Good morning, ladies and gentlemen, and welcome to Vulcan Materials Company's Fourth Quarter Earnings Call. My name is Gretchen, and I will be your conference call coordinator today. 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. If you would like to register to ask a question, please press Star then one on your touchtone phone. Now I would like to 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 Mary Andrews Carlisle, Senior Vice President and Chief Financial Officer. Before we begin, 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. A supplemental presentation has been 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, thank all of you for joining our call this morning. We appreciate your interest in Vulcan Materials Company. In 2022, our teams hands down excelled in confronting macro challenges, and they demonstrated the resiliency of our aggregates-led business. Let's start with the fourth quarter, which really showcased our commitment to controlling what we can control. We generated $375 million of Adjusted EBITDA in the quarter, and I was particularly proud of our team for delivering 11% year-over-year growth in aggregates cash gross profit per ton despite a 6% decline in aggregates shipments. Abnormally wet and cold weather across our footprint disrupted construction activity and shipments across all segments, and we also began feeling the impact of single-family residential decline. Pricing momentum continued with 15% growth in aggregates mix adjusted price in the fourth quarter. Our people continue to drive performance through good execution, which is grounded in our Vulcan Way of Selling and Vulcan Way of Operating disciplines. Gross profit in both aggregates and asphalt segments increased versus the prior year's fourth quarter despite lower volumes. Pricing momentum more than offset inflationary cost increases. In concrete, a 15% decline in volume, driven mostly by extremely wet and cold weather in Texas, created operational challenges that eroded pricing gains in that segment. For the full year, Adjusted EBITDA improved 12% with all segments posting year-over-year growth in gross profit. Aggregate segment gross profit improved 9%, a noteworthy performance with the headwinds of generationally high inflation and the unexpected and arbitrary shutdown of our valuable Mexico operations in May of 2022. Aggregates volume increased 6%, and average selling prices improved 10%, accelerating as the year progressed. Importantly, our aggregates cash gross profit per ton improved over 5% and also accelerated throughout the year, even in a challenging operating environment. In the first quarter, we held our own while inflation ramped up more steadily than expected. In the second quarter, cash gross profit per ton grew modestly versus the second quarter of 2020, 2021, as we responded quickly with additional pricing actions. In the third quarter, cash gross profit per ton increased 9% as pricing momentum accelerated and operating efficiencies offset some of the inflationary pressures. As I mentioned earlier, in the fourth quarter, cash gross profit per ton improved a notable 11% even as volumes declined. In our asphalt segment, the second half of 2022 marked an inflection point on price and cost dynamics. In the third quarter, robust pricing improvement began outpacing the sharply rising liquid asphalt costs. For the full year, pricing increased by 21% to more than offset the 36% increase in liquid asphalt costs. Volumes grew by 7% with particular strength in Arizona and California, our two largest asphalt markets. Ultimately, gross profit improved to $57 million versus the prior year's $21 million. In the concrete segment, full year gross profit of $89 million increased 64% compared to the prior year due to a full year's contribution from the U.S. Concrete assets, in addition to improved earnings in our legacy Northern Virginia and Northern California concrete businesses. Inflationary pressures, including diesel and the availability of both cement and drivers, had a significant impact on performance in the concrete segment. Let's shift to the new year, first focusing on demand. The demand environment for 2023 is mixed, both in terms of end uses and timing. We expect modest growth in overall public demand, but contraction in private demand. I'll comment briefly on each end use. Residential construction activity is showing the impact of rising construction costs, home prices, and mortgage rates on single-family housing. Single-family starts and permits have continued to decline, but to a lesser degree in Vulcan served states than the country as a whole. Currently, multifamily remains positive with a strong pipeline of projects under construction. Housing will certainly be the primary drag on private construction in 2023, but we expect it to quickly return to growth. It is important to remember that the demographics and employment growth in our markets continue to support household formation and the growing need for additional houses in the future. Overall, private non-residential