J. Marc Lewis - Vice President-Investor Relations José Ramón Mas - Chief Executive Officer George L. Pita - Chief Financial Officer & Executive Vice President.

Noelle C. Dilts - Stifel, Nicolaus & Co., Inc. Tahira Afzal - KeyBanc Capital Markets, Inc. Daniel Mannes - Avondale Partners LLC Jason A. Wangler - Wunderlich Securities, Inc. Chad Dillard - Deutsche Bank Securities, Inc. William Bremer - Maxim Group LLC John Bergstrom Rogers - D.A. Davidson & Co.

Adam Robert Thalhimer - BB&T Capital Markets Andrew John Wittmann - Robert W. Baird & Co., Inc. (Broker) Alex J. Rygiel - FBR Capital Markets & Co..

Please stand by. We are about to begin. Welcome to MasTec's First Quarter 2015 Earnings Conference Call initially broadcast on May 12, 2015. Let me remind participants that today's call is being recorded. At this time, I would to turn the conference over to Marc Lewis, MasTec's Vice President of Investor Relations. Please go ahead..

Thank you, Jessica, and good morning, everyone. Welcome to MasTec's First Quarter Conference Call. The following statement is made pursuant to the Safe Harbor for forward-looking statements pursuant to 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 reflect the company's expectations on the day of the initial broadcast of this conference call, and the company undertakes no obligation 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 these communications.

In today's remarks by management, we will be discussing continuing operations and adjusted financial metrics as discussed and reconciled in yesterday's press release and supporting schedules. In addition, we may use certain non-GAAP financial measures in this conference call.

A reconciliation of any non-GAAP financial measure not reconciled in these comments to the most comparable GAAP financial measure can be found in our earnings press release or the Investors and News sections of our website located at mastec.com.

As we have previously announced, the independent accounting investigation by the Audit Committee of the company's Board of Directors has delayed the filing of MasTec's 2014 Annual Report on form 10-K, and will also delay the filing of the company's 2015 first quarter 10-Q.

The Audit Committee is working diligently to complete the investigation in order to permit the filing of the company's 2014 Form 10-K and first quarter 10-Q as soon as possible.

Because the Audit Committee independent review has not yet been completed and no conclusions have been established, we will unfortunately not be able to provide any more information regarding the status, expected timing or outcome on this issue today.

In addition, all financial results on this conference call should be considered preliminary as this information has not undergone the complete review by the company's outside auditors that is customary for the release of interim results and filing of Form 10-Q.

The preliminary information represents the company's good faith belief as to the company's results for the periods presented, but is pending any potential impact from the investigation, and investors are cautioned that such information is neither final nor complete and should not be relied upon as such.

With us today, we have José Mas, our Chief Executive Officer and George Pita, our Executive VP and Chief Financial Officer. The format of the call will be opening remarks and analysis by José, followed by a financial review from George. These discussions will be followed by a question-and-answer period, and we expect the call to last about 60 minutes.

I will now turn the call over to José.

José?.

Thanks, Marc. Good morning and welcome to MasTec's 2015 First Quarter Call. Today, I will be reviewing our first quarter results as well as providing my outlook for the markets that we serve. Before we get started, as Marc mentioned, we are limited in what can be said about the current Audit Committee investigation.

While we understand and certainly share investors' frustration about when this issue will be brought to closure, it is important to note that proper corporate governance requires that a complete investigation be conducted, and it is not unusual for these investigations to take longer than investors or management would like.

We hope investors take comfort in the fact that we are reporting first quarter information in a detailed manner including segment performance. Management has reviewed first quarter results in detail and believes that results released today properly reflect the results for the quarter as presented.

We will, unfortunately, not be able to provide any more information on this call on this issue. As it relates to the first quarter, we expected a challenging quarter. The drop of commodity prices in the second half of 2014, the devaluation of the Canadian dollar and softness in wireless spending created headwinds entering 2015.

These issues, coupled with adverse weather, late project starts in oil and gas and a struggling wind farm project in Canada, resulted in a very disappointing first quarter.

We've adjusted full year guidance for the impact of our first quarter results and some expected continued headwinds primarily related to revenue in our Wireless and Transmission segments and its associated margins. Despite that, we expect EBITDA margins for the company to improve in 2015 versus 2014.

While we would have hoped for a better 2015, the outlook for our business in 2016 and beyond is excellent. We are very well-positioned to take advantage of the increasing opportunities our markets and segments afford us.

