“The infrastructure market represents approximately half of our aggregates product line volumes and increased 1.5% for the quarter. We were encouraged by the 91% increase in highway obligations during the quarter compared with the prior-year period. While the rate of improvement will moderate as the fiscal year progresses, we believe this is an early indicator for increased infrastructure construction activity in 2013. We also continue to monitor applications for funding provided by the Transportation Infrastructure Finance and Innovation Act (TIFIA), which provides $1.75 billion of federal credit assistance over the next two years for nationally or regionally significant surface transportation projects. Each dollar of federal funds can provide up to $10 in TIFIA credit assistance and, on an overall basis, TIFIA can leverage $30 billion to $50 billion in new transportation infrastructure investment. Several of our key states, including Texas, North Carolina and Virginia, have applied for TIFIA monies, which are expected to be awarded in early 2013. Construction activity related to TIFIA projects could begin as early as second half 2013, but more likely will have a greater impact on 2014 through 2016 construction activity.
“We continue to see significant state-level programs aimed at increasing funding for infrastructure projects. Recently, the state of Colorado passed a measure potentially increasing annual infrastructure funding by $300 million for the next five years. Texas, Iowa and Florida have also approved programs to provide additional funding for key initiatives. Additionally, the governor of Virginia proposed a transportation funding overhaul that could have provided more than $3 billion for highways, rail and transit systems in the next five years. The plan was approved by the Virginia House of Delegates but was effectively tabled by the State Senate. Not surprisingly, the increase in highway contract awards in Colorado, Virginia and Iowa is significantly outpacing the national average.