MasTec, Inc. (MTZ) Q4 2010 Earnings Report, Transcript and Summary

Welcome to MasTec's Fourth Quarter 2010 Earnings Conference Call, initially broadcast on February 24, 2011. [Operator Instructions] At this time, I'd like to turn the call over to Marc Lewis, MasTec Vice President of Investor Relations. Marc?

Thank you, Audra. Good morning, everyone, and welcome to MasTec's Fourth Quarter Earnings Conference 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. 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 forward-looking statements are the company’s expectations on the day of the initial broadcast of this conference call, and the company will make no effort 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. 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 results expressed or implied in these communications. In addition, we may make use of 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 our earnings press release or on the Investor Relations section of our website located at MasTec.com, which has recently been redesigned and updated with a significant amount of new information for our shareholders and customers. With us today, we have Jose Mas, our Chief Executive Officer; and Bob Campbell, our Executive Vice President and Chief Financial Officer. The format for the call will be opening remarks and announcements by Jose, followed by a financial review from Bob. These discussions will be followed by a Q&A period, and we expect the call to last for about 60 minutes. We have other great things to talk about today, so I'll now like to turn the call over to Jose. Jose?

Thank you, Marc. Good morning, and welcome to MasTec's Fourth Quarter and 2010 Year-end Call. In today's call, I would like to cover some of the year's highlights, and layout our financial and operational objectives for 2011. I would also like to make some observations about the outlook for the markets we serve. First, some fourth quarter highlights. Revenue for the quarter was $731 million, or 47% increase, over the prior-year fourth quarter. Gross margins increased to 17.3% versus 15% in last year's fourth quarter. EBITDA increased to $88.1 million, a 75% increase over last year's fourth quarter. Pretax income was 9% of revenues versus 5.2% in last year's fourth quarter. Earnings per share was $0.44 versus $0.22 or double last year. Cash flow from operations was $117 million for the quarter versus $39 million in last year's fourth quarter, and organic revenue growth for the fourth quarter was 36%. We had another fantastic quarter. A number of our businesses performed better than expected, providing a strong finish to a great year. Now I'd like to cover some full year highlights. Revenue for the year was $2.3 billion, a 42% increase over 2009. Gross margins improved 80 basis points year-over-year. Pretax margins improved 180 basis points year-over-year. EBITDA margins improved 100 basis points year-over-year, and EBITDA totaled $241 million, a 57% increase over 2009. Cash flow from operations was $218 million versus $124 million in 2009. And finally, organic revenue growth was 24% for the full year. We performed extremely well in both the fourth quarter and for the full year, as evidenced by our financial and performance metrics, which show almost across-the-board improvement. Yet, I believe our greatest success has been the way we have positioned MasTec to take advantage of significant growth opportunities in the markets we serve, markets which stand to benefit from a much improved economic outlook for 2011 and beyond. We worked hard over the last couple of years to diversify our business and to enter those markets we felt had significant long-term growth and margin potential. While we saw some fruits of our labor in 2010, even greater opportunities lie ahead, as a number of the industries we serve are expected to be the leading contributors to our nation's economic growth. For example, we believe the demand for wireless data will continue to grow, requiring carriers to make significant investments in their infrastructure for years to come. We expect that natural gas will become an even greater source of energy for our country, and that our nation's transmission infrastructure will need to be both updated and expanded to meet our growing energy needs. MasTec is well positioned within each of these markets and will remain one of the leading providers of infrastructure services as our economy continues to grow. Now I would like to discuss MasTec's specific performance in some of the markets we serve. Our communications revenue grew by more than 40% to $367 million for the quarter compared to $260 million in last year's fourth quarter, driven primarily by our Install to the Home and wireless businesses. In our Install to the Home business, revenue from DIRECTV was up nearly 30% for the quarter at approximately $155 million. For the year, revenue from DIRECTV increased by 15% to $558 million versus $484 million for the previous year. It is important to note that all of that growth was organic. Our Installation business had a great year, and we were surprised with the strength of the market and activity levels. For 2011, we are expecting single-digit growth. With that said, the first quarter is already shaping up a little bit better than expected in this market. Our Wireline business showed growth in the fourth quarter for the first time in two years. While activities have been depressed for quite a while, we are seeing stabilization in maintenance and considerable opportunities related to broadband stimulus. We actually began construction on broadband stimulus-funded projects in the fourth quarter and have now won over $60 million in broadband-funded projects. We have a number of opportunities outstanding and believe this will be a source of growth for the next couple of years. Shifting to Wireless. This has been an area where we have really excelled. We saw sequential growth of nearly 20% and year-over-year growth in the fourth quarter of over 100%. For the year, Wireless revenues doubled, and the outlook remains very strong. In 2011, we will begin to see the industry accelerate its 4G or LTE plans, and we expect carriers to significantly increase their build plans over the next three to five years. We are making strides in growing our business with both existing and new customers. During the fourth quarter, we expanded our geography with our largest customer and made progress on customer diversification. We have invested heavily in self-perform capabilities and feel we enjoy a strong competitive advantage. Now, I would like to cover our Utilities business. Our Utility revenue grew by more than 60% to $358 million in the fourth quarter compared to $222 million in last year's fourth quarter. We experienced growth from every market we serve, with the exception of distribution, which was down slightly. As it relates to our Transmission business, revenue for the fourth quarter of 2010 was double that of the previous fourth quarter. Since our last call, we have headwinds with Bangor Hydro, Con Edison, Oklahoma Gas & Electric, Brazos, Encore and Dominion. More importantly, during the fourth quarter, we announced our investment in EC Source, a nationally recognized transmission line contractor. Martin Maslonka, EC Source's founder, has assembled a highly regarded management team with extensive experience and expertise in building large-scale, high-voltage transmission project. We believe our combined resources will provide utilities and transmission developers with a viable competitor capable of executing any size transmission project anywhere in the country. Subsequent to our initial investment in EC Source, PacifiCorp announced it had awarded EC Source the Mona to Oquirrh transmission line project. Part of PacifiCorp's Energy Gateway expansion project, which will add approximately 2,000 miles of new transmission lines across the west. Construction of the Mona to Oquirrh project, which is approximately 100 miles, is expected to begin this summer for completion in 2013. This project is currently not included in MasTec's backlog. Our investment in EC Source contemplated a possible merger between the parties, which we now expect to occur early in the second quarter. Bob Campbell, our CFO, will cover the impact on our share count later. Our guidance today assumes total transmission revenues to exceed $200 million, with EC Source accounting for approximately $100 million of that revenue. We believe the transmission market will be an area of great opportunity for MasTec. There are, and will continue to be, a significant number of new projects bid and awarded in 2011, and we expect to win our share. Lastly, while distribution revenues were down slightly in the fourth quarter, on a year-over-year comparison, they were up sequentially for the second quarter in a row. Although we do not expect much growth in this market in 2011, we believe this market has stabilized. Moving to our Renewable business. 2010 was a good year despite the market challenges. Revenues were up nicely year-over-year, and we achieved our goals. Currently, we have about 800 megawatts in wind backlog versus about 922 megawatts at this time last year. We were recently awarded our largest individual project ever, and although we are in the midst of a very active bid season, we expect wind activity in 2011 to remain similar to that of 2010. As it relates to solar energy, we are actively engaged in a number of projects that are in final stages of permitting and funding, and believe that this is a market with significant potential for MasTec. On our third quarter call, we discussed our involvement in the BlueFire Renewables' cellulosic ethanol facility. BlueFire continues to make progress in obtaining both funding and loan guarantees. While we have not included this project as part of our backlog, we are encouraged by its progress. Our pipeline construction revenues exceeded expectations in both the fourth quarter and for the full year. Shale activity was very strong throughout the year and had a dramatic positive impact on our 2010 performance. Today, we remain very active in a number of shale plays, and demand remains strong. Since year end, we have been awarded over $125 million in new projects related to our shale pipeline activity. As it relates to our work on the Ruby Pipeline, environmental issues have pushed up the completion date. While we previously expected to be substantially complete by the first quarter, we now expect to be substantially complete by the second quarter. Following our strong performance in 2010, we expect 2011 pipeline activity to be flat to slightly up. We are in the midst of a very active bid season and are seeing significant opportunities. We continue to believe that natural gas will play an increasing role in our country's energy future. Now I would like to cover 2011 guidance. While Bob will cover this in greater detail, I would like to make a couple of observations. 2010 was my third full year as MasTec's CEO. During this time, and due to the efforts of many great men and women, MasTec has been able to more than double revenues and more than triple EBITDA. We have taken EBITDA margins from roughly 7% in 2007 to 10.4% in 2010, and it's important to note that we've done this in spite of a very competitive and challenging market. We have also positioned the company to where we have significant opportunities in just about every market we serve. 2011 should be another great year for MasTec. Including EC Source, we expect full year revenues of approximately $2.65 billion, EBITDA of $275 million to $280 million and EPS of $1.20 to $1.23. We expect organic revenue growth of 10% and margins to be flat to slightly up. For 2011, we anticipate two non-recurring situations which will negatively impact margins. The first, which is part of our wireless contact with our biggest customer, calls for certain pricing discounts based on efficiencies. While we expect to make up these discounts over time, we expect them to have a negative margin impact in 2011. The other is in our DIRECTV sales business where we will see an increase in commissions paid on certain sales channels. Both of these impacts should be offset by margin gains in virtually every other MasTec market. We are confident that we will continue to expand margins over the long term, as we have demonstrated over the last few years. In summary, 2010 was an excellent year, and 2011 is shaping up to be even better. I would now like to turn the call over to our CFO, Bob Campbell. Bob?

