Welcome to MasTec's Third Quarter 2021 Earnings Conference Call initially broadcast on Friday, November 5, 2021. Let me remind participants that today's call is being recorded. At this time, I'd like to turn the call over to Marc Lewis, MasTec's Vice President of Investor Relations.

Marc?.

Thanks, David. And good morning, everyone. Welcome to MasTec's Third Quarter 2021 Call. The following statement is made pursuant to the safe harbor for forward-looking statements described in the Private Securities Litigation Reform Act of 1995.

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

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

Should one or more of these risks or uncertainties materialize or should any of our underlying assumptions prove incorrect, actual results may differ significantly from results expressed or implied in today's call.

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

A reconciliation of any non-GAAP financial measures not reconciled in these comments to the most comparable GAAP financial measure can be found in our earnings press release or our 10-Q in the investors and news section of our website located at mastec.com.

With us today, we have Jose Mas, our Chief Executive Officer; and George Pita, our Executive VP and CFO. The format of the call will be opening remarks announced by Jose, followed by a financial review from George. These discussions will be followed by a Q&A session. And we expect the call to last about 60 minutes.

We had another good quarter and a lot of important things to talk about today, so I'll going ahead hand it over to Jose.

Jose?.

We're having a solid 2021 and are very excited about the opportunities in the markets we serve. Finally, I'd like to highlight the potential opportunities of the pending infrastructure bill.

With a significant presence in the telecommunications market, which include 5G build-out capabilities, our involvement in maintaining and building the electric grid, coupled with our exposure to the clean energy market, including wind, solar, biofuels, hydrogen and storage; and our recent expansion into the heavy infrastructure, including road and heavy civil, we believe we are uniquely positioned to benefit from the potential infrastructure spend.

We are confident we can hit our growth targets with solely private investments in infrastructure but do recognize the potential acceleration in our markets with significant government spend. I'd like to again congratulate and thank the men and women of MasTec for their fantastic performance. I'm honored and privileged to lead such a great group.

The men and women of MasTec are committed to the values of safety, environmental stewardship, integrity, honesty; and in providing our customers a great-quality project at the best value. These traits have been recognized by our customers.

And it's because of our people's great work that we've been able to deliver these financial outstanding results in a challenging environment and position ourselves for continued growth and success. I'll now turn the call over to George for our financial review.

George?.

Our estimate for 2021 share count continues at 74 million shares. We expect annual 2021 depreciation expense to approximate 4.3% of revenue, inclusive of year-to-date 2021 acquisition activity.

As we have previously indicated, this expectation incorporates an increased level of 2021 Oil and Gas segment depreciation expense when compared to 2020, as we are utilizing conservative depreciation life and salvage value estimates on previous capital additions to protect against future market uncertainties.

Given these trends, we anticipate that annual 2022 depreciation expense dollar amount and percentage of revenue will decrease when compared to annual 2021 levels. We expect annual 2021 corporate segment adjusted EBITDA to be a net cost of slightly under 1% of overall revenue.

And lastly, we expect that annual 2021 adjusted income tax rate will range approximately 22%, with our third and fourth quarter adjusted income tax rates ranging in the 19% to 20% range primarily due to the benefits of income mix and tax true-up adjustments.

This concludes our prepared remarks, and now we'll turn the call back to the operator for Q&A.

Operator?.

[Operator Instructions]. We'll take our first question from Alex Rygiel of B. Riley..

Another really, really strong quarter here, so congratulations on that. My first question wants to focus on capital allocation. So clearly you've got an enormous amount of opportunities ahead of you, so my question here is how should we think about capital allocation over the next, say, 2 years.

Should we think about you investing a greater amount of your free cash flow back into the business through M&A and some of these organic opportunities? Or do you feel like your biggest bang for your buck is investing and buying back stock at this time?.

Great question, Alex. A couple of things, right? I think we've been making a lot of investments in the business over the course of the last few years. We've added an enormous amount of people at MasTec, and we're thankful for that, right. Our employee count is probably up about 6,000 from where we were at this time last year.

Roughly 2,000 of that came from the INTREN acquisition, but the balance of that came organically, so I think we've been really investing in our ability to execute on the longer-term opportunities we see in the business. With that said, we've also been active on the M&A front.

It's an incredibly active market and we think there's a lot of good assets out there, so I think you'll continue to see us be active in that market.

And as we continue to generate cash and we're in the advantageous position of being a really good cash flow generator -- I think we've done a great job with cash this year relative to the growth that we've had.

