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

Andrew John Wittmann - Robert W. Baird & Co., Inc. (Broker) Matt Duncan - Stephens, Inc. Vladimir Bystricky - Citigroup Global Markets, Inc. (Broker) William Bremer - Maxim Group LLC Matt Tucker - KeyBanc Capital Markets, Inc. Jason A. Wangler - Wunderlich Securities, Inc. John Bergstrom Rogers - D.A. Davidson & Co. Alex J. Rygiel - FBR Capital Markets & Co.

Daniel Mannes - Avondale Partners LLC Noelle Dilts - Stifel, Nicolaus & Co., Inc. Chad Dillard - Deutsche Bank Securities, Inc. Adam Robert Thalhimer - BB&T Capital Markets.

Welcome to MasTec's Fourth Quarter 2015 Earnings Conference Call initially broadcast on February 26, 2016. Let me remind participants that today's call is being recorded. At this time, I'd like to turn the call over to Marc Lewis, MasTec's Vice President of Investor Relations. Please go ahead..

Thank you, Dana, and good morning, everyone. Welcome to MasTec's year-end 2015 earnings conference call. The following statement is made pursuant to the safe harbor for forward-looking statements described in the Private Securities Litigation Reform Act of 1995.

In these communications, we may make certain statements that are forward-looking, such as statements regarding MasTec's future results, plans and anticipated trends in the industries where we operate.

These forward-looking statements are the company's expectations on the day of the initial broadcast of this conference call and the company does not undertake to update these expectations based on subsequent events or knowledge. Various risks, uncertainties and assumptions are detailed in our press releases and filings with the SEC.

Should one or more of these risks or uncertainties materialize or should any of our underlying assumptions prove incorrect, actual results may differ significantly from results expressed or implied in 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, our 10-K, or in the Investors and News section of our website located at mastec.com.

With us today we have José Mas, our Chief Executive Officer; and George Pita, our EVP 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.

We have a lot of important things to talk about today, especially the 2016 outlook, so I'll now turn the call over to José.

José?.

Thanks, Marc. Good morning, and welcome to MasTec's 2015 year-end call. Today, I will be reviewing our fourth quarter and full year results, as well as providing my outlook for 2016 and the markets we serve. Before getting into details, I'd like to make some observations about 2015. The best thing about 2015 is that it's over. It was a difficult year.

We experienced significant organic revenue declines in our Oil and Gas segments and in our wireless operations. These declines negatively impacted full year margins.

We also dealt with the effects of our audit committee investigation, which led to disruption in our Electrical Transmission segment, where we also experienced significant revenue declines, coupled with very poor financial results. 2015 was a very disappointing year. However, there are many reasons to be very optimistic about our future.

First, despite very challenging environments in both our Communications and Oil and Gas segments in 2015, we were able to deliver fairly strong margins in those segments. Margins in our Communications segment were actually up year-over-year, despite significant organic revenue declines in our wireless business.

In our Oil and Gas segment, we held margins within 80 basis points despite a nearly 20% organic revenue decline. Our margins are significantly impacted by utilization levels, and as volume and demand goes up, we should see a corresponding benefit to margins.

Second, as I will discuss later, we are seeing and winning on an unprecedented level of opportunities across a number of our segments. Third, we have conservatively managed our capital structure.

We were able to reduce overall debt levels in 2015 despite a $100 million stock buyback, and we have significant liquidity to take advantage of the opportunities in front of us. And finally, we have continued to invest in building a great team and culture.

We have strong strategic relationships with our customers, and we look forward to having the opportunity to significantly grow our business over the next few years. Now some full year highlights. 2015 revenue was $4.2 billion. 2015 adjusted EBITDA was $308 million. Full year cash flow from operations was $367 million.

And for the fourth quarter, revenue was $1.03 billion and fourth quarter continuing operations adjusted EBITDA was $82 million. Again, we're glad 2015 is behind us and we're looking forward to 2016. We strongly believe that we are uniquely positioned to take advantage of the opportunities our market affords us.

Now I'd like to cover some industry specifics. Our Communications revenue for the fourth quarter was $521 million versus $561 million last year and $1.973 billion for the year compared to $2.041 billion last year.

Our wireless revenues were down over 30% organically for the year, offset by increases in both our wireline and installation revenues for the year. Despite our reduced revenue levels, EBITDA margins were actually up over 50 basis points from 2014. We expect both revenue growth and margin improvement in this segment in 2016.

Our install-to-the-home revenue was up for the full year sequentially and up 10% in the fourth quarter on a year-over-year comparison. Demand for our services is strong, and we're very proud of our efforts in expanding and diversifying this business in 2015.

We believe we are the largest third-party independent fulfillment company in the United States with broad geographic coverage. We feel this gives us a strong competitive advantage, and we are excited about a number of different opportunities with both existing and new customers who are looking for nationwide fulfillment services.

As it relates to wireline projects, revenues were up nearly 25% year-over-year. We have significant opportunities for continued expansion. Opportunities related to gigabit projects continue to grow and we expect significant revenue growth as we expand into a number of new geographies servicing our customers.

During 2015, our revenues associated with gigabit work were primarily driven by two markets. For 2016 and beyond, we have now secured work in 14 markets in nine states for multiple customers. Our wireless revenues, as expected, were down year-over-year. Despite the significant organic revenue decline, EBITDA margins were actually up year-over-year.

We believe that as revenue normalizes and our expected growth materializes that we will be able to further leverage and grow margins. One of our strengths and differentiators in this business is our vast geographic coverage. As carriers increase CapEx, we are extremely well-positioned to benefit from that growth.

Data usage and demand is expected to continue to grow at exponential levels, requiring our customers to increase their networks' capacities. We're also encouraged about the FCC move to the Connect America Fund which has stimulated new spend by carriers to bring wireless broadband to rural America.

This includes initiatives such as wireless local loop, which will have a very positive impact on our business. We're also seeing the first investments in 5G technology. While very early in the cycle, there is no question that wireless carriers understand the need and importance for increasing data speeds.

With the significant investment and advancements being made in wireline Internet speeds, it is only a matter of time before customers demand and carriers replicate those speeds in the wireless environment. As an example, one of the carrier's CEOs recently said that 5G testing is producing speeds 10 times to 100 times faster than 4G LTE.

Revenue in our Electrical Transmission business was down 50% in the fourth quarter and down 28% for the year. We significantly underperformed in this segment relative to our expectations. We had a couple of projects that had delayed starts and underperformed on others. Our primary focus today is on getting this business back to a profitable level.

We have taken significant steps at right-sizing this business and setting a higher level of accountability. While we are in the midst of a challenging market, we have the backlog and awards to return this business to a profitable level.

We have evaluated every project and spent a significant amount of time and energy going through detailed estimates to complete. Subsequent to quarter-end, we were awarded a 70-mile, 765-kilowatt project that will start in the second quarter. This is an important win that will help increase the segment's backlog in the first quarter.

