Quanta Services Inc

NYSE:PWR

Earnings Call Transcript 2021-Q4

[Operator]

Greetings and welcome to the Quanta Services Fourth Quarter and Full Year 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Kip Rupp, Vice President, Investor Relations. Thank you. Please go ahead.

[Kip Rupp, VP of IR]

Thank you and welcome, everyone, to the Quanta Services fourth quarter and full year 2021 earnings conference call. This morning, we issued a press release announcing our fourth quarter and full year 2021 results, which can be found in the Investor Relations section of our website at quantaservices.com, along with a summary of our 2022 outlook and commentary that we will discuss this morning. Additionally, we will use a slide presentation this morning to accompany our prepared remarks, which is viewable through the call's webcast and is also available on the Investor Relations section of the Quanta Services website. Please remember that information reported on this call speaks only as of today, February 24, 2022. And therefore, you're advised that any time-sensitive information may no longer be accurate as of any replay of this call. This call will include forward-looking statements intended to qualify under the Safe Harbor from liability established by the Private Securities Litigation Reform Act of 1995. These include all statements reflecting Quanta's expectations, intentions, assumptions or beliefs about future events or performance that do not solely relate to historical or current facts. Forward-looking statements involve certain risks, uncertainties and assumptions that are difficult to predict or beyond Quanta's control, and actual results may differ materially from those expressed or implied. For additional information concerning some of these risks, uncertainties and assumptions, please refer to the cautionary language included in today's press release, along with the company's periodic reports and other documents filed with the Securities and Exchange Commission, which are available on Quanta's or the SEC's website. You should not place undue reliance on forward-looking statements, and Quanta does not undertake any obligation to update such statements and disclaims any written or oral statements made about any third party -- by any third party regarding the subject matter of this call. Please also note that we will present certain historical and forecasted non-GAAP financial measures in today's call, including adjusted diluted EPS, backlog, EBITDA and free cash flow. Reconciliations of these measures to their most directly comparable GAAP financial measures are included in our earnings release. Lastly, if you would like to be notified when Quanta publishes news releases and other information, please sign up for e-mail alerts through the Investor Relations section of quantaservices.com. We also encourage investors and others interested in our company to follow Quanta IR and Quanta Services on the social media channels listed on our website. With that, I'd like to now turn the call over to Mr. Duke Austin, Quanta's President and CEO. Duke?

[Duke Austin, President and CEO]

