Kristine Walczak - Dresner Corporate Services William Koertner - President & CEO Betty Johnson - SVP, CFO & Treasurer Richard Swartz - EVP & COO.

Tahira Afzal - KeyBanc Capital Markets Alex Regal - FDR Capital Markets Andrew Wittman - Robert W Baird Noelle Dilts - Stifel John Rogers - Davidson Daniel Mannes - Avondale.

Good morning, everyone and welcome to the MYR Group Third Quarter 2016 Earnings Results Conference Call. Today's conference is being recorded. At this time, for opening remarks and introductions, I would like to turn the conference over to Kristine Walczak of Dresner Corporate Services. Please go ahead madam..

Thank you, and good morning, everyone. I would like to welcome you to the MYR Group conference call to discuss the Company's third quarter results for 2016 which were reported yesterday.

Joining us on today’s call are Bill Koertner, our President and Chief Executive Officer; Betty Johnson, Senior Vice President, Chief Financial Officer and Treasurer; and Rick Swartz, Executive Vice President and Chief Operating Officer.

If you did not receive yesterday’s press release, please contact Dresner Corporate Services at 312-726-3600, and we will send you a copy or go to www.myrgroup.com, where a copy is available under the Investor Relations tab.

Also, a replay of today’s call will be available until Wednesday, November 9, 11:59 Eastern Time by dialing 855-859-2056 or 404-537-3406 and entering conference ID 98416360. Before we begin, I want to remind you this discussion may contain forward-looking statements.

Any such statements are based upon information available to MYR management as of this date and MYR assumes no obligation to update any such forward-looking statements. These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements.

Accordingly, these statements are no guarantee of future performance. These risks and uncertainties are discussed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015, the Company’s Quarterly Report on Form 10-Q for the third quarter of 2016 and in yesterday’s press release.

Certain non-GAAP financial information will be discussed on the call today. A reconciliation of this non-GAAP information to the most comparable GAAP measure is set forth in yesterday’s press release. With that said, let me turn the call over to Bill Koertner..

Thanks, Kristine. Before we get started, I'd like to congratulate all of Chicago Cubs and Cleveland Indian fans who witnessed one of the best World Series in history; and what an exciting series showing baseball at its very best. As many of you know, MYR's corporate offices are located in the Chicago area.

Our offices are filled today with many blurry eyed but very happy cup fans. So please excuse us if we sound a little sleepy. I'd like to welcome everyone to our third quarter 2016 conference call to discuss financial and operational results.

I will begin by providing a brief summary of our results and then turn the call over to Betty Johnson, our CFO for a more detailed financial review. Following Betty's discussions, Rich Swartz, our Chief Operating Officer will provide an overall industry outlook and discus some of MYR's plans going forward.

I will then conclude with a few closing remarks and open the call up for your comments. Third quarter 2016 revenue and earnings per share improved both, year-over-year, as well as sequentially over the first two quarters of this year.

Year-over-year third quarter revenues increased 5% to $283.3 million in 2016 while gross margins increased to 12% from 12.6% last year. Additionally, our backlog increased mainly due to the Texas - the cross Texas transmission inward to construct approximately 68 miles of 345 KV transmission valued at approximately $125 million.

Our bidding activity was robust during the quarter, both our T&D and C&I market segments remain highly competitive. We were delighted to announce the recent completion of the strategic acquisition of Western Pacific Enterprises or WPE on October 28.

This acquisition expands our C&I and T&D capabilities in Western Canada to serve new and existing customers, and further demonstrates the execution of our three-prong strategy of prudent organic growth, acquisitions and return of capital to stockholders.

WPE has an exceptional reputation in its market region and is managed by a first rate team that shares MYR's values. We are pleased that this leader of the electric practical [ph] industry is joining the MYR group of companies.

WPE's mission is to provide innovative and comprehensive solutions to customers while maintaining the highest possible standards regarding safety, quality, ethics and team work.

All of our operating subsidiaries including WPE intend to remain disciplined in their bidding approach, as well as with their efforts to manage construction and contractual risks. This disciplined approach coupled with a competitive cost structure and a commitment to safety and outstanding service are the keys to our long-term success.

We maintain our belief that MYR is well positioned to win a sizable portion of project awards as they come to market. As always, we encourage and value the input of our stockholders. Your participation in and support of MYRs long-term strategy is to maximize shareholder wealth are essential for our continued success.