I think, after really investing in those two, then we would focus on potentially looking at where we are from a value perspective to invest capital and buying back stock. I think, if you look at us historically, we've always been one to buy our stock at what we think are very attractive levels.

We're disappointed about where we trade today from a valuation standpoint. So I think there's a lot of arguments to be made as to why it makes a lot of sense to consider doing that, but I think we've got a lot of priorities and a lot of good things happening.

And hopefully, we're in a great position from a cash flow generation perspective last year to take advantage on multiple fronts..

And my second question. I believe you might have said that, subsequent to the end of the quarter, you received another $800 million of awards that'll be dropped into backlog.

Was that the case? What markets were these in, generally speaking? And then you seem to have a renewed excitement about the oil and gas sector, looking out into 2022 and '23, so maybe you could round out that excitement for us..

Sure. So a couple things. The $800 million was specifically to the Clean Energy and Infrastructure segment. So since quarter end, we've been awarded $800 million. We were up about $700 million on a year-over-year basis on backlog. In clean energy, we were down just over $100 million, about $150 million, on a sequential basis.

So I think that the wins that we've had post quarter end really give us an enormous amount of confidence in our ability to continue growing that business. I think, more importantly, to what we've already been either awarded or verbally awarded is what's still outstanding.

There is an enormous amount of activity happening in that market, of which we feel really, really good about. So again we -- growth in the clean energy side obviously hasn't been our concern. We've done a great job being able to do that. I think for us it's about executing on margins, which I think, hopefully, we'll start seeing in the fourth quarter.

As it relates to the Oil and Gas business, look, we're really excited, I think, compared to where we were a year ago and the challenges we were facing in that market. Obviously commodity prices have been high. We have a lot of customers that are looking at a lot of different pipeline projects that were kind of put on the back burner a year ago.

There are still some challenges to get some of those projects to market, but we're actually seeing potential large pipeline activity on multiple projects that are somewhat surprising to us relative to where we've been.

When you also look at what's happening with hydrogen and with carbon capture, the potential for our pipeline business longer term, I think, is amazing.

I think, long term, we could have a carbon capture and sequestration business that kind of consumes our pipeline business and ultimately is the predominant nature of our pipeline business long term, again something that we wouldn't have expected a year ago.

So I think the outlook in that market beyond '22 is really bright and looking a lot better, so very exciting for us..

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

I want to start on the Communications segment and just your thoughts on some of the slower top line growth that we've seen here. What are the drivers, as you see it, to unlock the pace of growth that you anticipate? Talk a little bit about customer conversations around 5G rollout.

And are there certain types of communications activity that's being impacted more versus less in the current environment?.

The fiber business is growing leaps and bounds. The engineering work that we're doing today has significantly ramped to its -- which is really the leading indicator to the construction work actually starting.

So we think that will have a meaningful impact for us in 2022 with multiple customers, right, even including AT&T, which we think is going to be a big part of our business with them next year. So the mix is a little bit different today than what we probably expected into the second half of the year.

I'd say that, for the 2 larger accounts for us, the wireless business has been a little bit slower than we anticipated. With that said, right, in the third quarter, it was probably -- we had a lot more shrinkage in Q1 and Q2 with those customers than we saw in Q3.

We actually saw AT&T's business start coming back in Q3, just not to the levels that we expected. So again, we're very bullish. We know it's coming. We see it around the corner. We're positioning and gearing ourselves for it. We actually think we had an okay quarter relative to what was happening in the market from a top line perspective.

On the margin side, we were impacted by some closeouts as well on one of the fiber projects that I think the whole industry has talked about, but if not for that, I think margins would have come in in-line where everybody expected. I think our fourth quarter margins are going to be really strong in that segment.

Again wireless revenue is going to be a little bit light, which is why we lowered our revenue targets a little bit there for Q4, but outside of that, that market and the opportunity going into '22 and beyond for that market is just fantastic..

And the follow-up is just the clean margin -- the clean energy business and the margin profile was the huge focus of the last conference call. Just talk about where you are in that progression.

And what are the milestones we should be watching for to get confidence in the margin improvement story there?.

Look. We were hoping for more improvement in Q3. Obviously we were impacted by a couple of things. I think they truly were very related to the quarter, right? I think we're through most of our issues. I think we're going to see significant improvement in Q4. We're excited to be able to deliver that. We've been working very hard with that group.

I know they're extremely focused on it. And again, somewhat frustrating because we see the light at the end of the tunnel. We see it turning, and hopefully, we're here in the fourth quarter having a very different conversation related to that segment..

