Q4 2024 MYR Group Inc Earnings Call

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Operator: Good morning, everyone, and welcome to the MYR Group 4th Quarter 2024 Earnings Results Conference Call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during this session, you will need to press star 1-1 on your telephone. You will then hear an automated message inviting your hand is raised. To withdraw your question, please press star 1 again.

Speaker Change: Good morning, everyone and welcome to the MYR Group fourth quarter 2024 earnings results Conference call. At this time, all participants are in listen only mode.

After the Speakers' presentation, there'll be a question and answer session.

Speaker Change: Ask a question during this session you will need to press star one while our telephone you will then hear automated message if I can your hand is wave two.

Speaker Change: Your question. Please press Star one again todays conference is being recorded.

Operator: Today's conference is being recorded.

David Gutierrez: At this time, for opening remarks and introduction, I'd like to turn the call over to David Gutierrez of Dresden Air Corporate Services. Please go ahead, David. Thank you and good morning, everyone. I would like to welcome you to the MYR Group conference call to discuss the company's fourth quarter results for 2024, which were reported yesterday. Joining us on today's call are Rick Schwartz, President and Chief Executive Officer, Kelly Huntington, Senior Vice President and Chief Financial Officer, Brian Stern, Senior Vice President and Chief Operating Officer of MYR Group's Transmission and Distribution Segment, and Don Egan, Senior Vice President and Chief Operating Officer of MYR Group's Commercial and Industrial Segment.

Speaker Change: Time for opening remarks introductions I would like to turn the call over to David Paris of Dresdner Corporate services. Please go ahead David.

Speaker Change: Thank you and good morning, everyone.

Speaker Change: I would like to welcome you to the MYR Group conference call to discuss the company's fourth quarter results for 2024, which were reported yesterday.

Rick Swartz: Joining us on today's call are Rick Swartz, President and Chief Executive Officer, Kelly, Huntington, Senior Vice President and Chief Financial Officer.

Brian Stern: Brian Stern Senior Vice President and Chief operating officer of MYR groups' transmission and distribution segment.

Speaker Change: And Don <unk>, Senior Vice President and Chief operating officer of MYR group's commercial and industrial segment.

David Gutierrez: If you did not receive yesterday's press release, please contact Dresden Corporate Services at 312-780-7204 and we will send you a copy, or go to the MYR Group website where a copy is available under the Investor Relations tab.

Speaker Change: If you did not receive yesterday's press release, please contact dresner corporate services at 312780, Kevin two or four and we will send you a copy or go to the MYR group website, where a copy is available under the Investor Relations tab.

Operator: Also, a webcast replay of today's call will be available for seven days on the Investors' Change of the MYR Group website at myrgroup.com.

Speaker Change: A webcast replay of today's call will be available for seven days.

Speaker Change: Investors eight inch of the MYR group website at MYR group Dot com.

David Gutierrez: Before we begin, I want to remind you that this discussion may contain forward-looking statements. Any such statements are based upon information available to MYR Group's management as of this date. And MYR Group assumes no obligation to update any such forward-looking statement. These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. Accordingly, these statements are no guarantee of future performance.

Speaker Change: Before we begin I want to remind you that this discussion may contain forward looking statements any such statements are based upon information available to MYR groups' management as at the state and MYR Group assumes no obligation to update any such forward looking statements.

Speaker Change: These forward looking statements involve risks and uncertainties that could cause actual results to differ materially from the forward looking statements.

Speaker Change: These statements are no guarantee of future performance. These risks and uncertainties are discussed in the company's annual report on Form 10-K for the year ended December 31, 2024, and in yesterday's press release.

David Gutierrez: These risks and uncertainties are discussed in the company's annual report on Form 10-K for the year ended December 31, 2024, and in yesterday's press release. Certain non-GAAP financial information will be discussed on the call today. A reconciliation of these non-GAAP measures to the most comparable GAAP measures is set forth in yesterday's press release.

Speaker Change: Certain non-GAAP financial information will be discussed on the call today, a reconciliation of these non-GAAP non-GAAP measures to the most comparable GAAP measures is set forth in Yesterdays press release with that said, let me turn the call over to Rick Swartz.

Rick Schwartz: With that said, let me turn the call over to Rick Schwartz. Thanks, David. Good morning, everyone. Welcome to our fourth quarter 2024 conference call to discuss financial and operational results. I will begin by providing a summary of the fourth quarter results, and then we'll turn the call over to Kelly Huntington, our Chief Financial Officer, for a more detailed financial review. Following Kelly's overview, Brian Stern and Don Egan, Chief Operating Officers for our T&D and C&I segments, will provide a summary of our segment performance and discuss some of MYR Group's opportunities going forward. I will then conclude today's call with some closing remarks and open the call up for your questions.

Rick Swartz: Thanks, David Good morning, everyone welcome to our fourth quarter 2024 conference call to discuss financial and operational results.

Speaker Change: I will begin by providing a summary of the fourth quarter results and then we'll turn the call over to Kelly Huntington, Our Chief Financial Officer for a more detailed financial review.

Speaker Change: Boeing Kelly's overview, Brian Stern, and Don Egan, Chief operating officers for our T&D and C&I segments will provide a summary of our segment performance and discuss some of them were groups opportunities going forward.

Speaker Change: Ill, then conclude todays call with some closing remarks and open the call up for your questions.

Rick Schwartz: We finished 2024 with continued improvement in our financial performance in the fourth quarter, as we worked through the unfavorable impacts from a relatively small group of clean energy projects in our T&D segment, and one project in our C&I segment over the course of the year. These projects all reached mechanical completion during the fourth quarter. Our backlog increased to $2.6 billion, reflecting a healthy bidding environment and ongoing investments in infrastructure to meet growing electricity demand. We continue to expand relationships through multi-year master service and alliance agreements, while strategically pursuing additional opportunities to forge new partnerships. Key market drivers, such as system hardening, grid modernization, technology advancement, infrastructure improvement, and decarbonization all present opportunities for long-term growth across our business.

Speaker Change: We finished 2024 with continued improvement in our financial performance in the fourth quarter as we worked through the unfavorable impacts from a relatively small group of clean energy projects in our T&D segment and one project in our C&I segment over the course of the year.

Speaker Change: These projects all reached mechanical completion during the fourth quarter.

Speaker Change: Our backlog increased to $2 6 billion.

Speaker Change: Reflecting a healthy bidding environment and ongoing investments in infrastructure to meet growing electricity demand.

Speaker Change: We continue to expand relationships with multiyear Master service and alliance agreements.

Speaker Change: Strategically pursuing additional opportunities to forge new partnerships.

Speaker Change: Key market drivers such as system hardening grid modernization technology advancement transmit trance it infrastructure improvements and de carbonization, all present opportunities for long term growth across our business.