Now Betty will provide details on our financial results for the third quarter..

Thank you, Bill, and good morning everybody. As Bill stated earlier, project execution and the contributions made by organic and acquisition growth initiative improved our results as compared to the prior year.

Our revenues, gross profit, APF and backlog; all improved both year-over-year as well as sequentially over the first two quarters of this year. Our first quarter 2016 revenues were $283.3 million which represented a record high quarterly revenue. This also represents a $13.4 million or 5.5% increase compared to the same period of 2015.

The increase was primarily due to organic and acquisition growth, partially offset by lower revenues from large multi-year contracts. Compared to the 2015 third quarter, T&D revenues increased $2.5 million or 1.3% to $206.4 million.

The break down attended for the third quarter of 2016 was $148.4 million for transmission, and $58 million for distribution. C&I revenues were $76.8 million, an increase of $10.8 million or 16.4% for the - from the same period last year.

Both T&D and C&I revenues were at our second highest quarterly revenue levels for the company resulting in record high total revenues overall this quarter. Our overall gross profit in the third quarter of 2016 was $34.1 million compared to $28.6 million in the third quarter of 2015.

The increase in gross profit was primarily due to higher revenue in gross margin. Our gross margin was 12.0% for the third quarter of 2016 compared to 10.6% for the same period last year.

The increase in gross margin was primarily due to favorable closeouts and improved performance on several projects offset by inclement weather experienced and certain other projects.

Additionally, gross margin in the comparable prior year quarter was negatively impacted by lower bid margins caused by higher mix of shorter duration jobs, as well as under performance on certain jobs.

Changes in our estimates of gross profit and certain projects resulted in a gross margin increase of 70 basis points in the third quarter of 2016 compared to a decrease of 50 basis points for the third quarter of 2015. Third quarter 2016 SG&A expenses were $23.2 million compared to $19 million in the third quarter of 2015.

The $4.2 million increase included approximately $1.9 million of costs associated with our organic and acquisitions expansions into new markets. We also incurred higher bonus and profit sharing cost and increases in other payroll costs to support new and existing operations.

SG&A as a percentage of revenue represented 8.2% for the third quarter of 2016, up 7% for the third quarter of 2015 compared to the prior two quarters our SG&A has a percentage of risk, revenue has decreased from 9.4% in the first quarter and 8.6% experienced in the second quarter of this year.

Our provision for income taxes increased to $4.2 million in the third quarter of 2016, compared to $4 million in the same quarter of 2015.

Our effective tax rate for the third quarter of 2016 was 40.4% compared to 39.4% in the third quarter of 2015, the increase in effective tax rate was primarily caused by the year-to-date impact of a lower domestic activity deduction, and changes in the mix of business between state.

The domestic activity deductions in our last business primarily relates to tax deductions on new domestic construction activity.

This quarter 2016 net income was $6.1 million or $0.38 per diluted share compared to $6.2 million or $0.29 per diluted share in the third quarter of 2015, third quarter 2016 EBITDA was $20.5 million compared to $28.1 million in the third quarter of 2015, EBITDA on per diluted share basis grew from $0.95 per diluted share in the third quarter last year to $1.27 per diluted share in our 2016 third quarter.

Shifting out to our first nine months of 2016 results; revenues increased $8.3 million or 1.1% to $798.8 million extra to $790.5 million for the first nine months of 2015, the increase was primarily due to organic and acquisition growth, which was personally offset by lower revenue from large multi-year contract.

Our overall gross profit in the first nine months of 2016 with $92.8 million compared to $89.7 million in the first nine months of 2015 due to the higher revenue and gross margins, gross margin increased 11.6% versus 11.4% in the first nine months of 2015, primarily due to favorable close out and improved performance on several projects, this is partially offset by lower bid margins caused by increased competition in many of our markets and an increase in shorter duration projects.

Additionally, we experience some write down due to recognized sending project change orders in project claim, in climate weather and lower productivity experienced on certain projects.

Changes an estimate of gross profit and certain jobs result in a 50 basis point decreases in gross margin in the first nine months of 2016, compared to 50 basis point increase in the first nine months of 2015.

