Good day and welcome to MasTec's Second Quarter 2018 Earnings Conference Call, initially broadcast on August 3, 2018. Let me remind participants that today's call is being recorded. At this time, I'd like to turn the conference over to Marc Lewis, MasTec's Vice President of Investor Relations. Marc, please go ahead.

Thanks, Ann, and good morning, everyone. Welcome to MasTec's second 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 the 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 release, our 10-Q and 10-K or in the posted PowerPoint presentation located in Investors and News sections of our website located at mastec.com. With us today, we have 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, followed by a financial review from George. These discussions 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 things…

Thanks, José and good morning, everyone. Today, I'll cover second quarter financial results including cash flow, liquidity and capital structure, as well as our increased guidance expectation for 2018. In summary, we had a strong second quarter 2018 with significant adjusted EBITDA margin rate expansion, and are pleased to increase our 2018 full-year guidance expectation for 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 have initiated in 2018 coupled with the cash flow benefits to our customers of the Tax Cuts and Jobs Act should generate sizable growth opportunities in 2019 and beyond. 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. Here are a few summary comments regarding our second quarter 2018 performance. Second quarter 2018 revenue of $1.62 billion decreased 14% from last year primarily due to expected lower levels of Oil and Gas project activity. Second quarter 2018 revenue levels were also approximately 9% below our quarterly expectation, primarily caused by lower-than-expected levels of quarterly project production due to scheduled delays in our Oil and Gas and Power Generation and Industrial segments, effectively pushing more project activity towards the back half of 2018. We continued our strong booking activity trend during the second quarter, sequentially increasing our backlog to approximately $7.7 billion. This marks the third consecutive quarter of record total backlog and we believe this signals evidence of the significant strength of demand in our end markets for 2018, 2019 and beyond. Second quarter 2018 adjusted EBITDA was approximately $191 million or 11.8%…

Thank you. We're going to take our first question today from Noelle Dilts from Stifel, Nicolaus. Please go ahead. Noelle Christine Dilts - Stifel, Nicolaus & Co., Inc.: Hi, good morning. José Ramón Mas - MasTec, Inc.: Good Morning, Noelle. Noelle Christine Dilts - Stifel, Nicolaus & Co., Inc.: For the Communications division, you mentioned ramp up costs in the back half of the year as really these are – as FirstNet and some of the bigger fiber programs get underway. Given the significant growth we're expecting in the industry, one of the things we often hear about is, is that folks are worried about the availability of labor, particularly tower climbers. So, a couple of questions. One, are these ramp up costs looking like they'll be a little bit elevated relative to what you were initially expecting? And second, how are you kind of addressing that potential tightness in labor? José Ramón Mas - MasTec, Inc.: Sure, Noelle. I think if you go back to the last couple of quarters, we've been talking about 2018 and 2019; our view around Communications really hasn't changed. We expected activity to begin increasing in 2018. We've always been saying for a long time that we think we really start to see it move in 2019, just based on how these projects are planned out and the things that have to happen to actually put these projects in construction. We feel really good about where we are from a labor perspective and I'll cover both sides, I think they're both important on the fiber side. Activity in 2018 is a lot about preparation, it's a lot about engineering and permitting, which is where the whole industry's focus is today in terms of pushing those projects forward. Construction is going to ramp as the…

Thank you. Our next question today comes from Alex Rygiel from B. Riley FBR. Please go ahead.

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

José, it looks like, your backlog is up 47% year-over-year. Would you characterize your visibility at this time looking into the out year of being 2019 better than your visibility sort of in August of last year looking out into 2018? José Ramón Mas - MasTec, Inc.: No question, this is probably the highest level of visibility that we've ever had as a business. And even if you take some of our underperforming units, right, if you look at our Transmission business, last year at this time we were sitting on $295 million of backlog, today it's $632 million, with further wins it's going to take that number a lot higher. Part of the problem as people think about our story whether it's Transmission or to a lesser extent Communications, we're booking a lot of work today that's much more EPC like than what historically has been in our backlog, which means work is going to take longer for it to actually materialize in terms of our revenue in our P&L. In Transmission the work that we're winning and we're winning a lot of it and it's going to be a great market and I'm so bullish about that market, right, I'm as bullish about that market as it relates to MasTec that I've ever been, but the reality is the projects that we're winning today we're not going to see significant construction activity until the second half of 2019. We've kind of been saying the same thing with Communications for the last year, although there's so much out there that it's hard for that message to get through, a lot of the work that we've been doing is preparing ourselves for what we think are going to be very active construction cycles over a long period of time. But backlog is backlog, right, and at some point it's going to burn off and we're very excited about it, we're at extremely high levels and I think it bodes extremely well for the future of this company.

