Welcome to MasTec's Third Quarter 2021 Earnings Conference Call, initially broadcast on Friday, November 5, 2021. Let me remind participants that today's call is being recorded. At this time, I'd like to turn the call over to Marc Lewis, MasTec's Vice President of Investor Relations. Marc? Thanks, David. And good morning, everyone. Welcome to MasTec's Third Quarter 2021 Call. The following statement is made pursuant to the safe harbor for forward-looking statements described in the Private Securities Litigation Reform Act of 1995. In these communications, we may make certain statements that are forward-looking, such as statements regarding MasTec's future results, plans, and anticipated trends in the industries where we operate. These forward-looking statements are the company's expectations on the day of the initial broadcast of this conference call, and the company does not undertake to update these expectations based on subsequent events or knowledge. Various risks, uncertainties and assumptions are detailed in our press releases and filings with the SEC. Should one or more of these risks or uncertainties materialize or should any of our underlying assumptions prove incorrect, actual results may differ significantly from results expressed or implied in today's call. In today's remarks by management, we'll be discussing adjusted financial metrics reconciled in yesterday's press release and supporting schedules. In addition, we may use certain non-GAAP financial measures in this call. A reconciliation of any non-GAAP financial measures not reconciled in these comments to the most comparable GAAP financial measure can be found in our earnings press release or our 10-Q in the investors and news section of our website located at mastec.com. With us today, we have Jose Mas, our Chief Executive Officer, and George Pita, our Executive VP and CFO. The format of the call will be opening remarks announced by Jose, followed by a financial review from George. These discussions will be followed by a Q&A session. And we expect the call to last about 60 minutes. We had another good quarter and a lot of important things to talk about today, so I'll go ahead and hand it over to Jose. Jose?