First nine months 2016 SG&A expenses for 90 - were $69.6 million compared to $56.5 million in the first nine months of 2015 the $30.1 million increase was primarily due to $7.2 million of costs associated with our expansion into new geographic markets, and $1 million associated with activist investor activities earlier in the year, we also experienced increased bonus and payroll cost to support new and existing operations during the first nine months of 2016.

SG&A as percentage of revenue was 8.7% for the first nine months of 2016, up from 7.2% in the first nine months of 2015. Our provision for income taxes, decreased to $8.8 million in the first nine months of 2016 compared to $12.9 million dollars in the first nine months of 2015.

Our effective of tax rate for the first nine months was 39.1% compared to 37.7% in the first nine months 2015. The increase in the effective tax rate was primarily cost by the year-to-date impact of lower domestic activity deductions and changes in the mix of business between states.

Net income for the first nine months of 2015 was $13.6 million compared to net income of $21.4 million for the first nine months of two thousand and fifteen. Diluted earnings per share were $0.77 for the first nine months of 2016 compared to $1.01 for the first nine months of 2015.

EBITDA declined to $52.7 million for the first nine months of 2016 compared to $62.9 million for the first nine months of 2015. Total backlog at September 30, 2016 was $620.6 million consisting of 436.9 million in the T&D segment. And $183.7 million and the C&I segment. This represents an increase of 145.6 million or 30.6% from last quarter.

Our backlog has increased in nine of the past 11 quarters and was at our highest level in our four years with C&I backlog at a record high. T&D backlog at September 30, increased $132.3 million of 43.4% while C&I backlog increased $13.3 million or 7.8% from last quarter.

The increase in backlog was primarily due to the multi-year across Texas transmission contract, of approximately $125 million, which we were awarded in the third quarter of 2016. Turning to the September 30, 2016 balance sheet; we had approximately $600,000 in cash and cash equivalents.

$38.6 million of outstanding fund in capital leases, and $192.3 million available under our credit facility. As of September 30, 2016 we had working capital $87.6 million, which is an increase of $20.8 million from the last quarter. This increase is partly due to our working capital needs to support higher volume of revenues this quarter.

It also increased due to the timing of billing, some of which have been delayed due to milestone billing terms for large multi-year project. So that relates to our share repurchase program in the third quarter of 2016.

We repurchased $5.5 million of common stock for a total year-to-date repurchase of $100.6 million, as of September 30, we had $20 million of availability under a share repurchase program, which was recently extended to August 15, 2017.

As Bill mentioned earlier, in October 28, we completed the acquisition of substantially all of the assets of Western Pacific enterprises for WPE. WPE is electrical contractor firm in the Western Canada, with average annual revenues of approximately CAD100 million for the last five years.

We paid through borrowings under a line of credit approximately CAD16.1 million of which CAD13.7 million were paid at the time of closing, with the remaining amount holding extra to cover any working capital adjustment.

We may also make additional contingent payments in the future, which would base on the successful achievement of certain performance targets; they require the continued employment of certain key executives of WPE. In conclusion, we had another solid quarter with revenue - growth in revenues, gross profit EPS and backlog.

We believe that we have adequate capital and borrowing capacity is going forward to support our working capital needs, funding requirements, equipment investment, and future growth. I will now turn the call over to Richard, to provide an overall industry outlook in our view and MYRG opportunity..

Thanks, Betty and good morning everyone. Entering into the final quarter of 2016. We are seeing an improved project opportunities of all sizes, which we will believe will result in a strong start to 2017, and continued throughout next year. These developments are encouraging, as they represent viable bid in opportunities for MYR.

To that end as William mentioned, we've been awarded an approximate $125 million contract with cross Texas transmission or CTT an affiliate of LS power to construct a new 68 mile, 345 kilovolt limestone to given Creek transmission line, which is part of the Houston import project.

We have worked closely with LS Power [ph] on several of their major projects and look forward to expanding our long-term relationship on this important initiative. Construction is expected to begin this quarter with scheduled completion in the spring of 2018.

This award strengthens our view that large transmission activity will continue to improve throughout the U.S. in the near term. Looking out across the project horizon, transmission of quarterly market review indicated they are tracking one $133.4 billion of projects throughout the U.S.

and Canada which represents approximately 37,000 miles that are planned or under construction. As part of the spend they anticipate several large projects, which party been through extensive permitting period, will be out for bid in the next couple of years.