For example, in our Installation and Fulfillment business, we recently began providing a revolutionary service that we think will help change the way wireless phones are procured. Through the use of mobile experts, MasTec employees deliver, set up and transfer data on a customer's new or upgraded device.

We launched this service this quarter; and while we're not at liberty to disclose the customer yet, we look forward to updating the market in the future of this developing opportunity. We're also excited about the developing and growing opportunities related to 1 gigabit fiber.

An increasing number of carriers are actively building or planning to build, and increasing data speeds is becoming the key objective and norm for carriers. In the wireless market during a recent earnings announcement, one CEO of a major carrier spoke of, and I quote, "massively densifying" their network.

We expect wireless spending and activity to increase as we approach 2016. On yesterday's release, we announced record oil and gas backlog. We also said we expected backlog to more than double in the coming quarters. We've been very bullish about expected levels of activity in 2016 and beyond, and we are now seeing those opportunities materialize.

Now I would like to cover some industry specifics. Our Communications revenue for the quarter was $469 million versus $447 million in last year's first quarter. The growth was driven by increases in both our fulfillment and wireline business, offset by a decline in our wireless revenues.

Margins in our Communications segment were up over 300 basis points both sequentially and year-over-year. We expect continued improved margins on a year-over-year basis, especially during the second half of the year when we compare it against last year's significant disruptions.

Our install-to-the-home revenue was up 9% in the first quarter of 2015 versus 2014. Our revenues with DIRECTV were up slightly year-over-year, and our diversification efforts into security have helped lead to both geographic and revenue growth.

As we have previously stated, we believe we're the largest third-party independent fulfillment company in the United States with broad geographic coverage. We are excited about a number of different opportunities with multiple customers who are looking for nationwide fulfillment services.

As it relates to wireline projects, we are very bullish on the growth of 1 gigabit opportunities. We are actively engaged in a number of projects and expect revenues related to this initiative to accelerate through the balance of 2015 and into 2016. Our wireless business, as expected, was down year-over-year.

However, we are in a very different position going into 2015 than what we faced in 2014. As you may recall, we entered 2014 expecting significant wireless growth with the award of a contract in late 2013. We aggressively ramped our resources, and the revenues didn't materialize.

We struggled from a margin perspective in this business in 2014 due to having to adjust resources during the year. We started 2015 without these margin pressures, and our results demonstrate that. We believe that our geographic capabilities offer us great opportunities for future growth.

And while the growth hasn't materialized as quickly as we would've hoped, we are very encouraged about our future prospects. Revenue on our Electrical Transmission business was $115 million versus $80 million in last year's first quarter. While we had solid revenue growth, we struggled in the first quarter.

A number of our projects were negatively impacted by weather, and we had some project closeout costs as well. We are, today, much more geographically diverse in this segment. While we believe that's important for us to grow long term, smaller, more-spread-out projects are affecting our margins as we build to scale in different markets.

Many of these customers that we are currently growing with will be awarding much larger projects, and our presence on their systems is important. Moving to our Power Generation and Industrial segment, revenue was $80 million for the first quarter versus $54 million in last year's first quarter.

While revenue growth was good, we had one project where we took a significant loss reserve. This project, located on the north shores of Lake Superior in Canada, has been very challenging for MasTec. It was our first wind project in Canada. Excluding that project, our Power Generation Group would have had its best quarter in a long time.

While we're disappointed with the results, we are encouraged that the business is and will continue to improve in 2015. Our Oil and Gas Pipeline segment had revenues of $328 million for the first quarter compared to revenues of $380 million in last year's first quarter.

In the first quarter of 2014, we were completing a very large pipeline project that accounted for a significant amount of last year's first quarter oil and gas revenue. Lower utilization levels in the first quarter led to lower EBITDA margins in this year's first quarter compared to last year.

We expect margins to improve in the second quarter and approach or surpass 2014 levels for the balance of the year. As we look ahead for the balance of 2015, we are expecting a challenging environment in Canada and expect revenues in Canada to be down about 20% year-over-year.

In the U.S., we expect revenues to be down slightly, but the outlook for 2016 and beyond is excellent. As I stated earlier, despite having record oil and gas backlog this quarter, we are expecting backlog to more than double in this segment over the next few quarters.

This is based on significant levels of activities with customers on projects that are expected to start in early 2016. In addition, we are beginning to see the fruits of our efforts relative to the opportunities in Mexico. On our last call, we announced the award of two large U.S.

pipelines being built by CFE, the Federal Electricity Commission, as a member of the consortium with energy transfer partners and Carlos Slim's Grupo Carso. The consortium signed both of these contracts during the first quarter. MasTec plays two significant roles on these projects.

