Greetings, and welcome to the Primoris Services Corporation's 2017 First Quarter Financial Results Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Ms. Kate Tholking, Director of Investor Relations. Thank you. You may begin.

Thank you, Audrey. Good morning, everyone – or I should say good morning out here on the West Coast. Good afternoon to maybe some of you on the East Coast. Thank you for joining us today. Our speakers will be David King, President and Chief Executive Officer; and Pete Moerbeek, Executive Vice President and Chief Financial Officer. Before we begin, I'd like to remind everybody that statements made during today's call may contain certain forward-looking statements, including with regards to the company's future performance. Words such as estimates, believes, expects, projects, may and future, or similar expressions are intended to identify forward-looking statements. Forward-looking statements inherently involve risks and uncertainties, including without limitation those discussed in yesterday evening's press release and those detailed in the Risk Factors section and other portions in our Annual Report on Form 10-K for the period ending December 31, 2016, our Quarterly Report on Form 10-Q which was filed yesterday afternoon, and other filings with the Securities and Exchange Commission. Primoris does not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws. I'd now like to turn the call over to our CEO, David King.

Thanks, Kate. Good morning, everyone, and thank you for joining us today to discuss our first quarter results. Primoris's record first quarter revenue was the direct result of our hard work last year to win new jobs and grow our backlog. That backlog is now translating into revenue and earnings through focus on solid execution fundamentals. And I'm extremely proud that even with our strong backlog burn in the first quarter, our overall backlog remained at a record $2.8 billion. I'm sure you read the Form 8-K that we filed on April 7, explaining our new financial reporting segments and providing some historical numbers. These new segments line up with how we manage the business internally, and as an added bonus, I think the investment community will like this visibility as well. I want to start my discussion of the segment results with our Civil segment. As we stated in yesterday's press release, the board has decided not to sell the Texas Heavy Civil division and it will remain part of Primoris's Heavy Civil group. We realized that the early indications of interest we received for the division did not properly value the business, nor the opportunity to settle the claims with TxDOT, nor the significant market prospects that Texas Proposition 7 brings. That does not mean it is business as usual for that division. Over the past few quarters, we've made many management changes, most notably the hiring of Mark Buchanan to run the entire Primoris Heavy Civil business unit. Some of you met Mark at our Analyst Day in Florida, and he's doing a great job at improving the control over the bidding process and the project execution in this business. We've shifted the primary focus of our Heavy Civil work away from Texas DOT or Louisiana DOT…

Thank you, David, and good morning to everyone, including everyone on the East Coast. We filed our Form 10-Q last night, and while we hope that no one was up all night reading it, I am planning to only mention some of the highlights before we move on to your questions. Our 2017 first quarter revenue was $561.5 million, a 30% increase over 2016's first quarter. The primary drivers for that growth were Rockford's two large gas pipeline jobs in Florida. They were the top two in both customer revenue and gross profit for the quarter. Unfortunately, it is only bad jobs that seem to linger. So, as David mentioned, the contribution of these two jobs will decrease significantly after the second quarter. Although we still experienced its typical winter slowdown, our Utility and Distribution segment revenue was up $13 million compared to the first quarter of 2016. Most of that increase was from a cross-cutting MSA that ARB Underground has with its large northern utility customer. Power, Industrial and Engineering revenue was down slightly, as several of their projects are completed or are nearing completion and the long delayed Carlsbad project did not fully start until March. For the first quarter of 2017, our third largest customer was TxDOT, which was at virtually the same revenue level as the first quarter of 2016. The fourth largest was the large Southern Louisiana petrochemical project. However, as the overall revenue for that project is declining and most of the work is now being performed by Primoris Industrial, the quarter revenue for the Civil segment declined slightly. Gross profit in the 2017 first quarter was up 40% to $55.1 million and our overall gross margin increased from 9.1% in last year's first quarter to 9.8% this year. With the changes made to…

Thank you. Our first question comes from the line of Tahira Afzal with KeyBanc Capital Markets. Please state your question.

Hi, gentlemen. This is Sean on for Tahira this morning. We just wanted to ask, given the qualitative end-market commentary is quite optimistic, really across the board it seems, we're just wondering kind of what the key reasons are for maybe not seeing the rolling 12-month EPS guidance tick up a little bit. Maybe you guys can provide some color on just the key project timing elements or other nuances you guys might be building into that outlook.