Additionally, important milestones continue to be achieved in planning and permitting for major transmission projects, for instance the south line project was granted right away approval in September, by the New Mexico State Land Commissioner for a new and upgraded transmission project that will run from south eastern New Mexico to substations in Arizona.

It will consist of 240 miles of three-45kV line as well as 115kV and two-30kV line upgrade. This project, like many being planned in the western U.S. represents a good opportunity for regional subsidiary companies who have a longstanding history of performing transmission projects in these states.

Moreover, we have maintained a solid track record during our 125 year history and have secured our share of major transmission work, to our industry leading project expertise and vast resources.

We are one of a few contractors with capabilities required to complete North America's most challenging, electrical infrastructure projects, and we look forward to pursuing additional large projects over the coming years. We are also encouraged by ample bidding opportunity. Related to small to medium sized projects throughout the U.S.

and recent industry data points to continued investment in overall capital spending by utility. For instance, in august Edison Electric Institute published their electrical industry CapEx update, which showed an expected increase in transmission investment, primarily driven by growth in renewable generation and other grid modernization initiatives.

2016 industry capital expenditure projections, show an anticipated 7.7% year-over-year improvement.

These CapEx projections, were reinforced by recent announcements from regional transmission operators and several utility clients who stated that they will invest additional capital into a new transmission line, upgrade to existing transmission, as well as substation projects all of this translates to improved opportunities for MYR.

For example, in July Avin Grid [ph] announced is committed - its committed to invest more than $5 billion over the next five years for a wide range of projects, including System upgrades and reliability projects throughout the northeastern U.S.

Additionally in the third quarter, Exelon announced plans to invest more than $25 billion across its regulated utilities over the next five years.

The investments are slated for critical infrastructure, Smart grid technology and other reliability improvements and include $7 billion for their CapCo [ph] holding subsidiary $10 billion for Commonwealth Edison, $4.5 billion for their Baltimore Gas and Electric subsidiary, and $750 million for their Peacoat [ph] energy company.

We believe, that through our established offices of LE Myers company, Harlan electric and our recently acquired U.S. Bolus operation. We're well positioned to pursue opportunities resulting from Exelon significant investment plan.

Additionally, the regional transmission operator PGM approved $636 million in transmission projects over the next several years. Including new transmission and upgrades to transmission and substation facilities to alleviate regional grid congestion.

This announcement is a great opportunity for regional construction subsidiaries in the northeast and mid-Atlantic states.

Although the competitive landscape continues to be challenging, our backlog is increasing and we know that the main drivers that point to continued investment by our utility clients, remain intact, ensuring grid reliability, integrating renewable generation and natural gas resources to replace coal generation and replace aging infrastructure, all continue to spur investment into our nation's transmission system.

On the distribution front, we are encouraged by our Xcel Energy's recent announcement of plans to invest $562 million into building an advanced distribution grid in Colorado, which would improve integration between aging distribution infrastructure and new technology and equipment to better serve customers.

We have maintained a long alliance relationship with Xcel for work throughout Colorado since the early 1960s and look forward to the potential opportunities, this should present for the future.

Southern California Edison also released a formal plan in the third quarter that calls for investments in distribution, and transmission infrastructure to support a full integration of distributed energy resources, such as solar, wind and battery storage into the grid.

We anticipate that SCEs new plan will possibly impact - will positively impact our future opportunities for distribution work in this region.

Overall, a continued increase in distribution spending remains intact, due to drivers related to reliability mandate, grid modernization initiatives, growth in housing developing - development in certain parts of the country and rooftop solar generation.

In early October, we were saddened as hurricane Matthew impacted the people of Florida, Georgia and the Carolinas and elsewhere along the eastern coast, we would like to acknowledge all the work done by lying crews from throughout the U.S. who responded to the damage caused by Matthew, including our own line crews.

A recent article in The Wall Street Journal highlighted that all that although the impact of Matthew was extensive, it appears that the initial investment made by utilities in the region to strengthen or harden their distribution system against events like Matthew, may have made a difference in preventing even further power outages in the area.

We believe there will be future, similar storm hardening initiatives which provide another opportunity for MYR.

Activity in our C&I division remains strong, and we continue to see improved bidding opportunities in nearly all of our markets across the West and Northeast, data centers, transit, healthcare, manufacturing, education and water treatment facilities continue to dominate the bidding team/scene.