As a contractor, MasTec will participate in the building of approximately 337 miles of 42-inch pipe. As a member of the consortium, MasTec will hold an equity interest in these projects for their useful life. The value of these projects are not included in our backlog.

Construction will begin in either late 2015 or early 2016 and must be in service by 2017. To recap, we had a tough quarter. The bright spot was our Communications segment where we saw strong margin performance across the group despite weaker wireless revenues.

As wireless opportunities improve along with the continued growth of 1 gigabit, we know this segment provides good long-term organic growth opportunities. Our Oil and Gas business had a slow start as weather and project delays impacted margins. Utilization levels have improved. We've got solid backlog and great prospects.

We expect significant improvements in this segment. Finally, we expect Power Generation and Transmission to return to profitability in the second quarter. I know that there's a lot of noise surrounding MasTec today between an investigation and first quarter results that were below expectations.

I take responsibility for that, and I share in your frustration. But I've also been doing this a long time, and I feel have a good sense of the market. Despite our challenges and the noise that surrounds us, we have some excellent opportunities in front of us.

The men and women of MasTec are delivering for their customers, and our customers are rewarding us with more opportunities to grow our business. I'm very excited about our future, and I truly believe we have never had the prospects in front of us that we have today. I'll now turn the call over to George for our financial review.

George?.

AT&T at 19%; DIRECTV at 13%; Berkshire Hathaway Energy, Energy Transfer Company and Duke Energy were all 5%; Sprint was 3%; and TransCanada, Starwood Energy, Plains All American Pipeline, and Fluor Canada were each at 2%.

Individual construction projects comprised 48% of our first quarter revenue, with master service agreements comprising 52% and this mix is generally in line with recent trends.

As far as major customer trends are concerned, overall AT&T revenue levels during Q1 2015 decreased generally as expected when compared to last year, primarily due to lower wireless project activity in 2015.

Also noteworthy is the addition of Sprint as a top 10 customer, and this is due to the combination of our existing wireless and WesTower operations. At quarter end, our 18-month backlog from continuing operations was approximately $4.2 billion compared to approximately $4.2 billion in the first quarter of 2014 and $4.3 billion at year end.

Backlog growth occurred in our Oil and Gas segment, which increased 12% sequentially and by over $90 million to a record level of $870 million.

As José mentioned earlier, we continue to expect significant oil and gas project opportunities to materialize during 2015 and expect to see continued overall growth in oil and gas backlog during the balance of 2015.

Regarding first quarter 2015 continuing operations adjusted EBITDA performance, continuing operations adjusted EBITDA was $63 million compared with $75 million last year. On a rate basis, first quarter continuing operations adjusted EBITDA margin was 6.3% compared to 7.8% in the first quarter of last year.

Regarding other areas of the income statement, below the EBITDA line, first quarter 2015 depreciation and amortization expense was in line with our expectation at 4.2% of revenue compared to 3.5% last year. And this reflects the impact of the Pacer and WesTower acquisitions completed during 2014.

First quarter 2015 GAAP, general and administrative expense, as a percentage of revenue was 7.4% compared to 5.5% last year. First quarter GAAP general and administrative expenses include approximately $9 million of acquisition integration costs related to WesTower as well as $3 million related to the current Audit Committee investigation.

Interest expense during the first quarter of 2015 was $11 million compared to $12 million last year.

Even though we have higher borrowings compared to a year ago due to the capital deployed for 2014 acquisitions and 2015 stock repurchases, interest expense levels were lower as we have reduced our effective borrowing cost with the retirement of all our convertible notes.

And finally, first quarter 2015 continuing operations adjusted earnings per share were $0.7 per share compared to $0.21 per share last year, and continuing operations diluted loss per share was $0.8 per share compared to continuing operations earnings per share of $0.19 last year. Now let me talk about cash flow, liquidity and capital structure.

We generated $117 million in first quarter 2015 cash flow from operations, a $138 million improvement when compared to $20 million of cash used in operations last year. Strong cash flow from operations came from the seasonality of operations and working capital initiatives.

As I mentioned earlier, because of this strong cash flow, we were able to purchase over $90 million in MasTec shares during the quarter without any meaningful increase in our overall debt levels. Our first quarter 2015 accounts receivable days sales outstanding, or DSOs, were 90 days compared to 87 days at year end, a three-day increase.

As we have previously indicated, DSOs can bounce around some based on the timing of project closeouts and retention payments and the addition of WesTower operations, which were at higher DSO levels than MasTec operations, has also impacted our first quarter DSOs.

