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

All right. Great. Thanks, everyone, for joining us. My name is Adam Seiden, I'm the U.S. machinery and construction analyst at Barclays. We're pleased to have with us at this session here at the Americas Select Conference, MasTec. So joining us from MasTec is Chief Executive Officer, Jose Mas; and George Pita, from the Chief Financial Officer position; as well as Marc Lewis from Investor Relations. So for folks that may be new on the line, we'll certainly pass it off to Jose just for a couple of quick introductory comments, and then move into a bit of Q&A. If you do have any questions, please feel free to e-mail me at [email protected], and I'm certainly happy to ask questions to the MasTec team on your behalf. So with that, Jose, thanks again for joining us at the conference. We truly appreciate your support, and look forward to hearing from you.

Yes. So thank you, Adam. Thank you for having us here today. We're pretty excited to be here. These are exciting days for MasTec. For those of you that aren't familiar with MasTec, we are an infrastructure construction company, really specializing in 2 areas. One is what we would call our Communications segments and business and the other's on the Energy side. So within Communications, our 2 primary businesses are the build-out of networks, right? So we do both wireline and wireless networks. So on the wireline side, we work for most of the existing communications companies building out their infrastructure, building out their fiber plant and facilities, building out copper, coax, whatever it may be, the manhole systems, conduit systems, the aerial feeds, all the way into fulfillment in people's homes, right? So we install things like DIRECTV. We have a security installation business. So really focused on that side. And then on the wireless side, we feel we're probably the largest builder of wireless infrastructure in the country. On behalf of the carriers, we build out their wireless network. So whether it involves building a whole tower or doing a lot of work on the towers, we're the ones that put up the antennas, run all the cabling, maintain the networks, build the base stations, manage the base stations, And then we've got a pretty large optimization and integration team that does the back end. So all the way from front-end design through construction, through integration and optimization, we're involved on the wireless side of the business. On the Energy side, we focus on a couple of different areas. We've got an oil and gas pipeline business, predominantly gas, where we work both from shale-related activity all the way into the distribution system. So we've got a large distribution footprint where we work for the gas distribution companies and cities, expanding their networks, fixing their networks, maintaining them. Then we've got a heavy transmission group that builds high-voltage transmission and substations across the country. We recently acquired a company called INTREN to really focus on the union distribution side of our business. So they are a large union distribution player. We have a nonunion distribution piece of our electrical business that happens to fall into our Communications business. And then finally, we've got a large clean energy and infrastructure business, where it's predominantly on the generation side. So we do things like wind, solar and biomass. And then we've got an industrial business that does everything from civil construction, roads and bridges, to a little bit of industrial vertical construction, like metal buildings and things for like ports or airports or big industrial plants. We've been blessed that we -- my father started the predecessor company to this business. I had the opportunity to become CEO in 2007. At the time, we were under -- just under $1 billion, about a $900 million business. This year, we'll be well over $8 billion in revenues. Earnings have significantly expanded over the same time frame. So we've got a great run and I think more importantly and more exciting is the fact that the businesses that we serve today offer us tremendous opportunities for future growth, just about in every one of those businesses that I mentioned. The macro trends in those businesses are very positive. There's a lot of dollar flow into those businesses. There's a lot of plant expansion into those businesses. And we happen to be right in the middle of it and a huge beneficiary of it. So very exciting time to be here. And I look forward to your questions, Adam.

Great. Thanks, Jose, for the overview there. So maybe to start off, in the -- to start off, 2021, the company has been very active in the M&A market already acquiring several assets. So the INTREN assets certainly seems like a good asset, and you talked a little bit about what it does for you guys on the distribution side of the business and will -- how -- and it certainly adds a nice amount of revenues to the transmission segment. So I guess the question, though, is that with your balance sheet, where it sits today, are bolt-ons like we've seen earlier in the year? Is that your preferred path? Or are you -- is the company aiming for something more sizable? And if so, what -- are there certain segments where you'd feel more comfortable for doing a larger deal versus bolt-ons?

