Q4 2023 MasTec Inc Earnings Call

Maddie: Transcribed by https://otter.ai Welcome to MasTec's fourth quarter 2023 earnings conference call initially broadcast on Friday, March 1, 2024. Let me remind participants that today's call is being recorded. At this time, I'd like to turn the call over to our host, Mark Lewis, MasTec's Vice President of Investor Relations. Mark. Thanks, Maddie.

Welcome to mass Teck's fourth quarter 2023 earnings Conference call. Initially broadcast on Friday March 1st 2024, Let me remind participants that today's call is being recorded at this time I'd like to turn the call over to our host Marc Lewis mass texts Vice president of the.

Marc Gregory Bianchi: Investor Relations Mark Thanks.

Mark Lewis: And good morning, everyone. Welcome to MasTec's fourth-quarter call. The following statement is made pursuant to the safe harbor for forward-looking statements described in the Private Security Litigation Reform Act of 1995. In these communications, we may make certain statements that are forward-looking, such as statements regarding MasTec's future results, plans, and anticipated trends in the industries where we operate. These four forward-looking statements are the company's expectations on the day of the initial broadcast of the call, and the company does not undertake to update these expectations based on subsequent events or knowledge. Various risks, uncertainties, and assumptions have been detailed in our press releases and filings with the SEC. Should one or more of these risks or uncertainties materialize, or should any of our underlying assumptions prove incorrect, actual results may differ significantly from those expressed or implied in these communications today.

Marc Gregory Bianchi: Thanks, Matt and good morning, everyone welcome to <unk> fourth quarter call. The following statement is made pursuant to the safe Harbor for forward looking statements described in the private Securities Litigation Reform Act of 1995.

Marc Gregory Bianchi: In these communications, we may make certain statements that are forward looking such as statements regarding <unk> future results plans and anticipated crashed in the industries, where we operate.

Marc Gregory Bianchi: These forward looking statements are the company's expectations. Although there is an issue broadcast of the call.

Marc Gregory Bianchi: The company does not undertake to update these expectations based on subsequent events or knowledge various risks uncertainties and assumptions are detailed in our press releases and filings with the SEC in one or more of these risks or uncertainties materialize or should any of our underlying assumptions prove incorrect actual results may differ significantly from results expressed or implied in these communications today.

Mark Lewis: In today's remarks on management, we will be discussing adjusted financial metrics, reconciling yesterday's press release, and supporting schedules. In addition, we may use certain non-GAAP financial measures in this conference call. The reconciliation of any non-GAAP financial measures not reconciled in these comments to the most comparable GAAP financial measure can be found in the earnings press release.

Marc Gregory Bianchi: In today's remarks by management, we will be discussing adjusted financial metrics are reconciled in yesterday's press release and supporting schedules.

Marc Gregory Bianchi: Nishu, we may use certain non-GAAP financial measures in this conference call a reconciliation of any non-GAAP financial measures not reconciled in these comments to the most comparable GAAP financial measure can be found in the earnings press release. Please note that today, we have two documents associated with the webcast on the events and presentations page of our website at <unk> Dot Com there was a.

Mark Lewis: Please note that today we have two documents associated with the webcast on the events and presentations page of our website at mastec.com. There is a companion document with information and analytics about the quarter and year just ended, as well as a guided summary for 2024 to assist you in developing your financial models going forward. Both PDF files are available for download.

Marc Gregory Bianchi: And pain in dogs with information analytics about the core and you're just ended and it got at some rate for 2024.

Marc Gregory Bianchi: Are you in developing your financial models going forward, both create a PDF files are available for download.

Mark Lewis: With us today are Jose Mas, our Chief Executive Officer, and Paul Dimarco, EVP and Chief Financial Officer. The format of the call will be open remarks and analysis by Jose followed by a financial review from Paul. These discussions will be followed by a Q&A period, and we expect the call to last about 60 minutes. We had a nice quarter and a lot of important things to talk about today, so I'm going to go ahead and turn it over to Jose. Thanks, Marc.

Marc Gregory Bianchi: With us today, we have Jose Mas, our Chief Executive Officer, and Paul Tomorrow about EVP and Chief Financial Officer.

Jose Mas: Format of the call will be opening remarks, and analysis by Jose followed by financial review from Paul.

Jose Mas: And as we've thought about Q3, and we expect the call to last about 60 minutes, we had in last quarter and we'll have a fourth I used to talk about today. So I'll go ahead and turn it over to Jose.

Jose Mas: Thanks Mark.

Jose Mas: Good morning and welcome to MasTec's 2023 fourth quarter and year-end call. Today, I'll be reviewing our fourth quarter and full year results, as well as providing my outlook for 2024 and the markets we serve. First, some fourth quarter highlights.

Jose Mas: Good morning, and welcome to <unk> 2023, fourth quarter and year end call.

Jose Mas: Today, I'll be reviewing our fourth quarter and full year results as well as providing my outlook for 2024 and the markets we serve.

Jose Mas: First some fourth quarter highlights.

Jose Mas: Revenue was $3.3 billion, a 9% year-over-year increase. Fourth quarter adjusted EBITDA was $231 million, and fourth quarter adjusted EPS was $0.66. For the full year, 2023 revenue was $12 billion, a 23% year-over-year increase. 2023 adjusted EBITDA was $860 million, a 10% year-over-year increase. 2023 full-year adjusted earnings per share was $1.97, and full-year cash flow from operations was $687 million, and net debt was reduced by $535 million since the first quarter. In summary, our fourth-quarter performance was slightly better than our guidance, with strong performance in our pipeline business and strong cash collections across the entire business. While we enjoyed year-over-year growth in both revenue and EBITDA, our performance was significantly below our original expectations. As we discussed in detail on our last call, we had a number of challenges related to the acquisition of IEA, coupled with moderated spending by customers in the second half of the year.

Jose Mas: Revenue was $3 3, billion% to 9% year over year increase.

Jose Mas: Fourth quarter, adjusted EBITDA was $231 million in fourth quarter adjusted EPS was <unk> 66.

Jose Mas: For the full year 2023 revenue was 12 billion% to 23% year over year increase 2023, adjusted EBITDA was $860 million, a 10% year over year increase 2023 full year adjusted earnings per share was $1 97, and full year cash flow from operation.

Jose Mas: <unk> was $687 million and net debt was reduced by $535 million since the first quarter.

Jose Mas: In summary, our fourth quarter performance was slightly better than our guidance with strong performance in our pipeline business and strong cash collections across the entire business.

Jose Mas: While we enjoyed year over year growth in both revenue and EBITDA, our performance was significantly below our original expectations.

As we discussed in detail on our last call. We had a number of challenges related to the acquisition of IAA, coupled with moderated spending by customers in the second half of the year.

Jose Mas: While we expect some continued pressure in the early part of 2024, I'd like to walk through a number of positive developments that I believe will have a significant impact on our ability to grow both revenue and earnings and get back to our long-term targeted revenue goals. During the fourth quarter, in our communications segment, we significantly expanded our relationship with our biggest wireless customer, AT&T. In addition to the maintenance contract we announced on our third quarter call, AT&T expanded both our scope and geographic territory for our core wireless work. This expansion, coupled with the recent announcement of a complete swap out of Nokia equipment for Ericsson equipment over a five-year period, is expected to significantly increase our wireless business over the next few years.

Jose Mas: While we expect some continued pressure in the early part of 2024.

Jose Mas: Like to walk through a number of positive developments that I believe will have a significant impact on our ability to grow both revenue and earnings and get back to our long term targeted revenue goals.

Jose Mas: During the fourth quarter and our communications segment.

Jose Mas: We significantly expanded our relationship with our biggest wireless customer AT&T.

Jose Mas: In addition to the maintenance contract, we announced on our third quarter call AT&T expanded both our scope and geographic territory on our core wireless work.

Jose Mas: This expansion coupled with the recent announcement of a complete swap out of Nokia equipment to Ericsson equipment over a five year period is expected to significantly increase our wireless business over the next few years.

Jose Mas: While we won't see the impact of this new award until the second half of 2024, this award alone should increase our 2025 segment revenues by double digits. This, coupled with the continued demand for our wireline services, where we saw double-digit growth in 2023, and the expected impact of BEADS funding, gives us great visibility for future years. We've invested heavily in our communications segment, and we believe starting in the second half of 2024 and beyond, the benefit of these investments will be materialized with solid revenue growth and, more importantly, improved margins. Our oil and gas pipeline segment overperformed, as revenue and EBITDA both came in higher than estimates.

Jose Mas: While we won't see the impact of this new award until the second half of 2024.

Jose Mas: This award alone should increase our 2025 segment revenues by double digits.

Jose Mas: This coupled with the continued demand for our wireline services, where we saw double digit growth in 2023.

Jose Mas: And the expected impact of beans funding gives us great visibility for future years.

Jose Mas: We've invested heavily in our communications segment, and we believe starting in the second half of 2024 and beyond the benefit of these investments will be materialized with solid revenue growth and more importantly improved margins.

Jose Mas: Yeah.

Jose Mas: Our oil and gas pipeline segment over performed as revenue and EBITDA both came in higher than estimates.

Jose Mas: On our third quarter call, we guided pipeline revenues down with the same EBITDA dollars for 2024, resulting in higher margin expectations. This is due to the expected completion of the MVP project during the second quarter of 2024. While we're holding that guidance, we are very encouraged about the strength in this market. While backlog is down, demand is actually up considerably. We expect this segment to return to a more book-and-burn cadence as it relies less on larger projects.

Jose Mas: On our third quarter call, we guided pipeline revenues down with the same EBITDA dollars for 2024, resulting in higher margin expectation.

Jose Mas: This is due to the expected completion of the MVP project during the second quarter of 2024.

Jose Mas: While we're holding that guidance, we're very encouraged about the strength in this market.

Jose Mas: While backlog is down.

Jose Mas: <unk> is actually up considerably.

Jose Mas: We expect this segment to return to a more book and burn cadence as it relies less on larger projects.

Jose Mas: We're also really encouraged about 2020, 2025, and beyond. Based on verbal commitments and, obviously, based on project timings, we expect this business to grow in 2025. We had previously talked about a longer-term expectation of annual revenues in the range of $1.5 to $2 billion. We now expect long-term annual revenues to consistently be at or above the higher end of that range. Our power delivery business performed slightly above expectations in the fourth quarter and secured long-term extensions and expansions during the quarter with current key customers. However, post-quarter end, a negative rate case ruling in Illinois has impacted our customers in the state.

Jose Mas: We're also really encouraged about 222025 and beyond.

Jose Mas: Based on verbal awards, and obviously based on project timings, we expect this business to grow in 2025.

Jose Mas: We had previously talked about a longer term expectation of annual revenues in the range of one $5 billion to $2 billion.

Jose Mas: We now expect long term annual revenue to.

Jose Mas: To consistently be at or above the higher end of the range.

Jose Mas: Our power delivery business performed slightly above expectations in the fourth quarter and secured long term extensions and expansions during the quarter with current key customers.

Jose Mas: Post quarter end, a negative rate case ruling in Illinois has impacted our customers in the state.

Jose Mas: Having a large presence in the area, we've moderated 2024 revenue expectations to be roughly flat to 2023. We're hopeful that this will be conservative, but feel it's prudent as we think about 2024 segment revenues. Exelon, who owns one of the utilities in the state, has significantly cut capital expenditures for distribution spending in Illinois, but has also announced increases in transmission spending in the state and increased CAPEX outside of Illinois.

Jose Mas: Having a large presence in the area, we've moderated 2020 for revenue expectations to be roughly flat to 2023.