We typically expect our DSOs to range somewhere in the 80s as we continue to make progress in normalizing WesTower DSOs. Regarding our spending on capital equipment, first quarter 2015 cash CapEx, net of disposals, was approximately $18 million.

We added approximately $13 million in capital leases and other financed equipment purchases for a total CapEx spend, net of disposals, of $31 million.

We anticipate that 2015 cash CapEx levels, net of disposals, will approximate $80 million with an additional $80 million to $90 million in capital lease and equipment financing for a total CapEx, net of disposals, of $160 million to $170 million.

Liquidity at March 31, calculated as cash plus availability in our senior revolving credit facility, was $572 million.

Our overall net debt level at quarter end was approximately $1.1 billion, essentially flat when compared to our year-end level, and reflecting the 2014 acquisitions of Pacer and WesTower, as well as capital invested in our 2015 stock repurchase program.

As previously disclosed, in April, we successfully completed a Consent Solicitation with holders of our senior notes extending certain reporting requirements until August 1. We also received consent from our bank group under our senior secured credit facility to extend the deadline for financial reporting requirements to June 1.

Should any extension of this date be required in connection with the Audit Committee investigation, we fully expect the continued support of our bank group.

Moving on to 2015 full year guidance, we are projecting annual revenue of approximately $4.4 billion, with continuing operations adjusted EBITDA of approximately $425 million and continuing operations adjusted diluted earnings per share of $1.45.

This guidance level includes the impact of our Q1 results as well as the negative impact of approximately $0.05 per continuing operation diluted share of a higher expected 2015 income tax rate, which currently is estimated at approximately 41% versus our previous estimate of 39%.

And this increase is due to lower expected levels of 2015 Canadian income. Our estimate for the full year share count per diluted earnings per share is about 81 million shares and 80 million shares for the second quarter, and these estimates reflect the repurchase of over five million shares during the first part of 2015.

We expect to end 2015 with approximately 80 million shares outstanding. We currently estimate that Q2 revenue will approximate $1 billion, with continuing operations adjusted EBITDA in the range of $94 million to $99 million and continuing operations adjusted earnings in the range of $0.27 to $0.30 per share.

If you do the math, you will note that our guidance assumes that second half 2015 revenue levels will decrease in the mid-single-digit range compared to last year, and this is primarily due to lower expected levels of Canadian Oil and Gas revenues resulting from the combination of expected lower levels of demand for services and the impact of foreign exchange rate changes.

Our guidance also assumes improved EBITDA margin performance in the second half of 2015 compared to last year, and this is primarily due to improved Communications segment margins as we complete the WesTower integration and annualize against the severe disruptions that occurred last year in our wireless operations.

In summary, we had a challenging first quarter, but we expect to see improved profit margin performance in the second half of 2015 and remain excited about our revenue and profit margin growth prospects in 2016 and beyond. And that concludes my remarks, and now I'll turn it back to the operator for Q&A.

Operator?.

Thank you. And we'll go first to Noelle Dilts with Stifel..

Hi. Thanks, everyone. Good morning..

Good morning, Noelle..

Good morning, Noelle..

I was hoping that just to start off with a pretty broad question, but maybe you could walk us through how you're thinking about 2016 at this point and discuss where you're incrementally more optimistic on the outlook relative to, say, three months ago and where you're a little bit more cautious..

Well, I think we've been optimistic about 2016 for a while. No question that when we think about the oil and gas business, we think 2016 is going to be an absolutely fantastic year.

And going forward as well, I think 2016, 2017 and 2018 are all shaping up to be really, really good years, and that's a lot of visibility to be able to say that where we stand today. While we felt great about 2016 three months ago, we're finally seeing it start to take shape. So we feel a lot better.

Our confidence level is much higher today for 2016 than it's been. And I only say that because we're seeing contracts materialize and projects materialize, and we've got a good feeling of when jobs are going to start.

So there's no question that in that business, we expect significant growth in 2016 versus where we'll be in 2015 and, quite frankly, where we've been in the past.

You take into account the opportunities that we have in our fulfillment business, in our wireline business relative to gigabit opportunities, some of the opportunities that we're seeing in transmission that we think are going to play out later this year, it's shaping up to be a really, really good year..

Okay. And then just touching on the expected doubling or more of backlog in oil and gas, can you talk about if more of these projects that you're seeing are coming from Mexico or if it's still a lot of U.S.

opportunity? And then would you be looking at most of these projects moving forward in 2016, or do you think some of them could be 2016 and 2017 projects?.

