- Earnings call transcript Q3 2022

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Operator

Welcome to MasTec's Third Quarter 2022 Earnings Conference Call, initially broadcast on Friday, November 4, 2022.

Let me remind participants that today's call is being recorded. [Operator Instructions] At this time, I'd like to turn the call over to our host, Marc Lewis, MasTec's Vice President of Investor Relations. Marc?

Marc Lewis

Thanks, Elena, and good morning, everyone. quarter third MasTec's to call. Welcome is The harbor Reform to safe pursuant forward-looking following Act statements XXXX. Litigation statement for Securities described the Private made in of the such make and plans trends in we that we future where anticipated certain industries communications regarding MasTec's may are These forward-looking, operate. as the statements results, statements or of undertake statements and events the call, are on to These on conference these knowledge. company's forward-looking based the day does not this expectations the of update expectations initial broadcast company subsequent uncertainties SEC. risks, with our are press releases in Various and detailed assumptions and filings the or Should underlying one or uncertainties results results more materialize incorrect, today's prove implied should of may our these call. of or significantly from risks expressed any actual differ or assumptions in metrics Today's remarks reconciled schedules. and press by supporting release management, yesterday's we'll financial adjusted in be discussing

may found things These our by The remarks announces followed good use Pita, not financial non-GAAP non-GAAP Jose most comparable and to our measure certain call of be minutes. format talk we and today, had in will President review GAAP comments the Executive Mas, XX financial release. by today. We to measures reconciliation A a have important our this and Q&A George to be in addition, CEO; financial In about earnings will be a we opening another financial press quarter we call. of With any us from reconciled and Vice these in measures Jose, CFO. expect the can followed by the lot George. a discussions and call period, last of about

going. to over Jose? Jose, the turn can I'll So get so call we

Jose Mas

I'd I as my reviewing quarter I'd to welcome Call. today. like like offer think Third And to Quarter Marc. for to us serve. into you the my today. Today, on quarterly before results I'll providing stands morning, perspective our joining be the Thanks, as we where for getting details, outlook XXXX thank markets Good MasTec's third MasTec well and

long-term Just of achieving MasTec quarter MasTec's revenue important over $XX ago in XXXX, that Gas a of and XXXX. Oil business to was our XXXX of the of business. our revenue goal pandemic time, with somewhat two out at to Gas us, It's pace laid billion on years seen annual just third outlook generate coming that remember projects plus. impact from would XX% entering the $X short of Oil a on to and for call, we pipeline where Still take demand we had COVID significant and billion unsure

our we Considering markets. to and not footprint Oil dependent but billion provide ability our markets growth our only our the XX% operational ability other and quickly, from expand in needed our to and of was XXXX to outlook on across came to EBITDA strength capitalize the of on non-Oil capabilities $XX Gas Our these were Gas, and seeing businesses those happen profitably.

have effectively on capabilities our the As into space. businesses. of our made acquisitions investing organically, in transformed focused Energy we leader Clean MasTec growing we a Delivery that energy and Power heavily and a result, with resources Communications, heavily Combined and number a growing

significant With addition of IEA, of the Henkels & acquisitions of McCoy positioned ourselves and at that in the INTREN with the we've markets XXXX and have opportunities. recent and forefront growth demand

of goal our ambitious billion ago. $XX XX% $X.X I'd far power. quarter XXXX, in transformation, now two the results revenue potential truly a begin MasTec's XXXX faced earnings long-term billion, accomplishments exceed increase financial like years I key to $XX we this are show believe our to of during number approach the highlight and some to just year-over-year will approach expect that challenges confident billion during revenues While a third quarter. We or exceeding

XX% and XX% up were of mix. significantly revenue revenues for third diversifying segment both the Gas and earnings revenue EBITDA non-Oil our and XX% and of Our operational year-over-year quarter, represented

Our Gas XXX EBITDA basis year-over-year margins, double-digit Power points basis XX%. and improving sequentially. margins points XXX segments Delivery achieved EBITDA exceeded non-Oil both and Communication and

Infrastructure they and and and were summary, did not margins Energy basis at Clean sequentially. record points IEA, finally, year-over-year increased our XXX expectations, below backlog improve points And third to including is EBITDA XXX While second our backlog, levels it the basis quarter and previously sequentially laid since of first the was out. should improvements cadence could I frankly, we have have time not believe perfect quarter done for In we properly XXXX. reflects while quite and better, had the do

we transition. I'd in playing in fourth to continue country's make and take quarter closed also well and the opportunity members Gas perform results, fourth our for our fit improvements segments family. believe importantly, and our key weeks our than IEA we look transaction, welcome to forward are to and like to expect will non-Oil Demand in few time largest strategic I'd Infrastructure the a and MasTec this confident energy highlight MasTec's at excellent Clean in this history. investments and segment. incredibly is team More quarter in ago, very deliver to very our the Embedded I to we MasTec. in long-term a role history, are, our services to significant for revenue solid growth an prospects growth. make deliver in we is our any the I better points The critical that earnings to believe, Energy like high which

delivery power carbon-neutral enhances grow in we First, country presence generation the transformation economy. our our energy is it believe profile continues and the ESG and to to an ongoing what in a market as energy to transitions related both

contractor. routes of are renewable those a union IEA's Second,

markets. had expands renewables transaction our business been union an company, nonunion into this Renewables exclusively While construction MasTec

in allows More us and investments distribution our customers same importantly, union to the we it complementary growing cross-sell presence. to year the service made last with transmission

procurement with and X,XXX gives ability adds labor challenging team a where growing market, market scale so the labor strong to an with IEA an Fourth, in this scarce. led serve roots scale. a serve a emphasis added is by generational Third, on at nearly IEA members In efficiently skilled is market safety. management culture us our to business consistency excellent with family-type team more and deep the in customers a