High tech data center clients in Denver, Phoenix and Salt Lake City, have all announced sizable expansions, which offer unique opportunities, that are well suited to our capability and experience. In the Northeast, opportunities in healthcare and education have been announced with multiple facilities undergoing expansion and renovation.

In addition, transit and transportation oriented project have been announced in our Western target market, and includes sophisticated network, and advanced communication systems intended to increase traffic flow, through enhancing vehicle and Roadway interaction.

Additionally, as air travel numbers continue to break record, Denver International Airport and other airports are announcing plans to enhance the traveler experience, and increase Airfield operations. MYR is well suited to participate in these projects.

Moreover, the health care sector is been a major contributed - contributor to C&I revenue in the West, we believe this factor will continue to provide opportunities to us, as a wide variety of projects are being planned throughout Colorado. There are indications of similar health care expansion is starting in Arizona and other Western market.

Also, a number of water treatment projects are in the pipeline and most of our major market, the technical nature of this work, demand a contractor like MYR, which possesses a high degree of skill and experience.

Finally, we are excited that Western Pacific enterprises, will be joining them MYR group of company, as one of the largest electrical contractors in British Columbia, WP provides commercial and industrial construction services to general contractors and facility owners, as well as substation construction and maintenance service for utilities, government entities and private developers, their extensive experience, strong management team, skilled workforce and similar culture compliments and enhances both our C&I and T&D business segment, and we look forward to a successful integration, into our organization.

In conclusion, we are encouraged by the momentum we are building across several of our target markets, and will continue to focus our efforts on refining our skills, systems and processes in order to capture our share of these opportunities, by employing best practices on projects, we will provide seamless execution, in our work with our clients.

We are also starting to see both organic development and acquisitions, positioning us for opportunities that should come to market in both the near and long term.

Most of all, our goal is to meet or exceed our clients' expectation, and recruit, train and motivate the best employees available to work for MYR, if we do that well, our shareholders will we be rewarded with strong returns. Thanks everyone for your time today, I'll now turn the call back to Will, for some closing comments..

Thank you for the market update Rick, your report highlights the steps we've taken to strengthen our position in the marketplace and grow our North American footprint. We made some great progress this quarter and have positive momentum heading into Q4.

We will continue to invest in our core business, hire and train great teams of the employees, and expand our presence in both new and existing markets in our pursuit of profitable long-term growth. To conclude on behalf of Betty, Rich and myself, I sincerely thank you for joining us on the call today and for your ongoing confidence MYR group.

I look forward to updating you on our progress next quarter. Operator we are now ready to open the call up for comments and questions..

Thank you. [Operator Instructions] Our first question is from Tahira Afzal of KeyBanc Capital Markets, your question please..

Thank you folks, congratulations made strong quarter out to see, so you've got both your markets doing the new well as you head into 2017 Bill, that actually in terms of the rate of crude, which one would you be more excited about?.

Well, I'm very excited about both, I think our C&I market just had some outstanding growth, we've opened a number of new C&I offices organically in the West, and are expanding our C&I business in the northeast through the acquisition of ES Bollis [ph].

So I'm really confident of that market, but that doesn't mean I'm less confident about our T&D market, clearly we went through a pause in some of the growth on the T&D investment, but now certainly feels a lot better than it did a year 18 months ago, so I'm very optimistic of about our T&D market and that market, we also set up some new offices for organic growth, and as you note our SG&A expenses are a little higher than we'd like, and we view those as investments in that organic growth, as we've had to hire people, secure office space and do the kinds of things that are necessary to support that growth, we think that's a great investment as we put together our business cases before we went into those markets, so we're really pumped about both of our markets..

Sorry, Betty were you saying something..

No, I'm good..

Okay, I guess just to follow to that, to the nonresidential market in general has been made strong and some of the leading indicator sales turning slightly the other way, and your business is slightly more balanced in the late cycle, so do you see the revenue momentum organically continuing into 2017, or do you see in losing steam at some point?.

I'll have to - out there are more familiar with some of the government business indicators than May….

The areas were in I still see continues a growth right now and opportunities, I kind of do a balance between what we see within our offices to bid, what our general contractors have coming out and then also some of the engineering firms that are that are working in the markets we're in, and that work seems to still be, full on that side, so I do see it as a positive indicator going into 2017, so I really don't see that pullback in the markets and we're in..