Thanks, Kip. Good morning, everyone, and welcome to the Quanta Services fourth quarter and full year 2021 earnings conference call. On the call today, I will provide operational and strategic commentary and will then turn it over to Derrick Jensen, Quanta's Chief Financial Officer, who will provide a review of our fourth quarter results and full year 2022 financial expectations. Following Derrick's comments, we welcome your questions. This morning, we reported strong fourth quarter results, which complete another year of solid, safe execution, profitable growth. These results were built off a strong operational and financial platform and we believe demonstrates the dedication of the best employees in the industry. Our portfolio of companies, diversity of service lines and field leadership has allowed us to endure the uncertainties and challenges presented by the global pandemic over the past couple of years while still delivering four consecutive years of record adjusted EBITDA and five consecutive years of record adjusted earnings per share. We accomplished a great deal in 2021 through the successful implementation of our strategic initiatives, and our past success positions us well for the future. We remain focused on continuing to provide collaborative solutions to our customers and business partners to help them achieve their goals and to capitalize on opportunities to enable the energy transition that is unfolding. Here are some of our accomplishments in 2021. We continue to advance our front-end solution strategy both organically and through acquisitions, which is focused on strengthening our design, engineering, permitting, environmental and program management capabilities. This strategy allows us to expand our solutions to our customers, enhances risk management and increases our total addressable market. We expanded our emergency response capabilities and generated another year of record revenues by supporting our customers' efforts to restore power to millions of people adversely impacted by several severe weather events during the year. Our ability to quickly mobilize significant resources to support our customers in times of need is unmatched in our industry. LUMA Energy, our joint venture with ATCO, successfully transitioned to managing Puerto Rico's more than 18,000-mile electric transmission and distribution systems. Though many years of challenges and work were made, LUMA has made significant progress in improving customer service, response times, customer communication and system reliability. We continue to believe this opportunity is transformative for Quanta and the people of Puerto Rico and remain committed to supporting LUMA's mission to provide reliable electricity while building a modern and sustainable transmission and distribution system. In support of our commitment to the people of Puerto Rico, we, along with ATCO, bundled and commenced the LUMA College for Technical Training in Puerto Rico, and the first class of electric utility line workers graduated in October. Since opening the college, which is supported by Northwest Lineman College, hundreds of workers from LUMA have received additional training with the support of Quanta. We are proud of our commitment to the advancement of craft-skilled workforce in Puerto Rico. We grew our communications services revenue by approximately 25% and ended the year with record communications total backlog of approximately $1.3 billion. We also developed and rolled out wireless infrastructure solutions to strengthen our opportunities to capitalize on 5G network deployment and ongoing enhancement of 4G wireless networks. We expect to profitably grow the business and are booking incremental wireless revenue. We completed the acquisition of Blattner, a premier utility-scale renewable energy infrastructure solutions provider in North America with decades of experience and strong safety culture. This is Quanta's largest acquisition to date, and we believe it positions Quanta to be a leader in the energy transition and transforms our ability to collaborate early with our customers on their energy transition strategies. The integration of Blattner is going well, and we have increasing confidence in our ability to create meaningful growth and cost synergies together over time. We made meaningful progress in our initiative to apply certain skill sets and expertise from operations within the Underground Utility and Infrastructure Solutions segment to perform certain aspects of electric power and telecom-related work. We believe the resource expansion and operating leverage we gain through this initiative is a significant opportunity for Quanta to reinforce our self-perform capabilities, improve operating efficiency and profitability and demonstrates the strength of our portfolio approach. In addition to the acquisition of Blattner, we invested approximately $350 million in strategic acquisitions of nine high-quality companies, which primarily support our electric power and front-end service solutions. We believe the acquired companies are additive to our base business, advance our strategic initiatives and enhance our self-perform capabilities, which typically accounts for approximately 80% of our work and are key to providing cost certainty to our customers. We maintained our investment-grade credit rating while issuing $1.5 billion of senior notes and expanded our credit facility to fund the Blattner acquisition, which we believe points to the merits of the transaction, our strong financial profile, the resiliency and sustainability of our business model and positive multiyear outlook. We demonstrated our commitment to stockholder value and our confidence in Quanta's financial strength and continued growth opportunities through the repurchase of approximately $64 million of common stock and a 20% increase of our dividend. And finally, we continue to increase our efforts and dedicate resources toward implementing sustainable business practices throughout the organization and to improve the data we capture to manage our operations' sustainability and better communicate our ESG impact and initiatives to our stakeholders. It is easy to take for granted the reliability of the power grid, access to abundant sources of affordable energy and internet connectivity for commerce and entertainment. The impact of a hurricane, winter storm, wildfire or other events that shut off power affects our ability to heat or cool our homes and disrupts our quality of life, quickly changes this perspective and highlights how critical the infrastructure that we design, build and maintain is to our everyday well-being. The solutions Quanta provide support our customers' efforts to increase reliability, safety, efficiency and connectivity, all of which have a favorable environmental and social impact. Additionally, our services are at the forefront of providing the infrastructure solutions necessary to enable the energy transition and the adoption of new technology. As a result, we believe our business is levered to favorable and sustainable long-term trends. Demand for grid modernization, system hardening, electric vehicle charging, infrastructure and renewable energy interconnection services is robust and we believe will remain so for the foreseeable future. This activity drove our electric power results and backlog strength during 2021, primarily through significant multiyear master service agreements with utilities. Further, we believe we are in the early stages of utilities' undergrounding transmission and distribution lines to protect them from the effects of severe weather events and wildfires. For example, several utilities in the Western United States are planning to invest tens of billions of dollars in the aggregate to underground thousands of miles of electric power lines in high fire-threat areas. Electric utilities in other areas of the country are pursuing initiatives to underground critical infrastructure. Examples include electric transmission projects in the Northeast, distribution circuits along the coastlines and electric transmission line projects for offshore wind generation. Many of these initiatives are part of the large-scale multiyear storm hardening programs. We also believe North America is at an inflection point for significant investment in electric vehicle-related infrastructure, including charging infrastructure and the electric distribution system upgrades necessary to support the anticipated increase in the adoption of electric cars, trucks and commercial fleet vehicles in the coming years. Quanta continues its work with multiple leading electrical vehicle charging companies and utilities to build out infrastructure necessary to make fast, affordable charging possible in numerous states across the country. Quanta is presently working on the rollout of hundreds of charging stations. In many of these locations, Quanta is serving as the program manager, providing a full suite of engineering, development and construction services. With our scope and scale and turnkey program management capabilities, we are pursuing additional EV charging program management opportunities with other charging infrastructure companies, automakers and utilities. Our communications operations, which are within the electric power segment, grew revenues and backlog nicely in 2021, but our profitability levels did not achieve our goals. We are working constructively with our customers on certain items that have impacted profitability and believe these issues are approaching resolution. With the exception of these issues, the remainder of the communications operations are operating close to our target margin profile for the year. The demand for our communication services remains high, and we expect double-digit revenue growth and a return to upper single-digit operating income margin for our communications operations in 2022. With the addition of Blattner to our portfolio, we have begun reporting through three segments by adding a new Renewable Energy Infrastructure Solutions segment. This platform consists of services and solutions for infrastructure supporting the delivery of renewable energy, including renewable generation, electric transmission, substations and battery storage with Blattner's operations representing the majority of those solutions. We are strategically positioned to collaborate with our customers to lead North America's energy transition and capitalize on the growing and significant amount of expenditure expected to be invested in renewable generation and related infrastructure as part of these efforts. Renewable developers and utilities are leading the effort to reduce carbon emissions, many with carbon-neutral commitments through aggressive efforts to expand their renewable generation portfolios and implement new technologies for current and future needs. Achieving their goals will also require substantial incremental investment in transmission and substation infrastructure to interconnect new renewable generation facilities to the power grid and to ensure grid reliability due to the significant increase of intermittent power added to the system. For example, we highlighted in our earnings release this morning our recent selection to build more than 400 miles of high-voltage electric transmission across several states for our customer in the Western United States. This project is designed to improve operational flexibility in conjunction with future generation resources, including renewable energy to meet the load growth and provide increased reliability. Also of note, this is the largest electric transmission line contract ever awarded to Quanta in the United States. Over the near and longer term, we believe substantial load growth, public policy and the overall positive sentiment supporting a greener environment will continue to drive North America's power generation mix increasingly towards renewables. Quanta's utility-scale renewable generation solutions, coupled with Quanta's existing holistic grid solutions, creates a unique value proposition and opportunity to collaborate with our customers to shape their energy transition initiatives. We are increasingly confident in the gross synergy opportunities we have with the addition of Blattner, and to that end, believe we have only scratched the surface on what is possible. Our Underground Utility and Infrastructure Solutions segment faced challenges last year, primarily due to circumstances outside of our control, such as impacts from the global pandemic, work disruptions along the Gulf Coast due to hurricane and impact on results from a customer bankruptcy. Despite these challenges, our operations persevered in our gas utility and pipeline integrity operations performed well. We believe the recovery of certain of our markets and operations have begun. In particular, we expect our industrial services, Canadian and Australian operations to meaningfully improve this year both in revenue and margins. We expect to continue our focus on growing our gas utility, pipeline integrity and industrial services businesses, consistent with our strategy over the last five years due to the favorable long-term trends driven by safety, reliability and environmental regulations. Looking to the coming years, we believe Quanta has meaningful opportunities with customers in this segment as they increasingly pursue strategies to reduce their carbon footprint and transition their operations and assets towards greener business opportunities. For example, gas utilities are implementing system modernization initiatives to reduce methane emissions and that position them to blend hydrogen into their natural gas flow and certain refiners. Utilities and developers are building renewable natural gas and biofuel processing facilities. We are also actively pursuing sizable carbon sequestration projects. In our earnings release this morning, we provided our 2022 guidance, which we believe demonstrates the strength and sustainability of our business and long-term strategy, favorable end-market trends, our ability to safely execute and our strong and strengthening competitive position in the marketplace. Further, our ongoing investment and commitment to workforce training continues to positively impact our performance and positions us well to capitalize on future opportunities. Our expectations call for another year of meaningful growth, record revenues, adjusted EBITDA and earnings per share and improved profit margins. Additionally, we see opportunity to achieve new record levels of backlog in 2022. Derrick will provide additional detail about our guidance in his commentary. In summary, the strong performance of our electric power and Renewable Energy Infrastructure Solutions operations and the contribution of acquisitions during the year yielded record results in 2021 and has given us a leading platform to collaborate with our customers to shape the energy transition. We believe our strategic position in the marketplace remains strong, which has been further enhanced by the acquisition of Blattner, and that we are all well positioned for continued profitable growth over the near and longer term. We continue to make meaningful progress on growing our portfolio of services within each of our units to further leverage our operating results. The recent promotion of Redgie Probst to Chief Operating Officer is intended to support and promote this strategy, and we look forward to continuing to work with him on this important initiative. Considering our organic growth opportunities and the levers available to us to allocate future cash flow generation into value-creating opportunities such as stock repurchases, acquisitions, strategic investments and dividends, we believe Quanta will continue to generate meaningful value for our stakeholders going forward. We are focused on operating the business for the long term and expect to continue to distinguish ourselves through safe execution and best-in-class field leadership. We will pursue opportunities to enhance Quanta's base business and leadership position in the industry and provide innovative solutions to our customers. We believe Quanta's diversity, unique operating model and entrepreneurial mindset form the foundation that will allow us to continue to generate long-term value for our stakeholders. I will now turn the call over to Derrick Jensen, our CFO, for his review of our fourth quarter and full year results and 2022 expectations. Derrick?