Yeah. Good morning, Sean. I'll start out, and then Pete can certainly add anything. First of all, on the rolling four quarters, we are seeing some – as we mentioned, on some of the pipeline things, we are looking both in our open shop and our union pipelines, and we are getting some projects to work out through the end of the year. But they're obviously, especially on the Rockford side, not in the order of magnitude or significance of the size of the two projects that we finished in Florida. And again, as you heard me mention, the weather, which is always a risk on those kind of projects, was great weather for us in Florida. So, obviously, when we look at that, we're saying those units, although they're going to continue to perform well for us, they're probably not going to perform as well from a margin perspective as they have in this first or second quarter timing, with their burn off of the backlog on those Florida projects. Also, you heard Pete mention on ACP, we don't have anything in that rolling four quarters because we don't expect that one to really start until later, or especially after first quarter of next year. And then, when you begin to look at some of the other segments beside the pipeline segments, obviously, Tim is coming down off his large co-gen unit. He is coming up on the large project he's got in California. However, those projects, as we've said in the past, they don't burn a lot when you first come out of the ground. If you look at the curve of the way those things burn and the margin performance on them, you usually have to get them up in the 30% completion range before you really begin to see those things kind of kick in. We are seeing coming down off the large petrochemical project in Louisiana, but we are also coming up on some of the methanol projects that we've announced that we're working on. So, when you look at all of that mix together, we're certainly not concerned about where our guidance is at. But when you look at all the mix of that, we're certainly not prepared just yet to say that we think we should change that guidance. Pete, do you want to add any other flavor?

No. I think the biggest pieces are that we – a very tough comparison to the work that Rockford is doing in the first quarter this year, and $1 to $1.20 is a pretty wide range. So, at this point, we felt comfortable staying there. Obviously, as things get better, as we hope, we'd be in a position to improve it. And I think that, as ACP kicks in starting in second quarter next year, if I had to guess, I would anticipate that the guidance will improve.

Really helpful. Second question is, I've just noticed that you guys changed your mind on the Infrastructure division sale. You mentioned a little bit about valuation just not being quite where you wanted it to be. But I was wondering if you could provide any more color on what else impacted that decision? Whether that's something that you guys have sorted out internally with the business, or perhaps a better end-market outlook?

Kind of a combination of all. I'll start out. Obviously, the valuations didn't come in where we would have liked to have seen. And then you couple that also, if you remember, when we made that announcement to potentially look at selling it, we said it wasn't a fire sale. And at the same point in time, we would pursue that option, but we would also look at turning things around. We had already started previous to that, beginning to bid more airport work and port work. I will be honest with you from the perspective that I didn't think there was going to be as much airport work and port work as we're actually seeing. And those margins are better. Couple that with that better market performance, I think, in taxiway work and airport and port facility work, the Proposition 7, obviously it's not the market situation. There's plenty of work out there. It was a matter of making sure whether or not we could turn that business unit around. Now, when the offers also came in, we didn't see a good avenue that would allow us to maximize our return on the claims that we have with TxDOT. So, when you couple the fact that we thought it would damage what we could get claim-wise out of TxDOT, the market is certainly there. We're beginning to turn that business unit around, and the valuation didn't come in where we wanted it to. We just thought it more advisable to pull it off of the market, and that's indeed what we did.

Really appreciate you taking my questions. Helpful responses. Thanks, guys.

Thank you.

Thank you. Our next question comes from the line of Lee Jagoda with CJS Securities. Please state your question.

Hi. Good morning.

Morning, Lee.

Morning, Lee.

So, just starting on the MSA side, looks like you had a collaboration agreement with one of your MSA customers that caused margins to be lower in Q1. Is that something that should be ongoing? And are there additional opportunities to increase the scope of your MSA work with customers that have a lower margin percentage but have higher margin dollar?

