Welcome to MasTec's First Quarter 2018 Earnings Conference Call initially broadcast on May 1, 2018. Let me remind participants that today's call is being recorded. At this time, I'd like to turn the call over to Marc Lewis, MasTec's Vice President of Investor Relations. Marc, please go ahead.

Thanks, Abie, and morning everyone. Welcome to MasTec's first quarter 2018 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 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 does not undertake to update these expectations based on subsequent events or knowledge. Various risks, uncertainties and assumptions are detailed in our press releases and filings with the SEC. 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 today's remarks by management, we will be discussing adjusted financial metrics, as discussed and reconciled in yesterday's press release and supporting schedules. In addition, we may use certain non-GAAP financial measures in this conference call. A reconciliation of any non-GAAP financial measures not reconciled in these comments to the most comparable GAAP measure can be found in our earnings release, press releases, our 10-Ks and Qs or posted on the PowerPoint presentation located in Investors and News section of our website located at mastec.com. Today, we have with us José Mas, our CEO; and George Pita, our Executive Vice President and CFO. The format of the call will be opening remarks and analysis by José and followed by a financial review from George. The discussion will be followed by a Q&A period and we expect the call to last about 60 minutes. We had another great quarter and a lot of important thinks…

Thanks, José and good morning, everyone. Today, I'll cover first quarter financial results including cash flow, liquidity and capital structure as well as our increased guidance expectation for 2018. In summary, we are off to a strong start in 2018 above our initial expectations and are proud to increase our 2018 full-year guidance expectation for revenue, diluted earnings per share, adjusted EBITDA and adjusted diluted earnings per share. More importantly, we remain bullish that several multi-year infrastructure programs that our customers are initiating during 2018 give us sizable growth opportunities in 2019 and beyond. We believe our growth potential has not been appropriately reflected by the Street and thus we completed a share repurchase and 10b5-1 program during the first quarter of 2018, purchasing approximately 2 million shares. We then subsequently authorized an additional $100 million share repurchase and 10b5-1 program under which we repurchased another 545,000 shares in April. In total, on a year-to-date basis through April, we have repurchased approximately 2.6 million shares, or slightly over 3% of our total share base. These year-to-date purchases are approximately $0.05 accretive to diluted earnings per share during 2018 and approximately $0.07 accretive on a 12-month run rate basis. As Marc indicated at the beginning of the call, our discussion of financial results and guidance will include non-GAAP adjusted earnings and adjusted EBITDA. Reconciliation and details of non-GAAP measures can be found in our press release on our website or in our SEC filings. Even though we talked about it last quarter, I would like to reiterate that MasTec is a big beneficiary of the Tax Cuts and Jobs Act, both directly and indirectly. We expect that our 2018 GAAP and adjusted tax rate will approximate 29.5% of pre-tax earnings compared to the 39% adjusted tax rate in effect for 2017.…

Thank you. We will take our first question from Adam Thalhimer with Thompson Davis. Please go ahead. Adam Robert Thalhimer - Thompson Davis & Co., Inc.: First question I wanted to ask about the – on the wireline side. José, you've been talking about large wireline projects for several quarters now. Are those now substantially underway? José Ramón Mas - MasTec, Inc.: Good morning, Adam. So I think they've started, I don't think you've seen the full ramp effect of those projects to date. So we're still doing a lot of preliminary work in many of those areas where we were awarded projects. So I think we're going to see a ramp. As 2018 develops we're going to see increased activity in Q2, we'll see it in Q3, we'll see it in Q4, all the way into 2019. So I think, you're starting to see the beginning of it but quite frankly, it's really just getting started. Adam Robert Thalhimer - Thompson Davis & Co., Inc.: And then in Oil and Gas, can you give us a little more color on what you're seeing in the shales? And I'm curious if there's any chance that you can continue to grow backlog in Q2? José Ramón Mas - MasTec, Inc.: It's a good question, right. I think in Q1, we did very well from a backlog perspective, we were up about $132 million in backlog, a lot of that came from smaller projects. We typically wouldn't expect to have backlog growth after the awards that we had in Q4, which were fairly large in nature. We're starting our big project in Q2, so we'll probably eat into backlog like we've historically done. We get to a peak level in backlog, we work it off then we win another big project, which dramatically increases our backlog again. I think that trend is going to continue that's kind of how that business works. So, if we get started on time in Q2 on our large project for 2018, which we kind of are on time and we expect that to happen then I would assume backlog will drop a little bit in Q2 versus where it was in Q1 and then start building again going into Q3, Q4. Adam Robert Thalhimer - Thompson Davis & Co., Inc.: Okay. Thanks. José Ramón Mas - MasTec, Inc.: Thanks, Adam.