Inflation are cultures And important investments with and July that's intention in contains support, an fifth, July piece MasTec's MasTec's on opportunities size Act Infrastructure It's and Our acquire yet that And days XX, future just added announced. note This legislation Reduction $XXX was billion IEA the we business XX. We and two nearly combined of announced later, market to opportunities and Civil competitor acquisition on incentives business, serves. creates a great the markets that to enhances significantly bill. will similar number the of improved are growth IEA MasTec's that Infrastructure the with and of margin there The another result Inflation for improvement. directly the believe complementary. strong as Act. with MasTec the of Infrastructure available benefit IEA from scale also growth Reduction and to impact MasTec Civil undergoing of of

some like industry I'd to specifics. Now cover

with finally basis a growth Rural Opportunity the sequentially. see revenue was financials. our finally for margins expect XX% XXX the Digital full segment improvement increase a both start up year-over-year the Communications to in EBITDA XXX It's XG by of to million, and this to in associated was $XXX quarter year XX.X%, grow a Fund the Our good XX%. basis and year-over-year point revenues point over and show improvement infrastructure we impact

in by of AT&T, with customers. growth XX% Comcast, Our strong with with RDOF-funded with XX% was XX% of quarter the XX% and driven growth number increases T-Mobile, with Verizon year-over-year a

Internet and the XG fiber the opportunities, to to requiring also new and demand to expanded fiber be ecosystem usage. ever-increasing Not cell communications the revolution be and built the and cells related must must upgraded new significant demand added addition equipment existing data to meet In and connected, to millions transform only power. to continues micro for towers, of networks small be including

points new they not built, creating of presence maintenance a maintenance require All long-term be will of opportunity. but only service, to need and ongoing significant these

Moving strong. year's up Margins versus $XXX sequentially, last $XXX third points and in basis Revenue our was million million to Delivery Power remains outlook quarter. our were XXX segment.

an transition vehicle usage providing meeting believe challenges have of safety, We transforming significant the in United along on in our connectivity demand to and midst of role the customers helping in are to customers' electric and are the with and our We and the utilities position focus power energy energy able reliability, scale renewable grid. charging hardening, for performance history achieve, States been meet play of a the needs the to of we uniquely developers. us

this for the Infrastructure IEA, included will Revenue segment. results. quarter Backlog and million the in $XXX this panel for third segment demand be will a which challenges levels was not also Clean fourth renewable and with at IEA Despite include faced Commerce segment the XXXX. quarter. be to backlog, quarter IEA investigation, the in incredibly for do partial did in quarter. Results into energy the was we Moving solar fourth Department the although our include not heading our market Energy strong in record added is year

in as XXXX. begin Inflation benefits half Reduction second to the We activity our further impact Act increase the expect to business of

that new us we for very that look has the this in are tremendous solutions both very scale. customers our our of growth. acquisition the been We combination opportunities customers IEA position early cross-selling with received in market forward We well with and of uniquely segment. will providing innings to at by offer us existing dynamic and believe opportunities The a

Moving despite over Revenue Gas Margins million and segment. announced Last years. revenue to solid Oil was largest up three award $XXX Backlog we last in year-over-year versus the $XXX year. significant our remained quarter, our was and million drop. sequentially.

seen year-end. and activity project We to expect significant by have XXXX, materially a and backlog 'XX uptick in 'XX for build

in Mountain expect how recap, completion or To Valley over transformed proud without of in growth and we've transitioned in glimpse of of as I potential the in with segment this years. a MasTec We resilient most the markets a of Pipeline. significant XXXX quarter company. the I'm offers incredibly last significant believe our truly enjoy presence two we our some the economy. growth Today, this a

customers environmental able a for position These a are for these the continued The I I'm have our of now the been it's financial and great-quality bandwidth to and growth ourselves our our to to stewardship, providing lead to to work women turn with George? MasTec over of for committed challenging the performance and a values MasTec by great to people's work. and economy. will their environment our that I'd George of call success. in our men men been women our customers results customers project the because recognized and need review. supporting like great safety, to and communications carbon-neutral and honored our such group. hard are we customers, the We thank of this transition privileged work and helping opportunity take and best for honored at integrity, honesty deliver and to energy traits value. as in we've financial

George Pita

and quarter early good October. Jose, everyone. includes review IEA year, results on our in expectation Today, acquisition Thanks, guidance for and 'XX third provide now for the our operations color completed balance additional of morning, which quarter I'll the partial the financial

the of can will be and press As Marc in found call, Reconciliations our indicated our adjusted at and non-GAAP of earnings EBITDA. beginning the financial include or results filings. release, measures discussion and our guidance SEC details adjusted website of our non-GAAP

line and EBITDA quarter slight with with in revenue results guidance $X.X million. our in with billion adjusted $XXX beat generally Third at expectation, were at a

driven share interest of adjusted to balance income resulting tax in to per by was higher our were in compared lower partially share expectation from and earnings diluted offset with quarter $X.XX this $X.XX about $X.XX tax adjusted per expense costs. true-ups, EBITDA, by quarter the the due beat per share, Third

XXX point Third quarter adjusted rate quarter showed of XX% revenue. levels over second and a consolidated basis improvement approached EBITDA margin

year-over-year million Oil $XXX was by Gas level summary, third rate performance of non-Oil growth driven this quarter $XXX segment performance million an Importantly, performance strong EBITDA decline revenue. and year-over-year approximate adjusted of and Gas revenue. segment achieved revenue was XX.X% despite In margin in with and approximately of

driven the operations. we primarily MasTec's by segment begins future, improve improved demonstrate in expanded these of this and earnings the feel and Gas on potential profile non-Oil performance future While to further results can we

million in X% Energy. our revenue operations in segment $XXX growth Energy $XX and and Clean approximately and non-Oil or XX% million quarter Infrastructure our segment $XXX or Delivery million or approximately Third or XX% Communications segment was Clean driven by Gas in our in approximately Power segment,

record expect third to in areas belief levels these revenue for and continue Gas by is this in the segments. and future backlog We non-Oil our supported strong growth quarter all

IEA During we acquisition acquisition-related and completed October. efforts the third the completed & integration quarter, Henkels for in substantially McCoy our incurred for the expenses initial acquisition

working the cash and requirements million unchanged. was despite in from associated generated level flow increase net our capital During we third over $XXX revenue with of debt operations the quarter, a $XXX sequential million,

expect of as project fourth to investment-grade from sheet, during We investments We and utilize and our during that operations typically significantly working moderated operations, combination balance continue flow quarter timing will maintaining strong levels reduce the capital debt in to remain seasonality committed the expect fourth improved XXXX metrics legacy of rating cash quarter. a lower net levels leverage and strategic expenditures adjusted EBITDA of and capital levels improve and performance supportive of the XXXX XXXX. our strong overall

we third has quarter approximately the million well impacted opportunities the strongly fourth growth challenges, IEA operating of expansion. quarter at its this are in third long-term encouraged while $XXX revenue and In quarter, We and margin that end and with had not have ample both for are believe the level results liquidity we summary, our acquisition. XXXX positioned of by was