Thank you, Jose, and good morning. Today, I'm going to cover three areas: Fourth quarter and full year 2010 financial results, 2011 guidance, and cash flow liquidity and our capital structure. The fourth quarter and the 2010 full year were record periods for MasTec, records in terms of revenue, EBITDA and cash flow from operations. We had terrific results for just about anything worth measuring. Therefore, I have a pretty long list of highlights. Q4 revenue was up $235 million, or 47%, versus last year, and total revenue of $731 million was our highest quarter ever. Q4 organic revenue growth was 36%. That's after adjusting for the Precision acquisition. Let me say two things about our 36% organic growth. First, it reflects a partial payback of our investment in business development capabilities. As we have mentioned in the past, we've been beefing up in investing in our business development area in order to grow and diversify our customer base. And second, the organic growth was very broad-based. Q4 EBITDA was up 75% versus Q4 a year ago, and it was gratifying to see it continue to grow at a much higher rate than our revenue. In dollars, EBITDA was $88 million compared to $50 million a year ago, and our best quarter ever. We said that 2010 would be heavily back-end loaded, and the $88 million of Q4 EBITDA compares to $80 million for the entire first half of the year. Q4 EBITDA margin was 12.1% compared to 10.1% a year ago, and Q4 was our best margin quarter since 2000. Q4 EPS of $0.44 per diluted share was well above our guidance of $0.37 and double last year's $0.22. Year-over-year EPS comparisons are complicated because of a dramatically higher book tax rate this year. I'll walk you through the EPS details a little later. Q4 cash flow from operations was huge at $117 million, and our liquidity grew to $284 million at the end of the quarter. For the 2010 full year, revenue increased by $685 million or a 42% increase. Organic revenue growth was 24%. EBITDA of $241 million was up 57%, and EBITDA margin of 10.4% was 100 basis points better than 2009. 2010 cash flow from operations was up dramatically at $218 million compared to $124 million a year ago. 2011 guidance reflects double-digit revenue, EBITDA and EPS growth, and I'll cover the numbers in detail later. Now for the Q4 details. Q4 revenue increased by $235 million or 47% year-over-year to $731 million for a new all-time quarterly record. We had double-digit increases in Transmission and Substation; Pipeline; Renewables; and Install to the Home, which is primarily DIRECTV. Also, our Wireless business doubled compared to Q4 a year ago. These increases were partly offset by continued weakness in our electrical utility distribution market. While having three months of Precision Pipeline in Q4 2010 versus only two months in '09, that certainly helped our 47% growth rate. We nevertheless did have 36% organic growth for the quarter with broad-based growth. I'll talk about increases with specific customers a little later. Q4 gross profit margin increased to 17.3% from 15% last year, reflecting increased productivity, scale and a better business mix. Gross profit in dollars was up $52 million, which is what drove Q4 results. Q4 depreciation and amortization of $14.8 million was down $2.6 million from Q4 last year, primarily reflecting a $3.1 million decrease in acquisition and amortization. Depreciation and amortization as a percent of revenue dropped from 3.5% down to 2%. Net interest expense for Q4 was $7.2 million compared to $7.4 million a year ago. As a percent of revenue, interest dropped from 1.5% down to 1%. I'll talk about our capital structure a little later. Our Q4 general and administrative expense was $37 million compared to $25 million a year ago. The largest parts of the increase was the bonus expense related to dramatically higher earnings and increases in payroll and fringe benefits to handle the growth. As a percent of revenue, Q4 G&A of 5.1% was flat with last year. The book tax rate for Q4 was 41.9% compared to 28.9% a year ago. The increase in the tax rate for this year's fourth quarter was a $0.09 negative drag on EPS. Because of our NOLs, the majority of last year's tax expense was non-cash. MasTec believes that EBITDA is a very usual measure of our 2010 financial performance because of the big year-over-year increase in mostly non-cash book tax rate. Going forward, the year-over-year tax rates are going to be similar; therefore, EPS comparisons will be more comparable. I'll cover taxes in more detail later. For the fourth quarter of 2010, the 10 largest customers were AT&T was 22% of total revenue. Our Q4 year-over-year growth was 88%, which was driven by wireless growth. Our Wireless business actually doubled versus a year ago. Q4 was the first time in many years that DIRECTV was not our largest customer. DIRECTV was 21% of total revenue. Please note that it's down from 24% of revenue last year. The Ruby Pipeline project was 20% of revenue. That's natural gas pipeline work. Basin Electric Power Cooperative was 4% of revenue. That's wind farm work. Tenaska Energy was 3% of revenue. That's natural gas pipeline work. Edison Mission Energy was 3% of revenue. That's wind farm work. Kansas City Power & Light, TGGT, CenturyLink and Progress Energy were each 1% of revenue. Kansas City Power is wind farm work. TGGT and EXCO joint venture is natural gas pipeline work. CenturyLink is telecom work, and Progress Energy is electrical distribution work. Regarding diversification, our top 10 customers now include two telecom customers, one satellite television customer, three pipeline customers, three wind farm customers and one electrical distribution customer. Regarding concentration with DIRECTV, the concentration peaked at 47% of our revenue in Q1 2008. In Q4 2010, the revenue concentration was down to 21%. We believe that we have successfully addressed our prior DIRECTV concentration issue. Now let me talk for a minute about our revenue mix, split between one-time, non-recurring construction projects and our large base of revenue coming from what we call master service agreements and similar contracts for generally recurring services, and therefore, revenue. For 2010, 55% of our revenue came from master service agreements or similar contracts and 45% came from one-time, non-recurring construction projects. What we call master service agreements and similar contracts is briefly as follows: Generally, these contracts are for multiple years, often three to five years. And generally, they are exclusive for a certain geography or territory. Most of these contracts have some kind of price escalation language or some other price adjustment mechanism. Although these contracts did not contain revenue guarantees and they do allow cancelation under certain circumstances, in reality, the revenue from these contracts is pretty predictable. These contracts generally go to full term and are not canceled, and our renewal rate is extremely high. I just want to highlight that even though our one-time, non-recurring project revenue is growing nicely, we do enjoy a large and stable revenue base from these master service agreements and similar contracts. More disclosure about these contracts is in our 10-K. At year end, our backlog was $2.4 million. That's an 18-month backlog number. The comparable number for Q4 a year ago was $2.1 billion and $2.3 billion last quarter. Not included in the 12/31 backlog is any backlog for EC Source, the electrical transmission company of which we are currently a 1/3 owner. As Jose mentioned, EC Source recently won a large PacifiCorp transmission job, and MasTec currently intends to exercise its option to merge the rest with EC Source early in the second quarter. Therefore, the PacifiCorp job and other EC Source backlog should go into MasTec backlog in the second quarter. Also, not included in our backlog is a large biofuel plant project that one of our customers, BlueFire Renewables, announced in Q4. We excluded the project because some of our customers' financing is not yet finalized. The size of the project, which is an EPC project, is approximately $300 million. One last comment regarding backlog is that our backlog includes an estimate of the next 18 months of revenue from the master service agreements and other similar contracts. Now let me switch to a few 2010 full year numbers. Revenue was $2.3 billion compared to $1.6 billion in 2009. The full year revenue increase was $685 million or a 42% increase. Pipeline revenue tripled, partly due to the Precision acquisition, but also due to very good organic growth at Pumpco our midstream pipeline business. 2010 total organic revenue growth adjusted for the Precision acquisition was 24% in broad-based. In addition to the growth in Pipeline, Wireless doubled versus 2009, and we have strong double-digit growth in Renewables, Transmission and Substation, and Install to the Home. 2010 EBITDA of $241 million was up $88 million or a 57% increase. Fully diluted EPS was $1.05 versus $0.90 last year. It is worth noting that the 2010 full year tax rate was 41.3% compared to only 10.6% a year ago, and the mostly non-cash tax rate increase hurt our 2010 EPS by $0.52. 2010 EBITDA margin was 10.4% compared to 9.4% a year ago. Now let me talk about our cash flow, liquidity and our balance sheet. Net cash flow provided by operating activities was $117 million for the fourth quarter and $218 million for the full year of 2010. Our cash balance at December 31 was $178 million, and our liquidity was $284 million. We define liquidity as unrestricted cash plus availability on our senior credit facility. All of these amounts are dramatically higher than for 2009. For example, the 2010 full year cash provided by operating activities was $218 million, much higher than the $124 million for 2009. Regarding accounts receivable, our Q4 days sales outstanding, or DSOs, were 56 days as compared to 63 days last quarter and 60 days at year-end 2009. 