Thanks, Marc. Good morning and welcome to MasTec's 2021 Third Quarter Call. Today, I will be reviewing our third quarter results as well as providing my outlook for the markets we serve. I'd like to thank you for joining us today, and I hope and pray that you and your loved ones are healthy and safe. Before getting into the quarterly details, I'd like to offer my perspective on where I think MasTec stands today. At this time last year, during our 2020 third quarter call, we laid out a long-term goal of our pathway to achieving annual revenues of $10 billion plus. It's important to remember, at that time, MasTec was on a path to generate just over $6 billion of revenue in 2020. Still somewhat unsure of where the COVID pandemic would take us, we have seen a significant impact to our Oil and Gas business and the demand and pricing issues it had created. Our ability to provide that outlook was a testament to the strength we were seeing across our non-Oil and Gas business and the growing opportunities we were expecting. Fast forward 12 months, this year, we expect to generate $8 billion in revenue. And our long-term goal of reaching annual revenues exceeding $10 billion is now within reach in what we hope will be a much shorter time frame. Opportunities in our communication, transmission and clean energy segments continue to expand and give us great confidence we will be able to meaningfully grow revenue over the coming years. We believe we are in the midst of a very unique opportunity. Since becoming CEO in 2007, we've been able to grow MasTec from $900 million in revenue to $8 billion today. And while I've seen and experienced great cycles of growth during that time, I've never seen the number and scope of opportunities we are seeing across our business. Demand for our services is incredibly high, and again, our prospects to deliver long-term revenue growth are better than I've ever seen. While our business continues to expand and our mix continues to diversify away from Oil and Gas, our focus is on margin improvement and execution. Our margin execution across our non-Oil and Gas segments has been below our expectations in 2021. We've been challenged and impacted for multiple reasons, including COVID, labor availability, supply chain delays and poor performance on projects. With that said, we are confident we can achieve the margin targets we previously disclosed as we continue to grow the business in the coming years. We understand and believe that our ability to create shareholder value is driven not only by our revenue growth opportunities but more importantly by our ability to achieve our targeted margins. While we'd like to see our results materialize sooner, we believe the longer-term outlook is not only fully intact but actually improving. Now some third quarter highlights. Revenue for the quarter was $2.404 billion. Adjusted EBITDA was $278 million. Adjusted earnings per share was $1.81. And backlog at quarter end was $8.5 billion, a year-over-year increase of $821 million. In summary, we had another excellent quarter and are on track for another great year. There are a number of catalysts that could have a significant impact on our growth. These include within our Communications segment a ramp-up of 5G-related activity and the spend, including in-building solutions; continued focus on expanding fiber networks both in rural communities and in major cities to support broadband services as well as wireless backhaul; an increased focus on smart city initiatives, with increased availability of capital from both the public and private sector. Within our electrical transmission and distribution segment, catalysts include grid modernization, including significant investments for improved grid reliability and system hardening to better prepare for storms and fires; the growing need for new transmission lines to tap into renewable-rich geographies; and the focus on grid architecture related to growing electrical vehicle charging demand. In our Clean Energy and Infrastructure segment, catalysts include the growing focus on sustainability and climate initiatives, including zero-carbon emission goals; significant investments in renewable power generation, including wind and solar; a focus on other clean energy-generating fuels, including biomass, geothermal and hydrogen; opportunities around carbon capture and its potential benefits; and finally, the role of battery storage and its improving economics. We believe we are very well positioned to benefit from these growing and accelerating trends in our business segments. Now I'd like to cover some industry specifics. Our Communications revenue for the quarter was $670 million. We expected revenues to be slightly higher. And we continued to experience delays and COVID impacts that affected the acceleration of AT&T's and Verizon's build plans related to last year's spectrum auctions. Highlights for the quarter included our growth with T-Mobile, whose revenue more than doubled over last year's third quarter. In addition, we had another quarter of strong backlog growth. The second quarter of this year represented the largest quarterly sequential segment backlog increase in the company's history, and in the third quarter, we were again able to sequentially grow segment backlog by over $200 million. We expect another similar increase during the fourth quarter. Margins for the segment were 10.7% in the third quarter; and were impacted by both lower wireless revenues than expected, along with project closeouts related to a large fiber build that is nearing completion. We expect sequential margin improvement in the Communications segment in the fourth quarter and excellent momentum heading into 2022 based on our backlog build. Over the last few quarters, we've talked about the opportunities related to the Rural Digital Opportunity Fund or RDOF, which will provide $20 billion of funding over the next 10 years to build and connect gigabit broadband speeds in underserved rural areas; and the 5G Fund for Rural America, which will provide up to $9 billion in funding over the next decade to bring 5G wireless broadband connectivity to rural America. In addition to these programs, the current pending infrastructure bill has another $65 billion allocated for broadband infrastructure. While not built into any of our models, this amount of investment would likely have a significant impact on the potential opportunities for us in this segment. Moving to our Electrical Transmission segment. Revenue was $365 million versus $129 million in last year's third quarter. The increase was driven by organic growth of nearly 50% in the quarter on a year-over-year basis; and the first full-quarter contribution of INTREN, which we acquired during the second quarter. Margins for the segment were 9.5%, which exceeded our expectations. The integration of our INTREN acquisition has gone very well, and we are seeing a number of cross-selling opportunities which are positively impacting both MasTec and INTREN. While backlog was flat sequentially, we have an increasing number of opportunities that should allow us to continue to grow this business at solid double-digit rates for years to come. We believe the changes in electrical distribution and transmission needs led by grid modernizations and hardening, reliability and renewable integration, coupled with the transition towards increased electrical vehicle usage, will have an enormous impact on a last-mile distribution of electricity. Moving to our Oil and Gas pipeline segment. Revenue was $858 million and margins remained strong. During the third quarter, we were able to accelerate project timing and complete some projects early. Our fourth quarter revenue guidance level is impacted by this acceleration. As a reminder: Last year, we forecasted a longer-term recurring revenue target of $1.5 billion to $2 billion a year, assuming a continued depressed oil and gas market. As commodity prices have increased and maintained strong levels, we have seen an increase in customer requests, as we are working with a number of customers repricing previous projects and are optimistic we will see an uptick in opportunities. A challenge our customers are facing has been the increased costs of steel pipe related to the supply chain issues. Pipe materials often account for nearly 50% of project costs. While we believe there will be an increasing number of large pipeline projects, we expect the opportunities to materialize in 2023 and beyond as the supply chain issues improve. That, coupled with the continued growth of carbon capture and sequestration and the potential of hydrogen, have improved our longer-term outlook of our pipeline business. While we still expect 2022 to be within our previously disclosed revenue targets, we are becoming a lot more bullish about our opportunities for 2023 and beyond in this segment. Moving to our Clean Energy and Infrastructure segment. Revenue was $518 million for the third quarter. As a reminder: Segment revenue has grown nearly sevenfold since 2017. We expected a slight sequential improvement in margins that did not materialize. While I believe we have done an amazing job in growing and diversifying the segment, margins haven't materialized as quickly. With that said, we believe we are at the cusp of seeing significant improvements in margins. At MasTec, we take great pride in having been able to perform at high levels over a long period of time. Our conviction in improving margins in this segment are no different. We understand and are addressing the issues that have led to the underperformance, and we have tremendous confidence in the potential of this market and the associated margins we can generate. We believe our diversification is our strength in this segment, as we are capable of meeting any of our customers' demands. We are actively working on renewable projects, including wind, solar and biomass; baseload generation projects, including dual-source hydrogen-capable projects; as well as our growing presence in the infrastructure market. With a clear national focus on sustainability and clean energy, we have seen a significant increase in planned clean energy investments from our customers as they improve their carbon footprint. As a leading clean energy contractor and partner, MasTec is uniquely positioned to benefit from these investments. Backlog at quarter end in Clean Energy was $1.570 billion versus $891 million at the end of last year's third quarter, a year-over-year increase of nearly $700 million and a slight sequential reduction of over $100 million from the second quarter. Since quarter end, we've either signed or been verbally awarded another roughly $800 million in projects. In addition, the level of project proposal activity and negotiations has never been higher. To recap: We're having a solid 2021 and are very excited about the opportunities in the markets we serve. Finally, I'd like to highlight the potential opportunities of the pending infrastructure bill. With a significant presence in the telecommunications market, which includes 5G build-out capabilities, our involvement in maintaining and building the electric grid, coupled with our exposure to the clean energy market, including wind, solar, biofuels, hydrogen and storage; and our recent expansion into the heavy infrastructure, including road and heavy civil, we believe we are uniquely positioned to benefit from the potential infrastructure spend. We are confident we can hit our growth targets with solely private investments in infrastructure but do recognize the potential acceleration in our markets with significant government spend. I'd like to again congratulate and thank the men and women of MasTec for their fantastic performance. I'm honored and privileged to lead such a great group. The men and women of MasTec are committed to the values of safety, environmental stewardship, integrity, honesty; and in providing our customers a great-quality project at the best value. These traits have been recognized by our customers. And it's because of our people's great work that we've been able to deliver these financial outstanding results in a challenging environment and position ourselves for continued growth and success. I'll now turn the call over to George for our financial review. George?