demand remains at healthy levels. Manufacturing and other heavy industrial projects continue to provide opportunities, but we are monitoring leading indicators such as more recent ABI measures, moderation in the Dodge Momentum Index, and survey data indicating declining loan demand and lending tightening. On the public side, we expect positive momentum throughout 2023 and beyond as states and municipalities move forward with much needed infrastructure investment. Highway and infrastructure starts are both positive. In highways, starts strengthened significantly in the second half of 2022, growing at 25% on a trailing twelve-month basis at the end of the year. The Infrastructure Investment and Jobs Act funding is now reflected in proposed state fiscal year 2023/2024 budgets across our footprint. The multi-year outlook for public infrastructure is solid. We continue to believe that the increased funding will begin impacting aggregate shipments modestly as we move through 2023 and more meaningfully in 2024. In addition to IIJA funding, state tax receipts in Vulcan states are the highest they've been in the past 10 years. Strong state and municipal revenues support non-highway infrastructure investment as public entities continue to play catch-up from the last decade of housing growth that has driven a fundamental need for infrastructure investment. The considerable funding from IIJA for investment in water, energy, ports, and airports will provide future demand growth. 2023 demand for aggregates will be dependent upon the depth and the duration of the declines in residential construction activity. The impact of rising interest rates on private non-residential construction activity as the year progresses, and the timing of highway starts converting to aggregates demand. Considering these dynamics, we currently expect our aggregate shipments to decline between 2% and 6% in 2023. Pricing momentum and operational execution will drive our 2023 performance. We expect our pricing to increase between 11% and 13%. Most importantly, we will continue to improve our industry-leading aggregates cash gross profit per ton and deliver solid earnings growth in 2023. Now, I'll turn the call over to Mary Andrews for some additional commentary on our 2022 performance and some more details around our 2023 guidance. Mary Andrews. Thanks, Tom, and good morning. Our 2022 operating performance led to another year of solid cash generation and disciplined capital allocation. Over the last four years, our free cash flow conversion has averaged over 90%, with a 93% conversion ratio for 2022. After investing over $600 million in capital expenditures for both maintenance and growth projects, we put additional capital to work by completing $529 million in bolt-on acquisitions, and also returned $213 million to shareholders via our growing and importantly, sustainable dividend. During 2022, we also reduced our leverage back to within our stated target range of 2- 2.5 times after completing the U.S. Concrete acquisition in August of 2021. Net debt to Adjusted EBITDA was 2.3 times at year-end. Our investment-grade balance sheet and significant cash generation capability give us the capacity to continue to invest in both organic and inorganic opportunities with a constant focus on improving shareholder return and Return on Invested Capital as we grow and optimize our portfolio. During the fourth quarter, we completed the previously announced sale of our ready-mix asset in New York, New Jersey, and Pennsylvania. On a trailing 12-month basis, our Return on Invested Capital at year-end was 13.5%, inclusive of the loss of earnings historically generated from the network of assets supporting our shutdown Mexico operation. We also remain focused on continuing to leverage our SAG cost base. SAG expenses as a percentage of revenue improved by 50 basis points versus the prior year to 7% of revenues. Having strategically managed our balance sheet, our portfolio, and our overhead cost structure, we enter 2023 from a position of strength. Tom shared with you our views on the macro demand environment and resulting aggregates expectations. Even with a challenging and uncertain macro backdrop, we expect to grow our Adjusted EBITDA to between $1.725 billion and $1.875 billion by capitalizing on the strengths of our aggregate-led business and executing on our foundational strategic disciplines. In our downstream businesses, we expect total cash gross profit dollars to approximate 2022 levels. Continued improvement in asphalt segment profitability and the benefit of improving highway demand should offset both the impact of the 2022 divestiture of our concrete businesses in New York, New Jersey, and Pennsylvania, and the impact of slowing residential construction activity on our remaining concrete businesses. We expect SAG expenses of between $515 million and $530 million as we remain focused on driving efficiencies in our support functions while delivering new capabilities for the business through investment in technology and talent. We also