Now regarding our I expectations. segment and detail cover results some will

million, to of accelerate the when segment Communications XG deployment growth telecommunications reflecting enhancement. compared fiber XX% and revenue quarter Third to second same spectrum partners was last quarter, and the network expanded wireless/wireline a X% transformational for when as period services year $XXX the increase compared sequential

we quarter quarter point and from exceed adjusted leverage continued that $XXX approximating Communications revenue markets overhead segment revenue will XXX slightly Communications margin EBITDA new levels margin rate as adjusted year's expectation equates will and range. XX.X%, with increased rate to basis wireline operations This EBITDA Based rate third to quarter. low to transition from annual and XXXX billion levels the year-end million Communications fourth moderate margin mode. results RDOF mid-XX% EBITDA from revenue wireless primarily quarter to adjusted over to mode fourth segment normal levels, XXXX was quarter on second Third wireline startup be a improved due last a approximate segment in expect $X.X annual seasonality, improvement

XXXX, that do you in you expectation segment. strong believe math, into includes which note the us near-term trends, and significant giving XXXX we half this opportunity will accelerating second If our growth continue annual XXXX will

to was Third million, quarter revenue Clean X% segment when increase same last year. a the period $XXX Energy compared

points was margin from ago adjusted quarter compared year basis X.X% XXX up the rate Third sequential revenue, a quarter. EBITDA point and of improvement basis XXX to a second

segment by adjusted second quarter EBITDA performance projects performance margin this discussed impacted industrial still call. While negatively rate improved, the third quarter in was select during

$X.X estimate XXXX we revenue rate. -- equates at performance revenue this with adjusted in adjusted billion fourth EBITDA approach of quarter billion Energy rate adjusted This segment single-digit we to Energy mid-X% an include million forward add margin Clean represents rate margin approximately Energy look Clean last operations results, segment years. EBITDA approximately of XXXX As mid-single-digit margin the in fourth level, annual we'll quarter of expect IEA, Energy revenue fourth $X.X range. highest exceeds and at the quarter to segment year's with annual Clean segment margin that adjusted quarter quarterly expectation partial will expectation rate mid-to-high over IEA segment which a EBITDA EBITDA a Clean two in $XXX we an Inclusive

enacted project to EBITDA performance for an expect $X annual to single-digit range. segment in accelerate renewable As in XXXX we Inflation energy revenue levels in civil funding stated, scale, solar expected come. from lower improved disruptions our IEA of supply customers and support approximate transition Accordingly, have the activity Reduction power and combination margin the and recently high chain coupled and this resources, can that governmental rate capacity are increased levels we billion the previously adjusted mid for of to Act, MasTec of panel with years with

quarter increase $XXX quarter. the same when segment an second was period revenue compared last growth to compared sequential million, Power Delivery Third and when X% XX% year a the to

During last point second point Adjusted improvement XXX efforts was integration McCoy basis the XX.X% acquisition. Henkels over quarter we quarter, a basis margin for improvement from & completed a and substantially quarter. EBITDA third sequentially XXX the revenue, of the year's rate

continue performance project had Within and and operations start-up segment, closeout costs. project well, Delivery perform of gas our for the legacy distribution nonrecurrence second transmission driven the delays our third electrical and services by improvement to the quarter sequential quarter in strong we Power

Delivery single-digit $XXX EBITDA Looking billion, will EBITDA Power revenue expect high range. quarter the with in range. Delivery forward, our an This margin margin approximately mid-X% approximate in fourth annual segment adjusted rate adjusted to of segment revenue expectation we the an million with rate equates $X.X XXXX Power

Oil was of quarter Gas rate and segment Third $XXX margin adjusted XX.X% and revenue million, revenue. was EBITDA

and offset as when will that in annual third and significant to non-Oil operations. to represented a quarter. Gas and by approximately fourth and decline year XX% impacts We that with third and declined slow and levels adjusted billion the compared segment overhead EBITDA adjusted mid-to-high EBITDA a Oil largely quarter rate the an quarter margin revenue in segment of segment EBITDA adjusted has absorption lower As from expected, quarter last levels this revenue been Gas Gas XXXX during quarterly revenue range. seasonally rate $X.X view margin This Oil equates anticipate

construction As growth and This and to permitting due Oil XXXX in bidding Jose will sizable visibility have of activities show MVP that higher a be pipeline, and actions. XXXX. not mentioned, continues expectation for dependent to and levels judicial we Gas pipeline into on the for is services delayed segment believe strong restart the awards of which

basis similar net points $XX were quarter. XXX fourth expect the in third revenue, cost Third a cost of quarter level billion approximately Corporate consolidated quarter segment or we adjusted and

total represented customer more Based the business of than quarter, diversification revenue XX% our the Turning to our strategic on our of no revenue. third mix. during stream,

of year, the period to a primarily utility master recurring from And this repeatable derived services service total profile. our is increasing XX% 'XX significant agreements same revenue Third the quarter greatly last our nature compared increase. reached of XX% revenue spend from revenue derived for

September backlog a be on X, billion thus, record of we third billion approximately quarter $XX.X noted amounts and when $XXX closed included backlog compared no of As It million IEA in year. record total to are approximately period and October up levels. that had should the last same 'XX, the up acquisition approximately IEA XX, sequentially $X.X we our

That contracts occurring large backlog Importantly, that non-Oil represented across contract market third XXXX Gas be for and our each in September operations. quarter demonstrating single can segments, come only is a we've burn the revenue new as contract all XX, indicated end awards levels shift as record backlog time quarter backlog in years, of lumpy a and point actual off signings. large into at result said, as

our discuss and working capital cash will usage flow, I Now capital liquidity, investments.