Despite our internal challenges, we continue to be well-positioned for the growing opportunities in this market, and we look forward to getting back on track, and over time, executing at previous historical levels. Moving to our Power Generation and Industrial segment, revenue was up about 7% for the year.

With the exception of the Canadian wind farm, margin performance for this segment was much improved in 2015, and we expect to have a solid year in 2016. During the fourth quarter, Congress extended the wind production tax credits until 2020. We expect a robust renewable environment over the next few years.

Our Oil and Gas Pipeline segment organic revenues were down nearly 20% in 2015. Despite this drop, EBITDA margins were 10.5% versus 11.3% for the year. It's important to note that EBITDA margins for this segment, for the second half of 2015 were 12.4%.

As we have been saying over the last few quarters, we are incredibly bullish and excited about our Oil and Gas segment. While we're cognizant of the potential headwinds in the industry and understand that commodity prices will definitely impact the industry, we feel we are uniquely positioned to experience considerable growth over the next few years.

Let me elaborate and cover where we see both strength and weakness in the market. There are two areas of primary weakness. First, we have seen and continue to expect gathering opportunities to be limited and slowing due to the weakness in commodity prices and lower rig counts.

It's important to note that gathering comprises a small percentage of our Oil and Gas work and thus is not expected to have a material impact on MasTec. We also expect to see continued weakness in our Canadian Oil and Gas business. We expect 2016 Canadian revenues to decline more than 30% from 2015.

Between currency weakening and the softness in the market, Canada has been a challenge. We do, however, strongly believe in the market's long-term potential. This slowdown will see a number of our competitors vanish, and we will be ready to gain market share, once the market returns to a more normal level. Now the strengths.

In the U.S., while some shales may see some short-term weakness, the level of mainline activity is unprecedented. As demonstrated in our backlog, we signed over $1.4 billion worth of projects in the fourth quarter. This was primarily driven by our anticipated work on the Dakota Access Pipeline, where we will be constructing six spreads.

We also expect further awards, similar in value, to be awarded in the coming quarters for work to be performed in 2017 and 2018. Months ago, I did not believe the capacity existed to build the level of demand in our industry. While I still expect it to be challenge, we are seeing some projects get pushed out.

While some may view this as a negative, it is actually leading to project visibility all the way into 2020, something which I just find amazing. This level of activity is offsetting the weakness in the shales due to commodity prices and giving contractors ample time, years, for commodity prices to rebound.

Finally, some shales will be impacted more than others. For example, the amount of infrastructure being built to support initiatives dealing with providing natural resources to Mexico is just beginning. In fact, it's the low-price environment that is actually spurring the activity to Mexico.

We expect these to be the main drivers of our growth in our Oil and Gas segment and expect significant revenue growth, supported by both our recent wins and backlog in both 2016 and beyond. To recap, 2015 was a very difficult year. We're disappointed with our results and expect more from ourselves.

With that said, we have an opportunity to make 2016 a great year. As we announced in yesterday's release, the Board of Directors of MasTec has authorized a $100 million share repurchase program.

While we will be mindful of our overall debt levels and business conditions before we initiate any purchases, this authorization provides us the ability to be opportunistic if business and market conditions warrant share repurchases in the long-term interest of our shareholders.

Finally, I would also like to take this opportunity to thank the men and women of MasTec for their commitment to safety, their hard work and their sacrifices. Our people are our most important asset, and it's because of them that we have all of these wonderful opportunities ahead of us. I'll now turn the call over to George for our financial review.

George?.

Thank you, José, and good morning, everyone. Today I'm going to cover fourth quarter and full year 2015 financial results, including cash flow, liquidity and capital structure as well as our guidance range views for 2016.

As in our previous calls, discussion of our financial results and guidance will include non-GAAP continuing operations adjusted earnings and adjusted EBITDA. As Marc already mentioned, reconciliations of all non-GAAP measures can be found in our press release, on our website or in our SEC filings.

As José mentioned, 2015 was a challenging year from an earnings perspective due to the combination of both internal and external factors. That said, we managed our balance sheet well during this difficult period, as reflected by our record cash flow from operating activities, improved working capital metrics and overall debt level reduction.

As we look forward to 2016, while we are cognizant of the concerns focused on continued oil price volatility and weakness, we also have to recognize and acknowledge our record level of backlog of approximately $5.7 billion which gives us confidence that 2016 results will improve greatly when compared to 2015's levels.

Here are some takeaways for the fourth quarter. Fourth quarter 2015 revenue was approximately $1 billion, a 17% decrease when compared to $1.2 billion for the same period last year.

While overall fourth quarter revenues was in line with our expectation, we exceeded our revenue expectations in the Communications and Oil and Gas segments and underperformed in the Electrical Transmission segment.

Communications revenue exceeded expectations primarily in wireline fiber operations and Oil and Gas segment revenue exceeded expectations due to improved project productivity. Electrical Transmission segment underperformed due to the combination of new project startup delays and project inefficiencies.

Fourth quarter 2015 continuing operations adjusted diluted earnings were $0.21 per share compared to our guidance of $0.10 to $0.17 per share and $0.38 per share last year. Fourth quarter 2015 continuing operations adjusted EBITDA was $82 million compared to our guidance range of $70 million to $80 million and $110 million last year.

Cash flow from operating activities during the quarter was approximately $107 million and for the full year 2015 we generated approximately $367 million, which represents a record level for MasTec.

Coupled with the moderation of our capital spend in 2015, our free cash flow calculated as $367 million in cash flow from operating activities, less net cash capital additions, inclusive of sales of property and equipment of approximately $70 million, was $297 million, an increase of $67 million or 29% over 2014's levels.

This strong cash flow allowed us to reduce our overall debt levels during the full year 2015 period by approximately 10% or $112 million, with an overall debt reduction of approximately $192 million during the second half of the year.

We accomplished this debt reduction despite reduced 2015 earnings levels and the execution of $100 million share repurchase program during 2015. Our DSOs as of year-end 2015, were 68 days, which is an 18-day improvement compared to 2014 year-end levels.

While 2015 was a difficult year on a number of fronts, we are proud of our performance in managing cash flow during this challenging period. Now let me get into some detail regarding fourth quarter results.

As I mentioned earlier, fourth quarter 2015 results were slightly above our guidance range, with continuing operations adjusted diluted earnings per share at $0.21 versus our guidance of $0.10 to $0.17 per share. Continuing operations adjusted EBITDA was $82 million or 8% of revenue compared to our guidance of $70 million to $80 million.

Due to better than expected performance in our Oil and Gas segment, the benefit of lower expected earn-out liabilities and a lower adjusted tax rate, fourth quarter adjusted results exceeded our guidance despite the drag from larger than expected Electrical Transmission segment losses.

During the fourth quarter, as we do every quarter, we reviewed expected earn-out liability payments based on service line performance.