Rick Schwartz: According to the Deloitte 2025 Power and Utilities Industry Outlook released in December, utilities are responding to this dynamic energy landscape with record capital expenditures, reaching an estimated $174 billion in 2024. Forecasts project these capital expenditures to keep rising in the coming years. Many MYR Group plans to continue to serve as a resourceful, flexible, and committed partner to our customers as they endeavor to meet demands for reliable power. Our C&I segment continues to see robust long-term opportunities with new and existing customers within our core markets of data centers, transportation, pharmaceuticals, healthcare, and clean energy. The C3 Group's 2024 North American Electric Transmission Market Forecast, released in September, noted there are more than 170 hyperscale and co-location data centers planned, requiring more than 45 gigawatts of capacity.

Speaker Change: According to the Deloitte 2025 power and utilities industry outlook released in December.

Speaker Change: Utilities are responding to this dynamic energy landscape with record capital expenditures, reaching an estimated $174 billion in 2024.

Speaker Change: Forecast projected capital expenditures to keep rising in the coming years.

Speaker Change: Many MYR.

Speaker Change: MYR group plans to continue to serve as a resourceful flexible and committed partner to our customers as they endeavor to meet demands for reliable power.

Speaker Change: Our C&I segment continues to see robust long term opportunity with new and existing customers within our core markets of data centers transportation pharmaceuticals, healthcare and clean energy.

Speaker Change: The C. Three groups 2024, North American electric transmission market forecast released in September noted there are more than 170, Hyperscale and Colocation data centers.

Speaker Change: Requiring more than 45 gigawatts of capacity.

Rick Schwartz: Our C&I teams help build new facilities and expand existing ones, while our T&D crews provide grid infrastructure improvements and additions to help deliver the vast electricity demands required of data centers. Increasing demand for electricity offers a promising outlook for our industry, which more than ever needs proven partners with established resources to meet the energy needs of businesses and communities. We believe our chosen core markets are poised for ongoing success, thanks to the significant investments being made in electrical infrastructure.

Speaker Change: Our C&I teams help build new facilities and expand existing ones, while our T&D crews provide great infrastructure improvements and additions to help deliver the vast electricity demands required of data centers.

Speaker Change: Increasing demand for electricity offers a promising outlook for our industry, which more than ever need proven partners with established resources to meet the energy needs of businesses and communities.

Speaker Change: We believe our chosen core markets are poised for ongoing success. Thanks to the significant investments being made in electrical infrastructure.

Rick Schwartz: and are confident that our hard-earned reputation for collaboration, honesty, and reliable project delivery positioned us well for future work.

Speaker Change: And the and are confident that our hard earned reputation for collaboration honesty and reliable project delivery position us well for future work now Kelly will provide details on our fourth quarter 2024 financial results.

Kelly Huntington: Now Kelly will provide details on our fourth quarter 2024 financial results. Thank you, Rick, and good morning, everyone. Our fourth quarter 2024 revenues were $830 million, which represents a decrease of $174 million, or 17% compared to the same period last year. This decrease was primarily related to certain clean energy projects in our T&D segment that have reached mechanical completion, as well as a decrease in revenue on CNI fixed price contracts, offset by an increase in revenue on CNI T&E contracts. Our fourth quarter T&D revenues were $450 million, a decrease of 24% compared to the same period last year.

Kelly Huntington: Thank you Rick and good morning, everyone.

Kelly Huntington: First quarter 2024, our revenues were $830 million, which represents a decrease of $174 million or so.

Kelly Huntington: 17% compared to the same period last year.

Kelly Huntington: This decrease was primarily related to certain clean energy projects in our T&D segment that have reached mechanical completion as.

Kelly Huntington: As well as the decrease in revenue and C&I fixed price contracts offset by an increase in revenue on C&I T&D contract.

Kelly Huntington: Our fourth quarter T&D revenues were 450 million a day.

Kelly Huntington: Kris a 24% compared to the same period last year.

Kelly Huntington: The breakdown of T&D revenues was $267 million for transmission and $183 million for distribution. T&D segment revenues decreased due to a reduction of $136 million in revenue on transmission projects, primarily related to certain clean energy projects that have reached mechanical completion. Work performed under Master Service Agreement represented approximately 60% of our T&D revenues in the fourth quarter. CNI revenues were $380 million, a decrease of 8% compared to the same period last year. C&I segment revenues decreased primarily due to a decrease in revenue on fixed price contracts offset by an increase in revenue on T&E contracts.

Speaker Change: Take down of T&D revenues was $267 million for transmission and $183 million for distribution.

Speaker Change: T&D segment revenues decreased due to a reduction of $136 million in revenue and transmission projects, primarily related to certain clean energy projects that have reached mechanical completion.

Speaker Change: Work performed under Master service agreements represented approximately 60% of our T&D revenues in the fourth quarter.

Speaker Change: C&I revenues were $380 million.

Speaker Change: Greece at 8% compared to the same period last year.

Speaker Change: <unk> segment revenues decreased primarily due to a decrease in revenue on fixed price contracts.

Speaker Change: I'll start by an increase in revenue and <unk> contracts.

Kelly Huntington: Our gross margin was 10.4% for the fourth quarter of 2024, compared to 9.7% for the same period last year. The increase in growth margin was primarily due to the continued benefit of higher margins on certain completed projects and certain projects nearing completion. These benefits largely related to better than anticipated productivity and previous favorable change orders. growth margin was also positively impacted by better than anticipated productivity experienced during the fourth quarter. These margin increases were partially offset by a decrease in growth margin related to clean energy projects in T&D that have reached mechanical completion, the unfavorable impact of a CNI project that has reached substantial completion, and labor and project inefficiencies.

Speaker Change: Our gross margin was 10, 4% for the fourth quarter of 2024 compared to nine 7% for the same period last year.

Speaker Change: The increase in gross margin was primarily due to the continued benefit of higher margins on certain completed projects and certain projects nearing completion.

Speaker Change: These benefits largely related to better than anticipated productivity and previous favorable change order.

Speaker Change: Gross margin was also positively impacted by better than anticipated productivity experienced during the fourth quarter.

Speaker Change: These margin increases were partially offset by a decrease in gross margin related to clean energy project in T&D that had reached mechanical completion.

Speaker Change: The unfavorable impact of a C&I project that has reached substantial completion and labor and project inefficiencies.

Kelly Huntington: T&E operating income margin was 6.7% for the fourth quarter of 2024, compared to 7.2% for the same period last year. The decrease was primarily related to losses on certain clean energy projects that have reached mechanical completion. These project losses were due to higher labor and contract-related costs, as well as labor and project inefficiencies. combined the gross profit changes related to certain clean energy projects negatively impacted T&D operating income as a percentage of revenues by 3.0% in the fourth quarter of 2024. C&I operating income margin was 3.9% for the fourth quarter of 2024, compared to 2.1% for the same period last year.