Thanks, Jose. And good morning, everyone. Today, I'll cover our third quarter financial results and our updated annual 2021 guidance expectations. As Marc indicated at the beginning of the call, our discussion of financial results and guidance will include non-GAAP adjusted earnings and adjusted EBITDA. Reconciliation and details of non-GAAP measures can be found on our press release, on our website or in our SEC filings. In summary, we had strong third quarter results with revenue of approximately $2.4 billion, a 42% increase over last year; adjusted EBITDA of approximately $278 million; and adjusted EBITDA margin rate at 11.6% of revenue. This represented record-level third quarter revenue and adjusted EBITDA. Yesterday, we announced a new and increased credit facility of $2 billion, which adds to our ample liquidity, improves pricing and eliminates security requirements. I would like to thank our banking partners for their continued long-term support of MasTec. Our strong cash earnings profile, coupled with our focus on working capital management during 2021, has allowed us to easily fund organic working capital needs associated with approximately $1.5 billion in year-to-date revenue growth while investing approximately $600 million in strategic acquisitions. At the end of our third quarter, we maintained a strong balance sheet and capital structure with liquidity approximating $1.3 billion, comfortable leverage metrics and with net debt at only 1.3x adjusted EBITDA at quarter end. Given our strong balance sheet and cash flow performance, coupled with the unsecured nature of our new credit facility, we have approached credit rating agencies for review and are hopeful of a positive rating agency action in the near term. Now I will cover some detail regarding our third quarter segment results and guidance expectations for the balance of 2021. Third quarter Communications revenue was $670 million, approximately 4% growth compared to last year. This growth level was a few percentage points lower than our expectation, as project start-up issues slowed revenue during the quarter. Our third quarter Communications segment adjusted EBITDA margin rate was 10.7% of revenue, an 80 basis point sequential decline primarily related to the overhead impacts of lower-than-expected third quarter revenue levels. Our annual 2021 Communications segment expectation is that revenue will range somewhere between $2.5 billion to $2.6 billion, with annual 2021 adjusted EBITDA margin rate approximating 11%. This implies fourth quarter year-over-year revenue growth in the high-teens range despite some continued slower revenue impact on new project start-up activity. This also implies strong improvement in fourth quarter adjusted EBITDA margins, both sequentially and compared to the fourth quarter of last year, as we begin to ramp toward significant expansion in 2022. Third quarter Clean Energy and Infrastructure segment or clean energy revenue was $518 million. And adjusted EBITDA was approximately $14 million or 2.7% of revenue, below our expectation. As we indicated on our last quarter's call, we anticipated some continued negative impact on third quarter clean energy adjusted EBITDA margin rate as 2 underperforming projects, highlighted during the prior quarter, would generate third quarter revenue with no margin. We substantially completed those projects during the third quarter, with performance largely as expected. However, during the third quarter, clean energy segment results were also negatively impacted by a COVID-19 outbreak on a project that caused delays and additional cost. At one point during this project, approximately 1/3 of the project field crew and 50% of critical path electricians were either infected with COVID or in quarantine, effectively stopping project production. Thankfully, no significant long-term health issues arose during this outbreak to our employees, and we have substantially completed this project. Absent this unique impact, third quarter clean energy segment adjusted EBITDA margins would have been generally in line with our expectation of a slight sequential adjusted EBITDA margin rate improvement. We believe the issues that have negatively impacted our clean energy segment year-to-date adjusted EBITDA margin performance are largely behind us and, based on project timing, expect that fourth quarter segment revenue will be the largest revenue quarter of the year with over 60% year-over-year revenue growth and strong fourth quarter adjusted EBITDA margin rate improvement to a high single-digit level. As we have previously indicated, our clean energy segment has grown from $300 million of revenue in 2017 and will approach $2 billion in revenue during 2021. In order to achieve this growth, we have significantly expanded our field crew operations and head count very quickly. This rapid expansion has caused some growing pain inefficiencies, which have impacted our annual 2021 adjusted EBITDA margin performance. As I just indicated, we expect improved performance during the fourth quarter and, importantly, continued strong revenue and adjusted EBITDA margin rate improvement in 2022. Third quarter Oil and Gas segment revenue was $858 million, and adjusted EBITDA was $171 million. During the quarter, we accelerated work on a large project and achieved substantial completion ahead of schedule. This increased our third quarter revenue by approximately $100 million, accelerating revenue previously expected to occur in the fourth quarter. We would like to recognize the men and women of our MasTec teams for their commitment to safety and quality during this difficult project. We currently expect annual 2021 Oil and Gas segment revenue will range between $2.5 billion to $2.6 billion, with annual 2021 adjusted EBITDA margin rate for this segment expected in the high-teens to low-20% range. Third quarter Electrical Transmission segment revenue was $365 million, and adjusted EBITDA margin rate of 9.5% of revenue. Third quarter results reflected a full quarter of electrical distribution and storm services from INTREN, which contributed revenue of approximately $175 million to the quarter. Excluding INTREN, organic segment revenue during the third quarter grew $64 million and adjusted EBITDA margin performance was strong. We expect annual 2021 revenue for the Electrical Transmission segment to approximate $1 billion and annual 2021 adjusted EBITDA margin rate to range somewhere between 6.5% to 7% of revenue. This expectation includes the assumption that second half of 2021 segment adjusted EBITDA margin rate will approximate a low-8% range, a significant improvement when compared to first half '21 performance. We continue to believe that multiple macro end market trends, including renewable power generation, increased distribution needs to support electric vehicle expansion and grid investments for storm and fire hardening, are continuing to develop and should provide our segment substantial