During quarter, flow associated the increase operations $XXX unchanged. the we was despite with revenue and third from sequential in net requirements million $XXX working generated level over the cash million, capital of debt our

leverage adjusted committed the fourth investments operations low operations $X.X lower in from improved of maintaining continued expense debt combination the estimate. as debt to significantly the our issued updated interest Including million an balance from strong equates and acquisition combination utilize investment-grade of quarter We rating quarter and approximate approximately to remain net metrics. fourth and year-end from flow strategic EBITDA expect net sheet, the our expenditures working a improve seasonality typically billion. assumed and moderated rates, range. the $X quarter fourth supportive acquisition, IEA and levels during reduce performance and cash strong flow have Based to debt in timing operations debt levels and during capital levels higher overall mid of of expectation will billion expect floating XXXX We the to levels expect we interest continue XXXX we of on project $XXX the cash This legacy our IEA will of levels XXXX annual capital. that

of to IEA quarter, We the capital DSOs the not the With have level XX quarter, and compared $XXX acquisition. quarter. end regard second third was were approximately ample working of million third to the our at liquidity days during XX the days profile at impacted fourth of end the by quarter this

XXXX mid-XXs range. look will DSOs we forward, to the improve that As slightly we year-end anticipate

during purchases capital equipment. chain call, first delivery we half constrained of ensure second discussed our the As accelerated we quarter XXXX supply earnings expenditure during of as

a with quarter, by committed quarter expenditure cash moderated of on We moderated capital the to continuation million our focus long-term During fourth a we as rating. investment-grade gross third summary, CapEx, of offset capital deleveraging. $XX liquidity level which during continue program the in CapEx we we only with fully was structure and expenditures be disposals. ample In our is capital solid anticipate our to

impact communicated maintained credit have acquisition that are profile leverage our who during ratios, leverage plan will mindful near-term and investment-grade our with agencies rating. have We XXXX IEA to the rating normalize we post-transaction our

quarter expectation of of share net $X.XX. approximately $X.X for approximating with per $XXX and revenue, of income of adjusted guidance. $XXX now IEA adjusted results turn the Moving adjusted to per adjusted diluted to XXXX EBITDA prepared the an annual billion adjusted diluted million we'll revenue Operator? share. equates operator the concludes with of quarter This expect to our our call recently revenue, updated with or our earnings at of Inclusive billion back XXXX acquisition, $X.X fourth remarks, partial X.X% million the Q&A. in of $X This million we $XXX of EBITDA earnings with

Operator

our Robert Baird. W. And question comes Hauke Instructions] [Operator first with Justin from

Justin Hauke

contribution on And earnings the and results. see coming Gas nice non-Oil to through the

So I guess questions. had I a

that and it that put from would I about have redeemed now getting questions -- structure thinking the bondholders. I fully Just maybe would you that interest next of debt the be, not guess of tranches the IEA first, year. two two debt kind the in on with for rate

to of kind expectation a refinance And next expense guess able rate assuming have run year baked Just And there is that question for in? you're is the then those? fully costs million what that XQ, to interest second the $XX next of I you that of carry in is year? about being good any do think to quarterly

George Pita

part first. I'll George. second your Thanks, that. I'll take Justin. is This take

I talked of that I about $XX delever we in rate, run XXXX. this. would the to we expect terms say In mean million

$XX would said, time I would as So think terms we during That XXXX. the would more and expect how course interest hard expectation an to delever mark of rates of change. is a it's over million into XXXX. high of in predict to

modeling -- So forward. factors the combination those of are consider going of factors to two terms in

look issue amounts the trigger did of capital basis. that on year all MasTec And Per and at structure floating that and puts with at it That's place. assumed investment at constantly in here a today If exchange to XX% bonds the it we'll change might rate of pricing. ago point, capital result forward. X. the of a been tranches bonds, these existing now remaining have our QX, million end our relative The more our not in additions the with point, capital to our I rate are $XXX therefore, transaction the October on be million the at converted those obviously, coupon mean term IEA. we ultimate bonds, And the of us close of terms And the -- there we're that's we this monitoring this of IEA option. are future did about you what keep as of terms the even offer, grade. $XXX rated we a have structure, Both as capital that's those best rate as at and into to loans mean we $XX said, structure mix of a our moved. is have bonds. new consistent I of than going notes prepayable IEA at did IEA out intend structure costing bonds million them we relative we looking have is And debt comparable to are put that's a what our constantly indenture, control flexibility remains

Justin Hauke

Okay.

And outlook the And curious second for have billion $X.XX was the in that that at guess, of given was That's I EBITDA least gave is framework just had XXXX. question if outlook. you just I unchanged. sounds there's you change an Okay. It or been guys helpful. guess like guidance, a I I any revenue previously,

Jose Mas

Nothing has really changed.

for $XX we in next revenue So about billion talked year.

more very is I that's clear. still the think Obviously, more market I becoming attainable. it's of early. the of that profile that. We laid that, and margin think out supportive

because I think $X.X while billion, I of 'XX guidance there's a do, I think range, think and $X.XXX we've laid out work not somewhere to billion that's to we're that lot providing for reasonable. in

Operator

Alex in question Riley. from comes Rygiel Next B.

Alex Rygiel

Nice quarter here.

Jose Mas

Thank you.

Alex Rygiel

Jose. A of couple quick questions.

speaking, yet business? a a there there's First, out do broadly So obviously, slowdown that lot concerns and in front that of affect with are marketplace? activities activities that do how of is be macro understanding other the may funding energy economic some how in us, think business mile, kind the stimulus you the by your of your just of your there of affected out you an last driving but government are recession clean think to mild going

Jose Mas

government is XG think in is an -- you here, Fiber funding bandwidth in telecom, if seen pushed. And XG speed. I that an into think think level I've we RDOF. actually my portfolio. career incredibly first, is have laid no activity and highest But So probably at significantly about expanding out 'XX resilient we for as need the the and some being and ever beyond. look of you about we're into There's much question it. gone has I so

I there's -- the than work can we more there think there's that truth currently do. is

the to about about I to you renewables, utilities a transmission about that's so I across to electric of I aggressively usage, vehicle into the and Infrastructure the about think going public to we're and about you our to When market where country, as energy exist how about business, that When is you be think trying think conversion I many gas been lines fast that they've Civil approved of unaffected. impacted. think as services not moving When won't grid that impacted. unaffected. we transitionary the that's think and think different the can. the been our going to that's with challenges it, renewables, think When that's unaffected. be So hardening that's commodity grow the meeting When think you connect be by unaffected. you the being that's and built needs today they're prices think and you relative fuel bill When think pipelines

housing is will the very So us it would of opposite, small you affected. And a piece I see a business inflationary equate that somewhat decline like economy be there's of even pressures because could might to in our the that Alex, that will deflate mildly our which very, reality help argue in portfolio we something actually today. the is the probably that

think for I business might that perspective. our could resilient. revenue outlook from that actually cost us happen help anything incredibly And a So is the

Alex Rygiel

And you've the synergies, acquisition, can but either both of it a talk for sort the or for couple only of of secondly, quality cost? you backlog revenue owned discovered the weeks, that about you've IEA on opportunity and

Jose Mas

Sure.

