Greetings, welcome to Quanta Services' first quarter 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. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Kip Rupp, Vice President, Investor Relations. Please go ahead, sir. Great. Thank you, and welcome everyone to the Quanta Services first quarter 2021 earnings conference call. This morning we issued a press release announcing our first quarter results, which can be found in the investor relations section of our website at quantaservices.com, along with a summary of our 2021 outlook and commentary that we'll discuss this morning. Additionally, we'll use a slide presentation this morning to accompany our prepared remarks, which is viewable through the call's webcast and 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, May 6, 2021, 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, Quanta does not undertake any obligation to update such statements and disclaims any written or oral statements made by a third party regarding the subject matter of this call. 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 email 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 would now like to turn the call over to Mr. Duke Austin, Quanta's President and CEO. Duke? Thanks, Kip. Good morning, everyone, and welcome to the Quanta Services first quarter 2021 earnings conference call. On the call today, I will provide operational and strategic commentary and will then turn the call over to Derrick Jensen, Quanta's Chief Financial Officer, who will provide a review of our first quarter results and full year 2021 financial expectations. Following Derrick's comments, we welcome your questions. This morning, we reported solid first quarter results, with revenues of $2.7 billion in GAAP and adjusted diluted earnings per share of $0.62 and $0.83 respectively. Backlog at the end of the quarter was a record $15.8 billion, which we believe reflects the continued advancement of our long-term growth strategies. We continue to see opportunities for multi-year growth across our service lines, driven by our solutions-based approach and the growth of programmatic spending with existing and new customers. The recognition that the country's infrastructure needs to be modernized to support economic growth, improve safety and reliability, and for a cleaner environment is evidenced by the Biden administration's recently proposed $2 trillion infrastructure plan. The proposal will evolve and take time to move through the political process. As proposed, the plan includes funding and policies to encourage new infrastructure development and modernization in several of our core markets, including high-voltage electric transmission and power grid modernization and resiliency, renewable energy, electric vehicle charging station infrastructure and other electrification initiatives, and broadband infrastructure expansion. While this infrastructure proposal could accelerate activity in these areas and provide incremental opportunity for Quanta over several years, I want to stress that our positive multi-year outlook and strategic plan are not reliant on this infrastructure proposal. We have been collaborating with our customers for many years to support their significant multi-year investment programs already in place to modernize the existing power grid, ensure reliable power delivery, and to integrate higher levels of renewable generation. Our electric power solutions operations performed well during the quarter, reflecting broad-based business strength driven by ongoing grid modernization, system hardening, renewable energy interconnections, and solid and safe execution. During the quarter, we signed a significant multi-year master services agreement with a utility in the western U.S., which made a substantial incremental contribution to our record first quarter backlog. We believe our record backlog and these initiatives will continue to drive multi-year growth opportunities for Quanta. Though COVID-19 has created some near-term challenges in Canada, we see opportunities to pursue additional large projects there for the coming years. Additionally, our discussions with high voltage electric transmission project sponsors in the United States have increased as the need for large scale electric transmission infrastructure to support growing renewable generation and achieve carbon neutrality goals become evident. LUMA Energy and its employees, as supported by Quanta and its joint venture partner, ATCO, are all working diligently towards transitioning the operations and maintenance of the Puerto Rico electric power grid to LUMA in early June. LUMA's efforts under the agreement are intended to deliver long-term social and economic benefits to the people of Puerto Rico. As stated previously, we believe this opportunity is transformative for all the parties involved, including the people of Puerto Rico, and the work to be performed by LUMA under the 15-year contract aligns with Quanta's strategy of providing sophisticated and valuable solutions to the utility industry that benefits consumers. The majority of our communications operations are off to a solid start this year, driven by strong demand for fiber densification to reach homes and businesses, and the early stages of 5G network deployments. During the quarter, we experienced short-term challenges, largely associated with efficient subcontractor work in a specific geographic area, which required rework. We have addressed our quality assessment protocol shortcomings on this issue and are pursuing compensation from the subcontractor. This was an isolated issue. We believe we are on track to generate high single or double-digit operating income margins for the remainder of this year. We continue to believe we can achieve at least $1 billion in annual revenue with double-digit operating income margins in the medium term. As service providers continue to push fiber closer to the customer, fiber backhaul densification continues, 5G wireless infrastructure development increases, and meaningful federal funding is provided for broadband network expansion initiatives in underserved markets. On prior calls, we have shared our belief that Quanta is uniquely positioned between the communications and utility industries to provide solutions for broadband and 5G technology deployments, leveraging existing infrastructure. We have made significant progress working with our customers and a broadband technology partner, and during the first quarter, made a minority financial investment in this partner. We also entered into a strategic alliance with them, where Quanta