future growth opportunities. Now I will discuss a summary of our top 10 largest customers for the third quarter period as a percentage of revenue. Enbridge was 21% of revenue, reflecting the previously mentioned pipeline project acceleration. Newly defined AT&T services totaled 7% of revenue. As indicated on our 10-Q filed yesterday, reported AT&T revenue amounts have been reclassified to exclude DIRECTV services for all periods, as this entity has been spun off into a separate third-party entity. Revenue performed for AT&T includes wireless, wireline and other services, including smart city deployment projects. NextEra Energy was 6% of revenue, comprising services across multiple segments including clean energy, Communications and Electrical Transmission. Equitrans Midstream was 5%. Entergy and Comcast were each 4% of revenue. Duke Energy, DIRECTV and Exelon reached 3%; and Enel Green Power was 2%. Individual construction projects comprised 63% of our third quarter revenue, with master service agreements comprising 37%. With the combination of an expected resurgence in wireless MSA work, coupled with the INTREN acquisition whose revenue is virtually all MSA-driven, future MSA revenue is expected to increase as a percentage of our total revenue, highlighting an increased level of MasTec revenue expected to be derived on a recurring basis. Lastly, as we've indicated for years, backlog can be lumpy, as large contracts burn off each quarter and new large contract awards only come into backlog at a single point in time as a result of actual contract signs. As of September 30, 2021, we had total backlog of approximately $8.5 billion, up approximately $821 million when compared to last year. Importantly, each of our non-Oil and Gas segments' backlog represented a record third quarter level, reflecting continued and expanding strength in these end markets. As noted in yesterday's press release, as expected, Oil and Gas segment backlog was down both sequentially and compared to the third quarter of last year. And we continue with the expectation that 2022 segment revenue will range somewhere between $1.5 billion to $2 billion, with potential sizable growth opportunities in 2023 and beyond. Now I'll discuss our cash flow, liquidity, working capital usage, and capital investments. As I mentioned earlier, yesterday we announced the closing of a new unsecured $2 billion credit facility, which reflects a $250 million increase from our prior facility with improved pricing and an extended term. We are hopeful that the combination of our consistent and strong cash flow performance along with our new unsecured credit facility will provide us a path towards an investment-grade credit rating in the near term, and we are engaging with rating agencies for an updated outlook. During the third quarter, we managed to reduce our net debt levels by approximately $80 million despite the working capital associated with about $450 million in sequential revenue growth. We ended the quarter with $1.3 billion in liquidity and net debt, defined as total debt less cash and cash equivalents, at $1.26 billion, which equates to a very comfortable 1.3 times leverage metric. Year-to-date cash provided by operating activities was around $500 million. We ended the third quarter with days sales outstanding at 72 days compared to 85 days in the third quarter of last year, which is well below our target DSO range of mid- to high 80s. We are proud of the strength, resilience, and consistency of MasTec's cash flow profile. Looking ahead to the end of 2021, we expect continued strong cash flow generation despite the working capital associated with our revenue growth for the year, and we anticipate that annual free cash flow for 2021 will exceed adjusted net income. Assuming no acquisition activity in the fourth quarter, net debt at year-end is expected to approximate $1.2 billion, leaving us with ample liquidity and an expected book leverage ratio slightly over 1 times adjusted EBITDA. In summary, our long-term capital structure is extremely solid with low interest rates, no significant near-term maturities, and ample liquidity, providing us full flexibility to capitalize on any potential growth opportunities to maximize shareholder value. Moving to our 2021 guidance view. We predict an annual 2021 revenue of $8 billion, with adjusted EBITDA of $930 million or 11.6% of revenue; and adjusted diluted earnings of $5.55 per adjusted diluted share, which is a $0.10 per share increase over our prior expectation of $5.45 per adjusted diluted share. And the earnings per share increase is primarily due to the benefit of lower expected annual 2021 income tax expense. This translates into a fourth quarter revenue expectation of $1.85 billion, with adjusted EBITDA of $218 million or 11.7% of revenue; and earnings guidance of $1.33 per adjusted diluted share. As previously mentioned, our fourth quarter revenue view includes approximately $100 million in lower revenue expectations for the Oil and Gas segment due to the acceleration of project revenue during the third quarter. As we have previously provided some color regarding 2021 segment expectations, I will briefly cover other guidance expectations. We anticipate net cash CapEx spending in 2021 at approximately $120 million, with an additional $160 million to $180 million to be incurred under finance leases. As we have previously indicated, as our end market operations shift with non-Oil and Gas segments becoming a larger portion of our overall revenue, our capital spending profile should reduce, as the Oil and Gas segment has historically required the largest level of capital investment. We expect annual 2021 interest expense levels to approximate $54 million, with this level including approximately $600 million in year-to-date acquisition funding activity. For modeling purposes: Our estimate for 2021 share count continues at 74 million shares. We expect annual 2021 depreciation expense to approximate 4.3% of revenue, inclusive of year-to-date 2021 acquisition activity. As we have previously indicated, this expectation incorporates an increased level of 2021 Oil and Gas segment depreciation expense when compared to 2020, as we are utilizing conservative depreciation life and salvage value estimates on previous capital additions to protect against future market uncertainties. Given these trends, we anticipate that annual 2022 depreciation expense dollar amount and percentage of revenue will decrease when compared to annual 2021 levels. We expect annual 2021 corporate segment adjusted EBITDA to be a net cost of slightly under 1% of overall revenue. And lastly, we expect that annual 2021 adjusted income tax rate will range approximately 22%, with our third and fourth quarter adjusted income tax rates ranging in the 19% to 20% range primarily due to the benefits of income mix and tax true-up adjustments. This concludes our prepared remarks, and now we'll turn the call back to the operator for Q&A.