Jose Mas: We're hopeful that this will be conservative, but feel as prudent as we think about 2024 segment revenues.

Jose Mas: Exelon, who owns one of the utilities in the state has significantly cut capital expenditures for distribution spend in Illinois.

Jose Mas: But as also announced increases in transmission spending in the state and increased capex outside of Illinois.

Jose Mas: We believe we are well positioned to participate in that growth, but again have taken a conservative view until we have better clarity.

Jose Mas: We believe we are well positioned to participate in that growth but, again, have taken a conservative view until we have better clarity. While we experienced some fluctuation in capital spending by different utilities in different geographic areas in the second half of 2023, some of which we continue to expect in early 2024, there is no question about the need and commitment for significant capital spending on our nation's electrical infrastructure. Expectation for load growth is increasing across the country, and a number of utilities this quarter announced increases to their expected capital spending. But it's important to remember that in 2021, just two short years ago. MasTec's power delivery business generated a billion dollars of revenue per year.

Jose Mas: While we've experienced some fluctuation in capital spending by different utilities in different geographic areas in the second half of 2023, some of which we continue to expect an early 24. There is no question about the need and commitment for significant capital spending on our nation's electrical.

Jose Mas: Structure.

Jose Mas: Expectations for load growth is increasing across the country and a number of utilities this quarter announced increases to their expected capital spending.

Jose Mas: It's important to remember that in 2021.

Jose Mas: Just two short years ago.

Jose Mas: <unk> power delivery business generated $1 billion of revenue for the year.

Jose Mas: We closed out 2023 generating over $2.7 billion, or nearly a three-fold increase in revenue in just two years. With the integration efforts of the acquisitions and power delivery behind us, we believe we are better positioned than ever. While the majority of our business is recurring MSA-driven, our project business has the greatest opportunity for growth. We are currently bidding on a number of very large projects. Anyone of these individually could grow the segment by double digits annually.

Jose Mas: We closed out 2023 generating over $2 7 billion.

Jose Mas: For nearly a threefold increase in revenue in just two years.

Jose Mas: With the integration efforts of the acquisitions and power delivery behind US, we believe we are better positioned than ever.

Jose Mas: While the majority of our business is recurring MSA driven our project business has the greatest opportunity for growth.

Jose Mas: We are currently bidding on a number of very large projects.

One of which individually could grow this segment by double digits annually.

Jose Mas: After spending the last few years building out our platform geographically, we are really excited about this segment's future. Finally, in our Clean Energy and Infrastructure segment, margins were in line with our expectations for the fourth quarter. We spent a lot of time on our last call talking about the issues and challenges we faced in 2023. I'd like to spend time today on 2024 and beyond and what we're seeing in the market. Today, we've guided segment revenues of $4.4 billion for 2024. This compares to about $4 billion in 2023. To add some color, our renewable revenue was budgeted by performing a bottoms-up project review. For example, we built an estimate of every project we've won or believe we will win and estimated a cadence of quarterly revenue. We took into account potential challenges and risks projects may face and took a conservative view.

Jose Mas: After spending the last few years building out our platform geographically, we are really excited about this segment's future.

Jose Mas: Finally in our clean energy and infrastructure segment margins were in line with our expectations for the fourth quarter.

Jose Mas: We spent a lot of time on our last call talking about the issues and challenges we faced in 2023.

I'd like to spend time today on 2024 and beyond and what we're seeing in the market.

Jose Mas: Today, we've guided segment revenues of $4 4 billion for 2020 for this.

Jose Mas: This compares to about $4 billion in 2023.

Jose Mas: To add some color our renewable revenue was budgeted by performing a bottoms up project review for example, we built an estimate of every project. We've won or believe we will win an estimated a cadence of quarterly revenue.

We took into account potential challenges and risks projects may face and took a conservative view.

Jose Mas: All this to say that our process for 2024 is significantly different and more conservative than last year. While short-term challenges still exist, we strongly believe in the long-term fundamentals of this segment. The undeniable shift towards renewable energy and the cost competitiveness they offer create significant opportunities for the market.

Jose Mas: All this to say that our process for 2024 is significantly different and more conservative than last year.

Jose Mas: While short term challenges still exist, we strongly believe in the long term fundamentals of this segment.

Jose Mas: The undeniable shift towards renewables and the cost competitiveness they offer creates significant opportunities for the market.

Jose Mas: We continue to believe that we have significant opportunities to grow revenue, and 2024 does not reflect the growth potential we expect to achieve. For example, between what we've been awarded and expect to be awarded over the next two quarters, not only does it solidify 2024 revenue, but it actually carries over a similar amount of revenue into 2025. With continued strong demand, our growth potential in 2025 and beyond should help us achieve our original annual revenue goals for this segment. In summary, while we know we've had our challenges, we are incredibly bullish about our ability to grow our business and build scale to deliver safe and cost-competitive solutions to our customers to help them meet their infrastructure needs. I strongly believe that the investments we've made in the last few years to build scale along our vertical offerings and position ourselves as a leader in the businesses we operate in will translate to not only strong levels of revenue growth but the ability to meaningfully improve margins. I want to make sure I emphasize that thought.

We continue to believe that we have significant opportunities to grow revenue in 2024 does not reflect the growth potential we expect to achieve.

Jose Mas: For example between what we've been awarded and expect to be awarded over the next two quarters not only does it solidified 2020 for revenue, but actually carries over a similar amount of revenue into 2025.

Jose Mas: With continued strong demand our growth potential in 2025 and beyond should help us achieve our original annual revenue goals for this segment.

In summary, while we know we've had our challenges we are incredibly bullish about our ability to grow our business and build scale to deliver to our customers safe and cost competitive solutions to help them meet their infrastructure needs.

Jose Mas: I strongly believe that the investments we've made in the last few years to build scale, along our vertical offerings and position ourselves as a leader in the businesses. We operate in will translate to not only strong levels of revenue growth, but the ability to meaningfully improve margins.

Jose Mas: I want to make sure I emphasize that thought.

Jose Mas: I truly believe that the most successful companies in our space are those that have the scale to meet our customers' demands. Our customers' projects have significantly increased in size and scope, and there is no question that our customers want to simplify and work with fewer partners. I believe that over the last few years, our biggest accomplishment has been to position ourselves as one of only a few partners that's viewed throughout our industry as a partner whose size and scale affords it the capabilities to take on any project. While I'm proud of that accomplishment, I also understand the need for this advantageous positioning to be reflected in our financial results. I'm optimistic that our results will show continued improvement throughout 2024.

Jose Mas: I truly believe that the most successful companies in our space are those that have the scale to meet our customers demand.

Jose Mas: Our customers' projects have significantly increased in size and scope and there is no question that our customers want to simplify and work with less partners.

Jose Mas: I believe that over the last few years, our biggest accomplishment has been to position ourselves as one of only a few partner that's viewed throughout our industry as a partner whose size and scale affords us the capabilities to take on any project.

Jose Mas: While I'm proud of that accomplishment I also understand the need for this advantageous positioning to be reflected in our financial results on.

Jose Mas: Im optimistic that our results will show continued improvement throughout 2024.

Jose Mas: As we expect revenue to be more predictable and consistent, we are working on and focusing on improving margins. While incremental revenue has a very positive impact on margins, as we reach our desired scale across our segments, it allows us to focus on maximizing efficiency. Again, I'm looking forward to the opportunities that 2024 and beyond bring and providing our stakeholders with better consistency in our performance. I'd like to take this opportunity to thank the men and women of MasTec. The men and women of MasTec are committed to the values of safety, environmental stewardship, integrity, and honesty and to providing our customers with a great quality project at the best value.

Jose Mas: As we expect revenue to be more predictable and consistent we are working and focusing on improving margins.

Jose Mas: While incremental revenue has a very positive impact on margins as we reach our desired scale across our segments. It allows us to focus on maximizing efficiency.

Jose Mas: Again, I'm looking forward to the opportunities that 2024, and beyond bring and providing our stakeholders with better consistency in our performance.

I'd like to take this opportunity to thank the men and women of Mastec.

Jose Mas: The men and women of Mostek are committed to the values of safety environmental stewardship integrity honesty and in providing our customers a great quality project at the best value.

Paul Dimarco: I also know how competitive our people are and the desire they have to perform at a very high level. I know they're up for the task. I'll now turn the call over to Paul for our financial review.

Jose Mas: I also know how competitive are people are and the desire they have to perform at a very high level.

Jose Mas: I know they are up for the task.

Jose Mas: I'll now turn the call over to Paul for our financial review, Paul Thanks, Jose and good morning, everyone.

Paul Dimarco: Thanks, Jose, and good morning, everyone. Before I turn to the financial review, I wanted to provide some color on some key developments for 2023 and financial initiatives going forward. Despite the disappointing financial performance and visibility we provided last year, we made significant progress on key areas of our integration in power delivery and clean energy. In power delivery, we are deploying a regional operating model, consolidating leadership over our various companies and common geographies to drive efficiency and enhance customer support. In Energy, we are organizing this segment into market sectors, namely renewables, infrastructure, and industrial, with the various components of our legacy business and IEA integrated to effectively deliver the full breadth of our operating capabilities to our customers.

Paul Dimarco: Before I turn to the financial review I wanted to provide color on some key developments for 2023 and financial initiatives going forward.

Paul: Despite the disappointing financial performance and visibility we provided last year.

Paul: We made significant progress on key areas of our integration and power delivery and clean energy.

Paul: And power delivery, we are deploying our regional operating model consolidating leadership over our various companies and common geographies to drive efficiency and enhanced customer support.

Paul: And clean energy, we are organizing this segment in the market sectors, namely renewables infrastructure and industrial.

Paul: With the various components of our legacy business and IAA integrated to effectively deliver the full breadth of our operating capabilities to our customers.

Paul: We are now focused on fully deploying consistent tools and processes across each segment to put all of our teams in a position to excel.

Paul Dimarco: We are now focused on fully deploying consistent tools and processes across each segment to put all our teams in a position to excel. We are confident these strategic changes will enable us to capitalize on the robust, long-term demand offered by our end markets. From a financial perspective, we are keenly focused on capital allocation to ensure we are generating appropriate returns on the capital we deploy. As we look at investments for organic growth, we have enhanced our evaluation of capital expenditure allocations to drive higher utilization of owned equipment and operating profits.

Paul: We are confident these strategic changes will enable us to capitalize on the robust long term demand afforded by our end markets.

Paul: From a financial perspective, we are keenly focused on capital allocation to ensure we are generating appropriate returns on the capital we deploy.

Paul: As you look at investments for organic growth, we have enhanced our evaluation of capital expenditure allocations to drive higher utilization of owned equipment and operating profit.

Paul Dimarco: Coupled with our ongoing working capital initiatives, we expect to drive higher returns on invested capital and improve our strategic flexibility. Now I will turn to our 2023 financial review. Fourth quarter revenue was $3.3 billion, in line with our guidance, and adjusted EBITDA was $231 million, or 7.1%, exceeding guidance by approximately $10 million. Adjusted earnings per share was $0.66, exceeding guidance by $0.22, driven primarily by the adjusted EBITDA fee.

Paul: Coupled with our ongoing working capital initiatives, we expect to drive higher returns on invested capital and improve our strategic flexibility.

Speaker Change: Now I will turn to our 2023 financial review.

Speaker Change: Fourth quarter revenue was $3 3 billion.

Speaker Change: In line with our guidance and adjusted EBITDA was $231 million or seven 1% exceeding guidance by approximately $10 million.

