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

Okay. Good afternoon, everyone. I'm Steve Fisher, UBS Machinery and E&C analyst. We're very pleased to have the management of MasTec with us to close out day 1 here of the conference. We have the Chief Financial Officer, George Pita. We have Marc Lewis, the VP of Investor Relations. If anyone has any questions, please submit them through the app or the website, and they will come directly to me. Just before we get started, as a research analyst, I'm required to provide certain disclosures relating to the nature of my own relationship and that of UBS with any company, on which I express a view on this call and discussion today. These disclosures are available at www.ubs.com/disclosures. Alternatively, please reach out to me, and I can provide them to you after the call. So George, Marc, welcome. Thanks for joining us.

Just to kick things off, what's the most important message that you'd like investors to take away from our discussion today?

Thanks, Steve. This is George Pita. First, thanks, everyone, for joining us this afternoon. I hope everyone is safe and healthy and hope the nation can come together in some unity as we move forward. As -- before I start, I want to just make some comments. I know that this is being webcast, and please make note, we have an investor presentation on our website, mastec.com. In there, there's a safe harbor statement regarding forward-looking statements, so please make note of that as we go through today's conference. In terms of discussing MasTec in points, Steve, I guess I would say is like we're going to talk about a lot of our end markets today. And we believe we have significant growth opportunities across multiple end markets. But maybe before we get into that point, I guess I would just start by describing a couple of things, right, that I think -- that we think make us unique, and I'll talk a little bit about how well positioned we think we are, given the current disruption from COVID that, that exists. When you look at our end markets, right, and we're in multiple end markets, we're a very diversified E&C provider. We're across multiple power and telecommunication markets. And many of them have what we'll talk about today, a lot of growth opportunities. I think what's important to note about that is that we're not in today's end markets just by happenstance. And the reason that we're in a lot of these end markets has been through a very definitive M&A and focused growth pattern or growth evaluation process that MasTec does, where we're constantly looking at trends within infrastructure and looking at emerging trends within infrastructure and determining where we think there might be an opportunity to get into higher growth, higher-margin markets, in order to maximize opportunities. And I think over the years, if you look at MasTec from what it was back in 2007, where it was a $900 million company, that was primarily an underground contractor with some DIRECTV services. And you compare it today with what we have across North America, including wireless, oil and gas pipelines, transmission, power generation, et cetera. All these are markets that we've entered into in the last decade plus, and that we've had significant growth with. So when we talk about end markets, I think one of the things to consider about MasTec is that our DNA, if you will, is such that we are constantly looking at infrastructure trends and trying to determine what's next, and that's not going to change. And also, I think, tied into that, fortunately, for us, is our business model is such that we generate significant amount of free cash flow on an annual basis. And that's because when you look at our project profiles in our mix, we have a combination of a lot of recurring services, which are typically short-term duration and paid. And we have a vast majority of our jobs done on a short duration basis. So we don't take long-term commodity price risk or project risk, we're typically doing projects within 12 months. So that flow or that profile leads to a strong cash flow profile. And what it does, it gets -- it puts MasTec in a position where each year, we're generating several hundred million dollars worth of cash flow that is really to be determined as to what the investment would be to maximize shareholder value, right? And in some cases, that may be share repurchase. In many cases, that's M&A activity. And in other cases, it could be deleveraging, right? So we're fortunate in that we're in a lot of good growth markets. We've gotten here through a process and our business model is such that it gives us that opportunity. And I think today, as you look at the post COVID-19 environment, clearly, our balance sheet that we have is a strength today because we're coming into this with significant liquidity, strong cash flow expectations and performance. And we think our balance sheet is going to give us a competitive advantage in this time, both from a standpoint of being able to take opportunity -- to take advantage of opportunities relative to M&A. And also, just in general, as our customers look to work with resources and contractors that have staying power and the ability to manage through some of the things that are happening and have been happening today. So in summary, we're very -- we're blessed in that our business model is very strong. Our operations have been largely proceeding despite of COVID and we're in a very good spot. So we're happy to be here today and happy to take, Steve, questions from there.

Terrific. So maybe to start off the detailed discussion on a couple of segments that maybe don't get as much attention as they deserve. Starting with power gen and industrial, what's the vision that you guys have with this segment? It's running at 15% to 20% of trailing revenue. So in my view, it's actually pretty substantive. From a revenue perspective, only around 5% of profit, though. Should this segment be a double-digit percentage contributor of EBITDA to profits over time?