A couple things. One, we said on the call today that the Mexico projects that we won during the first quarter, which was through the consortium and those are not in backlog. So while those are Mexican projects are actually in the U.S. but that will obviously add a significant amount of backlog as we look forward.

In addition to that, we expect significant awards in the U.S. and also, hopefully, in Mexico that will further add to that backlog..

Okay. And then final question. In terms of the installed-to-the-home business, I think there's been a fair amount of investor concern around some of the cost synergies that AT&T had talked about with the DIRECTV business.

Can you just talk about how you see that playing out and impacting MasTec over the next couple of years?.

Sure. I think at the end of the day, AT&T is paying a lot of money for DIRECTV. I think they've got very solid plans on how to grow the business, which I think is going to create opportunities for us. So where we stand today, we're really excited about the opportunity and think we've got some opportunities to potentially grow that business..

Okay. Thanks..

Thank you, Noelle..

We'll go next to Tahira Afzal with KeyBanc Capital Markets..

Good morning, José and team..

Good morning..

Good morning, Tahira..

José, clearly it seems like – well, hopefully it seems like your backlog opportunities are now ticking up. Potentially, you're seeing a trough on the Communications spending side. So on the revenue side and in terms of the backlog, everything seems to be anniversarying and probably positively inflecting into the second half.

I guess my concern is around execution and confidence around you're taking on work from, perhaps, new clients going into new regions.

Given the learning curve or the learning lessons we've had there over the last couple of quarters, is there anything on the execution and operations side that you've changed, perhaps, in terms of how your management is incentivized or anything operationally or structurally that's different?.

So my first reaction to your question, Tahira, is I think we understand the issue. We understand the concern. We accept it. We have struggled over the course of the last year with multiple issues. I think some of the issues have been within our control but, quite frankly, I think a lot of the issues have been outside of our control.

Maybe we've misread some things. I think in the wireless business, we've obviously been bit a few times in terms of declining revenues. With that said, I think we have now demonstrated operationally that we're able to manage at those levels.

And I think that we've demonstrated that with the margins that we were able to deliver in Communications this quarter. I think those margins will continue at those levels, if not even slightly improve from here through the balance of the year. So when we get a good feel for what we've got, I think we can manage well to it.

If you look at our Oil and Gas business, which, obviously, from a margin perspective didn't perform particularly well in the first quarter, a lot of that was due to utilization levels.

For example, just to give one example, our biggest division in that group went from about $165 million in revenue in last year's first quarter to $58 million in this year's first quarter. And a lot of that had to do with projects that we were hoping that would start in Q1, and they kind of got pushed out into Q2.

We're expecting that same unit to almost triple in revenues in the second quarter. So when we have the work, we think we're managing it well. Obviously, we had our issues in Transmission and Power Gen. I think they're very specific. I think we're dealing with them.

So for lots of reasons, we're looking forward to 2016 because I think that the opportunities for revenue growth are going to be there. And I think we've demonstrated in the past that when those opportunities are there, we're able to execute to them and deliver.

And again, I understand the market's frustration and I understand the questions because we haven't over the last year. But I feel a lot today like I did a couple years ago where things were about to break. So I'm excited and looking forward to moving forward..

Again, José, on the wireless side, it seems you can't comment much on what you're doing in terms of with this customer in regards to new technologies. But any more color you can provide on what you're doing? I know there are a lot of fluid new technologies coming out on the wireless side. Would love to get a sense how you are leveraged to that..

Look, I think today on the wireless side of the business, I think we've become a very well-known commodity. I think our size and scale is unmatched in the industry. I think that's very important to carriers. I think we're going to see that play out over the coming year in terms of opportunities that we get with different customers.

When we made the WesTower acquisition last year, we talked about it being a diversification play, a geographic diversification play, and we hope that the customer diversification would follow. We think we're making really good inroads relative to that.

And I think as time plays out, we're going to see not only nice revenue growth from that business, but really saw a diversification which we think's important..

Got it. Thank you, José..

Thank you, Tahira..

We'll go next to Dan Mannes with Avondale Partners..

Thanks. Good morning, everyone..

Good morning, Dan..

First question on Oil and Gas. Obviously, you have a strong backlog on the quarter, and you have a pretty positive outlook there. Can you talk about any meaningful wins, either in the first quarter or subsequent, and I'm kind of pointing at Lone Star here and the others.

And to the extent that and the TexMex's drops aren't in your backlog as of quarter-end, is that partially maybe giving you some of the confidence as it relates to the balance of the year?.