Adjusted earnings per share was <unk> 66 exceeding guidance by 22, driven primarily by the adjusted EBITDA beat.

Paul Dimarco: Accordingly, annual 2023 results followed suit. Revenue of $12 billion was in line with our guidance, while adjusted EBITDA of $860 million and adjusted earnings per share of $1.97 both exceeded our annual guidance expectations. We generated almost $500 million of cash flow from operations in the fourth quarter, bringing the total for 2023 to $687 million. This exceeded guidance by almost $300 million, driven by a significant improvement in DSO, which at 74 days was down 11 days sequentially from the third quarter. Our liquidity remains very strong at $1.6 billion.

Speaker Change: Accordingly annual 2023 results followed suit revenue of $12 billion was in line with our guidance, while adjusted EBITDA of $860 million and adjusted earnings per share of $1 97, both exceeded our annual guidance expectations.

Speaker Change: We generated almost $500 million of cash flow from operations in the fourth quarter, bringing the total for 2023% to $687 million.

Speaker Change: This exceeded guidance by almost $300 million driven by a significant.

Speaker Change: Significant improvement in DSO, which has 74 days was down 11 days sequentially from the third quarter.

Speaker Change: Our liquidity remains very strong at $1 6 billion.

Paul Dimarco: Flow Generation has been a key area of focus for MasTec, and we are very pleased with the efforts displayed across the company to achieve these results. Our strong cash flow performance resulted in net debt at year end of $2.5 billion, a $315 million reduction year over year, and puts net leverage at 2.9 times. Eighteen-month backlog at year-end totaled $12.4 billion, with sequential growth in each segment, excluding oil and gas pipeline due to the significant work performed on MVP in Q4. I'll cover more details on the individual segments shortly. Turning now to the segment performance and expectations, fourth quarter communications revenue was $760 million, with an adjusted EBITDA margin of 7.6%, both in line with guidance. Annual 2023 communications segment revenue was $3.26 billion, flat year over year, with adjusted EBITDA margins declining 140 basis points to 8.9%. As we discussed last quarter, the reduction in second half volume had a negative impact on operating leverage and margins.

Speaker Change: Cash flow generation has been a key area of focus for Mastec and we are very pleased with the average displayed across the company to achieve these results.

Speaker Change: Our strong cash flow performance resulted in net debt at year end of $2 5 billion, a $315 million reduction year over year and puts net leverage at two nine times.

Speaker Change: 18 month backlog at year end totaled $12 $4 billion with sequential growth in each segment, excluding oil and gas pipeline due to the significant work performed on MVP in Q4.

Speaker Change: I'll cover more details on the individual segments shortly.

Speaker Change: Turning now to the segment performance and expectations.

Speaker Change: Fourth quarter Communications revenue was $760 million with an adjusted EBITDA margin of seven 6% both in line with guidance.

Speaker Change: Annual 2023 Communications segment revenue was $3 6 billion.

That year over year with adjusted EBITDA margin declining 140 basis points to eight 9%.

Speaker Change: As we discussed last quarter the reduction in second half volume had a negative impact on operating leverage and margins.

Paul Dimarco: Our outlook for this segment continues to improve, particularly on the wireless front, where AT&T has revised its long-term build plan and is consolidating its vendor base to drive efficiency. We expect to begin realizing the benefits of these consolidations in the second half of 2024 and be fully ramped up in 2025. Based on preliminary estimates, these developments should drive 10% plus revenue growth in the segment.

Our outlook for this segment continues to improve particularly on the wireless front, where AT&T has revised its long term build plan is consolidating its vendor base to drive efficiency.

Speaker Change: We expect to begin realizing the benefits of these consolidations in the second half of 2024 and be fully ramped in 2025.

Speaker Change: Based on preliminary estimates these developments should drive 10% plus revenue growth in the segment.

You can see these benefits begin to come through in the segment backlog, which grew by approximately $325 million versus Q3.

Paul Dimarco: You can see these benefits begin to come through in the segment backlog, which grew by approximately $325 million versus Q3. We anticipate that the communications segment annual revenue in 2024 will approximate $3.5 billion with an adjusted EBITDA margin improving 50 to 60 basis points year over year. Q1 revenue is expected to be $700 million, with adjusted EBITDA margins in the mid-single-digit range.

Speaker Change: We anticipate that communications segment annual 2020 for revenue will approximate $3 5 billion with adjusted EBITDA margin, improving 50 to 60 basis points year over year.

Speaker Change: Q1 revenue is expected to be $700 million with adjusted EBITDA margins in the mid single digit range.

Paul Dimarco: Q1 guidance reflects historical trends of a modest decline in volume sequentially from the fourth quarter, as well as potential short-term disruption from the realignments in our wireless business. We expect year-over-year growth in the segment for each subsequent quarter of 2024. Fourth quarter clean energy and infrastructure segment revenue was $1.1 billion, slightly below our guidance, with adjusted EBITDA margins of 4.8%. Full year segment revenue was approximately $4 billion, with an adjusted EBITDA margin of 4.3%.

Speaker Change: Q1 guidance reflects historical trends of a modest decline in volume sequentially from the fourth quarter as well as potential short term disruption from the realignment in our wireless business.

Speaker Change: We expect year over year growth in the segment for each subsequent quarter of 2024.

Speaker Change: Yeah.

Speaker Change: Fourth quarter clean energy and infrastructure segment revenue was $1 1 billion.

Speaker Change: Slightly below our guidance with adjusted EBITDA margin of four 8%.

Speaker Change: Full year segment revenue was approximately 4 billion with adjusted EBITDA margin of four 3%.

Paul Dimarco: Backlog for this segment was up slightly from 2.3 to 3.1 billion. Of note, year-end backlog includes a reduction in our industrial sector of $200 million due to the previously discussed indefinite pause of construction on the Rochester Hub project. For 2024, we expect clean energy segment revenue to approximate $4.4 billion, representing low double-digit growth. Adjusted EBITDA margins are expected to be in the mid-single digits, with at least 100 basis points improvement versus 2023. Q1 revenue is expected to be $775 million, showing a slight contraction versus 2023 due to the timing of project burn. We currently expect adjusted EBITDA margins to remain in the low single digits with modest margin expansion versus last year. Fourth quarter pipeline segment revenue was $800 million, with adjusted EBITDA margins of 11.9%. We had good production on a number of fronts, leading to higher adjusted EBITDA margins than anticipated. Annual segment revenue was just shy of $2.1 billion, with adjusted EBITDA margins of 13.7%. We anticipate 2024 pipeline segment revenue will decline to $1.9 billion.

Speaker Change: Backlog for this segment was up slightly from Q3 to $3 1 billion of note yearend backlog includes a reduction in our industrial sector of $200 million.

Speaker Change: Due to the previously discussed indefinite pause of construction on the Rochester hub project.

Speaker Change: For 2024, we expect to clean energy segment revenue to approximate $4 4 billion.

Speaker Change: Representing low double digit growth.

Speaker Change: Adjusted EBITDA margins are expected to be in the mid single digits with at least 100 basis points improvement versus 2023.

Speaker Change: Q1 revenue is expected to be $775 million, showing a slight contraction versus 2023 due to timing of project firm.

Speaker Change: We currently expect adjusted EBITDA margins to remain in the low single digits with modest margin expansion versus last year.

Speaker Change: Yes.

Speaker Change: Fourth quarter pipeline segment revenue was $800 million with adjusted EBITDA margins of 11, 9% we.

Speaker Change: We had good production on a number of fronts, leading to higher adjusted EBITDA margins than anticipated.

Speaker Change: Annual segment revenue was just shy of $2 1 billion with adjusted EBITDA margins of 13, 7%.

Speaker Change: We.

Speaker Change: <unk> 2024 pipeline segment revenue will decline to $1 9 billion.

Paul Dimarco: We expect adjusted EBITDA to be flat year over year at $285 million, with the anticipated margin expansion due to a lower contribution of cost plus work. First quarter revenue will be approximately $600 million, with an adjusted EBITDA margin in the low double digits. Q1 will likely be the highest revenue quarter for this segment in 2024. Fourth quarter power delivery segment revenue was $658 million, and adjusted EBITDA margin was 8%, both in line with our expectations.

Speaker Change: We expect adjusted EBITDA to be flat year over year at $285 million with the anticipated margin expansion due to a lower contribution of cost plus work.

Speaker Change: First quarter revenue will be approximately $600 million with adjusted EBITDA margin in the low double digits.

Speaker Change: Q1 will likely be the highest revenue quarter for this segment in 2024.

Speaker Change: Fourth quarter power delivery segment revenue was $658 million and adjusted EBITDA margin was 8%.

Speaker Change: Both in line with our expectations.

Speaker Change: Annual 2023 power delivery segment revenue was approximately $2 7 billion with annual adjusted EBITDA margin of seven 9%.

Speaker Change: 2024 began with some challenges in parts of our power delivery segment of certain customers in Illinois received unfavorable rate case decisions. We are optimistic this will be resolved in the coming months, but feel it is prudent to factor in a prolonged appeal process and our outlook.

Paul Dimarco: Annual 2023 power delivery segment revenue was approximately $2.7 billion with an annual adjusted EBITDA margin of 7.9%. 2024 began with some challenges in parts of our power delivery segment. Certain customers in Illinois received unfavorable rate case decisions.

Speaker Change: Accordingly, 2024 annual revenue is expected to approximate $2 $8 billion with annual adjusted EBITDA margins similar to 2023.

Speaker Change: First quarter revenue is forecasted at $550 million being the biggest quarterly impact from this deferred spending and lower levels of transmission activity versus 23 is a transition from certain completed projects to new work expected to start in Q2.

Paul Dimarco: We are optimistic this will be resolved in the coming months but feel it is prudent to factor in a prolonged appeal process in our outlook. Accordingly, 2024 annual revenue is expected to approximate $2.8 billion with annual adjusted EBITDA margins similar to 2023. First quarter revenue is forecasted at $550 million, seeing the biggest quarterly impact from this deferred spending and lower levels of transmission activity versus 23 as we transition from certain completed projects to new work expected to start in Q2. The reduced operating leverage will weigh on earnings in Q1, with adjusted EBITDA margins in the mid-single digits.

Speaker Change: The reduced operating leverage will weigh on earnings in Q1 with adjusted EBITDA margins in the mid single digits.

Speaker Change: Annual 2020 for corporate segment costs are expected to approximate 125 basis points of consolidated revenue and investments reported in our other segment.

Speaker Change: <unk> are expected to generate approximately $30 million of adjusted EBITDA.

Speaker Change: Turning to our consolidated guidance announced yesterday.

Speaker Change: We are projecting 2024 annual revenue of approximately $12 5 billion with adjusted EBITDA approximating $955 million.

Speaker Change: Adjusted earnings per share is expected to approximate $2 69.

Speaker Change: This represents double digit adjusted EBITDA growth and approximately 30% adjusted EBIT EPS growth versus 2023.

Paul Dimarco: Annual 2024 corporate segment costs are expected to approximate 125 basis points of consolidated revenue, and investments reported in our other segment are expected to generate approximately $30 million of adjusted EBITDA. Turning to our consolidated guidance announced yesterday, we're projecting 2024 annual revenue of approximately $12.5 billion, with adjusted EBITDA approximating $955 million. Adjusted earnings per share is expected to approximate $2.69.

Speaker Change: We expect Q1 revenue of $2 billion $625 million, adjusted EBITDA of $130 million or 5% and an adjusted diluted loss of $48 per share.

Speaker Change: This expectation includes the combination of our normal seasonally slow first quarter and the Q1 impact as we noted earlier in our communications and power delivery segments.