Yes. It's a great story, right? I mean, when you look at the power gen and industrial segment, I think in 2017, we did about somewhere in the $300 million range. And this year, 3 years later, we're going to be somewhere in that $1.3 billion to $1.5 billion range. So it's been a dramatic growth in a short period of time. And again, while that may -- that's not really been driven totally by M&A, it is driven by, again, our view of looking at infrastructure trends and determining how to take advantage of those where we've taken a business that, back in '17, it was primarily just simply a wind renewables business. And we looked at what we thought was trends in smaller distributed generation type facilities, coupled with renewable power standards in the states and some of the things that were happening, and we really expanded this business to be able to offer both -- not just wind but also solar and biomass and other similar kinds of smaller projects to maximize on that opportunity. And in this case, we didn't necessarily do it. There were some acquisitions, but really did a lot of it organically by just adding those capacities and levering what we had. But certainly, it's a business that 3 or 4 years ago, we would have said we think it can be a $1 billion business, and we're sitting here today north of that. We think there's continued growth opportunity for it going forward. I think today, we think of it as being a $2 billion-plus business opportunity for us going forward in terms of the size of that segment. And relative -- you mentioned profit, relative to the overall profit, as we've grown in the last 3 years pretty sizably, I think it's fair to say that we haven't necessarily maximized our margin potential because we've been growing so quickly that we've been -- we had some just growth pains associated with managing that level of expansion. So as I think about that business going forward, I think it's got nice potential for continued growth. It will be a part of our growth story. It may not be albeit as big as the growth story that we have in the communications space with 5G. But between the power generation and the transmission, both of those, I think, are nice supportive trends that will allow us to continue to expand our operations. And as we do that, I think we will both -- we will continue to see some improvement in the margin profile. In this business today, I think over time, it's -- it could be high single digit, low double-digit. I think the issue on this business is certainly today, we're growing so fast that we're not able to really "maximize" our margins. But in addition to that, I think there are some more material pass-throughs in this business than there are in some of our other segments. So I don't -- I think the profile here is to get from the low to mid-single-digit to the upper single, low double over time. And I think we'll start seeing that certainly sooner rather than later. We expect the balance of this year to be pretty good and strong on that front. And I think we expect to see continued improvement into next year.

Great. So maybe you can talk in a little more detail about that. Kind of what's the positioning and the strategy here? What do you need to do to grow the business more meaningfully? You mentioned some of the end markets. Is it new customers? Is it different regions? What do you need to do to take that to closer to that $2 billion?

Well, we've really -- I think what we try to do and we have done successfully is expand the service base, the categories that we offer, right? So the combination of what we're doing today is much broader than what we were doing 2 or 3 years ago. And I think that trend is continuing. I mean, we're seeing record levels of backlog. We're seeing a very healthy bidding activity in this business. I don't think we're geographically challenged in this because, really, a lot of these are -- some of these are built in places where you don't necessarily need to be, you kind of go towards them. So the trend towards smaller distributed generation, I think, is something that we're riding well. I think we're well positioned to do that. And I think the investments we've made in expanding our business operations to provide more and more types of services is really what we're going to be able to utilize to go forward and continue to grow this business.

And so can you just talk about what's the bidding environment like at the moment? How competitive is it? How do you differentiate? What could the trend of backlog be over the next several quarters?

I mean we're -- we just came off a record -- when you look at our backlog in total for the first quarter, we had a record backlog. We had strong bookings across a number of different segments, and we had record backlog here in power gen. We're seeing a lot of continued activity. This business hasn't had much of an impact on COVID because a lot of these, again, are being -- a lot of these facilities are being put in places that are not necessarily in urban locations, right? So there's not that many impacts to them. Our customer base here is -- has been broad, not quite a bit. We're dealing with typically the Tier 1 investor-owned utility kind of customer, which is good. Fiscal policy is supportive. So I mean, we feel like, again, this is a business that has a nice opportunity to continue to grow. Frankly, so does the transmission. Transmission, when you look at our transmission segment, we're doing today somewhere in that -- between $400 million and $500 million. We think of that as being a $1 billion business over time. And that's simply because if you look at the trends that exist there relative to an aging grid, storm hardening needs, fire hardening needs, all the new sources of renewables that are being put in place that drives new transmission and distribution needs. We think there's a big opportunity there, where, again, we positioned ourselves in a market where we can expand with it, and in that case, gain some market share because we're relatively small today. So I think both of those, when you put them together, are going to help drive growth from MasTec in a nice way over the next several years because they're both -- the end markets are supportive of it. We've positioned ourselves with a good, strong service offering and a diversified service offering and we think we're going to be able to take advantage of that, grow these businesses. And as we're doing that, continue to mine some margin out of them.