56 days sales outstanding is unusually good for MasTec and better than our current goal of 60 days. We will likely see, going forward, a little volatility in DSOs due to either the positive or negative impact of big projects with different payment patterns. Our cash flow in 2010 clearly benefited from our federal tax NOLs. However, we have now exhausted the last of our federal tax NOLs, so we will finally be a relatively normal cash taxpayer beginning in 2011. Also, our book’s tax accrual rate will finally be fairly similar year-over-year. Our 2010 book tax rate was 41.3%, and our guidance for 2011 assumes a 39% tax rate. Regarding capital spending, we spent $30 million for 2010 compared to $22 million for 2009. Our 10-K has an estimate of $40 million. That's an estimate for 2011, which includes an estimate for EC Source, our electrical transmission venture. Now let me provide some information about our earnout payments related to some of our acquisitions. MasTec, in December, made a large one-time payment to buy out or buy down most of the earnout obligation related to Nsoro, our highly successful wireless acquisition. And the Wanzek acquisition earnout expired at the end of 2010. Our estimate of cash earnout payment in 2011 is about $40 million. Generally speaking, earnouts are earned in one calendar year and then paid the following year. Our estimate of earnouts that may be earned in 2011 but paid in 2012 is just over $25 million including an estimate for EC Source. The largest portion of this estimate is for DirectStar. The earnouts for accounting purposes are treated as additional acquisition purchase price resulting in additional goodwill, and they generally do not flow through the income statement. To summarize our cash flow characteristics, I would say this. EBITDA continues to grow nicely. Guidance is $275 million to $280 million, up from $241 million. DSOs around 60 days are in good shape. CapEx of about $40 million is modest. Earnouts have been reduced. Cash interest of $29 million is reasonable; therefore, we expect that our cash flow should be very good again this year. Now let me talk for a moment about our capital structure. As a quick capital structure summary, at year end, we had $653 million in equity; $413 million of total debt; only $235 million in net debt, that's net of cash; and we expect to have $275 million to $280 million of 2011 EBITDA. Therefore, all of our balance sheet and credit ratios are in very good shape. I'd like to note two things about our capital structure. First, we have no significant debt maturities until '13, '14 and '17; and second, all of our debt has attractive interest rates. To give you a little more detail, our bank line matures in 2013, but of course, we would expect to roll it over long before maturity. The convertible notes mature in 2014, and our senior notes mature in 2017. And as I mentioned, our debt is very attractively priced. Our bank revolver interest rate is LIBOR plus 2.25, although we currently have no withdrawals on the revolver. We pay only 4% and 4 1/4% on our two convertible notes, which total $215 million of principal amount; and we pay 7 5/8% on our $150 million of senior notes. My overview today of what we've been able to accomplish over the last several years is the same as I've mentioned before. We've been able to expand into a number of new markets with excellent growth potential, grow and diversify our customer base, dramatically reduce our DIRECTV concentration, all while improving our liquidity and our capital structure. Our 2011 full year guidance is revenue of $2,650,000,000, EBITDA of $275 million to $280 million and fully diluted EPS of $1.20 to $1.23. 2011 revenue of $2,650,000,000 is an increase of 15% over $2.3 billion for 2010 and double-digit growth without EC Source. 2011 EBITDA of $275 million to $280 million is a 14% to a 16% increase over $241 million last year. The 2011 EBITDA margin implicit in our guidance is 10.4% to 10.6%, which compares to 10.4% last year, and I'll discuss margins in more detail in a minute. And EPS of $1.20 to $1.23 is a 14% to 17% increase over $1.05 last year. Now let me make a few comments about our 2011 guidance. First, our guidance assumes that we will exercise our EC Source electrical transmission option and own 100% of EC Source early in Q2. Second, we are carrying over about half of the Ruby Gas Pipeline project into 2011, which benefits both Q1 and Q2. Third, our estimated 2011 estimated tax rate is 39% compared to 41.3% for 2010. The reduction in tax rate is primarily due to production activity deductions that we can now get because our NOLs are exhausted. Fourth, our estimate of amortization expense of intangibles related to EC Source is $7 million, bringing our total 2011 amortization expense up to $15 million compared to $13 million last year, and of course, EC Source increases our depreciation and interest numbers also. And fifth, let me give you some insight about our 2011 share count per fully diluted EPS purposes. Our full year 2010 share count per fully diluted EPS calculations was a little under 91 million shares. We currently estimate that the share count for full year 2011 fully diluted EPS calculations will be about 86 million shares. In big picture terms, the 2011 reduction in share count is due to the reduction in the dilution from our convertible notes, partly offset by issuing 5.15 million shares in Q2 in order to exercise our option to merge the rest of EC Source. You may remember that we completed an exchange offer for our converts in January, and the only significant change was going from a physical settlement payment mechanism to a net share settlement payment mechanism. Simply put, with the change to a net share settlement payment mechanism and with our current intention to pay the principal amounts in cash, we no longer have the potential dilution of paying off the principal amount in stock. In the future, we may have to add increased shares to the share count for EPS purposes related to the premium on our converts, which are now in the money. One hard-to-explain side effect of the change to net share settlement for our convertible notes is that in 2011, we will start to accrue annually over $4 million of non-cash interest over and above the cash coupon amounts. What that means is that our book interest on the converts is now at 6.7% even though the cash coupon rates are 4% and 4 1/4%. This additional non-cash interest is sometimes referred to as phantom interest by non-accountants. In dollars, we will have cash interest of roughly $29 million in 2011 and book interest of $35 million, reflecting the phantom interest and deferred financing fees. MasTec share count, non-cash interest and EPS calculations had become more complex, and I suggest that you refer to Footnote 3 in the 10-K for additional detail. And if you still struggle with share count, phantom interest and EPS calculations for your models, call Marc Lewis, our VP of Investor Relations, and he'll help you out. My final comment about our 2011 full year guidance is about margins. The EBITDA margin implicit in our guidance is 10.4% to 10.6%, flat to up a little from last year. Relative to 2011 margins, let me say three things. First and most importantly, we continue to work in mostly soft or less than robust markets. Our competition has excess capacity, and in some cases, low levels of backlog. And therefore, we are assuming that 2011 pricing will remain at today's relatively low levels. We would expect that MasTec can get a significant additional bump in margins when we and our competitors get the opportunity to return to more normal prices, meaning higher prices. We have not yet seen any shift in pricing power toward contractors. A shift in contractor pricing power could happen in 2011, and we hope we see it. But to be practical about it, if we see higher pricing in the second half of the year, most of the benefit would really be in 2012 anyway. And second, in 2011, we will have some contractual pricing erosion to overcome in our Wireless business, and we'll start paying higher commissions in our DIRECTV marketing business. And third, we may get hurt by rising fuel prices, depending on global factors outside of our control. Bottom line, we will strive for much higher margins, continue to work on the basics and productivity, and expect that someday get a significant benefit from tighter markets with better pricing. Therefore, we expect to show much more margin expansion over time, but we see flat to modestly increased margins for 2011. Now let me cover Q1 guidance. We currently expect Q1 revenue of about $575 million compared to $450 million last year. That's an increase of 28%. We expect EBITDA of $55 million compared to $34 million last year. That's an increase of 62%. We expect Q1 fully diluted EPS of $0.23 compared to $0.10 last year. That's an increase of 130%. In summary, 2010 was a record and a terrific year for MasTec in the midst of a mediocre economy and generally soft markets. Q1, Q2, Q3 and Q4 were each better than our original expectations. We are encouraged by our Q4 36% organic non-acquisition revenue growth and by our broad-based revenue and EBITDA trends. We expect 2011 to be another excellent year for MasTec. That concludes my remarks. Now let me turn the call back to the conference operator for Q&A.

