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

All right. Well, we're really excited for this session here today. It's the Outlook for Green Capital Spending with Jose Mas, the CEO of MasTec; and Brian Singer, the Head of GS SUSTAIN, a familiar face to many of you as the former business unit leader for natural resources. Thank you both for being here to talk about a really important topic, which is the outlook for spending to ultimately decarbonize and enable the energy transition. Just to level set the conversation, Jose, maybe you give a little bit of background on MasTec for the audience. Many of us know you, but it'd be good for you to just walk through the bones of the business. And I'll ask Brian to do the same.

Sure. So again, Neil, thank you for having me today. Very happy to be here. For those of you that are not familiar with MasTec, MasTec is an infrastructure construction provider that really specializes in 2 areas. One is communications. And there, we do everything from building out the networks for the traditional carriers, the AT&Ts, the Verizons of the world, providing both telephony and Internet, video services at the home, including cable TV providers. And then we've got a large wireless operations where we support the wireless carriers build them out their network. So from finding their sites, to building their sites, to changing out the equipment on the sites. As you think about 5G, all of the small cell deployment and tower deployment work, that's a big chunk of what MasTec does on that side. And then about 10, 15 years ago, we got into the energy market in a pretty significant way. So today, it's the biggest piece of our business, and we're pretty much involved in the entire gamut from generation. And in generation, we're predominantly a renewables-based generation company. So we build wind, solar, biomass, advanced turbines, some other clean energy initiatives as well as some basic gas-fired work. We've got a very large transmission and distribution business where we take it from those generation sites and ultimately distribute it to homes and businesses, so people can have power. And then we've got an oil and gas pipeline business that -- where we've built a lot of the large and midsized oil and gas pipelines throughout the country. Obviously, that's a more challenged business today that we'll talk about with all of the opportunities there, including carbon capture and some of the newer technologies. We've got about 30,000 team members across the company. We've been in business for about 50 years, and again, traded on the New York Stock Exchange, Fortune 500 companies. So we've been blessed to be able to build a great company.

Great. Yes. And terrific success. There's a lot we would want to talk to you about, including your most recent acquisition. And Brian, the same question to you. Talk to us about GS SUSTAIN where you are the global head and taking on this new role. What are the capabilities and what are you focused on?

Yes. Thanks, Neil, and thanks, Fahad. And great to be on this panel here with Jose as well. That dovetails nicely into a lot of the work that our team has been doing. GS SUSTAIN has been around actually as part of our Global Investment Research division since, I think, 2006 or 2007. And really, the goal is to provide research and data tools, exploring how innovation, regulation and implementation of ESG topics will impact sustainable investing and broader capital flows as well. From a data offering perspective, we have environmental and social detailed scores for 7,000 companies globally, tools that help define revenue exposure to individual sustainable development goals and the EU taxonomy, which became a little bit more relevant to natural gas and nuclear overnight over earlier this week. We've got tools on ESG fund flows for what percent overweight, underweight or how well our owned companies are and then some new forward-looking estimates from analysts like yourselves on how green CapEx and green revenue mix is shifting. From a research perspective, we've written actively of late on the topic of green CapEx, what's needed to make net 0 infrastructure and clean water goals happen versus what's on track and how we see investment opportunities in equities across the supply chain, looking forward to discussing all that.

Thank you, both. Jose, let's start with you and take us into the room with your customers and your conversation with the customers. What is the sense of urgency from both private and public players to make investments to move towards net 0? And how does that manifest itself across the different pillars of your business, whether on the electric side, the oil and gas side, but even the telecommunications side?