Speaker Change: In terms of the cadence for 2024, we expect the majority of our revenue growth to come in the second and third quarters with Q4, roughly flat last year without any contribution from MVP.

Speaker Change: Our guidance indicates a 50 basis point improvement in full year adjusted EBITDA margins and we expect the majority of this expansion to also come during Q2 and Q3.

Paul Dimarco: This represents double-digit adjusted EBITDA growth and approximately 30% adjusted EPS growth versus 2023. We expect Q1 revenue of $2,625,000,000, adjusted EBITDA of $130,000,000, or 5%, and an adjusted diluted loss of $0.48 per share. This expectation includes the combination of a normal, seasonally slow first quarter and the Q1 impacts we noted earlier in our communications and power delivery segment. In terms of the cadence for 2024, we expect the majority of our revenue growth to come in the second and third quarters, with Q4 roughly flat last year, without any contribution from MVP. Our guidance indicates a 50 basis point improvement in full-year adjusted EBITDA margins, and we expect the majority of this expansion to also come during Q2 and Q3.

Speaker Change: We expect to generate approximately $550 million of cash flow from operations in 2024, assuming dsos are in the high <unk> over the course of the year.

Speaker Change: Coupled with the anticipated growth in adjusted EBITDA, we expect to reduce leverage to the low twos by the end of 2024.

Speaker Change: We remain committed to maintaining our investment grade rating and have proactively communicated our outlook to the various rating agencies.

Speaker Change: In closing I have enjoyed the first year of engagement with our analysts and our investor community.

Speaker Change: I look forward to continuing to build relationships with you and improve our communication and your confidence in our performance and outlook.

Speaker Change: That concludes our prepared remarks, I'll now turn the call over to the operator for Q&A.

Operator: Thank you if you would like to ask a question. Please signal by pressing star one on your telephone keypad.

Operator: Speaker phone. Please make sure your mute function is turned off to allow your signal to reach our equipment. If you have additional questions. After your initial question. Please ask.

Paul Dimarco: We expect to generate approximately $550 million of cash flow from operations in 2024, assuming DSOs are in the high 70s over the course of the year. Coupled with the anticipated growth in adjusted EBITDA, we expect to reduce leverage to the low twos by the end of 2024. We remain committed to maintaining our investment-grade rating and have proactively communicated our outlook to the various rating agencies.

Operator: Please ask.

Operator: Joining the queue. After your first two questions again, Please press star one to ask a question, we'll pause for just a moment to allow everyone an opportunity to signal for questions.

Operator: We will take our first question from Sanjay Jain with Keybanc.

Sanjay Jain: Hi, Thanks, so much for taking my question.

Sanjay Jain: And Paul if I can ask you on your power does the Rebooking.

Paul Dimarco: In closing, I've enjoyed the first year of engagement with our analysts and our investor community. I look forward to continuing to build relationships with you and improve our communication and your confidence in our performance and outlook. That concludes our prepared remarks. I'll now turn the call over to the operator for Q&A. Unknown Attendee, Thank you. If you would like to ask a question, please signal by pressing star 1 on your telephone keypad. If you are using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment.

Sanjay Jain: You expressed.

Sanjay Jain: A lot of optimism on the bookings momentum can you share with us how close we may be too.

Sanjay Jain: Some of those translating into backlog is it like a first half event or later and also given that youre working through will be large projects. What gives you the confidence in the high single digit.

In this segment.

Sanjay Jain: Thanks.

Speaker Change: Yes, so couple of things I think that.

Speaker Change: On the project side of our power delivery business, where we.

Speaker Change: We've been really excited for a period of time, we think we've been really close on a number of projects that we haven't won over the last couple of years.

Speaker Change: We've obviously been doing a lot of integration as we integrated all of the acquisitions that we've made and I think our.

Operator: If you have additional questions after your initial question... Please ask. Unknown Speaker Excuse me, please ask, join the queue after your first two questions. Again, please press star one to ask a question.

Speaker Change: Our.

Speaker Change: Where we stand in the market today versus where we were a year or two of those are very different place and I think customers recognize that and I think customers are excited about giving us an opportunity to work on large projects and I think we're going to be very successful this year on being able to attain that.

Operator: We'll pause for just a moment to allow everyone an opportunity to signal for questions. Unknown Attendee, we will take our first question from Sanjita Jain with KeyBank. Hi, thanks so much for taking my question.

Speaker Change: So I do think that over the coming quarters. Hopefully, we'll have we'll have at least something to announce and talk about an add to backlog, which I think could have an impact as early as 2024.

Speaker Change: With that said for margins for the year were basically.

Sangita Jain: Jose and Paul, if I can ask you about your power delivery bookings, you expressed a lot of optimism about the bookings momentum. Can you share with us how close we may be to some of those translating into backlog? Is it like a first half event or later?

Speaker Change: <unk> relatively flat margins on a year over year basis.

So theres not a big change in the margin profile for 2024 as there was in 2023.

Speaker Change: Great and if I can follow up with one on communications you talked about the AT&T Ericsson contract can you help us understand what your scope maybe on the AT&T Sportsnet drove ma'am maybe.

Jose Mas: And also, given that you're working through these large projects, what gives you confidence in the high single-digit margins in this segment? Yeah, so a couple things. I think that, on the project side of our power delivery business, we're, we've been really excited for a period of time; we think we've been really close on a number of projects that we haven't won over the last couple years. We've obviously been doing a lot of integration as we, you know, integrated all the acquisitions that we've made. And I think our position where we stand in the market today versus where we were a year or two ago is a very different place, and I think customers recognize that.

Speaker Change: So.

Speaker Change: Our contract with AT&T is what they call a turf contract right. So in certain geographic areas we have.

Speaker Change: Exclusivity on on specific types of work and that isn't really changing so whether whatever whatever initiatives there'll be doing in the in the geographies that we've been awarded were going to be the ones that perform those services.

Speaker Change: Great. Thank you so much thank.

Speaker Change: Thank you. Thank you.

Speaker Change: We will take our next question from Brian <unk> with Stifel.

Brian: Yes. Good morning, Thanks for taking my question.

Brian: Been hearing a lot about the ramp and the tax credit transferability market on the clean energy side in recent months.

Jose Mas: And I think customers are excited about giving us an opportunity to work on large projects. And I think, you know, we're going to be very successful this year in being able to attain that. So I do think that over the coming quarters, hopefully, we'll have at least something to announce and talk about and add to backlog, which I think could have an impact as early as 2024. With that said, for margins for the year, we're basically guiding relatively flat margins on a year over year basis. So there's not a big change in the margin profile for 2024 as there was in 2023. Great.

Brian: Curious what you guys are seeing here how impactful it is for your customer base and how important is to the clean energy outlook overall thanks.

Brian: There's no question that the sentiment has been improving transferability as having significant impact, but I think more importantly, what we've done as a company is we really.

Brian: Went through every project that we see potential on in terms of stuff that we expect to happen in 2024, I think we significantly derisked.

Brian: Our expectations relative to understanding where every project stands from a financing perspective from an interconnect perspective.

Brian: And I think that while we talked a lot about this last year is something that quite frankly, we don't have to hope to talk a lot about this year. There are a number of other projects that could hit quite frankly that we've probably underestimated their ability to be performed in 'twenty four.

Jose Mas: And if I can follow up with one on communications, you talked about the AT&T X and contract. Can you help us understand what your scope may be on the AT&T FirstNet program, maybe? So our contract with AT&T is what they call a turf contract, right?

Brian: But anything that has significant risk to it we've kind of moved it aside and accounted for 24, but theres no question that the sentiment is improving the opportunity to use different methods to finance projects has improved considerably.

So latter part of next year, and I think as as a as a total industry, we're going to see a significant increase in what comes out in the second half of 2024.

Jose Mas: So in certain geographic areas, we have exclusivity on specific types of work, and that isn't really changing. So whatever initiative they'll be doing in the geographies that we've been awarded, we're going to be the ones that perform those services. Thank you. Thank you. We will take our next question from Brian Brophy. Yeah, good morning.

Speaker Change: Okay, that's great.

Then another one on power delivery.

Speaker Change: Obviously low single digit guidance on the top line.

Speaker Change: Probably a little bit lower than some expected it sounds like some of it kind of a customer mix issue.

Brian Daniel Brophy: Thanks for taking my question. I've been hearing a lot about the ramp and the tax credit transferability market on the clean energy side in recent months. Curious what you guys are seeing here, how impactful it is for your customer base, and how important it is to the clean energy outlook overall.

Speaker Change: In Illinois, but just curious what you guys are embedding.

Speaker Change: On the emergency restoration side in 2024 relative to 2023, given the easier comp there.

Jose Mas: Well, there's no question that sentiment has been improving, and transferability is having a significant impact. But I think more importantly, what we've done as a company is, you know, we really went through every project that we see potential in terms of stuff that we expect to happen in 2024. I think we significantly de-risked our expectations relative to understanding where every project stands from a financing perspective, from an interconnection perspective, and I think that, you know, while we talked a lot about this last year, it's something that, you know, quite frankly, we don't have to hope to talk a lot about this year. There are a number of other projects that could hit, quite frankly, that we've probably underestimated their ability to be completed in 2024.

Speaker Change: So we didn't we haven't assumed that its going to be any better than 2023, and 2023 was a really low storm year.

Speaker Change: It's very difficult to model that so we we.

Speaker Change: We have a very we have a baseline budget that you've got to include something for so it's not much different than with 23 years. So I think there's opportunity there to be clear on the previous part I mean, exelon did announce a significant reduction right they've announced the $1 billion to $5 billion reduction over three years and distribution spend it is a big area for us so that is what's happening.

Speaker Change: The impact where we have slightly moderated our revenue target for 2024, and our power delivery business.

Speaker Change: That's really helpful. Thanks, I'll pass it on.

Jose Mas: But anything that has, you know, significant risk to it, we've kind of moved it aside and not counted it for 2024. But there's no question that the sentiment is improving. The opportunity to use different methods to finance projects has improved considerably since the latter part of next year, and I think as a total industry, we're going to see a significant increase in what comes out in the second half of 2024. Okay, that's great.

Speaker Change: Thank you Brian.

Speaker Change: Okay.

Speaker Change: We will take our next question from Andy Kaplowitz with Citigroup.

Andrew Alec Kaplowitz: Hey, good morning, everyone.

Andrew Alec Kaplowitz: Good morning, Andy.

Andrew Alec Kaplowitz: I just wanted to go back to your comments on communications for a second you did see a significant uptick in sequential bookings as you guys mentioned you already talked about the higher scope of work with AT&T and <unk> and also the transition later this year, but could you breakdown. What you were thinking in terms of core wireless and wireline for 2004 and could you tell us how much larger.

Jose Mas: And then another one on power delivery. Obviously, low single-digit guidance on the top line, probably a little bit lower than some expected. It sounds like some of it is kind of a customer mix issue in Illinois, but just curious what you guys are embedding on the emergency restoration side in 2024 relative to 2023, given the easier count there. Thanks. So we didn't, you know, we haven't assumed that it's going to be any better than 2023. 2023 was a really low storm year.

Andrew Alec Kaplowitz: That contract is with AT&T now maybe versus what it was and did you actually see a positive inflection in your core markets and excluding this new work that you have.

Andrew Alec Kaplowitz: Well when we look at 'twenty, three let's start with 23 right.

Andrew Alec Kaplowitz: What we've said is our wireless business was down versus 22.

Andrew Alec Kaplowitz: Our wireline business was up double digits right. So we had another strong wireline year.