[Operator Instructions] And we'll go first to Alex Rygiel of FBR Capital Markets. Alexander Rygiel - FBR Capital Markets & Co.: First question, your commentary about the Pipeline business suggesting that in 2011, it's going to be flat to up little bit. It seems like a little bit more of a positive shift than maybe what you might have been saying a month or two ago for that business to be flattish to maybe down a little bit because of the rollout of Ruby. So what has changed in the last month or two that seems to have moved you into a more positive view or outlook for Pipeline?

Well, over the course of I guess the last four or five months, there's no question that some of the Ruby projects shifted from 2010 to 2011. So when we look at 2011, we're going to get the benefit of a lot of Ruby revenue that we actually expected in 2010. So if you look at our 2010 performance and you kind of backout the Ruby project, the rest of the Pipeline business performed considerably better than we would have ever expected in 2010. And really, that performance continues in 2011 when you add the incremental Ruby piece that we probably didn't expect three or four months ago. It shapes 2011 into a very good year in the Pipeline business. Alexander Rygiel - FBR Capital Markets & Co.: And looking at the opportunities in the Electrical Transmission segment, when we reflect back over the last three years, you've built a Wireless business that's become a very significant portion of MasTec, and you built a Pipeline business that's very significant as well. Should we also think about over the next two to three years this Transmission business becoming 15%, 20%, 25% a year overall revenue mix?

Absolutely. Alexander Rygiel - FBR Capital Markets & Co.: And can you comment a little bit on the bidding pipeline that you have or EC Source has out in that market right now?