Look, it's remarkable how times have changed in such a short period. I remember early 2020 and as we got into the beginning of this pandemic, how quickly the sentiment changed with oil and gas commodity pricing being impacted and the push towards ESG and the push towards all of our customers in terms of trying to reduce their emissions, get to net 0. What's been remarkable to me is the -- is really the push on the oil and gas side, right? Our oil and gas customers and the commitment that they've made within their business to find ways to reduce emissions to invest in renewables, to invest in pieces of their business to make them greener, it's been quite remarkable. Maybe some of it has been driven by the shareholder base and the demands of the shareholder, but they've really followed through with it. So between our historical customers, which are a lot of the utilities, a lot of the historical companies that were in the business, they were already actively investing in renewables, they were actively investing in their ESG programs. But to see the broad base of companies doing it today is a huge shift, and it's been quite remarkable, right? And everybody is looking to invest in the same areas, right, whether it's solar, wind, biomass, for some of the oil and gas guys and the advanced gas turbines that ultimately burn hydrogen. It's the carbon capture projects we're seeing throughout our oil and gas customers. It's just the broad base of intent, the broad base of investments that's happening has been quite remarkable. And I think several years ago, we made the -- we got into the renewable business in 2008 through the acquisition of a small business. We knew it wasn't a fad, but I don't think in our wildest dreams we could have expected 10, 12 years later for most of the world will be talking about renewable sources of energy being the dominant form of power generation. And I think we're ultimately going to get there. It's going to have a huge impact on the electrical grid, which I'm sure we're going to talk about. And we're making a lot of investments there, because we think that's really the next domino that needs to support that. But today, the focus from our customers, the commitment, the investment dollars that they're putting behind the development of these projects is quite remarkable.

Well, that's a great dovetail, Brian, to some of your work. In green CapEx before December, you highlighted about $3 trillion in green CapEx needed annually in this decade in order to achieve net goal specifically. Of the $3 trillion spending for the electric grid and renewables comprised about $1.7 trillion, if I remember, Brian. So can you talk about the largest drivers of that $1.7 trillion bucket? And where you see the greatest spending shortfalls today?

Yes, absolutely. So to kind of put our green CapEx mosaic into context, on an overall basis, so not incremental, I'll talk about the incremental, but on an overall basis, if we think about what's needed for decarbonization plus infrastructure plus clean water, we think we need about $6 trillion per year of investment this decade, up from about $3.2 trillion per year on average in 2016 to 2020. So that's an incremental $2.8 trillion or about 2.7% of global GDP. The decarbonization path to 2050 net 0 piece of that is about $1.8 trillion. So $1.8 million of the $2.8 trillion comes towards incremental net 0 investment that's needed. And then the bulk of the rest of it is towards infrastructure. I think one of the most important points when we think about the net 0 piece of it, in particular, is that this is not a "one technology solves the world issues" type situation, right? We can't entirely get to and decarbonize and get on a path to net 0 from solar alone, offshore wind alone, onshore wind alone. We need broader electrification. We need energy efficiency. We need carbon capture. We need biofuels, battery storage, hydrogen, et cetera. And certainly, in some of those investments, particularly in renewables have moved more quickly, but there's a broader supply chain in a lot of other products that are going to be needed here. We're coming off of a year or 1.5 years period in which 4 major global economies saw energy reliability issues, Texas, California, China and Europe. And we think it's going to lead to a greater focus on impact, and we think it's going to lead ESG investors to look more broadly across the supply chain to really help determine what is on track. If we think about that incremental $2.8 trillion that's needed, only about $0.9 trillion, we think, is actually on track from the private sector, publicly traded companies and private companies. We also, though, think that there's an incremental $1 trillion of spare capacity from publicly traded companies based on excess free cash flow and balance sheet capacity.

Thanks, Brian. I'm going to turn it over to Fahad to talk about transmission.

Thanks, Neil. So taking a deeper dive into electric transmission. Jose, with the acquisition of INTREN last year and then the H&M transaction, MasTec has meaningfully grown its presence in the T&D end market. With MasTec's growing scale, how is your project opportunity set and then the competitive landscape evolved over the past few years? And what competitive advantage does MasTec bring that allow the company to increase share and grow above the rate of overall T&D CapEx?