Lee, this was a somewhat unique situation where we have an agreement for a lot of additional work, which is why you saw the additional revenues. Unfortunately, the agreement is written in a way that the first part of it is done through engineering, and we don't do the engineering. So, that work was done by somebody else and we really didn't get a markup on it. What we will see is that incremental work out of that MSA should drive revenues higher for the next three quarters at more normal margins. And, in general, an MSA is an agreement that allows you to have different forms of contracting. So our major MSAs allow us to do either cost reimbursable, or fixed price, or some sort of shared savings, or even a unit cost. So it isn't that MSA per se that determines specifically what the margins are going to be. It's really the type of work that the customer wants you to do. So we had a bunch of work in the first quarter that turned out to be in the lower margin end of it and then, obviously, a significant piece of work that we got no margin on. So the overall gross margin came down, but as I said, we fully anticipate that they will be back at additional revenue from where they would have been and that that revenue will be profitable revenue going forward.

And, Lee, your second question, it was kind of embedded in there. You can always gain revenue growth by lowering your margins. I shouldn't say always, but typically you can do that. But once you start lowering your margins, it's extremely hard to raise those margins back up. So, if you're in a fairly developed market that you've already got a good market share, from our perspective it's not good business to lower the margins to try to gain more revenue share when you're really already splitting that market with maybe two or at most three competitors. All you're doing is really driving down everybody's profitability because they're going to do the same thing. Now, obviously, if you're entering a new market and trying to establish yourself, you may go in at lower margins to try to get your feet in the door and established. But typically, we don't look at that as a way to gain market share.

Okay. Great. And then on the TxDOT work, how much backlog is still left from the jobs you've already taken write-downs on? And you mentioned that you're pursuing some claims on all those, the bunch of projects. Can you give us a sense for how much you're looking to try to get back?

The answer to the first one is around $200 million is left. And I think the answer to the second one, we're going to need to wait a couple of quarters. We're right now in the process of documenting the claims and we need to be in a position to actually file those claims with TxDOT before I give you a sense of the amount of dollars. It's significant, and we believe and certainly our attorneys, the ones we are paying, believe that we have a very good case. So, unfortunately, in Texas, the process is such it may take a couple of years to get fully adjudicated, but at this point I'd rather wait a couple quarters to give you that number.

Sure. One more question for me. Just on the Wilmington joint venture, can you give us some color on what that is? How big it is? And more in general, on the non-controlling interest line, any guidance you can provide there would be great.

Both the Carlsbad and Wilmington jobs are joint ventures and, unfortunately, in today's accounting rules, we have to put the full amount on our balance sheet and income statement and then back off their 50% ownership in that non-controlling interest line. I don't want to say the Carlsbad job in total is about...

Yes. We announced that project...

Yeah. We did...

October 2015.

It was about – what was the value, Kate? About 200-ish million?

For Wilmington?

For Wilmington, I think was full time (34:10)

No, not Wilmington.

Yeah. Carlsbad is a little over $200 million.

Carlsbad is a little over $200 million. Wilmington was about – I want to say Wilmington was $80 million, somewhere in that range. She can look up the exact numbers, Lee, while we're discussing.

So, basically what you're going to do is, if you look at that $200 million and spread it out over the next six quarters and then say that about half the traditional margin is going to go to the non-controlling interest line.

Lee, Wilmington was around $50 million. There were some options for us purchase versus client purchase. It could have went up higher, but the actual contract value for us was in the 50s.

And that's also a 50%/50% JV?

Yes.

Okay. Thanks.

Thank you. And our next question comes from the line of Bobby Burleson with Canaccord Genuity. Please state your question.

Yeah. Good morning.

Good morning.

So, just curious, it sounds like you're getting more airport and port works than you expected initially. Can you kind of remind us what the margins are on those types of jobs? And then where you would expect the mix to go? What's an ideal mix for you guys as you redirect more to those types of projects?

Well, traditionally, we get about 5% margin on the traditional DOT work. We tend to get into the high-single digits on this type of work. Obviously, the ideal mix would be 100% of it at this higher margin, but I think realistically what you're going to see is that it's not going to be anywhere near there and that you're still going to get the traditional DOT work being the larger part of your work.

