full year volume guide is, you know, acquisition activity and just the healthy underlying demand held up. Got it. Thank you very much. Thank you. Our last question comes from Michael Dudas from Vertical Research. Hey, Michael. Morning. Thanks for getting me in, and good morning, Mark, Tom, and Mary Andrews. Maybe to follow up on the previous questions back on free cash. As you're, you know, looking at your plans for 2023, not to put out the exact guidance, but relative to CapEx spending levels next year versus this year, are you caught up from some of the delays from the pandemic relative to some of the maintenance or growth opportunities? Since you implied that potentially because of the uncertainty, new acquisitions may be a little bit more tricky or maybe deferred, how does that impact relative allocation towards either the balance sheet or capital return to shareholders? Thank you. I think on, you know, on CapEx, like our operating plans, we're in the middle of, you know, finalizing our 2023 needs right now. I don't think I would expect anything substantially different. We have, you know, hopefully been able to catch up some of the lack of spending in 2020 and 2021. You'll note that, you know, our pace of spending in Q4 will accelerate from what it has been, and that's, you know, dependent upon receiving, you know, equipment. We'll just kinda see how that shakes out, and that will, you know, somewhat impact 2023 as well. Over the longer term, you know, I think about CapEx as the needs, you know, vary with volume more than anything else, more and more than time. We wouldn't see anything, you know, meaningfully different. That appears to be our last question. I will now turn the program back to management for any additional or closing remarks. Thank you. I wanna take a minute and thank the entire Vulcan team for their tireless efforts to ensure continuous improvement, regardless of what the world throws at them. We appreciate your interest in Vulcan Materials, and we look forward to talking to you through the quarter. Thank you, and have a safe day. Thank you, ladies and gentlemen. This concludes today's conference. You may now disconnect.