We initially record an earn-out liability estimate at the time of acquisition, and as these estimates increase or decrease over time, based on the performance of the service line, we record any changes, both positive or negative, as corporate other income or expense.

During the fourth quarter, we update our estimates of earn-out liabilities and due to 2015 underperformance reduce these estimates by approximately $12 million as required by generally accepted accounting principles.

Fourth quarter Communications segment revenue decreased $39 million, comprised of decreases in wireless project services, partially offset by increases in wireline fiber and install-to-the-home services. Communications segment EBITDA margins were 10.2%, an increase both sequentially and over last year's fourth quarter.

Fourth quarter Oil and Gas segment revenue decreased 19% compared to last year, with all of the decrease due to weaker Western Canadian operations. Despite the decline in revenues, Oil and Gas fourth quarter EBITDA margins were strong at 12.3% of revenue due to improved project productivity within U.S. operations during the quarter.

During the fourth quarter, our Electrical Transmissions segment underperformed to our expectations with a 50% decrease in revenue compared to last year and EBITDA losses of approximately $24 million.

We had expected that this segment's revenue would increase sequentially in the fourth quarter, but due to the combination of delays on several expected project starts to the first quarter of 2016 and a $14 million project fade experienced during the quarter on a current project, Electrical Transmission segment performance was substantially below expectations.

The $14 million project margin fade reflected in the fourth quarter occurred primarily due to increased costs which are now anticipated to be incurred in order to maintain expected project completion schedule.

Based on these actions, we believe project production is now on schedule for a December 2016 completion date, and the project is running at a low single-digit project margin. While the project remains profitable, the anticipated profit margins decreased during the fourth quarter which resulted in negative gross margin during the quarter.

Fourth quarter Power Generation and Industrial revenue was approximately $79 million and EBITDA margins were 6.2% of revenues which represents a 100-basis point improvement over the same period last year.

During the fourth quarter, we recorded approximately $8 million in a project loss related to our non-controlled Canadian joint venture which was constructing a bridge in Western Canada.

That joint venture, which is managed by a third party and automatically terminates after completion of the project, has experienced continued delays in delivery of the key material before a manufacturer, which has negatively impacted the construction schedule of the bridge and caused additional project costs.

We have no substantive direct work involvement in the project which we acquired as part of the Pacer acquisition in 2014. While we have reflected the full amount of our proportional share of this project's losses, we are actively pursuing several alternatives for potential recovery.

As this project loss does not relate to any current MasTec operations, we are excluding it from our adjusted results. During the fourth quarter, we recorded a noncash goodwill and intangible asset impairment related to the Pacer acquisition of approximately $78 million.

This charge reflects the weakness in Western Canadian Oil Sand facilities construction primarily due to oil price volatility over the past year.

While we expect Pacer operations to generate positive EBITDA in 2016 and beyond, the expected levels did not support the full carrying value of our intangible assets and thus we recorded an adjustment to reduce these amounts to estimated fair value.

We are currently in the process of finalizing actions to right-size our Western Canadian operations and anticipate that we will incur approximately $3 million to $5 million in onetime restructuring costs during the first quarter of 2016.

Finally in the fourth quarter of 2015, the company recorded approximately $4 million in unrealized fair market value adjustments related to an interest rate hedge entered into by our Waha joint venture which will build, own and operate two gas pipelines in Texas to the Mexican border.

The joint venture prudently entered into a hedge contract to fix what were variable interest rates related to the joint venture's project financing, and the accounting policy chosen by the joint venture partner requires that any unrealized change in the fair market value of the hedge flows through the income statement regardless of the fact that the joint venture intends to hold this hedge in place throughout the life of the project.

Accordingly, these noncash fair market value adjustments, gains or losses, will be excluded from our adjusted results on a go-forward basis. In summary, despite the fourth quarter underperformance in our Electrical Transmission segment, our adjusted fourth quarter results were slightly above our expectations.

Turning to full year results, full year 2015 revenue was $4.2 billion, a 9% decrease compared to $4.6 billion last year. Full year 2015 continuing operations adjusted diluted earnings per share were $0.64 and continuing operations adjusted EBITDA was $308 million or 7.3% of revenue.

As I think this bears repeating, full year 2015 cash flow from operating activities grew to a record level of $367 million and our 2015 free cash flow increased by $67 million.

In terms of segment performance, for the full year 2015 period, the Communications segment reported a mid-30% organic decrease in wireless project activity, but yet was able to report a 50-basis point improvement in full year 2015 adjusted EBITDA margins at 10.8% of revenues.

During the year, we successfully integrated WesTower, solidifying ourselves amongst the nation's largest wireless construction service providers and significantly expanding our geographic footprint.

Full year 2015 Oil and Gas segment revenue decreased 14%, driven primarily by our Western Canadian operations, which declined due to both reduced project demand related to oil price reductions and foreign exchange impacts. Despite the revenue declines, the Oil and Gas segment reported full year 2015 adjusted EBITDA margins of 10.5% of revenue.

In addition, 2015 results were also negatively impacted versus the prior year by lower levels of large diameter long-haul U.S. pipeline activity. As we have indicated, and our year-end backlog confirms, we anticipate a major increase in U.S. long-haul pipeline activity during 2016.

Electrical Transmission segment results for the full year 2015 included a 28% decrease in revenue with adjusted EBITDA losses of $59 million.

While this segment significantly underperformed in 2015 due to the combination of internal and external factors, we continue to believe that the causes of this underperformance are largely behind us and expect annual 2016 earnings results to improve.

We expect that 2016 annual revenue in this segment will decrease in the mid-teens range when compared to 2015 levels, but also expect that 2016 annual EBITDA margins will improve to a profit in the low single-digit range.

While this expected 2016 performance would generate a significant improvement when compared to 2015's losses, it should be noted that we view 2016 in this segment as a transitional rebuilding year with expected continued improvement in end market conditions and segment execution in 2017 and beyond.

Lastly, I'll note, for illustrative purposes of the impact improved results may have on 2016, that if Electrical Transmission segment operations are excluded from our adjusted 2015 results, the balance of MasTec operations reported revenue of approximately $3.9 billion with adjusted EBITDA of approximately $367 million, which represents a 9.5% adjusted EBITDA margin rate for the full year 2015 period.

And these results are despite organic revenue declines caused by difficult end market conditions in Oil and Gas and wireless. Full year 2015 Power Generation and Industrial segment revenue grew approximately 7% to $382 million. Full year EBITDA for this segment was approximately $9 million or 2.3% of revenue.

As we have previously indicated, 2015 EBITDA margin for this segment was negatively impacted by a $21 million loss on a Canadian wind farm project, which negatively impacted annual segment EBITDA margins by approximately 5%. This project was completed in 2015.

Excluding the impact of this project loss, 2015 EBITDA margin for this segment would have approximated 7% of revenue, a strong level for this segment. Now I will discuss summary of our top ten largest customers for full year 2015 as a percentage of revenue.