Yeah. And Bobby, I'll add. I think the reason we're seeing more of it is really a focus of two things, or a result of two things. One is us beginning to go out there and look for it and try to pursue it, because I think the group was so heavy into DOT-related work, they kept their mind focused on DOT. And now that we're going to go out there and look at it, we're actually finding that there's more opportunities out there for it. And the second thing, I think just some of the infrastructure spending that's beginning to go through some of the municipalities and airport authorities and port authorities is now beginning to be looked at more seriously and funded more seriously. So, like Pete said, if I thought I could fill it up completely with the higher-margin work, that's where I'd tell them to go. And so I tell them to try to go to the higher-margin work, but at the same point in time we wouldn't be – I don't think we'd fill our shop up with 100% of that type of work. So I don't really have a per se ideal mix of where I'd like to be. It's fill up with the high-margin work first and the lower-margin work second.

Okay. Fair enough. And then, with the TxDOT work, you mentioned that with some of the additional funding there, it's attracting a lot of competition. But I imagine you guys can be somewhat selective. And just wondering whether or not the stuff you're bidding on, where you're seeing those bid margins? Are they going to start creeping up? Or do you think just the amount of competition is going to kind of keep margins where they've been?

Well, at the start, when they start re-leasing it, and we've been watching that pretty closely because, as I told you, with Mark Buchanan taking over, we're being very selective and we're raising our margins on certain projects. So, obviously, we're seeing that maybe we came in third or fourth as opposed to first or second as we begin to raise our margins, but intentionally doing that to see where the market would run. And what we're beginning to see is indeed that. As more of that work gets re-leased, you're going to see the margins naturally come up, I think, from all contractors because there's not going to be enough contractors to do that work. Now, you're going to see other contractors trying to come in. And again, the issue with DOT type work, whoever can get a bond, can bid. It's not a pre-qualification process that you might see in private type of work. But we are beginning to see that we're winning some of that work, and the guys are looking and saying, we got that at a better margin than we would have had a year ago, let's say. I don't want to say it's coming up as fast as I'd like to see it coming up, because it's not, but I think we're seeing a little bit of that slowly inch up.

Okay. Great. And one last one. In terms of the guidance you guys have given, does that bake in the incremental pipeline work that you talked about maybe announcing soon? Or would that be – if everything else kind of stays where you're expecting it to be, would that be incremental to the guidance?

It was already in our guidance, the pipeline projects we're talking about that we'll be announcing. That was already in our guidance because we tracked that very well and we knew that we had, at least for the Rockford group, we knew that we had to set – the third and fourth quarter, we had some availability to do some additional work, so we had started well over a year ago trying to make sure we could get that work. And then, with our open shop, it was a matter of getting those guys geared up and tracking to get the right job. And again, you saw that when I mentioned it in my work that it's in a part of that West Texas pipeline going down toward Houston area. That one, we didn't make a public announcement on it. I put it in my earnings call because I really don't want to confidentially talk about what the price was for that job, so my competitors can see what my price was, but it's a nice job for that group.

Okay. Great. Thank you.

Thank you. Our next question comes from the line of Adam Thalhimer with Thompson Davis. Please state your question. Adam Robert Thalhimer - Thompson Davis & Co., Inc.: Hey. Good morning, guys. Nice quarter.

Thank you, Adam.

Thank you, Adam. Adam Robert Thalhimer - Thompson Davis & Co., Inc.: Can I ask a question, just a broad question on the Gulf Coast? The large projects that are slated to start up in 2018, do you think those generally start on time?

We track a lot of them, Adam, and no, I don't think they generally start on time. Most of what we see out there in the public domain when you're talking about them, it's where they would like them to start. I think the clients want them to start there. But they obviously have a lot of things they have to do on their side to get to FID on the projects and things. So, generally not. That's why it's important to have more than one or two or three of these in, so that at any one given time – and as I've mentioned, that was one of the things that Tom and some of our other sales people have looked at, is having enough opportunities out there so that when one is delayed, another one falls into its slot so to speak. But the ones that we are seeing, I mentioned the ExxonMobil one, that one's being tracked. I do think it's going to start doing some related work, and in fact, they are already I think doing some from an engineering perspective. You can certainly get that information from them. We did announce the one methanol project, I think it was first quarter or last quarter, I can't remember now which, that we had been tracking. So it did get its legs underneath it, and there's a few others that I think will. But, generally, we do see those things slip. So, to answer your question, yeah, we see a little bit of slippage in those jobs also from time-to-time. Adam Robert Thalhimer - Thompson Davis & Co., Inc.: Okay. And then, as it relates to the large pipeline outlook for 2018, seems like there's a lot of work to bid on out there. How are you guys looking at that?