Well, we generally don't talk about any project in particular. Obviously, we've talked about these TexMex projects more because they were public. I can tell you that a lot of what we expect to come isn't really being talked about relative to MasTec, so I think it's really new projects that people haven't been focused on.

And just to be clear, the two projects that we won that are in the U.S. relative to Mexico are not in backlog. The construction activity for those are not yet in backlog and, over the next quarter or two, they'll be in backlog. Those projects are expected to start in either really early 2016 or potentially could start in late 2015..

Understood. And then secondarily, can you help me a little bit more with the view for the back three quarters of 2015? Obviously, you've been pretty clear on what happened in the first quarter and especially with the wind drop, but you did take a bit of a hack to the balance of the year.

Can you maybe break that up? I mean, we're looking at about a $27 million reduction of EBITDA. I don't know if you can maybe point to where that would be and whether it's electric or wireless, if you can help us out a little bit there..

Sure. So I think in the wireless business, when we look at the revenue guidance that we've now given for 2015, we've moderated our view on wireless. I think the second quarter was a very difficult comp for us. It was a very, very busy quarter last year. I think it was the height of wireless spend that we saw in the industry.

It was after Q2 that the market really took a hit, and it dropped significantly in Q3 and Q4 of last year. So I think the second quarter is a tough comp for us. I don't think we're going to see the same level of increases in Q2 that we saw last year, so we're expecting a down year-over-year comparison in Q2.

I think from that point on, it begins to normalize a little bit. I think from an oil and gas perspective, it all depends on what starts in the fourth quarter, and I think we've taken a very moderate view relative to that. So I think those are the big drivers.

Transmission, we probably reduced our expectations just slightly, although we expect 15%, 20% growth over last year. So that business is still growing but probably moderated our views just a little bit..

Great. Thank you very much..

Thank you, Dan..

We'll go next to Jason Wangler with Wunderlich..

Good morning. I was curious maybe to get some color on your fiber comments.

I know it's a little bit tough to talk about, but as you go throughout this year and next year, I mean, are we seeing more, I guess, cities and more infrastructure being built within the ones that we've heard announced, or are you expecting even some more cities to be brought out as that expands?.

I think we're really excited about the fact that everybody's talking about it. I mean, anybody that's involved in that industry is deploying 1 gigabit. There's a lot of people that generally wouldn't be talking about it talking about it. So I think it's just a very active market. I think it's becoming the norm for everyone.

So we're seeing a very broad-based push towards gigabit services and fiber services. And I think it's great for the industry..

Okay.

And then if I could on, obviously, the buyback and completing that, as we go through the year and expecting to generate some pretty good cash flows, is there an idea to put something else on under that? Would it be to look at paying down some debt or just kind of the thoughts there?.

The challenge for us today is that we are, without having filed our annual results from last year, we're kind of in a closed window right now. So as the company or as management, we're really not allowed to do anything. We bought $100 million of shares at roughly $19 and change. We thought that was great value.

We can continue to think that's great value. And if it was up to me, we'd do a lot more of that..

Okay. So let's wait for the next one. Sounds great. Thank you..

Thank you..

And we'll go next to Vishal Shah with Deutsche Bank..

Hi. This is Chad on the line for Vishal. Just wanted to get back to your comment about the oil backlog doubling.

Can you talk about the composition of the projects, whether you're expecting a number of smaller projects versus larger projects, oil versus gas and does that include any M&A?.

I'll start with the last question first. It does not include M&A. It's a combination of both oil and gas projects. It's going to be driven by larger projects, although there will be a bunch of smaller projects as well. And again, we're very confident in our ability to say that. So we expect a more than doubling, which is going to be very broad-based.

So large projects, some smaller projects, geographic mix, customer mix. It's a very, very active market that we're currently in..

And then just on oil and gas still, can you just talk about the bidding environment? I mean, are you seeing any increased pricing pressure from competition? Are you seeing any cost reduction request from customers? Any color on that will be helpful..

I think that the people that are involved in these projects, the customers that are involved in these projects, understand the amount of work that's coming, which I think is unprecedented, and they're trying to lock up resources. They're being fair on contract terms. They want to get their projects built on time within their budgets.

So I think we're seeing very fair pricing in the market as we would have expected six months ago, or a year ago as we knew these opportunities were coming..

Okay. And just one lastly.

So would you expect the margin in that backlog, are you expecting it to be higher than where you are right now?.

Yes..

That's it from me. Thank you..

Thank you..

And we'll go next to William Bremer with Maxim Group..

Good morning, gentlemen..

Good morning, Bill..