We will take our next question from Alan Fleming with Citi. Please go ahead.

Hi. Good morning, guys. José Ramón Mas - MasTec, Inc.: Morning, Alan.

José, maybe I can start on communication margin. I mean, you had – you talked about facing some start-up cost here in the first half and you instead did double-digit margins there, 13% I think it's the highest we've seen on a quarterly basis in a long time. So, is there anything you'd call out there? I know, you mentioned some storm work, but anything else you'd call out? And is there any reason to think that the margins can't kind of be at this level going forward as revenue continues to ramp into the second half of the year? José Ramón Mas - MasTec, Inc.: You know as we look at 2018, I don't think we're going to generate 13% margins throughout. Obviously we were somewhat impacted by storm in Q1 and probably had about a 200-basis-point impact to the quarter, one of our named customers was $50 million, $60 million of revenue for the quarter, which was predominantly storm. It wasn't all incremental obviously because we would have been doing other work with those same crews. But we do get a positive impact from a storm based on margin, so it probably represented 150 basis points to 200 basis points in the quarter. We see the margins somewhat normalizing. I think our target for 2018 was about 11%. We've historically talked about being north of 12%, into 13s, which we've kind of approached in the back on a full-year – in the past on a full-year basis. Market's playing out really well. We will have some start-up costs that we are currently obviously going through with all of the ramp. We've got an activity around Communications. We'll continue to have some of that I think over the course of the next couple of quarters. But there is no question that it's – the way things are shaping up we're going to have a fantastic run. Backlog was up $191 million in Communications. A lot of that was driven by wireless backlog growth which we're very excited about. Unfortunately, I don't think we see that go into our numbers until late 2018, early 2019, but there's no question that the markets – we got a lot of wind behind our sails and we're really excited about what's coming.

That's very helpful. And then my follow-up maybe is on Oil and Gas margin. Can you still reach your EBITDA margin guidance there for the year of low 13% if you're starting the year at low 6%? Obviously that implies a steep ramp. You mentioned construction starting on your big project in backlog here. How much of an impact – can you quantify the impact from the cost reimbursable work in 1Q and do you think you can still get to those levels as your new work starts to ramp? José Ramón Mas - MasTec, Inc.: So we do, Alan. The impact on the first quarter on the cost reimbursable was also a couple hundred basis points in margins. So margins would have been a couple hundred basis points better in our Oil and Gas business. We expect a significant ramp in margins in Q2, especially as we start the new 2018 work that we've got kicking off. We still have a little bit of Rover that we'll finish, which is at lower margins. But we think throughout the year, those margins will continue to grow. We're still shooting for that 12% to 13% range from a full-year margin in Oil and Gas. We think it's achievable and we think unlike last year where we started with higher margins and margins kind of tailed off because of the cost reimbursable project, I think we'll see the end versus here where we're affected by the cost reimbursable project early. But as the other projects and a lot of our new work kicks in, margins will go up. I think it's really important to talk about our total business there. And if we look at our business net of Rover over the last year and a half, the other projects have been performing extremely well from a margin perspective, which gives us a lot of confidence in our ability to talk about where we think margins will be long-term in that business.

Thank you, guys. Good luck. José Ramón Mas - MasTec, Inc.: Thank you.

And we will take our next question from Tahira Afzal with KeyBanc Capital Markets. Please go ahead.

José, congrats to you and your team on another good quarter. José Ramón Mas - MasTec, Inc.: Thank you, Tahira.