AT&T revenues derived from wireless, wireline and install-to-the-home security services, was approximately 18% and DIRECTV services were approximately 14%. On a combined basis, these four separate service offerings total 32%. Energy Transfer was 7%. Momentum Midstream was 6%. MidAmerican Energy and Duke Energy were each 3%.

And Sprint, Plains All American Pipeline, CNRL, Verizon, and an unnamed wireline customer were all at 2%. Individual construction projects comprised 52% of our annual revenue with master service agreements comprising 48%, and this mix is generally in line with recent trends.

At year-end 2015, our 18 month backlog from continuing operations was approximately $5.7 billion compared with $4.6 billion at the end of the third quarter of 2015, and $4.3 billion for the fourth quarter of 2014. This represents record levels for MasTec and is a 24% increase sequentially, and a 31% increase over last year.

Backlog growth was led by the Oil and Gas segment, which grew 115% to a record level of $2 billion. We indicated during our last call that we had approximately $1.5 billion in Oil and Gas awards in the process of being signed during the fourth quarter, and our year-end backlog levels reflects these completed awards.

As we have indicated, despite all the current negativity that surrounds oil and gas related services, we fully expect 2016 to be a record year for our Oil and Gas segment. Now let me talk about our fiscal year cash flow, liquidity and capital structure.

As we have previously noted, our long-term capital structure is solid, with low rates and no significant near-term maturities, and we have an excellent bank group.

We had a record level of 2015 cash flows from operating activities at $367 million and significantly increased free cash flow, as well, despite execution of a $100 million share repurchase program during 2015, and a challenging earnings performance.

We enter 2016 with approximately $500 million of liquidity, calculated as cash, plus availability in our senior credit – revolving credit facility, giving us flexibility and resources to support growth opportunities in 2016 and beyond.

Regarding our capital structure, at year-end, we had approximately $1 billion in net debt which reflects approximately $112 million of deleveraging during the year or a 10% decrease in total net debt. As we look forward into 2016, we expect significant revenue and EBITDA growth, which will require an increased investment in working capital.

That said, we also expect that our 2016 operations will generate sufficient cash flow in amounts whereby execution of the $100 million share repurchase program announced yesterday should not meaningfully change our overall year-end 2016 debt levels from where we are today.

Thus, as we look forward towards the end of 2016, the combination of a similar debt level, combined with anticipated improved 2016 earnings should generate a significant improvement in our 2016 year-end leverage metrics when compared to 2015.

Our 2015 fourth quarter accounts receivable days outstanding, or DSOs, were 68 days compared to 86 days last year, an 18-day improvement year-over-year. The improvement was driven by a combination of improved collection performance across all major segments and segment mix.

Looking forward into 2016, we expect that our DSOs will range somewhere in the mid to high 70 days, depending on the timing of project closeouts. Regarding our spending on equipment, full year 2015 cash CapEx, net of equipment disposals, was $70 million compared to $92 million in 2014.

The total of our full year cash CapEx, capital leases and financed equipment, net of disposals, was $97 million in 2015 compared to $168 million in 2014, a 42% reduction. Moving on to our 2016 outlook, we are cognizant of the concerns centering around the potential impacts of continued oil price volatility and weakness.

That said, our record backlog of recently signed contracts is unprecedented for the company.

Based on current market conditions, our full year 2016 revenue guidance range is estimated between $4.6 billion and $4.8 billion and continuing operations adjusted EBITDA at $415 million to $430 million, and continuing operations adjusted diluted earnings per share of $1.35 to $1.45.

The 2016 revenue range represents a 9% to 14% increase over 2015 with a projected 35% to 40% increase in continuing operations adjusted EBITDA and a 111% to 127% increase in continuing operations adjusted diluted earnings per share.

We expect 2016 operations adjusted EBITDA margins to approximate 9% of revenue compared to 7.3% of revenue in 2015, with this increase driven by improved margin performance across Communications, Oil and Gas, and Electrical Transmission.

And as I indicated earlier, given the impact of Electrical Transmission segment losses in 2015, a normalized low-single digit EBITDA margin on this segment should generate significant improvement in 2016 EBITDA margins when compared to 2015.

We expect 2016 interest levels will approximate $51 million, a slight increase over 2015 levels due to projected increases in interest rates during the year and higher usage of our letter of credit facilities as we support our expanded large project activity in 2016.

Interest expense estimates do not include the impact of any potential share repurchase activity in 2016. We currently expect 2016 depreciation and amortization expense will grow at a slower pace than overall revenue and expect better equipment utilization in 2016 as we support expanded, large project activity.

We anticipate that 2016 depreciation and amortization on a rate basis will approximate 3.6% to 3.8% of revenue.

We also expect that 2016 CapEx levels will increase some from 2015 levels with cash CapEx, net of disposals, of approximately $70 million to $80 million, and another $70 million to $80 million of capital leases and equipment financing for a total CapEx, net of disposals, of $140 million to $160 million.

We anticipate that our 2016 income tax rate will approximate 42% based on lower levels of expected Canadian income due to difficult market conditions. Our estimate for full year 2016 share count for diluted EPS is about 81.5 million shares and 81.1 million shares for the first quarter of 2016.

These share count estimates do not include the impact of potential share repurchase activity in 2016. We currently estimate 2016 first quarter revenue of approximately $950 million, with continuing operations adjusted EBITDA of approximately 5% to 6% of revenue in the range of $50 million to $55 million.

We expect 2016 first quarter continuing operations adjusted diluted results per share to range between a breakeven level to a loss of $0.03 per share. And as many of you are aware, our first quarter is seasonally our lowest quarter in terms of revenue and overall profit.

This guidance reflects a slow earnings starts to the year, particularly in Oil and Gas and wireless, as we prepare ourselves for significantly increased volume levels starting later in the year.

In terms of some color on the expected timing of our 2016 performance, we would expect that revenue during the first half of 2016 will approximate 2015's first half levels, with first half – with second half revenue growth rate exceeding our annual 2016 growth rate.

This is based on expected ramp-ups in both Oil and Gas long-haul project startups late in the second quarter of 2016, as well as increased second half 2016 wireless project activity.

Based on the expected seasonality of 2016 revenue, we would expect only a slight increase in first half 2016 EBITDA margin rates compared to the same period last year, with higher expected second half 2016 adjusted EBITDA and margin rates due to increased utilization of overheads as revenue level significantly ramps up.

In summary, despite the headwinds, we ended 2015 with record cash flow generation. We entered 2016 with improving market opportunities in multiple markets and record backlog that supports our optimism to take advantage of the growth opportunities ahead of us.

We expect that 2016 will be a rebound year, where we get back on track with strong top line growth and improved profit and margins. That concludes my results – my remarks. I'll now turn the call over to the operator for Q&A.

Operator?.

Thank you. And we'll go first to Andrew Wittmann with Robert W. Baird..

Good morning, and thanks. My first question or – my first question here is on the Oil and Gas segment.