Sure. Thanks, Fahad. First of all, it's so exciting to hear Brian's comments, because it truly is -- we're living in a time that I think is going to have such a meaningful impact on all of us. And for those companies that are involved in this space, I think the opportunities are endless because of the sheer magnitude and size of everything that has to happen. And it dovetails into what we've been doing in distribution and transmission, right? A handful of years ago, we saw the utilities really start making significant investments in their grids, right? And whether it was driven by reliability, whether it was driven by hardening, you think about the East Coast and all the storm activity, if you think about the West Coast and all the fire activity, hardening has become a huge issue for every major utility company. When you think about renewable connectivity, which is still lagging in so many parts of this country, so if you're going to build wind and solar, you have to have the transmission lines to get it out or whatever other fuel source you want to build, usually, it's not close enough to where people live for it to make a meaningful difference, which means significant investments in the grid. When you think about electrical vehicles and if the projections for 2035 or anywhere near it, the way that, that's going to tax the existing distribution networks in cities and municipalities all over the country are going to require massive investments. So for us, it's really been about how do we get in front of that and how do we position MasTec to be a significant player in that and a beneficiary of that. And truly the way I think about it, those who have the resources will win, right? This is -- it's a difficult market. Those are hard jobs. Those aren't jobs that you can teach overnight. It takes years to train somebody to be proficient in those markets. So we've been organically growing as much as we can for a long time. But we're realizing that the amount of investment that's coming and the needs that exist are so large that we weren't going to be able to achieve them organically. So we made 2 very large acquisitions in 2021. The first was a company called INTREN. The second, we closed right at December 30, which was Henkels & McCoy, which is really, in our business, a household name, a company that's been around 100 years with an impeccable reputation. The beauty of that transaction is we picked up 5,000 new team members, right? We picked up 5,000 people that are proficient in a craft that we think we're going to be able to deploy better with higher utilization rates, have a big impact to the margins. But at the end of the day, just having the resources, having the scale. When we talk about what's MasTec's competitive advantage going forward, it's our ability to invest in equipment, it's our ability to invest in the tools that we need to execute. But more importantly, it's about our most important asset, which is our people, right? So it's about being able to have enough people to be able to go to our customers to convince them that we're the right partner for them to build whatever it is that they want to build, whether it's on the distribution or transmission side. And I think that's the biggest issue, right? It's how do we become people-centric companies in the service industries where labor is becoming such an issue, how does MasTec become the employer of choice across our industry? What are the things that we do internally to really make it feel like when people join our company, it's not about a job, but it's about building a career? And how do we truly invest in their own improvement, in their own -- getting them to be able to achieve different levels, getting the management training, getting them proficient on some of the weaknesses that they may have individually. And if we can do that as a business, we think that the stick rate with our team members is very high. And if you can build that loyalty, then you don't have as much movement. And if you have that, then you've got a great asset to go and sell customers on the ability for you to build projects on time, safely and on budget, which I think is really one of the most important things in that space today with the outsized growth that exists in that space.

Appreciate it, Jose. Makes a lot of sense. So moving back to you, Brian. In your green CapEx infrastructure report in October, you cited a Princeton University study that indicated the need for expanding U.S. transmission capacity by 75% by 2030 with roughly $500 billion of total transmission spending necessary to meet that goal. And then the study also recommended a 60% expansion of ultra-high voltage or UHV capacity this decade. So can you talk about the key reasons behind the spending need and then the degree to which we're underspending currently?

Absolutely. It's really a part demand and part geography. Let's think demand. We're really arguing for a lot more electrification, as from a decarbonization perspective, we reduced the dependence on traditional baseload sources of fossil fuel-driven power. And so if we think about the extent of the electrification of autos, homes and more, it's going to lead to an increase in overall electricity demand. And if at the same time we're reducing the generation capacity of the traditional fossil fuel fleet or its use of it, where are the best places for renewables and then what needs to happen to get that electricity to where the demand is. And that's where the transmission comes in from both the demand and geographic perspective. It's frankly one of the areas that I think is one of the bigger opportunities, but also one of the greater risks in that we've highlighted a number of sectors, and we featured about 4 of them as what we call Greenablers, Green Enablers. Sectors that are early in the supply chain with long lead time projects where if the investment doesn't happen now, we think we're facing supply chain issues or supply chain bottlenecks in the medium term. We think of electricity transmission as one of them. Copper aluminum as one, semiconductors and cybersecurity. And we actually think that there should be a lot more focus on whether the requisite amount of investment is happening today for all the reasons that I mentioned. And if we look at the mosaic of that $6 trillion and the number of technologies where electricity transmission is going to be needed in addition to those other Greenablers, it's a pretty high percentage. So we think it's very, very important. So what's keeping the investment from happening, and certainly interested in part in Jose's perspective on this, and this isn't to say that it isn't happening, it is, but what could make it even greater or what's restraining it from being even higher, it is in part because a lot of the times, the electricity transmission becomes part of the customer bill. And so regulators have to make a decision how much am I going to allow that bill to go up and how much should we be investing in the future versus just doing what's absolutely necessary right here right now. And certainly, that does have an impact on inflation and what percent of the wallet customers are going to have to pay for their electricity needs. But we think of this as both an opportunity and a risk of getting to what's actually needed to get -- to meet these and -- to meet and achieve these goals.