It's extremely strong. I think a couple of things in the Transmission business, we've obviously been looking to expanding that market for a long time. We really haven't had the opportunity to publicly talk about EC Source a lot because we didn't have a call at the time of that acquisition. But it's a very robust market. I think there's obviously been a lot of press and a lot expectations in that market over the last couple of years, and I think that's finally becoming a reality. A number of projects are currently out to bid, but more importantly, there's a lot more in the pipeline that's coming. So we're very encouraged. We think it's a market that it's going to quite frankly explode. We think we entered it in a very disciplined manner, as we have many of the other acquisitions that we've made. We think our competitive position there is strong, and we think that we're poised for some tremendous growth in that business. Alexander Rygiel - FBR Capital Markets & Co.: And it looks like -- last question. Your backlog's up double digits, your revenue guidance for 2011 is a little bit more conservative than your backlog growth year-over-year, and you've got what appears to be a pretty sizable sort of shadow backlog, projects like BlueFire and EC Source's work that could enhance that growth. It seems like your guidance here is pretty conservative.

Well, I think we've done -- we obviously had a great 2010. I think we've got now a pretty good track record of not only meeting but beating on guidance. You'd love to be in a position to always feel you can beat guidance. I hope that people don't expect the blow-out quarters every quarter, but we're going to try hard to make them happen. There's no question that when you look at the guidance that we provided, it excludes major projects. I think there was a lot of commentary in the remarks about a lot of the businesses that we serve and really the large opportunities that exist almost across the board. And the reality is that if we hit some of the big projects that we hope to hit, any one of those businesses could dramatically change based on any given award, and it will obviously have a very positive outlook to financials. I think that as you think about the bigger projects to talk, it is important to note that a lot of that, while it might have some impact in 2011, it's probably out into 2012 because those big projects take a little bit of time to get started with some exceptions. So when we look at our Pipeline, Transmission, really Industrial businesses, our Wind business, we've taken pretty conservative outlooks on what we need to win for the balance of the year for our guidance to be right.

We'll go next to Guo Shou of Barclays Capital.

On the PacifiCorp transmission project, the EC Source one, is the asset margin accretive or dilutive to your 2011 EBITDA margin guidance? What I'm trying to get at is that EC Source had to be very price competitive to win that project.

When we look at full margins for the project -- and remember, we're only getting a piece of the year for EC Source and it's also the beginning of the project where they're going to begin to ramp. So that's a multi-year project that will affect more than just 2011. There's no question that as you look at the life of the job, we feel that margins will be accretive to our overall margins. Specifically in 2011, there is a share count bump up. Obviously, we've got amortization included with our EC Source transaction. So from an EPS perspective, it's kind of just about breakeven for 2011. We expect it to be very accretive over time. And from a margin perspective over time, it will also be accretive.

What about the labor pool for electric transmission as EC Source ramps up; is it easy to staff, or is it competitive in the market?

Just like every other business, we think that staffing has a lot to do with the people on your team and the people you put together to build a solid management and operational team. We think we have done a fantastic job of bringing in the right people that have access to significantly grow our employee base in that business. And we think we're going to be very successful at that, regardless of what the market looks like from a competitive perspective on labor.

And the two items that you mentioned that negatively impact margin, are they specific to 2011, or do you expect them to carry forward?

Well, I think they both have effects on margins in 2011. I think in both of those businesses, over time, you recoup those margins. So you end up giving some margin back initially and you end up creeping up margins in those businesses as you continue to gain efficiencies, which offset those margin deductions that you have upfront. So even in 2011, the margin impact towards the beginning of the year is higher than towards the end of the year because by the end of the year, you've already made a little bit of that back, especially in the Wireless business. So we're in a very privileged position in both of those businesses to be where we are. They're both excellent businesses for the company. We think we're doing the right thing for our customers. And at the end of the day, we're in this for the long term. We think it's going to benefit both of those business long term from really a revenue and a growth perspective, and we think it's the right thing to do.

And finally, can you give us a little more color on what's embedded in your $2.65 billion revenue assumption for 2011? I wonder if the majority of that growth versus 2010 is on the consolidation of EC Source, or does that you include any of the larger EPC contracts in your guidance, or no, like the solar, BlueFire or both?

What we said is we expect EC Source to represent about $100 million of that $2.65 billion. So if you back that out, it's $2.55 billion. We did about $2.3 billion this year. So we're expecting 10% organic growth from the balance of our businesses, our existing business. I wouldn't say that we obviously have included those projects that we've won and we know we're going to begin construction on. And like every other business, there's certain amount of business that we need to win during the year and book and burn, which we had a lot of in 2010. Some of that book and burn might come from projects that are currently not identified, and some of that book and burn might come from projects that we already know about like some of these industrial or solar projects. I think it'll be a combination of both. If we get every major project that we hope and expect to get, then obviously all of those are not included in our guidance numbers.

What's your current capacity utilization across the different end markets, the wireless, the wireline, pipelines and renewables? I wonder how you’re staffed for those. I noticed there's a number of employees actually went down a little bit in 4Q. Just a little more color on that, if you could.

Look, I think Q4 was a quarter in which we were able to increase utilization. Every business is different, and that's a question that you'd almost have to deep dive into every one of our businesses to answer. When you look at the results for Q4, it's finally a quarter where we got a little better utilizations, and you see what it did to margins. Margins are dramatically impacted over when they were in previous quarter. So I think it is a reflection of what a fully utilized -- and we weren't fully utilized, but we were better utilized. But I absolutely think it's a reflection of the kind of numbers and the kind of improvements you can see with better utilization. Across the board, we still have flex in our model. We could still grow in just basically every market that we serve. I think we've done an incredible job, all the men and women in MasTec, in managing this business. We did have an employee reduction from Q3 to Q4. And I just think it speaks to the quality of the management teams that we have out in the field and the work that they're doing. And again, we're going to continue to strive to be as best as we can, and as we get higher utilizations, margins should improve.

We'll go next to Tahira Afzal of KeyBanc.

I think a lot of my questions in regards to margins have been answered, so I'll go directly to those in regards to EC Source. I think you were asked earlier about your bidding pipeline. We'd love to get a little more color of regions that you think you're stronger to the extent you can comment. I know that Jim Haunty used to be part of EC Source. We'd love to know if he's still part of EC Source. And if he is, if that gets you involved into key utilities like American Electric Power, et cetera, that are yet to award portions of the current project?

So a couple of things. I think there's a lot of press out there about all of the projects that are in the pipeline. And quite frankly, there's a lot -- we don't see a lot in the press out there. So activity is very strong. We don't want to list every project that we're bidding on, but the truth is, we're getting an opportunity to bid on just about every project that exists out there. So we feel really good about our competitive position. Again, this is a new venture for us and one that, while it will have dramatic growth, we're going to have control growth. And we're pretty excited about it. I think that the upside potential there is again huge. As it relates to the EC Source team, he's still involved. He's, I believe, on the board of EC Source, has been for a long time and continues to be an active participant of the company. Again, we're excited. We're going to look at projects throughout the entire country. We think the union of the two companies really gives us a lot of competitive advantages in certain markets, and we're going to be competing in the east. We're going to be competing in the mid-west. We're going to be competing in the West. And again, we hope to do extremely well in that market.