Well, I'll tell you, we... Adam Robert Thalhimer - Thompson Davis & Co., Inc.: It's also having a lot of capacity committed already.

Well, kind of intriguing (42:46) to ask that question, Adam, we've got several customers. I tend to look at four, five more than I do any others. And you can subscribe to pipeline tracking services, and we certainly do, and we track a lot. But obviously, Enterprise, from what they were talking about last year to this year, they're looking at a lot more miles of pipeline. Same thing with Kinder Morgan. The Spectra-Enbridge – or Encana, I should say, they're looking at really staying kind of where they're at, if not increasing some additional. Williams, who's always been a good customer for us, looking at continuing with theirs. So, when you look at it last year to this year, you're seeing an uptick. When you look at the whole broad range of all those entities, gosh, I don't know, you're looking at probably another 30%, 40%, if not more, maybe even as much as 50% mileage being added from last year to what they're predicting this year. And as we have been saying for, gosh, I don't know, the last probably year-and-a-half that we thought this pipeline industry was really into the stages of some really good three- to four-, five-year runs. We've been saying that for about the last year, year-and-a-half, on the gas side. We weren't saying it so much on the liquid or the oil side. So I don't know if that adds some to your question, but we still see some good opportunities there yet.

And the other half of your question, Adam, yes, we are aware of the capacity limitations and we do take that in consideration as we look at where the jobs are, where our crews are. If you ask Scott Summers, he says the biggest problems that pipeline operators have or that pipeline construction companies have is when they try to do work in the winter or they try to do work with tired crews. So, yes, we do take that into consideration. We're trying to schedule our guys, recognizing that nothing ever starts when it's supposed to. But we're very good at trying to schedule our guys, so they get some time off. And we do jobs that the advantage we see is that we'll be in a position to be able to use our equipment and make a lot more profit rather than just trying to hopscotch around. So, that is something we look at when do bidding in what we're going to bid for jobs. Adam Robert Thalhimer - Thompson Davis & Co., Inc.: Okay. Thanks for the color.

Thank you. Our next question is from the line of Jason Wangler with Wunderlich Securities. Please state your question.

Morning. Just on that Permian pipeline, David, I think you said, is that fourth quarter work or will that spill into next year as well?

No. It'll be – in fact, we're already actually working on it now, Jason. It'll probably be third and fourth quarter work. I don't expect to see any at all spillover until next year. Now we may have, like we typically do on these things, a little bit of reclamation and environmental type things to deal with into next year, but nothing of any major revenue burn.

Okay. And then, in your remarks, you talked about some of the opportunities on the water pipeline side. Could you maybe just talk about the size of those types of projects? They may be kind of all over the board, but just kind of wondering what you're seeing, because I think that could be pretty good work to kind of fill calendars as you wait for 2018 as well.

Yeah. There's always been a push, Jason, to try to get the bigger water pipeline networks to get water out of the areas that need it. That's really not what I'm talking about there, although I think there may be some of those that pop up that give us some opportunity. And we've certainly had a couple of different customers approach us on those size projects. But really where we're more talking about is in the smaller water pipeline areas, and they will, they'll pop up occasionally. They're going to be nice filler work for us. They're going to be nice little add-ons. But they're certainly not going to shift the needle at all. So I don't want to imply that they're going to shift our needle much.

Okay. I'll turn it back. Thank you.

Thank you.

Thank you. And our next question comes from the line of Matt Duncan with Stephens, Inc. Please state your question.

Hey. Good morning, guys. This is Will on the call for Matt.

Good morning, Will.

Good morning. I wanted to follow up on that pipeline question into next year. Wondering about your current utilization levels on your spreads at Rockford, and if you expect you'll need to deploy any more capital towards equipment there? And maybe talk a little bit about – you mentioned the crews. Talk about the labor environment. And if you start to see these increases in projects coming through, what you might expect in 2018 and maybe even 2019? Thanks.