Jose Mas: It's very difficult to model that. So we, you know, we have a very big, we have a baseline budget that you got to include something for so it's not much different than what 23 was. So I think there's opportunity there. To be clear on the previous part, I mean, Exelon did announce a significant reduction, right? They announced a $1.25 billion reduction over three years in distribution spend.

Andrew Alec Kaplowitz: Talked a lot about this on our third quarter call. So that was really unchanged through the balance of the year.

Andrew Alec Kaplowitz: As we think about 2024, we expect our wireline business to be up again, because it's a very strong market.

Andrew Alec Kaplowitz: Theres changes in cadences, we did see a slowdown in the second half of 'twenty three versus the first half of 'twenty three but again the demand in that business is extremely high.

Jose Mas: It is a big area for us, so that's what's having the impact where we've slightly moderated our revenue target for 2024 and our power delivery bill. That's really helpful. Thanks. I'll pass it on.

Andrew Alec Kaplowitz: And when you add on beads funding, which will which will start impacting the business and 25 is a very positive development on the wireless side, it's different right on the wireless side I think this this particular award coupled with the change that AT&T is doing in their network will have a significant impact on <unk> and.

Andrew Alec Kaplowitz: Thank you. We will take our next question from Andy Kaplowitz with Citigroup. Good morning, everyone. Good morning, Andy.

Andrew Alec Kaplowitz: Today, our wireline wireless combination it used to be we were bigger in wireless quite frankly today, we're bringing in wireline. So it's about a 60 40 split.

Andrew Alec Kaplowitz: I just wanted to go back to your comments on communications for a second. You did see a significant uptick in sequential bookings, as you guys mentioned. You already talked about the higher scope of work with AT&T and Nokia, and there's Ericsson too, going forward. But could you break down what you were thinking in terms of core wireless and wireline for 24? And could you tell us how much larger your contract is with AT&T now, maybe versus what it was?

Andrew Alec Kaplowitz: This contract will probably get it closer to 50 50 over the course of the next couple of years and it's going to have a meaningful impact to our wireless business. Our wireless business has the ability to grow.

Andrew Alec Kaplowitz: Probably 30% to 50% from where it was in <unk> and 'twenty three so it's a significant award that has a significant impact on the total revenues for the segment.

Speaker Change: Very helpful. And then kind of a similar question for clean energy side could you tell us what you're assuming for IAA in 'twenty four maybe differences between wind and solar and infrastructure. Obviously, you've seen you know theres still a fair amount of noise in the developer World. I think you said, you're only assuming sort of what you can tell.

Jose Mas: And did you actually see a positive inflection in your core markets, excluding this new work? Well, when we look at 23, let's start with 23, right? You know, what we've said is that our wireless business was down versus 22. But our wireline business was up double digits, right? So we had another strong wireline year. We talked a lot about this on our third quarter call. So that was really unchanged through the balance of the year. As we think about 2024, we expect our wireline business to be up again because it's a very strong market. There are changes in cadences.

Speaker Change: It was already going forward. So how did you sort of discount that the noise. That's out there in the developed world, especially in the IAA side for 24.

Speaker Change: Yes. So the first I think the first thing that's really important to kind of focus on us.

Jose Mas: We did see a slowdown in the second half of 23 versus the first half of 23. But again, the demand for that business is extremely high. And when you add on BEADS funding, which will start impacting the business in 25, it's a very positive development. On the wireless side, it's different, right?

Speaker Change: As we look to 'twenty four even in late 'twenty three right. We're not we're not viewing it as Moss Lake legacy versus IAA, we've gone to market with one business. So we've got a master renewables business, we do have.

Jose Mas: On the wireless side, I think this particular award, coupled with the change that AT&T is doing in their network, will have a significant impact on MasTec. And today, our wireline and wireless combination – it used to be that we were bigger on wireless. Quite frankly, today we're bigger on wireline, so it's about a 60-40 split.

Speaker Change: Different operating groups semi performed the work, but in market where in market as Maastricht renewables with with one leadership team.

Speaker Change: And when we think about.

Speaker Change: The industry as a whole.

Speaker Change: Ends up being very focused on on customers right each customer's in a different place each customer has different challenges. So it's really about understanding where every customer sits on a particular project irrespective of what's happening across the entire marketplace the entire marketplace.

Jose Mas: This contract will probably get it closer to 50-50 over the course of the next couple of years, and it's going to have a meaningful impact on our wireless business. Our wireless business has the ability to grow probably 30 to 50 percent from where it was in 23. So it's a significant award that has a significant impact on total revenues for the second half. Very helpful, Jose.

Speaker Change: There is definitely some that are more challenges than others.

Speaker Change: It's going to get better for everybody as the year goes on but we've really focused on those developers and projects that we think are primed to be built and 24 are going to have less issues and thats kind of how we built our model.

Andrew Alec Kaplowitz: And kind of a similar question for the clean energy side. Could you tell us what you're assuming for IEA in 24? You know, maybe differences between wind, solar, and infrastructure. Obviously, you've seen, there's still a fair amount of noise in the developer world. I think you said, you're only assuming sort of what you can tell is already going forward. So how did you sort of discount the noise that's out there in the developer world, especially on the IEA side?

Speaker Change: Surprisingly when we think about 'twenty for the growth in wind and solar has been somewhat equal we're seeing a lot of strength in the wind market, especially on the Repowering side.

We've had a lot of bookings are we think thats.

What we like about that is the predictability of those projects have a lot less.

Speaker Change: Potential issues.

Speaker Change: Do you think about the construct ability during the year so.

Jose Mas: So the first thing that's really important to kind of focus on is, you know, as we looked at 24, even in late 23, right, we're not viewing it as MasTec legacy versus IA; we've gone to market with one business. So we've got a MasTec renewables business; we do have, you know, different operating groups that might perform the work, but in the market, we're in the market as MasTec renewables with one leadership team. And when we think about, you know, the industry as a whole, it ends up being very focused on customers, right? Each customer is in a different place; each customer has different challenges. So it's really about understanding where every customer sits on a particular project, irrespective of what's happening across the entire marketplace. There are definitely some that have more challenges than others.

Speaker Change: When there's been.

Speaker Change: Frankly, it was pretty strong for us in 35 are split our 'twenty three are split last year.

Speaker Change: <unk> was about 60, 40%, 40% being wind and I think it's going to be somewhat similar this year and 24, so the markets held in.

Speaker Change: And we feel good about how we built our plan from a bottoms up perspective. There is there is opportunity that we know theres going to be challenged as certain projects. So we took some some overall contingencies, but I do think as the year goes on things will get better and there might be some projects that that you get that on in the second half of 'twenty four.

Speaker Change: I appreciate all the color Jose.

Jose Mas: Thanks, Andy Thank you.

Jose Mas: We will take our next question from Steven Fisher with UBS.

Steven Fisher: Thanks. Good morning wanted to just follow up on that last question wondering if you can maybe bridge for us.

Jose Mas: I think it's going to get better for everybody as the year goes on. But we really focused on those developers and projects that we think are primed to be built in 24 are going to have fewer issues. And that's kind of how we built our model. You know, surprisingly, when we think about 24, the growth in wind and solar has been somewhat equal. We're seeing a lot of strength in the wind market, especially on the repowering side. We've had a lot of bookings for that. We think that's what we like about it is the predictability of it. Those projects have a lot fewer potential issues as you think about the constructability during a year. So, you know, wind has been, and quite frankly, it was pretty strong for us in 35. Our split in 23, our split last year was about 60-40, 40% being wind.

Steven Fisher: $4 4 billion of expected revenues in clean energy versus the three one of year end backlog, how much of that incremental $1 3 billion as discrete renewable projects that are maybe in like limited notice to proceed.

Steven Fisher: That you expect to put into backlog and then burn versus how much is maintenance and small capital projects and a flow work or maybe theres something specific in civil infrastructure or industrial that you have expected that.

Steven Fisher: Breach that backlog versus revenue gap.

Speaker Change: Yes so.

Speaker Change: I guess generally right when you think about industrial and civil to get it out of the way backlog is pretty much set in those.

Speaker Change: We believe that in our backlog numbers, we have most of the burn required in 2024, we there's some work that youre going to book and burn but for the most part we think we're sitting in a really good place relative to backlog versus revenue expectations on the renewable side of the business. The reality is that.

Jose Mas: And I think it's going to be somewhat similar this year in 24 so long as the market's held. And, you know, we feel good about how we've built our plan from a bottoms up perspective. There's an opportunity that, you know, we know there's going to be challenges on certain projects. So we took some overall contingencies. But I do think, you know, as the year goes on, things will get better, and there might be some projects that you take on in the second half of 24. I appreciate all the color, Jose.

Speaker Change: In our minds right. The business is much better than what backlog shows I think youre going to see considerable backlog build in Q1, I think youll see considerable backlog build again in Q2 and that will give you my opinion at least the outside world that doesn't see our numbers day to day the comfort that our 24 has solidified in our prepared remarks, we talked about.

Speaker Change: That actually having a really positive impact for 25, because these projects actually have a similar if not a little bit greater amount of volume activity and 25% due in 'twenty, four which I think positions us incredibly well for a really strong growth year in 'twenty five.

Andrew Alec Kaplowitz: Thanks Andy. We will take our next question from him. Unknown Attendee, Steven Fisher, with UBS. Thanks. Good morning.

Speaker Change: But the good thing is we've identified them right. So even though they may not be in backlog. We know every project. We've identified it we know when they are supposed to sign most of it is under Ela in CP, if not all of it but it's it's really about at the end of the day getting it to a signed contract and being able to work on it and Thats, what we hope to be able to deliver in the <unk>.

Steven Fisher: Wanted to just follow up on that last question. Wondering if you can maybe bridge for us the $4.4 billion of expected revenues in clean energy versus the $3.1 billion of year-end backlog. How much of that incremental $1.3 billion is discrete renewable projects that are maybe in limited notice to proceed that you expect to put into backlog and then burn versus how much is maintenance or small capital projects, just kind of flow work, or maybe there's something specific in civil infrastructure or industrial that you have expected to bridge that sort of backlog versus revenue gap? Yeah, so.

Speaker Change: First and second quarter from a backlog perspective.

Speaker Change: Okay. That's helpful and then just a little bit of.

Near term cadence in I guess in terms of your Q1 numbers.

Speaker Change: Starting March here, so two thirds of the quarter done yes.

Speaker Change: To what extent are there still any notable things that have to happen.

Jose Mas: I guess generally, right, when you think about industrial and civil, to get it out of the way, backlog is pretty much set in those we've, you know, we believe that in our backlog numbers, we have most of the burn required in 2024. We've, you know, there's some work that you're going to book and burn, but for the most part, you know, we think we're sitting in a really good place relative to backlog versus revenue expectations. On the renewable side of the business, you know, the reality is that in our minds, right, the business is much better than what the backlog shows. I think you're going to see a considerable backlog build in Q1. I think you'll see a considerable backlog build again in Q2.

Speaker Change: To date.

Speaker Change: <unk> one numbers I've seen you've factored in all of the January and February weather and timing of solar projects.

Speaker Change: And then do you have an overall kind of first half versus second half EBITDA mix just to kind of get an early framing of what youre thinking about Q2. Thank you.

Speaker Change: Yes, so look on the first quarter, obviously, we are cheap in the first quarter. So I think we've taken into account everything that we know as of today.

Speaker Change: Whether it was a little bit of an issue in certain geographic parts that impact that are impacting our first quarter, but.