José, just based of what you're saying and if you look at the telecom sector, obviously a lot of growth ahead into 2019. It seems maybe Oil and Gas has had that transition year in 2018 with some Canada work coming back, some Permian projects seeming to be fairly large. So as you look out to 2019 and I know it's early, qualitatively speaking, it seems all your sectors should see growth and you should be able to maintain maybe organically a mid-single-digit growth number into 2019 on the revenue side? José Ramón Mas - MasTec, Inc.: We agree with that.

Got it. Okay. And is there a reason why we shouldn't think directionally your EBITDA margins as well should progress up as a consequence? You are anniversarying out some tough Oil and Gas margins this year. And your telecom utilization and transmission should get better into next year as well. José Ramón Mas - MasTec, Inc.: No question about it and I think that's been part of our story for a long time. We've been waiting for utilization to pick up in some of our businesses that haven't performed as well over the last couple of years. I think we're seeing that today. I think the margin upside is – I think we're going to start to demonstrate that over the coming quarters. We're really excited about that. We think that's a big part of our story. So, in summary, Tahira, to your comments I think we've got the opportunity to grow all of our segments into 2019, including Oil and Gas, with an improvement in margin almost across the board. I think it bodes really well for us going into the remaining part of 2018 and more importantly 2019 and beyond.

Okay. Thanks a lot, José. José Ramón Mas - MasTec, Inc.: Thank you, Tahira.

Our next question comes from Noelle Dilts with Stifel. Please go ahead. Noelle Christine Dilts - Stifel, Nicolaus & Co., Inc.: Hi, thanks. Good morning and congrats on a nice quarter. José Ramón Mas - MasTec, Inc.: Thanks, Noelle. Noelle Christine Dilts - Stifel, Nicolaus & Co., Inc.: So, given just the strong growth profile that you're seeing in both oil and gas markets and in telecom, could you just comment on what you're seeing in terms of pricing and terms? Are you seeing them meaningfully improve? And then also if you could touch on labor and the availability of resources, are there any kind of points where you're seeing particular tightness? José Ramón Mas - MasTec, Inc.: Noelle, for us it's all about utilization when it comes to pricing, right? So what we've been saying for I think the last year-and-a-half or so is we've seen a good pricing environment. I don't know that we're going to see pricing dramatically uptick just based on the amount of resources that are available to work. With that said, to the extent that you can kind of plan out your work and get a higher utilization level, it significantly impacts margins. There's no question that the tightening environment is helpful, right, because I think everybody's relatively busy. So you will have some natural uptick in pricing, but I think the bigger impact and effect is really on utilization. So I think that bodes well for everything that we're doing across all of our segments. As it relates to labor, I think we're in good shape, especially in 2018. We have talked about in the past where we think in 2019 the Communications market is going to see some labor pressure. We think we've done a really good job of trying to prepare…

We'll take our next question from Chad Dillard with Deutsche Bank. Please go ahead.

Hi. Good morning, guys. José Ramón Mas - MasTec, Inc.: Morning, Chad.

So based on what you have ahead of you in Oil and Gas, do you think you can keep growing backlog year-over-year, I guess in 2018 and what does that composition look like? I mean it will be more of a Permian story and like what's the mix between mainline versus midstream? And if it is more of a Permian story, I mean how do we think about just like the ultimate margin potential, if you take into consideration just like those level of contingencies you booked there versus let's say the Marcellus and the Utica basins? José Ramón Mas - MasTec, Inc.: So the short answer is yes, we do expect to come out of 2018 with similar backlog levels as we go into – as we came into 2018 with. We say that because we've got tremendous visibility and confidence in what's happening in the market. I still think for the foreseeable future and I'm talking three or four years, there's a lot of large project work. So I think over as far out as we can see, we're going to get ourselves some big projects on a year-in, year-out basis and those projects will be augmented by a lot of the smaller work that we're doing, very similar to what's happening to us in 2018. So we've got one large project with lots of other small to mid-sized projects and the mid-sized projects could be a couple of hundred million dollars apiece. We expect that trend to continue in 2019, 2020, 2021 based on the discussions that we're having with our customers. There's a lot of work out there. I know there's a lot of concerns about the long-term nature of what's happening in that market and how long this cycle is going to last. Quite frankly and I know we sound like a broken record, but we have great visibility. We're in great dialogues with lots of customers about future projects. We don't see an end in sight to the long line projects and the long-haul projects in the business. So we're very encouraged. We think activity levels today are as high or higher than they've probably been since we've been in this business. The rig counts are up 151 rigs from this time last year. So there is a considerable incremental workload in the shales, we're seeing it. Quite frankly, we are in a position today where we're having to turn away work. And we're doing everything we can to serve our customers as best as we can. And again, I think we're in a great spot. I think that business has tremendous legs and good opportunities for growth, both in the short and long-term and it's something we're really excited about.