And there, given the backlog increase and your expectations clearly for this business, I think, a discussion about how well permitted projects that you're anticipating to contribute to this year's earnings – given that it's somewhat back-end loaded in guidance, we would like to know how well permitted they are or what hurdles need to be accomplished before those things can go into the ground..

Well, I think we're in good shape. We're anticipating starting on most of our projects late in the second quarter. I think, when you take our total backlog numbers relative to the size of the awards and you look at our guidance, I think, we've made some assumptions around some of the work probably being delayed.

I think, we've got some conservative assumptions built into our Oil and Gas guidance based on that because we're typically seeing delays of a couple months on most projects.

But right now, I mean, our customers are telling us that we're on schedule, we're on time, to expect things not to really move out much, and we're excited about that, and that's what we're managing to..

Okay. Great. My second question has to do with the Communications segment, and specifically, the AT&T and DIRECTV merger.

I don't know if you guys have addressed this on a prior conference call, but there is a concern out there that there will be truck roll consolidation, and I'd like to hear your perspectives on that? And what, if anything, you're hearing from the folks at DIRECTV with the potential consolidation with their new parent?.

Look, we feel good about our business. There's no question that I think AT&T is trying and actually doing a very good job at growing the DIRECTV base. I think that's creating more work. There's two workforces that obviously came together.

One was the existing workforce that was doing DIRECTV like us and others, and then AT&T was doing some of their U-verse installs. I think, as you look at the total pie today, the positive is the pie is growing, and I think the need for more work ultimately exists, which I think is good for both parties. I think, it's good for us.

There are a number of new opportunities on the install side, including things like wireless local loop that I think will have some solid long-term opportunities. So, right now, we're – look, we're excited about our business. It's growing. We had a very good fourth quarter in that business.

We're having a really strong start to the year, and we don't expect anything to really change..

Thank you..

We'll go next to Matt Duncan with Stephens..

Hey. Good morning, guys. Nice job this quarter..

Thank you..

José, I want to stick with the Communications business first and just look at sort of the various pieces of that business and what your expectations are for this year. It sounds like you guys are thinking all pieces of that business probably grow this year.

But if you can maybe break it down and look a little bit more at the components of growth and how much that segment ought to be up in total I think that would be very helpful..

Look, I think for guidance purposes we're probably growing the overall Communications sector at about 5%. The reality is you're right, we expect each one of those subunits to actually be up year-over-year. We've talked about our wireline business and the opportunities that gigabit affords us. We expect to grow that business.

We've got some real good opportunities to grow our wireless business. And for the first time in a couple years, we think we've got a nice shot at growing our installation business. So if we talked about each opportunity, we could come up with a bigger number.

And again, I think based on what we've had to live with in the last two years, again, we're taking very conservative views around what our customers are telling us. And to the extent that things pan out the way we hope they do, then I think we've got some further opportunities to have more growth in that business..

Okay. And then you got into a little bit into my second question there, which is really just looking at how you guys arrived at this guidance? I know last year was a difficult year.

Obviously, none of us want to see the difficulties that you had meeting guidance last year again this year, so I think we all want to get a little bit of a comfort level that there's conservatism built into this guidance for each individual piece.

And when you roll it up, it therefore could be maybe more materially conservative if you're able to execute, if projects don't get delayed to very far beyond your expectations.

So just can you talk a little bit about the guidance philosophy this year? And how you came to these numbers to give yourself confidence there could be upside if you're able to execute?.

Yeah. First and foremost, I think, we've put solid guide – a solid guide out there. I think coming off the year we're coming off, if these are the results that we generate, we would be proud of them. We think it's a very strong rebound year.

Obviously, there's a lot of noise in our industry which is forcing us to take a very conservative view as we look at a number of our different businesses. If things pan out, again, the way we hope they do, across the – a bunch of our segments, the opportunity for us to do considerably better exists.

But I think in – relative to again all of the noise that's out there, all of the concerns, I think we've taken a very conservative view on a segment-by-segment level as to what a very realistic target is. And then we obviously have our own internal goals and metrics that we're going to chase that are a little bit different..

Okay. Thank you. I'll hop back in queue..

Thanks..

We'll go next to Andrew Kaplowitz with Citi..

Good morning, guys. Vlad Bystricky on for Andy.

How are you?.

Hi. Good morning.

How are you?.

Good, thanks. So just to focus in on Oil and Gas a little bit more, José, you talked about seeing some pushouts on long-haul pipeline awards that you think are actually extending visibility in that business.

So can you talk about your confidence level that those projects that are getting pushed out actually do ultimately go forward over the next couple of years?.

Sure. I think there are a lot of projects out there, a lot of projects that some people track. I know everybody is – it's interesting because everybody is tracking all these different pipeline trackers these days, some of which make a lot of sense and some are – which are accurate, and some which we look at and we're very skeptical of.

So we have our own list that we track. We track it very closely. We are in constant dialog with a lot of customers. I can tell you that the projects that we're tracking, we're highly confident are going to go forward for lots of reasons, and we're not going to get into specifics. I think there are some projects out there that are more questionable.

And as we look at projects that we expect to be performed, we see projects that are going to be performed in 2016, 2017, 2018 and 2019, and again, we come from a world where we've been living in for years, which is pretty much we're worried about booking backlog for the work that we're going to be doing in three months to six months.

We're talking to customers and actually entering into agreements where we're talking about what we're going to be doing in 2018 and 2019. Again, I think that's remarkable. I think, it's a very different place than where we've historically been. I think, it has to do with the fact that so much has to get done.

There is a shift in the business, no question.

We're going to see some weakness in some shales across the country; it's going to affect people, and we're trying to position ourselves to really not be impacted by that, and hopefully as that comes back over time, hopefully there's less players in the industry and the ones that are left enjoy more success, and I think that's ultimately what we're going to see in the next couple years..

Okay. That's helpful. Thanks.

And then just following up on that, on conversations you're having with customers about these projects, I guess with oil and gas backlog now at record levels, how should we think about your opportunity or your chances of meaningfully growing backlog from here over the next couple of quarters?.

It's a good question because I think it's going to be lumpy on a quarter-by-quarter basis. We're going to have quarters where we generate a lot of work and maybe we win something big in that quarter, maybe we don't.

Unequivocally I can say that on a full-year basis, and I can't tell you whether that's going to be Q1, Q2, or Q3 or Q4, we expect backlog to dramatically grow in 2016 from where – from levels that it's at today. So we expect further dramatic growth of backlog in 2016..

Okay. That's very helpful. Thanks. I'll get back in queue..

We'll go next to William Bremer with Maxim Group..

Good morning, José, George, Marc..

Good morning, Bill..

Good morning..

Hey. Congratulations on finishing up 2015, first and foremost. I'd like to go right to the Oil and Gas segment. You provided us with some color on Communications for 2016 in terms of growth. Oil and Gas, we're expecting a very significant second half.

