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18 • ROCK products • March 2018 www.rockproducts.com IN THE KNOW as storms negatively impacted not only total demand but also freight costs and the mix of work. Fourth quarter Aggregates seg- ment gross profit was $208 million, or $4.52 per ton. These results were lower than the prior year in part due to a 23 percent increase in the cost for diesel fuel, the lingering effects from weather events in the current year's third and fourth quarters and cer- tain expenses related to integrating acquired operations. Distribution costs were higher due to storm-related ship-loading and barge movement inefficiencies, as well as the transition to new ships and increased transportation-related liability accru- als. These items, along with the negative pricing mix noted above, neg- atively impacted segment gross profit by approximately $20 million in com- parison to the prior year. The company closed the acquisi- tion of Aggregates USA on Dec. 29, 2017 for $610 million, net of proceeds from divestitures. This transaction complements and expands Vulcan's service offerings in Georgia, South Caro- lina and Florida with 3 granite quarries and 16 rail distribution yards. The integration is proceeding as planned, although full synergy capture will require at least 18-24 months. For 2018, the company expects the acquired assets to contribute approx- imately 7 million tons of aggregates shipments and $50 million of EBITDA. The company expects the acquisition to be accretive to 2018 earnings. Management expectations for 2018 include: • Same-store aggregates shipments growth of 4 to 6 percent. • Same-store aggregates freight-ad- justed price increase of 3 to 5 percent. • Approximately 7 million tons of aggregates shipments from Aggregates USA operations. • High single-digit gross profit growth in Asphalt, Concrete and Calcium, collectively. • An effective tax rate of approximately 20 percent due to changes in federal tax law. "The ultimate level and quarterly timing of shipments in 2018," concluded Mr. Hill, "will depend in part on the pace of starts and construction activity for larger, publicly-funded projects. How- ever, we have better visibility than we did one year ago. We expect pricing to improve throughout the year, partly in response to rising diesel costs and other inflationary trends. With a return to approximately 5 percent same-store shipment growth, we anticipate a return to the incremental flow-through rates delivered by the company earlier in the recovery cycle."