[Derrick Jensen, CFO]

Thanks, Duke, and good morning, everyone. Today, we announced record quarterly revenues of $3.9 billion for the fourth quarter of 2021. Net income attributable to common stock was $104.8 million or $0.71 per diluted share and adjusted diluted earnings per share, a non-GAAP measure, was a record $1.54. Overall, the fourth quarter closed out another exceptional year of operational performance for Quanta. Our fourth quarter results include the introduction of our Renewable Energy Infrastructure Solutions segment, largely due to the inclusion of Blattner in our operating results beginning in October. At a high level, this segment primarily represents the solutions we're providing associated with interconnection, substation and generation infrastructure directly supporting the delivery of renewable electricity. Historically, these activities were included within our electric segment. However, as the same market forces driving Blattner's growth will drive growth in these related areas, which included the aggregation of these services provided incremental clarity to the investment community. Our reported results exceeded our expectations for the fourth quarter in numerous areas, including revenues, adjusted EBITDA, EPS and adjusted EPS, with revenues and adjusted EBITDA delivering significant growth as compared to last year. I'll cover a few items impacting the quarter. Revenues continued to show significant growth compared to last year, in part due to record emergency storm response revenues, although only slightly above last year's ERS revenues. Additionally, revenues from acquired businesses were approximately $500 million in 4Q '21, the majority of which was attributable to Blattner. Operating margins in the quarter benefited from continued strong execution across our electric operations with margins exceeding 12%. Also contributing were the operating results of our integral unconsolidated affiliates. This primarily relates to the LUMA joint venture, but also includes contributions from a business that provides specialty site preparation and access solutions in which we acquired a 44% interest during the quarter, as we commented on in our third quarter earnings release, and they performed quite well during the quarter. Partially offsetting those dynamics were our communications operations, which had negative margins during the quarter due to the challenges experienced in certain regions. Specifically, one customer reduced the previously expected scope of work in certain markets, while the requirements to evidence the completion of the work have been subject to multiple changes. Due to the elimination of future scope and associated construction activities, we were required to recognize in the quarter the full cost necessary for the preparation and submission of the modified closeout packages. For two other contracts with another customer, we recognized losses due to ongoing permitting delays, which were substantially hindering production as well as increased cost to meet schedule commitments. These two projects are near completion. Importantly, our remaining aggregate communications operations are operating in the upper single-digit range, giving us the confidence that our longer-term margin profiles are achievable. Our previous guidance included expected contributions from transactions made in 3Q '21 and 4Q '21 through the date of our November earnings release of between $40 million and $60 millions of adjusted EBITDA, a non-GAAP measure. Ultimately, our fourth quarter results included contributions towards the higher end of this range. We recognized an incremental $8.1 million provision for credit loss or $0.04 per diluted share related to outstanding receivables owed by Line 3 refining that declared bankruptcy in July 2021 as we do not anticipate the receipt of any funds through the bankruptcy proceeding. We no longer have any exposure related to receivables owed from this customer. Operating margin in 4Q '21 was negatively impacted by $146 million associated with amortization, deal costs and fair market value adjustments to earn-out liabilities, a combined 370 basis point impact, compared to $28 million of comparable costs and approximately 100 basis point impact in 4Q '20. Also of note, the tax expense and effective rate for the fourth quarter and full year of 2021 were significantly lower than our previous guidance. This reduction was largely driven by the favorable IRS clarification on per diem deductions for 2021 and the reversal of certain reserves for uncertain tax positions upon expiration of certain statutes of limitations. Our total backlog was $19.3 billion at the end of the fourth quarter, another record level. $1.6 billion of the backlog is attributable to fourth quarter acquisitions, the majority of which was from Blattner. But excluding those contributions, total backlog were still up over $600 million compared to 3Q '21. 12-month backlog of $11.3 billion includes close to $1.5 billion of acquired backlog, but excluding those contributions still represents record 12-month backlog on an organic basis. We believe these increases continue to reinforce the repeatable and sustainable nature of the largest portion of our revenues and earnings and the demand for our industry-leading infrastructure solutions. For the fourth quarter of 2021, we generated free cash flow, a non-GAAP measure, of $111 million, resulting in $246 million of free cash flow for the year. Our previous expectations of $350 million to $500 million of free cash flow for the year excluded significant change-in-control-related disbursements associated with acquired liabilities during the quarter associated with the Blattner transaction, which aggregated to $72 million and are required to be treated as operating cash outflow items in our GAAP calculation. We also took the opportunity in the fourth quarter of 2021 to accelerate the opportunistic and strategic procurement of around $50 million of equipment. Given the ongoing supply chain challenges in the equipment and vehicle markets, we felt it was the right long-term action to take to support the ongoing needs of our operations. Days sales outstanding, or DSO, measured 80 days for the fourth quarter, which is a reduction of nine days compared to the third quarter of 2021 and three days compared to the fourth quarter of 2020. The decreases were primarily due to the favorable impact of the acquisition of Blattner, which typically has lower DSO in certain of our other larger operating companies. This positive impact was partially offset by continued elevated working capital requirements associated with two larger Canadian transmission projects driving an increase in contract assets, which we've discussed in prior quarters. Both projects have been impacted by work stoppage protocols in Canada associated with COVID mitigation as well as delays attributable to, among other things, wildfires' impact access to work sites. Discussions with both customers regarding change orders associated with these increased costs are ongoing, with multiple change orders already approved. The remaining amounts are being pursued in the normal course. We had total liquidity of $2.1 billion at year-end and a debt-to-EBITDA ratio of 2.3 as calculated under our credit agreement. While our leverage profile remains above our target range due to the acquisition financing, as we stated in prior calls, we expect to efficiently delever over the following quarters while continuing to create shareholder value through our dividend and repurchase programs as well as strategic acquisitions. To that end, during the fourth quarter, in addition to the three transactions we announced during our last earnings release, we acquired four additional businesses for a total combined consideration of approximately $230 million. These four acquisitions all closed late in December and other than incremental deal costs were immaterial to our 4Q results. Turning to guidance. First, forecasting and providing specific commentary on the classification of uncommitted revenues between electric power versus renewables can be challenging. Accordingly, it's possible that as we progress through the year and gain more visibility into the nature of the work we'll be performing, there could be movements outside these initial segment ranges simply due to the type of infrastructure our activities will be supporting. As Duke commented, we deliver our portfolio of services, and we are comfortable with our aggregate expectations. Additionally, by following seasonality commentary addresses our expectations for 2022 as compared to our recast quarterly results for 2021, which align prior reported numbers to our new segmentation. And these 2021 