We'll take our first question from Alex Rygiel of B. Riley.

Another really, really strong quarter here, so congratulations on that. My first question wants to focus on capital allocation. So clearly you've got an enormous amount of opportunities ahead of you, so my question here is how should we think about capital allocation over the next, say, 2 years. Should we think about you investing a greater amount of your free cash flow back into the business through M&A and some of these organic opportunities? Or do you feel like your biggest bang for your buck is investing and buying back stock at this time?

Great question, Alex. We've made significant investments in the business over the past few years, adding a substantial number of employees at MasTec. Our workforce has grown by approximately 6,000 since this time last year, with around 2,000 from the INTREN acquisition and the rest coming organically. We're focused on enhancing our ability to capitalize on the long-term opportunities ahead. Additionally, we are actively pursuing mergers and acquisitions in a highly dynamic market, as there are valuable assets available, and we plan to remain active in that area. We've also been strong cash flow generators this year, which puts us in a favorable position. After prioritizing these investments, we will consider capital allocation and stock buybacks. Historically, we have aimed to repurchase our stock at attractive valuations, and we are not satisfied with our current trading position. There are compelling reasons to explore this option, but we also have numerous priorities and positive developments ahead. We believe our robust cash flow generation last year positions us well to seize opportunities across multiple avenues.

And my second question. I believe you might have said that, subsequent to the end of the quarter, you received another $800 million of awards that'll be dropped into backlog. Was that the case? What markets were these in, generally speaking? And then you seem to have a renewed excitement about the oil and gas sector, looking out into 2022 and '23, so maybe you could round out that excitement for us.

Certainly. The $800 million was specifically allocated to the Clean Energy and Infrastructure segment. Since the end of the quarter, we have secured an additional $800 million, and our backlog grew by about $700 million year-over-year. In clean energy, we experienced a decline of over $100 million, approximately $150 million, on a sequential basis. The wins we achieved after the quarter end boost our confidence in continuing to grow that business. More importantly, what's noteworthy is what we've already been awarded or is verbally confirmed, with significant activity occurring in that market, which we feel very optimistic about. Growth in the clean energy sector has not been a concern for us; we've managed it effectively. Our focus now is on executing margins, and we hope to see positive results in the fourth quarter. Regarding the Oil and Gas business, we are genuinely excited compared to the previous year and the challenges we faced. Commodity prices are currently high, and many customers are reconsidering pipeline projects that were delayed last year. Although hurdles remain in bringing some projects to market, we are witnessing potential large-scale pipeline activities on multiple projects that we find quite surprising. The developments in hydrogen and carbon capture present remarkable long-term opportunities for our pipeline business. We believe there is potential for our carbon capture and sequestration efforts to substantially drive our pipeline business in the future, which is something we would not have anticipated a year ago. The outlook for that market beyond 2022 appears very promising and significantly improved, which is exciting for us.

We'll take our next question from Neil Mehta of Goldman Sachs.

I want to start on the Communications segment and just your thoughts on some of the slower top line growth that we've seen here. What are the drivers, as you see it, to unlock the pace of growth that you anticipate? Talk a little bit about customer conversations around 5G rollout. And are there certain types of communications activity that's being impacted more versus less in the current environment?

Sure. Thank you, Neil. It's quite frustrating because our backlog is growing at levels we haven't seen in a long time. We continue to win and pursue work, and the growth opportunities are the best we've seen in years. We anticipate further backlog growth in Q4, at least matching the levels of Q3. We will finish 2021 with an incredible backlog in that segment, but it hasn't yet translated into revenue numbers. There are many reasons for this. Our wireless work with AT&T and Verizon is taking longer to start meaningfully than we expected. We know it's coming and understand the delays, but it's just a matter of timing. We anticipate slightly lower performance in the third and fourth quarters than we initially thought. On the positive side, T-Mobile has been a fantastic account this year and continues to grow, which is exciting for us. The fiber business is expanding rapidly, and the engineering work we're currently doing is a leading indicator for future construction. We believe this will significantly impact our business in 2022, particularly with AT&T as a key customer. The current mix of business is different from what we expected for the latter half of the year. For our two larger accounts, the wireless segment has been slower than anticipated. However, in Q3, we saw better performance from AT&T compared to Q1 and Q2, even though it wasn't at the levels we hoped. We're optimistic about what's coming and feel prepared for it. Given the market conditions, we believe we had a decent quarter from a top-line perspective. Margins were affected by some closeouts on a fiber project, as the industry has discussed, but without that, margins would have met expectations. We expect strong margins in Q4 for that segment. Although wireless revenue will be slightly lower, we remain confident about the market and the opportunities it holds for 2022 and beyond.

The follow-up is regarding the clean margin. The clean energy business and its margin profile were key points of discussion in the last conference call. Please share your current status on that progression and the milestones we should monitor to build confidence in the story of margin improvement.

Look. We were hoping for more improvement in Q3. Obviously we were impacted by a couple of things. I think they truly were very related to the quarter, right? I think we're through most of our issues. I think we're going to see significant improvement in Q4. We're excited to be able to deliver that. We've been working very hard with that group. I know they're extremely focused on it. And again, somewhat frustrating because we see the light at the end of the tunnel. We see it turning, and hopefully, we're here in the fourth quarter having a very different conversation related to that segment.