Can you give us a since of what are we looking at there in terms of growth for Oil and Gas? And more importantly, can you give us some insight on the pricing of what you're booking currently?.

Sure. I think just based on where the projects are lining up, we're obviously expecting much larger second half of 2016 than we do first half. If you go back a couple years, we had – prior to the Pacer acquisition, I think we generated about $500 million in one particular quarter in our Oil and Gas segment.

So I think that we've demonstrated historically that we're able to deliver that kind of revenue in a particular period. I would say today we've got a lot more resources, and our expectation would be that we should be able to deliver a much greater number than that today in one particular quarter.

Obviously, if you start annualizing those kind of numbers, the numbers get really big, and hopefully over time we're going to be able to demonstrate that on a consistent basis.

So we feel we're in relatively good shape in order to be able to deliver on what is a somewhat back-ended loaded year in our Oil and Gas business, and the size of that will be somewhat dependent in terms of how much work we actually get to complete in 2016.

So there's obviously one view that we've created from a guidance perspective, and hopefully, there'll be another view relative to what our customers are going to demand and ask us to do. We're ready to be able to meet both of those. From a pricing perspective, look, it's a tight industry. Everybody knows there's a lot of work.

There are only so many people that can get this work done, and I think that bodes well for the industry. I don't think pricing is an issue at all in today's industry, and quite frankly, I don't think it's been an issue. I think the bigger issue has been utilization in the extent of trying to keep your people busy consistently over time.

And if you can do that, then I think it has a very positive effect on margins, which is really what we're trying to accomplish..

Okay. My follow-up would be on the labor front.

Do you feel as though labor is contained throughout?.

I do. And I think – and I think we're in an advantageous position in that we're going to get a fairly early start in the cycle and be in a position to somewhat have the pick of the litter. I think if we can do that, and obviously I think people enjoy our culture. I think people enjoy working here.

And to the extent that we can do a good job, we'll be able to keep those people throughout the full cycle..

And where is MasTec with that? Are you hiring in certain segments and restructuring others?.

Well, obviously, right? I mean we've got some segments that are performing very well, and some segments that aren't. So in those that aren't we're right-sizing them. We're trying to get lean and mean and prepare ourselves for the opportunities in front of us.

And we obviously have some segments that are going to grow drastically over where they were last year. And we're preparing in that as well..

Great, José. Thank you..

Thanks, Bill..

We'll take our next question from Matt Tucker with KeyBanc Capital Markets..

Good morning, and congrats on a nice quarter..

Thanks, Matt..

I wanted to follow-up on the back-end loaded outlook this year.

Could you comment on how dependent is that on expected awards versus more the scheduling of what's already in backlog?.

Yeah. So two things, Matt. First, I know we keep getting congratulated on 2015. I just want to reiterate that for us we're not happy at all about 2015. It was a rough year. We kind of just survived it. So I don't want to make light of that. It was a tough year, and we've got to do a lot better.

As it relates to Oil and Gas, which I think is where we expect the biggest jump in revenues, it's about backlog execution. We've actually got some stuff that we'll backlog here in the coming quarter that will be executed in 2016, but for the most part, for us to achieve the numbers that we expect to achieve, it's about executing existing backlog..

Great. Thanks. And the follow-up to that, as you said, 2015 challenging particularly in Electric Transmission.

I guess, could you talk about kind of the trajectory of getting back to profitability there this year? And is this project that you mentioned starting up next quarter, should that get you there?.

Well, look, I think it's going to be a much better year. Obviously, we expect to be profitable in 2016, which is a big change from where we were in 2015. We're hoping it happens really early in the year, but we've been somewhat surprised, so again, I think we're taking a little bit of a conservative view.

We absolutely expect the first quarter to be dramatically better than anything we saw in 2015, especially in the second half, so I think we'll get close in Q1. I think we'll definitely get there in the second quarter, and we'll see how good we can make it in 2016..

Great. Thanks, José..

Thanks, Matt..

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

Good morning guys.

José, I was just curious, as you talk about the backlog and looking forward in 2016, maybe even as you extend a little bit into 2017, do you see the seasonality of the sector kind of maybe smoothing out a little more, too? Because it seems like a lot of this big work is going to obviously spill into 2017 and I assume that's going to mean that the beginning of the year is still going to be busier than the last few.

Would that be a fair statement?.

Yes, it is..

Okay. And, George, this may be for you. Just curious on the buy-back.

Is there anything on the credit facility or anything that restricts that, or is that just able to be used whenever you guys see that that's a good opportunity?.

Yeah, there's no restrictions on the facility for the buy-back. We have – we're able to execute the $100 million without any restriction..

Great. I'll hand it back. Thank you..

Thanks..

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

Hi. Good morning..

Good morning, John..

José, just following up on the transmission side for a second – appreciate your comments, but in terms of your mix in that business right now, have you re-thought how much of that you're going to pursue long-haul transmission projects or regional projects versus how you thought about that business a couple years ago? Because we heard a lot of stories about just the market isn't what it used to be..

Well, so let me take a step back, right?.

Yeah..

We actually grew that business and did really well in that business on the back of bigger projects.

And that's really where we as an organization focused always with the intent of – and the understanding that we were going to have to really build out a much more diverse offering and geographically diverse offering, which I think – by the way, I think we've actually had some good success at it.

So if you look at, especially a lot of our wins in the tail end of last year, we're starting to do a lot more regional type work. We're actually having okay success at that. It's not maybe at the margins that we were historically doing on larger projects, but albeit at decent margins. So I think we've got a fairly nice mix in our work.

I think we're – we've got much better geographic coverage that I think puts us in a position to compete on larger projects as they come in those geographies a little bit better than we historically did. Again, we had a tough year.

It's hard to dissect 2015 without really getting into a lot of details to get an understanding as to why we have confidence relative to 2016.

We tried in our remarks to at least give a very clear indication that we've spent a lot of time on that business on a project-by-project basis, understanding exactly what we've got for 2016, understanding what our opportunities are and what we can ultimately achieve from a margin perspective.

So we feel relatively comfortable that we're obviously going into 2016 with our eyes wide open.

We think we've got some really solid opportunities to turn it around very quickly and more importantly, to start building back a base of business that we can ultimately hope to get to historical levels, which I think, as the business rebounds a little bit – and by the way it will rebound.

I mean, there's a significant amount of work that will be coming in that industry. We're unfortunately in a lull. But we've got to position ourselves internally to be able to win and execute on that work over a longer period of time..

So, the – I mean, is your expectation – it sounds like that this can get back to being a $450 million or $500 million business at some point?.

Absolutely..

Okay. Great.

And then just on the Communications side of the business, you've talked in the past about spreading out your customer base there, and as you look out, especially into the back half of 2016 or 2017, some of the programs that are out there, how do you think about customer concentration in that market and your expectations there?.