All right, go ahead Bill..

I would add to that, obviously we keep track of government statistics and data put out by EEI and hub and other groups that put up forecast, but more important than that is talking to our clients. We’re in our clients' offices every day, every day, every week asking about what work they have what work they've got coming up.

So that's probably the best intelligence that we can get. Because for how you know customers offices..

And last question I guess, I'm not sure I've been go to Betty or Billy here but you know given that you are starting to see the transmission business come back. You know and you are investing regionally in some other C&I markets.

Is it possible for you to really grow your top clients notably in 2017 yet hold your G&A flattish?.

Well it's definitely possible to grow our topline and we're trying to you know keep our SG&A costs in line but you got to spend a little money to make some money and if the opportunity is there we're prepared to spend some money and you know if that that investment doesn't get capitalized it has to be expense so we definitely see potential for topline growth in 2017 and beyond..

And I think agree that overall the SG&A would grow with that growth if there's another business unit like an acquisition like WPE if we are our sales are growing for that, your gross SG&A dollars are going to be growing.

The SG&A as a percentage could get leveraged still further but not from a dollar perspective, the dollars will go up somewhat according like Bill referred to..

But we also will remain disciplined in our bidding strategy and the risk. We're willing to accept, so we will chase top line growth. It's got to be balanced..

Got it. Okay. Thank you very much and congratulations to your team again..

Thank you. Our next question comes from Alex Regal with FDR capital markets.

Your question, sir?.

Good morning everyone. Bill couple of quick questions on Canada WPP.

Why C&I in Canada? What's the profitability level look like at WPP? How should we think about seasonality of that business and is the WP acquisition kind of old school C&I or is it sort of a blend of What you'd call more electric utility infrastructure work, in other words substation work and so on..

You asked about five questions there Alex. The C&I business margins are very comparable to the margins we've achieved in the C&I market in the U.S., so I would say it is very comparable. Whether it's old school C&I, I guess I don't think there is an old school C&I as I say tour our C&I projects in the hospital here in the lower forty eight.

Or a hospital in Canada they look like a lot of technology and it's important for or our subsidiaries or existing subsidiaries and now WBE to really be at the cutting edge of installing this new technology.

Because I don't see any old school installations, if you will, everything is very modern, very high tech and it requires a highly skilled electrician and design team to build these facilities..

In the seasonality?.

Seasonality, you know, I don't think is very different than what we have here in the States..

And could you comment on cross Texas? It sounds like it's starting this quarter.

How should we think about mobilization expenses and how that can affect profitability in the fourth quarter?.

As far as mobilization size we did that in our estimates since we put them together. This was a procure and construct contract so we are furnishing materials on this project but as far as the any negative side on mobilization of that project I don't think we'll see, or we don't anticipate seeing anything in this quarter..

Thank you very much..

Thank you..

Our next question comes from Andy Wittman of Robert W. Baird.

Your question please?.

I want to keep going across Texas if I might. I guess my question on this one, this is a see one of the larger projects you guys booked in a while and my question is as you address this project in terms of pull resources away from other growth opportunities in the company.

In other words if everything else was equal would this be additive to the overall portfolio of projects you're working on or is this going to sap resource. I am just trying to understand how this gets balanced and the overall workload for the company..

Now this I would say you know our goal is to have this as additive. Every bit we review we do every time we talk to our districts or where we review their business plan to have these projects as additive.

we've got a groups set up that performs these projects and in slower time we'll move them out to other projects that work on client development, will do certain things and then we group them back together so or capable of doing multiple large projects at a given time. So we're not at full capacity by any means when it comes to that size..

Great and then Rick maybe just to keep going on this one you mentioned that if you've got the procurement side of this project, how does, considering that how does the margin of this project compare with the margins that you've been putting up recently in the segment? Obviously it’s got the advantage of being a large project but procurement sounds like it should be lower margin.

I guess as we look out into your execution this project, I'm just trying to get a feel of what this project could do to your overall mix of margins?.

What we've always said that if there's large material component it is usually at a lower margin, it's a lower risk for us but this project and its performance really ties down to the execution of our work out in the field and how we perform and with many of our large projects, we carry much to margin until the end when we can recognize hopefully through production again and things that change on the projects and potential upsides..