Look, we've talked probably over the course of the last 6 to 9 months about our acquisition strategy. We talked about it becoming much more active. I'd say 2020 was a very active year in terms of seeing what opportunities were out there, having discussions with people. We really didn't close much in '20. It was an active year relative to the activity levels, but nothing closed. So we started off '21 with a lot of deals that we have been working on for a long time. For example, INTREN is the deal that we probably started working on over a year ago. So look, we've made -- our bread and butter is the bolt-on, anything from $50 million to $200 million business. There's a lot of those. There's a lot that we're working on. I would venture to say that the expectation should be that MasTec is going to close more deals in 2021, probably a handful of them. Are there opportunities the size of INTREN or even bigger than the size of INTREN? The answer is yes, right? So it's -- again, it's very active. We're all about value, right? So at the end of the day, it's -- purchase price is important. And what we think we can do with those companies post acquisitions is really important. So we're looking to find the right mix between value and opportunity. Again, the businesses that we're in afford us tremendous opportunities. We're going to organically grow our business significantly, and we're going to manage to what those opportunities are to the -- if there's an opportunity to do something on the M&A side that helps us get there faster, that really helps us service our customers and either have a better revenue profile or a better margin profile are the things that we can do to fundamentally improve the businesses that we're buying, that's what we're looking for. Even in INTREN, which is a sizable deal. There are things that we think we're going to be able to do together that are going to benefit those sites, right? So we do think we can bring some margin expansion opportunities to INTREN. We think INTREN brought a great customer subbase to us that we typically hadn't served, at which we'll try to cross-sell, right? So we're going to try to sell them generation construction, right? So whether it's renewables or something else, we're going to be in front of them as a trusted provider on their distribution system to sell them on other services, be it transmission, substation or generation. That's very exciting, right? Those are things that we probably could not have solely done organically. For example, one of the other deals that we announced is Byers Engineering. Byers is a very well-known company that was started in the '70s, all wireline engineering. So when you look at the -- what's happening on the wireline side of our communications business right now and the growth and what's happened, engineering is going to be a huge clog on the wheel. And to be able to have that resource in-house and then to do business differently, right? One of the things that we're really going to try to do with this acquisition isn't just go out and procure engineering services and wait for the construction bids and then bid on the construction. We're actually trying to change the model and do a lot more turnkey services. So where we go to our customers and we say, look, we have the resources to be able to do this all in-house for you from start to finish. A lot less touch points, a lot less people to have to manage, a lot of less people have to blame if something goes wrong, right? So we think that that's going to sell really well. So we're trying to make acquisitions that make sense on their own but truly have something that they can offer much beyond just the deal dynamics or what a projected P&L may look like. But at the end of the day, how do we fundamentally change what their service offering is and the service that we're providing to our customers to really make it a true value-add for MasTec in the view of our customers, right? How do we add value to our customers, how do we get them to do business differently, how do we make them think outside the box. And I think all of those things will ultimately help our business and help both our growth and our margin profile over time.

Got it. So 2 follow-ups to that then, I guess. One would be your -- what would be the -- so the value proposition that you guys would bring to the table, having things more in-house, I mean is that something that gets recognized more in terms of a large revenue base pool that you could play for? Or is that margin and the profitability opportunity that you could -- that you guys would then be able to realize? And then the second somewhat unrelated question is on some of these deals that have been closing as well within the pipeline for the rest of 2021, how much is capital gains tax? The threat -- the potential of higher capital gains taxes in the rest of the year, how much is that a motivating factor for some folks out there?