All right. Let me start out, because I think you asked capacity – the capacity capital and labor. So let me – Will, to answer your question, I want to make sure I divide it to where we're talking about our open shop and our union pipeline, because there's two different answers for the two. First, let me start with our union side, the Rockford side. Obviously, right now, having come down off of Florida, we've got adequate capacity. In fact, the work that we're talking about getting and adding into this third and fourth quarter will not utilize all of that capacity. So we're actually still looking for some additional out there. Once ACP does kick in, then yeah, we'll start seeing some capacity limitations with our Rockford group. Although at the same point in time I will tell you, Scott Summers, Frank Welch, Josh Ramsey are continuing to look at ways to add additional spread capabilities out there to alleviate any capacity shortfalls, because we do see more demand out there than maybe what the market supplies out there. Now, from a capital perspective in the open shop – I mean in the union side, if you remember looking at our CapEx spending a couple of years ago, and I think I've mentioned this many times on the call, we poured a lot of capital in to get some of the best equipment out there. In fact, some of our equipment right now that we're not using, we're actually renting to some other contractors on some of the projects that they currently have. So I don't see us – we'll still have some capital spend, Will, but not near to the degree that we had before from a CapEx. We really geared up quite well for this run…

Yeah. That was perfect. I really appreciate it. And then, just as a quick follow-up there, kind of looking at the rest of the year, I was hoping maybe you could talk a little bit about the sequential step-up in revenues that we should be thinking about in the 2Q? And then, just how the revenues in the back half of the year are shaping up after the Florida projects roll off? And if I can add a follow-on to that, how we should think about SG&A levels trending through the rest of the year?

I'll do the easy one first. The SG&A levels, I think you'll see them go down as a percentage of revenue. But, obviously, we'll have some increases. If you look at it sequentially, as I said, we're virtually the same as fourth quarter. And I think you'll see some step-up, but it's probably total year 3-percentage-type numbers. The revenues are a little bit more challenging, A, because I don't want to give any guidance beyond what we did, and B, some of that depends on when the projects take place. I think we'll have a good second quarter, obviously, as we complete the jobs in Florida. And I think when we look at it, we should see our traditional third and fourth quarters, it's hard to say, but I think you will see probably slightly better second quarter because of the Florida jobs, and then kind of a traditional third and fourth quarter percentage of total revenue.

Thanks a lot, guys.

Thank you.

Thank you. Our next question comes from the line of Ryan Cassil with Seaport Global. Please state your question.

Hey, guys. Thanks for fitting me in.

Good morning.

Good morning. So I just want to touch on the ACP pipeline for a second. Has the timing changed? A lot of the resources out there still indicate it could be late 2017. So is the way you're thinking about the guidance just sort of prudent conservatism on the start-up time?

Well, on ACP, there is some tree clearing and a few other things – right-of-way clearings I should say, that was scheduled and still is toward the end of this year. But that project is pretty much always been scheduled to really start off in that 2018 timeframe. Relative to any slippages that we may see therein, we're not seeing anything that really is out of the norm. I guess, from what even the Florida pipeline projects, if you remember, they slid one way or the other sometimes three and six months on the Florida pipeline thing. So, yeah, to answer your question, when we're looking at our guidance, we're certainly – if I knew for sure the exact start date for ACP, I might be giving you a different answer. But until I know the exact start date of when we can actually – and for us, actually start doesn't mean doing some clearing. It means actually out there beginning to dig the ground and put pipe in and do drilling and things, so. Pete, do you...

And also remember that there are four contractors on ACP and that doesn't necessarily mean all four of us will start at the same time. So there may be other people who will start their spreads before we do, but our best estimate right now is looking toward the end of the first quarter, which is why we didn't put it in guidance.

Okay. Great. Appreciate the color there. Just moving to the Texas Heavy Civil unit, I think there was a leadership transition around when you announced the process to look at a potential sale there. Can you talk about it? Or do you have the leadership team in place you'd like? And are there any additional CapEx requirements that you need to make here at this point?

You're absolutely right. I had actually been – Tom and I had been interviewing the individual, meaning Mark Buchanan, that we brought on board even before we made that announcement to look at potentially divesting that unit. It was kind of interesting. He certainly came in with his eyes open, knowing that we might eventually divest it. But at the same point in time he said, look, guys, I can turn this around. I know what you guys want. I can do it. And indeed, I've been very pleased with what he's been doing, which is another one of the reasons, like I say, that we chose to not sell the unit. As far as CapEx is required, no, we don't really see any major CapEx spending. We had a strategic planning meeting earlier this year. There were some opportunities to add on, and I really call it bolt-in, some ways of increasing our margins and supplying other types of materials in some of this highway work that Mark had offered up, and I think is worth us investigating. But it's very small capital money that we'd be talking about. So I really don't see any CapEx spending of any significant nature for them.