So again, we're excited. super

The I for think the services is the robust. the incredibly demand off market is charts.

seeing business did. based backlog I backlog growth a coming differently going both than see customers. tremendous conversations on just awards MasTec's we little legacy IEA quarters, the have from IEA's think bit in you're and we're to report the and did

there $X will So somewhere think quarter as think additions the to considerable quarter. is be the to the in fourth the we added going that. we And IEA in mount, billion backlog range are be

market fuels course over again, couple going carbon thinking happens hydrogen it's resilient very So of is that of to be even wind, the lot what active. that whether even you sequestration, the about with a incredibly we're these it's of next I years regardless about, of solar, think think or economy. the transitionary And

Operator

Kaplowitz Andy from in comes question next Our Citigroup.

Andy Kaplowitz

chain know had talked about very I that has step-up you a been XX.X%. I see to difficult. nice in Communications margins supply Jose, you

could the Were people? Was be your of there went what maybe better quarter? little. Any been able this about more down have renegotiate contracts? helpful. of your So utilization any right significant you fuel talk in coming you costs to color a would Maybe

Jose Mas

felt the growing Andy, guided is that, We've a see where the nothing And seen it's the to relative we there's they'll ability been XX%, we you and us bit just Well, once good, to While first, over finally little in QX, that expected because We've quarter. actually and it than there's be I'd term, we're right? results right? moderate the can was revenue is comfortable. seasonality I'd are improved, right performance. reality been run the solid board, we to right? our it fantastic. in performance a just hit Again, also long people thought once volumes to special could big there in it, in had and that, say There in on came say, number our it, the deliver individual a good out of fully was no that, expected concern areas growth rate, we I that timing Once are significant the pressure step-up. we that, achieve got on we think throughout. the solid the get but way QX business. we've about margins of about more any pickups, we If those utilized, we know quarter

Andy Kaplowitz

business? us improvement, that is IEA you? bit drag mentioned seeing project thinking in in then to about the Clean Energy much And markets what mid-to-high are in segment? for you give are with any, more Or how QX? Energy behind getting help you And a solar you industrial EBITDA can that's your utilization is if QX. problem your single-digit little Clean in Could you talk the from coming margin in the You

Jose Mas

Yes, sure.

So we talked some QX in in the some with we still industrial had drag QX. of about projects

but million it, a When out 'XX $XXX this I for them of $XX of it point. better million we and million about we to conservative [X.XX] of they it for few did think conservative in QX that to be a only weaker in $XXX view. than Again, been think that we've EBITDA. for little longer-term to When reported in about it's to we anything, We to lot I've quarter quarter weeks, It's to think we a about industry, how of thinking million can Quite talked anticipated we a think a owned kind $XX at think way at -- outlook job was if bit panel we is 'XX. solar be can them, alluded thinking better of -- frankly, business and reasons third same X in was the income much we're make IEA number. think the delivered and it I George improve build a the points see that's I that to for about renewable issues. ultimately the When about -- Their originally the much QX. net And a they in that for going unchanged. conservative, prepared probably laid the QX. last that beyond, investigation IEA our remarks. synergies was his QX out that the about

has of services reaction for Again, really the there amount incredible customers' been an Our that is we fantastic. offer. to acquisition demand the

to be levels. going the as acquisition projects, each to starts significant stack we other of stop, and management utilization find sure about through any any the the we 'XX. Make on the right Our right that's or don't the job have the projects going right is project process it throughout be and that pick and customers, to holes think

at going to that going getting a of great be job do just do we're confident a we're I'm we're very great think started. to to but that, I and and things there, optimistic able lot very,

of able do talk still we'll work next on lot some hopefully a to call, we more a a expectations that but we as lot into our year-end call, going So there. awards lot our highlight with on to of new be and got about 'XX,

Operator

Goldman of from Sachs. Mehta Next Neil question is

Neil Mehta

here. on congrats Yes. quarter And a good

to in do you're these pricing are The way push diesel thinking -- through costs first managing exist to how you some labor, sufficiently you feel just those? built able inflationary question guys pressures Are market working of about about this and like the ranging into that the 'XX? from through you is

Jose Mas

things, quarter versus think Yes, call, difference lot 'XX. the We couple it it huge in talked us about a on where Obviously, Neil, second half a QX. a for our of first in far I of was 'XX fuel was as back right? as even

of that see of year. obviously some all fuel did in in we the it We balance that correctly modeled and the I quarter, third the time. think costs flows through the improvements -- we ebbs some saw

points on our think I there's it for eye something little keep think wage can it continue for labor inflationary significant We pool services vocal bit, moderated open been the about pressures counteract very housing but seen. from inflationary up that off labor. and think will, it's cool that historically the an of the think a inflationary wage probably little It's a exists. seen got we the of bit. I earlier we've will some again, that still to we hopefully demand so a on. much it. We've To it that as And just a does pressures will draw we've we market little the bit, pressures some will of that

is at we're here got our the hard place we're that important working Obviously, in all 'XX. think opportunities. member MasTec we've do process people. have Team So things we some good acquisition most we it. of we about think a about And one as because tremendous at we

to component that. We expect our of revenue going lot is markets, of a growth of further key all labor be across a and

In customers of contracts we do of we've length a due and in continue this from seeing we're being with our we've lot that and come dates it that we've annual question And have due cases, We've through of expected. Those no to there's at XXXX. able talked a as in early lot process pressures. expect our relief since We've on discussions on anniversary year. the about in escalators. gotten to customers. many negotiation, So had inflationary seen

that again, it's you the first and were We see caused on of we're about the I some third it impacted execution. And So managing half in our of the we to that intent that manage it. how something us think quarter, vocal very the were in of issues results it year. we well. going the think obviously We think