Yes. Look, so on the in-house versus outsourced model and what we're doing for customers, typically, all contractors, right, they do a portion of the work in-house. They have relationships with contractors that help them, right, through the peaks and valleys of the business. That's important. I feel like we're entering a really interesting time in all of our businesses, quite frankly, as it relates to labor, right? Labor has been really tight. I think some of it has to do with unemployment benefits in the U.S. and what's happened, some of it doesn't, right? Some of it's going to be -- labor is going to be more challenging as time goes on. So to the extent that you control your variables, I think it's going to be a huge competitive differentiator in the coming years. It's probably not as big of an issue today as I think it will be in 2022 and 2023. And our customers know that, right? And that has to be part of what we're selling to our customer and the value that we're bringing to our customers to be able to say, look, we have these resources in-house. We're building our own people to be able to execute on your projects. It should give you certainty that your projects are going to be completed on time and on budget. And that holds weight, right? And it may not hold weight for everybody, but when you've got a company the size of MasTec with 20,000 people across the country, and we can bring those resources to bear for our customers, it really differentiates us. And I think that in today's environment, with the concerns about labor, with the concerns about the escalating cost of labor, for customers to have the most certainty that they possibly can on their projects, which doesn't mean we're guaranteeing rates, right? All it means is we're guaranteeing the availability of the people. The rates may change but having the availability of people, where others may not, right? People -- I'm convinced that we're an employer of choice. I'm convinced that people come to MasTec to build a career not for a job. We offer great career tracks for our people, which I think is really important in the business that we're in. I think all of that differentiates us, and I think it makes us unique and different. Going back, which is part of the reason M&A is important, right, because you build your employee base, you build your skill sets, you build your asset base, and that just gives you the opportunity to give more certainty to your customers to execute and excel. So on the M&A side and what may be in sellers' minds, do I think the capital gains -- the potential capital gains tax treatment changes will have an impact on sellers? I mean, how could it not, right? Like we don't know, right? We don't know what's going to happen. We don't know if capital gains taxes are going to be increased. I think it's on everybody's minds. I think if you're even contemplating selling, you have to consider the timing, right, because it's a massive difference if you can get something done in December than you do in January. Do I think that's -- I think -- I don't know if that's the sole reason people have been doing it to date, although it's definitely a driver, and it's a value driver, right? So to some extent, I think that you've got to be disciplined on what you're going to do throughout the year because there's going to be a point in time where your value proposition of being able to close something in 2021 is going to be a huge differentiator than if somebody has to start over and try to sell their business in 2022. With all that said, I think we're going to see a huge run in the second half of the year if we do get any certainty around capital gains, a further group of people that will contemplate doing something because of purely the capital gains. So I think there are a number that are already in that and thinking about that. But as the year goes on, if there's any certainty or clarity on that, I think we're going to see a massive increase in the number of people that are considering doing something. And you got to be ready to act, right? As a company, I think one of the things that we've talked about is If we do get in a short cycle, where there happens to be a lot of short-term opportunities, where you can pick up something of value because it's going to be a big difference in price on December 31 versus January 1, how do we put ourselves in a position to be able to close those and execute those on a timely basis to take advantage of that.

Got it. And on that, maybe for George in -- on leverage, where you guys feel comfortable sitting. Whether it's for a short time and then growing into that leverage number with further accretion. But is it around that 2.5x? Or how should we be thinking about for a target?

Well, I think Jose and I might answer this a little differently. Look, we're blessed in that. We generate significant cash flow and free cash flow on an annual basis. I think as our business transitions, you'll see that profile improve even further as oil and gas becomes a smaller component of our overall business. Our free cash flow profile will further strengthen. And we've done, I think, a reasonably good job of managing our balance sheet in both uptimes in growth -- periods of growth as well as periods of challenge. We're generating significant cash. We gave some color as far as where we thought we'd end the year, absent additional M&A that would be very comfortably levered by the end of the -- by the end of 2021. We know we're going to use some capital here in the second quarter, but it's far below those numbers you mentioned. I think historically, we've talked about 1.5x as we kind of sustained target. Maybe you step on that periodically for a short period of time if you have a strategic acquisition or something that requires it. But somewhere in that, I'd say that 1.5x, Jose might go a little higher and go 2, but that range is certainly -- we've been under that period of 1.5 for a long period of time. And at this point, we kind of operate into that scenario.

Look, what George and I would both agree on is we have a ton of space and a ton of availability to do things if we want. So we're not concerned about that at all. I think -- and for the right opportunity, it almost doesn't matter, right, because you're looking at things on a pro forma basis. And so the reality is we're blessed to have a balance sheet that gives us tremendous flexibility on doing just about any size deal we'd like to do if it made sense. And I think what we've shown and demonstrated over time is we're disciplined buyers. We don't chase things. We would be perfectly happy if we didn't close anything else in 2021. I don't think it would dramatically change the business outlook for us. So I think anything that we do from this point on is really what we think is additive to the business and potentially improves our outlook over the years to come, which I think is important. So we don't feel compelled to do anything. And I don't know that you're always in that opportunity as a business, but that's where we sit today. So anything that we do will be the right decision and I think will be additive to the commentary we've already made on out years.

And Adam, before I forget, Marc just pinged me and reminded me that we didn't address that we're being webcast today. And we have Investor Relations deck on our website, and please make note of the forward-looking statements on our deck. So Marc, you're happy? Good. Thank you.