I think that's one of our big successes in 2015, right, was our ability to create relationships with new customers, grow our business with new customers. Communications is obviously a big sector, but in our install business, we started the Sprint Direct 2 You program, which I thought was a nice differentiated product.

We've got some opportunities right now to further expand our customer base there with some pretty unique and interesting things. On our wireline side, we've grown our gigabit business with multiple customers. I think that's going to bode well for us, not only in 2016, but quite frankly probably more importantly in 2017 and 2018.

When you look at our wireless business, I think we did a good job of growing different customer base. We're doing a lot more work for the tower companies. So I think we had a fairly good year in that and I think we're going to continue to work hard at that.

There are some large carriers that are going to have some big spends that didn't spend a lot and haven't spent a lot over the last 12 months to 18 months. I think that's going to turn. And when it does, I think we're super well-positioned to benefit from that as well.

So I think there's some good things, a, that we've done; and, b, more importantly, that are on the horizon that are going to add to that story..

Okay. Thank you..

Thanks, John..

Our next question comes from Alex Rygiel with FBR..

Thanks. Good morning, gentlemen..

Hey. Good morning, Alex..

José, you haven't talked too much about Mexico yet.

If you could, sort of update us on your interest in pursuing opportunities down in Mexico and/or projects that are associated with Mexican customers?.

I mean it's all part of our Oil and Gas business. It's part of the reason why we're so bullish. I think I fully expect to win a decent-sized project this year and I think we're going to build a really nice business, both that supports Mexico and the U.S., and also in-country in Mexico, a lot of activity.

Obviously, there's some turmoil down there as well, but it's actually creating some opportunities. And nothing has really changed from our perspective there and we're hoping to get to the point where we can actually talk about specific projects in the near future..

And then secondly up in Canada, I know you mentioned your revenue expectations for Canada, but can you quantify what – how much revenue you think you're going to be generated from Canada? Kind of break that down between the different sort of service types across Oil and Gas? And any other further thoughts you have on Canada?.

Yeah. I mean for us today, it's all Oil and Gas. We did about $550 million in 2015. We said we expected to be down probably a little bit more than 30% in 2016. It's one of the drags on Q1. We did about $170 million in Canada in the first quarter of 2015.

That number is probably going to be closer to about – I don't know, I'd guess $75 million in the first quarter of 2016, so it's a big drag on our first quarter revenues. There's some, actually some really good and interesting opportunities there. It's just it's a market that I think has been highly driven by commodity prices. It's been highly impacted.

We've got to be cognizant of that. I think, we've right-sized for it. I think we've got a great reputation up there, and as I said earlier, I think when it comes back it's going to be very strong and I think we're going to be in a much better competitive position than we are today, so we're going to be patient..

Very helpful. Good luck to your hurricanes in March..

Thanks, Alex..

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

Thanks. Good morning, guys..

Good morning, Dan..

A couple follow-ups here mostly on the Oil and Gas side. First of all, you talked about, I guess, a $1.5 billion you were bidding last quarter; you brought a $1.4 billion in the fourth quarter.

Are those two numbers aligned and/or did you add stuff you weren't expecting? Is there more stuff you were previously looking at that's still yet to come? If you can just give us a little bit more color on that, particularly as it related to work for 2016..

Sure. So for 2016 I'd say the majority of what we have in backlog is to be completed in 2016. So there are some things that we're still hoping for and expecting in 2016, but quite frankly, it's quite limited at this point. We're in really good shape relative to 2016.

Relative to the comments that we made last quarter, there are a number of projects that we were probably talking about at that time that we're hoping will come soon.

So I think that the number has significantly grown from that conversation, and I think based on what we're seeing, and I think based on our commentary today, I do expect it to be a much larger number than what we were alluding to last quarter, and I think we'll be able to demonstrate that in the coming quarters..

Got it. And then the other thing we understand is a lot of the pipeline work to be picked up and a lot of that you expect to pick up is kind of with one family of companies, and you've already shown a willingness to accept a lot of customer concentration on the Communication side.

I'm just wondering is this something strategic you're targeting? Is this something we should think of as a risk factor? If you can just maybe walk us through a little bit because I anticipate that in 2016 you're going to have another very major customer that could be across their family, I don't know, 25%, 30% of your revenue..

So first thing I'd say is we want to align ourselves; a) with the right customers where we have really good relationships and where the relationships actually matter and make a big difference, so that's important.

More importantly we want to align ourselves with what we think are the right projects, almost more than customers, because there are projects that are going to have a much higher likelihood of success, right, and of their ability to go forward. So we're really trying to work hard at understanding what the opportunities out there.

I can tell you that when we talk about the opportunities that we're seeing in the industry, they're broad-based; they're not with single customers. We're talking to multiple customers about very large opportunities.

So we feel good about our ability to diversify our work across customers, but we're also not afraid to make big bets with particular customers, especially when, again, when the relationship is strong. As I think about more of our future commentary, I think you're going to see diversified awards.

I think it's not all with one customer, but obviously to the extent that any single customer wants to give us large deployment opportunities on good projects, we're going to take it. So we don't really view that as a negative, all right. We're seeing in the pipeline world a lot more project financing as it associates with particular projects.

I think that really secures your position from a payment perspective relative to a project. And look, at the end of the day, the guys that are building these things are fairly big – are very large companies, many of which, while they're undergoing some difficulty today, are in a great long-term position. So we're really not worried about that..

Got it. Thanks..

Thanks, Dan..

We'll go next to Noelle Dilts with Stifel..

Thanks. Good morning..

Good morning, Noelle..

My first question kind of ties into what you were just speaking about with Dan, but I think one of the challenges for investors right now is that they're seeing this dichotomy where you Quanta, others, are expressing this very bullish outlook on the mainline pipeline market, and then we're seeing these challenges and changes with how MLPs are accessing capital.

So can you just speak to that? Is your confidence a function of the company's high-grading backlog? And you think your work will be on top? Can you just help us understand how you're looking at that dynamic?.

Well, sure. I think, again, we're cognizant of the issues in the industry, and we're tracking it, and we're looking at project-specific work. And what's specifically happening to those projects as we make commitments.

I think one of the best things that happened to us over the last year is our own involvement in owning a pipeline, right? So today we're a partner in a pipeline. We've learned a lot from that experience.

We've learned a lot about what it takes to actually build a pipeline from scratch, all of the stuff that goes that historically we haven't been a part of, and more importantly the financing around it. So the project that we've got is a fully-financed project.

We understand exactly what that means, and we understand the interest that exists around financing oil and gas projects. By the way, not just in the U.S. but in other countries such as Mexico and Canada. There's a ton of interest. There's a ton of funds, and people chasing those dollars.

I mean, as an example, recently we've seen KKR, BlackRock, First Reserve, Sempra, all make significant announcements and investments related to Mexico infrastructure funds, specifically related to oil and gas. So there's plenty of money available to ultimately secure and build these pipelines.