And I guess a follow-up is on capacity there. In the past, you've said you're taking a more cautious approach to really commenting on natural gas power plant opportunities and Wanzek's ability to really leverage themselves there. We'd love to know that as you look at the bidding pipeline for Wanzek, where do you see more of the opportunities lying for 2011 and then into 2012?

We look at Wanzek, and you've got the Wind business. I think the Wind business is at a point where it's a stable market. It's not a market where we're seeing tremendous growth, but it's a market where we're seeing a lot of opportunities. For example, unfortunately, we lost one project in that business that was the biggest project we had ever seen or bid on. It probably would have led to a tremendous growth in that business in 2011. So while we didn't win it, it's a great sign that there's still a lot of activity in that market, and we expect it to be a good market for years to come; yet, a stable market. So when we look at the growth opportunities for Wanzek, we really focus on two areas. One is in the solar market, where we think solar's going to have a pretty big impact on the space. We still think it's a business that's in its infancy. While there are projects ongoing, there's not a ton of projects ongoing, and we think the level of projects and the activity is going to significantly increase. We think we've got a good competitive position within that industry. And again, we think that could be a very large market for us and could provide tremendous upside, not just the Wanzek, but quite frankly to all of MasTec. And we feel the same way about the industrial business. We've invested a lot of money and time in hiring what we think is a very well-seasoned team. We're seeing a number of opportunities, some smaller right now. But we think that over time, natural gas power generation is going to be huge. We think that's really going to be the next place where the market is going to explode. We're not seeing it yet, but we think it's coming. And by the time it gets here, we expect to be a player in that market and be competitive in a number of opportunities related to that.

Jose, yesterday, the EPA finally announced the industrial emissions regulations ruling. This is the final rule. And it will require a lot of industrial facilities to go back and really modify, upgrade, inspect a lot of their boilers especially on the solid fuel side. Are there any opportunities for MasTec over there?

It's a lot of the same functions that we've been providing on some of the industrial projects that we've worked on, or at least the skill sets. I think it's too early to tell whether that will create opportunities for us long term, but we'll obviously going to look at them. And if the opportunities exist, we're going to go after them, but it's not something that we can provide a lot of color on today.

We'll move next to Theodore O'Neill of Wunderlich Securities.

You talked about the size of the wind market being about stable year-over-year. Could you talk about the solar, how 2011 should look compared to 2010? Can you also talk about whether you're seeing any change in the regulatory environment that would make permitting for natural gas or electrical transmission any easier or less easy, is that environment changing at all?

Well, couple of things. I guess the legislative efforts first. I don't think anybody could really determine -- figure out what's going to happen in any given point. We've got a lot of opinions. Some of which have been right, and some that haven't. Obviously, transmission side is getting a lot of press and a lot of attention from the feds in both from FERC and from legislative efforts. We think over time, there's absolutely going to be things that are going to dramatically positively impact that business, but we're not there yet. We're very hopeful that we're going to see some sort of Clean Energy Act or standard where it might include a lot of different things, but we think renewables and natural gas will be a part of it. Anything that they come out with from a goal or mandate would be great for all of our businesses. So we're encouraged by that. We actually thought we had a shot at a renewable standard last year. This is a little bit different not only in it will include more things, but again still very positive. So we're hopeful, and we think it's the right thing for us to do as a country. So we're encouraged by that. And I missed the first part of your question.

How you're thinking about the solar outlook for 2011 versus 2010.

The market is going to be a lot bigger. It's similar to some of our other businesses where it really depends on what you win. We've got opportunities out there that are extremely large. And if we're lucky enough, that it's those projects that we're involved with are the ones that get funded and go, then we're going to do very well. I think as we think about solar a little bit more long term, what we're really encouraged by is a lot of our wind customers are starting to enter that market. So if you think about our wind customers building winds and have a renewable team, and we've been very successful in gaining market share in that business and having a significant part of our customers' build plan as they enter solar, we're going to have those same opportunities with those same customers because they're going to be looking at the people that helped them on the wind side help them on the solar side. So the bigger guys get into the business, as they get more active, we think it opens up a lot more opportunities for us. Today, we're seeing a combination of both bigger players and smaller developers. So we're very encouraged. It's very active. And again, it could be huge or it could be modest. And right now, we're not expecting a ton, although we are expecting some, but we're also hopeful that it'll be a lot better than what we're anticipating.

We'll go next to Adam Thalhimer of BB&T Capital Markets. Adam Thalhimer - BB&T Capital Markets: AT&T, I don't really understand what you guys are talking about with the margin impact. I mean, could you guys just explain what's going on there? How material it is?

I think that we talked about two issues. One in being a Wireless business, one in being our DIRECTV sales business. If we look on probably a year-over-year comparison of both the discounts provided and the commissions paid, it probably represents somewhere between 60 to 80 basis points on a full year basis. So basically embedded in our guidance, we're making up that 60 to 80 basis points and then a little bit more. But that's pretty much the financial impact of those two one-time effects. Adam Thalhimer - BB&T Capital Markets: But, I mean, what is it about the AT&T contract that causes margins to be lower? I just don't understand what's in that contract.

The discount. The built-in discount based on certain revenue targets and efficiencies. Adam Thalhimer - BB&T Capital Markets: So they’re saying to you we’ve given you so much work were going to reduce the potential for your margins.

That's right. It was built into the original contracts that we provided. Adam Thalhimer - BB&T Capital Markets: And then you mentioned new territory with AT&T, how material was that addition?

It could be very material. We picked up a portion of the Chicago market. We're very excited about it. It's a big market. We've been working there since Q4, so it should have a very positive impact on our 2011. Adam Thalhimer - BB&T Capital Markets: Finally, staying on AT&T, the contract renegotiation, I think it takes place this year. Is that accurate?

Yes, it does. Adam Thalhimer - BB&T Capital Markets: But also I'd point to a very good relationship there, so is there any risk to that?

We have a great relationship. We think that, obviously, the expanded geography is extremely important because it really, I think, says a lot about the performance that we've been providing and how good they feel with what we've done. We're encouraged. We don't think there's a lot of risk. And quite frankly, we're trying to grow that business as much as we can, both with AT&T geographically and with other customers. Adam Thalhimer - BB&T Capital Markets: EC Source, Jose, I mean, you mentioned that you didn't have a conference call about the acquisition. I still don't have a great sense for how that business is structured. When it was formed? Is it asset-based? Do they own their equipment? They lease equipment? Will they be at capacity with Utah or have capacity for another large transmission project? Maybe you can just give us some additional color there.