I see a nod of approval from Marc. All right. So that's fair. So then -- and I think, Jose, you certainly -- you spoke about the businesses and communications side and oil and gas right at the onset. And then, George, I think you just mentioned as far as oil and gas becoming a smaller part of the business, part of that, I believe, is as the other businesses just grow, that just naturally makes also oil and gas smaller. So while we spent a lot of time on the additions to the company, just curious, how does pipeline fit into the long-term vision of where you want to take MasTec?

Look, it's a business that has been challenged over the course of last year. I think going back to 2019, it was a fantastic business. It was a business that had an enormous amount of projects in queue that we expected to see in 2021, '22, '23. Quite frankly, we had great visibility into outer years. And then COVID hit and obviously, oil prices and demand got impacted both oil and gas, right? So we saw a significant run from what was the oil and gas business from a valuation perspective across the board to all of our customers. On top of that, you had the ESG matters that made -- that probably exasperated the issue during that time. And I think for all those reasons, we took a very conservative view as to what our oil and gas business should and will look like for a period of time. With all that said, and we kind of put the $1.5 billion to $2 billion range out. I think it was end of the quarter of '20. I -- we're still standing by that. We think that's the right way to think about our business as we're kind of planning out and mapping out our strategy over time. With that said, right, obviously, oil prices have rebounded to levels that nobody would have ever imagined a year ago, right? I think there's a sentiment change in the business where our customers have been very focused on repaying debt and improving their balance sheets. It's happening, right? So there will be a point in time where their balance sheets will be in a position where they can reinvest in their business. Some of them are probably feeling a lot closer to that than any of us could ever have imagined. So I do think the sentiment in the business is changing, and I think there will be a period again of growth in that business and a period of opportunity. So we're not soured on the long-term perspective on the business. I think when you see things like what happened in Texas, there was a train derailment yesterday in -- I believe in Iowa, that it just -- it further shows and strengthens the fact that pipelines are a safe way for us to move commodities that for a long period of time, we're going to depend on as a nation, right? I think you've seen statements from the administration here in the last week. I think Peter -- I always pronounce that...

[ Peter Judge ].

Yes. So he made a great comment yesterday on the safety of pipelines and the importance of pipelines in the country. So not that that's going to change anything tomorrow. But I do think it's important, right, because the sentiment has been really, really negative. I think renewables are going to continue to grow. I think there's a huge push to lowering our carbon footprint. I think all of that is critically important, and we play a key role in that. But I do think there's a point in time where you have to really focus on diversity of generation assets, the diversity of how we create power in this country. And I think there's going to be things that require pipeline over a long period of time. So whether it's gas and I think gas is a cleaner form of energy than what we traditionally use, which I think is important to mention. But I also think hydrogen is coming, right? And hydrogen is going to move on pipelines, too. And we're installing one of the first Mitsubishi engines that's dual sourced that burns LNG, but will ultimately over time burn hydrogen. So we're seeing projects today that are going to have pipeline activity. Maybe it's gas related. Maybe in the future, it's something different. Maybe we see huge hydrogen projects. So I don't think our business is going anywhere. I don't think -- I definitely don't think it's something that we're going to look to divest. I think it's going to be part of what helps this country become energy diverse and, by the way, cleaner, right, and have a lower carbon footprint. So it's an important part of our business that we'll have a cycle where it will be down. But over time, I think it has tremendous growth opportunities. And I'd like to tell people all the time, right, that it's -- we get that it's hard to invest in the oil and gas industry today. But through MasTec, you got a great option on the business, right? So we're highly exposed to these other areas of the market that are growing. And we're not getting a lot of value for our oil and gas business anyway, but it's there. And if it does come back and things do change, you have great option value at MasTec that you probably can't get somewhere else.

Yes. That's very clear. Maybe we'll come back to pipeline a little bit here. I mean, I think you already talked a little bit about where commodity prices have gone and its level there. But I wanted to make sure we touch on Comms. So -- and there was -- just yesterday, there was the news around AT&T and Discovery. So what -- it's obviously early days and the actual spin isn't necessarily even what you guys are working with. But what type of impact, if any, do you think that the spin could have on the legacy business as far as their focus on fiber or some of the wireless spending that we've been waiting for?