expect depreciation, depletion, amortization, and accretion expenses of approximately $610 million, interest expense of approximately $195 million, and an effective tax rate of approximately 22%. In 2023, we plan to consistently reinvest in our franchise with $600 million-$650 million of capital expenditures for both maintenance and growth projects. I'll now turn the call back over to Tom for some closing remarks. Thank you, Mary Andrews. Before we move to Q&A, I want to thank our entire Vulcan team for a successful year in 2022. I have great confidence in their ability to continue to execute in 2023, even with the uncertainty in the macro environment. As always, we will be keenly focused on keeping our people safe, driving value for our customers, and capitalizing on the profitability expansion opportunities supported by the Vulcan Way of Selling and the Vulcan Way of Operating disciplines. Vulcan is uniquely positioned to create long-term sustainable value with the right products, in the right markets, with the right focus from the right people. Now Mary Andrews and I will be happy to take your questions. At this time, we will open the floor for questions. If you'd like to ask a question, please press the star key followed by the one key on your touch tone phone. If at any time you would like to remove yourself from the questioning queue, press star two. We ask that you limit your participation to one question. Our first question comes from Stanley Elliott from Stifel. Good morning, Stanley. Thanks. Good morning, everybody. Good morning. Good morning. Thank you all for the question. I guess my question would be, I guess coming in, maybe we would have thought maybe more flattish volumes in 23 or maybe even modest volume growth. What changed, if anything, resulting in the 2-6 kind of volume outlook decline now? Is there anything you could share with us about what you're seeing and maybe a little more in-depth across those end markets? Thank you. Yeah, sure. If looking into 23, we saw some pretty good bounce back in January from, you know, the bad weather we had had in the fourth quarter. Solid shipments. That being said, with the exception of California, which everybody knows we had floods, but the markets look pretty good. If you look at the leading indicators this year, maybe not as clear as they usually are. We try to be thoughtful as we look to demand throughout the year. I think a lot of it boils down to timing. When do we see the decrease in single family really hit shipments? You probably saw a little bit of that in the fourth quarter, but I think the full impact gets us. We realize that kind of into the first quarter, beginning of the second quarter. Single family probably gets hit about down 20%. Then for non-res, it's really again about timing with. While the leading indicators for non-res look pretty good, starts, longer-term indicators, commercial loans and the ABI could lead to challenges in the second half of the year. We would call that segment flat for 2023. As always, timing for highway funding and lettings going to shipments will be critical. We think that segment, the public segment is up low single digits. As we step back and look at this, we try to be thoughtful about the dynamics that are impacting shipments and the timing of that demand. While we can't control demand, we can control how we run our business and our unit margins. I think we've proven we're very good at that. We think we grow that mid-teen. Regardless of the dynamics affecting shipments, we'll grow our earnings. Great, guys. Nice work on the profitability improvement. Thanks. That's it for me. Best of luck. Thank you. Thanks. Our next question comes from Trey Grooms from Stephens Inc. Hey. Hey, good morning, everyone. Good morning, Trey. Good morning. Hey, so, yeah, I wanna echo, good work on the profitability. It looks like on the guide, it. Implies an acceleration there on that improvement on Cash Gross Profit per unit. I guess, the moving pieces there, if you could maybe cut into those a little bit. You know, Pricing is obviously playing a role, and as we kinda look at the cadence there through the year, maybe you could talk about that as well with maybe what's baked in with a mid-year increase and how we think about, you know, the cadence of that profitability improvement as we look through the year. I would call it pretty consistent. We carry really good pricing momentum into 2023. As we said, we guide, you know, 11%-13% for 2023. I'm really pleased with our team's performance and how they service our customers to earn that price, and how they face the challenges that we've seen over the last three years, and that they can adjust price on the fly very quickly. Our pricing discussions, you know, for January one, I thought went very well, and they're in place. You got to remember that, you know, as we progressed through last year, pricing accelerated, you know, as we went through 2022 driven by inflation. The comps in the second half on price get harder, but I think we're confident in that. While