Yes, we can turn it over to Neil.

Jose...

Do you mind if I add something to Brian's commentary? I think it's fascinating, Brian. And I think that -- I think you're right. And one of the differences that I do see is we are seeing a lot more government commitment, right? So we're seeing it at least from a dollars perspective, them making large dollar commitments to the industry. It's probably a drop in the bucket relative to what's needed, but it is a source of funds that haven't historically been there that do for -- and depends on how it gets allocated, but it actually helps from the consumer side, right? Because I agree with you, right, the state utility commissions all over the country, their big concern is I can't pass all of this on to the customers. And the utilities aren't going to do it unless the customers pay for it. So at the end of the day, how does government intervene and at least help in that process to make some of that more available.

Yes.

Thanks, Jose. Just rounding out this topic around T&D, the H&M transaction just closed. In -- along perspective on why we you view this as a natural bolt-on into the business. The market has responded very well to the announcement of the deal. The one pushback we got was around EBITDA margins of that segment, which is half levels of what you enjoy at MasTec. So talk about your conviction level and the ability to get that up there? And what do you see that attracted you to this business?

Yes. First, it's a lot of what we've talked about, right? We're such believers in what's going to happen in the market that I truly believe having the resources and having the ability to do the work yourself and having the resources yourself, it makes a massive difference, right? So at the end of the day, I think the greatest thing that we picked up with the Henkels acquisition was 5,000 people, right? It's the most important part of that acquisition. Forget about -- the customers are great, and there's customers that have been with them for 67 years. And all of that is really important, and the relationships, all of that matters. But at the end of the day, it's capacity, right? So -- and when you think about that, to be quite honest, what I love most about the transaction was it was underperforming, right? Because if it was a performing asset, the reality is it would have been unaffordable, right? It would have been trading at a massive multiple. And the fact that we were able to get it at a reasonable multiple at current levels, right, and the belief that we have in our ability to ultimately fix those margins, there's absolutely no fundamental reason why they shouldn't be performing at the same margin profile that the peer group is, right, irrespective of MasTec, as the rest of the peer group is. There's lots of reasons for their performance issues, and we don't really need to get into them. And I think we're going to learn a lot more about that as we actually get really entrenched in the integration of the deal. But there's lots of levers that we can pull that we think will ultimately improve margins. We talked about SG&A publicly, right? Their SG&A runs almost 6 points higher than MasTec's, which is somewhat incredible. We haven't really focused on the growth opportunities and the utilization improvements and the margin improvements that you get just strictly with growth. And then they had issues, right? We know that the Verizon project was a challenging project for many in the industry. It was for them. They had some challenging gas line projects that they did. So they had a lot of cash flow issues, which limited their ability to invest in their business over the last couple of years, which should have been great years for them to invest and grow their business. So I think we were a unique buyer for the asset in that we were in the space. We've got the ability to really put the right personnel around to take it in the right direction. It's not about cleaning house, right? It's one of those transactions where I hope we don't lose one person, because people are -- it's such a commodity right now, right? It's so difficult to find good people that our mission needs to be how do we utilize them correctly, how do we put them in the right seats on the bus and how do we ultimately grow their business. And I think because of the valuation that we got, because of the lack of performance that they have in the business, we were able to buy it at a reasonable price, and we're going to be able to make the right investments in the business to get it to perform where it needs to perform. And again, I think -- and maybe even a step further, when you look at their geographic concentration versus ours, it was very different, right? They have a massive presence in the Northeast. They have a massive presence in the West Coast. When Brian talks about the transmission spend across the country, almost 30% of the total transmission lines needed are in 3 states. It's California, Texas and New York. 2 of those, MasTec was very underserved in, which was the West Coast and New York, right? So Henkels gives us that footprint into those markets that's going to be very meaningful markets going forward. Today, we really have a national footprint that we can walk into the customers and provide end-to-end services, right, from clearing, to the structures, to the foundations, to the cabling and the conductors across the country. And that's something that I think is really unique, something that organically would have been very difficult for us to build over the years and between the INTREN acquisition in early 2021 and the Henkels transaction at the end of the year, it really makes us one of the premier electric distribution transmission providers in the United States.