I got to tell you, we were pretty excited when we read the news yesterday. I think what you're seeing is AT&T saying that they're going to go back to their roots and truly be a telecom provider and compete with the likes of a Verizon or T-Mobile on the merits of that business. I think it says -- I think it speaks volumes to the shift in the perspective of what the communications industry can deliver. I think they're great businesses, right? I think all of us in our daily lives are addicted to information and addicted to being connected. And that's not a bad thing. But I think we're all trying to find ways which those connections improve, not just for those of us that have it, but for those that don't have it as well or don't have as much access as others do. I think it has changed the world, and it's going to continue to change the world. And I think what you're seeing is the realization by all of these companies that it's a hell of a business, right? That at the end of the day, having broadband connectivity and the ability to connect people is going to be a big driver of revenue and earnings for somebody. And I think what we're seeing is AT&T going back to that and saying, we're going to make a hell of a business just doing that. It's going to require investment, right? They're highly capital-intensive businesses, but they're high margin, highly profitable businesses that over time have tremendous new sources of revenue growth. I think 5G, obviously, we all wish it would have come sooner, but it's coming, and I think it will change the way we all live our lives yet again. And there will be tremendous revenue opportunities that are derived on those that are driving the technology behind it and the carriers that own it, that will significantly improve their business model. So look, I think it's good. I think AT&T had become a really big company, and lots of challenges for the dollars within AT&T. So I think this makes it very clear that they're going to have a strategy to invest in their networks and have a pure play where they're trying to grow a business that happens to impact us in a pretty big way.

Got it. And you brought up some of the other carriers. And T-Mobile, I believe, was on your top 10 customer list this past quarter, [ 2% ] or so...

For the first time. So we're very excited about that.

That is good.

61% year-over-year growth, if I may add.

On what they...

No, actually that was a different customer. 400% growth year-over-year. 400% growth.

There you go. That's right. So -- but the point is, it's -- clearly, the business is getting more diverse. You have more relationships and so forth. You're seeing folks spend. But -- so by year-end 2021, is it reasonable that both DISH and T-Mobile could be on that top 10 list? And then more so, just any 1 of those 2 carriers, do you see -- do you envision a future where they could maybe overtake where Verizon is, where that makes up that part of your portfolio?

Look, I think you bring up a great point. When we look at our Communications business in the first quarter, we were challenged, right? We had historically our 2 biggest customers, AT&T and Verizon, down almost 35% year-over-year. And yet, we had tremendous growth from others, right? So we were up 400% with T-Mobile. We were up 61% with Comcast. So what we like about the story is we know that AT&T and Verizon were momentary glitches, right? They were waiting for the spectrum auctions to complete in December. It impacted their workload. We know that's going to change, especially with AT&T, especially with these announcements, right? So we know that, that business is going to come back to historical levels, if not a lot better, right, in a pure deployment cycle. So we have -- it actually plays well to the fact that we're taking this time to really grow relationships with other customers that we think can be meaningful relationships for us for a long time. Do I think DISH could be -- DISH has been slower out of the gate, right? They're a new entrant into the space. I think DISH could be a very meaningful customer over time. I don't know if it's by 2021, but I definitely think they have the potential and the opportunity to be a top 10 customer over the cycle because you're going to have to obviously spend a lot of money. And I think we're a key provider that can help them do that, and they've been a good customer and a good relationship that we've been able to enjoy over the last couple of years as they've gotten into the wireless business. I think Verizon is going to continue to be an opportunity for us, right? I think we did some really good things through the initial FiOS builds and that's -- or one fiber builds, and that's going to continue with a lot of additional opportunities. We're going to keep growing our AT&T business. Our T-Mobile business, obviously, has grown really nicely, and I think there's going to be tremendous opportunities with them as they continue to grow. So our whole idea has been how do we diversify the business, how do we get some of the second and third tier players to the size of the bigger guys that we've dealt with in the past? And then what we haven't talked about is you have this whole new customer dynamic that's going to come from the RDOF and the Rural America Fund and potentially any other infrastructure money that comes into broadband, right? So I think you're going to see a further diversification of our Communications customers, which I think ultimately is good for the business. I think you're going to see a lot of strength from the top end of that customer base, some of those bigger customers that are going to continue to drive our business. So I mean, it's -- and I know that there's some concern as to when it comes and how do we get there faster. But the truth is that the dynamics and the win that we have at our sales relative to what's going to happen in our Communications business, we couldn't be more bullish about. we couldn't be more excited about. And we think it's going to have meaningful impact to MasTec in the years to come.

So on that last point there, so how do you get comfortable around the timing and the size of the opportunity? I think simplistically, we could say the size is large and the timing is it's going to come. So -- but as far...