Speaker Change: T&D operating income margin was six 7% for the fourth quarter of 2024 compared to seven 2% for the same period last year.

Speaker Change: The decrease was primarily related to losses on certain clean energy projects that have reached mechanical completion.

Speaker Change: If the project losses were due to higher labor and contract related costs as well as labor and project inefficiencies.

Speaker Change: Combined with the gross profit changes related to certain clean energy projects negatively impacted T&D operating income as a percentage of revenues by 3.0% in the fourth quarter of 2024.

Speaker Change: Yes.

Speaker Change: C&I operating income margin was three 9% for the fourth quarter of 2024 compared to two 1% for the same period last year.

Kelly Huntington: The increase was primarily due to the continued benefit of higher margins on certain completed projects and certain projects nearing completion. These benefits largely related to better than anticipated productivity and previous favorable change orders. Operating income margin was also positively impacted by significant estimated gross profit changes related to better than anticipated productivity experienced during the fourth quarter. These increases were partially offset by a single project, which had a negative impact of 2.2% on C&I operating income margin during the fourth quarter. This project reached substantial completion during the fourth quarter. The loss on this project was primarily due to scope additions, increased labor costs related to scheduled compression, and lower productivity due to access and workflow issues.

Speaker Change: The increase was primarily due to the continued benefit of higher margins.

Speaker Change: Certain completed projects and certain projects nearing completion.

These benefits largely related to better than anticipated productivity and previous favorable change orders.

Speaker Change: Operating income margin was also positively impacted by significant estimated gross profit changes related to better than anticipated productivity experienced during the fourth quarter.

Speaker Change: These increases were partially offset by a single project, which had a negative impact of two 2% on C&I operating income margin journey in the fourth quarter. This project reached substantial completion during the fourth quarter.

Speaker Change: The loss on this project was primarily due to scope additions increased labor costs related to scheduled compression and lower productivity due to access and workflow issue. Additionally.

Kelly Huntington: Additionally, C&I operating income margin was positively impacted by a decrease in contingent compensation expense related to a prior acquisition. Fourth quarter 2024 FG&A expenses were $57 million, a decrease of $3 million compared to the same period last year. The decrease was primarily due to a decrease in employee incentive compensation costs and a decrease in contingent compensation expense related to a prior acquisition, partially offset by an increase in employee related expenses to support future growth in our operations. Our fourth quarter effective tax rate was 40.9% compared to 32.3% for the same period last year. The increase was primarily due to higher other permanent difference items and the unrecognized benefit of deferred tax assets.

Speaker Change: Additionally, C&I operating income margin was positively impacted by a decrease in contingent compensation expense related to a prior acquisition.

Speaker Change: Fourth quarter 2020 for SG&A expenses were $57 million.

Speaker Change: Decrease of $3 million compared to the same period last year.

Speaker Change: The decrease was primarily due to a decrease in employee incentive compensation costs and a decrease in contingent compensation expense related to a prior acquisition, partially offset by an increase in employee related expenses to support future growth in our operation.

Speaker Change: Our fourth quarter effective tax rate was 49% compared to 32, 3% for the same period last year the.

Speaker Change: The increase was primarily due to higher other permanent different items and the unrecognized benefit of deferred tax asset.

Kelly Huntington: Fourth quarter 2024 net income was $16 million compared to $24 million for the same period last year. Net income for diluted share of $0.99 compared to $1.43 for the same period last year. Fourth quarter 2024 EBITDA was $45 million compared to $53 million for the same period last year. Total backlog as of December 31, 2024 was $2.6 billion, consistent with the prior quarter and a 2.5% increase from the prior year. Total backlog as of December 31, 2024 consisted of $818 million for our T&D segment and $1.8 billion for our C&I segment. Fourth quarter 2024 operating cash flow was $21 million compared to operating cash flow of $43 million for the same period last year.

Speaker Change: Fourth quarter 2024, net income was $16 million compared to $24 million for the same period last year.

Speaker Change: Net income per diluted share at 99 cents compared to a $1 43 for the same period last year.

Speaker Change: Fourth quarter, 2024, EBITDA was $45 million compared to $53 million for the same period last year.

Speaker Change: Total backlog as of December 31, 2024, with $2 6 billion consistent with the prior quarter and a two 5% increase from the prior year.

Speaker Change: Total backlog as of December 31, 2024 consisted of $818 million for T&D segment, and $1 8 billion for our C&I segment.

Speaker Change: Fourth quarter 2020 for operating cash flow was $21 million compared to operating cash flow of $43 million for the same period last year.

Kelly Huntington: The decrease in cash provided by operating activities was primarily due to the timing of contingent compensation payments associated with the prior acquisition and lower net income. Fourth quarter 2024 free cash flow was $9 million compared to free cash flow of $22 million for the same period last year, reflecting the decrease in operating cash flow partially offset by lower capital expenditure. Moving to liquidity in our balance sheet, we had approximately $266 million of working capital, $74 million of funded debt, and $355 million in borrowing availability under our credit facility as of December 31, 2024. We have continued to maintain a strong funded debt-to-debt leverage ratio of 0.63 times as of December 31, 2024.

Speaker Change: The decrease in cash provided by operating activities was primarily due to the timing of contingent compensation payments associated with prior acquisition and lower net income.

Speaker Change: <unk> fourth quarter 2020 for free cash flow was $9 million compared to free cash flow of $22 million for the same period last year.

Speaker Change: The decrease in operating cash flow, partially offset by lower capital expenditures.

Speaker Change: Moving to liquidity and our balance sheet, we had approximately $266 million of working capital of $74 million of funded debt and $355 million in borrowing availability under our credit facility as of December 31, 2024.

Speaker Change: We have continued to maintain a strong funded debt to EBITDA leverage ratio at 0.63 times as of December 31, 2024.

Kelly Huntington: We believe our credit facility, strong balance sheets, and future cash flow from operations will enable us to meet our working capital needs, support the organic growth of our business, pursue acquisitions, and opportunistically repurchase shares.

Speaker Change: We believe our credit facility strong balance sheet and future cash flow from operations will enable us to meet our working capital needs.

Speaker Change: Support the organic growth of our business pursue acquisitions and opportunistically repurchase shares.

Kelly Huntington: Our Board of Directors recently authorized a new $75 million share repurchase program. New program will expire on September 5, 2025, or when the authorized funds are exhausted, whichever is earlier.

Speaker Change: Our board of directors recently authorized a new $75 million share repurchase program New program will expire on September five 2025.