Our next question comes from Noelle Dilts of Stifel..

So I wanted to dig into clean energy a little bit more. First, you're -- obviously have this really strong backlog going into next year. I was hoping, first, you could touch on the mix of that backlog and how we should think about wind versus solar.

And I think, last quarter, you talked about this expectation for sort of an ability to grow that business 25% annually.

You also have one of the largest players in the market talking about flattish revenues for next year, so I was hoping you could comment on if -- just how you're thinking directionally about growth and how we should think about that discrepancy..

Yes, sure. So a couple things, right? I think -- when we look at our Clean Energy and Infrastructure business, I think we have the best diversified business mix of any player in the industry, when you think about everything we can do not just from a renewable perspective but just about every power generation need that our customers are going to have.

When you look at renewables in particular, right, you have a big difference between wind and solar. The wind business was a business that over the course of the last year or so has been impacted relative to the available projects and the transmission assets related to wind and the availability of bringing new wind farms on.

I think, when you look at the solar side of the business, the solar side of the business has been on fire. It's growing leaps and bounds. So depending on where you're skewed is going to depend on revenue growth opportunities going into '22.

'21 for us was a year in which we saw some wind revenue declines, which is partly what you see happening in Q3, right. Our business is converting to much more of a solar business from a growth perspective. I think we'll have a relatively flattish year in '22 on wind.

And it -- we think it will pick up again in '23 a lot as some of these transmission lines come -- get built and are in place to really open up a lot of that wind corridor.

In the meantime, if you want to grow this business, you've got to grow your solar, right? I think -- when you look at the peer and competitor you're talking about, I think they actually had a -- we think, a fantastic wind year this year, which we didn't necessarily experience. So we think -- we saw that wind decline in '22. We think -- or in '21.

We think that we'll probably see it more in '22, which is why we're -- which I think is where the difference is..

Okay. And then second, just I know it's a little bit early to be talking about 2022, but I was hoping you could maybe comment on how generally you're thinking about the timing of work next year.

In years past, on the telecom side you tended to see kind of a slow start to the year and then a really strong fourth quarter, but you have some different dynamics here with work appearing to kind of accelerate in the fourth quarter and into the first, so I'm wondering just how you're thinking about the timing there.

And then also, on the clean energy side we've heard some others talk about some projects pushing to the right, so do you think you'll see a slower start to the year there and a stronger back half? Any sort of high-level questions there just -- or sorry, thoughts there on how to think about the cadence of earnings for the year would be helpful..

Sure, Noelle. I think we're obviously working through budget season now and we'll have a much better outlook on our next call relative to timing. Just generally, right, I think our Communications business will be a lot more evenly distributed next year with the amount of projects that we hope to be starting early in the year.

I think our Oil and Gas business will probably be a little different, right, where we've got some projects that may delay in Q1 and we expect some of that activity to really start in Q2 and beyond.

Clean energy is a mix, right? I think there we're very cognizant of the fact of what is happening with the supply chain issues and what could potentially -- how that could potentially skew projects.

So I think it's going to be a fantastic year, but I do think we've got to be cognizant of the fact that, some of that stuff, we're going to have to manage through. And then on the transmission side, I think it's relatively similar to what we saw this year when you pro forma in the INTREN acquisition. So we feel good about it, lots of challenges ahead.

We're dealing with these vaccine mandates that we're going to have to fully understand how it affects the workforce. We're doing everything we can to prepare ourselves for that and to make sure that we have no disruption. A lot of those rules came out yesterday.

So lots of things that we're managing, but I think all in all the demand for our services is through the roof, so I think it'll be a really good year across the board, regardless of how you look at it, and maybe a couple ups, a couple downs in different segments, but it should be a great year..

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

Jose, electronic transmission margin in the high single digits is the highest it's been in a while, I think, since 2014. I know that's probably a lot of INTREN, but with the alleviation of pressure, I think your problem projects are over there. And then INTREN obviously brings nice scale to the business.

What kind of opportunities can that open up for you in '22? And do you see a path to a double-digit margin too?.

We're super excited, Andy, just the level of opportunities we're seeing there, the -- I think the way the customers have reacted to the acquisition, the opportunity subset that's come from it. We feel really good that we'll be able to grow the business and grow it at solid margins.

A good quarter for us from a margin perspective, right? We'll have a little bit of seasonality in Q4, but we definitely think that the level of margin profile that we saw in Q3 is sustainable throughout all of '22. And again it's, I think, really one of the bright spots of what we were able to deliver in this quarter.