Here you go, Adam. Thank you.

But like as far as trying to get little precision or more so from your guys' seats, managing to that, when you hear that there's something so large and has a little bit more uncertainty around when it comes, you know what's going to come, but when. Just how do you guys have to handle that internally and how you're preparing the business for that and to get comfort around that?

Look, it's a challenge, right? And I think It's -- we've tried to manage that very conservatively over time. I think we've done a good job at forecasting what revenue is going to look like and not allowing the story to get ahead of itself. So I think we've done a good job with that, right? And I think as we think about it, right, if anything, we're hoping that we're conservative in how we think about it rather than being aggressive. I do think 2022 is going to be a crazy year because I think all of this is going to be going on, right? You're going to have all the carriers spending, you're going to have all these new broadband entrants spending. Does that gear up? I still think Q2 is going to be challenged relative to what Verizon and AT&T is going to look like what we've said, right? We -- I think we -- exactly what we said we think is going to happen in Q2 as I think what's going to happen in Q2. I don't think we're going to have the opportunity to have significant beats in Q2 on the Communications side because it's not ripe yet, right? But when I -- But I think we start seeing it in Q3, and then I think we see it more in Q4, right? If you look at our second half projections in our Communication business, it's a sizable increase from the first half. And I think you'll continue to see that kind of growth into the first half of 2022. So I think we're on the precipice and the cusp of really seeing the change. And we're seeing it because we know it's being designed. We know what's in engineering. We know what's in permitting. We know what's expected to come out. So it's there, right? We tangibly see it. The question is, could there be -- a month makes a big difference, right? Because you're going from one quarter to the other. So again, I think we've conservatively guided the second half of the year to take into account anything that may or may not happen. But I think '22 is going to be a crazy year. I think it accelerates again in '23. And then I think it's going to maintain for a long time. So we see the light at the end of the tunnel. We understand that people want to see the growth faster, but I truly believe it's coming, and we're going to be able to demonstrate that in short order, and I think that's important.

Yes. So you just gave a lot of helpful detail there as far as that runway. So maybe just to put a fine point on second half, so what you're seeing -- so when we think of the second half ramp in Comms, is that -- how much of that is comp-based? Comms, year-on-year Comms versus you guys seen the engineering and certain -- in the other areas, all coming together and just getting ready to be out there to be spent. So how much is it is true visibility versus just some of the comps like that?

Yes. Look, I mean -- and I think if you look at comps, right, you also look at trending comps, right? So you look at what's happened from Q1 to Q2 to Q2 to Q3 and Q3 to Q4, and are those levels of growth attainable? And more importantly, are they repeatable, right? So are you going to continue to grow at kind of that same metric because that's how we manage the business, right? At this point, what we did in Q3 of 2020 is somewhat irrelevant because we're sitting here in Q2 of '21, right? So now it's more about how are we manning based on our existing resource pool or where we'll be in Q3 or where we'll be in Q4. We can use historical data to kind of gauge what the normal growth or seasonal pattern is in the business, but it doesn't really mean a lot as I'm sitting here today. So what we're mapping now is what's our crew count, what's our employee count going to be going into the second half of the year. How do we see that ramp, how do we manage that ramp. We do that based on the workload that we see in front of us. So again, I think we've got better visibility to understand what's coming, what's in front of us, how do we execute it, how do we manage it. And then more importantly, what's on the back end of that, right? So leaving Q3, leaving Q4, going into Q1 of next year, going into Q2 of next year, what does that order look like, what does that flow look like, how do we have to increase staffing yet again to meet those demands, right? Going into '21, we were in a position where we didn't have to increase stocking because we knew work was actually going to dip in a lot of these. The exact opposite is going to happen in '22. I would say that the comps in the first half of '21 are going to be really low compared to what we're going to be able to deliver in the first half of '22. It doesn't really have a lot to do with '21. It has to do more about the trend rate as we're leaving '21. So we're tracking all of that. We're managing to that. And again, I think we feel really good about our ability to hit the profile that we've laid out for the balance of 2021.

Got it. Last one on Comms and I promise, I'll switch over here. So on thinking about once a network is built, how much maintenance on existing telecom networks do you do behind the scene? So even just thinking like 4G, how much work would you -- do you have that's just going to be on maintaining that existing network versus then obviously getting 5G built out here sort of thing? Just trying to think of what's the base test in there?