we're confident in that, there's still work to be done in pricing and earning that from our customers. Importantly, as you talked about, our teams have been able to take price to the bottom line, we think we do that mid-teens this year. I would call price, while pricing comps get tougher as we progress through the year, cost comps get easier. I would expect a pretty steady growth in that mid-teen level of unit margin growth, quarter after quarter. Yeah. Trey, we do expect, you know, solid unit profitability growth throughout the year. Of course, we don't give, you know, quarterly guidance, but I will try to give you some, you know, additional and hopefully helpful context, maybe more related to the volume. If you think in terms of cadence, we definitely will have, you know, tougher seasonal comps in the first half. Looking back at 2022, three of the six months in the first half of 2022 implied 12-month shipments, you know, at a higher level than our full year of 2022, and only one of six months in the back half, you know, showed particularly seasonally strong shipments. Of course, Q4 with the weather impact, you know, will provide an easier comp in 2023. You know, all in, I think, more challenging year-over-year in the first half from a volume perspective and the comps at least moderate as you move through the second half. Got it. Thanks, Mary Andrews. That's super helpful. I guess, just to make sure I'm clear on the comment, Tom, that you had around pricing. 11%-13%, I guess, just coming out and asking is there any... What is the assumption around mid-year price increases that are baked into that? I know you guys have been of the opinion, and you've said, on the last call, I think that, you know, you guys were gonna be targeting pretty, you know, pretty aggressively in the first half, or excuse me, in the first of the year. Any kind of comment around what's in that for mid-year? Sure. Let me just step back and talk about pricing in the aggregate. If you remember, you know, about 40% of our work is fixed plant, and we price that once or twice a year. We had discussions in October, November for January one price increases. I thought those went very well. Those are in place. We'll just have to see what happens as we progress through the year and what the market calls for in the individual markets of how that's priced. The other 60% of your business is bid work. You know, we're bidding jobs as we speak. That's something, it's something you earn every day, and it's a continuous improvement effort. What we're bidding now will ship in the third or fourth quarter. All in, we're very confident on our pricing guidance, but some of that's got to be earned, as we progress through the year and earn every day with our customers. Understood. Got it. Thanks for the clarity there, Tom. Super helpful. Keep up the good work, I'll pass it on. Thanks. Thank you. Our next question comes from Kathryn Thompson from Thompson Research Group. Morning, Kathryn. Hi. Good morning. Good morning. Good morning. Thank you for taking my question today. Tagging on just for the pricing question, but really pulling the string more in terms of the balance of price and cost. Given there's been so much volatility in 21 and 22, could you clarify the confidence that you have in unit margin growth into 23, in light of the historic volatility just with that price cost? It would be helpful, too, if you know, focus in on the aggregate side, but also given, the divestiture of your, Northeast Concrete assets, giving any color for expectations, for unit margins or just any type of profitability, color on that segment would be helpful. Thank you. Yeah, great question. I think that as you looked at 2022, we set records in unit margins, and we're very pleased with our growth there. We'll grow those again in 23, as we said, mid-teens. What you're seeing there is the Vulcan Way of Selling and the Vulcan Way of Operating disciplines at work. You saw us set new goals for long-term unit margin growth at our Investor Day in September. I think that over the last four or five years, the team has done great work on this very important metric. They have shown that they are never satisfied, that they're always hungry for continuous improvement, and I'm proud of their performance and the culture they developed and their commitment to excellence. That said, my confidence is very high on our target guidance on unit margin growth because of our past performance and our consistency. Mary Andrews? Yeah. You know, Tom highlighted the consistency, I think, you know, if we look over the last three years, we've grown our cash gross profit per ton in 11 of 12 quarters. As we've said, expect to continue to do that in 2023 and to accelerate. I think another important reminder about both the level of unit margin expansion in 2022, and also a contributing factor to the contraction in aggregate gross margin percentage is that, you know, we had a considerable headwind year-over-year since we report inventory using LIFO, as we believe it results in a better matching of