And hopefully, we'll be able to talk about some of the other segments in similar light in the coming quarters..

That's helpful, Jose. And then I know you're still guiding to that sort of $1.5 billion to $2 billion run rate in Oil and Gas next year, but as you know, Oil and Gas for MasTec has continued to beat expectations.

I know maybe there's a little bit of pull forward here but especially on the margin side, so I guess, why shouldn't we think that that's possible in '22, that you sort of sustain these higher margins and there is some upside toward that $1.5 billion to $2 billion?.

I think supply chain is having an impact on the industry, right? So I think projects that started that had commodities bought already, in other words the pipe projects that had pipe bought and pipe sitting, is different than somebody who's trying to build something new today and looking for pipe just because of the dramatic increase -- pipe costs are up.

Those costs are up north of 50% over the course of the last few months. I think that has to kind of -- and that's pure project cost, right? So at the end of the day, we've got customers that we know want to do things but are hesitant to pull the trigger based on that. They're working hard to try to figure it out.

As I think that becomes clear, then we could probably look at our story a little bit differently, but I think, with what we know today, we still think that's the reasonable outlook for 2022..

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

I've got two; one bigger picture, so I guess I'll start there; and then 1 more -- maybe more financial, but it sounded like the supply chain issues really are more on the Oil and Gas side.

And you talked about the clean energy margins maybe more pressured a little idiosyncratic with the COVID outbreak that you had in some of the problem projects, but are there supply chain issues that you're seeing as well there? And where are the bottlenecks that you're seeing, particularly on the solar side, that could impact the timing of some of those starts?.

Well, the reality is that there are supply chain issues everywhere, right? So the issue is how do you manage through them. And how do you ultimately have it -- have the least impact on your business as possible? But we're seeing it in some of the telecom equipment and some of the shipping times of getting stuff here.

Different customers handle it differently, right? I -- obviously the larger customers, I think, are less impacted by it than some of the smaller customers. We're seeing some of it on the solar side with some of the supplies that you need in the solar business. We're seeing it in some of just your everyday materials that you use on a construction site.

So again I don't think it's had meaningful challenges for us relative to pushing schedules and things, but it's something that we're obviously paying a lot of attention to. The costs of the -- we don't have a lot of commodity to -- risk in our contracts, but we do have some small miscellaneous items that we buy.

We've seen cost pressure related to that as well. So I think everybody in today's world is impacted in some way or another. I think we've been able to mitigate those impacts, with the exception of a couple of projects here or there, and hopefully, that's how we're able to manage through it until it gets better..

Okay, that's fair enough. I guess the other one is just on the new credit facility and the potential for you guys to get an investment-grade rating here on your debt. I'm just wondering.

What kind of interest expense savings are you thinking about for next year? I mean, what could you possibly kind of look at that preliminarily versus the $54 million this year?.

Justin, I mean we're looking -- obviously, again for next year, we'll consider -- the cash flow performance this year has been very strong. We would anticipate it's going to be -- continue to be very strong next year. Our capital profile right now is a combination of fixed and floating, all right? And we've just redone the facility.

The facility has slightly improved terms, so that will improve -- that should improve the interest expense a little bit year-over-year. The unknown for us going forward is going to be what happens to short-term rates. So it's a little hard to predict.

I'd say, generally speaking, there's a little bit of a bias towards a reduction year-over-year on our costs.

Obviously we have to approach the rating agencies and we have to get a change in rating before we can see anything else happen relative to our capital structure, but I think the most direct impact to us right now is a slight improvement that we have on our credit facility which will help us.

Unknown, when you think about next year, so what happens to short-term rates and how those move, generally speaking, I think most folks would anticipate they're going to go up some. So maybe together, if you push this together, it's kind of a push in terms of the initial view for next year.

I think, what the investment-grade rating would give us, right, it would give us meaningful flexibility going forward, all right, in terms of financing as we look at alternatives and opportunities to maximize shareholder value, so obviously we would be very pleased if we can get into that profile and that rating.

We think, based on our cash flow, based on our balance sheet management, based on everything else and now with the change that we've made in our facility which is now an unsecured facility, that's kind of a precursor towards improving our ratings profile.

And we think -- with where we are today, we think we're at that point, but obviously we have to get the rating agencies to agree with us. So we're hopeful for that, and more to come when and if that happens..