I just want to touch base a little bit on Mexico, the broader picture there longer term. The government recently announced bidding for some oil and gas rights to some land application in areas down there.

I know that's way before you guys come in, but can you give us a sense of how you're looking at that market specifically in Mexico? I know right now the projects that you do have are U.S. based, the leading rights at almost the border. But give us a sense of what you're seeing longer term there.

And I'm sure that it's not just on the oil and gas side, but it looks as though that many of your segments are quite needed there and have done some work down there in the past..

I think we're at the beginning of what's going to be an unbelievable run in Mexico. You currently have a number of pipeline projects that are either bidding or going to be bid. So there's probably over a dozen projects of very large scale that are going to be built in Mexico, some through Pemex, some through CFE. We hope to participate. We hope to win.

We think we're going to have a very successful Mexican operation that's building pipelines in Mexico. I think those projects will take that business for the next couple of years for sure, all of the projects that are currently announced. I think beyond that, you've got Mexico importing a lot of gas from the U.S.

They have massive needs for expanding their pipeline network. You've got the potential for them drilling some of their own resources. So I think we're at the beginning of a very, very long-term significant build-out plan. I think it ties into what they're going to do with transmission.

So I think from the electric and energy side, it's a fantastic market. You've got very large players starting to pay attention. We've had a lot of our U.S. customers now starting to – their interest has peaked. We've had a lot of new entrants into the Mexican market. We think it's going to be a fantastic market for a long time.

In addition to all that, you obviously have the wireless opportunities. AT&T closed on their acquisitions in Mexico. There's going to be a significant ramp-up in wireless spend, we believe, in Mexico as well.

So the Mexican market, in general, is just a market of great potential for MasTec and one that we hope we're going to deliver on over the coming quarters and years..

Okay, José. Thank you..

Thank you..

We'll go next to John Rogers with D.A. Davidson..

Hi. Good morning..

Good morning, John..

José, I just wanted to follow up on some end market exposure.

In the Oil and Gas segment, how much of your work in the quarter on a go-forward basis is upstream versus traditional midstream or interstate pipeline work now?.

I'd still say the majority of our work is related to midstream..

Okay..

(46:28).

But when you talk about the lower commodity price, I mean, that's affecting the gathering side of it? Is that what you were trying to say?.

Well, we don't really – I mean, the commodity prices are affecting two areas of our business in a more meaningful way. One is the gathering. But quite frankly, we're not that big there, so it's not that big of an impact..

Right..

But two, I think commodity pricing is affecting Canada much more than it's affected the U.S. I think it will subside. I think there's a lot of projects on the board for Canada. I think a lot of the big customers in Canada, a lot of their revenues and financials are associated with the price of oil. So unfortunately, they've been hit harder financially.

They've cut their CapEx more aggressively than some of our other customers. So I think we've just seen more of an impact there. I think that, again, will normalize, and we'll see a lot more activity in 2016 from the U.S. side when we think about especially the southern shales with what's happening on the natural gas side, it's extremely busy.

And we don't see that subsiding anytime soon..

Okay.

And then as a follow-up, on the Communications side, can you give us a breakdown of how much of the business now is in-home wireline versus wireless?.

When you say in-home wireline, what do you mean by that?.

Oh, sorry, in-home, wireline and wireless, I mean, between those three end markets?.

So I'd say on a full year basis, our wireless business is half of our Communications revenue, more or less..

Yeah. About 30% to 35% would be the installed-to-the-home, and the balance would be wireline..

Okay..

About 30%..

Okay.

30% on the wireline, George?.

Yeah, roughly..

Okay. Perfect. Thank you..

All right..

We'll go next to Adam Thalhimer with BB&T Capital Markets..

Hey, good morning, guys..

Good morning, Adam..

José, where are we right now in terms of demand from AT&T? It just seems like they're kind of spending at unsustainably low levels, and I'm curious. There are some people who think maybe that gets better once they close their DIRECTV deal.

Do you have any thoughts on that?.

What we can control is how we manage the business, so the work that we have, and I think we've done a good job with that. So relative to where we are as a business, we're managing to the levels that we see.

When we look at the industry in its whole, we think there's going to be a significant increase and an uptick in wireless spending for lots of reasons. Some of it is driven by some of our existing customers, and some of it is driven by new customers.

So while we've had to manage through some declining revenue trends here over the course of last year, we do think that turns, and we hope it turns in a big way. And we think we're going to be well positioned for it when it does..

Okay. And then I wanted to make sure I have this straight. I think you said that in the back half of the year, margins in Communications, up slightly from Q1, and margins in Oil and Gas are, in the back half, going to be at the levels of full year 2014.