Now, you're right; they're looking at different sources of capital. So when a project is project-financed, it doesn't make any difference to us, right? If we can tie that project to financing, it actually puts us in a pretty comfortable position knowing that the funds are going to be there for us to ultimately get paid. And I think that's important..

Okay.

Second question, I was hoping you could just expand a little bit on what you're seeing in wireline and discuss your expectations in terms of growth in 2016 and 2017? And really when you think this market could peak, and if you could comment a bit on your margin expectations as well?.

Yeah, I think, again, we're very early in the cycle. I don't think the market's going to peak for a number of years. So it's a great market to be in today. We're making our strides. We're pretty excited about the level of activity that we've been able to secure and the growth that we expect to see.

Again, it's a relatively small piece of our business, but one that we've said here recently we expect it to be a much bigger part of our business in the future. It's where our roots are from, so we think we're good at it. We're really starting to compete at a higher level than we have over the last few years.

So we're, again, as we think about guidance, if you think about our Communications guidance, we don't have an enormous amount of growth built in, so the reality is that to the extent that we still have to start executing on these and hopefully we can beat some of that. But our expectation is there's solid growth opportunity there.

It's going to be around for a long time and we're happy to play our part..

Thank you..

Thanks, Noelle..

We'll go next to Vishal Shah with Deutsche Bank..

Hi. This is Chad Dillard on for Vishal. Could you walk through your revenue expectations for gathering versus mainlines in oil and gas in 2016? And how much of your expected revenue is already in backlog? Thanks..

So, as it relates to gathering, gathering's been a relatively small component of our business. It's probably been $100 million or less over the last couple of years. I wouldn't expect it to be any different in 2016. So it's a small part of what we do.

We've got a decent amount of backlog in that business today, so quite frankly, I don't think we need to stretch much to get to the numbers that we're expecting there. It is down from historical levels and one where we don't think it's coming back in 2016.

I'm not sure if the question related to our overall oil and gas business, but at this point, to hit what we have in guidance, we pretty much have what we need in backlog. It's a matter of executing and getting the opportunity to execute on that in 2016. With that said, we do expect further awards for work to begin in 2016.

So, again, hopefully if all goes our way, we'll have an opportunity to do a little bit better..

Okay.

And just to follow up, what are your margin expectations in oil and gas ?.

Yeah. So I think I lost you there at the end, but I think your questions were about oil and gas margins. So look, we're expecting margins to be up year-over-year. Again, for all of the reasons we've talked about and all of the uncertainty that exists, we haven't made very large assumptions in margin improvement.

Actually, we've got a very modest margin gain over 2015. We've talked about over the years, historically, we had some good years and quarters where we exceeded, I think in 2013, we exceeded over 13% for the year, and we had particular quarters where we did a lot better than that.

There's no reason to believe as this work gets going that we can't achieve that again, but it's definitely not what's built into our guidance..

Great. Thank you..

Thank you..

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

Hey. Good morning, guys..

Good morning, Adam..

José, I wanted to ask you about 5G, because your customers are talking about it. You mentioned it in the press release.

I mean, what is it in terms of infrastructure? And when could it be a material driver for your business?.

Well, I think it's similar to 4G, there's going to be a lot of – I think the difference now is there's lots of different deployment opportunities, but I think we're going to see a lot of equipment related to 5G and I think we're going to see a very similar type of upgrade cycle over the next few years in terms of what's on towers and what's on – whether they're towers or small cells or whatever they are, I think you're going to have different equipment that's going to be deployed.

And that's great for our business; I think it's still very early. They're obviously testing it so we don't have any rollout plans yet, but it's just another – I think it just adds to the fact that we're nowhere near the end of the cycle.

The business is going to continue to evolve and grow and it's going to create tons of opportunities for companies like ours for a long period of time, and we're happy to be in the industry. We're happy to have the competitive position that we have. We think today we're the largest in the nation. So we'll benefit from it.

We're looking forward to it, in the meantime there's still a lot of other work to get done before that happens, and hopefully, it all starts, I guess falling one on top of the other. But we're pretty excited about it..

Okay. And I guess I won't congratulate you on the year, but I will congratulate you on the cash flow and the kind of year-end balance sheet.

And I'm just curious, I mean if you were to do M&A, where would you buy?.

Hey, look, at this point, we've got a lot of opportunities; we've got a lot of organic opportunities. We feel that our stock is pretty depressed. We're also cognizant of the fact that some of these opportunities are going to require working capital, so we've got some things to work through in our own minds in terms of what we do.

I think from an M&A perspective, we're going to be very opportunistic. If the right opportunity came along and made a ton of sense, I think we would consider it, but I don't think it's something that's really driving us right now. We haven't really done much in the last year.

I don't think you should suspect or expect us to do really a lot in 2016, other than, again, if something very opportunistic came about. I think if we were going to deploy capital in that manner today, quite frankly we don't think there's a better investment than our stock. We bought over 5 million shares at roughly $19 earlier in the year.

So obviously if we thought it was a good investment then, I think we've got much better visibility today than we did back when we bought those shares, so we'll see..

Okay. Thanks, José..

Thanks, Adam..

And we'll take our final question from John Rogers with D.A. Davidson..

Hi. Thanks. Just one follow-up. José, you mentioned on Dakota Express (sic) [Access], you've got six spreads.

What's your capacity now as we go out into 2017? Do you have to significantly ramp up capital spending? I know we don't want to get too far ahead of us, and I appreciate George's comments on plans for this year, but can you comment on that?.

Sure. So now, I mean I think we're in a position to, again, to execute on the work that we've got. Again, the anticipation is that most of that work will be done in 2016; again, not necessarily what we may have in guidance, but I think there's a chance that that work is to be executed in 2016.

Again, if it is, we're obviously in really good shape relative to backlog and where we need to be, but look, we've grown a lot, we've added capacity over the years.

We're in a great place to take advantage of the opportunities that the markets afford us, and we're fully capable of doing that, and again, that's just one job, so we're obviously fully capable of doing a lot more than that as well..

But what is your spread capacity now?.

You know, we don't....

Or what do you expect it to be?.

I think it's a tough metric because so much work isn't really done in spread capacity, right? There's so much work that's multiple spreads that are breaking up or you can break up one spread and do different things on them. On the mainline side, obviously, six spreads is a lot of work. We've got capacity to do a little bit more than that.

But we don't – if the opportunities are there, we think we have the right personnel and leadership in place that we'll be able to execute on it..

Okay.

Without significant more capital spending?.

Without a significant ramp in capital spending..

Okay. Great. Thank you..

Thanks, John..

And I'd now like to turn the conference back to Mr. Mas for any additional or closing remarks..

Now I'd just like to thank everybody for participating today and their interest in MasTec. Again, I want to thank the men and women in MasTec for their dedication and hard work, and more importantly, their dedication to safety in 2015, and we look forward to updating everybody on our first quarter call in a couple of months. Thank you..

Again, that does conclude today's presentation. We thank you for your participation..