Adam, it's a great question and it's a super important question and one that we don't talk enough about. If you think about what we've done in the last 2 or 3 years, it's all been maintenance related to LTE or 4G, right? So that's our bread and butter. We haven't really been on massive deployments in the last X number of years. The last time we were on any significant deployment was on the ramp of 4G, where we were, on a pro forma basis, significantly bigger than we are today in that business. So we know there's going to be a significant spike in deployment of 5G, no question. But when you think about what 5G does, right, 5G is the densification of the network. So where historically, the networks were predominantly macrocell-based. Now they're going to have millions of touch points. It's going to be street lights and telephone poles and billboards, and you're going to have all these small cells and in-building networks that are all tied to the carrier's network. So the amount of maintenance requirement in these systems is going to grow exponentially from what it historically was, which is why 1.5 years ago, we made significant investments into integration and optimization because as we think about these networks over a long period of time, the care that's going to be needed to provide is going to dwarf the levels that we've had in the past. So if we've been able to maintain our business over the course of the last few years on a maintenance cycle, of a network that was predominantly macro-based, imagine how big our maintenance business is going to be when we're managing a network, we're helping manage a network that's got millions of touch points, exponentially greater than what it is today and the opportunities on the maintenance side that, that creates. So while I'm super excited about the deployment and what that may mean for MasTec over the next 3 to 5 years, the reality is we've got to start thinking about how do we position ourselves to be exponentially bigger on the back end of this than what we've traditionally been, and that opportunity absolutely exists for us.

Great. So maybe shifting a bit to clean energy. And you guys have laid out a long-term segment revenue target, but can you just talk about how -- talk a bit about the mix of the business, how it's historically been versus how you see that playing out in '21 and then really out over the next couple of years? And then as far as scaling up to hit that long-term number, is that purely from an organic standpoint? Or are you inorganic as well? Should we be thinking that?

Yes. So look, we did about $1 billion of wind last year. We did about $200 million of solar last year. The solar business, we've said, is going to double this year. The wind business is not -- it's more of a stable business. Wind is going to require -- it's -- wind is going to go to the extent of what they put in the infrastructure. So I think wind is going to maintain itself over a long period of time at very good levels. But for there to be significant growth in wind again, there's going to have to be some government rollout of something that moves. So we're not anticipating significant growth in our wind business, right? We're kind of anticipating a flattish business with significant growth across the rest of the portfolio. So our solar business will double in '21. We think it will double again in '22, quite frankly, can double again in '23. So we're looking at a solar business that will ultimately probably dwarf our wind business, right? So we think it will get to the size of wind potentially as early as '22. It might even get to double the size of what our wind business was last year. In the next few years, we think, ultimately, solar could be a $2 billion opportunity related to wind at $1 billion opportunity, right? We look at what's happening on the biomass side of the business. We think that could ultimately reach what the size of our wind business is. And then on the industrial side, we're running about $600 million today in that business on a pro forma basis. That's going to continue to grow, too, right, because it's -- that's a huge -- that's going to be massively impacted by what happens in the infrastructure build, right? So when I look out, right, we've got potentially $1 billion wind business or somewhere in that range. We've got a $2 billion -- potentially a $2 billion solar business; a $1 billion biomass building business; $1 billion civil and infrastructure business, right? So you're looking at a potentially $5 billion clean energy business over time. That today is $2.1 billion. Last year was $1.5 billion. I think we've given early indications that we think that business will be somewhere -- we should grow another 30%, 35% next year. So we feel all of that is attainable, organically over time, right? And that's probably a much longer outlook to the extent that we did acquisitions, we think we could accelerate the time line as to when we can reach some of those objectives. So that's what we're looking at, right? Is -- does an acquisition make sense relative to the timing and the subset of the opportunity? I don't want to -- if I think I have a -- just to use a number, a $2 billion solar opportunity over time, I don't want to go buy a business that gets me to $2 billion, and then I can't grow it anymore, right? So the question is, if I could buy a business tomorrow that would give me the $2 billion, could I then go to $4 billion, right? And that's what would make sense for me to do it. I'm using hypothetical numbers, but that's how we're thinking about our acquisition strategy and how do we buy something that ultimately gives us the ability to grow that. Not eat into the growth that we could have generated, but rather how does it help us accelerate and further grow the business beyond where we think we could have done it ourselves.

Got it. And with the revenue outlook, I mean, you laid out some pretty big numbers there. If you...