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

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

Great question, Jamie. I don't think our views changed dramatically, right? I still think that the -- we've got a slide that we've had in our deck for a long time relative to how we get there. So we still think the Communications business in short order is going to be in that $3.5 billion to $4 billion range.

We've talked about Oil and Gas being $1.5 billion to $2 billion, and that's kind of the light that we'd put the $10 billion out. We've talked about, with the growth in transmission and distribution, we're probably closer to $1.5 billion than the $1 billion that we had put out.

And our clean energy business really should already be approaching some of the levels that we've talked about. You put that together and I think we've got the outlook for getting there in the relatively short order in the next couple of years, and that's pretty exciting.

When we think about the margin profile of the business, it hasn't really changed long term, right? We've talked about ultimately getting to the point where we think we can consistently hit 13% margins in Communications. Obviously we need scale to do that. We think, over the longer term, we can probably beat that, but we'll build into that.

Hopefully, we will get somewhere in that 12% to 13% range on a full year basis next year. When you look at our Oil and Gas margins, we don't really expect much change here, anywhere from the mid-teens to the low 20s. When we think about transmission, we've talked about double digits.

When you think about clean energy, we've talked about the high single digits and, over time, working our way into the double-digit category. So nothing has changed, I think, just the speed at which we think we can ultimately achieve it, which I think is great news..

And then I just guess my follow-up question is just sort of on the M&A front. Obviously you guys have a strong balance sheet and have had success with acquisitions historically.

To what degree are the multiples that are out there preventing you from sort of being more aggressive on the M&A front?.

So it's something we debate all the time, right? At the end of the day, we're looking for good companies that we think we can add a lot of value to. We're not just buying -- trying to buy a company for the sake of generating revenues.

We're trying to find companies that we think are additive to what it is that we're trying to do for our customers and how we can deliver. So how do we help companies significantly increase their opportunities? And vice versa, how do those companies help us achieve our goals, whether they be margin goals or revenue goals? And we'll pay fair amount.

Obviously the values of those companies and the valuation requirements to buy things have increased, but I still think it's a relatively good market for us out there. And I think we'll -- there are a number of deals that we've been working on that we think we'll get to the finish line.

And a lot of it is our bread and butter, all right? We buy a lot of smaller companies that we think have tremendous opportunities to grow. I think you'll see us do a number of those before year-end. And again we're excited about the opportunities out there and what we're seeing..

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

Just wanted to follow up on clean energy and the growth there. Just curious. What should be the lead time on the bookings turning to growth? Because I would have thought that -- with the bookings being up so much year-over-year for 3 quarters now, that you'd have organic growth there, but it seems like the organic growth is still negative.

So I know you mentioned like COVID-19 impact.

I don't know if -- how much of that was driving an organic decline or if it's some of the supply chain stuff, but what should the lead time be in when could that segment turn to organic growth?.

Yes, no, look. I -- a couple of things, right, which I think are important to talk about. First, you've got what we saw in the wind business, right? So when you compare for us 2020 to 2021, we had headwinds in that business, all right? We expected a decline in that business.

We think we've done a good job growing the balance of our business to more than offset for that. I think, when we think about '22 and we see the order flow that we've got, we actually see the inverse happening there. We think we're going to have a relatively good wind year relative to '21 from a year-over-year comparison.

When you look at the rest of the project work that we're seeing, we think we're going to see considerable organic growth in '22 versus '21.

I think -- even in the fourth quarter, all right, when we're able to deliver on what we see relative to our performance last year, I think you'll see considerable organic growth in the fourth quarter for the first time this year..

Okay, that's good to hear. And then just on the Oil and Gas business, I'm curious how to think about what the book and burn is running and expected to run. And I know you've -- intend to kind of be in that $1.5 billion to $2 billion of revenue range for next year.

The backlog currently is below that, so how should we think about the book and burn? And what gets us back into that revenue range relative to backlog for next year?.

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

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

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

Yes. Look. It's been broad-based. We're really excited. The amount of dollars that we're seeing relative to both wireline and wireless activity continues to increase. I think a lot of our bookings -- because of the delays in the wireless side, a lot of the incremental bookings have been on the wireline side from lots of different customers.

There are still tens of billions of dollars to deploy from the federal initiatives that are out there that I think are going to only expedite that and increase those levels, so I feel great about where we are relative to the cycle in terms of the customer relationships we've been able to build, the projects we've been able to build or win but more importantly what's coming, right? I still think that we're just really scratching the surface of what this will ultimately be.

I think there are some huge programs that are out there that we're in discussions with, with some customers that would meaningfully move these numbers even more.

