MasTec, Inc. (MTZ) Earnings Call Transcript & Summary

[Audio Gap] started again. We're really excited to have MasTec with us. You guys have come to our conference every year for a long time. We really appreciate it. With us today is George Pita and Marc Lewis. George has been the CFO since January 2014. I think you joined in February 2013. And so -- again, we're really excited to have you guys.

So maybe the best way to start out while people are still coming in, is, George, if you could sort of frame sort of where we are here? José had like talked about some background stuff on 2020, whether it's sort of the low teens revenue growth. Like, I know you don't want to talk about the quarter, but any sort of like high level things you can talk about on the end markets?

Sure. I mean -- first, thanks for having us. We appreciate coming here. We're hometown Miami folks. So it's an easy commute for us to come to this conference, and we always appreciate coming to the beach and folks coming to Florida. So thanks for coming. Just before we get started, just make note, we have our slides on our website. It has our forward-looking statements. I think it's available on the webcast as well. So please make note of the forward-looking statements. We're very excited to be here today. It's a very exciting time to be at MasTec. We are reporting our 2019 year-end numbers next Friday. So you're welcome to join in and listen to that call. And we're in a very exciting time, in summary. We are a North American-based E&C contractor. I think it's important to note -- and we'll talk through a number of the different segments that we're in and whatnot, but I think it's important to note when we talk about E&C that you kind of evaluate where we fit in the E&C space. Because I think we're a bit unique in what's a little bit of an out of favor sector. And that we have a number of things in our risk profile that are beneficial and put us on the, I think, in a favorable light in what is somewhat of an unfavorable sector. If you look at us as a company -- and before I get into all the components of our segments and whatnot, really, at the end of the day, we're unique from -- in a couple of different standpoints. Number one, about 30% to 35% of what we do is on a recurring revenue basis. So we have a lot of smaller activity that we do on a recurring basis in geographic territories. So unlike most E&Cs that have large -- only large project activity and have to continually, if you will, eat what they kill, we have a base of our revenue that's always recurring and provides a stable base for us on the revenue side. I think it's also important to note that while we're in a number of very strong markets, the profile of the types of projects that we pick on -- or that we take on, typically fall in the safer range of the profile of project activity than I think most of the E&C space. For example, as a contractor, we have -- virtually all our contracts are done within 9 to 12 months. The extension -- to the extent that there's a few that are past that, and Andy, I'm sure, we'll talk about a few of those in the Oil and Gas space. Those contracts have morphed into cost-plus, which basically mean they're riskless to us. So when we look at contract activity, we have a relatively short duration. We're typically working in North America. We're not working on multiyear overseas complex projects that have the associated -- risks associated with them, whether it be foreign currency, labor rates, commodity price differential for steel, et cetera, et cetera. Our commitments and our profile and projects are typically more of a short duration, which gives us the ability to come in, assess, create and move on. So I think over the years, if you look at our history, you'll see that we have a, I think, a more stable and predictable performance pattern. I think part of that is the structure of what we do. Tied into that -- because we don't do multiyear, for the most part, we provide services. For the most part, we also don't necessarily take large commodity risk. One of the segments we'll talk about certainly going forward, Andy, I'm sure is Oil and Gas. In the Oil and Gas segment, we provide services to welled, move and put pipe in the ground, but we don't go out and make commitments to buy that pipe 3 years in advance. We don't actually buy the pipe. The pipe is bought by our customers. So we're not trying to predict steel pricing, we're not trying to figure out inventory price upfront and manage the -- trying to hedge what may or may not happen. We're typically doing a contract that's done within a short period of time. So within all that picture, I think it paints a picture of MasTec of within the E&C space that's different than most. I think that's worth noting before we get into the specifics. I think another thing that's worth noting -- and we'll talk about it today, is you're going to see that we're in a number of high-growth