And just maybe wrapping up here, a couple more on the segment. As you think about the pipeline, would you say, is it more solar first than wind than other? Or what's the ranking of where you see the kind of robustness of opportunities?

Well, certainly, I'd say it's -- solar is growing at a faster pace. Wind is a little bit bigger business at this point still, right? And that's kind of that kind of the combination. And the biomass is also growing at a faster pace. So it's a mixture. I think that solar is where we expect some of the bigger growth over time as that seems to continue to expand. But we're pretty much seeing -- in the smaller distributed generation space, we're seeing a lot of activity. I think I keep saying that because it's important to note that we're not necessarily building large nuclear plants in place. And we don't take -- that's not the kind of a project that typically fits the risk profile that MasTec works within, right? We work within smaller projects typically done within a year that we can manage and evaluate the project risk accordingly, right? And that trend that we're seeing, whether it be some small civil work, some of the solar projects that we're talking about, or wind, there's a lot of that kind of activity out. And solar is growing for us at a bigger pace because we're starting from a smaller piece. But I think that will be -- that's a continued trend that we would expect going forward.

And just lastly on this segment, there's been some volatility of the margin in the segment. And if you could just talk about what drives that volatility. I know you said there's some growing pains. But is that -- was it some legacy projects? And is the mix getting different that you should expect more consistency or just kind of building up a better expertise there? What would you say the prospects are for a steadier trend of margins?

Yes. I think it's clearly kind of all of the above, right? I mean, certainly, the fact that we've been growing a lot has impacted us over time on some selected projects. There's no legacy 1 big project but there are individual pockets where you have some inefficiencies on a project that impact you over the course of the quarter. If you look at our performance, we kind of run somewhere in the -- approaching 2% to approaching 8% margin over time. During 2019, we ran approaching 4%. This year, we've talked about we expect to see about 100 basis point improvement over the course of the year in net margins, it puts us closer to the 5% plus, 5% to 6% range. And we have been seeing quarters where we're doing in that 8-plus-percent range or thereabouts. So that's really where we want to go towards. At the end of the day, when you look at this business, it's still subject to, again, weather, start-ups, et cetera. And when you're talking about a business that in a quarter is going to do $200 million or $300 million, that can move the needle a couple of points on a quarter and not necessarily change the overall picture, right? I mean I think that's what we've been seeing. In addition to the fact that clearly, over the course of last year, as we grew as quickly as we did, we did have some growing pains on some things that we've been adding to shore up that business as we've been expanding into new -- some of the new service offerings that we have.

Got it. And just as we move on to the electric segment, I mean you already kind of gave a little bit of an introduction there, $400 million to $500 million grow to $1 billion. What's the key? You've got the aging grid, storm hardening, fire hardening you talked about. What's really the key? Do you have to develop new relationships there? Is it setting up new sales operations? What's the key to capturing the opportunities in that space?

Yes. I. Mean, I think what we're expecting and seeing, certainly, is all what you said won't hurt, right? At the end of the day, we've done a lot of that, and we've invested in some of that. So we're running a business today that we're not necessarily running to maximize margin, but we're running a business today with costs associated with trying to grow a business into a bigger pie, right? So what we're operating today, we've built -- we've invested in business development and some of the things you've talked about to help grow that business, and that's kind of in our base of current expectation of performance, and we hope that, that will bear fruit and help us grow going forward. I think what, to me, is a trend that I think we're seeing is this business today in 2020 is, really, it's a $400 million business, and it's built on the backs of multiple smaller projects, right? When I say smaller projects in this business, I mean, I don't know, $25 million to $75 million in size. The -- what we're seeing going forward, and we've seen some fall into backlog and it's outside of 18 months, but it's going to start showing -- it's going to start turning into backlog here in 2021 or the latter part of 2020. We're starting to see that on top of that base of projects that we have that are all in the smaller area. We're starting to see a resurgence of some of the larger projects. And larger projects here, I'll call it, $100 million to $300 million worth. And what we expect will happen is we'll keep the base of smaller projects. Some of the larger project activity starts becoming into fruition here as we move towards the latter end of 2020 and into 2021. And then just pretty simply, with a combination of what we have today and a handful of some larger projects, you can move the needle on that business pretty quickly and start making a difference in both the top line performance as well as the margin performance. And we've seen some of that in our backlog. Our backlog has been -- we've seen a few projects coming in. We have more that are expected to come in that we think would be starts in 2021 that are a little bit larger in size. So between the 2 -- the mix of those kinds of projects, that business, we think, can move pretty quickly into a higher level, depending on the timing of those starts. And right now, that looks to be sometime late '20 or more likely early 2021.