Our next question comes from Noelle Dilts of Stifel.

I wanted to explore clean energy further. You clearly have a strong backlog heading into next year. Could you first discuss the composition of that backlog and how we should view the balance between wind and solar? Last quarter, you mentioned an expectation of growing that business by 25% annually. Additionally, one of the major players in the market is projecting stable revenues for next year, so I would appreciate your thoughts on your growth outlook and how to interpret that difference.

Certainly. When we examine our Clean Energy and Infrastructure business, we believe we have the most well-rounded business mix in the industry, addressing not only renewable energy but also all power generation needs of our customers. Specifically regarding renewables, there's a significant difference between wind and solar. The wind sector has faced challenges over the past year due to fewer available projects and limited transmission infrastructure for new wind farms. On the other hand, the solar segment has been thriving and is growing rapidly. The potential for revenue growth in 2022 will largely depend on which segment you focus on. In 2021, we experienced some revenue declines in wind, which contributed to what we observed in Q3. Our business is shifting significantly toward solar growth. We anticipate a relatively stable year for wind in 2022, with a rebound expected in 2023 as new transmission lines are constructed, unlocking more wind resources. To expand this business, solar growth is essential. While our competitors had a strong year for wind, we did not see those same results. We experienced a decline in wind in 2021, which may continue into 2022, indicating the source of the discrepancy in outlooks.

It's a bit early to discuss 2022, but I would appreciate your insights on your expectations for work timing next year. Historically, on the telecom side, the year usually starts slowly and finishes strong in the fourth quarter. However, it seems there might be a different trend this time, with an acceleration of work towards the end of the year and into the first quarter. Can you share your perspectives on this timing? Additionally, regarding clean energy, we've heard of some projects being delayed, so do you anticipate a slower start and a stronger second half there? Any high-level thoughts on how to approach the earnings rhythm for the year would be valuable.

Sure, Noelle. We're currently navigating through budget season, and we'll have a clearer outlook on timing during our next call. Generally, I expect our Communications business to be more evenly balanced next year with several projects anticipated to kick off early on. Our Oil and Gas sector might be slightly different, as we have some projects that could be delayed in the first quarter, but we anticipate that activity will pick up in the second quarter and beyond. The clean energy sector presents a mixed picture; we are very aware of the ongoing supply chain issues and how they may impact projects. Overall, I believe it will be a fantastic year, although we need to manage some challenges. Additionally, regarding the transmission side, it appears to be similar to what we experienced this year, especially when considering the INTREN acquisition. We feel optimistic, yet there are challenges ahead, including the vaccine mandates that we need to fully understand in relation to our workforce. We're doing everything possible to prepare and prevent any disruptions, especially with the recent regulations announced. In summary, the demand for our services is incredibly high, so I anticipate a strong year overall, even if there are some ups and downs across different segments.

We will take our next question from Andy Kaplowitz of Citigroup.

Jose, electronic transmission margin in the high single digits is the highest it's been in a while, I think, since 2014. I know that's probably a lot of INTREN, but with the alleviation of pressure, I think your problem projects are over there. And then INTREN obviously brings nice scale to the business. What kind of opportunities can that open up for you in '22? And do you see a path to a double-digit margin too?

We're really excited about the level of opportunities we're seeing, particularly in how customers have responded to the acquisition and the additional opportunities it has created. We are confident in our ability to grow the business while maintaining solid margins. We had a strong quarter in terms of margin performance, and although we expect some seasonality in Q4, we believe the margin profile we achieved in Q3 is sustainable throughout 2022. This has been a highlight of our performance this quarter, and we hope to discuss similar advancements in other segments in the upcoming quarters.

That's helpful, Jose. And then I know you're still guiding to that sort of $1.5 billion to $2 billion run rate in Oil and Gas next year, but as you know, Oil and Gas for MasTec has continued to beat expectations. I know maybe there's a little bit of pull forward here but especially on the margin side, so I guess, why shouldn't we think that that's possible in '22, that you sort of sustain these higher margins and there is some upside toward that $1.5 billion to $2 billion?

I believe the supply chain is affecting the industry. Projects that were initiated with commodities already purchased, such as pipe projects that have pipe available, are in a different situation compared to those attempting to start something new today and seeking pipe due to significant cost increases. Pipe costs have risen by more than 50% over the past few months, which impacts pure project costs. Consequently, we have customers who are interested in moving forward but are hesitant to commit due to these costs. They are actively working to address this issue. Once the situation becomes clearer, we may reassess our outlook, but based on what we know at this moment, we still believe this is a reasonable expectation for 2022.

We'll take our next question from Justin Hauke of Baird.

I have two questions; one is more general, so I'll begin with that. The other is more financial. It seems that the supply chain issues are primarily affecting the Oil and Gas sector. You mentioned that the clean energy margins might be under pressure due to specific challenges related to the COVID outbreak in some of your troubled projects. Are you also experiencing supply chain issues in that area? What are the specific bottlenecks you are encountering, especially regarding solar projects, that could affect the timing of their launches?

The reality is that supply chain issues are prevalent everywhere. The challenge is managing them and minimizing their impact on our business. We're experiencing delays with some telecom equipment and shipping times. Different customers are coping with this in various ways; larger customers seem to be less affected than smaller ones. We're also noticing disruptions in the solar sector due to necessary supplies and in everyday materials needed for construction. While I don't believe these issues have significantly hindered our schedules, we're paying close attention to them. We don't face substantial commodity risk in our contracts, but there are some minor items we purchase that have experienced cost pressures. Overall, everyone is affected in some manner, but we've managed to mitigate most impacts, except for a few projects here and there, and we hope to continue managing through this until conditions improve.