Speaker Change: It's really not much different and quite frankly, what our expectation was coming out of our third quarter call, maybe with the exception of the Illinois rate case, and the impact that Thats had on our power delivery business in Q1.

Jose Mas: And that'll give, in my opinion, the, you know, at least the outside world that doesn't see our numbers day to day, the comfort that, you know, our 24 is solidified in our prepared remarks. We talked about, you know, that actually having a really positive impact for 25, because these projects actually have a similar, if not a little bit greater amount of volume activity in 25 than they do in 24, which I think positions us incredibly But, you know, the good thing is that we've identified them, right?

Speaker Change: Outside of that I think everything is pretty consistent with our expectations.

Speaker Change: We think about second quarter, and third quarter, and we do year over year comps we have.

Speaker Change: Pretty similar ramp to what we had last year from an earnings perspective, right. We expect earnings in the second third and fourth quarter to be above where they were in 'twenty three but we don't expect any particular quarter to be dramatically above. So I think margin profiles are going to be consistent with what we're generally last year and it's going to.

Speaker Change: Really be driven by the revenue expectations. Paul stated the second and third quarter are going to be our two biggest quarters and.

Jose Mas: So even though they may not be in backlog, we know every project, we've identified it, we know when they're supposed to sign, most of it is under LNTP, if not all of it, but it's really about, you know, at the end of the day, getting it to a signed contract and being able to work on it. And that's what we hope to be able to deliver in the first and second quarters from a backlog perspective. Okay, that's helpful.

Speaker Change: And I think that we will be able to show and it has moderate growth rate. So we're going to have nice growth between the second and third quarter.

Very similar to last year. So if you take last year's cadence I think we're going to have a similar cadence in 2024.

Speaker Change: Thanks Jose.

Jose Mas: Thank you.

Jose Mas: We will take our next question from Mike Bianchi with Cowen.

Steven Fisher: And then just a little bit of near-term cadencing, I guess, in terms of your Q1 numbers. We're already starting March here, so two-thirds of the quarter is already done. I guess, to what extent are there still any notable things that have to happen in order to hit your Q1 numbers? I assume you've factored in all the January and February weather and timing of solar projects. And then do you have an overall kind of first half versus second half EBITDA mix just to kind of get an early framing of what you're thinking about Q2? Thank you.

Marc Gregory Bianchi: Hey, thanks.

Marc Gregory Bianchi: Jose I think I heard you say that you had some optimism about the oil and gas business in 'twenty five and beyond because the roll off of this MVP does create a tough comp when you get to 25. So can you talk about.

Marc Gregory Bianchi: Where that.

Marc Gregory Bianchi: Those opportunities are and when we might get some.

Marc Gregory Bianchi: Some visibility on that.

Marc Gregory Bianchi: Sort of external spectators.

Jose Mas: Well I think it's multiple things one I actually think that the.

Jose Mas: Yeah, so look, for the first quarter, obviously, we're cheap in the first quarter, so I think we've taken into account everything that we know as of today, whether it was a little bit of an issue in certain geographic areas that are impacting our first quarter. But it's really not much different than, quite frankly, what our expectation was coming out of our third quarter call, maybe with the exception of the Illinois rate case and the impact that that had on our power delivery business in Q1. Outside of that, I think everything is pretty consistent with our expectations. When we think about the second quarter and the third quarter, and we do year-over-year comps, we have a pretty similar ramp to what we had last year from an earnings perspective. We expect earnings in the second, third, and fourth quarters to be above where they were in 23, but we don't expect any particular quarter to be dramatically above.

Jose Mas: The gas side of the pipeline businesses incredibly active, especially in certain geographic areas I think youre going to see that <unk>.

Jose Mas: And materialize our year goes on just from some of them will be book and burn, but I think we will have a really strong.

Jose Mas: Year outside of MVP.

Jose Mas: And then when we think about 'twenty five we see that continuing.

Jose Mas: Based on the conversations we're having with customers and then more importantly, we're starting to see real jobs on some of the other alternative types of pipeline builds right whether that be carbon capture hydrogen we think that becomes real in 'twenty. Five we think that becomes meaningful it probably changes the business right because I think that's going to be.

Jose Mas: Consistent in nature for a long period of time.

So I think the mix of our business, what we would call oil.

Jose Mas: We view it more as a pipeline business right. So I think theres going to be more diversity in that business and 25, which is going to lead to some of that growth that we talked about so it's not specifically what we used to do but it's a mix of what we're seeing in the future.

Jose Mas: So I think margin profiles are going to be consistent with where they were generally last year, and it's going to really be driven by revenue expectations. Paul stated that the second and third quarters are going to be our two biggest quarters, and I think that we'll be able to show – and it has moderate growth, right? So we're going to have nice growth between the second and third quarters, very similar to last year.

Jose Mas: And the margin composition of that opportunity would it be similar to sort of what's implied here in the back half of the year.

Speaker Change: It is.

Speaker Change: Great. Thank you I'll turn it back.

Jose Mas: So if you take last year's cadence, I think we're going to have a similar cadence in 2024. Thanks, Jose. Thank you. We'll take our next question from Mike Bianchi. Hey, thanks.

Speaker Change: Thank you.

Speaker Change: We will take our next question from Daniel <unk> with Goldman Sachs.

Daniel: Yes, Thank you Neil Mehta here I.

Daniel: I guess Jose Luis add some industry questions on the utility side, which is there's been a lot of talk about this load growth to transition from a market that has flattened power demand and funding for a variety of reasons, including data centers.

Marc Gregory Bianchi: I, Jose, I think I heard you say that you had some optimism about the oil and gas business in 25 and beyond because the roll-off of this MVP does create a tough comp when you get to 25. So can you talk about where those opportunities are and when we might get some, some visibility on that as, you know, sort of external spectators? Well, I think it's multiple things.

Daniel: Electric vehicles and onshoring. So just would love your perspective as you talk to your utility customers about what that means for the capex profile of the industry and what does the industry need to do.

Jose Mas: One, I actually think that the gas side of the pipeline business is incredibly active, especially in certain geographic areas. I think you're going to see that materialize as our year goes on. Some of it will be book and burn, but I think we'll have a really strong year outside of MVP. And then when we think about 25, we see that continuing, just based on the conversations we're having with customers. And then, more importantly, we're starting to see real jobs on some of the other alternative types of pipeline builds, whether that be carbon capture or hydrogen. We think that it will become real in 25.

Daniel: In order to meet growing load.

Speaker Change: I think we're seeing it right if you look at.

Speaker Change: Not to plug you Neal, but you actually put out a note yesterday that listed a number of different utilities that had raised their capex here in the first quarter I thought it was a thoughtful note I thought it was important and reflective of what's really happening in the industry.

Speaker Change: And.

Speaker Change: That's what we're seeing our customers are talking about it our customers aren't just talking about it but they are raising their capex dollars to deal with it. We don't think this is a short term initiative. We think this is going to last for a really long time, and we think we're just starting to see the beginning of it. So this is an incredibly exciting market to be in again.

Speaker Change: There has been.

Speaker Change: Some issues with the cadence of that spend over the course of the last year, but there's no question in my mind, where the direction of that is going.

Jose Mas: We think that becomes meaningful. It probably changes the business, right? Because I think that's going to be very consistent in nature for a long period of time. So I think the mix of our business, what we would call, we view it more as a pipeline business. So I think there's going to be more diversity in that business in 25, which is going to lead to some of that growth that we talked about. So it's not specifically what we used to do, but it's a mix of what we're seeing in the future. And the margin composition of that opportunity, would it be similar to sort of what's implied here in the back half of the year? Unknown Attendee It is.

Speaker Change: From our perspective, we think we sit in a really good place. We've added an enormous amount of scale in that business and we think that's really going to start to pay off for us here in the next year or so so we're really excited about what's happening in the industry and I think that I think.

Speaker Change: Generally I think people underestimate the capital requirements.

Speaker Change: To meet the growing demand of energy use that we're going to have over the coming years.

Speaker Change: Yes.

Thanks Jose.

Speaker Change: There is a related question, which is there's been a lot of talk about the impacts of wildfires across the utility system and certainly.

Neil Singhvi Mehta: Great, thank you. I'll turn it back. Thank you. We'll take our next question from Daniel Mehta with Goldman Sachs. Yeah, thank you. Neil Mehta here.

Fortunately, we've seen a lot of incidence here over the last year or two.

Speaker Change: Again your perspective on this as does this represent.

Speaker Change: A challenge that you see yourself as well positioned to help utilities.

Jose Mas: I guess, Jose, I want to add some industry questions on the utility side, which is that there's been a lot of talk about this load growth transition from a market that has flattened power demand to inflecting for a variety of centers, electric vehicles, and onshoring. So just wanted your perspective as you talk to your utility customers about what that means for the CapEx profile of the industry and what the industry needs to do in order to meet growing demand. I think we're seeing it right if you look at, not to plug you, Neil, but you actually put out a note yesterday that listed a number of different utilities that had raised their CapEx here in the first quarter. I thought it was a thoughtful note.

Speaker Change: Mitigate and as you think about specifically in the utility system.

Speaker Change: Things that they can do as they think about trying to head off this problem.

Speaker Change: I think its two things I think one is wildfires and the other storms and I think that when you think about the west coast. They have been more impacted by far is the east coast has been more impacted by storm.

Speaker Change: The fixes for either one are somewhat similar so the investments in underground systems and hardening systems across the country become more and more meaningful as we deal with climate change So I do think that.

Speaker Change: Those are the challenge right is who's going to pay for it and where to state stand in terms of funding these initiatives.

Jose Mas: I thought it was important and reflective of what's really happening in the industry. And that's what we're seeing, right? Our customers are talking about it. They aren't just talking about it, but they're raising their CapEx dollars to deal with it. We don't think this is a short-term initiative. We think this is going to last for a really long time, and we think we're just starting to see the beginning of it.

Speaker Change: Whereas the cost of power in a particular state and how willing as a public service Commission to grant that utility.

Speaker Change: To be able to do it.

Speaker Change: We're based here in Florida, and Florida, Theres been a huge initiative in the state Public Service Commission has passed.

30 year program with <unk>.

Tens of billions of dollars of funding to allow the utilities year to do that I think we're going to see more of that as time goes on I think it's necessary.

Jose Mas: So this is an incredibly exciting market to be in. Again, there have been some issues with the cadence of that spend over the course of the last year, but there's no question in my mind where the direction of that is going. You know, from our perspective, we think we sit in a really good place.

Speaker Change: And I think it is going to be meaningful across the country. In addition to what's happening with load growth rate. This helps offset these investments help you manage some of the issues that are going to come with load growth, but they are different and they both need to be dealt with so these are all catalyst and positive trends that we're going to see in this industry for a long time.

Speaker Change: Yeah.

Jose Mas: We've added an enormous amount of scale to that business, and we think that's really going to start to pay off for us here in the next year or so. So we're really excited about what's happening in the industry, and I think, generally, people underestimate the capital requirements to meet the growing demand for energy use that we're going to have over the coming years. Yeah, thanks, Jose. And there's a related question, which is that there's been a lot of talk about the impacts of wildfires across the utility system. And certainly, unfortunately, we've seen a lot of incidents here over the last year or two. I just, again, your perspective on this is: does this represent a challenge that you see yourself as well positioned to help utilities mitigate? And just as you think about specifically in the utility system, what are different things that they can do as they think about trying to head off this problem? I think it's two things. I think one is wildfires and the other is storms.

Speaker Change: Important issues. Thank you Jose.

Jose: Thanks Neil.

Speaker Change: We will take our next question from Adam Tal Hymer with Thompson Davis.