Speaker Change: The authorized funds are adopted whichever is earlier.

Brian Stern: I'll now turn the call over to Brian Stern, who will provide an overview of our transmission and distribution segment. Thanks, Kelly, and good morning. The T&D segment continues to focus on strengthening and growing our market presence by seeking to expand long-term relationships. Strategically bidding and winning opportunities with new and existing customers. Our fourth quarter 2024 results were steady, thanks to proven business principles of safety, quality, and reliability across our balanced portfolio. We continue to maintain a stable and diverse pipeline of transmission, distribution, and substation projects, working closely with customers to deliver quality results and on-time outcomes.

Brian Stern: I'll now turn the call over to Brian <unk>, who will provide an overview of our transmission and distribution segment.

Speaker Change: Thanks, Kelly and good morning, everyone.

Speaker Change: The television segment continues to focus on strengthening and growing our market presence by seeking to expand long term relationships and strategically bidding and winning opportunities with new and existing customers.

Speaker Change: Our fourth quarter 2024 results were steady thanks to prudent business principles of safety quality and reliability across our balanced portfolio of work.

Speaker Change: We continue to maintain a stable and diverse pipeline of transmission distribution and substation projects.

Speaker Change: And closely with customers to deliver quality results and on time outcomes bidding.

Brian Stern: Bidding activity remains healthy in the segment and the outlook for 2025 and future years is positive. Investments to upgrade an aging electrical infrastructure, improve reliability, meet low growth. To achieve decarbonization goals, all present opportunities for long-term growth. According to the S&P Global Forecast released in January 2025, aggregate energy utility investments are projected to hit new highs. $202 billion in 2025 and increased to $211 billion by 2027. As the country strives to meet increasing electric Our customers require the proven expertise and reliable project delivery. and MYR Group provides in the face of this dynamic energy landscape.

Speaker Change: Bidding activity remains healthy in this segment and the outlook for 2025 in future years is positive.

Speaker Change: Investments to upgrade an aging electrical infrastructure improve reliability to meet load growth and achieve de carbonization goals all present opportunities for long term growth.

Speaker Change: According to the S&P Global forecast released in January 2025.

Speaker Change: Energy utility investments are projected to hit new highs of $202 billion in 2025, an increase of $211 billion by 2027.

Speaker Change: The country's strives to meet increasing electricity demand.

Speaker Change: Our customers require the proven expertise and reliable project delivery MYR group provides in the face of this dynamic energy landscape and we believe this creates opportunities for future growth.

Brian Stern: And we believe this creates opportunities for future. Considerees continue to execute and win additional work across the U.S. and Canada. and our eastern region, the L.E. Meyers Company, on transmission and substation work throughout the Midwest, as well as in Virginia and Tennessee. Harlan Electric and ES Bullis received Substation and Transmission Project Awards. Out West, Sturgeon Electric extended a three-year master service agreement in Alaska. Transmission, Distribution, and Substation work in Arizona, Oregon, Washington, and Utah. Southwestern Construction was also awarded new transmission, distribution, and substation projects in Texas, Florida, Georgia, and the Carolinas.

Speaker Change: Our subsidiaries continued to execute and win additional work across the U S and Canada and our eastern region, nearly Myers company, one transmission and substation work throughout the Midwest as well as in Virginia and Tennessee.

Speaker Change: Harlan electric and yes, Louis received substation and transmission project awards in the northeast.

Speaker Change: At West Sturgeon electric extended a three year Master service agreement in Alaska.

Speaker Change: And one transmission distribution and substation work in Arizona, Oregon, Washington, and Utah.

Speaker Change: Great Southwestern construction was also awarded new transmission distribution and substation projects in Texas, Florida, Georgia and the Carolinas.

Brian Stern: In summary, we believe this is an exciting time to be part of the industry. Our customers rely on us to help them safely meet the increasing demand and deliver reliable energy to consumers. We're proud of our amazing teams and the commitment they show every day to overcoming challenges. Successes are attributable.

Speaker Change: In summary, we believe this is an exciting time to be part of the industry our customers rely on us to help them safely meet the increasing demand and deliver reliable energy to communities I'm proud of our amazing teams and the commitment. They show every day to overcoming challenges and providing exceptional value.

Speaker Change: Our successes are attributable to them.

Don Egan: I'll now turn the call over to Don Egan, who will provide an overview of our commercial and industrial... Thanks Brian and good morning everyone. The C&I segment achieved improved results in the fourth quarter compared to previous quarters as our chosen core markets remain healthy and we continue to capture new projects. Our ability to safely and skillfully execute projects of various sizes is creating many long-term opportunities in our chosen markets. Fitting activity remains healthy, with continued signs of long-term stability. The 2025 Dodge Construction Network Outlook released in November 2024 forecasts an increase in total non-residential construction, including 7% growth in commercial construction, 4% in institutional construction, and 9% in manufacturing.

Speaker Change: I'll now turn the call over to Donnie and who will provide an overview of our commercial and industrial segments.

Speaker Change: Okay.

Donnie: Thanks, Brian and good morning, everyone.

Speaker Change: The C&I segment achieved improved results in the fourth quarter compared to previous quarters as our chosen core markets remain healthy and we continue to capture new projects, our ability to safely skillfully execute projects of various sizes is creating many long term opportunities in our chosen markets.

Speaker Change: Bidding activity remains healthy with continued signs of long term stability.

Speaker Change: The 2025 Dodge construction network outlook released in November 2024 forecast, an increase in total nonresidential construction, including 7% growth in commercial construction, 4% institutional construction and 9% in manufacturing.

Don Egan: The American Institute of Architects Consensus Construction Forecast predicts healthy growth in 2025 across our core markets such as data centers, health care, and manufacturing. Data centers alone are anticipated to see a 22% increase. Our teams continue collaborating with customers to build new facilities and upgrade existing facilities, while leveraging our expertise to place us in leading positions to strategically capture future opportunities for continued success. Across the U.S. and Canada, our companies continue to perform and pursue an array of projects. In the fourth quarter, Western Pacific Enterprises won healthcare work in Vancouver, and Huon Electric was awarded a large distribution center project in New Jersey.

Speaker Change: The American Institute of architects consensus construction forecast predicts healthy growth in 2025 across our core markets such as data centers healthcare and manufacturing.

Speaker Change: Data centers alone are anticipated to see a 22% increase our teams continue collaborating with customers to build new facilities and upgrade existing facilities, while leveraging our expertise to place us in leading positions to strategically capture future opportunities for continued success.

Speaker Change: Across the U S and Canada, our companies continue to perform and pursue an array of projects in the fourth quarter Western Pacific Enterprises, when health care work in Vancouver, and human Electric was awarded a large distribution center project in New Jersey.