Yes, very clear, Jose. Well, I'd like to take the conversation away from T&D now to renewables. And Brian, maybe you can set the tone here. I'll ask you to put your energy cap -- expert cap back on after spending 2 decades looking at this space and your thoughts on the renewable outlook. There's no doubt that the growth potential in renewables is tremendous. And I think that one of the lessons learned from the last couple of months in Europe, though, is the resource is still intermittent. And so we have to transition in a way that's still effective and incorporates baseload. Just would love your thoughts on the opportunity set on renewables, but how do you effectively transition the grid without compromising both reliability and cost effectiveness.

It's a real tough question, because I think the world really has to be really thoughtful on what the risks and timing of the transition that we're going to go through, depending on the way we want to engineer that transition. And as you highlighted and as I mentioned earlier, with a number of the energy reliability issues across multiple economies, there still is a need for baseload power. And while we can engineer a transition that quickly moves towards the renewables today, it might come with more reliability issues. So how do we find to bridge that gap and be comfortable with it, and there are certainly other technologies like carbon capture that play a role, we think, in helping to bridge that gap. There is no question, we see very, very strong secular growth coming from renewables. But that doesn't necessarily mean that it shouldn't be complemented with and timed with investments to make sure that there are -- that there's ample baseload power at the same time. Now from an equity ownership perspective, it's been really interesting to see where ESG funds have parked their capital, because to date, much of the major positions in terms of their outsized weightings versus benchmarks have been in the end of the supply chain, final product, pure-play company where there's no debate about impact, and that is largely renewables. It's solar companies, wind companies, water companies, aquaculture companies as well and not necessarily earlier on in the supply chain, including in some of those Greenablers and green-enabling sectors. So -- and if we look at the corporate returns from renewables companies and the cost of capital, they've both come way down, right, which is the cost of capital has gotten low, because that's where a lot of the new ESG capital has been supporting. And at the same time, it's pushed returns down. So you asked me to put my overall energy hat on -- cyclical hat on, and I think the question is, are we saturated with capital and renewables and our returns insufficient. I would say we're not saturated with capital because we still see secular growth, as [ the Brian Lee, right, ] sees a lot of secular growth in renewables. But those that are investing in renewable stocks today should know where -- that they're well owned and where the overall corporate returns are. So we highlight a number of them, but we also talk a lot more about other parts of the supply chain and that -- and making sure that companies like the Greenablers, including electricity transmission or contractors like MasTec and their peers that play a key role in ensuring the success of renewables, can have their weighting as well.

Yes. Jose, we'd love your perspective on this, because you spend a lot of time with CEOs of utilities who've got to make sure that they provide a reliable electric grid, but one that's also decarbonizing it -- decarbonizing effectively. How are they balancing it? And how do you suggest we transition rapidly, but also do it in a way that doesn't compromise reliability?