spaces, right? We're going to talk about 5G, we're going to talk about Oil and Gas. We're talking about power, renewables, and we're going to talk about transmission. And we're in a number of high-growth spaces that have a lot of end market ability for us to grow going forward. And when you look at that, it's easy to just take a step back and say, here's where you are, I think it's important to note how we got here. If you look at our company, where we were in 2007, which is 13 years ago, this company was a $900 million company. It did 2 things: it did underground fiber construction; and it did DIRECTV installations, and that was what it did. And from that period forward, today, we've entered into the wireless space, where we are the largest wireless contractor in the country. And obviously, wireless is one of the things we're going to talk about here in a minute because it's a big growth factor for us, given what's happening with 5G and how 5G is evolving. We've also entered into the oil and gas space, on the pipeline side, we provide services there. We're the largest oil and gas long-haul provider in the United States today. We entered into transmission, we're entered into power. And we did those through, what I would say, at the time was niche M&A, where we've acquired and our CEO, I think, is particularly adept at looking at infrastructure trends within the United States, looking for where trends might have ability to develop, and then establishing a beachhead acquisition in that area, getting together with that group that we acquire and helping that group grow. And consequently, we've gone from a $900 million company in one niche segment in 2007 to today, a multi-segment company. That's -- our 2019 number is going to be north of $7 billion. I think the consensus right now for 2020 is about approaching $8 billion. There's been sizable growth in our company, both in terms of expansion of opportunity of what we do and in size of revenue and as well profit margin and profit and cash flow. And that's come not by happenstance, but because of the fact that our CEO is very adept at looking at market trends and trying to determine how to enter. And that's something that if history is a guide, you would not expect to stop. In other words, as we move forward today -- and we can talk about some of our acquisitions, Andy, that we think are important today. We're always looking at -- I think we're very nimble, large company, right, in terms of being able to look at infrastructure trends, determine how we make entry points into that and how we help that grow. An example of that would be, if you look back and you go to look at our history charts, you'll see that again, we were $900 million in 2007, let's say, we're approaching $8 billion here in 2020 at $7 billion of growth, your first reaction of that might be that the company acquired $7 billion of growth. And the reality is the company acquired, maybe $3-and-change billion of growth. And the balance of that has come from the fact that our M&A strategy, which, again, we can talk about in more detail, is very specific and has really, over time, proven to be very adept at hypercharging potential post-acquisition growth on the companies that we buy. And that's something, again, we would look to continue to do. So with that, what do we do? What we do is we operate in 4 segments. We've a communications segment. In the Communications segment, let's call it, about $2.6 billion here for 2019. In that segment, we perform wireless services. We're the largest wireless contractor in the country. We form services for AT&T, Verizon, Sprint and others. Those services entail things such as tower climbing and performing carrier additions on towers in the United States. If you think about the wireless network, there's a lot of work that is associated with maintaining network performance, simply to keep up with today's throughput, which is what drives the capital for what we do. That's a big area for us. We're going to talk a lot about it, but we're in the advent of a major explosion of demand for services that we do with the coupling of 5G, recent merger activity et cetera, and expansion of carriers. There's a lot going on in that space that's going to drive a lot of volume for us. We're very, very excited about being there. In addition to the wireless services, we do wireline/fiber services in that segment. And historically, that segment had been one that had been driven more by extensions of underground plant to new sub developments and expansions of housing and then maybe fiber-to-the-home. Today, that group is really -- as a significant driver of underground fiber construction that's being put in the ground that is meant to support the future evolution of 5G. And that's changed the nature of why underground fiber is being put in the ground today. A lot of it today is being put in the ground to support future 5G deployments. Again, we'll talk more about it. But