costs with revenues. In periods of increasing costs, like we saw in 2022, LIFO, you know, will result in higher cost of revenues than under FIFO. Pre-tax in 2022, we took an incremental $54 million of costs through the P&L instead of putting it, you know, on the balance sheet if we'd used, you know, a FIFO method in both periods. You know, I think we really showed strong unit margin in 2022 with, you know, some considerable cost challenges. Kathryn, I'd also expect to see unit margin growth in the other product lines. Okay, great. All right, thank you very much. Thank you. That's a wrap. The next question comes from Anthony Pettinari from Citi. Good morning. Good morning. Hey, on the aggregates volume guidance, should we think of that as really an organic kind of apples to apples percentage change, or is there any kind of impact from, you know, maybe downstream divestitures impacting upstream shipments, or are there sort of supply agreements in place to take care of that or any volume impact from Mexico? Just wondering if there's any impact there and if you could bridge those. Yeah. On the divestitures, I don't see any impact on volumes, as I think, you know, we'll continue to service those ready-mix plants. On Mexico or acquisitions that we made partially for partial year in 22, they're built into the guidance. Okay. That's helpful. I'll turn it over. Our next question comes from Jerry Revich from Goldman Sachs. Morning, Jerry. Good morning. Hey, hi, Tom, Mary Andrews. Good morning. A really interesting price-cost spread for aggregates this year as you folks catch up on the inflation we essentially saw in 2022. I'm wondering, as the exit rate heading into 2024 is gonna show some pretty good pricing momentum for you folks. I'm wondering, as you look at other cycles in the past, Tom, is there a precedent for, you know, another year of significant above trend price versus cost that's potentially feasible and maybe similar to what we saw 15 years ago? Yeah, I, you know, I think that's built into our guidance in that mid-teen unit margin growth. As I said a little bit earlier, I think the cadence of that is your comps and pricing are easier in the first half than the second half, but the flip is true on costs. Your comps are gonna be easier in the second half on costs. I think we're pretty consistent in how we in our ability to grow unit margin as we progress through the year. I've also, like I said, we've been very consistent with being able to do that, so I don't see that being choppy. Sorry, Tom, I was just asking the momentum heading into 2024. Is there prior points in time that could give you confidence that this period of outsized price costs and unit profitability growth above trend can continue into 2024? You know, as always, visibility to growing public demand is a good thing for price. I think we are, our folks are quite disciplined on how they earn price. You know, let's get through 23, we'll be ready to tackle our challenges and maximize unit profitability as we go into 24 and make sure we fall back on those disciplines of the Vulcan Way of Selling, the Vulcan Way of Operating. Sounds good. Thank you. Thank you. Thanks. Our next question comes from Michael Feniger, Bank of America. Thanks, guys, for taking my questions. Can you just help us understand how much were costs like energy, raw materials, diesel, how much was that up incrementally in 2022 versus 2023? Sorry, 2022 versus 2021? What are you kind of baking in there for 2023? Mary, why don't you take 22 and I'll take 23. Yeah. You know, energy a considerable headwind in 2022, cost us, you know, about $225 million between diesel and liquid. You know, I think maybe important context in reflecting back on 2022 and thinking about how it will impact 2023, Tom can give some more color on that, is the fact that, you know, diesel in the fourth quarter of 2022 was almost 40% higher than the first quarter of 2022. You know, liquid, likewise, was almost 20% higher in the fourth quarter versus the fourth quarter. I think that's the setup as we move into 2023, Tom can comment more on sort of full year 2023. Yeah. I think what we have in the plan right now is probably high single-digit. It's a combination of inflation, fuel and labor. As I said, we'll feel a bigger impact in the first half just due to the inflationary pressures that we felt kind of escalate as we went through the year. That being said, I think all of that is partially offset with operating efficiencies and improvements generated by the Vulcan Way of Operating. I think our folks are all over that. You know, how we do that, many of the details we illustrated in our September Investor Day. I do have pretty good confidence that they can keep some of that at bay just by improving the key metrics that of throughput and downtime and preventive maintenance that really drive your cost. Yeah. Specific to the energy in 2020, 2023, you know, our expectation is that it'll be, you know, more stable, but it'll remain at these, you know, high levels, which is what will result, you know, in a