recasted segment numbers have been included in today's earnings release. As it relates to the electric power segment specifically, we see 2022 revenues ranging between $8.2 billion and $8.3 billion. Our base business continues to lead the growth in the segment driven primarily by North American utilities outsourcing activities required to replace, rebuild and upgrade existing infrastructure. Notably, these growth expectations are tempered by reduced storm revenues, $250 million of which are included in our current expectations compared to over $450 million in 2021. Additionally, revenue contributions from larger electric projects are forecasted to be around $200 million lower in 2022 as we expect to reach substantial completion on one of our larger Canadian projects in the first quarter. Included within the segment are our communications operations, which we expect to grow double digits over 2021 levels to around $750 million of revenue in 2022. While we expect 2022 operating margins for the electric power segment to range between 10.7% and 11.3%, which includes contributions of between $45 million and $50 millions of earnings from our integral unconsolidated affiliates, the largest portion of which relates to the LUMA joint venture in Puerto Rico. 2021 represented another exceptional year for our electric operations, and our margin profile was again above our historical norms and our original expectations due in part to the record emergency restoration service revenues. Our 2022 expectations for margins for the segment remain elevated but are more consistent with historical averages and are tempered by normalized storm revenues as well as our communications operations, which are expected to operate in the upper single digits in 2022. As is typically the case, we expect that first quarter operating margins will be the lowest for the year, likely around 10%, with margins increasing into the second and third quarters and then slightly declining in the fourth quarter. The Renewable Energy Infrastructure Solutions segment full year revenues are expected to range between $3.8 billion and $4 billion, with the largest portion of the growth due to the acquisition of Blattner. As it relates to Blattner, we remain confident in the initial range of expectations for 2022 included in the September deal announcement. From a revenue seasonality perspective in 2022, we expect segment revenues to be between $900 million and $950 million in the first quarter, then growing sequentially into the third quarter with a slight decline in the fourth quarter. We expect 2022 operating margins for the renewable energy segment to be around 9% for the year, translating into double-digit EBITDA margins, which is what we would expect from the segment. Due to the slightly higher project-oriented nature of this segment, margins will be more variable on a quarterly basis. As it stands today, similar to our other segments, we expect margins for the first quarter to be the lowest for the year, likely around 8%. Margins, therefore, have the opportunity to strengthen in subsequent quarters as volumes increase and we successfully execute through individual project contingencies throughout the year. The Underground Utility and Infrastructure Solutions segment has been heavily impacted by the uncertainties in the energy market and economy caused by COVID-19. However, we expect far fewer headwinds in 2022. We are currently anticipating double-digit revenue growth of off of 2021, with full year revenues expected to range between $4 billion and $4.2 billion. This growth is expected to be led by our industrial, Canadian and Australian operations, each of which has dealt with significant challenges associated with COVID-related impacts for the last two years. Additionally, our gas utility business continues to see nice year-over-year growth opportunities. Operating margins are expected to improve meaningfully in 2022. We see segment margins ranging between 6.5% and 7.5%, led primarily by recovery from our industrial and Canadian operations. Consistent with years past, our first quarter traditionally has lower activity in the segment due to weather seasonality, which impacts our revenues and precious margins to slightly below mid-single digits. However, we expect solid improvement into the second and third quarters with a seasonal decline in the fourth quarter. The number and size of acquisitions in 2021 will significantly change the magnitude of amortization, acquisition and integration costs and certain other corporate and unallocated costs as well as the quarter-to-quarter timing of these items. We've included some additional information on these as well as further segment seasonality comments and other guidance items in the outlook summary that was posted in connection with the earnings release and can be found on our IR website at quantaservices.com. One incremental item for 2022. Early last year, Quanta made a $90 million minority investment in a private company that provides broadband technology. The company has entered into an agreement with a special-purpose acquisition company and pursuant to the transaction is expected to emerge as a publicly traded company in the first half of the year. Once effective, our current interest would become common equity and would be subject to mark-to-market accounting, with changes in value recorded in other income. We expect to adjust for these changes in value when reporting adjusted EBITDA and adjusted EPS but have not forecasted any valuation movements curve. These segment operating ranges support our expectation for 2022 annual consolidated revenues of $16 billion to $16.5 billion and adjusted EBITDA of between $1.59 billion and $1.7 billion. This represents another record level of adjusted EBITDA and full year adjusted EBITDA margins over 10%. With these operating results, we estimate our range of GAAP diluted earnings per share attributable to common stock for 2022 to be between $3.56 and $4.06 and anticipate non-GAAP adjusted diluted earnings per share to be between $6 and $6.50. Turning to cash flow. The contract assets I spoke of earlier associated with the Canadian transmission project impacted our operating cash flows in 2021 but are expected to represent inflows of cash in 2022 as components reach resolution. These positive effects will be partially offset by the payment of approximately $46 million of change-in-control-related payments associated with the Blattner acquisition and the payment of $54 million of previously deferred payroll taxes in accordance with the CARES Act in 2020. As such, we currently expect 2022 free cash flow to range between $650 million and $850 million with capital expenditures of around $400 million. As we caution every year, quarterly free cash flow is subject to sizable movements due to various customer and project dynamics that occur in the normal course of operations. Reflecting on our 2021 performance, we delivered another exceptional year, led by solid execution in the field and highlighted by the transformational acquisition of Blattner during the fourth quarter. We ended the year with approximately $1.3 billion of adjusted EBITDA, a record for Quanta, which represents a nearly 16.8% CAGR since 2016. More importantly, our record adjusted EPS of $4.92 represents a 26.6% CAGR since 2016. Looking forward, we continue to see the opportunity to deliver adjusted EPS growth that outpaces our adjusted EBITDA growth, led by margin expansion and operating leverage in the field, coupled with strategic capital deployments focused on delivering long-term returns to our stockholders. Over the last five years, we have deployed approximately $3.9 billion in cash for M&A and strategic investments, $827 million for stock repurchases and $86 million on dividends. Against this backdrop, our financial strategy and consistent performance have been acknowledged by our rating agencies, which reiterated our investment-grade rating subsequent to the debt raised to fund the Blattner acquisition. Going into 2022, we have significant liquidity available and approximately $473 million of availability remaining on our current stock repurchase program. Now we are focused on deleveraging in the near term. We remain committed to delivering the shareholder value through strategic acquisitions and opportunistic repurchase activity. Overall, we continue to believe we are in the early stages of a significant infrastructure investment cycle and that we are uniquely positioned in the markets we serve to deliver comprehensive end-to-end solutions to support North America's transition to carbon-neutral energy infrastructure. This concludes our formal presentation, and we'll now open the line for Q&A. Operator?