net-net, when you combine what's happening on the wireline side and the wireless side, there's a huge opportunity for MasTec here relative to telecommunications and 5G expansion. In that group, we also do DIRECTV installations. We do about 28% of the country. That's not necessarily a growth vehicle for us, it's a couple of hundred million dollars, but we provide that service where we roll technicians to your home, and we provide installation upgrades, et cetera. In addition to the Communications group, we have an Oil and Gas group. Oil and Gas group is $3 billion and change. Had a very good 2019, is going to be very strong for us in 2020. We have good visibility going forward into '21 as well. We can talk about more components about that. But what we do there is we do both union and nonunion Oil and Gas pipeline services, whether that be Shale, Midstream work, whether that be long-haul work, we work in providing and putting pipes into the ground, whether it be replacement pipes, whether it be eventually integrity work, whether it be new pipes being in to move existing production. Our business there over the last several years, 2 or 3 years, has grown sizably. We've gone from -- 2 to 3 years ago, we were $1.5 billion and change, now we're $3 billion and change. That's been a big part of our growth story up to this point. It's interesting because while we think that business stays somewhere in that mid to low to high 3 range going forward, we're kind of morphing now into a telecommunications growth story, given the diversity of our business, and we'll talk more about that. But suffice it to say that Oil and Gas has been a great business for us, and we do have a lot of visibility about continuation of that going forward. We have 2 other segments that we're in. We have a power generation segment -- and when I say that, let me once again, qualify that. I'm not building something of a multiyear projects overseas. We're building wind farms, solar farms, biomass facilities, typically, let's call it, $75 million to $150 million to $200 million projects that are done within 9 to 12 months and fit the risk profile of who we are. We've been riding a good wave there. That business, 2 years ago, was $300 million. 2019, as we look to close it out, it's going to be approaching $1 billion. So it's been a sizable growth in the last couple of years. We've done a nice job of diversifying our offering there. Historically, when we were doing $300 million 2 years ago, we were a wind contractor. Now we're doing wind, solar, biomass. We've done a great job of expanding that. We're riding a good wave and a good trend in the United States, which is being driven by smaller distributed generation facilities, which has fit down the risk profile of what we do, coupled with renewable power standards by states that are asking for more and more power generation to come from renewable sources. And that business has grown sizably for us, and we expect sizable growth going forward in 2020. And again, we can talk through that. And then the last business that we're in is Electrical Transmission. Today, it's about -- in 2019, it's about a $400 million business. That business, we do high-voltage transmission lines and install those. The trends for that business, we think, are favorable. We think it has a lot of potential for future growth. Andy, you've been with us a long time but if we went back on the Power side, 3, 4, 5 years ago, we had a $300 million business and we talked about the fact that it was going to be $1 billion business. Well, we're kind of there. We feel the same way about Transmission. We think that business can be $1 billion business because of the opportunities there. And we look forward to taking advantage of that and expanding it. The trends in that business are that as new renewable generation sources and distributed generation sources come online, there are needs for transmission spends to just to move that production. And then you have the combined aging grid problems as well as fire hardening needs on the west side of the country and storm hardening needs on the east side of the country, which really drive a lot of potential opportunity for us. So with all that, we're coming off right now. We'll be reporting next week, we expect to have a record year in 2019. We expect to have a record year again in 2020, relative to earnings, EBITDA, cash flow, et cetera. We're in a very good position with our end markets, we're very excited about the opportunities. I guess the headline I would do -- I'm not giving 2020 guidance today. But the headline I would give is that whatever 2020 guidance we give, it's not the peak by any stretch of our business. And it's not like I'm trying to disappoint on 2020. I'm just saying that at the end of the day, there's -- the opportunities that we have in our markets are substantial. And we think that that's going to drive a lot of growth for us beyond 2020 into '21, '22 and beyond.