Right. Okay and then this one to do one here on C&I. The margins have obviously been picking up and yes on the C&I business, my question is are you seeing job, bid margins being higher or is it the greater utilization of your workforce In limited equipment of those margins, I guess and that’s driving the margins.

How is the sustainability of those margins going forward with the backlog that you currently have? Could you comment on that please?.

When I look at that side, I see it as a very competitive market. I think all the markets where we're at remain competitive, really the margin increase we're seeing is through execution. And good contract management and that's where we're seeing those gains at. The projects build at the beginning of the script are very competitive out there.

We know the markets we are in and we got a good team that can perform so it's more on the execution and contract management side..

And then just a clerical question to finish up here.

What was the, can you guys give us estimate of what the revenue was with Hurricane Matthew here in the fourth quarter?.

We don't disclose that Andy, over a million dollars..

Okay. Alright thanks guys..

Thank you. Our next question is from Noelle Dilts with Stifel.

Your question?.

Thanks, I just wanted to circle back to western Pacific for a moment.

You know you guys disclosed that annual revenues have averaged around one hundred million Canadian dollars over the last five years but given that you know we have seen that's tumults in the Western Canadian markets I would imagine it might be running a little bit lower than that now.

Can you give us a sense of what the run rate is today?.

Going forward we really don't project that out or provide that guidance but I would say Our goal is to have it similar to their existing runway rate that we've averaged over the last five year, that’s the minimum would anticipate going forward..

Okay and then you know given that you sort of won a leverage their relationship into more work on the T&D side. I mean can you comment on, are you expecting a meaningful rebound in Western Canadian transmission activity? I know Alex asked about this a bit but I just want to understand your outlook there..

As we said they're primarily a commercial C&I entity. They do substation work. They really do no transmission or distribution work.

So it's a point through some of their existing clients we can bring that expertise to them and hopefully springboard some growth off of that side and then work on those relationships to further develop on the on the transportation side other markets they may not be in..

Okay.

All right can you speak, just shifting over electric distribution it looks like revenues were again down this quarter but less so than we saw in the second quarter, can you just comment on what you're seeing in the market and what your expectations are as we move into kind of 2017 and 2018 just in terms of the general trajectory for the market..

I see it, I still see it continuing to grow. The one thing the distribution market is always gets into as people use that as kind of a budget balancing component.

So we see that work turned on and off very quickly and depending on the clients we're working for and the weather and everything else we've seen the work turned on and off and they use it as that of the budget balance component so I do, I'm looking for some growth overall..

Okay. And then could you just comment a little bit on the transmission side. From a geographic standpoint which areas of the U.S.

are maybe a little bit relatively stronger versus those that are weaker?.

Well I am seeing opportunities I would say Central Eastern, I see a lot of opportunities, Midwest Really the area that needs to get their permitting done and some other side to California and that would probably be the side I see that hopefully those projects seem to get pushed further and further out that the others when I look at the rest of the U.S.

I see some potential than just about every other geographic area..

Great, thanks Rick..

Thank you again. [Operator Instructions] Our next question is from John Rogers with Davidson.

Your question please?.

Good morning. Couple of just follow up things for some Western Pacific.

Based on that transaction pricing and you’re financing, this will be accretive in 2017 is my question?.

Yes, just saw our expectation..

Okay and I guess in the terms of backlog that they bring to the business?.

Yes they've got a significant backlog. We need to do a sort through to make sure as we reported the end of the fourth quarter they're using the same definition of backlog that we've used for the rest of the company.

That hasn't been totally sorted out at this stage but they definitely have a nice book of business going in to the fourth quarter and into 2017. But we haven't disclosed the backlog, because we're still getting Western Pacific to reconcile their backlog reporting to our definition..

Okay..

I have a little bit to add John. We've known this company since really 2013. We've had many conversations with him over time, it's something we've looked at the market.

We spent a lot of time up there and you know it's like any of our other districts some of the work that if they haven't negotiations or they don't have contracts or its pending right now we will won't count that in backlog but we've got good visibility to do what's coming ahead in the next few months..

Okay and as far as the seasonality of that business just given the geography and all the I mean does it, I guess what I'm concerned about is there a meaningful slowdown or drag that you're going to see from him in the first part of the year then not to be expected..