[Operator]

[Operator instructions] Our first question is coming from Michael Dudas of Vertical Research. Please go ahead.

[Michael Dudas, Vertical Research]

Good morning, Kip, Derrick, Duke. I think in your prepared remarks, I was quite intrigued about -- you talked about expanding service offerings at several operating units. I assume you've made quite a few acquisitions to expand that, especially on your front-end work and advisory stuff. Can you share a little bit more what's going on and how that's going to be -- I would expect strategically because of what you can add to your clients, but I would also think maybe a mix or margin or financial aspect? So I thought that would be something that you could be like to get more clarity on?

[Duke Austin, President and CEO]

Yes. Thanks, Mike. We've talked about it quite a bit, about the company being a portfolio and truly believe we operate in that manner. As we think about the regionality and how we sit, we -- what we've done is in our underground segments, our utilized segments, you continue to see us look at underground electric, look at underground telecom. It doesn't matter to us what median or what service we're providing. The equipment is very similar. The people are very similar. So we believe we can expand those offerings as well as on the front-end services across the board really at a regional level. And so the segmentation may look one way, but how we're operating in the field to get the leverage at the unit, which will ultimately produce the margins that they're seeing and enhance the margins that you're seeing will allow that leverage at that level. So it's just from our standpoint, that's the way that we will continue to operate the company and offer various service lines to the customer and really what's driving that as a customer demand on the local level for expanded services that we can offer. So really, it's us trying to make sure that we're leveraging that at the very field level, which will ultimately increase margins.

[Michael Dudas, Vertical Research]

Thanks Duke.

[Operator]

Our next question is coming from Justin Hauke of Baird. Please go ahead.

[Justin Hauke, Baird]

I guess I have two questions. I'll start with kind of maybe the bigger one, and then I've got just a quick technical one. But just -- maybe just a little more details on the Las Vegas project. It's EPC. I'm just wondering, are you -- do you have partners on this project or is that all you? And just any comments on kind of the risk terms or how it would be different. And then you talked about it being the largest U.S. contract you've ever had. I think the Canadian ones you had were just over $1 billion of revenue. So would that be a good benchmark to kind of think about maybe the size of this project?

[Duke Austin, President and CEO]

Yes. So the project we discussed to the West, that's not Las Vegas. But in general, what I would say is we're performing that holistically internally, probably still performing 90% of it. We're proud of the project, nice mill project. So in our mind, an example of us stacking on to our existing base business there in the West. And we don't have partners, and it's not necessary for us to have partners given the size of the company. So again, we're trying to really work on the synergy transition, and we're going in a holistic fashion. This is something where had several operating units coming together and able to perform the whole project for the client and give them the best service offering, in our mind. So real proud of the project to the west. And again, it's just an example of where the company is going. And way I do believe it's in the renewable segment, as we discussed. And I do think you'll see more of this moving renewables to the west. And so those type of projects will definitely stack on to our existing base business. We're proud of it. And as far as the size of it, we talked about it being the largest in the business in North -- in the Lower 48. So ultimately, a large project for us. We're not going to get into the size of it.

[Derrick Jensen, CFO]

Yes. We'll only frame it by saying that had it been awarded prior to year-end, our total backlog would have exceeded $20 billion.

[Justin Hauke, Baird]

Okay. That's helpful. I guess, Derrick, maybe the other question. So on the equity income this quarter, it jumped to $22 million. You guys called out the minority investment that you did. It sounds like maybe that's part of it. I'm just curious, was there anything that was like a -- that was associated with LUMA being at full transition that we should think as kind of a run rate for that? Because it looks like the implied guidance for '22 would have run at a much lower rate than what it was in the quarter.

[Derrick Jensen, CFO]

Yes. I mean, actually, the majority of the difference was the joint venture-type dynamic. It had a very nice fourth quarter. There is a little bit of an uptick in the fourth quarter associated LUMA, which just has to do with the timing of kind of internal administrative costs rather than anything associated with the fixed fee itself. On a go-forward basis, I would tell you that it's -- that range that I provided, $45 million to $50 million, is a little bit of the increment associated with the joint venture contribution and fairly close to our original expectations for the remaining LUMA.

[Justin Hauke, Baird]

Great. Thank you very much guys. Appreciated.

[Operator]

Our next question is coming from Sean Eastman of KeyBanc Capital Markets. Please go ahead.

[Sean Eastman, KeyBanc Capital Markets]

Hi, team. Thanks for taking my questions. I just wanted to hone in on the new renewables segment. It sounded like the underlying outlook for Blattner embedded in there is consistent with what you guys communicated before. But it'd be helpful just -- since we only really had historicals on an EBITDA level for Blattner, it would be great to just kind of walk through the sort of normative or targeted margin profile we should be thinking about for this new segment since it includes some other stuff as well.