Don Egan: We continue to win additional transportation work in Canada and Colorado, while CSI Electrical Contractors and Huon Electric captured additional clean energy projects in California and New York. ES Bulos was also awarded a higher education project in Maine and is well positioned for additional project opportunities in the future. In conclusion, when I look at the accomplishments of our employees have achieved, I am inspired by their effort and dedication to serving our customers with integrity. Because of them, our organization remains at the forefront of the industry. We believe the future is promising, and we will continue working side-by-side with our valued customers to safely build the infrastructure required to meet the demands of modern society.

Speaker Change: We continue to win additional transportation work in Canada in Colorado, while CSI electrical contractors in human electric captured additional clean energy projects in California, and New York.

Speaker Change: <unk> was also awarded a higher education project in Maine, and is well positioned for additional project opportunities in the future.

Speaker Change: In conclusion, when I look at the accomplishments of our employees have achieved I'm inspired by their effort and dedication to serving our customers with integrity because.

Speaker Change: Of them our organization remains at the forefront of the industry. We believe the future is promising and we will continue working side by side with our valued customers.

Speaker Change: Build the infrastructure required to meet the demands of modern society.

Don Egan: Thanks everyone for your time today.

Rick Schwartz: I will now turn the call back to Rick, who will provide us with some closing comments. Thank you for those updates, Kelly, Brian and Don. Our steady fourth quarter performance demonstrates our commitment to sound business strategies and strong operating principles. even as we faced headwinds from a relatively small group of projects. We believe that the growth forecasts in the markets we serve, a steady pipeline of project opportunities, and the continued development of our experienced teams position us well for enduring success. Through both our business segments, we serve as an open and trusting partner for our valued customers.

Speaker Change: Thanks, everyone for your time today I will now turn the call back to Rick who will provide us with some closing comments.

Thank you for those updates Kelly Bryan and Dan are steady fourth quarter performance demonstrates our commitment to sound business strategies and strong operating principles, even as we faced headwinds from a relatively small group of projects.

Speaker Change: We believe that the growth forecast in the markets, we serve a steady pipeline of project opportunities and the continued development of our experienced teams position us well for enduring success.

Speaker Change: Through both our business segments, we serve as an open and trusting partner for our valued customers, who rely on us to safely deliver high quality electrical construction services.

Rick Schwartz: who rely on us to safely deliver high quality electrical construction services. Our success is made possible thanks to the excellence of our dedicated and talented employees. I am grateful for them and their invaluable contributions this year. I would also like to thank our customers for their continued trust and our shareholders for your ongoing support. We are excited about the essential role MYR Group will play in the coming years to help create the modern electrical infrastructure our communities rely upon every day.

Speaker Change: Our success is made possible thanks to the excellence of our dedicated and talented employees I am grateful for.

Speaker Change: For them and their invaluable contributions this year I would also like to thank our customers for their continued trust and our shareholders for your ongoing support.

Speaker Change: We're excited about the central role MYR group will play in the coming years to help create the modern electrical infrastructure our communities rely upon every day I look forward to working with you in 2025 and beyond.

Rick Schwartz: I look forward to working with you in 2025 and beyond.

Operator: Operator, we are now ready to open the call up for your comments and questions. Thank you.

Speaker Change: Operator, we are now ready to open the call up for your comments and questions.

Operator: At this time, we'll conduct a question and answer session. As a reminder to ask a question, you'll need to press star 11 on your telephone and wait for a mute to be announced. To withdraw your question, please press star 11 again. Please stand by while we compile the Q&A roster.

Speaker Change: Thank you at this time, we will conduct a question and answer session. As a reminder to ask a question you will need to press star one wondering your telephone in wafer and we want to be announce to withdraw. Your question. Please press star one again, please standby, while we compile the Q&A roster.

Speaker Change: Okay.

Sangita Jain: Our first question comes from the line of Sangita Jain of KeyBank, your line is now open. Hi, good morning. Rick Kelly, thank you for taking my question.

Speaker Change: Our first question comes from the line of Sangeeta Jain of Keybanc. Your line is now open.

Sangeeta Jain: Hi, Good morning rig Kelly. Thank you for taking my question.

Rick Schwartz: Can I start by asking you on the bidding environment that you're seeing in C&I, the type of projects, the geographies, and if the potential tariffs are coming up in your discussions? I would say we're seeing activity in really all the markets. We're in a lot on the data center side. I think when you're getting into hospitals, and that's still a lot of activity. And then the transit side, as Don highlighted in his prepared comments. I think tariffs, the potential of tariffs is always coming up as we get into newer contracts. I think that's a point that everybody's talking about.

Speaker Change: Can I start by asking you on.

Speaker Change: The bidding environment that youre seeing in C&I, the type of projects to geographies and have the potential tariffs coming up in your discussions.

Speaker Change: I would say, we're seeing activity in really all the markets. We're in a lot on the data center side, I think when youre getting into hospitals and that's still a lot of activity in the transit side as Don highlighted it as is.

Speaker Change: Prepared.

Speaker Change: Comments I think tariffs the potential of tariffs is always coming up as we get into newer contracts.

Speaker Change: I think that that's a point that everybody is talking about so I would say, it's a very discussed pointed out there and I would say a lot of our contracts are getting provisions.

Rick Schwartz: So I would say it's a very discussed point out there. And I would say, you know, a lot of our contracts are getting provisions in to cover that risk. Got it.

Speaker Change: To cover that risk.

Rick Schwartz: And if I can follow up on some comments that you made in your prepared remarks about lower revenue and fixed price contracts in both segments, can you explain that? Is that a function of a change in how you're bidding for projects with a bigger focus on T&E contracts? We like T&E contracts, but we also like fixed price. I think it's just a mixture of the projects that are coming to us. During that quarter, I wouldn't look at it as a long-term trend going forward. We've shown we can execute either type of project, but we did see an increase in kind of the T&E ones over this last quarter.

Speaker Change: Got it and if I can follow up on some comments that you made on your prepared remarks about lower revenue and fixed price contracts in both segments.

Speaker Change: Can you explain that is that a function of.

Speaker Change: A change in how youre bidding for.

Speaker Change: <unk> is a bigger focus on PMA contracts.

Speaker Change: We like to do.

Speaker Change: <unk> contracts, but we also like fixed price I think it's just a mixture of the projects that are coming to us.

Speaker Change: During that quarter I wouldn't look at it as it is.

The long term trend going forward.

Speaker Change: Showing we can execute either type of projects, but.

Speaker Change: But we did see an increase in kind of the TNT ones over this last quarter.

Rick Schwartz: Was that in any specific area that you can highlight?

Speaker Change: It was that in any specific area.

Speaker Change: That you can highlight.