There's no question in my mind that the company is set up to really be one of the largest providers of transmission services in the country. I think that's how strong their management and how deep their management team is. So no, they're nowhere near capacity. They've got a combination of both owned assets and like everything else, I don't think anybody wants to be in the position of having an enormous amount of assets sitting, waiting for a job. That doesn't make good sense. So they're not there. They don't have an enormous amount of equipment just sitting there waiting. But we have a lot of access to equipment. With the combined entity, we've got a very solid fleet that will give us the opportunity to dramatically grow that business, and again, it's like every other business. We tend to try to complicate things. The reality is that businesses are driven by relationships and by people's confidence in whoever they choose ability to get the job done. And I think that with the combination of MasTec and EC Source, those are the things we're bringing to the table. Solid relationships, the ability to execute, and our customers are going to feel comfortable that they're going to get their job done on time and on budget, and I think it's a great win-win.

We'll go next to Veny Aleksandrov with Pritchard Capital Partners.

My first question is about weather. Weather has been horrible so far in Q1, has it affected you? Has it taken this into affecting the guidance? And if yes, how much higher was the guidance have been without the weather impact?

It has absolutely impacted us. Our guidance would have been better with better weather. So we've gone business by business, and we know exactly to what level it's affected us. Obviously, some of our businesses had been more affected than others. We do a significant amount of work in the southern states where weather hasn't been as bad. But it is having an impact. I'm not going to say it's having a huge impact, but it did have an impact or will have an impact on margins in Q1, and that's fully baked into our guidance.

And then in addition, in terms of guidance, when you gave Q1 and full year guidance, it seems like the year is not as I quoted as 2010. Is the deferral of the Ruby Pipeline the reason or because of the new segment mix year-on-year is more balanced now?

I think it's a combination. There's no question that Ruby has an impact. Obviously, Ruby is very strong in the front end of this year. We had a sizable project in Q1 of '10, that position was burning off, but Ruby is bigger. So again, I guess we've talked a lot about that we haven't included a lot of large project awards in our guidance. So to the extent that some of those come in and then our year man are being more back-end loaded, but at this point, we expect at least a less seasonal year than the one we had in 2010.

We'll move next to Liam Burke with Janney Capital Markets.

DIRECTV had a nice quarter and a nice year. What was driving that aside from just the typical subscriber growth there?

They're doing a great job in managing their business and are performing extremely well. And I think it's really nothing more than that. They got great products. They got a large demand for their services, and we're glad to be associated with them.

And on the wireless front, you talked about AT&T and then branching off into new customers. Would that create capacity issues, or how do you address that with AT&T and then having serve other carriers?

We're more focused on growing our business outside of AT&T and markets where we're not necessarily serving them so that we don't double resources or move resources around. We've got access to a lot of different resources in different parts of the country where we think we can help a lot of other carriers. It's a challenge. It's probably part of the reason why customer diversification hasn't happened sooner. We've been obviously experiencing phenomenal growth in that business. And quite frankly, we expect it to continue, so it's a challenge that we hope to live with for a long time. We're very bullish on the activity levels that they're going to have over the next few years, but the market in general is going to grow very large and very quickly. We mentioned it in the remarks, and I think it's very important. We have invested a lot of money, time and effort in growing our internal resources or our self-perform capabilities. We think that if we can become the largest provider of wireless services regardless of carrier or demand, or our products are going to be in demand, and we think that gives us an incredible competitive advantage, not only with AT&T but with many other carriers. So it's a great business. It's one that's going to see a lot of growth over the next couple of years, and we think we're incredibly well positioned.

And next, we'll go to Noelle Dilts of Stifel, Nicolaus. Noelle Dilts - Stifel, Nicolaus & Co., Inc.: My first question is just again trying to get a little more clarity on ECS. Could you just give us a sense of how EBITDA margins at ECS compare to your kind of core and historical transmission margins?

When you look around at the industry, I don't think -- I think the industry, like a lot of other industries, are similar. So I think when you look at the transmission builders, they're all generating better margins in that business and there are in some of the others, and I think it's no different for EC Source. So again, we expect margins to be positively impacted by the growth of that business. It's a longer-tale story than just 2011. But there's no question that the margin capabilities in that business are better than in some of our others. Noelle Dilts - Stifel, Nicolaus & Co., Inc.: But how about with ECS having capability to do some of the aerial transmission work and their tendency toward higher voltage projects, so comparing that to your historical transmission market, would you say that the margins tend to be higher there?

Well, they're higher than our company average, and they're absolutely higher than our historical Transmission business. We've been focused on more of the smaller transmission type projects. So as you get into the bigger projects, the margin potential is much higher. So a, they're significantly higher than our current transmission margins; and more importantly, they're also higher than our company average margins, and the attainability of those margins is there. Noelle Dilts - Stifel, Nicolaus & Co., Inc.: Just looking at wireless, last year, you saw, and historically, you've seen kind of a weaker first half of the year and then a pick-up in the back half. Are you expecting that same sort of typical seasonality, or is there any change in 2011?

The first half this year is very strong, partly because there was a lot of activity late in the year. Some of which got pushed into Q1, which is going to make that first half of the year stronger than it traditionally has been. I think the carriers also did a little bit more in advancing their 4G or LTE plans. There's been acceleration in those build-outs, so a lot is trying to get pushed out. That still will have a much bigger impact in '12 than it were in '11 because it's just going to take time. So I think the positive thing is '11 is probably helped a little bit more by some work that fell in from '10. And I think '12 is going to get off to a fantastic start because so much is being done right now to prepare for years of 4G and LTE expansion. I think it's still going to be somewhat seasonal. We're still going to see more activity in the second half of the year than we will in the first, but the first is going to be a lot stronger than it was last year. Noelle Dilts - Stifel, Nicolaus & Co., Inc.: In 2011, you're looking for flattish large gas pipeline revenue, it sounds like outside of Ruby, but you are looking at a robust bidding environment. Would you expect more -- if you do see some of these larger pipeline project wins, would you expect more benefit in '12 than in '11 due to the timing?

Absolutely '12, and with a lot of potential in '11.

And we'll go next to William Bremmer at Maxim Group.

I don't want to beat a dead horse on this EC Source, but can you give us an idea of the capability. I mean, how many hundred million dollar -- put it into hundred million dollar project, how many can EC Source simultaneously act upon?

As many as we can get.

And the $10 million that was provided to them at this time, pretty much of that was for capital large scale cranes?