considerable headwind early in the year, and then that will moderate as the year progresses. Great. When you look at the portfolio, Tom, you divested some concrete assets in the Northeast. I'm just curious, is there any further portfolio moves we could see going forward? Like, how do you kind of view these downstream assets after, you know, kind of a couple of challenging quarters with a lot of, you know, moving parts that impacted the year? Appreciate it if you kind of comment on how you feel the health of those, that part of your portfolio. Sure. through 23 and just long term. Thank you. I think that as always, we look at our assets as a group of assets that have to stand on their own. If it's worth something to more, but somebody to us, then we'll divest of it and put that money back in our aggregates business, which you've seen us do in the past. Right now, the markets that we have concrete businesses in are privileged concrete markets, and we're pleased with them. Obviously, inflationary pressures, you had price chasing cost, and like we did in asphalt, we'll catch that and bypass it and get back to growing margins. I think the markets where we bought into, we like them. We kept our aggregates business in New York and New Jersey. So far so good, and we think we can continue to improve our returns as we march through 2023. Our next question comes from Mike Dahl from RBC Capital Markets. Morning, Mike. Good morning. Morning. Thanks for taking my question. Question. Just a quick one on the public side. I don't know, maybe sensing a little bit of nuance here. We've been hearing, you know, about how strong backlogs and lettings are recently in terms of the growth. Now you're saying kind of some modest impacts more, as we get through the year and more meaningful in 2024. I think if we rewound back three or six months, the, you know, thought was that it, the tailwinds might come a little bit sooner than that. In the context of your low single-digit expectations for public, maybe, you know, you could help us understand if there's something different in the market that you've seen in terms of timing or level of distribution of fundings. Is there something related to just the labor constraints? How would you characterize what seems to be maybe a little delay in some of the infrastructure tailwinds? Look, I think this is as good of an infrastructure tailwind as we've ever seen in decades. That being said, as you've heard me say before, highway work comes slower than anybody anticipates it to, but it's coming. Overall, highway funding is way up. The sector is in great shape, as is the entire public sector. State DOT funding is extremely healthy. You've got IIJ revenues that are gonna be reflected in fiscal year 23, 24 proposed budgets. Our top states are sustaining robust lettings. You know, that IIJ funding hits, will hit lettings in 23. It'll really impact 23/24 as we move forward. I'll give you a couple examples. If you think about Arizona, they'll let 45 projects in the, in the first half of this year. If you go to move to California, the total dollars, project dollars in 2023 will be a record coupled with, you know, record highway lettings that we saw in November, December. You know, Texas is at, you know, a $10 billion budget, and they'll have $7.4 billion of lettings in the second half of their fiscal year, which is March through August. On the more to come list, now that's what's there on, we know is coming, but on the more to come list, in Florida, you got Governor DeSantis has proposed a 33% increase in the FDOT program, that would, you know, impact lettings particularly in the second half of the year or first half of next year. He's also, there's initial $7 billion that he's wanting to accelerate for some 20 projects, congestion projects. Tennessee's governor proposed to double the 2023, 2024 TDOT budget. For this year, it's a matter of timing and how fast do lettings get to project shipping. I wanna step back and say it's nothing but timing. This sector is in very good shape, in as good a shape as we've ever seen it and growing. Got it. Okay, thanks for that. Very helpful, Tom. Sure. Our next question comes from Tyler Brown from Raymond James. Good morning. Hey, good morning. Hey, Tom, I actually wanted to go back to the Investor Day and talk about the progress on your logistics excellence, I think the next-gen plant operations. I'm just kinda curious how those initiatives are rolling out, and are they expected to be a material driver in expanding margins in 2023, or are those more on the come in, say, beyond 2023 into 2024? I think what you'll see in 23 is maybe a little bit of incremental impact. It'll be more of a 24 play. That's a little bit of what we said in the Investor Day about the operating piece, where was really rolling it out in 22, but more of an impact in 23. For logistics, we're doing more rollout development in 23, probably bigger impacts in 24. Okay. Thank you. Our next question comes from Phil Ng from Jefferies. Hey, Tom. Just piggybacking on Mike's question earlier on the public side of things. The low single-digit growth does seem a little more muted than your two public peers are guiding for this year. Curious if it's a function of maybe you guys are a little more levered to bigger projects, so that's more timing related. I guess it'd be really helpful to kinda give us a perspective into how you think public will grow as we exit 2023 and perhaps, more importantly, 2024 when you get the full impact of IIJA. Well, I think that it's Well, I'll take the second part of that question first. 