Rick Schwartz: No, it wasn't in one specific area, it was just the way the work came in.

Speaker Change: No no. It wasn't in one specific area was just the way the work came in.

Kelly Huntington: Thank you so much. Sorry, just to add on to that, you know, we did highlight in our disclosures that revenue has been coming down on clean energy projects within the T&D side, and that is all fixed price work, and I think conversely, you've seen our percentage of MSA work has climbed up to 60% of our overall T&D revenue. Understood.

Speaker Change: Great. Thank you so much.

Speaker Change: Sorry, just to add on to that I did highlight in our disclosures that.

Speaker Change: Revenue has been coming down on clean energy projects within the T&D side and that is all fixed price work.

Speaker Change: And I think Conversely, you've seen our percentage of MSA work.

Speaker Change: And up to 60% of our overall T&D revenue.

Kelly Huntington: Thank you, Kelly. Thank you. One moment for our next question.

Kelly Huntington: Understood. Thank you Kelly.

Kelly Huntington: Thank you one moment for our next question.

Justin Hauke: Our next question comes from the line of Justin Hauke of Baird. Your line is now open. Uh, great. I guess, it's obviously good to see the challenging projects have reached mechanical completion here, which I know is kind of the target for the year end. And I guess the corollary of that would be just thinking about the free cash flow, because it looks like with the completion of those bad jobs, a lot of the unbilled has moved into accounts receivable. And just thinking about the free cash flow the last couple of years has been kind of challenged as you funded those.

Speaker Change: Our next question comes from the line of Justin Hauke of Baird. Your line is now open.

Kelly Huntington: Okay.

Kelly Huntington: Great.

Kelly Huntington: Alrighty.

Kelly Huntington: I guess so.

Kelly Huntington: Obviously, good to see the challenging projects.

Kelly Huntington: Aged mechanical completion here, which I know is kind of the target for the year end and I guess the core.

Kelly Huntington: Corollary of that would be.

Kelly Huntington: Just thinking about the free cash flow.

Kelly Huntington: Because it looks like with the completion of those bad jobs a lot of the Unbilled has moved into accounts receivable.

Kelly Huntington: And just thinking about the free cash flow. The last couple of years, it's been kind of challenged as you funded those.

Justin Hauke: What needs to happen to kind of collect the AR on that and kind of bring the DSOs down?

Kelly Huntington: What needs to happen to kind of collect the.

Kelly Huntington: They are on that.

Kelly Huntington: And should we think of 2025 as being a much stronger free cash flow year? Yeah, good question, Justin. And similar to my comments on last quarter's call, we do see stronger free cash flow generation this year. And I would say, you know, positive drivers, you know, of course, increased profitability as we return to more of the mid part of our target operating income ranges for each segment. So that's a driver. And then as you pointed to also the recent reductions and balances for total pending change orders, that's down about 40% from third quarter, and retainage also down over 20% from third quarter.

Kelly Huntington: Bring the DSO is down and should we think of 2025 as being a much stronger free cash flow year.

Speaker Change: Yes, good question, Justin and similar to my comment on last quarter's call, we do see stronger free cash flow generator generation this year.

Speaker Change: And I would say positive drivers you know of course that increased profitability as we return to more of the mid part of our <unk>.

Speaker Change: Target operating income ranges for each segment and so that's a driver and then as you pointed to also the recent reductions in balances for total pending change orders and that's down about 40% from third quarter and routine edge I'm also down over 20% from the third quarter. So as we see that cash collected.

Kelly Huntington: So as we see that cash collected, that helps to drive positive cash flow. Now, the one thing I would maybe just a couple factors going the other way, you know, we of course, quarter to quarter, our cash flows can be lumpy. And that really comes back to project timing. And I would say that our selective selectivity on clean energy projects and kind of the lumpiness of large transmission work can also impact operating cash flow and just kind of the ebbs and flows of that. But yes, just to return to your original question, we do see stronger free cash flows in 2025.

Speaker Change: That helped to drive positive cash flow now the one thing I would add maybe just a couple of factors going the other way.

Speaker Change: Of course quarter to quarter, our cash flow can be lumpy and that really comes back to project timing and I would say that our selected selectivity on clean energy project and kind of the Lumpiness large transmission work can also impact operating cash flow and just kind of the ebbs and flows of that but yes.

Speaker Change: Just to return to your original question, we do see stronger free cash flows in 2025.

Justin Hauke: Okay, great.

Kelly Huntington: And I guess my follow-up, you guys have given us, at least in the T&D segment, the trailing 12-month revenue contribution from clean energy projects with the last couple of quarters that have helped kind of normalize where the revenue expectations are as kind of we think about those cycling out. Do you have the update as of the year-end, how much was... Clean Energy Projects in the T&D segment. Yeah, it ended up being about 4%. per year, 4%, yes. And that was 4% for the quarter, about 10% on a year-to-date basis.

Speaker Change: Okay great.

Speaker Change: I guess my follow up.

Speaker Change: You guys have given us at.

Speaker Change: At least in the T&D segment, the trailing 12 months revenue contribution from clean energy projects with the last couple of quarters.

Speaker Change: That have helped kind of normalized where the revenue expectations are as we think about those cycling out do you have the update.

Speaker Change: The year and how much was.

Speaker Change: Clean energy projects in the T&D segment.

Speaker Change: Yes, it ended up being about 4%.

Speaker Change: First per year.

Speaker Change: 4%, yes.

Speaker Change: Okay and that was perfect.

Speaker Change: There are about 10% on a year to date basis.

Rick Schwartz: Okay, is it fair to think that that's https://www.myrgroupinc.com I think for us we're going to continue to be selective in that market. We like that work overall, as Don spoke, he picked up some work in a few areas where we see very good activity and we've had very good success in some of the other markets we're in, where we've historically done that on the T&D front, we'll continue to be very Right now, we haven't said we're not taking on any work, we definitely like that market, but we want to take on that work at the right price.

Speaker Change: Okay.

Speaker Change: Is it fair to think that that's it.

Speaker Change: Essentially zero.

Speaker Change: 2025 that work hasn't come back in or is there a portion of it that is.

Alright, I think for US we're going to yes, I think for US we're going to continue to be selective in that market.

Speaker Change: We liked that work overall as Don spoke he picked up some work in a few areas, where we see very good activity and we've had very good success in some of the other markets.

Speaker Change: We're in where we've historically done that on the T&D front, we will continue to be very selective so right now I wouldn't.

Speaker Change: We haven't said, we haven't we're not taking on any work I mean, we definitely like that market, but we want to take on that work at the right price.

Rick Schwartz: So we'll continue to be selective. Okay. Yeah. All right. Fair enough. Thank you for clarifying. Thank you.

Speaker Change: So we will continue to be selective.