Okay, George. So lot to follow-up on there. So let me start with something you said kind of in the beginning, which is, there's a lot of misperceptions about MasTec, right? So let's start in oil and gas. The misperception is that oil and gas is peak-ish and going to fall off, right? And you said that you can sort of disaggregate it, right? And so like I know sort of what the pieces are. But I think the nervousness is around things like the Permian business. And when does that fall off? And then, of course, Mountain Valley Pipeline, right? And is that going to go forward? So maybe you can just address, in more detail, how to think about oil and gas? And why oil and gas is going to be stable to growing over the next couple of years?

Sure. On the oil and gas front, I guess, I would characterize the market -- and it's been this way for 24 months or so, I would characterize the market for us as being one in which our customers are concerned about contractor capacity to adequately and safely complete construction for projects that are in the works. And that concern is significant enough to drive actions where we have a much greater degree of visibility about future project activities than we might have, should the market condition not be that way. And what do I mean by that? What I mean by that is, typically, these pipeline projects don't just show up overnight and get done, right? I mean customers spend years typically either buying pipe, getting approvals from FERC or Army Corps of Engineers, going through right land acquisition, going through a number of different steps. So there's a universe out there, which everyone can track, of a lot of pipeline activity that needs to get done in the next several years. And our customers look at that universe and look at the timing of that and are concerned that contractor capacity is not sufficient to be able to build those on time when they're ready to get built. And there's one thing that's kind of exasperated that over the last 18-plus months, which is that the reality is that constructing long-haul pipes today, Mountain Valley Pipeline or Rover or others, has become a longer, more difficult process in the last 18 months than it would have -- than the actual construction would indicate. And what I mean by that is, if you look at those projects, those projects typically will be done within 9 to 12 months, regardless of size. It might be sizable, it could be $1 billion, but it -- typically, one of those projects will be done within a 9- to 12-month period. What's happened on some of these projects over the last 18 months is, as there had been increasing levels of regulatory, judicial or other actions that have slowed or stopped construction. Construction can no longer start on mile 1 and go to mile 350. So as you start these jobs, you're constantly bouncing to different parts of the right-of-way to complete what is available based on what permit exists and what challenge is or isn't, where the status of certain challenges are. And what that's done in the industry, for us -- I mentioned before, from our perspective that, again, we -- all our projects are on within 12 months, we have projects now that are taking 2 years. But to fit the risk profile on our profile for those, those projects that are now taking a long period of time have changed over into cost-plus, right? Because at the end of the day, we, as contractors, don't bear that risk of regulatory delay or judicial delay, et cetera. So those contracts have turned into longer, but they've morphed into a cost-plus nature. That's exasperating what was already a concern about looking at the universe of projects and saying, how many can be done in the next x amount of years? And consequently, what we have is we have a condition where, when we're talking about project activity, we're talking today about project with customers on a one-on-one basis about projectivity for 2021, and in some cases, 2022. That we're talking about -- we haven't signed anything, but we're in pre negotiations and discussions about planning on these jobs. And over time, that will become a more firm commitment, right? And that commitment eventually will become backlog. But the backlog, we're typically the only to point of signing, which is done typically 3 or 4 months before the job starts. So it's not -- there's a lot more visibility to us prior to the actual signing of backlog, given where we are in discussions, given where we might have signed agreements where we have limited notes to proceed or breakup fees, if the job isn't started at a certain time, et cetera, et cetera. We have a lot more visibility to it. So that's what's driving our confidence in that we have a business here that is going to stay at this elevated range for several years. We've been saying that for a couple of years. So to be fair, the same concern about the peak has been here for multiple years. It's interesting because nowadays, it seems like people aren't worrying about 2020, they are worrying about 2021, which is, I guess, a step forward because historically, we're always worried about the current year. But the condition for us still continues, and that is driving our visibility. And we are effectively a top-tier contractor. So while I can't speak to macro levels of spends by customers and who's increasing an MLP and who's not, I can only tell you that I see -- we see the visibility and the directness of what we're planning on working on. And I think like as a top-tier contractor, I think we're getting first dibs on a lot of projects. So if there is some movement in overall spending. I'm not sure that we -- well, we don't feel like we're seeing it. So that's, in summary, why I think we feel very confident about our Oil and Gas business. I'll take one more thing, right, because we have said this publicly before. One of the things I get from investors on Oil and Gas is, 2019 is going to be a very strong year relative to margins on Oil and Gas. And I try to explain the folks -- and we've said publicly that we'll be approaching 20-plus percent for the EBITDA margin for the Oil and Gas business in 2019. So then the next natural question is, well, can you sustain that in 2020? Or what's going to happen? And we've already come out and told folks that we expect 2020 will be in the high teens, which, by the way, is the normal course of what we say. We always would say that Oil and Gas business should run in the high teens. During 2019, we had a bit of a change in shift of project mix. So nothing is changing between '19 and '20 that's changing pricing or terms or conditions on the ground. That mean that I've structurally have a different business. But as I mentioned before, we're doing cost-plus work, and we're doing unit -- other regular work. In 2019, because certain projects were delayed, we dropped about $0.5 million -- $0.5 billion worth of revenue out of the year and moved into 2020 because of regulatory issues. We broke early for winter, stopped production, and we're going to start that back up in late spring, early summer. And by pushing that activity out of 2019, our cost-plus work typically is dilutive to our overall margin, right? So it's -- cost-plus is great, because it's riskless, but it's also not necessarily 20-plus percent margins, right? It's in the lower teens. So what's happening in our mix, as we look at '19 to '20, is not a structural change or anything else. It's just that we're going to grow top line. We think our mix of business in 2020 will be more normalized in terms of the mix of cost-plus work and unit work. And with that, our margin should normalize into our normal range of the high teens. So I want to make that point because I think folks are -- one of the things people are looking at in addition to the cycle longevity itself is whether or not that means that the current performance is sustainable or not. And what we've said is that's our view for next year. And we think within that view, we expect 2020 to be a record year, with record earnings and revenue, et cetera, et cetera.

So George, I don't like to focus on one particular project. So I'm just going to ask one more question about this is, like you mentioned some -- you took $0.5 billion of revenue or more. You took it from '19 and put it into '20. What happens if that project continues to get delayed? Can you make up the difference in Oil and Gas? Or -- I know you're getting paid to like stay mobilized, but how do you think about that? And then the other side of the question is, if it's going to be harder for these sort of multi-state pipelines to go through because the states and local jurisdictions are pushing back. As you go into '21 or '22, what's sort of next for that business?