[Duke Austin, President and CEO]

Yes. Sean, it's Duke. In general, I would think, in our mind, it's double-digit EBITDA, even some uplift in margins if we can operate through some contingencies on the way through it. So we're proud of the segment. We think it highlights where the company is at. Certainly, Blattner is the big piece of that segment. We've stated the guidance there before around 2.6. So that's where we stand on that. And I do think you'll see those type of margins that are previously stated with Blattner in that segment. So we had a nice business in Florida. We talked about a lot, how we're enabling the infrastructure with substations and interconnections and long transmission lines. I do think that segment will continue to build. You'll continue to see nice work, nice backlog. It is lumpier than what you would consider our base business. But it's just timing -- days timing, not years timing in my mind. So I do think it is fairly predictable at this point. And we've given good guidance on Blattner out to '25. So I do think we're able to not only show the power of what we can do in that sector but also give you some visibility. And I'll let Derrick comment.

[Derrick Jensen, CFO]

Yes. I think you've said it fine. The only thing I'd add additional color, you could think all way back to when we did the original deal announcement for the largest portion of a decade, Blattner has been able to operate at a double-digit EBITDA. They had some very good performance within the last few years, kind of pressing that number up a little bit. But we look to kind of those historical dynamics to think about our multiyear expectations. So consistent with the '22 and in the outer-years, we think they continue to operate it was double-digit EBITDA. Aggregate for the segment, we think we've tried to be prudent on how to think about that in '22 when you think about it at the operating level of that 9%. I think that between the Blattner execution as well as our own, as we execute through contingencies, that gives us the ability to see a margin expansion. Duke made reference to it within our prepared remarks. We do believe that there's a bit more variability that you'll see within the segment. There's a smaller number of overall projects as compared to, as an example, the larger remaining electric power group as a whole, which can create a bit of variability in the timing to work, but largely very confident in our ability to execute.

[Sean Eastman, KeyBanc Capital Markets]

Okay. That's helpful. And the underground segment, it looks like no changes to the segment reporting there. The revenue and margins came in a little better than I was expecting in terms of the outlook. So just a bit of a flavor on what type of operating environment and kind of underlying assumptions for the bigger buckets in there, namely industrial and the LDC business, would be helpful as we think about what bridges less to this 2022 outlook for that segment.

[Duke Austin, President and CEO]

Yes, Sean. I think you've seen the rebound in some of the oil pricing and things of that nature. So the industrial business seems really going to uplift. We thought it would be anyway. So I think it will stack on to the current demand that we're seeing on the industrial side. So we're confident in that business in '22 as it stands. That's certainly something that we were watching very closely. So we feel good about it. Our Canadian business is also rebounding. We like where we stand there. So all in all, I would say, incrementally, we're more positive on the underground segment than we have been. But we stated before, we're running it as a portfolio, the LDC business. We may be doing telecom, we may be doing electric, and some of that business will be blended within the electric segment, telecom segment in the field as a portfolio. So I wouldn't get too caught up in the segmentation. The overall business will continue to rise, and we're producing double-digit margins, double-digit growth, those kind of things at the bottom. And so what I'm really looking at is that bottom number, and they continue to grow. So we're proud of it.

[Sean Eastman, KeyBanc Capital Markets]

Okay, excellent thanks guys. I’ll turn it over there.

[Operator]

[Operator Instructions] Our next question is coming from Jamie Cook of Credit Suisse. Please go ahead.

[Jamie Cook, Credit Suisse]

I guess my question is on Blattner. Understanding the revenue guide and guidance for Blattner is unchanged, is -- can you talk about what they're sort of seeing on the supply chain side? Any difference in what you're expecting, solar versus wind, or perhaps revenue synergies are starting to come through? So just an update on what Blattner is seeing? Thank you.

[Duke Austin, President and CEO]

Good morning Jamie. So in general, I would say we're confident in Blattner, confident in the guidance. Obviously, we've given outward year guidance as well. The demand on renewable business balance of plant is certainly there across the board, both solar and wind. We have really nice high-demand clients that customers that we believe really have the supply chain figured out for the most part, not to say there's not some small areas where you're seeing things happen. But in general, we took all that into account when we gave guidance originally. We've taken into account now. We believe we can execute through it. Certain things may show up a little later, but we've done a really nice job. I think what I would tell you is I think it's an advantage for Quanta when there is the supply chain disruptions. It allows us to show the breadth of the company and be able to move where a panel may be delayed a little bit, but we can build everything up to the panel and move to where the panels are and just move around. So it shows the scale and scope of the company and how we operate, and it doesn't affect us, which allows us to collaborate with the client. So I mean, I think we're using it to our advantage. Honestly, we like where we sit in the market.

[Jamie Cook, Credit Suisse]

Congratulations. Thank you.

[Duke Austin, President and CEO]

Thank you.

[Operator]

Our next question is coming from Neil Mehta of Goldman Sachs. Please go ahead.

[Neil Mehta, Goldman Sachs]

Good morning team, and strong quarter as well here from my end. First question is about the supply chain. Can you talk about how supply chain issues could affect Quanta in 2022? Is there a risk around project delays this year? And how has Quanta been able to scale its labor force in conjunction with revenue opportunities amid a relatively tight labor market?

[Duke Austin, President and CEO]

I think the company in the past -- over the past six, seven years has really focused on labor, our craft-skilled labor, and so it's the core of the business and really invested in it. So that investment certainly pays off in tight labor markets. And I think when we look at it, it's to our advantage. We continue to grow the business nicely. We work on how we perform our labor where we are able to train, get people to the field faster, safer. So those things are something that we've worked on quite a bit and believe it's core to us. So yes, we like where we sit and we like how we're performing. The supply chain with the breadth of the company and the scale that we have, we're able to move pretty nimble through this. And I think, yes, there is some supply chain issues in certain areas. But in general, we're able to work with the client well before there's a problem or an issue and move project to project or help them become nimble as well. So I do think it's us working with the client, knowing that we see some supply chain constraints and make sure that we're operating properly. And we've done that in the past. You can see the margins in the fourth quarter. We've operated through, we believe, in '22. We'll do the same thing. We have leaned into some of the issues on fleet being the third, fourth largest fleet in North America, we're able to really stretch ourselves there and make sure that we have the fleet necessary to get in front of some of those issues. So we've done a nice job across the board of mitigating the risk of supply chain, not to say that it's not out there.