Okay. Great. And then the last one for me, more of a modeling question. You'd mentioned the negative mix in U&D and the impact on the margin there and the fact that it usually takes three months or so for that to normalize. Have you seen that yet? Or is that something you anticipate at this point in the quarter? I'm just trying to get a sense on how to kind of handicap the margin ramp there. Thanks.

No. I think we are starting to see, based on the number of employees and the work we're doing and the fact that we're now out of the ground or in the ground, I guess, technically at Q3C, that we would expect the margins more – that segment to get back to their traditional second quarter or perhaps even slightly higher, just depending on how we end up getting the work from our clients.

Okay. Great. Thank you.

Thank you.

Thank you. Our next question comes from the line of Brent Thielman with D. A. Davidson. Please state your question. Brent Edward Thielman - D. A. Davidson & Co.: Thanks. Good morning.

Morning. Brent Edward Thielman - D. A. Davidson & Co.: David, you mentioned several large California power projects out for bid next 12 to 18 months. What sort of size and scale are those opportunities for you? Are they anywhere near Carlsbad?

Yes. I would say the ones that we're tracking are all of that same size as Carlsbad. We've got some smaller opportunities, but the bulk of what we're looking at that I mentioned in my earnings call notes was really this Carlsbad size projects, if not a little larger. Brent Edward Thielman - D. A. Davidson & Co.: Okay. And then I got to ask one more on the guidance. Sorry for this. But I appreciate all the comments already on timing of ACP. I think you mentioned some of the pipeline projects that haven't been announced and that fell in later in the year are now in the guidance. I don't think it was there before. So I guess I'm just kind of wondering what are some of the other moving pieces that can get you toward the higher end.

It actually was – we did anticipate that there would be – that guys from Rockford would not spend the entire summer twiddling their thumbs. I mean, we had in the guidance before some anticipation, additional work, and that's what we're seeing. I think that, clearly, if that work gets added to or if the open shop pipeline work, if they got another job, you'd be at the higher end of the guidance. If we can do additional airport work, that would get you to the higher end of the guidance. But it's pretty wide range intentionally because we really are looking four quarters out and it's difficult to try to figure out where we're going to be much less in second quarter, and then you start to worry about where you're going to be in first quarter next year.

Yeah. And I'll add another comment in there, and I know Pete alluded to it in his opening comments. Our guys are really focused on the organic growth. They're really focused in out there. But we burned a lot of revenue off on these two pipeline projects and the guys were able to get out there and book that additional work. As Pete said, I'm hoping our backlog stays at $2.8 billion next quarter. We're doing everything we can. But it wouldn't surprise me to see a little downtick in that. That's not something that I would be concerned about. That's just the nature of the business. But we've still got plenty of opportunities out there that we're looking for. So, until we see those mature on further, Pete and I are cautious in wanting to change anything with that guidance, or even tell you that we'll be at the top end of that guidance. Brent Edward Thielman - D. A. Davidson & Co.: Appreciate taking the question. Thank you.

Yes, sir.

Thank you. Our last question is a follow-up from Lee Jagoda with CJS Securities. Please state your question.

Just one more quick follow-up on the SG&A, Pete. You had mentioned for the year about a 3% increase, but in the first half of the year it's a very difficult comparison if Q1's the bogey, just given Q1 was up 22%. So I guess, assuming it's going to stay at the Q1 levels, what would cause it to go back down to get you to that 3%?

So I guess I was talking about – are you saying compared to last year? I mean, I was looking at it to go from this year's number probably going forward, between now and the end of the year, somewhere in the 3% range.

Got it. Okay. Perfect.

There are some things that could take it down, but at this point, I think we'll just kind of stay at that level.

Thank you. There are no further questions at this time. That does conclude our question-and-answer session. And I will now turn it back to your CEO, David King, for closing comments.

Thank you very much. As always, we appreciate your interest in Primoris Services Corporation. Thank you today for your time, and all the good questions. I hope all of you have a good day. Thank you.

This concludes today's teleconference. Thank you for your participation. You may disconnect your lines at this time.