Well, 2 things: one, I think it's unlikely. I think it's very likely -- everything I know tells me we're going to move forward on this project. And the question is going to be, how much is left? And I don't know really know the answer to that, right? In other words, depending on what issues may come in, I think it's highly likely we'll start and then the question is going to be, how much of, on a cost-plus basis, are we completing the job on, and we'll see, right? Hopefully, it's an easy completion. If it isn't, typically in this environment on a cost-plus basis -- not that we're trying to increase cost because we're absolutely not. But typically, it would tend to grow. And when you look at the contract that we're talking about, that contract has grown dramatically in size as it's been expanded and delayed over time because it obviously costs more to do that job. So that's one factor. I think the other factor is, it will be interesting to see, right, a number of the issues -- what's happening in the industry is we initially would plan these jobs. And if we were going back 3, 4, 5 years -- and you would remember this, Andy, we would always say to you, we're going to have our highest margins whenever we have periods of big long-haul work, right? And today, it's the opposite, right? When you have long-haul work, it's good work. It's cost-plus, but it's not highest margin, right? Because it's morphed into cost-plus. So the industry responded to these challenges by morphing these items into cost-plus. And if you go back, again, you look at us, we're a very strong cash flow generator, right? And if you look at us over the period of time, on an annual basis, we're very strong and have been. But one period of time that we had some cash flow challenges was in the middle of '18. It's because we were taking certain of these initial contracts that were on a unit basis and transitioning them to cost-plus as the realities hit the ground of what was going to happen on those jobs. It just took some time to work that through the system, and we ultimately got paid, right? So I don't know, going forward, I think the industry today has certainly taken note of some of the factions that have caused delays, which you could arguably say were administrative errors, right? In terms of -- now, if you if you have an approval or something is happening, and it's approved in one spot and something else is contradictory, if you don't clear that up, I think the industry is now realizing, well, that could be a point of contention and that could stop the project, so let's clear that up upfront. I think it's to be determined. If there is less of that, I think contracts go back to unit based, and that gives us the opportunity to maximize margin on those type of activities, right? If it stays as it is today, I think we end up having this cost plus scenario, and I don't really know where that heads, although I think it's pretty obvious to think that as we're moving towards activity now that will start in 2020 for new projects -- which we'll talk about at some point here in the next call. That's being done in an environment where people are realizing what challenges have been to date. So we'll see how that morphs.

So let's talk about Communications in the context of, obviously, you had the Sprint, T-Mobile news. They are smaller customers for you now, but big potential. And then you also have Verizon that's been growing significantly for you guys. So when I think about the next, call it, 2 years or so, how does it play out? Obviously, your biggest customer, we all know, is AT&T and then these -- there are these other customers. Is it more that these other customers really start to grow as a percentage of the business? And when do you see them growing? I mean, I know Verizon has already been growing, but it's mostly been on the wireline side. So how do you -- how does the next 2 years play out? I know -- you don't have to talk about the specific customers necessarily, but is it more sort of the incumbent or is it more of these new guys? And when do the new guys really start to ramp up for you guys?