Again, a tough issue, right? And I think we're going to continue to see some diversity. We're seeing a lot of customers start deploying advanced gas turbines, right, where they're burning gas today, but they could burn hydrogen tomorrow. We think that's potentially a leveling set where as much renewables as we want, right, there are challenges to get as much renewables built as we need to. So we're going to have, as Brian said, some baseload generation. And I think some of that baseload is going to have to find a way to be lower emission baseload over time than what we've been used to. Look, we've been in the renewables business for a long time. We got into it in 2008, again, with the purchase of a small contractor, who was doing wind. They were a top 5 wind contractors at the time back then when the wind business was relatively small. In 2020, we installed the second highest number of megawatts in the United States as a contractor. We started our solar business really from scratch in 2020. We've seen unbelievable growth there and continue to see it. The demand for that is just off the charts today. The challenge for us is, and we lived it in the wind business, is we saw the customers' transitions, right? So we saw what started as really a lot of small developers, who were chasing capital, who were chasing returns. And ultimately, today, the wind business is either dominated by very large wind developers or the utilities. And we think solar is going to be somewhat similar. It's a little bit different. I think developers probably have the opportunity to stay in that business longer, but we've already seen it, right? We saw a business that started with predominantly smaller developers, transitioning into every major utility today. Even the oil and gas companies are trying to find ways in which to invest in solar and build in solar. To Brian's point earlier, PPA prices are challenged, right? Every industrial company out there is trying to decarbonize as well. So they're buying renewable assets from these utilities, but the price that they're demanding, right, they're trying to drive down prices. So there's so much money out there. The capital is coming in at lower return profiles than maybe what we've seen a couple of years ago, which means that utilities are having to take this or developers are having to take it maybe at a lower margin contribution than they had just a few years ago, which puts a lot of pressure throughout the entire ecosystem of building these, right? As these get built, as they get built at scale, you generate a lot of efficiencies, you generate a lot of cost savings. Those cost savings get spread throughout the whole ecosystem. But today, it's -- quite frankly, it's a difficult market to keep up with, right? The demand that we have for our business today, it's kind of the same in transmission and distribution, right? It's about people. So we've been building our workforce for the last couple of years. We continue to invest a great deal in that because we think both from a wind perspective, and wind is probably challenged a little bit more with transmission. But with the demand that we see in the solar market today, the reality is if you had a lot more people and the supply chain wasn't disrupted, we'd see a lot more activity in '22 than we'll probably see, although I think that the activity we'll see in '22 is, at least for MasTec, far substantial than what we saw in '21.

That's a great perspective. Well, we have about 5 minutes left. I'm going to turn it over to Fahad, because I know you have some questions on both 5G in this periphery.

Yes. Thanks, Neil. So Jose, let's talk a bit about the 5G rollout and then some of the drivers behind the delays that we may have seen last year with the C-band spectrum auction and then what may have happened in later in 2021 as well. How do the delays affect different types of projects between wireless and wireline? And then do you have any sort of data points or observations you could share that give you confidence in seeing stronger activity this year?

Look, I think we can start on the wireline side, right? The wireline business is probably as strong as it's ever been since I've been involved in this business, and I've been in it for a long time. The amount of fiber that's being laid both from a connectivity perspective just to give us the ability to do calls like these and really improve people's own connectivity at their house, but more importantly, the fiber connectivity that's going to be required for the 5G rollout. Every 5G antenna, every small cell requires fiber connectivity. The truth is that it doesn't exist today. So there's some lag on 5G deployment relative to fiber deployment. So we're in the middle of a fiber deployment now that is really in early stages. The amount of -- all of the government programs that have been built to put dollars into the fiber builds like RDOF in the $20 billion range, right, are now beginning to see the deployments of those dollars. You have another $50 billion that's been allocated in the infrastructure bill that we probably won't see for a year or so out. So the amount of money that's going into the fiber side, and that business is unbelievably healthy, and we'll see dramatic growth in that business in '22 versus what we've seen in the last few years. On the wireless side, it's been a little different, right? At the end of 2020, you had the spectrum auctions. They were incredibly important for both AT&T and Verizon. They didn't have the right spectrum to go out and build their 5G. T-Mobile was in a different position where they had a lot of spectrum. So T-Mobile made a lot of gains in 2021 in the market. If you look at all the studies, you kind of -- they always rank the performance. T-Mobile has done an amazing job of building themselves up. It's put Verizon and AT&T both on notice. They're both going to come out and build -- have significant build plans to catch up and hopefully regain their market share and their market dominance. With that, there's challenges, right? The small cell business is a difficult business. It's a very local, municipal-driven business, permitted-driven business. You've got some of these FAA issues that have been talked about, that have been in the press lately. The reality is that the spectrum is so wide, there's so much spectrum availability and they've paid tens of billions of dollars for the spectrum, they're going to get the right bands of spectrum to allow them to go forward with their build plan, whether it takes a month or a couple of months or a couple of weeks. I don't think the delay is going to be much more than that. There's so much work to do out there from a macro perspective and a small cell perspective that I think this is going to be a big year, or by midyear, all of the major utilities are going to be in very active modes, which is going to create a lot of challenges in the business.