That's helpful. And then switching over to Communications, can you speak to your expectations of revenue contribution in 2018 for wireless, wireline as well as DIRECTV? And then also if you can comment on FirstNet and how you think about that contribution and when you expect that to hit peak run rate? José Ramón Mas - MasTec, Inc.: Yeah. So from a revenue perspective, we expect our Comm business to be up double digits in 2018 versus 2017. Not much different than what we've said in the past. We expect the DIRECTV business to decline in 2018 offset by a lot of growth in both our wireline primarily and then our wireless business. We think the wireless is more of a 2019 story. From a FirstNet perspective, we saw incredible order flowing. The first quarter, I think our order flowed more than tripled in FirstNet from Q1 to where we are today. But quite frankly we've generated very little revenue associated with FirstNet and we won't see much of that revenue until the second half of this year. The projects are underway, but the constructability of those projects take time. So the big revenues won't hit until third or fourth quarter. We'll continue to see a ramp going into 2019. So I think 2019 is a dramatically bigger year for that than 2018 is. And it probably will continue to grow through there. I don't think 2019 is a peak either, I think the peak's going to come out in 2020 or 2021. So I think we're at the very early stages of what we're seeing in FirstNet. The good side of that is we've got orders in hand. We're seeing that order flow, customers committed, there's some deadlines to make, so it's in a good place. And we feel the same way about 5G. I think, even if you look at the T-Mobile-Sprint just the way they've talked about their deal, I think when you think about the importance that they both put on 5G and the network, I think all the carriers are in the same spot. They've got to upgrade their networks to meet the growing needs of their customers, that bodes extremely well for companies like ours. And between Verizon and AT&T and what Sprint and T-Mobile are going to have to do, it's just a fantastic business to be in and one where we think we're going to have really solid growth opportunities.

Thanks. I'll jump back in queue. José Ramón Mas - MasTec, Inc.: Thank you.

We'll take our next question from Matt Duncan with Stephens. Please go ahead.

Hey. Good morning, guys. Let me add my congratulations on the quarter. José Ramón Mas - MasTec, Inc.: Thank you, Matt.

So, sticking with Comms and thinking about the backlog there José, you've had five consecutive quarters of backlog growth, you're up 35% in Comms backlog over that timeframe and that's only an 18-month backlog and you're talking about a peak that's let's call it at least three years away before we get there. So is it reasonable to assume, given the ramp you're expecting in 5G and in FirstNet that you would see backlog continue to grow there? And if so, what's the reasonable backlog level you could exit this year within that business? José Ramón Mas - MasTec, Inc.: Matt, I don't know that we've run the math to that detail. I think you're right. Our expectation is backlog is going to continue to grow. Again, we always talk about the lumpiness in backlog and it all depends on what happens from an order flow. It's a lot easier to manage within our Comm space because so much of it is under long-term maintenance agreements. So we do expect growth, continued growth through the balance of the year. I don't know that we're going to peg a number to it, but obviously the numbers are a lot higher now than it's been over the course of the last 18 months, a lot of positive developments there. I think obviously that's going to be somewhat driven with what happens between T-Mobile and Sprint. The more clarity we get around that deal, I think there's going to be tons of activity and opportunities around that, which would obviously help – which is going to help backlog growth at some point.