[Neil Mehta, Goldman Sachs]

The follow-up is just on the high-voltage project award that you announced in January. Can you talk about the opportunity set for additional high-voltage transmission projects at a similar scale through this year and beyond? And could you see additional opportunities this year? And as you talk about that, maybe you talk about the regulatory environment because the not-in-my-backyard syndrome is certainly something that's affected the rollout of these transmission lines.

[Duke Austin, President and CEO]

Yes. I think when you look at the company, we've stated before, the base business to 80% to 85% on the electric side and underground given Blattner guidance. So if you think about it, those projects will stack. There's a multitude of projects out there. The list is long. I do think we've talked about where the company sits in those type of projects, and we've always said we would be around the edges and lack of chances. We continue to refine how we deliver to the client. The programmatic spends of the client are larger. And our ability to execute on time, on budget was 85% to 90% self-performed has given us advantages across the board, and we like where we sit in that spectrum. So as those projects become -- come to market, they get FID, we get approvals. Not to say there's not the normal problems around permitting because there is. It's getting better, but there's still issues. And many of these projects have been on the books for decades. When I look back, we had looked at it 10 years ago, and it's just now coming to market. So we're not going to get chase shiny objects all the time, but we are there in the edges. And we will, I believe, have a great service offering to the client when those become available, and we'll stack on top of what you already see in the growth rates that you see below. So we're excited about where we sit. And obviously, the project to the West is just, in our mind, something that as it comes available, we like our chances to win those type of projects.

[Neil Mehta, Goldman Sachs]

Thanks Duke.

[Operator]

Our next question is coming from Adam Thalhimer of Thompson, Davis. Please go ahead.

[Adam Thalhimer, Thompson, Davis]

Hey good morning guys. Duke, I wanted to ask two questions, both on Blattner. Number one, are you seeing any revenue synergies yet? And then number two, can you talk about whether you see and how you're thinking about any kind of long-term service opportunity in the renewables business?

[Duke Austin, President and CEO]

Yes. I think when you look at it, Blattner really, in many ways, transformed where we sat in the energy transition. It certainly puts us in front of the client across the board, both sides from energy all the way to utilities to developers. So it allows us a broad spectrum at a very early stage within a project. Blattner's ability, their self-perform capabilities, how they think was much like us on the transmission/distribution side of the utility business. So when we put our heads together, there's not a day that goes by we don't think of a synergy or something that we believe was transitional to the market. So we're in front of this. We think a lot alike. We've enjoyed the management team, and our ability to collaborate has been exceptional. So the opportunities that not only what we would call renewable but also clean energy, and how we think about how Blattner helps us transition ourselves as Quanta to really lead the way in that transition is much more than 1 plus 1, in my mind. It will really allow us to help our client, which is ultimately, both companies are focused on the client. And I say it over and over again, but very much aligned on that. So we really want to get in there and help the client move forward at a very early stage, and it allows a lot of benefits to both sides on the backside of this. You see tight markets like this when both of us are in there with our existing clients, we're able to really produce a nice project for the client at a low cost that, in my mind, it doesn't escalate or we're not having the issues that others may have because we self-perform. So in my mind, we did risk a lot of things that a normal E&C does not. We said that many, many times. And the resiliency of the company shows with Blattner and where we're at -- where we sit in the energy transition.

[Adam Thalhimer, Thompson, Davis]

Thanks Duke. Congrats on the quarter.

[Duke Austin, President and CEO]

Thank you.

[Operator]

[Operator Instructions] Our next question is coming from Ian MacPherson of Piper Sandler. Please go ahead.

[Ian MacPherson, Piper Sandler]

Good morning gentlemen. Congratulations. This has sort of already been passed a little bit by Jamie and others, but I wanted to revisit. If we look at the tape with renewables, and we see the negative sentiment in the market regarding the impact of rising interest rates and political gridlock in Washington and supply chain cost risk that's impacting utility-scale development, there is implied fear, I think, with respect to the Blattner order momentum throughout this year. And I know you're not guiding on orders and backlog. But Duke, would you refute that negative cinema regarding an air pocket in renewables order activity for this year despite those factors?

[Duke Austin, President and CEO]

We've had a robust market over the last few years, and you continue to have one. You're talking days, months if you're moving things. So I'll just give you an example. If solar panels are delayed, the last thing we're really accomplishing in a solar field will be putting the panels on. So if we build everything else and then put the panels on at the end, it's not a big deal. Does it disrupt a little bit? Yes. Can we get through it? Yes. So it's not -- the things that you're seeing, the disruptions you may see is not something that's insurmountable nor do we believe has affected our ability to capture work or the way that Blattner looks long term, short term. We gave guidance with that in mind, that there would be some balance and some, I would say, lumpiness in the market. We felt like it was there. That's why we gave the guidance we gave. We also gave guidance in 2025 of $3.6 billion. So the market, the overall, where we're going with the energy transition, I don't believe that's changed. I believe all the clients that we have, have said the same. So we really -- we're going to a greener environment where load growth is going up. There's no doubt about it. And the carbon-free, the way that we're going to deliver energy, will be much different. And we're sitting at the very front of that transition over the next decade. We're just getting started. So we really like where we sit.

[Ian MacPherson, Piper Sandler]

Good result, good answer. Thanks Duke.

[Operator]

Our next question is coming from Steven Fisher of UBS. Please go ahead.

[Steven Fisher, UBS]

Thanks, good morning. And you may have really just answered this, but wanted to ask you again about the renewable segment margin because you do have a decline there assumed. And I'm just wondering, is that for what you just talked about you're baking in -- is it declining because you're now baking in some more of these kind of timing issues where you have to put the panels on later? And I guess the follow-on to that would be, what's the potential for that business segment margin to start growing again as we look beyond 2022?

[Duke Austin, President and CEO]

Yes. If you look at the renewable segment -- I think if you look back, we recast this last year, 13%, I believe, is what it looked like, a little bit over that. Obviously, we've guided differently with the Blattner acquisition, 2 -- a couple of things. Last year, you had some contingency releases, things like that. And the recast as well as when you go forward, we talked about double-digit EBITDA at Blattner, as we said. Can we operate through -- do we think we have given prudent guidance in our renewable segment? Yes. So we'll be prudent about it. We've thought about it. We've thought about the guidance that we've given and our ability to grow. We've talked about Blattner going to 3.6. It's a segment that we believe will grow. Certainly, with both companies doing the things that we're doing, the backlog and things of that nature in this segment, similar to the project that we announced today, I believe, that will go into backlog in the first quarter. So you'll continue to see the growth there, in my mind, on these projects as utility-scale renewables come in as well as the -- our ability to enable that through substations and transmission. So I really like where that segment is, and I do believe it's a growth segment for us. And we talked about if we got over $1 billion in the segment, we would segment them, and that's what we did. So we want to give the investor base a good look at it and allow you to see it. So I'll let Derrick comment more.