Okay.

Speaker Change: Alright fair enough great. Thank you for your clarify on those two.

Atidrip Modak: One moment for our next question. Our next question comes from the line of Atidrip Modak of Goldman Sachs, your line is now open. Hi, good morning, team. Rick, Kelly, just curious if there's anything that you can share in terms of how you're thinking about the growth in the two businesses for this year? And anything on the margin progression as we roll through the year? I know you don't have official guidance, but any kind of color there that would be helpful. I would say on the margin projection, right now we anticipate operating at a year basis, kind of in that mid-range of our targets that we've been out, that 7% to 10.5% on T&D, and the 4% to 6% on C&I.

Speaker Change: Thank you moment for our next question.

Adam <unk>: Our next question comes from the line of Adam <unk> of Goldman Sachs. Your line is now open.

Adam <unk>: Hi, good morning team.

Speaker Change: Kelly.

Speaker Change: I'm just curious if there's anything that you can share in terms of how youre thinking about the growth in the two businesses for <unk>.

Speaker Change: And anything on the margin progression as we roll through the year and I know you don't have official guidance, but any kind of color there that would be helpful.

Speaker Change: I would say on the on the margin projection, we're going to we right now we anticipate operating at a year basis are kind of in that mid range of our our targets that we've announced that 7% to 10, 5% on T&D and the board of six on C&I.

Rick Schwartz: When we're looking at growth, we still see that on the C&I side, I guess that upper single-digit growth opportunity there on revenue, and I think on T&D, we still have growth within the core T&D segments, but we've got to make up for that loss of what we've had on the solar side or the clean energy side. As we said last quarter, there would be a hole to fill, and we anticipate trying to fill that best we can, and we see the opportunities out there to do it.

Speaker Change: When we're looking at growth, we still see and all of that.

Speaker Change: The C&I side I guess.

Speaker Change: Upper.

Speaker Change: Single digit.

Speaker Change: Growth opportunity there on revenue and I think on T&D, we still have.

Speaker Change: Growth within the core T&D segment, but we've got to make up for for kind of that loss of what we've had on the solar side or the clean energy side. So.

Speaker Change: We said last quarter, there would be a hole to fill and we anticipate trying to build up as we can and we see the opportunities out there to do it.

Rick Schwartz: That's super helpful. And then I think you highlighted over 170 hyperscalers if I heard that right. Can you talk about how many of those are in the core markets that you are exposed to? I know you previously indicated that you want a balanced exposure in the CNI business. But I'm just curious what the competitive landscape is for those core regions and what that means in terms of the size and number of projects that you could be on. Yeah, I would say we're seeing lots of opportunities.

Speaker Change: Okay.

Speaker Change: That's super helpful. And then I think you highlighted award of 170, hyper scaler, if I heard that right.

Speaker Change: Can you talk about how many of those are in the core markets that you are exposed to I know you've previously indicated that you want a balanced exposure than the C&I business, but I'm just curious what the competitive landscape is for those quarterly agenda and what that means in terms of the size and number of projects that you could be on.

Speaker Change: I would say, we're seeing lots of opportunities I'll turn that one over to Don he deals with that every day.

Don Egan: I'll turn that one over to Don. He deals with that every day. We are seeing some of the hyperscalers come into our core markets, and just like we said, we're going to continue to be diversified in what we focus on. We like to focus on data centers and healthcare and water-wastewater work, but there are, to answer your question specifically, there are hyperscalers that are moving into our core markets. Thank you.

Don Egan: We are seeing some of the Hyperscale has come into our core markets and just like we said, we're going to we're going to continue to be diversified and what we what we focus on we like to focus on data centers and health care and water wastewater work, but there are to answer your question specifically there are hyper scalar that are moving.

Speaker Change: Into our core markets.

Don Egan: I turn it over.

Speaker Change: Thank you I'll turn it over.

Operator: Thank you. One moment for our next question.

Speaker Change: Thank you <unk> for our next question.

John Braatz: Our next question comes from the line of John Braatz of KCCA. Your line is now open. Good morning, everyone.

Speaker Change: Our next question comes from the line of Jon Braatz of Casey. Your line is now open.

Jon Braatz: Good morning, everyone.

Rick Schwartz: Rick, I have a question for you and Brian, and sort of a big picture question. Obviously, the Trump administration is sort of refocusing attention on oil and gas, and I'm curious if... There's more electricity generation via, you know, combined cycle, single cycle, as opposed to clean energy. How might that affect your business, and what are you hearing from your utility customers in terms of a changing generation mix as a result of the new administration? And again, how it might influence the opportunities ahead for you. For us, either way, I mean, whether it's clean energy or coming from combined cycle plants or anything like that, we're doing the lines in and out of them.

Speaker Change: Good morning, Rick Good morning, I have a question for.

Jon Braatz: You and Brian.

A big picture question, obviously, the Trump administration is sort of refocusing attention on oil and gas and I am curious if.

Jon Braatz: Theres more electricity generation.

Jon Braatz: Combined cycle single cycle.

Jon Braatz: As opposed to clean energy.

Jon Braatz: How might that affect your business and what are you hearing from your <unk>.

Jon Braatz: Utility customers in terms of.

Jon Braatz: Changing generation mix.

Jon Braatz: As a result of them.

Jon Braatz: The new administration and again.

Jon Braatz: Influence the opportunities ahead for you.

Jon Braatz: For us either way I mean, whether its clean energy are coming from combined cycle plants or anything like that we're doing the lines in and out of them. We don't do that construction of the combined cycle itself.

Brian Stern: We don't do that construction of the combined cycle itself, and we're selective on the clean energy side that we do. So though it's a part of our business, the lines in and out, the substations and the associated work is very strong either way for us.

Jon Braatz: We're selective on the clean energy side that we do so.

Jon Braatz: Part of our business.

Jon Braatz: The lines in and out and the Substations and the associated work is is very strong either way for us I'll, let Brian add to that.

Brian Stern: I'll let Brian add to that. Yeah, Rick kind of hit on it. I think our planning planning cycle with major utility customers has been in motion for a while. So we haven't seen any shifts and discussions with them. As far as a change from the new Okay, okay.

Brian Stern: Yes, Rick kind of hit on it I think our planning planning cycle with major utility customers has been in motion for a while so we haven't seen any shifts in discussions with them as far as a change from the new administration at all okay, Okay, and Kelly <unk> one question for you.

Kelly Huntington: And Kelly, one question for you.

Kelly Huntington: Just curious what the unrecognized benefit from the deferred tax is. Okay. charge was, if you want to call it that. Sure. So that just had an overall impact on the effective tax rate for the quarter and the year, and really just comes to the sort of unevenness in profitability we had this year across the portfolio. So a little drag there. I think when you look at tax rate overall, you know, obviously our effective tax rate was higher this year, driven by the higher permanent differences, which a lot of that was really driven by contingent compensation from a prior acquisition, and the deductibility limits around that.