Okay. And then my second question is just on capital allocation. You've bought back 2.6 million shares year-to-date, the stock still seems fairly inexpensive. Is that something that you see yourselves continuing to do from this point forward, are there acquisitions that you feel like might could get over the finish line here in the next call it – basically between now and the end of the year? How do you balance out those two with each other right now? José Ramón Mas - MasTec, Inc.: First, we've been all about trying to take advantage of the opportunities that the market affords us right from an organic perspective, so it's about executing organically. We have tremendous organic growth opportunities across all of our businesses. With that said, we're always looking at ways to augment and improve our business both geographically and penetrating customers deeper. With that said and I think from a long-term perspective, we haven't been big buyers of stock. We've been somewhat opportunistic in buying opportunities. Last time we bought the stock was in the teens a while ago that worked out well for us. When we look at our stock price today, we obviously think we're trading at significant value if not we wouldn't be buying our stock. Going into today's call, we're trading at about seven times earnings. The reality is that we've got a lot of private deals in our space being done between 8 times to 10 times. So we're trading at a pretty significant discount to what's happening in the private sector with companies that I don't think are anywhere near as diversified and as good as MasTec. So today we're a believer in our story, we're a believer in our stock. So I think you can expect this to continue.

Got it. Thanks, José. José Ramón Mas - MasTec, Inc.: Thanks.

And we will take our next question from Alex Rygiel with B. Riley FBR. Please go ahead.

Thank you and great quarter, José. José Ramón Mas - MasTec, Inc.: Thanks, Alex.

Sorry if this was asked already, but can you expand a little bit upon what you're doing down in Puerto Rico, what the contribution was in the first quarter and what the future opportunities are over the next handful of quarters or years? José Ramón Mas - MasTec, Inc.: Yeah. So in Puerto Rico, we've been there for a long time. Obviously the storm dealt a significant blow to Puerto Rico last year. We've done a little bit of everything. We did some telecom work. Late into the fourth quarter, early first quarter, we supported Puerto Rico on the power side of the business, so we had a lot of distribution and transmission crews doing storm restoration work that kind of ended towards the end of the first quarter. With that said, there are significant opportunities for long-term growth in Puerto Rico. There is a number of RFPs that we've participated in over the last couple of months that we feel somewhat confident about. The opportunity there is going to be very large for a very long time. So there's going to be billions of dollars invested in that infrastructure. I think what we've seen is the first phase of restoration happen. Lights are on and I say that somewhat lights are on most of the time, but they've struggled and they've got to invest a lot of money in their network to make it reliable. So there's going to be significant long-term opportunities there. I think that what we were able to do there for the period of time we were there demonstrated our ability to gear up and perform. So I think that bodes well for us. I believe yesterday, the FCC talked about an additional $1 billion investment into the telecom infrastructure of Puerto Rico, which also bodes well for us. So we don't have – if we talk about our numbers for the balance of 2018, I don't think we've got a lot built in for Puerto Rico because a lot of it is influx. But quite frankly, there are significant opportunities there. There's also significant opportunities in the Virgin Islands as they continue to recover from a lot – from the same natural disaster and a lot of the issues that they've had. So this is a somewhat unique situation in that we got some benefit from the short-term nature of the storm but quite frankly, there is tons of opportunities I think over a two- or three-year period to stay actively engaged in those markets, helping them recover.

And turning to wireless, where is the pinch point going to be in the shortage of labor in wireless in 2019? In the past, there was tower climbers, but what's it going to be in the future with 5G? José Ramón Mas - MasTec, Inc.: It's going to be more broad based, Alex. I think you're still going to have a tower climbing issue because every carrier is going to pretty much have to touch every existing tower that they're on. But you're also going to have the incremental need of all of these small cell initiatives that they're doing. So these millions of touch points that we're going to have across the network and those are somewhat of a different skill set. And I think we're already planning on how to best execute around that in terms of personnel. But I think, between that and the fiber ramp that we're going to see in the coming years, I think that's where there will be a bottleneck in Communications.

Thank you. José Ramón Mas - MasTec, Inc.: Thanks, Alex.