It's for a couple of things. One was really to give them modern capabilities to go after some of the larger projects, and obviously, from an equipment perspective, they had been working on building their fleet for a long time, and there's a lot of equipment available out there. And quite frankly, there's a lot of ways to get equipment without a lot of capital if you're a startup, especially in this market. But it was really for working capital constraints, and more importantly, to help them shore up their balance sheet for bidding purposes. As they're looking at big projects, we're a lot more engaged and we obviously have a much bigger balance sheet that we've been willing to put on the table for any significant awards. So it's partly when we structured the deal, they hadn’t won a major project yet. So we want them to have a little bit of working capital in there to hold them for a long time in case an award took longer than we expected. Obviously, the award came very fast, and the need for that working capital kind of dissipated because they're going to perform better than they probably expected when we originally closed that transaction or announced the transaction. So I think circumstances have changed a little bit where that's not as meaningful as it once was. To go back to the earlier question, because I said there was some seriousness, and obviously not in full seriousness, had we've been sitting here two years ago, talking about a five or sixfold growth in our wireless business, which is what we're going to experience over the two or three years that that we've own them, it would've been anybody on our call or anybody that would be listening to us that really thought we could grow that business five or sixfold. And the reality is that any business has the opportunity to grow at a very aggressive level if it's managed correctly and if it's done right. And the reason that I said that I think that EC Source has the ability to grow at virtually any level is because they got a great team, with the resources of MasTec, we’ve got great people and at the end of the day, if you find the right people, you can execute. With that said, we're not out here chasing jobs. We're not out here chasing revenue. I think that we've demonstrated over the last three to four years that we are a conservative company. We're looking for good opportunities. We're looking to maximize shareholder return, and I think we're going to do that in a fiduciary responsible and in a responsible manner. So with that said, I truly believe that we can grow that Transmission business to the extent that we can be successful at winning projects at the prices we think are fair for the services that we need to perform. We do not think that resources will be limited or they will not be available to us. We think we've got a good competitive position. We think we're a great place to work. We think people would love to work for our company. And to the extent that the jobs were there, we'll find the resources to get them done.

Let's pull the attention to Precision. Can you give us an idea of what the percentage Precision was for the fourth quarter?

If you take the -- their biggest project obviously in the fourth quarter was Ruby. Obviously, it was a good proportionate amount of their revenues because of the level of activity of Ruby. And Ruby was approximately 20% of revenues in the quarter. So they were slightly higher than that.

On a consolidated basis?

On a consolidated basis.

And then for Bob, just some housekeeping question. Can you give us a run rate to use on SG&A, pretty much first quarter but yet embedding EC Source into the second quarter and beyond for '11?

EC Source isn't going to change our SG&A profile quite a bit. If you look at it obviously there was a big spike each of the last two years in the fourth quarter. Honestly, a lot of that was bonus accruals for the years that we had. I think as a percent of revenue, we'll continue. We've had a really great story where SG&A as a percent of revenue was at an all-time low both in the third quarter, and we matched last year. So in dollars, you're going to see modest growth, and I think the SG&A percent will continue to go down slightly, if that's helpful.

And finally, can you give us a depreciation amortization figure for '11?

It's actually in the table supporting the EPS. It's in the press release table, but I'll read it for you. Depreciation for 2011 in our guidance is $57 million. Amortization is $15 million, and $7 million of that is for EC Source. And the book interest is $35 million because most of the spend in interest, the cash interest is about $29 million.

We'll go next to Chase Becker at Credit Suisse. Chase Becker - Crédit Suisse AG: Question on your 10% organic growth that you were mentioning, I believe, in the previous question. I just want to make sure I understand this. Are you assuming any contribution from BlueFire in that? I know you said it's not in your backlog, but is there any assumption in the actual top line?

What we said is there's a certain amount of the revenues at the company-wide that are unidentified. It happens every year. We identified what we call book and burn during any given period. We have a number for book and burn as the year goes on for all of our business, whether that comes from a project that's currently not identified or a project that is identified like BlueFire, we don't know. So we do not specifically have them as a project as a book of guidance. Obviously, if we got a big project, it would have a positive effect and it will probably be more than what we currently have in our guidance numbers for book and burn, but that book and burn can come from anywhere. It can come from, again, unidentified projects or identified projects. Chase Becker - Crédit Suisse AG: And just in terms of your conversations with the customer, what are you hearing on the timing for that project? Is there any update from when you last gave some thoughts on that?

Obviously, there has been a lot of updates, partly we feel somewhat uncomfortable talking about it, because it's their updates. But we're very encouraged by the progress that they've made and what's happening behind the scenes. So we feel good that something positive will come out of that in relative short order. Chase Becker - Crédit Suisse AG: And then just my last question, bigger picture. I mean, obviously, EC Source is going to be a pretty huge opportunity for the company. Just wondering how do you think of directing resources for future growth? I mean, it seems like there's opportunities like there's BlueFire that's kind of one-off, but when you think of kind of the things that you have to go through to get these types of projects like BlueFire approved and how much uncertainty there is with resources. How do you think about directing your efforts going forward towards the other portions of your businesses? Is EC Source really the primary focus? I know you got these other businesses now, but just if you can help me kind of understand how I should be thinking about how this business evolves over the next couple of years?

Well, I think every business is an important focus. I think that when you think about BlueFire, BlueFire in itself is a renewable project. It's a biomass project that somewhat of a relatively new industry. So I think you're going to have more delays in that type of project than you would in an industry that's more mature. No question in long term we think that natural gas generation is an important market, one that we want to penetrate and one we think we'll have. It could have a dramatic impact on the business. But we said earlier, we look across every one of our businesses and we think there's really, really strong opportunities. We envision a wireless business is dramatically bigger than what we have today. We envision an installation business that could grow. We envision a solar business that could get a lot bigger than it is today. Transmission has great opportunities. Pipeline has solid opportunities. So across the board, there's a lot of good stuff that can happen for us both from geographic expansion and from customer expansion. We've been active in the M&A market. We’ve only done two deals in the last two years, but quite frankly, today, M&A activity is higher as it's ever been. There's a lot of good opportunities out there. Again, we're very conservative and very opportunistic, but we're encouraged by the signs there as well. We're lucky to be in a very privileged position where there are plenty of opportunities to really chase and try to build on.

And next, we'll go to Vance Edelson of Morgan Stanley.

This is Vikram in for Vance. Just one follow-up on the last comment you had about M&A. You did mention you're building up -- that there's going to be decent cash going forward, cash build-up. Can you just talk about by business where do you feel if you do think about an opportunity where you feel you want to complement?

Well, again, it's a tough question to answer because quite frankly, we believe that every one of our businesses has opportunities. When we look at markets, obviously, we said in the past, Canada's an interesting market across a number of the different industries that we serve. We've talked about our Industrial business and natural gas power generation, and we've talked about tuck-ins and just about every one of our other businesses that might makes us and might help us get that end goal quicker. Bottom line, is from an M&A perspective, we're opportunistic. We're looking for deals that we think have a lot of value and that we can bring a lot of benefits to. To the extent that those are available in any one of our businesses, we would look at them. Again, you mentioned we're in a very privileged position, that we've had a very rapidly growing cash balance and we're going to be good storage of that cash and if that means reinvesting in the company via acquisitions, we'll do it. If it means looking at other opportunities to increase shareholder value, we'll look at that as well. Again, I think we've been blessed with good growth, and we're sitting on a good arsenal of cash to deploy in what we ultimately believe is going to be the best manner.

And that does conclude today's question-and-answer session. I'll turn the conference back over to Jose Mas for closing remarks.

Alright. I'd like to congratulate the MasTec team on a great year. Their effort and dedication led to solid execution. We look forward to updating the market as 2011 develops, and we appreciate everyone's time and interest. Have a great day.

And that does conclude today's conference. Again, thank you for your participation.