And you think those could come into backlog? Or could they come into backlog before Q4? Or is that more...

Yes, there's some that's in backlog today. We have -- I want to say it's -- I don't know the exact number, but it's approaching a couple hundred million dollars of backlog that's outside 18 months because we only report 18-month backlog. And as we -- that's jobs that we've won that are going to start and turn into revenue going forward as well as then more work that we're looking to win this year, which we obviously expect to win and increase the backlog. So yes, we'd expect the backlog to start moving further north over the course of 2020.

These types of projects, as you start talking about larger type projects, you always have to be mindful of the permitting situation. Are they still in that sort of small to medium-sized category or medium-sized that they're not multistate kind of things that get really complicated? Or how do you approach what the -- some of this might be as you think about...

Well, it's a mix. It's a mix. I think there's -- I mean there's some that, on some of the large, large projects, we won't necessarily have the entire project. We'll have a component of it, right? I think a lot of the permitting and delay issues have been what has been in the business now for 24 months and is kind of coming to a point where it's moving from that to a construction phase, right? And that's why some of the things that we -- for example, projects we've won that we have that are outside of 18 months because of expected timing of those projects, right? So I think that's baked in, and it's been what's been in the business for a few years now, and is now coming to the point where when it comes to the point of actually coming to bid and being won, it's a different stage than when it's initially being planned and permitted. So it's much further along at this point than it would have been, let's say, 24 months ago.

Got it. So I guess as we just kind of wrap up these 2 segments, it sounds like they have a good potential to be more meaningful contributors. With folks that are -- have concerns about the oil gas side, would you tell them that sometime within the '21 and '22 period, you could start to see these segments offset the decent part of -- should there be any downturn, in the event that there were, you've got something to mitigate that there in a material way.

Well, I think -- listen, there's a lot of discussion about oil and gas, but I think the comment you made is correct in a broader sense, which is that we believe -- first of all, we believe we have good visibility into the oil and gas business out through 2021. And we've talked about that publicly, and we can explore that further. But we see a lot of project activity. We have a lot of -- just won $1 billion worth of awards in Q1. We're going to start a significant amount of work here in the back half of 2020. That's going to continue into 2021. So we feel pretty good, very good about line of sight on work that we have in the oil and gas space. Now regardless of that, as you look forward, if someone were to worry about or to model in some level of reduction, okay, we think that what we've got happening in the communications space we have with the 5G, coupled with the power and the transmission side, certainly are drivers that put us in a good position overall, regardless of if there is -- not that we're predicting that, but if there is some significant reduction going forward in another segment.

Got it. And when we talked a couple of weeks ago, it sounded like maybe M&A opportunities were starting to become a bit more active as this whole post-COVID and oil price situation, or maybe just the post-COVID situation kind of played out. Can you talk about what you're seeing there? And what's coming across your desk at this point?