Okay, that's fair enough. I guess the other one is just on the new credit facility and the potential for you guys to get an investment-grade rating here on your debt. I'm just wondering. What kind of interest expense savings are you thinking about for next year? I mean, what could you possibly kind of look at that preliminarily versus the $54 million this year?

Justin, we are looking at a very strong cash flow performance this year, and we expect it to remain strong next year. Our current capital profile includes both fixed and floating elements. We have restructured our facility, which has slightly better terms that should help reduce our interest expenses year-over-year. The uncertainty for us moving forward is how short-term rates will behave, making predictions challenging. Generally, there is a tendency to expect a slight reduction in our costs year-over-year. We need to work with the rating agencies to change our rating before we can make significant adjustments to our capital structure, but the immediate benefit we are seeing is the improvement in our credit facility. Looking ahead to next year, there is uncertainty regarding short-term rate movements, but many people think they will increase slightly. When considering everything together, it seems like a balanced outlook for next year. Achieving an investment-grade rating would provide us with significant flexibility for financing as we explore opportunities to maximize shareholder value. We would be very pleased to reach that rating level. Our cash flow, balance sheet management, and the changes we've made to our unsecured facility position us well for improving our ratings profile. We believe we are at a critical point, but we need the rating agencies to align with our view. We remain hopeful for that and will provide updates if it materializes.

We'll take our next question from Jamie Cook of Crédit Suisse.

Jose, I think you mentioned in the prepared remarks the path to get to the $10 billion in revenues is probably approaching quicker than you had originally expected, so could you provide a little more color there? And while we're getting there quicker by segment, is the path to get there bigger in terms of where you're thinking about the segments going? And then at the same level, on that $10 billion in revenues, how are you thinking about the margins in total based on what you've seen from the portfolio today?

Great question, Jamie. I don't think our views have changed significantly. We still believe that the Communications business will soon be in the $3.5 billion to $4 billion range. We've estimated Oil and Gas to be between $1.5 billion and $2 billion, which helps support the $10 billion target. With the growth in transmission and distribution, we may be closer to $1.5 billion than the $1 billion we previously mentioned. Our clean energy business should already be nearing the levels we've discussed. When you combine this information, I believe we have a strong outlook for achieving our targets in the next couple of years, which is quite exciting. Regarding the margin profile of the business, it remains consistent over the long term. We've indicated that we aim to consistently achieve 13% margins in Communications, and while we need to scale up, we believe we can exceed that in the long run. We hope to reach the 12% to 13% range on a full-year basis next year. For Oil and Gas margins, we don't anticipate much change, expecting them to remain between the mid-teens and low 20s. In transmission, we've discussed aiming for double digits. For clean energy, we expect to start in the high single digits and eventually move into double digits over time. So, nothing has fundamentally changed; it's just the timeline for achieving our goals that seems to be accelerating, which is great news.

And then I just guess my follow-up question is just sort of on the M&A front. Obviously you guys have a strong balance sheet and have had success with acquisitions historically. To what degree are the multiples that are out there preventing you from sort of being more aggressive on the M&A front?

We constantly discuss this issue. Ultimately, our goal is to identify strong companies where we can add significant value. We're not simply looking to acquire a company just to boost revenues; we want to find firms that contribute to our mission for our customers and enhance our service delivery. The key question is how we can help these businesses dramatically expand their prospects, and conversely, how they can assist us in reaching our objectives, whether related to margins or revenue. We are willing to pay a fair price. While the valuations for these companies have risen, I still believe the market presents good opportunities for us. We are actively engaged in several deals that we expect to finalize. We typically focus on smaller acquisitions that show great potential for growth, and I anticipate we will complete several of these before the year concludes. We remain enthusiastic about the possibilities we are exploring.

We'll take our next question from Steven Fisher of UBS.

I wanted to ask about clean energy and its growth. What is the expected lead time for bookings to translate into growth? Given that bookings have significantly increased year-over-year for three quarters, I would have expected to see organic growth, but it appears to still be negative. You mentioned the impact of COVID-19, but I'm not sure how much that is contributing to the decline, or if it's due to supply chain issues. When do you anticipate that segment will shift to organic growth?

Yes, there are a couple of important points to discuss. First, regarding the wind business, when we compare 2020 to 2021, we experienced challenges in that area, and we anticipated a decline. However, we believe we effectively grew other segments of our business to compensate for that decline. Looking ahead to 2022, based on the order flow we are observing, we anticipate a positive change. We expect a much better performance in the wind sector compared to 2021 when comparing year-over-year. Additionally, for the rest of our project work, we foresee significant organic growth in 2022 compared to 2021. Even in the fourth quarter, we expect to demonstrate substantial organic growth for the first time this year as we deliver on our performance relative to last year.

Okay. That's good to hear. I'm curious about the Oil and Gas business and how we should understand the book and burn rates, both what they are currently and what they are expected to be. I know you plan to achieve a revenue range of $1.5 billion to $2 billion next year, but the current backlog is below that. How should we interpret the book and burn, and what steps can help us return to that revenue range relative to backlog for next year?

I think the business is going to look a lot more like it did 7, 8 years ago, right, where backlog wasn't anywhere near your total annual revenues. I think that's kind of what the business is leading into. We could very well see the business with backlog levels below $1 billion and still be very comfortable of being able to hit our annual targets.