2024, I think we'll see a lot more maturing of the DOTs getting work, getting work to shipments. You know, if you look at the level of lettings that we'll see throughout the year, that sets us up extremely well for 2024 because they get them let, they get the jobs out there, get them started. We enter 2024 with a higher level of starts and starts that have gone to aggregate shipments. I think that obviously, you gotta wait and see how that progresses, and are the DOTs able to get the work let and out for with the projections they have. On big work, it's hard for me to really judge what some of my peers are doing because I don't get to look at their backlogs and look at their work, so a little bit hard to judge. You are insightful in the fact that very large jobs take longer to get from letting to start because they're complicated, and there's a lot that goes into it from procuring land and permits and just more, more, more detailed, larger engineering things that have to happen and pre-work that has to go into it. We do have a number of large jobs in our backlogs, and as I said, they do take longer, but comparing it to my peers is just tough to do. I mean, would it be fair, Tom, looking out to 2024, we should see like mid-single digit plus growth in public, or that's still too optimistic at this point? Well, obviously too early to call because you've got to see what's happening with these lettings, but let's all be hopeful on that one. Okay. Appreciate the color. Our next question comes from Garik Shmois from Loop Capital. Hi. Thanks for taking my question. I wanted to ask on the non-res side of the ledger, the outlook for flat volumes this year. Just wondering if you can maybe break out what you're seeing in your markets and your backlogs on the heavier non-res side, so things like LNG, manufacturing warehouses, things of that nature versus lighter commercial. I think the very large projects, it's really encouraging. We're seeing a number of them. I mean, I'll give you some examples. You got an aluminum plant here in Alabama, a Hyundai plant in Savannah, Georgia, the GM battery plant that we'll be shipping in Tennessee, the Ford F-150 plant in Kentucky, and a big solar plant in North Alabama. All those are, you know, hundreds of thousands of tons per job, very good work. We have some concerns on does the light non-res follow home construction? That's one piece. While on heavier res, the starts look good right now. It's really the question is, and what we're trying to see and can't see yet, is what's behind those, because you've got commercial loans that have been challenged for four quarters. Right now, the leading indicators look good. And, you know, we'll just have to wait and see on the other, and see how starts trend. I think in all in all, we try to be thoughtful as we assume flat. Remember, that flat is at extremely high levels, and this sector's not overbuilt. Those set us up good for the future. Even if there is, you know, some of the lighter stuff follows, home building, you've got a lot of heavy behind that too. Understood. Thank you. Thank you. Our next question comes from Keith Hughes from Truist. Thank you. I have some questions on the cost that was referred to earlier on the high single digit increases in cost. Could you just say again on energy, are you assuming energy just kind of rolls forward at current prices, or is there any, you know, change up or down in the first half of the year? A little bit. The first half of the year, energy costs will be up because of costs. We think it remains at elevated levels, but in the first, in the first part of the year, there's no question that, you know, everything, including energy, will be up because, you know, we saw such a quick rise of inflation throughout the year. So the costs get easier in cost as we go through the year just because the cost rose last year. But for energy in the first half, yeah, it'll be a headwind for us. If you strip out the energy, what does year-over-year cost growth look like in other inflating items kind of percentage? I would take it in pieces. I think that most of it is up mid to high single digits. That's everything from electricity to parts to, you know, to labor. Just kinda all of it is up. It's just gonna get hit harder in the first six months than the second six months. Okay, thank you. Thank you. Your next question comes from Michael Dudas from Vertical Research Partners. Good morning, gentlemen. Mary Andrews. Morning. Morning. Tom, just maybe you could share a little bit