I did. I can see George like grabbing his glasses and stuff to make sure -- but look, I think that's the opportunity subset, right? I don't -- obviously, we have to execute. We have to do it and -- but it truly is. It's -- there's remarkable growth opportunities in that business today for us.

Well, to add a little color to that. I mean, we've talked about studies that talk about just not even fulfilling the buying plan but getting 90% of the way there. And in order to get there, you got to generate over 70 gigawatts of renewable power in the next 15 years on an annual basis. And that's roughly 3x the level of activity that we've had over the last couple of years. So there's a huge opportunity here.

Yes. And I think -- I mean, I can't understand -- 3x the amount of renewable generation on an annual basis and what we've experienced in the last couple of years, that's insane. I mean that truly is if those numbers are anywhere near being realistic, the amount of dollars and efforts, quite frankly, if those numbers are right, which is what's being reported, my numbers are low.

There you go. And then maybe actually -- yes. So on -- you laid out again a pretty good revenue outlook there, really good revenue outlook. So then it also comes down to execution. And as you're taking businesses that were smaller and trying to -- and scaling them up to be larger, I mean, what systems or what do you put in place so that when you're going to execute on some of these projects, it comes out with what you think is a fair margin for that business?

Yes. Look, it's a challenge, right? And it's something that we're experiencing. We -- as we grow some of these businesses, and we're doing it organically, which is the most expensive way to do it, I think over time, it's probably the least expensive way to do it. But in the short term, it's hard, right? When you put a new crew to do something, the margin profile on that first job obviously isn't very good. As they get to second job, it's better. As they get to third job, it's really good, right? So that's what we're doing. We're building our infrastructure. And by -- and the good thing about it is nobody has done this before, right? So the solar business is so new that there's been such a few players doing it that the people aren't even available. So the only way to grow is to basically do it organically and through in-sourcing, right? So this is our story, right? Where pieces of our business performed really well, make good margins. Those other pieces that are newer are dragging down the margins of the overall group, which is why margins have trailed in this business. We were able to double our solar business, right, last year -- or actually create our solar business from scratch pretty much in 2020 and have a bunch of projects that we're starting with people that had never worked on it before. And by the way, we increased our margins in '20 versus '19, right? We look at '21, we're doubling that business. We're throwing a lot of dollars in assets at that business. And again, we think we're going to improve the margins of the profile because some of those are becoming -- some of those are getting more productive, some of those are becoming more fully utilized. So we're seeing a benefit from the earlier projects that we started while we're still starting a bunch of new projects. But I think it's the only way to manage that business today. I think today, it's all about building scale, driving as much as we can. And I think it's going to pay long-term dividends for a long time. I'm convinced that we can get that business to double-digit margins over time based on the profile of the projects that we're working on. So we're not worried about the long-term impact potential of the business. We see it like there are other people out there doing those margins today at scale. So we know what -- we think we know what we have to do to get there. We just got to get there, right? And in the meantime, we're going to try to take advantage of the opportunities in front of us as much as we can. And I think they're meaningful, right? I think if we could build this business to be the size and scale that I think, it ultimately starts rivaling with the size of MasTec was last year, right? And that's pretty amazing that we could have a segment that could be as big as almost the total company was a year or 2 ago. That's pretty exciting, quite frankly.

Yes. That's a high-class kind of problem, but a high-class thing to be talking about. So on transmission, I think you guys have laid out $1 billion goal in the segment. Obviously, now with INTREN a part of that, should we be thinking about that as $1 billion plus INTREN? Or does that help get you to where you want it to be for transmission?

No, we should be looking at it as a $1 billion plus INTREN. I think that, again, that's not a '22 goal, but I think it's definitely a goal, right? The business should do better in '22 than it did in '21 from a pure dollar perspective, right? Our transmission business should be $1.2 billion, $1.3 billion in '22, just based on what we've got today, right, the combination of those 2 and with some slight growth. So we hopefully do better than that. But I think the long-term opportunity there is to take that $1 billion profile that we laid out, layer on INTREN on top of it potentially there on some other opportunities. And we would expect that business to be more meaningful in size than we previously laid out over time.

All right. Well, great. Well, I think we're about out of time. Comprehensive as always. So thank you very much to MasTec for being with us today and certainly look forward to future conversations.

Adam, thanks for having us. Appreciate everybody participating.

Thanks again, guys.