[Derrick Jensen, CFO]

Yes. I don't know that I have anything too incremental other than kind of we comment on the things we said earlier. The Blattner dynamic, again, in the last 10 years has operated at a double-digit margin profile. That gives us the multiyear confidence. More specifically, again, the more recent period, they've executed quite strongly above that. So yes, do we believe that we can see an upward potential against our guidance on a multiyear basis? I think the answer is yes. Whether that be because of our legacy electric operations that are now within this group, we think that we continue to see double-digit operating income-type performance of some of those legacy operations and then now thinking about Blattner. So we remain quite confident in our ability to execute on those margins with the level of upside opportunity. But we want to see the mix of work, right? There's a procurement component of it that can put pressure on margins. So very much, I think that it's the right thing to be looking at this year and being kind of prudent guidance. We want to get more visibility. And on a go-forward basis, very confident in our ability to execute at this level and then giving us the upside opportunities as we execute through contingencies.

[Steven Fisher, UBS]

Thank you.

[Operator]

Our next question is coming from Alex Rigel of B. Riley. Please go ahead.

[Alex Rigel, B. Riley FBR]

Very nice quarter, gentlemen. Just one quick question here. How do you view the federal regulatory environment currently? At times in the past, it hampered growth; at other times, it enhanced growth. How do you see it developing here one year into a Biden administration?

[Duke Austin, President and CEO]

Thanks, Alex. When we look at it, the overall transition, the energy transition, I believe, is intact. Under any administration, we believe that the sentiment towards carbon-free is certainly there, whether it be hydrogen renewables, balance of plant solar, it doesn't matter. We believe that ship has settled. As far as trying to help with different -- as far as siting, permitting, certainly Build Back Better, those things are all helpful. But either way, I mean, the programmatic spend underneath, if you go into electric vehicles, if you're going to put that many electric vehicles in the systems, your distribution system has to move in a much, much different manner with decades worth of work to be done to modernize as well as the same with renewables coming on to the systems. The modernization, the way it has to work and the interconnections are something that I think goes unnoticed in the amount of work that needs to be done on the grid. So with those type of things are there. Obviously, if we push an interest way high, it would concern everyone. And we were certainly cognizant of hiatus, what it does to an economy and can push it down. So we're certainly watching that as well.

[Alex Rigel, B. Riley FBR]

Thank you very much.

[Operator]

Our next question is coming from Noelle Dilts of Stifel. Please go ahead.

[Noelle Dilts, Stifel]

Just quickly on underground. Could you walk through the key factors that are allowing you to guide for record margins in 2022, though revenues are about 20% less than the 2019 peak? And is this a full recovery or is there still more recovery in '23 that you're expecting?

[Duke Austin, President and CEO]

Thanks, Noelle. I think when we looked at our underground segment, we thought the industrial business would come back strong. And certainly, as it sits today, it's coming back strongly. And so that's a turnaround. We also -- the Line 3 adjustment that was in their last year, it was not there on a go-forward basis. So you get some movement there as well. Those 2 things are really driving it up. Canada, Australia, both are energy economies that have been depressed over the last 24 months and are certainly moving in the right direction. And so we really like what we said in both Australia and Canada. You add all it up and what we've done on the LDC business and how we're leveraging at the operating level in the field allows all segments to move up. So I do believe as we operate as a portfolio, it will ultimately pull up all segments as we go forward. Was that’s helpful.

[Derrick Jensen, CFO]

Yes. The only thing I'd comment to is that thinking all the way back to a pre-COVID environment, we actually were guiding to a similar type of margin expectations. And so it's just taking us down in a couple of years to get through both on the industrial, Canada and Australia. So I'd argue that we're very similar to where we were in a pre-COVID environment. And I think this is a good step towards us getting to that upper single digits we've been talking about being able to return to as we look forward on a multiyear basis.

[Duke Austin, President and CEO]

Yes. And I think where we're at now is we're early in a way that we're operating the portfolio of the companies. For us to guide there, that's good. We're getting there. But certainly, we're not satisfied with that. We believe we can operate the segment in upper single digits.

[Noelle Dilts, Stifel]

Great. Thank you.

[Operator]

Our final question today is coming from Gus Richard of Northland. Please go ahead.

[Gus Richard, Northland]

Yes, thanks for filling me in and congratulations on a good quarter. I was curious about the underground business. And how much are you seeing in the energy transition to hydrogen? And how much are you seeing Integrity as people try to mitigate the methane leaks?

[Duke Austin, President and CEO]

Yes. I mean we saw that early, and I think we invested in the LDC business quite a bit. We've grown it, and there's certainly a multitude of capital deployment there over 30-year periods across the board. So the methane release that we've seen, certainly, that's part of that LDC business that's growing nicely. Hydrogen and carbon sequestration is certainly a few other we were sorting going to lead the way there on many teams that are doing that. We're early, but I do think hydrogen blend, hydrogen, green hydrogen will be something we talk about quite a bit. As you saw batteries 3 or 4 years ago, 5 years ago, we were talking about batteries. And I think they're certainly prevalent today and moving forward. So the same thing with hydrogen, we're just -- we're a little early. But I do think the company sees that and is in front of that in many ways to make sure that we capture that market share in that segment. So certainly, when we think through it, we'll definitely see hydrogen as being a part of the solution of energy transition.

[Gus Richard, Northland]

Got it. Thanks.

[Operator]

At this time, I'd like to turn the floor back over to management for any additional or closing comments.

[Duke Austin, President and CEO]

Yes. I want to thank the men and women on the field that are out in the inclement weather doing the things that they do rate the storm here, tough environments. They continue to execute at very, very high levels safely. So we're proud of that and proud of them. With that, I'd like to thank you all for participating in our conference call. We appreciate your questions and your ongoing interest in Quanta Services. Thank you. This concludes our call.

[Operator]

Ladies and gentlemen, thank you for your participation. This concludes today's teleconference. You may disconnect your lines at this time, and enjoy the rest of your day