Speaker Change: Hey, good morning, guys. Congrats on the strong Q4 cash flow.

Thanks, Adam.

Speaker Change: How is that your comment about double digit communications revenue growth next year was interesting what what's the driver of that again.

Speaker Change: Just a wireless win that contract by itself should allow us to grow double digits for the full segment next year.

Speaker Change: And then.

Speaker Change: Related to that given that dynamic what kind of margins do you think you could generate.

Speaker Change: With that kind of revenue growth.

Improving margins right. So if we go back a few years.

Speaker Change: At scale.

Our business has been declining or when you would think about our wireline business over the course of last year's decline that's challenging for margins. There is obviously, a startup phase where where we invest in the business, which we've kind of baked into the margin profile that we're expecting for 'twenty, four but with scale right.

Speaker Change: Incremental revenue comes at a higher margin and Thats going to help drive margins up so that's a really important part of our 25 and beyond story as well.

Jose Mas: And I think that, you know, when you think about the West Coast, they've been more impacted by fires; the East Coast has been more impacted by storms. The fixes for either one are somewhat similar. So the investments in undergrounding systems, in hardening systems across the country, become more and more meaningful as we deal with climate change. So I do think that, you know, those are the, the challenge, right? Is who's going to pay for it? And where does the state stand in terms of funding these initiatives? And, you know, where is the cost of power in a particular state?

Speaker Change: Great. Thank you.

Thanks, Adam.

Speaker Change: We will take our next question from Brett Castelli with Morningstar.

Brent Edward Thielman: Thank you.

Brent Edward Thielman: Just on power delivery can you talk about your capabilities today on the transmission side of that business, maybe relative to history.

Brent Edward Thielman: Sure. So we I mean, we actually started that business.

Yeah.

I don't know now maybe.

Brent Edward Thielman: 10, 12 years ago really focused on the transmission side Thats, where we started we did some big projects.

Brent Edward Thielman: Wanted to get into the <unk>.

Brent Edward Thielman: The more predictable cadence of the business. So we really started focusing on distribution our efforts in 2021 and 'twenty two through the acquisitions that we made were really to expand our geographic scope.

Jose Mas: And how willing is that Public Service Commission to grant the utilities dollars to be able to do it? You know, we're based here in Florida. In Florida, there's been a huge initiative in the state. The Public Service Commission has passed, you know, a 30 year program with, you know, 10s of billions of dollars of funding to allow the utilities here to do that. I think we're going to see more of that as time goes on. I think it's necessary, and I think it's going to be meaningful. across the country, in addition to what's happening with load growth, right, this helps offset these investments help you manage some of the issues that are going to come with load growth, but they are different. And they both need to be dealt with.

Brent Edward Thielman: The primary nature of those acquisitions was also heavy MSA heavy distribution, although they all add transmission resources available I think since those acquisitions have made.

Brent Edward Thielman: We've really.

Brent Edward Thielman: Rone and added to our transmission capabilities in terms of talent and capabilities and I think today, we are in a position where we've done some jobs here in the last two years that are of size and the scale and I think we've really positioned ourselves to be a significant player in that market for a long time again in our prepared remarks, we talked about a number of jobs that work.

Jose Mas: So, you know, these are all catalysts and positive trends that we're going to see in this industry for a long time. Important issues. Thank you, Jose.

Brent Edward Thielman: Currently bidding that we feel comfortable and good that we'll be successful on some.

Brent Edward Thielman: And they will have a meaningful impact to our business. So it's.

Adam Robert Thalhimer: Thanks, Neil. We will take our next question from Adam Thalhimer with Thompson Davis. Hey, good morning, guys.

Brent Edward Thielman: That's probably going to be the biggest growth part of our power delivery business over the next couple of years. There is an incredible amount of demand across the country and theres more coming so.

Adam Robert Thalhimer: Congratulations on the strong Q4 cash flow. Thanks, Adam. Um, Jose, your comment about double-digit communications revenue growth next year was interesting. What's the driver of that? Just that wireless win, right? That contract by itself should allow us to grow double digits for the pool segment next year. And then.

Brent Edward Thielman: It's an important part of where we're trying to take that business.

Brent Edward Thielman: Okay, and then I think you mentioned <unk>.

Brent Edward Thielman: <unk> Foundation of contractors by your customer base in your prepared remarks.

Brent Edward Thielman: Is that maybe more pronounced in certain segments.

Speaker Change: Our segments are just kind of.

Jose Mas: Related to that, given that dynamic, what kind of margins do you think you could generate with that kind of revenue? Improving margins, right? So if we go back a few years, you know, at scale, our business has been declining, right? When you think about our wireline business over the course of the last year, it declined.

Speaker Change: Curious, how you're seeing that across the business.

Speaker Change: I think it.

It's actually part of the same comments with scale. So I think we're actually seeing it in all of our businesses right. We see it in the award of our biggest customer in wireless communications, we're seeing it in with some of the utilities did we did talk about a nice nice awards in our utility business of markets, where we feel.

Jose Mas: That's challenging for margins. There's obviously, you know, a startup phase where we invest in the business, which we've kind of baked into the margin profile that we're expecting for 24. But with scale, right, the incremental revenue comes at a higher margin, and that's going to help drive margins up. So that's a really important part of our 25 and beyond story as well. Great, thank you.

Speaker Change: Some of our customers consolidated their vendors, we're seeing it in the clean energy space, where developers large utilities are using less vendors for.

Speaker Change: The renewable projects portfolios on a go forward basis.

Speaker Change: So we think as projects get bigger.

Speaker Change: As consolidation happens across our customers as well people tend to want to work with less partners and we think that's a really important part of the story, we think scale matters.

Brent Edward Thielman: Thanks, Adam. We will take our next question from Brett Costelli with Morningstar. Just on power delivery, can you talk about your capabilities today on the transmission side of that business, maybe relative. Sure. So we actually started that business, I don't know now, maybe... 10, 12 years ago, really focused on the transmission side. That's where we started.

Speaker Change: Think we've built great scale.

Speaker Change: Our customers believe in the scale capabilities that we have and we do think that's a really important part of what's going to make company successful in the future and that's really what we've been building towards.

Speaker Change: Thank you I'll leave it there.

Speaker Change: Thank you.

Speaker Change: Okay.

Speaker Change: We will take our next question from Justin Hockey with Robert W. Baird.

Jose Mas: We did some big projects. You know, wanted to get into the more predictable cadence of the business. So we really started focusing on distribution. Our efforts in 2021 and 22 through the acquisitions that we made were really to expand our geographic scope. The primary nature of those acquisitions was also, you know, heavy MSA, heavy distribution, although they all had transmission resources available.

Speaker Change: Great.

Unknown Attendee: Thanks for taking my questions here I guess the first one.

Unknown Attendee: Just truly kind of just a numeric one that I wanted to clarify in terms of the backlog and what's in it and what's not so I think you said.

Jose Mas: I think since those acquisitions have been made, we've really grown and added to our transmission capabilities in terms of talent and capabilities. And I think today we're in a position where, you know, we've, we've, we've done some jobs here in the last two years that are of size and scale. And I think we've really positioned ourselves to be a significant player in that market for a long time. Again, in our prepared remarks, we talked about, you know, a number of jobs that we're currently bidding on that we feel comfortable and good that they will be successful on some, and they'll have a meaningful impact on our business. So it's, you know, that that's probably going to be the biggest growth part of our power delivery business over the next couple of years. There's an incredible amount of demand across the country, and there's more coming.

Unknown Attendee: AT&T scope edition.

Unknown Attendee: <unk> booked in the fourth quarter, but.

Unknown Attendee: Nokia and Ericsson equipment.

Unknown Attendee: Scope that youre talking about the second half that is not in backlog yet that'll be win.

Unknown Attendee: When you go into the second half and then the.

Unknown Attendee: The <unk> on that aspect would be in the clean energy I think you said that you booked the Rochester job that was 200 million I'm just curious if there were any other.

Unknown Attendee: Significant de bookings in the quarter in that segment as you kind of scrubbed the backlog.

Unknown Attendee: There was no other <unk> bookings.

Unknown Attendee: Obviously, we announced the issues with that project in the third quarter.

Jose Mas: So, you know, it's an important part of where we're trying to take that. Unknown Attendee And then, in your prepared remarks, you mentioned consolidation of contractors by your customer base. Is that maybe more pronounced in a certain segment?

Unknown Attendee: Life cycle project is.

Unknown Attendee: On hold so we've taken it out of backlog.

Unknown Attendee: It was a project that we had been working on so typically once a project its backlog usually rebuild.

Jose Mas: more segments are just kind of curious and how you're seeing that across. I think it's actually part of the same comments with scale. So I think we're actually seeing it in all of our businesses, right?

Unknown Attendee: Very few instances, where we've had to take anything out of backlog. Obviously lifecycle was its own has its own issues. When we think about comps.

Jose Mas: We see it in the award of our biggest customer in wireless and communications. We're seeing it in what some of the utilities did. We did talk about nice, nice awards in our utility business in markets where we feel some of our customers consolidated their vendors. We're seeing it in the clean energy space where developers or large utilities are using fewer vendors for their renewable projects or portfolios on a go-forward basis. So we think as projects get bigger, as consolidation happens across our customers as well, people tend to want to work with fewer partners. And we think that's a really important part of the story. We think scale matters.

Unknown Attendee: A portion of it is in backlog I think that again, we're not expecting significant impact from that until the latter part of the year and again, that's our backlog as we only take the 18 month view. So there is a component for that but it's a relatively we think a much smaller component and what the actual award means.

Unknown Attendee: Over the long term.

Unknown Attendee: Okay.

Speaker Change: And then I guess my second question is just.

Speaker Change: Maybe it's another numeric one, but just kind of quantifying.

Speaker Change: The Illinois.

Speaker Change: The impact in the power delivery business.

Jose Mas: We think we've built great scale, and our customers believe in the scale capabilities that we have. And we do think that's a really important part of what's going to make companies successful in the future. And that's really what we've been building towards. Thank you. I'll leave it there.

Speaker Change: Yes.

Speaker Change: I didn't realize that that was such a big geography for you. So.

Speaker Change: Maybe you can just give some context.

Speaker Change: For 2024 guidance assumes like 2% growth for that segment.

Justin P. Hauke: We will take our next question from Justin Hauke with Robert W. Baird. Great. Thanks for taking my questions here. I guess the first one is kind of just a numeric one that I wanted to clarify.

Speaker Change: How much is the Illinois rate case.

Speaker Change: On the revenue.

Speaker Change: Growth outlook there.

So I'd say a couple of things Exelon was is our fourth largest customer at mastec. So it's not all in Illinois, but it's a good chunk of it is.

Justin P. Hauke: Unknown Attendee, Steven Fisher, MasTec Inc., When you go into the second half, and then the other numeric on that aspect would be in clean energy. I think you said that you debooked the Rochester job that was 200 million. I'm just curious if there were any other significant debookings in the quarter in that segment as you kind of scrub the backlog. There were no other debookings.

Speaker Change: They are a meaningful cut for 'twenty four we originally talked about mid single digit revenue growth in this market for 24 versus what we're seeing today and I think that entire drop is the impact. So if you want to call it.

Speaker Change: 100 $150 million of impact in 'twenty, four that's kind of what we built in assuming we don't we're not able to.

Jose Mas: Obviously, you know, we announced the issues with that project in the third quarter. The life cycle project is, you know, on hold, so we've taken it out of backlog. It was a project that we had been working on. So, you know, typically, once a project hits backlog, you know, usually we build it, very few instances where we've had to take anything out of backlog. Obviously, the life cycle was had its own issues.