And, George, obviously accounts receivables kind of walked its way up a little bit higher here, DSOs have walked their way up, you talked about near-term improvement on that front, can you sort of – if we think about maybe year-end 2019, and I know you don't have 2019 guidance out there yet, but if we think about year-end 2019, how much in receivables between now and then do you think you can convert sort of into cash and therefore at year-end 2019, what do you think is an appropriate kind of run rate DSO target that we can have?

We've always said that the DSO target range for us is in the mid-to-high 70s. And that really hasn't changed. I mean the elevation we've experienced so far in the first half of 2018 is related to a specific project, which we've talked about and that we expect to resolve itself now in Q3. So really from a structure perspective, a DSO range is in that mid-to-high 70s, reflects the mix of our business and the mix of our projects, and is a good view of the kind of working capital that we would expect on a normalized basis going forward.

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

Thank you. Our next question today comes from Tahira Afzal from KeyBanc Capital Markets. Please go ahead.

Thank you very much. So José, given you've seen some timeline push-outs, which seems to be kind of the norm in this environment on the pipe side especially. But if you look at some of the push-outs, does it add a little more juice to the early part of your year as a consequence? Was this really takeaway and replace some of the other work that you have on the pipe side? José Ramón Mas - MasTec, Inc.: Well, a couple of things are happening. One, we're seeing a lot more activity even in 2018 than I think we originally anticipated. A lot of that has to do with the Permian takeaway issues. So, there's a lot of projects that are coming to fruition today that we wouldn't have been talking about or wouldn't have been thinking about, especially at this time last year. So there is more activity coming into the second half of 2018. With that said, there's some – some of the other stuff is getting pushed into the beginning of 2019. So whatever is getting pushed, there's more than enough work to backfill. Quite frankly the market is extremely active, it's extremely healthy. I don't think getting work is an issue today. It shouldn't be for anybody. It's about keeping your utilization levels high, trying to pick the right projects that you can work on and continue your higher utilization rates. We think we're doing that. Even on our Mountain Valley project, we're actually very pleased with the direction that it's gone. We took a little bit longer to ramp the project in the second quarter than we had anticipated. But quite frankly, today, we're at full ramped up levels. We expect that to continue, is it going to be a little bit – are these…

Okay. And José my second question is a little trickier, you are very bullish on your stock and rightly so I guess when it was in the mid-50s, high-50s. It seems you have the strong, the language yourself and George have used much more confidence around the timing of that Rover receivable and really the free cash flow in the second half of the year. So why would buybacks not be your priority at these levels from all the three that options you have that George highlighted? José Ramón Mas - MasTec, Inc.: So let me say a couple things Tahira. First, obviously, over the last few weeks we've been inundated with phone calls around short reports that are out there, making all kinds of accusations around the quality of our earnings and the receivables collection issues. I don't know how clear we can state other than what we've done today around how we feel about the collection of those receivables, right? We're talking about – we've been saying for a long time, we expected 2018 to be a record cash flow year, we're now saying that we expect it to exceed $500 million, our previous best year ever was $367 million in 2015. So we're going to generate dramatically more cash flow this year than we've ever had. We are extremely bullish about it. We're not backing down from that. We've made significant inroads in terms of closing that out. The issues and why it's taking so long quite frankly have a lot to do with just getting to the point where we were substantially complete. It has been an extremely complex and difficult project. It was a contract structure that required cost reimbursable, which unfortunately forced us to wait somewhat to the end to have all that data done before we could get the final resolution. We think we're there. So we're moving forward. We believe that our stock is very undervalued if you look at what we bought during the second quarter. The shares that we bought were just under $45 a share. You can expect us to be very active especially within that range, quite frankly our stock recovered somewhat during the quarter, only here shortly that it begin to dip again. We've always said, we're going to be opportunistic around our buybacks, but we're very supportive and with – as the cash comes in and obviously we're going to be in a very different position from a cash flow perspective, it will absolutely be on the top of our list of things to consider to deploy the capital with.

Okay. That is very helpful. Thank you. José Ramón Mas - MasTec, Inc.: Thank you, Tahira.

Thank you. Our next question today comes from Jamie Cook from Credit Suisse. Please go ahead. Jamie L. Cook - Credit Suisse Securities (USA) LLC: Hi, good morning. I guess a couple of questions. One, sorry José or George back to the cash flow the $500 million in 2019, which is a pretty big number. George, can you just walk me around the assumptions on the $500 million just so we can get comfortable like what sort of onetime versus, I mean do we see net income more – net income as a percentage of free cash flow. And then, I guess my second question is I just think longer term about free cash flow with the Oil and Gas market picking up, I mean should we expect over time cash flow to just be more lumpy just because of the complexities of these big pipeline jobs. So I guess I'll start there?