Sure. I mean, if you look at what MasTec has done well over the years, right? And it's been -- we've been doing typically, what I'd call smaller M&A activity, right, as opposed to buying typically a public company or buying from an auction from a private equity firm. We've typically been buying from local entrepreneurs and have helped those entrepreneurs grow their operations post acquisition, pay them through an earnout and have had very good success with that. And I think what we said a couple of weeks ago is that this environment, right, the COVID environment that's brought on and has changed the world in a relatively short order, for that base of folks that we would look at for M&A, that's changed some folks' perspective, right? And those folks are looking at whether or not it's -- might be the right time to change and get a liquidity event and do something different or expand their operations in a different way. And that's not a guarantee that will successfully complete all these deals or deals, but we are actively looking and seeing the environment that is more fruitful for that kind of stuff. And I think that, combined with our balance sheet and our liquidity, and that combined with the fact that we've had such a good success record over time in helping folks grow and showing them that as a local entrepreneur, becoming part of the MasTec family is going to be beneficial for them long term, altogether, it becomes -- it's a favorable environment for us to look at opportunities. And that's always been our mantra is that whatever we're going to do, we're doing it in the mantra that it has to be a strong value proposition, and it has to be supportive of growth for us in an expansion or a market or an area that we think makes sense. As an example, fourth quarter last year, we completed a small acquisition of a company that does integration and optimization on the wireless networks, right? That company, it's a $60 million company. And if we're right, right, that's a trend that we think has significant opportunity in a 5G environment as 5G develops with all its new touch points. We think that, that service level or that service requirement is going to grow in size and scope and need. And if we're right, after making this beachhead acquisition and getting this group in place, we'll be able to really grow that opportunity between the skill set they bring, the capital we bring, the relationships we have with our customers. And knock on wood, hopefully, we're looking at a business in 3 to 5 years that's significantly higher than what we had today, right? That's -- those are the kinds of M&A opportunities that we look at, right, whether it's peripheral or different kinds of services within the end markets that we support today. Or if it's a new end market at some point that we think has some legs, maybe making a small entry point to that. That's why I go back to how MasTec got to be what we are today. It's been through that kind of methodology and that kind of thought process, and that's something that's continuing today.

And because you guys have that entrepreneurial lens and have been successful in kind of reshaping your businesses in the past, why not take the opportunity to maybe reshape the -- or take some steps towards reshaping your oil and gas business to something that's a little broader at this point with maybe the next 10 years in mind.

Well, I mean, I think the question becomes -- and we have -- in our oil and gas business, we're doing a number of different services, right, whether it be water pipelines, dewatering services, other kinds of scopes that we're actively looking at and doing. That said, that's not different than we do with any one of our markets. And frankly, what we do say in our markets today is the U.S. is, albeit producing less today than they were a year ago, but the U.S. is still a much net larger producer and it has been over time. And with that production comes a level of capital spending in that we have been able to serve and go forward with. So we do evaluate that market no different than any other markets in terms of looking at peripheral services that we think makes sense. Value and growth -- combination of value and growth potential is what we're going to invest in.

Got it. Maybe shift gears and talk in a little bit more detail about the remaining 2 segments. The oil and gas business first. So oil prices have clearly picked up here over the past -- last several weeks. So how has that changed the nature of any of the discussions you're having with your customers at this point?

Well, I mean, again, we've got -- I'd say the sentiment is certainly much different today than it was 60 days ago in terms of -- at this point, 60 days ago, there was so much going on that there was a bit of a shock going on in terms of what the impact might or might not be, and it certainly seems to be -- that's certainly much lesser today and then there's much more of a bullish sentiment in terms of how to play opportunities from a customer's perspective today than there was 60 days ago. So I think that sentiment is much better. What I'd also say is that, again, when you look at our particular business, and what we've seen is we have what we believe is top-tier service level and a very optimal low pricing and we think we're a contractor of choice for many of our customers. And we continue to have dialogue with them, not only about activity for, obviously, this year, we just came off the first quarter. We booked $1 billion worth of awards, and there's more to come. And we have that visibility that continues with continued activity out through '21. So I think this segment, in terms of volatility, is obviously somewhat cyclical, like any other business, but I think the level of that cyclicality has -- and concern has been somewhat overplayed, if you will, over concerned -- there's too much concern in our view, right, relative to that. And we still think when we look at MasTec, if you were to model in some small decline in the oil and gas business that net-net, MasTec is going to show growth over time because of all the markets that we're in. And we don't think the decline in the oil and gas space is going to be as dramatic as many are playing it out to be.

And looking more in the next few quarters, it sounds like there's more on the bookings front to come. How lumpy or steady do you think that is? Do you have any visibility to that? And kind of what are the gating factors of when these get booked? Are these verbal awards that need permits? Or is it more just kind of signing the paperwork?

I mean, yes, we're -- we've we booked $1 billion-plus in Q1. We talked about there being somewhere in the neighborhood of $1.4 billion of stuff that was in the process, and that balance is something that we expect to book shortly. And I think typically, what we have seen on the backlog side is folks are signing contracts closer to the start of projects, which is a good thing, as opposed to signing them in advance. That's why we've been -- we've had clear line of sight on activity that we're going to do in the second half of 2020 for a good 6 to 8 months now. And it really showed up. Some of that started showing up in backlog here in Q1, right? That's the -- there's the -- we only put stuff into backlog once it's signed, once it's firmly signed. And in many cases, we're well along the lines with multiple customers in preplanning on multiple jobs that we're going to start, which give you a very good line of sight about what's coming next, that's not signed backlog and won't be signed backlog for a period of time. Having that said, we'll clearly have some more signings this year. And expect that, again, as many of the things that we're working on now that would be 2021 starts will develop and will become backlog either Q4 or maybe more likely Q1 of next year.