You know really put those people on other work, which I think theres going to be an opportunity for us. So again, we talked about it being somewhat of a conservative view, but that's our view today. So we've kind of taken the entire impact that we expect in 'twenty four completely out of guidance.

Speaker Change: Got it okay. Thank you.

Speaker Change: Thanks, Justin.

Speaker Change: We will take our next question from Brent Thielman with Davidson.

Brent Edward Thielman: Pretty close.

Brent Edward Thielman: Hey, Jose Paul just on.

Jose Mas: When we think about communications, you know, a portion of it is in backlog. I think that, again, we're not expecting significant impact from that until the latter part of the year. And again, that's our backlog; we only take the 18-month view. So there is a component for that, but it's a relative, we think, much smaller component than what the actual award means.

Brent Edward Thielman: The $550 million cash from operations bogey could you talk about the puts and takes that could get potentially above that this year. Just given you had a pretty strong finish to 2023.

Brent Edward Thielman: Yes. This is Paul I think the biggest driver is just around the DSO. So I said, we're assuming we kind of.

Justin P. Hauke: Over the long term. Okay, and then I guess my second question is just, maybe it's another numeric one, but just kind of quantifying Illinois and the impact on the power delivery business. I guess I didn't realize that that was geography for you. So maybe you can just give some context.

Paul: Spend the year in the high <unk>.

Paul: Yes versus the 74, we ended the year at so I think there is some some opportunity for us to continue to perform.

Paul: Better from a DSO perspective and at.

Paul: At the revenue levels were.

Paul: We're generating each day is north of $30 million of cash flow, so that's a pretty meaningful opportunity.

Jose Mas: I mean, the 2024 guidance assumes like 2% growth for that segment. How much is the Illinois rate case weighing on the revenue growth outlook there? So I'd say a couple of things. Exelon is our fourth largest customer at MasTec. So it's not all in Illinois, but a good chunk of it is.

Speaker Change: Okay, Great and then just back to clean energy.

Speaker Change: And we think could you just speak to the margin profile of the structure of the contracts.

Speaker Change: Anything else through the new business that you are adding into the backlog at this point.

Jose Mas: They have a meaningful cut for 24. You know, we originally talked about, you know, mid single-digit revenue growth in this market for 24 versus what we're saying today. And I think that entire drop is the impact.

Speaker Change: And maybe how that all inform your view around higher levels of profitability for that business group kind of over the medium term I know you've got your expectation for this year, but kind of looking out beyond that.

Jose Mas: So if you want to call it, you know, 100, 150 million dollars of impact in 24, that's kind of what we've built in. Assuming we don't, you know, we're not able to. You know, really put those people to other work, which I think there's going to be an opportunity for. So again, we talked about it being somewhat of a conservative view, but that's our view today. So we've kind of taken the entire impact that we expect in 24 completely out of guidance. Transcribed by https://otter.ai. We will take our next question from Brent Thielman with Daw Davinson. Close. Hey, Jose, Paul, just on the $550 million cash from operations bogeyman, could you talk about the puts and takes that could get you potentially above that this year, just given you had a pretty strong finish? Yeah, this is Paul.

Speaker Change: Yeah look it's a great question. One obviously is 23 played out and even.

Speaker Change: Bit into early 'twenty four we're still working on contracts that were won a while ago, obviously everybody knows the challenges that have existed with supply chain. So as you.

Speaker Change: As you are working on all the projects in those businesses, sometimes it has a negative impact to margins.

Speaker Change: Historically and even as we look at it our 'twenty three performance our wins Maher.

Margins significantly outperformed our solar margins that has everything to do with the fact that we've been in wind for a long time and we're a lot newer to solar we have got a ton of opportunity to increase our solar margins, which we need to do and we need to accomplish I think that's going to be the bigger driver of the margin growth over time.

Speaker Change: But when margins quite frankly are holding with what we've historically done so as the wind market comes back and as that becomes a bigger driver of revenues. We do think that the margin profile. There is considerably at least from our performance perspective considerably better. If you go way back we used to we used to.

Brent Edward Thielman: I think the biggest driver is just around the DSO. You know, so I said, we're assuming we kind of spend the year in the high 70s versus the 74 we ended the year at. So, you know, I think there's some opportunity for us to continue to perform better from a DSO perspective. And, you know, at the revenue levels we were, we're generating each day north of $30 million in cash flow. So that's a pretty meaningful opportunity. Great And then we can just go back to clean energy.

Speaker Change: Years, where this business performed at double digits. The whole segment a lot of that was driven by wins, we're seeing similar margin potentials in some of those projects on a go forward basis, we've got to get our solar business. There over time, which is what we're working on obviously the solar businesses, what's going to grow faster. So.

Speaker Change: We're encouraged 23 again it was a tough year.

Jose Mas: Jose, could you just speak to the margin profile, the structure of the contract? Unknown Speaker Anything else for the new business that you're adding to the backlog at this point, and maybe how that all informs your view? around higher levels of profitability for that business group kind of over the medium term. I know you've got your expectations for this year, but I'm kind of looking out beyond. Yeah, look, it's a great question. One, obviously, as 23 played out, and even, you know, a little bit in early 24, we're still working on contracts that were won a while ago. Obviously, everybody knows the challenges that have existed in the supply chain.

Speaker Change: We're going to have ups and downs in 'twenty four we've kind of built that into our model, but I really think that our focus today is on executing these projects on driving margins out of the business.

Our goal our objective is really to increase those margins over time.

Speaker Change: Okay. Thank you.

Speaker Change: Thanks.

Speaker Change: We will take our next question from Min Cho with B Riley Securities.

Min Cho: Hi, good morning.

Min Cho: Quick question, Hey, there.

Min Cho: And James and Paul You mentioned that you are breaking out the clean energy section into several market sectors.

Min Cho: Can you provide a general revenue breakout right now where the renewables versus infrastructure industrial stand.

Jose Mas: So as you, you know, as you're working on all the projects in those businesses, sometimes it has a negative impact on margins. You know, historically, and even, you know, as we look at our 23 performance, our wind margins significantly outperformed our solar margins. That has everything to do with the fact that we've been in wind for a long time, and we're a lot newer to solar. We've got a ton of opportunity to increase our solar margins, which we need to do, and we need to accomplish. I think that's going You know, but wind margins are, quite frankly, holding with, you know, what we've historically done. So as the wind market comes back, and as that becomes a bigger driver of revenues, you know, we do think that the margin profile there is, you know, considerably, at least from our performance perspective, considerably better. You know, if you go way back, you know, we used to, there were years where this business performed at double digits, the whole segment, a lot of that was driven by wind.

Speaker Change: Yes, our renewables businesses.

Speaker Change: Just over 60% of the total segment.

Speaker Change: Okay.

Speaker Change: Obviously, where all the growth potential is going forward.

Speaker Change: Yes, I mean infrastructure has got some good opportunities as well right I mean that business had a meaningful both our legacy Nia had good scale in that business in different geographies and.

Speaker Change: With the infrastructure Bill there are a number of opportunities there as well we have de emphasized industrial.

Speaker Change: In the near term just in light of some of the challenges we had on projects over 'twenty, one and into.

Speaker Change: Latter part of 'twenty three.

Speaker Change: So I do think Theres renewables for sure drive the growth but infrastructures.

Speaker Change: Some good opportunities as well.

Speaker Change: Thanks, Thats very helpful. And then just finally, obviously.

Speaker Change: Was there I know you've been scaling up.

Speaker Change: With expectations for growth for the next couple of years.

Speaker Change: It sounds like there is so much more growth to come we're just at the very beginning and across all of your end markets and labor.

Speaker Change: And this year will continue to be an issue, but when do you think the industry gets to.

Speaker Change: Full capacity, where you start to see elongation of the cycle, where it really benefits margin.

Jose Mas: We're seeing, you know, similar margin potentials in some of those projects on a go forward basis. We've got to get our solar business there over time, which is what we're working on. Obviously, the solar business is what's going to grow faster. So, you know, we're encouraged. 23 again was a tough year.

Speaker Change: I think each segment is different I think in some segments quite frankly, we're almost there.

Speaker Change: Yes.

Speaker Change: I think one of the really important things as customers recognize it right they talk about it.

Speaker Change: They don't necessarily feel it yet because they know theres still flex in the system, but everybody knows we're going to get to that point I think coming out of 24% to 25.

Jose Mas: You know, we're gonna have ups and downs in 24, we've kind of built that into our model. But I really think that, you know, our focus today is on executing these projects driving margins out of the business. And, you know, our goal, our objective is really to increase those margins over time. We will take our next question from Min Cho with B. Reilly. Hi, good morning. A couple of quick questions.

Speaker Change: Across all of our segments, we're going to feel some of that some more than others.

Speaker Change: And I do think that at that point.

Speaker Change: It does start impacting.

Speaker Change: What we do with customers I would talk about it and how we price things.

Speaker Change: Excellent alright, well good luck to your point 24. Thank you. Thanks.

Min Chung Cho: In terms of, Paul, you mentioned that you're breaking out the clean energy. Unknown Attendee, Steven Fisher, MasTec Inc., Unknown Attendee, Steven Fisher, MasTec Inc. Yeah, you know, our renewables business is, you know, just over 60% of the total segment. That's obviously where all the growth potential is going forward. I mean, infrastructure has got some good opportunities as well, right? I mean, so that business had meaning, both our legacy and IEA had good scale in that business in different geographies. And, you know, with the infrastructure bill, there are a number of opportunities there as well. You know, we've de-emphasized industrial in the near term, just in light of some of the challenges we had on projects over 21 and, you know, in the latter part of 23. So, you know, I do think there are, you know, renewables will for sure drive the growth, but, you know, infrastructure's, you know, got some good opportunities as well.

Speaker Change: Thanks Man.

Speaker Change: We currently do not have any further questions I will turn it back to Mr. Mas for closing remarks.

Jos Ramon Mas: Just wanted to thank everybody for participating today, and we look forward to updating you on our first quarter call here in short period of time. Thank you.

Speaker Change: This concludes today's call. Thank you for your participation you may now disconnect.

Speaker Change: Okay.

[music].

Jose Mas: Unknown Speaker 21.36 for you. Thank you. That sounds like it's very, very helpful.

Jose Mas: And then just finally, obviously, Jose, now you've been scaling up kind of with expectations for growth for the next couple of years, and it sounds like there's so much more growth to come. We're just at the very beginning, and across all of your end markets, and labor, you know, it's always an issue, it will continue to be an issue, but when do you think the industry gets to, you know, kind of full capacity, where I think in some segments, quite frankly, we're almost there. I think one of the really important things is that customers recognize it, right? They talk about it all the time. They don't necessarily feel it yet because they know they're still flexing the system. But everybody knows we're going to get to that point. I think coming out of 24 into 25, you know, across all of our segments, we're going to feel some of that, you know, some more than others.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: [music].

Jose Mas: And I do think that at that point, you know, it does start impacting what we do with customers, how we talk about it, and how we price it. All right, well, good luck to you in 2024. Thanks, man. I currently do not have any further questions. I will turn it back to Mr. Mas for closing remarks. Just want to thank everybody for participating today, and we look forward to updating you on our first quarter call here in a short period of time. This concludes today's call. Thank you for your participation. You may now disconnect.

Speaker Change: Yeah.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: [music].

Jose Mas: ... Unknown Attendee, www.marcbianchile.com Unknown Attendee, Steven Fisher, MasTec Inc.

Yeah.

Operator: .....