Well, let's go back, I mean we said we expect 2018 cash flow from operations to exceed $500 million... Jamie L. Cook - Credit Suisse Securities (USA) LLC: Sorry. José Ramón Mas - MasTec, Inc.: ...and we talked about – yeah, 2018 $500 million. Jamie L. Cook - Credit Suisse Securities (USA) LLC: Yeah. José Ramón Mas - MasTec, Inc.: And we talked about the guidance range of $6.9 billion to $708 million et cetera. We've been talking all year long about the fact that our DSOs are elevated. And if you simply apply a more normal level of DSO to the year end – to our year end guidance and our view, which is in a mid-to-high 70s you're going to come to a number that gets you to approximately $500 million plus or north of $500 million in cash flow from operations. So there's nothing that mysterious about getting to that number. The reality is, our cash flow from operations and our working capital has been higher than normal with this project, and we expect that resolution to occur in the third quarter. And by the time year-end, we're going to have a significant cash flow generation, we're going to significantly delever from where we are today. Relative to the structure, I would not surmise that because of larger Oil and Gas projects that a working capital, larger usage is the norm. And if you go back, we had our largest cash flow generation ever, when we had $367 million back in 2015, when we were doing Dakota Access. So, the issues that are associated with working capital really to me are unique to this project. And we're moving past that now and expect that to be behind us and now we're going into a more normalized process…

Thank you. Our next question comes from Andy Kaplowitz from Citigroup. Please go ahead.

Hey, good morning, guys. José Ramón Mas - MasTec, Inc.: Hey, good morning, Andy.

José, you mentioned last quarter that after Oil and Gas backlog likely goes down in Q2, it'll start to rise again in Q3 and Q4, and it should get back to at least Q4 2017 levels. I assume that's still what you're thinking, but do the congestion issues in the Permian actually mean higher potential for you to grow backlog here in the near-term, given all the larger pipeline arguably midstream work that needs to be done in that basin. José Ramón Mas - MasTec, Inc.: So I think it's an excellent question, Andy, and I think we have to look at it historically to kind of think about how we answer that looking forward, right? So if you look at 2017, we ended the first quarter at $2.3 billion in backlog, the second quarter went down to a $1.5 billion, the third quarter went to $900 million, and then the fourth quarter shot back up to $2.5 billion. And then obviously this year at the end of Q1 we were at $2.6 billion and at the end of Q2 we're at $2.2 billion. So, we have had dramatically less of a negative impact from Q1 to Q2 than what we saw in 2017. Obviously, some of that is because Mountain Valley has started – had a little bit less activity than we anticipated, but you saw a much less decline in Q2 over Q1 in 2018 versus 2017. I do think the number is going to go down in Q3, just because it's obviously a quarter where we'll have a significant amount of activity across a number of projects. We do expect some pretty significant wins that may come into Q3 backlog and thus kind of play out to what you're saying. But quite frankly, whether it happens in Q3 or it happens early in Q4, our expectation is we will end the year at or exceeding levels that we ended last year at, which we think is a very bullish signal. And with all of the activity that's happening, I think we're feeling more and more comfortable that that will be an exceed rather than a meet.

Great. And then just shifting gears, we know you've said that Communications related growth will be back end loaded this year. So, the growth in 2Q is not really a surprise. But it does seem a little low in the context of the very strong Communications backlog growth, the 26%. You mentioned the 20% decline in your installation business, but could DIRECTV continue to decelerate here and does it mean that it could be difficult to grow Communications at a double-digit rate for this year, or does Puerto Rico help you with the end of the year, so ultimately you still can grow double-digits this year? José Ramón Mas - MasTec, Inc.: So, a couple of things, right? If you look at the installed business, it probably had a negative 7% total growth rate number for the quarter, for the business, so it's pretty significant. We think in our installation business, we've gotten to a level now that's going to be somewhat sustainable, the type of work that we're doing today is much more maintenance driven, not so much customer activation, which is obviously lower revenues. But at the end of the day, I think it will be more stable over time. We'll still have a tough comp as we look at Q3 and Q4 because the current levels today are significantly lower than what they were in Q2 and quite frankly, it was pretty steady last year. So that trend is going to somewhat continue. We expect double-digit growth in wireline, double-digit growth in wireless in the second half of the year, that's going to be very strong. For guidance purposes, we've taken a very conservative view. As to Puerto Rico, Puerto Rico, which is something we're incredibly excited about. It's all about funding. So FEMA is funding that project, but FEMA has a bunch of requirements to fund and then those requirements again require a lot of planning and upfront approvals which is something new, which is something that's taking time and we expect the beginning of that to really start hitting at the end of Q3 and Q4. So, we've taken a pretty soft estimate of what we'll actually deliver in 2018 relative to that project, it could get a lot better, but I think we've taken a very conservative view. That project is going to ramp pretty heavily into 2019, which is going to have very solid comp. If we start thinking about Q1 of 2019, comps there are going to be pretty solid because of the amount of work that we're going to be doing there and our expectations. So, time will tell, I think there's a chance that Puerto Rico offset some of the softness in DIRECTV, I don't think we have all of that baked into our guidance, but it could definitely happen.