Neil Mehta

was this And upside? do where significant to the then recognition? very the it quickest quarter. you backlog seeing Where think And translates are you backlog revenue surprised into

Jose Mas

a that time actually backlog our it increases. our the great that impacted It's high pipeline that at relatively hard prepared first the because it's second awards quarter to rare number. level. quarter said third really remarks, it's that in third And it's question. revenue XXXX quarter it's but -- had large normally book-to-bill No, such our and we same a is And have since we've historically, to

was So backlog of particular across every was of lot the right? beauty book-to-bill. of strength, It It a broad-based. was print it from segment, any really come didn't project, lot this a

that of proud super we're accomplishment. So

think we're all across going segments. to our I see it of

that XXXX we've each to for I think out growth it's segment. very laid dialogue supportive the relative in of the

been strength and me be Act think previous means. than a in could pretty think our over that going time, to market lot of it's is long massive we business pretty what me expecting were quarters we've that seen and the time. we upside such about a we're Gas in potentially in backlog probably we've you a seeing Reduction down our to broad-based. are and what But impact If surprise have on it's the excited Inflation 'XX, Obviously, because ask to more Oil it most for

so 'XX. and written, we accomplish. we frankly, think in we being still But really expect direction, that things are of trending from rules are fantastic all the what second until the excited of we're Some half don't quite significant to see a impact can about

Operator

Credit Cook from Suisse. of is question Next Jamie

Jamie Cook

the a first addition But do portfolio of Jose, Congratulations McCoy on debt the my exit obviously, done with some George, -- given you you've a of can in a have community, try and question, M&A. to type first how I now is need? then nice as portfolio think & quarter. just right transitioned so we can't the we Henkels second And lot you a more the XXXX to generate guess, we've just you portfolio free as the opportunities of basis? think the the you normalized investment cash is this think flow on else low-teens my we're rightsized about pitching a is margins this that question, as conversion you on consistent how basis, you anything think medium question. term, with That's we over of see growth that there think portfolio for sort and about this ahead? company, the do the Or And IEA.

Jose Mas

Sure, Jamie.

profile about going think we improve. right? As to obviously, continue things, couple the future, to of the a So is margin

'XX. and think We think We business and get margins time high to double-digit a EBITDA of Infrastructure teen-type going to is in profile One of margins. you our -- single to drive -- midterm, EBITDA margins, be have challenges we that, total the obviously achieving can we'll margin business, that's think achieve obviously, company won't That our guidance think especially our low We not it's up. our for as near digits. will our more about it to Energy business. Clean double

strength 'XX that's for no in where and sure. achievable. depending today. there's can only that's I to the guidance come a we're happens I market portfolio, Relative the take And what improve my that, But on we over position portfolio, Our think going great for think the mind doubt the of will that, lower than in in to time. to

we've think on. us markets I so many in execute of front growth that got got we've to

it's think We to that a that we we're of couple position ever we're think said, be is we're are than going we're organically, And what and the to than think doing that advantage about levels they've on the just companies of super over levered, I looking in a -- we'll have And ever of competitive relative what excited in a markets years. course put We serve. higher our holds. are we'll going lot always our With these think lot. see of next the opportunities happens debt, for better of I growth But it's again, better we the think been. that pressure capable opportunities. to in portfolio been. future a

George Pita

our has into oil generally we've just historically is think, the as on more businesses to in, away better business we flow, the a as down intensity distribution lessened business as has capital-intensive. capital as larger we've that -- which Jamie, flow move as cash the most pipelines, we our this moves gas those business because relative time, we've from business, transitioned way being And less a renewables move are and a profile operate in capital-intensive centered and over free free into profile before, been I that the electric transition we to said cash moved

third moderate to our here be would in forward. I do that expenditures expectation capital obviously, XXXX. we So quarter, and our mean, the into so going we'll started

sure I trying But accelerated able supply make to have the first we that secure were of half some to because we were the some that of in deliveries did transition certainly been CapEx go spend and that. things capital think or profile entity a as chain-constrained we profile year through this profile our we I intensity. is improved working a similar have an as we stronger an free cash with flow because think capital

Operator

from Steven Next UBS. with Fisher is question

Steven Fisher

just QX give more could and the segment you Clean Energy in into on a if wonder I then in little color QX. buildup the margin

including maybe the Just Civil that of you that segment assume piece more see low but next the IEA, QX single be going we breakeven similar piece and kind do digits? into year? Renewables, should a Industrials within then like trending more at the I and the How levels, of in guess, are buildup or to

Jose Mas

Sure.

think So that's think performing is do our accurate, Civil I that I business well. right?

profile that highest time, be I our will of margin will markets think renewables over the group. outpace,

will in think Civil better and be 'XX have I project than that the business profile it levels it was probably the at similar 'XX, based we that Industrial business. expect to in significantly on our least at to will be

Renewables in the business the and a improvement think that tighter do in outperform pieces 'XX, 'XX. business Industrial think will to segment, the fourth expect won't see the little that it three of do fourth Industrial bit but margins do the I Civil of So -- think quarter we be quarter. in about if we'll we the of I

Steven Fisher

just And be side panel half what first in, this the of knowledge a call, how in I is your earlier. of helpful. visibility? to XXXX. things? kind projects if the you apologize accessibility, very good say, through of You talk have renewables is I That's solar And the bit -- of their but slotting have covered you customers? of availability going you for Would can Okay. the little two missed then the about part let's

Jose Mas

Sure.

which confident probably significant of I delivering XX%, plus be we and can portion A we of Renewables achieve. that Infrastructure, that our above XX% -- is $X Clean for think XXXX, we've So think highly our or we've Energy Renewables, at we're billion will talked about business.