We did get a question here sent in, and it relates to the Nationwide 12 permitting process and any impact that you see from that? How that is affecting your expected start date of projects and anything about the expected costs and ultimate revenue opportunity for you on the related projects?

Sure. The environment on the oil and gas space has changed pretty significantly in the last 36 months in which there have been an increasing level of either regulatory, judicial or other challenge to performing typical oil and gas pipeline work. And as a result of those changes, which have been happening now and started going as far back as Dakota Access pipeline and this has accelerated since then. As a result of those changes, a lot of the contract structures in the oil and gas business have changed because contract risk or risk on permitting and regulatory and traditional stoppages is not something as a contractor -- that as a contractor we take, right? So what's happened over time and -- is that some of these projects that are subject to more of that risk have changed from what used to be unit-based pricing, where you would bid a job based on the conditions on the ground, you would come in and say, I think this job is worth x. You have units. The reason I cite that way is because it's never really fixed price. It's unit-based. And if the conditions on the ground change and you run across more rock, you have a unit price added for rock and you add it to the price and the contract changes accordingly with it. But a lot of contracts now that have this added risk have changed from that to now a cost-plus type of work, right? And that's typically been in the larger projects, of which we expected to a greater amount of larger project activity in the second half of 2020. We've always said that from the beginning of the year. We've always said that oil and gas business was going to be more back half loaded than it was in 2019, which was more typical, by the way. That's the way historically it's been, but '19 was a little different. But it would be more typical of a historical standard. And there will be more activity in the back half of the year. That's our expectation today. And that's continuing today. We're monitoring Nationwide 12 issues, and our customers are. We are, in many cases, in some cases, initiated on some of these projects already, although they're going to be more meaningful in the third quarter than they are in the second quarter. And typically, in this environment, whether it's Nationwide 12 or other things, what's happened is these stoppages or these changes have changed the size, scope and duration of a job. And in the last 2 years, which is what we've seen is we've seen contract values increase in size on a cost-plus basis as a result of changes that might be necessary or slowdowns that might be necessary as a result of some of those actions. So that's -- right now, we expect to continue with our projects. And we have plenty of work to do outside of some of the things that might be impacted by Nationwide 12. We're proceeding and expect it to happen in a big way in the second half of this year. And depending on the ultimate resolution of that, if it changes the scope or duration of the job, typically, we'll receive some compensation of that on a cost-plus basis.

Great. Maybe just wrapping up here on oil and gas before we go to telecom briefly. So what is the -- because the conditions we have right now are suggesting to some investors that there might be a bit of a decline in the oil and gas business. And it sounds like you think the base case should not be that. What were the conditions we'd have to see in order for that to happen? Would that be sort of the unlikely scenario where just LNG projects don't get done anymore into perpetuity? There's no differentials in the basin prices on oil and gas? Like what would that environment be?