So the fact that we are where we are going into '22, with the backlog levels that we have, with the existing potential that continues to exist out there, again is a -- lots of the reasons why we're so excited about this business long term..

I mean I understand the expectations here for 2022. I'd love to just get your thoughts on how far out some of these opportunities are in sequestration; hydrogen; I guess, some of the less-traditional things that you've at least historically done.

How far away are these things? And can they manifest and be impactful as early as '23?.

Yes..

Okay..

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

We'll take our next question from -- I'm sorry. Go ahead, sir..

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

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

Jose, the -- you said the C-band timing was a little delayed.

What are your thoughts on that starting back up?.

Well, one of the challenges that everybody is having is fiber, right? So to the extent that you don't have fiber and you build it then you can't really turn it up. Over the last couple of days, we've seen some stuff on the FAA too which are probably going to impact some of the 5G turnups. So lots of issues to still manage through.

I think our customers are -- once they get started, they're going to push construction, right, irrespective of turnup, but I think they got to be smart about their capital allocation, all right? They don't want to put -- they don't want to build stuff and then have it be stranded for significant periods of time.

They'll build in anticipation of some stuff, but when they have real clear direction on what's going to be available -- that's what we've seen. We've already seen the increase, all right, so we're already seeing the beginning of that starting to get turned on, which is good.

It's just later than we thought and probably less aggressive than we thought in '21. So I do think '22 is going to be a very different year, a much better year; and I think we're already seeing signs of that..

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

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

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

I just wanted to get an update on where you're at from a human capital perspective. I mean you've talked about adding some huge numbers of people, obviously huge training efforts.

I mean, where are we at there? Or do you still need to add a bunch of people and maintain this level of training? Or do you have these people in place now to deliver the backlog you've built up?.

Yes, good question, Sean. One of the questions that we get a lot is what's happening with labor availability and pricing and what kind of challenges does that create for our business.

And the reality is that we kind of look at that question very differently, all right? We look at that question and we say we think that's a huge strategic advantage for MasTec, so we've invested heavily in really making MasTec an employer of choice; making MasTec a place where people want to come and build a career, start at one level and really allow yourself to spend your whole career at MasTec.

So I think that, to achieve our goals, not just the ones we've verbally laid out but to ultimately achieve what we think we can do, we're obviously going to need to continue to hire people. It's a tough market. And again we think that our size, our diversification, our culture really allows us to have an advantage.

I think our customers are looking for companies that they can depend on in an uncertain labor market, so I think those are really important drivers for MasTec and we're going to continue to invest in people and in growing our resources to be able to deliver for our customers. So I don't think you'll see us stop that.

Obviously there'll be pockets where we've got to hire more people in a particular quarter and in a particular couple of quarters and others where we won't, but I think you're going to see a sustained increase to the total numbers. And I don't think we'll ever stop doing that..

Okay, interesting. And a lot of companies talking about wage inflation ramping through this year -- obviously you hold sort of a scarce resource here in your labor pool, and I just wanted to get a sense for how you think about deploying that scarce resource.

Last quarter, you kind of mentioned some customers wanting to lock up capacity over a longer period of time. I mean, is that what you want to do here? Or do you -- be more nimble and more careful about how you're deploying those resources? I hope that question makes sense, but I'm just kind of curious what your thoughts are there..

It does. I actually think it's a really good question, Sean, all right? So a lot of different thoughts, all right? One is we're not mercenaries, all right? So we're not going to go to the top dollar every time because that's not the right thing to do for the long-term nature of the business.

With that said, all right, customers have to understand the challenges that exist in the marketplace and have to be willing to participate and really pay for what's happening in the market at any given point in time. So there's a balance associated with that and we think we manage that balance well.

There's obviously customer relationships that we've had for a long time. We're going to be here for our customers. We're going to do everything that we can to help them meet their build plans, but they have to pay a fair wage. And to the extent that they're not willing to pay a fair wage and -- then we'll have to move our resources to people that will.

I think ultimately everybody in the business understands what's going on with labor. And everybody is going to participate in those challenges, but if we run into a customer that's not willing to and -- then we'll take the appropriate actions to allow our people to make a fair wage and a fair return on their time and investment.

We only have so many people. Their jobs are important. And we want to make sure that they're proud of what they build and they feel good about it and that we do too as a company, all right? We need to be paid a fair wage for what we do and we need to deliver for our customers.

And again it's a balance that we think we're going to be able to manage fairly well..

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

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

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