about two of your, you know, where some of your large where some of the surprises you may see given the dynamics you just put forth, whether it's regional, whether it's California. You know, the weather's, you know, was very hard obviously from the end of the quarter, beginning of this year. Where some of the areas you think there could be some upside surprises and two areas where there needs to be a little bit more concern about some of the project flows that you're anticipating? I think the big question for all of this is timing of highway projects. That's, that's in every DOT we have. All of them have great funding, all of them have great plans, all of them have really good lettings. It's how fast do they get that work to shipping aggregates. I think that's, that's the biggest question that we'll have to watch as we go through the year. Now, you know, the good part about that question, if it goes faster, that's great. As I've said, the highway work, it just takes longer to get there than we think than anybody ever thinks it does, but it gets there. Is that the delta between -2 and -6 on your volume expectations? I would tell you that I think that's probably the biggest factor in the range. Yes. Thank you, Tom. Thank you. Your next question comes from Adam Thalhimer from Thompson Davis. Thanks. Good morning, guys. Morning. Morning. Can I get your help with your margin guidance? 'Cause you're giving us aggregates cash gross profit per ton. I wanna convert that back to you, just your reported aggregates gross margin. I think you're guiding to, call it 100- 200 basis points of aggregates gross margin improvement this year, but I'm just not sure. Yeah, that's right. We do expect aggregates gross margin expansion, you know, I'd say at least at those levels. You know, also on EBITDA margins too, this will be a year where we can, you know, claw back to some of our more historical levels. Do you see a lot of variability between quarters or is that a pretty evenly throughout the year? Yeah, I think from a margin standpoint, you know, we expect consistent, you know, improvements throughout the year. As Tom said, it'll be, you know, first half will be, you know, more price, more cost, and second half will be more moderate price and more moderate cost. I think on the margin side, we should see good growth, you know, all throughout the year. Okay. Very helpful. Thanks. Thank you. Our last question comes from Rohit Seth from Seaport Research Partners. Morning. Hey, good morning. Good morning. Thanks for taking my question. Just to clear up on the non-resi. You talked about light and heavy non-resi. What is the mix between the two and your total non-resi exposure? I think, you know, it's probably right now we're probably a lot heavier on the heavy non-res, as we saw the light catch up. It had to catch up with residential growth, and it fell behind a little bit. I think you still got some runway with light res as it lags single family. The heavier piece of this will be in much heavier piece with this will, majority of ours will be in heavy res. Okay. non-res is what? 30% of your sales or your volumes? That's, yeah. That's a pretty good round number. Okay. Just on capital allocation, you know, can you maybe comment on what the deal market looks like at the moment? Yeah. I think we, you know, we still see, you know, good activity. We have our teams are always out, you know, looking for opportunities. You know, I think typically in these kind of environments, I mean, sometimes there may become a disconnect between sellers' expectations and, and buyers' valuations. But, you know, as we talked about, we have, you know, a great ability to, you know, generate a lot of cash, and we're always looking for, you know, ways to put that to work, growing the franchise, particularly through the bolt-on acquisitions. Those, I think are more, more about timing on the seller side than anything else. Yeah. You saw us complete several of those, really strategic ones in 2022. Very important, particularly to our California, our critical California and Texas markets. We always have a few of those that we're working on. We're very picky about it. We're very disciplined about it. While, you know, years in which the maybe the future's not as clear, sometimes they get harder. I wouldn't expect a big, you know, a big turn off or turn on with acquisitions, kind of a steady flow like we've seen. So I think there will be some out there. Timing of that will to be seen, but, we'll keep plugging at that and be disciplined about it. Understood. I thank you for taking my questions. Thank you. It appears we have no further questions at this time. I will now turn the program back over to Tom for any additional closing remarks. Thank you for your time this morning. Thank you for interest in Vulcan Materials. We look forward to talking to you throughout the quarter and throughout the year. Please stay safe, and we look forward to seeing you soon. Thank you. Thank you, ladies and gentlemen. This concludes today's conference. You may now disconnect.