frankly, waiting installations starting of solar months. be panel we not to lot we're of panels slotting because the And a what think we've I of plants, about solar our But solar this been good people the so to don't the me are of need projects that October long -- solar at their they're talking awarded, work solar they're what's a time, to verbally depending and really quite the we'll on which if is of place really most, new when that that where That could what's the on they we've without in got at for starting we lot they're when for -- are year. identified, requiring panels. they're be or we'll and in for where that do solar feel been lot to some have incredible in newer look all, those nine projects on A solar, that move ability backlog, currently out a panels chasing, an they'll today we believe ready. projects end start previous build leads six, better. the working

your in we the that's have course to do future XXXX. hyper-focused rates where having it's highest got how can, We're early. on gaps And But schedule, understanding more on more We of I level project in, of and basis and what are that a laying where lot hyper-focused over the about month have cycle. we're a quarter-by-quarter is making months updates couple on lot as where don't good out out of the resource clarity we'll lay you think work on do possibly to utilization it. a can. each depends as we it put we'll you spending that our that's next lays We've for year So going you We're feel lays Obviously, as how that out, a building you can in your detail calls. efficient it's out. and make resources, of to our lot it sure 'XX. what obviously, for how exactly the give

Operator

Davidson. Thielman from of D.A. question Next is Brent

Brent Thielman

to Can deals? INTREN just sort embedded margin guess Jose, integration doing in sort sort internal all up then expenses of Great. quarter. the work about of, that from how And quite doing and that you're a just acquisition H&M follow-up -- of the all and Power internally you're in potential guess, Power last in Delivery talk you the view informs the of what's integration going process were Delivery I I your in that? What forward? segment of bit

George Pita

George. that. Delivery quarter. finished We've Power is completed integration I of take up why I'll the substantially The point, made really this number Henkels. indicated of the was to kind that's this Brent, we

in been in overheads, of a -- have process is see you in of we've there lot programs, insurance finalization in that changes So of our cost what of different the the lot that a made the terms indirect being things of changing evaluated.

we've completed that. So

will move forward more a to quarter. should that as Delivery So as number XXXX And our benefits have realizing certainly we as that view the we Power in we fourth drop significantly in in here we margin start to program segment continue improve grow. and continue the

for So Henkels. of et fees, quarter the costs, were those improvements We're lot costs adviser that's segment to cetera. that relative started fees, some but right, We the where we're terms of to in And in we anticipate incur integration to forward. here have happy completed IEA, bridge headed. a going acquisition third in investment et cetera,

there. more a acquisition, some more Henkels in fourth that quarter bit have -- had than evaluate the the lift different we'll it's changes. we'll structural But from So which of some of a was little and

Jose Mas

but has and in on growth the and think deal. I of the business we than I hopefully going today the upside think think our achieve we Brent, strength can help business. growth really only them previously acquisition better, that that, of originally the margins, well. that, about will the lot gone ability that We're in your time a terms more profile not think what I expected into achieved of To and talked we've we second optimistic to business that we make about outpace the integration question at of of We've the the were

Brent Thielman

Yes, in business. exciting times

Operator

Next from Dilts is Noelle Stifel. question at

Noelle Dilts

sort How is fair given about this the George. at just moment? of is that mitigate Would amount the of capital the interest more rates increases? rate a curious structure, additional about I at thinking think how Just higher XX% geared risk are rate I for debt. floating But swaps you George, or think moment. of about you thinking about think to potential that just you're the caps

George Pita

we're the IEA going way Look, constantly that The post Yes. is, level to the We acquisition. we now evaluating obviously, in a it. financing reality have right elevated a more us maximize on for forward. flexibility did

So prepayable and rate, floating are they but term at loans we time. they're have also and whatnot,

out conditions still we might so we rate a it in and think we have capital don't of the structure the yet of expensive mix more is than TBD, on debt is, right, than have market where our that's current we're is do in point structure. And the changing cheaper to what while that depending to the know capital flexibility So evaluate think the year right? also moving floating guess constantly that when a terms at whether rate should the what on we debt, I'd case. put be fixed it's be most by and We was is ago, obviously certainly I We structure. looking where to market way cases. able what the right answer are, depending

in question environment. on one will as based so certainly evaluating it's do a that fair and this that, we're So constantly

Noelle Dilts

in results I quarter reiterated what any on this But third 'XX, the performed Okay. sort some question. extent know any with your for overall you you how Great. you're would detail can is And be with company's I of more additional provide helpful. -- IEA for to but think of the sort in expecting then there addressed expectations detail XXXX? any you us and there Andy's in EBITDA

Jose Mas

Yes.

be the mean, whatever was out quarter below public expectations, some had I they Noelle, So expectations honest. -- third their to there, original

somewhat of trailing 'XX than us because on time it's We haven't dynamics. spent enormous understanding the other for indifferent the deal amount an

conservative I a to think our position we're around them. get very We've their forecast. arms with again QX to starting relative taken

they're better own we today, now, it's the I helping think do we're here be we've than laid definitely so numbers so but more out to what going -- to cautious.

the thought two quite not that achievable frankly. say did Reduction The it the days prospects time, at time, that view XXXX We for again, improving. it announced. before earnings company was long out announced. enhances we Our an is of And And the Inflation Reduction a in we I'll Act including got 'XX. laid significantly this unchanged, mind, deal got capability on if in Inflation my long,

grow work So and what better than was costs of and original 'XX, be but do. to I we've anticipation in lot our I'm that do very got more to the And to opportunities be to think combined take we'll there's efficient bullish of able lots faster. between a out entity to

bake we can't that in something that's today. So

I'm be long-term incredibly working capabilities. bullish that, that's terms of but And We their to have what execute on. we'll to in

as about The second challenging industry, half 'XX, of has the talked was in for everybody Renewables.

in You numbers. see our it

it You quarter, any them, I people's it's it's good the fourth it the for relative think it expect and We're right? market. they We're have IEA, was beat doesn't conservative hoping -- to change other long-term outlook numbers. fourth them quarter to with but And their don't in but still numbers. see different for a business, good we our a

Operator

Next from Davis. Adam of Thalhimer is question Thompson

Adam Thalhimer

you said and XXXX And I the so between about can to George just morning. of flesh or traditional a little projects like bit? -- at much -- were Gas, Jose, said opportunities the you the XXXX. little or of that sizable I'd see curious something then, Oil you kind if kind just stock on bit be have or give you growth oil and next a that's and if Good the there? work You talked out year? looking Great. this think up gas of Jose, expanded

Jose Mas

Yes.