So maybe similar growth rates for the second half of the year and then ramping up again as we go into the first half of 2019? José Ramón Mas - MasTec, Inc.: Yes.

Thanks.

Thank you. Our next question today comes from Brent Thielman from D.A. Davidson. Please go ahead. Brent Edward Thielman - D.A. Davidson & Co.: Thanks. Good morning. José Ramón Mas - MasTec, Inc.: Good morning, Brent. Brent Edward Thielman - D.A. Davidson & Co.: José, on Mountain Valley, I mean in the bigger ramp into the fourth quarter just given some of the delays and noise around the project, how solidified is that schedule, kind of what's the risk of that expectation, the confidence around that that fourth quarter acceleration just based on discussions with the customer? José Ramón Mas - MasTec, Inc.: So, let me be clear, it is not a fourth quarter acceleration. We anticipated that project to start in Q2, to peak towards the end of Q2 going into Q3, and then begin to soften in Q4 as we were completing the project. Since it's moved to the right, we've now ramped at the levels that we expect to maintain through Q2 or right at the end of Q2 into Q3 all the way until we end that project which is going to be into Q4 and Q1. So there is no ramp requirements for us to hit what we're saying on MVP. We're at that level, we don't expect that level to decrease until the job is closer to completion. So there is no risk of ramp because we're already at the levels that we need to be at. Brent Edward Thielman - D.A. Davidson & Co.: Perfect. That's what I was hoping to hear. And then on the Permian opportunities, I mean it seems like the projects are starting to move forward pretty quickly, it doesn't seem like they run into the same sort of issues that maybe the larger jobs do in other parts…

Thank you. Our next question today comes from Adam Thalhimer from Thompson Davis. Adam Robert Thalhimer - Thompson Davis & Co., Inc.: Thanks. Good morning, guys. José Ramón Mas - MasTec, Inc.: Good morning, Adam. Adam Robert Thalhimer - Thompson Davis & Co., Inc.: José, how much is this 2019 wireless, wireline opportunity. I'm curious how much of that do you think was kind of in your Q2 backlog. And can you give us any thoughts about how Communications backlog will trend in the back half. José Ramón Mas - MasTec, Inc.: Yeah. Remember, we're only including 18 months of backlog in our backlog numbers, so total backlog is actually higher than the 18 months that we're putting out. So, we're estimating what's going to actually be completed in that 18-month period. When you think about, FirstNet is kind of baked in, a lot of the fiber stuff that's already been awarded is somewhat baked in, you've got a lot more fiber awards that I think are going to happen over the course of the next year on other markets that haven't been awarded. But I think the big driver of future backlog growth is going to be what happens with 5G, I mean today the carriers are doing very little around 5G. Everybody's got tests, there's some activity happening, but that activity is going to considerably increase as we look in 2019 and beyond. And when you think about wireless spend over the course of the next few years, it's going to be driven by that, right? I mean I think FirstNet is an example in and of its own because it's particular project, but the future of all of these companies is going to be about what they spend in 5G. Again we're seeing the very early part…

Thank you. We have a question now from Chad Dillard from Deutsche Bank.