And I think sticking with kind of the legislative side, as you've alluded to, in light of the bipartisan infrastructure bill that was passed, kind of -- the Build Back Better I know is in limbo, but there's pieces to both of those bills that there's dollar amounts that could potentially translate to project activity. There may be some regulatory support that you may find in the bills. Can you talk about how MasTec is kind of seeing those 2 bills, like the benefits that they could flow in through your P&L on the permitting side? And then we can also turn to Brian as well to talk about the implications for the bill there as well.

Yes. Real quick, I think Build Back Better is probably the single biggest benefit for us for our clean energy business because of the tax incentives that are built in. It may or may not happen. So we'll see. But the pure infrastructure bill, right, had $50 billion for transmission, had $50 billion for broadband. It had a lot of money set aside for water and other infrastructure. So it's a very meaningful goal from us. Like the reality is that by the time the government allocates those dollars, by the time that process goes, we won't really see any of that money in '22, which is fine, right, because it helps our outer years. And that money is real, right? That's been -- that bill did pass, so we will see those dollars flow through. But I think it's '23 and beyond when -- even when you think about Build Back Better, some of the transmission issues that Brian talked about earlier, for us, it's almost more regulatory issues than it is dollars, right? How do we get these projects permitted faster? How do we get siting done on these projects? How do we get the states in line with the federal government, because a lot of times their interest don't align? And how do we get the permitting process so that it's not constantly challenged in the courts? It almost -- we've seen drastic issues as they've impacted the pipeline industry historically. We need to make sure we don't have those same issues as we're trying to build out transmission lines for renewables, right? If you don't want the oil and gas, you have to have the renewables, but you've got to build these lines to ultimately get that power from where it's being produced to where it needs to be. And I think we need support from the government relative to that almost more importantly than the dollars, because I think the dollars are available in the private market. Obviously, government dollars help, but I think that the permitting side and the regulatory side are just as important.

Thanks a lot, Jose. And Brian, if you had any other quick thoughts on the infrastructure spending?

Yes, I'd just add a couple of things. One, I mentioned that there's a $1 trillion that we see, about $1 trillion of annual spare capacity among publicly traded companies for greater investment, but that's actually pretty highly concentrated among 4 sectors: oil and gas, metals and mining, software and semiconductor companies. So I think one of the areas that may be less well understood is that not every sector has unlimited ability without having any change to their cash flow profile to be materially increasing their capital spending. And some do, right? Those ones do certainly, but not necessarily every sector. The other point that's not as well understood is that just because sectors have the available capital doesn't necessarily mean their corporate returns are great. There are plenty of sectors that are needed across the supply chain to make these goals work that have below overall market average corporate returns. And so how do you bridge this gap? You either need innovation, which would lower cost, which will undoubtedly happen over time or you need price increases, which is inflationary or, I guess, as in utility speak, you need that to be allowed by the regulators or you need policy support. And so that's a little bit of what we're talking about. Whether it's elements of Build Back Better, whether it's price increases, whether it's further innovation, we think one or all of those are needed catalyst to be able to stimulate a further surge in overall green investment than what's currently on track.

Well, a terrific discussion. Thank you, Jose. Thank you, Brian. On behalf of Goldman Sachs Natural Resources research team, we really thank you both for sharing your insights and on really important topic of how do you stimulate the green investment we need to effectively energy transition. So thank you.

Thank you for having me.

Thank you.