Well, I mean, look, I think it's -- when you talk about the broader environment, I think what you described are some issues that would impact it, right? When you talk about short-term quarters or years, if you have a project start change and move a little bit on, it could impact the size -- the timing of a project, while it won't impact the overall scope of it, right? But you could move a couple hundred million dollars out of a quarter or out of a year by starting 2 -- a month or 2 later than you might normally do. We saw that last year. Last year, at the end -- in our fourth quarter, we ended up moving about $0.5 billion worth of revenue out because we broke early for winter on a cost-plus project that, because of regulatory challenges, couldn't be finished, and that job is going to start -- has started up now in a partial way, but we'll start off in a more meaningful way end of June, beginning of July, right? So in terms of individual timing, that could move around a little bit. In terms of the macro level, I mean, it's hard to predict. We have good visibility out through '20 out past that, then you get into some more of the factors that you're talking about, right, in terms of what's the overall level of production, what are the differentials? We don't typically do direct LNG export facilities. But obviously, as export facilities are being built, then you're going to see pipes that have to feed them. So it would have an indirect benefit to us, right? So the factors on the oil and gas space, there's many of them, right, that would impact it going forward, up or down. And right now, past '21, it's -- those are all macro levels that we talked about that could impact the business or could impact all of our businesses, honestly. So what we have right now is good visibility through that '21 period. And we feel like the U.S. production over a long-term period of time, there are things that are going to come back. We've already seen a nice bounce back on pricing. One thing that people don't necessarily know is when we do pipelines, we're doing both oil and/or natural gas, and we kind of made that point in our call, we said that only 6% of what we built in the last 3 years was oil in terms of our pipelines. So the majority was natural gas, right? And we think natural gas, again, as a byproduct, there are certainly differentials and opportunities there. And the combined element, I think, is going to give us some opportunity going forward. I guess the last thing I would say is, one thing we have noted over time, and if you go back to 2015, you'll see it in 2015, there was a big disruption on commodity price with significant reductions in price of oil and drops. And you look back and you look at our business and our business really wasn't negatively impacted. And in part, one of the things that we see as a little bit of a byproduct is when commodity prices are challenged, there is -- when you move any commodity price, whether it be truck or rail, that is the most expensive, most dangerous way of moving product. And in periods of time where the commodity price is high, sometimes it makes sense to do that on a short-term basis because it's only a small percentage of -- the transportation cost is a small variable piece of your overall commodity price. As commodity prices are more challenged, assuming that production is there, there is an impetus to try to get that into lower-cost pipelines over time. And we saw that happen in '15 and '16.

Coming up to the end here, but I wanted to give you the last word on communications. And maybe we can just frame it this way is it seems like a lot of good things are coming together right now from a variety of angles on this business. I'll just ask it this way. Do you think the stars are finally aligning on the business, it could really drive some really accelerated growth over the next 12 to 18 months?

Yes. There's no question, listen, it's -- we're very excited about the telecommunications space. I think it's a great time to be in this business there from our perspective, when you look at it, I think when you look at what 5G is, what's -- I think what's important to think about it is that the 5G build out is going to be a much larger, more complex, costlier build out than 2G to 3G or 3G to 4G because it's not simply going to be based on towers, which is a significant amount of work, but it's also based on a combination of towers as a hub and small cells as a spoke. And that new network that's going to be built over time, which is going to take multiple years, is meant to be dramatically faster. And handle is dramatically a much higher level of throughput than what we have today. So when you take a step back and you say, well, why? Why would that -- why is that investment required or why is it appropriate? It's really because as our customers and our carriers have said, they really look at 5G as a transformational use of the wireless network. It's not about another handheld or tablet. It's not about downloading the video on your phone faster. Those are byproducts, right? But it's really about providing the network capacity and speed that will allow for significant transformation of how we use a network today. And what I mean by that is Internet of Things, smart cities, robotics, drones, telematics, autonomous vehicles. With those utilizations, with the 5G infrastructure that's going to be built, as that develops, that will create new and different sources of revenue for our customers, right? So I think 5G is viewed as being a growth capital spend, and albeit all capital is fungible, right? But when you're looking at capital dollars, if you have the ability to either do maintenance capital or growth capital, people choose growth capital when you can. That's where we put ourselves in the 5G. And ultimately, right, when you look at what drives what we do, what we do is based on throughput in the network. And as it stands today, pre-5G, there's a $1 billion-plus business that we have that's nothing more than adding capacity every year to the existing wireless network we're trying to keep up with today's level of usage. I tell people, if you go back to 2007 and you think about what we were doing with Motorola Razr phones, and then the iPhone was introduced and you compare that to what we're doing today on the wireless network, it's dramatically different, right? It feels like ages ago, when you go back to that -- those days. I would be venturing to bet that if we look forward to '15, we'll be saying the same thing about today as I'm saying right now about 2007, which is the network usage is going to be very different. The use case is going to be different. This is being built in a way to allow for that and to generate a new stream of revenue. And I think over time, right, as that capacity continues to grow and those users continues to grow with those use cases, it ends up driving more and more capital for what we do, which is infrastructure support. So from a perspective of looking at the telecom industry, we think it's a fabulous time to be in that space. We're looking forward to significant growth in this over the next several years. And we're very excited about the prospects and what this brings to MasTec as an opportunity to help build this evolution.

Terrific. Well, we'll leave it there. George, Marc, thank you so much for your time today and your insights. And thanks, everybody, for dialing in. Have a good day.

Bye. Thank you.