Did I hear all that right?.

I think in the back half of the year, Oil and Gas margins are going to be close to where they were in the back half of last year, which is slightly better than our full year basis..

Got it.

And then how about Communications?.

Communications should be up from where we are today in the first quarter. So they'll be significantly higher than they were in 2014..

Okay. Thank you..

Thank you..

We'll go next to Andy Wittmann with Robert W. Baird..

Hi, guys. Thanks for taking my question. I wanted to just dig in to the wind project a little bit more, José, and just get your sense on where that one is. It doesn't sound like it's completed yet.

But could you give us some color on maybe the percent complete that it is, and what items, if any, that you've changed operationally to get that one back on track?.

Yeah. So a couple things. What we did on that project, during the quarter, we realized that the project was going to end up in a loss position. When you have a project that you believe is going to end up in a loss position, you have to take a loss reserve for the balance of the project, which is what we did.

A lot of the loss that we've taken on that project is prospective in nature; it hasn't all happened yet. We've got a significant ways to go. As George said, we're going to finish that project in the fall. We've probably got roughly 40% of that project to complete. There's been lot of issues on that project.

We've had some local partners that really didn't pan out a lot. There was a large local content required on that project. There's been significant weather issues based on where it was located. We've had a lot of our own issues. So at the end of the day, it's a very troubling project.

We decided to highlight the project because it's meaningful enough that to really understand our results, you kind of need to understand what made up the results. So if you back that out, our Power Gen Group's actually doing much better in improving. No excuse for that project.

We're not happy about it, so we've taken a lot of actions relative to that project in particular. We've made significant management changes as well. So we feel good about where it's headed. We don't feel good about that project in particular..

All right. Thanks for the color on that one. And then just on the Mexico pipeline, you said that you signed the contract in 1Q. I'm just curious.

Why didn't they go in backlog? Is there a permit that it's waiting on or something else that we should be aware of that's holding you back from putting it in the numbers?.

What we were awarded was we were part of a consortium. The consortium was made up of three partners. We were awarded to basically build, own and operate those pipelines for their useful life. MasTec will be the contractor for those pipelines.

The contract will be between MasTec and the consortium and, quite frankly, we've been a lot more focused on getting the contract signed with the customer than we've been worried about getting the vendor contract signed in which we will be one of them. So it just hasn't been high on our priority list.

We said on our last call that we didn't think it would make Q1 backlog. It didn't. We are already working to begin construction on that. Whether it's late 2015 or early 2016, we're gearing up for it. We have no doubt in our minds that we will be the contractor on that.

But we're not going to put into backlog until that contract's actually signed with the consortium..

Okay. That makes sense. Thank you..

Thank you..

We'll take a follow-up question from Noelle Dilts with Stifel..

Thanks. I just wanted to ask another question on the wind project. This is your first wind project in Canada.

Are you anticipating pursuing more of these types of projects in Canada, or was it more of a one-off event?.

Probably not..

Okay. And then, also, just I think you cited a 20% decline in Canadian revenue this year. Can you talk a little bit about how much of that headwind is coming from FX and then what you're expecting on an organic basis? I think you're comparing against the step year for Pacer in 2014.

So can you just give us a better sense of what you're looking at on an organic basis?.

Sure. So I'd say that FX represents about half of that, so currency exchange, the balances is reduction in work. If you annualize Pacer's revenue in 2014, it's obviously a much bigger drop. So again, our Canadian business has been hit probably harder than anything else that we've got, but it's a tough year.

And a lot of it is customers that have put projects on hold based on their own economic circumstances. So I think a lot of those projects are going to come back, and I think some of them come back as early as 2016..

Okay. Thanks..

Thank you, Noelle..

And your last question comes from Alex Rygiel with FBR Capital Markets..

Thanks. José.

How are you today?.

Hey. Good morning, Alex.

How are you?.

Just one quick question.

Can you help us understand why you're not authorizing an additional buyback at this level with your stock trading at $17, $18 and this fairly upbeat outlook that you anticipate in the second half of the year and into 2016?.

Because we haven't filed our 10-K and, thus, we're in a closed period. So until we file our annual, we're not allowed to do another authorization for a stock buyback..

All right. Thank you..

Thank you, Alex..

And that does conclude our question-and-answer session. We'll turn the conference back over to José for closing remarks..

Just want to thank everybody for participating today, and we look forward to updating you as the year rolls on and hopefully we can talk a lot more about the opportunities as they materialize. So thank you..

And this does conclude today's conference. Thank you for your participation..