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

So you mentioned that you're going to see contract value increase for Mountain Valley. I'm just curious whether you're going to see a margin associated with that and if you can discuss this how big of an increase over the original contract value. And then secondly, you mentioned that you saw some pressure from Rover in the quarter. Is there any way you can quantify how much you saw? José Ramón Mas - MasTec, Inc.: Yeah. So, a couple of things, when we think about MVP, we're kind of parroting what our customers said, so if you track what our customer's been saying about MVP, they're expecting the project to be somewhat delayed and cost them a little bit of more money because of the move arounds and delays that directly from the scripts of their earnings calls here recently. Our contract is different there than I think as people think about this, Rover was a very different contract, because it was a cost reimbursable contract where we made certain concessions. That's not the norm we've said that, that's not the type of contracts that we have on a go forward basis. So as we look at – we obviously want to work with our customers, we want these jobs to be done as expeditiously and efficiently as possible on behalf of our customers, that's what we're working towards. And quite frankly, we're going to try to finish this project as quickly as we can and if there's any way that we could possibly get it done by the end of the year with the regulatory issues that they have then we will try to do that as well. So I think that's all still a work in progress, we'll see as time goes on. But if their expectation, which is the projects now going to move into the first part of next year, if that actually comes to fruition then obviously the contract value will go up and I think they've said that publicly. On the Rover side, it wasn't a big number. I think we called it out more than for anything else other than just say our margin wasn't driven by any single closeout issue or benefit. Margin was driven by operational performance, which I think was important to kind of lay out.

Got it. And then against the backdrop of, I mean it seems like higher uncertainty in permitting on fiber and 5G. How should we think about the pace of your backlog run rate relative to where it is right now? I'm just asking because we're starting to see some uptick in telecom, and I just want to make sure we're on the same page about the pace of execution going forward? José Ramón Mas - MasTec, Inc.: Yes, let me be clear, when we talk about permitting issues, this is not like you know pipeline. This is not you know permitting regulatory issues. This is you have to do the engineering work. You got to get in front of the municipalities to go through their public works departments and their water departments. This happens every day, has been happening, forever, right, so this is not something that's particularly difficult. It's just there's from a sheer volume of what's happening in the country, there's a lot of it going on. And there should be an expectation of how long it takes. We've – we're right on plan relative to where our fiber business is and what we're delivering. It's not like these delays have caused dramatic shifts to our financial expectations as the year goes on. We've always said we expected this to be a significant ramp in 2019. With that said, there's a lot of work out there. There are labor constraints around that portion of the business and we're working as diligently as we can to get construction in the ground. So becoming more difficult, a lot of activity out there. And again, it plays into the hands of the bigger players in the industry and those that have the resources to be able to put on these projects to execute them and perform.

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

Thank you. We have a question now Andy Wittmann from Baird. Please go ahead. Andrew John Wittmann - Robert W. Baird & Co., Inc.: Great. Thanks. I wanted to build a little bit on the last question, José, just on MVP, if it's not reimbursable and you get these periodic delays that started a little bit late, does that mean that you're going to require change orders and could this have an impact on the way you collect your cash on this project? José Ramón Mas - MasTec, Inc.: So two issues, one, reimbursable is a different term, so when we talk about cost reimbursable, we kind of talk about a cost plus contract, where you're actually generating costs, sharing those costs with the customer and have a whatever markup you've agreed to have with that customer. Our contracts on most pipelines are different, right, they're more fixed price or unit price in nature where you have protections relative to issues that may arise, and in today's world because of the issues that we've had, contractors are protected from delays, from move arounds and things like that. Sometimes in the case of unit adders and sometimes in the case of whatever you contractually agreed to. So this is a very different circumstance than what we saw over the course of the last year. We've been very active with our customer and working through that. So I don't expect what we saw with Rover again to re-manifest itself on this project. Andrew John Wittmann - Robert W. Baird & Co., Inc.: Okay. Great. I'm going to move to the Communications segment next. I don't know if I heard, necessarily you guys address the very strong margins here in the segment for the quarter and the sustainability of those margins. It was…

Thank you. We have a follow-up question now from Tahira Afzal from KeyBanc Capital Markets. Please go ahead.

Thanks for taking my follow-up. Just quickly, just in – I had a question as a follow-up to what Chad asked in regards to Rover. You mentioned José that it's not still a gain, you've had any closeouts from Rover really helping the second quarter out, if anything, it is the other way around. But I guess that makes the question, as you resolve and square away on the Rover receivables, is there a chance that some of the change orders you've talked about in the past could have some benefit that's not in your guidance? José Ramón Mas - MasTec, Inc.: Yes.

Okay. Thanks again. That's all I have. José Ramón Mas - MasTec, Inc.: Thank you.

Thank you. That will conclude today's question-and-answer session. I'd now like to turn the conference back over to José Mas for any additional or closing remarks. José Ramón Mas - MasTec, Inc.: I'd just like to thank everybody for participating on today's call, and we look forward to updating everybody on our third quarter call in a couple of months. Thank you.

Thank you. That will conclude today's conference call. Thank you for your participation, ladies and gentlemen. You may now disconnect.