Yes. I think it's both, right? I mean, let's just talk about what's happening and why? If you look at 5G and you look at how it will be built out it's very clear that 5G is being built out in a more complex costly way than 4G or 3G. And that means today's towers or today's network if it's a 4G network, it's based on, let's say, a couple of hundred thousand cell phone towers, macro towers that are -- have equipment a couple of hundred feet in the air. And that's the way it works. You transmit from your GPS to a tower 2, 3 miles away. It may take a few seconds, it hits the tower, when it goes into the tower, that tower has been set up to be connected to the underground telecommunications network through fiber and that data is -- and that flow through then occurs through the underground existing network. That's today's network. 5G in addition to a significant amount of tower work it's going to occur because we're going to be changing out all the 4G radio equipment over time to 5G. We have FirstNet. We have -- a lot of things that are going to drive significant amount of tower work for us for several years, and we'll talk about that because we've invested in that. 5G, in addition to having that tower -- those towers, it's now going to have -- think of 5 to 10x as many small cell points. So it will be a hub and a spoke, right? It'll be -- the hub is the tower and then the spoke is going to be the small cells that will be placed across all major metro markets. And those small cells traveling very short distances -- it travels very fast, but it's also easily disruptable. So therefore, you have to have small cells across multiple touch points in order for the new network going forward to be able to handle the activity at the speeds that it's requiring. And what happens today? If you think about a macro level, you've got small -- you've got tower work, you've got small cells that have to be deployed across the country, then you've got underground fiber that has to be deployed to get those small cells to connect to the underground telecommunications network. And then you've got other entrants like -- other carriers like Verizon that are building their own fiber rings, not to build fiber-to-the-home, but simply to support 5G network. There's a ton of underground activity now going on that's meant to support 5G. And if you look at all that, by nature, it's going to be more costly than 3G to 4G because it's a lot more involved. And you'd ask yourself the question why would a carrier do that? And I can't speak for the carriers directly, but I can certainly look at public commentary. And when you look at what they're saying and what this is about, this is clearly not about a YouTube video on your phone freezing or downloading in 27 seconds instead of 35 or 47. This is really about -- 5G is about deploying a whole new usage of the wireless network going forward with robotics, drones, autonomous vehicles, the Internet of Things, smart cities, smart traffic systems that are based on flow. I can't even think of other ones, but they're above my pay grade right now. But there's a whole new evolution that is meant to occur with 5G. And carriers are doing this build out in a different way, to be faster and to be able to handle a dramatically higher level of throughput. And they're doing that because the view is all those new applications will ultimately become different and new revenue streams for them. So really, at the end of the day, when I think of 5G, I think of it from a carrier perspective of saying you have a first-mover action, if you will, right? You don't want to fall too far behind because you don't want anyone else to kind of get into that game as it starts developing in a bigger way if you're a carrier. So they're all -- they all have an incentive to move towards a 5G solution. So that to me is the why, right? And why within capital spends? While, I can't talk to overall dollars, I can tell you, I think this is the highest tier capital spend for a lot of the carriers. Because with it, and -- if someone gets there first, it's going to make a major difference. So when we look at that whole landscape, it's a significant landscape for us that's going to drive, we think, a lot of activity and a lot of volume for multiple years. While we're going to have a nice growth in 2020 in Communications, and we're going to improve our margins because we invested a lot of things in 2019 that we think will start paying dividends in 2020, by no means, do I believe the activity and the rates and what we think we're going to generate in 2020 provide a peak. If anything, it's building, right? And things like the recent merger activity, should that -- once that totally finalized with potentially an entrance of a fourth carrier and a merger and a creation of a stronger of a third carrier, those are all positive momentum items that develop and kind of move towards incremental spending over time, over the 2020 year for all those guys. Because, frankly, pending a lot of that activity, there's been a lull on many carriers in terms of spending, waiting to see how this all played out. And finality of that is ultimately a good thing for the industry because I think it will reinvigorate some more spending in general. Finality with a merger is a positive thing as well. Because there's incremental work that's required because there's integration work to combine both networks together to get the maximum capacity on tower. So there's more incremental activity as well. And from our perspective, what we did in 2019 on this business -- and if you look at our numbers in 2019, it's no surprise -- or no -- at this point, we've all talked about it, we had a year where our margins in 2019 were under the norm, right? And we set up -- we talked about that because what we did during 2019 was we invested significant monies to recruit and train and put in place a number of crew -- of tower crew capacity initiatives. So we had more in available tower crews than we've had in the past than what the industry had. Because during '19, for a period of time early on in the year, the demand for tower crew capacity exceeded the industry's capacity to provide. So we built that capacity, incurred those costs in '19. We think in '20 as that moves to fruition -- because a lot of this that we're doing is just the incremental training and then we're putting people on jobs as extra hands for a period of time, just to give them the final training push. As that comes off, that -- we'll be able to monetize that tower crew capacity, both with our current customers and, hopefully, an increasing level of diversity of our -- of new customers because the demand is there, and we think we have the asset.

So George, I think you mentioned it, like what's really hard for us looking at this, right, is timing. Like, I think we all agree that there is a nice cycle ahead. But like most of us in this room, I -- probably all of us don't have 5G phones. They're not really available. Apple's coming out later this year, obviously, with its first phone. But like -- so if I step back and think about growth for Communications, do you -- how should we frame it for 2020 and beyond? Is it mid-single digits, double digits? Like, any more color you can sort of give us there around growth?

Yes. We've kind of talked -- we think we'll be approaching $3 billion in that segment in 2020, right? That's kind of what we said during our third quarter call. We think we're approaching double-digit margin, which both of those are nice improvements over 2019. I guess the main headline for me is that's not the peak, right? I mean we were...