things. So a couple of

say than laid $X the billion $X.X a out we So 'XX right? I'd $X.X outlook business. deliver billion originally to of lot this We're longer-term to softer closer going billion is to year. we in a First, anticipated,

pipelines in we're strength right? all billion on with that significant it's when going number think we're $X be without it's gets said, to achievable I Mountain we Despite high not $X.X we think a say growth, Pipeline we bigger. count it feel is when is going but of we to going are There's comments there's planned think to that and we today, likelihood dramatically the billion built, in the With Valley pipeline. that outsized think stages. we gas made about comfortable a forward significant Obviously, being 'XX, Pipeline, 'XX, the built the seeing Valley it. across move Valley that Mountain all still markets, that and probably Mountain to different

Some imminent. are very

more 'XX are a them. to being projects. being lot is lot 'XX, relative made going projects, of is Pipe but bought, are Some those into work a of commitments

going And line. to the they're carbon been happen. good really talking then sequestration obviously, we've feel about we So

talking those closer to been. We they've are You've hydrogen. about fruition projects think than been

generally general, and surprising the next more Oil few short just about years, two the -- coming I business, and that's were a good be hopefully, not in to in defined lot a going somewhat Gas, I really ago. we years I run right, talking Pipeline for we'll think vis-a-vis have our but is whether where think pipeline again, think quarters. just those And we'll

Operator

of Markets. our KeyBanc Eastman take Capital question last we'll And from Sean

Sean Eastman

update here. Nice

upside relative Jose, So year. out thinking we and if segment alluded next being the have that upside discussion look kind just kind of expectation the this here? preliminary kind wondered a could kind for you I of major preliminary or bit to Oil downside risk in of core driver one Gas risk round of to to how in place drivers the of we about to terms the you're factors little the

Jose Mas

Yes.

Gas truth was been be the the actually on look an what's I -- from of we've me is it's happening negative base, think commentary space balance our I more Let energy and so you me better, expectation surprising. But think what I Oil and right? -- long just getting around a clear, right? my at that's that when I unprecedented. business, most the that time surprised that there is in think for somewhat

more Oil bullish Delivery Clean term. and So Gas. Oil I I'm more by I'm and Power than long and in am Energy on surprised Gas

I incredibly in want middle the us many but them, is the -- we're and many, clear time growth. seeing changing, today want because So my I truth of everything years to to what first lifetime, on energy industry I that don't think that in it's going of in the we're position be that, well for the with and rank to is it's for

that have there. But minds, have, to all nice in it's Communications. portfolio bullish upside, our unbelievably a So including full businesses tremendous of

we've businesses are to had doing manage going and businesses. to foreseeable ups where to think upside. we're I I had So future, And in of well while have downs going enter are some and think different our cycles tremendous others the are a through all We've here struggling. period businesses for

laid if to As that better. we out achieve the way that, we've going think 'XX, about I'm highly we're confident not

in. risks right? to with think we variations do revenue inflationary risks, And think on very market is is all I what's I and experience. I got to different the about But on we're the probably an so -- level because do that we spending the we think have see term passing eye again, pressure on that that one those And costs happening macro in become the reduce pressures. cost concerned we ultimately can industries got keep we to relative that because short keep obviously of how what margins. strong, eye obviously, We've an inflationary involved think change dictates the government I'm the less little I in while the we've of can

and customers, do them, we the how on. and members, So train safe with we the that's our do on our team we what make are how in along efficient, that workers most people more efficiently new pass sure industry, focused do bring we're how

incredibly at So point. XXXX about this I'm bullish actually

Sean Eastman

in rolled got when kind maybe we if rewind here, folks a that reporting of be back first get ahead bit year. earnings? some year. of Okay, quarter early And in season, -- out place this this guidance, as little of -- terms that how quarter in it. it's the ahead for just guys but terms XQ kind for 'XX to was of just that And starting half I get could we I it numbers the realize point the of those the could first thought of year half, of jarring past pronounced you I sort fourth The

George Pita

color, fair the mean Yes, first think directional I I typically quarter. slow is give it's right? we Sean, very to can that obviously, say quarter a

roughly -- bit that seasonality a So in similar a last is cadence, but cadence better maybe year, probably of than speaking, little I think cards. kind generally the

the the we rate, I a we'll IEA. at comes Communications slower spend of more first of addition same different what obviously components, continuation maybe see think the of half Clean when be look terms because we in first quarter, certainly different better see think generally right? higher 'XX rate year. of I how should the some last you together. general Energy now than Energy saw cadence in should for the of in has but Clean I It's timing But us a think a at with

us, think give factors But today. we're when to the typically through are 'XX, is consider, think we necessarily go of I as significant color we'll the when those and -- just in and don't start obviously guidance some we slow what I given we a not know components. it's -- for that think a there's So change more first quarter

Jose Mas

in comps add really especially 'XX, really was would to I which first because of our the things and important. I Oil historically a When big. Gas that, couple you were quarter, think difficult are so compare

reason we be step this the year. Oil of million comps year, 'XX. comps, our Oil I take $XXX $XXX in drop-off will first quarter to look at the better we to in dramatically business. our than back of 'XX. back drop-off business, same the is at 'XX you 'XX Gas first did quarter that a had Gas and the million looking of $XXX When The 'XX, quarter million. first a just In $XXX that did a 'XX million had second say our quarter, almost we're in and So in the we We 'XX

case pronounced XXXX. it will and growth 'XX, was very not offset the we to in So Oil have while decline, had Gas the in the that to be

phenomenon So 'XX, against had issues a created in the I half first exist the better of acquisition to first huge distinction at so lot had beginning us comps think us anything 'XX to It's we in the 'XX, the consistent of think 'XX. for I big was first year relative live I to we that half in the not the dramatically should the and of making that we have IEA. think the that the which to which and through working year lot XXXX, of half the And without of challenging a being made back. look a between a Obviously, going us. that's benefit more of

Operator

back There to Mas. time. to hand are call like further at no I'd Jose this the questions

Jose Mas

Yes.

that updating our to for So We're on want laying to We out forward again, call our guidance and you did. print the everybody interest. we year-end I your look just quarter XXXX. for again happy to thank

you. and So talk Thank safe, soon. be

Operator

And gentlemen. conference Thank participation, call. you. for you ladies your conclude Thank and today's this will

You may now disconnect.

MasTec (MTZ) 4 Nov 222022 Q3 Earnings call transcript