And we'll take our next question from Brent Thielman of D.A. Davidson.

Obviously another really strong quarter for bookings in Communications. It looks like that's going to continue. I guess, Jose, maybe just talk around the diversity of customers you're seeing in terms of new awards and overall sort of inquiry activity.

Yes, it's been broad-based and we're really excited. We're seeing an increase in the amount of dollars related to both wireline and wireless activity. A significant portion of our bookings has come from wireline due to delays in the wireless segment, with many different customers contributing. There are still tens of billions of dollars from federal initiatives that will expedite and boost these levels, so I feel very optimistic about our position in the cycle. We've built strong customer relationships and won projects, but what's more important is what's ahead. I believe we're just beginning to tap into the potential of this market. We're engaged in discussions about some major programs that could significantly impact our numbers. As we head into 2022, with our backlog and the ongoing potential, there are many reasons to be excited about the long-term outlook for this business.

Okay. And I guess, on Oil and Gas: I mean I understand the expectations here for 2022. I'd love to just get your thoughts on how far out some of these opportunities are in sequestration; hydrogen; I guess, some of the less-traditional things that you've at least historically done. How far away are these things? And can they manifest and be impactful as early as '23?

Yes. I thought that would be the easiest answer, Brent. I mean...

We'll take our next question from the gentleman.

Yes. I mean they're active. They're currently active, all right, so we will definitely expect some of that to hit in '23.

We will take our final question from Adam Thalhimer of Thompson, Davis.

Jose, you mentioned that the C-band timing was slightly delayed. What are your thoughts on when that will resume?

One of the challenges everyone is facing is fiber. Without fiber, if you build it, you can't really activate it. Recently, we've noticed some developments related to the FAA that may affect some of the 5G activations. There are many issues that still need to be navigated. I believe our customers, once they begin, will push forward with construction regardless of activation. However, they need to be prudent with their capital allocation. They don't want to invest in projects that may remain unused for long periods. They will proceed with building in anticipation of future developments, but they need clear guidance on what will be available. We've already observed an increase, and the initial activations are starting, which is positive. It's just happening later and perhaps less aggressively than we anticipated in 2021. I expect that 2022 will be a much different and better year, and we are already seeing signs of improvement.

Okay, so the follow-up question would just be, what are your thoughts on the cadence of revenue in comps next year, starts low and just ramps and then builds throughout the whole year?

Well, for sure, it's going to build throughout the year because a lot of stuff is going to be starting, but I think it's going to start pretty strong, all right? I would expect activity levels to be better than they were in the first quarter of this year and to continue to grow through the balance of the year.

We will take our final question from Sean Eastman of KeyBanc Capital Markets.

I just wanted to get an update on where you're at from a human capital perspective. I mean you've talked about adding some huge numbers of people, obviously huge training efforts. I mean, where are we at there? Or do you still need to add a bunch of people and maintain this level of training? Or do you have these people in place now to deliver the backlog you've built up?

Yes, good question, Sean. One of the questions that we get a lot is what's happening with labor availability and pricing and what kind of challenges does that create for our business. And the reality is that we kind of look at that question very differently, all right? We look at that question and we say we think that's a huge strategic advantage for MasTec, so we've invested heavily in really making MasTec an employer of choice; making MasTec a place where people want to come and build a career, start at one level and really allow yourself to spend your whole career at MasTec. So I think that, to achieve our goals, not just the ones we've verbally laid out but to ultimately achieve what we think we can do, we're obviously going to need to continue to hire people. It's a tough market. And again we think that our size, our diversification, our culture really allows us to have an advantage. I think our customers are looking for companies that they can depend on in an uncertain labor market, so I think those are really important drivers for MasTec and we're going to continue to invest in people and in growing our resources to be able to deliver for our customers. So I don't think you'll see us stop that. Obviously, there'll be pockets where we've got to hire more people in a particular quarter and in a particular couple of quarters and others where we won't, but I think you're going to see a sustained increase to the total numbers. And I don't think we'll ever stop doing that.

Okay, interesting. Many companies are discussing wage inflation increasing this year, and since you have a limited labor pool, I wanted to understand how you plan to manage that resource. Last quarter, you mentioned some customers wanting to secure capacity for a longer duration. Is that your goal, or will you take a more flexible and cautious approach to deploying those resources? I hope that question makes sense, but I'm curious about your thoughts on this.

It does. I actually think it's a really good question, Sean. We have a lot of different thoughts on this. First, we are not mercenaries; we aren't going to chase the highest dollar every time because that's not the right approach for the long-term health of the business. That said, customers need to recognize the challenges in the marketplace and be willing to pay for what is happening at any given time. We manage that balance well. We have longstanding relationships with our customers and will do everything we can to support their plans, but they must pay a fair wage. If they are not willing to do that, we will shift our resources to those who are. Ultimately, everyone in the business understands the labor situation, and we all will face those challenges. If we encounter a customer unwilling to pay fairly, we will take the necessary steps to ensure our team earns a fair wage and gets a reasonable return on their time and investment. We have a limited workforce, and their roles are important. We want them to take pride in their work and feel good about it, as do we as a company. We need to be compensated fairly for our work and must deliver for our customers, and we believe we can manage that balance effectively.

That concludes today's question-and-answer session. Jose Mas, at this time, I will turn the conference back to you for any closing remarks.

All right. So I want to thank everybody for participating today. And we look forward to updating you on our year-end call. Have a great weekend.

This concludes today's call. Thank you for your participation. You may now disconnect.