Jon Braatz: Just curious what the the.

Brian Stern: The unrecognized.

Brian Stern: Benefits from.

Brian Stern: The deferred tax.

Brian Stern: Charge was if you want to call it out.

Brian Stern: Sure. So that's just an overall impact on the effective tax rate for that quarter and the year and really just kind of to be sort of unevenness in profitability. We had this year across the portfolio and so a little drag there I think when you look at tax.

Brian Stern: Tax rate overall, obviously, our effective tax rate was higher this year driven by the higher permanent differences.

Brian Stern: Which a lot of that was really driven by contingent compensation from a prior acquisition and.

Kelly Huntington: So that will become less of a headwind as we look forward. But we do expect to still have pressure on our overall effective tax rate relative to history, because of the growth in our Canadian operations.

Brian Stern: Deductibility limits around that.

Brian Stern: So that will become less of a headwind headwind does look forward, but we do expect to still have pressure on our overall effective tax rate relative to history because of the growth in our Canadian operation.

Kelly Huntington: The last thing I'll mention just maybe while we're on tax rate as something that's a little bit unusual relative to the last few years is that we do expect our effective tax rate quarter by quarter to be more even across the year. The last few years, we've had a tax rate benefit in the first quarter driven by how stock compensation hits the tax rate, and we don't expect that to be a material driver here in the first quarter of 2025. Thank you, Kelly.

Brian Stern: The last thing I'll mention just maybe while we're on tax rate as something that's a little bit.

Brian Stern: Unusual relative to the last few years is that we do expect our effective tax rate quarter by quarter to be more even across the year. The last few years, we've had a tax rate benefit in the first quarter driven by stock compensation hit B.

Brian Stern: The tax rate and we don't expect that to be a material driver here in the first quarter of 2025.

Kelly Huntington: Okay. Thank you Kelly.

Brian Brophy: Thank you one moment for our next question. Our next question comes from the line of Brian Brophy of CSO. Your line is now open. Yeah, thanks. Good morning, everybody.

Speaker Change: Thank you Mohammed for next question.

Kelly Huntington: Okay.

Kelly Huntington: Sure.

Kelly Huntington: Yeah.

Speaker Change: Our next question comes from the line of Brian Brophy of Stifel. Your line is now open.

Kelly Huntington: Yes, thanks, good morning, everybody.

Brian Brophy: Curious if conversations with customers on these prior challenge projects have completed or finished regarding potential claims or change orders? Or is there any potential impact from those discussions that could occur in sometime in 2025? I would say those conversations are continuing. Some have been settled out. Some discussions are still going on. There always could be possible impacts, you know, as you settle out these projects. But as we stand right now, we feel we have them, you know, covered as far as the way we've reported them. So I would say everything that way appears to be good, the conversations are ongoing, but there always could be impact.

Kelly Huntington: I'm curious if conversations with customers on these prior challenged projects.

Kelly Huntington: We have completed or finished regarding potential claims or change orders or is there any potential impact from those discussions that.

Kelly Huntington: Could occur sometime in 2025.

Kelly Huntington: I would say those conversations are continuing summit then settle out.

Kelly Huntington: Some discussions are still going on there always could be possible impacts as you settle out.

Kelly Huntington: These projects, but as we stand right now we feel we have them.

Kelly Huntington: As far as the way we.

Kelly Huntington: We've reported them. So I would say everything that way appears to be good and the conversations are ongoing but there always could be impacts.

Rick Schwartz: Okay, I guess, can you give us a sense for potential size? Would this be something relatively immaterial? And then, I guess, I guess, is there potential for there to be a positive impact because you're pursuing change orders, or are there also negative potential outcomes? Just any help there would be appreciated. The way we're looking at it is it's either positive or negative. It's probably not enough to move the needle when we're looking at it, but, you know, that's how we see it today as these conversations continue to evolve. We would provide any updates we had, but at this point, not all of them are settled and those conversations are ongoing, so I'm kind of limited on what I can say about them at this point.

Kelly Huntington: Okay.

Speaker Change: Can you give us a sense for potential size or would this be something relatively immaterial and then I guess.

Kelly Huntington: Okay.

Kelly Huntington: I guess is there a potential for there to be a positive impact because youre pursuing change orders, where theyre also negative potential outcomes just any help there would be.

Kelly Huntington: I appreciate it.

Kelly Huntington: The way we're looking at it is it's either positive or negative, it's probably not enough to move the needle.

Kelly Huntington: When we're looking at it but that's how we see it today as these conversations continue to evolve.

Kelly Huntington: We would provide any updates we had but at this point not all of them are settled and those conversations are ongoing something kind of limited on what I can say a bottom at this point.

Kelly Huntington: Understood. Thank you. Just to reiterate, I mean, we evaluate that and we adjust our estimates on that month by month, quarter by quarter. So what we're presenting in our year-end financials reflects the most up-to-date information we have.

Kelly Huntington: Understood. Thank you I appreciate it.

Kelly Huntington: Just to reiterate I mean, we do and we.

Kelly Huntington: We evaluate that and we adjust our estimate on that month by month quarter by quarter. So what we're presenting and our year end financials reflect the most up to date information we have.

Brian Brophy: Understood. Appreciate it. Thank you.

Kelly Huntington: Understood I appreciate it thank you.

Operator: Again, as a reminder to ask a question, you'll need to press star 11 on your telephone.

Kelly Huntington: Thank you.

Speaker Change: And as a reminder to ask a question you will need to press star one on your telephone.

Operator: I'm showing no further questions at this time.

Speaker Change: I'm showing no further questions at this time I would now like to turn.

Rick Schwartz: I would now like to turn it back to Rick Swartz for closing remarks. To conclude, on behalf of Kelly, Brian, Don and myself, I sincerely thank you for joining us on the call today. I do not have anything further, and we look forward to working with you going forward and speaking with you again on our next conference call.

Speaker Change: Turn it back to Rick Swartz for closing remarks.

Speaker Change: To conclude on behalf of Kelly, Bryan, Dan and myself I sincerely. Thank you for joining us on the call today I do not have anything further and we look forward to you working for.

Speaker Change: We look forward to working with you going forward and speaking with you again on our next conference call until then stay safe.

Rick Schwartz: Until then, stay safe. Thank you for your participation in today's conference.

Speaker Change: Yes.

Speaker Change: Thank you for your participation in today's conference. This does conclude the program you may now disconnect.

Operator: This does conclude the program. You may now disconnect.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: [music].

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Operator: Thanks for watching!

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