We don't see that with the work they have on right now. I mean they're more of a commercial contractor. It’s one of those that their work is similar to ours in other regions where we work so they are lower there, Vancouver and that area continues to progress even during the winter so no major impact that we see with the backlog they have currently..

Okay. Thank you. And then on the P&B. side of the business I mean, Congratulations on the surge in orders and backlog and the last time we saw these levels of backlog, Even with a lot of materials involved in contract. I mean your margins were up over in double digit range.

Is that ahead of us now?.

John it’s possible. I don't think we would be counting on it if we have exceptional execution. You know it's possible that going in as we bid these jobs are more typical of what bid margins we've assumed historically..

Okay fair enough. Thank you..

Thanks John..

Our next question is from Dan Mannes with Avondale.

Your question, please?.

Thanks. Good morning everyone. A couple quick thoughts here on Western Pacific again. I know you said mostly eye business but also substation. if I were to allocate the hundred million of trailing revenue, 80% and 20% between T&D or almost none that would fall into the T&D..

I would save 80% - 20% or 85% - 15% depending on the timing..

No that's helpful. Secondly, I think in Bill's comments you said that management was coming aboard and in various comments there was some discussion about you know a contingent payout tied both to performance as well as retention.

Can you give a little bit more color on the status of the current management team and their likelihood of staying with the business and then maybe a little bit more on any on the materiality of the continued consideration?.

I bet you comment on the family. Last name or Fedfax [ph], if that with the business for a long, long time, they are younger than me and they have indicated an interest in staying on. They are actually core members of the management team.

They are very committed to growing the business and as we did our due diligence, we definitely don't want to just buy equipment and assume contracts where we're looking to bring on the management team and integrate them into our organization so we're very comfortable with the management team and we spent a lot of time talking about culture and we feel very comfortable that there are cultural lines with our culture..

And then they are continuing consideration?.

We haven't disclosed that, it's not a big factor in the economics of the deal but we definitely want to make sure that the management of WPE is sounded just like we want to have the management for all the other MYR Companies..

Completely understood. I also want to touch a little bit on gross margin in the quarter; it sounds like there are a lot of puts and takes, it sounded like execution, particularly on C&I was a positive, maybe weather was a negative.

Can you maybe drill down a little differ on the impacts from a margin perspective of some of those puts and takes?.

I guess just start with the overall impact on the margins; you can think about like half for between T&D and C&I. And yes, from a T&D side, whether was an impact but offset by some other favorable execution, probably going - something probably in both ways. So that's for quarter-to-date than proven into across the board..

So basically you're saying they kind of net each other out.

So - I guess I'm trying to make sure that weather was a headwind, execution was a tailwind; and as it relates to T&D, they netted each other?.

On T&D there was execution. Overall, it was more favorable than the weather. So half and half of our net-net write up on margins was between C&I and T&D but the favorable on T&D was that much more favorable but offset by some of the weather that we talked about in the prior projects..

But given the revenue mix; C&I is obviously a smaller piece of the revenue.

Can I assume that the execution benefit to C&I was even a good deal larger than the T&D and if you can just give a little bit more color - are these on average projects that are at completion with closeouts or these things that are ongoing and you've just executed really well on them?.

It's a mixture, some are projects that we're finishing up and some are ongoing, we're executing very well and we've got enough visibility in it that we could forecast where we would be accurately..

Got it. And then lastly, since you did now put CTG in backlog - your press release, a contract one which you hadn't seen in a long time; I wanted to get an update maybe on anything new on Harry Eldorado [ph] which you've talked about the past but I don't believe you put into backlog yet..

We have not put that into backlog yet, that's a project that will probably - from everything we see now probably, build in 2018. Hopefully, we get a contract secured on that in '17 but that is not in our backlog..

Got it, thank you very much..

I'm no longer seeing any questions in queue. At this time I'd like to turn the conference back over to Mr. Koertner for closed statements..

So I like to thank everyone for participating in today's call. As always - I'd like to extend my thanks to our employees that make all this happen. It's not just the management team - we've got a great group of employees at MYR that really dedicated building value for shareholders. I don't have anything further.

We look forward to speaking with you again on our next call..

Ladies and gentlemen, thank you for your participation in today's conference. This concludes the program. You may now disconnect..