And we'll take our next question from Brent Thielman with D.A. Davidson. Please go ahead. Brent Edward Thielman - D.A. Davidson & Co.: Thanks. Good morning. Great quarter as well. José Ramón Mas - MasTec, Inc.: Hey. Thanks, Brent. Brent Edward Thielman - D.A. Davidson & Co.: José on Oil and Gas the discussions with customers for jobs seems it continue to extend out, I think you're now saying preliminary discussions out to 2022. Obviously, capacity in the market has been a part of that focus there. But it seems to me from what you're saying that there is some sort of new jobs that have been on the sidelines now, looking more realistic or economical to develop. Is that more of what's going on here? José Ramón Mas - MasTec, Inc.: Different customers have different needs, so it's not a broad-brushed answer, because there is – I'd call it there's projects that fall in different buckets. But across the board we're seeing significant activity from a number of different customers for different reasons. Some may be to power power plants. Some may be to offset their transportation costs from truck and rail. Others may be just a necessity of where a product is being extracted versus where they want it to go. All-in, we're just seeing an enormous amount of projects that are being planned, that are being worked on from reputable customers that we think have a high likelihood of output. When you're talking about a project that's three years out, there's obviously some risk that goes with that. So to the extent that you can position yourself with customers that have significant track record and we know we have spent a lot of money in the past, I think, it bodes better to the long-term viability and…

We'll take our next question from Jamie Cook with Credit Suisse. Please go ahead. Jamie L. Cook - Credit Suisse Securities (USA) LLC: Hi. Good morning and nice quarter. I guess just two clarifications given the time. You beat the first quarter numbers. It looks like you're raising ET revenues and maybe even Power Gen to some degree. Just to be clear, Oil and Gas growth, is it still forecast to be sort of up mid-single-digit off of the normalized $3 billion level? And then I guess just a longer-term question for you, José. Understanding the prospects in Oil and Gas are very robust over the next several years and you're not concerned about the peak, but to what degree do you want to – to what degree are you concerned that this business could get too big as a percentage of your portfolio and given the lumpiness, so that you want to sort of manage this business not to become too big of the percent of the portfolio? So I'm just wondering, how you think about that. And in that context, should we think about Oil and Gas over the next couple of years, assuming markets are, okay, is a 3 billion-ish plus or take revenue business? José Ramón Mas - MasTec, Inc.: So a couple questions there, Jamie. First, yes, our anticipation is we're going to grow single-digits from the normalized run rate. So we talked about the normalized run rate last year being about $3 billion. We expect to grow mid-single-digits base off that number in 2018. We think that that is no – we have no doubt in our mind that we think that's a sustainable number over a long-term and I'll get into that in a second. And I think what's going to naturally happen…

We'll take our next question from Justin Hauke with Robert W. Baird. Please go ahead. Justin P. Hauke - Robert W. Baird & Co., Inc.: Yes, good morning. Thanks for taking my question. I've got two here. So maybe the first one, George, I appreciate you talking about the cash flow that was helpful. I was just hoping to maybe understand a little bit better the nature of the increase in the unbilled, especially since it sounds like the work for your one large project has been under a reimbursable cost structure, at least at this point. So I'm just wondering why that has continued to build and then the visibility on the timing of the collection for that, if you could give a little more color? José Ramón Mas - MasTec, Inc.: Yeah. So I'll answer it. It's José. So I think when you look at it it's largely been driven by two main projects, two of our larger pipeline projects. I think even though one of them is cost reimbursable in nature, we still got to go through an approval process of those invoices. So if you think about it, these are projects that have somewhat been hampered with permitting delays. The projects have taken a lot longer than what we expected or the customer expected. The contracts have grown in value above and beyond what they were initially were. So as you get to the end, quite frankly those invoices customarily have the – I think in a normal process have to get approved that approval process takes longer than what you have in your initial bid estimates and contracts. And I also think it's important to note that things are always flowing in and out of that. So things flow in, they get approved as it…

And we have no additional phone questions at this time. I would now like to turn the conference back to José Mas for any additional or closing remarks. José Ramón Mas - MasTec, Inc.: Again, just want to thank everybody for participating today. And we look forward to updating you on our second quarter call in a couple of months. Thank you.

Ladies and gentlemen this does conclude today's call and we thank you for your participation. You may now disconnect.