will serve as the program manager for large scale deployments of their fixed wireless broadband technology, which we utilize our customers' facilities where appropriate. We believe this relationship advances our solutions with customers to accelerate and improve access to affordable and reliable broadband in rural and underserved markets. We believe our proactive strategy and the unique solutions Quanta provides the marketplace enhances our opportunity to expand our telecom infrastructure solutions with other utility and communication customers. Our underground utility and infrastructure solutions segment performed well in the quarter, with better than expected profitability despite seasonality and continued challenges caused by COVID-19. We are confident in our full year expectations for the segment, driven by solid demand for our gas utility and pipeline integrity service. Additionally, there are encouraging signs supporting our expectations of improved demand for our industrial services beginning in the second half of this year. We believe deferred maintenance and capital spending due to the effects of COVID-19 on the downstream market is creating pent-up demand for our services, which should prove beneficial as market conditions normalize for our customers. However, we would like to see how the summer travel season develops, which could influence activity levels of our downstream customers before making adjustments to our full year expectations for this segment. The solutions Quanta provides support our customers' efforts to increase reliability, safety, efficiency, and connectivity, all of which have favorable environmental and social impact. Our end markets and multi-year visibility are solid, and we have built a strong platform that positions us well to capitalize on favorable long-term trends, particularly grid modernization and hardening, the transition toward a carbon neutral economy, and the adoption of new technologies such as 5G, battery storage, and hydrogen. Previously, we have discussed our strategic focus on enhancing our front-end capabilities, such as engineering and permitting. To complement our world-class construction expertise, our strategy is designed to provide differentiated, comprehensive, and industry-leading solutions to our customers, which we have achieved through organic investment and select acquisitions. This strategy is contributing to our backlog growth, increasing our total addressable market, and providing meaningful growth opportunities for the future. In our earnings release this morning, we raised our 2021 guidance due to solid first quarter results and confidence in the business. We believe this demonstrates the strength and sustainability of our business and long-term strategy, favorable end market trends, our ability to safely execute, and our strong competitive position in the marketplace. We continue to believe we are in a multi-year upcycle with continued opportunity for further record backlog and results in 2021. 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 build 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 all our stakeholders. I will now turn the call over to Derrick Jensen, our CFO, for his review of our first quarter results and 2021 expectations. Derrick? Thanks, Duke. Good morning, everyone. Today, we announced first quarter 2021 revenues of $2.7 billion. Net income attributable to common stock was $90 million, or $0.62 per diluted share, and adjusted diluted earnings per share, a non-GAAP measure, was $0.83. The first quarter was another strong quarter for Quanta, led by continued strength from electric power and better than expected profitability from our underground utility and infrastructure segment. Our electric power revenues were $2.1 billion, a record for the first quarter, and a 17% increase when compared to the first quarter of 2020. This increase was driven by continued growth in base business activities, as well as contributions from larger transmission projects underway in Canada and revenues from acquired businesses of approximately $70 million. Also, revenues associated with emergency restoration services attributable to winter storm response efforts were approximately $80 million, a first-quarter record. Electric segment margins in 1Q21 were 9.7% versus 7.3% in 1Q20. The improved operating margins were driven by double-digit performance from our electric operations within the segment, including the benefit associated with increased profit contributions from emergency restoration efforts, which typically present opportunities for higher margins than our normal base business activities due to higher utilization. Operating margins also benefited from approximately $5 million of income associated with our LUMA joint venture. Negatively impacting first-quarter margins were recorded reserves for the identified issues Duke discussed, which when combined with normal seasonality, exacerbated by severe weather challenges from Winter Storm Uri, created an operating loss within our U.S. telecom operations for the quarter. Again, we believe we have addressed the issues and expect margins at or near double digits going forward. Underground utility and infrastructure segment revenues were $643 million for the quarter, 35% lower than 1Q20, due primarily to reduced revenues from our industrial operations and a reduction in contributions from larger pipeline projects. Operations within this segment in last year's first quarter results had yet to be impacted by COVID-19 headwinds. In fact, our industrial operations had record results in the period. In 1Q21, the segment continues to be negatively impacted by COVID-19, with first quarter revenues from our Canadian operations and our industrial operations both meaningfully below pre-pandemic levels. Despite the COVID-related headwinds, the segment delivered margins of 1.4%. Although 170 basis points lower than 1Q20, primarily due to the reduced revenues, the results exceeded our original expectations for 1Q, led by execution across much of our base business activity, including our gas distribution and industrial services. Our total backlog was a record $15.8 billion at the end of the first quarter, with 12-month backlog of $8.9 billion, representing solid increases when compared to year-end, as well as the first quarter of 2020. This marks the third consecutive quarter where we posted record backlog, a trend driven primarily by continued growth in multi-year MSA programs with North American Utilities, which we believe continues to validate the repeatable, sustainable nature of the largest portion of our revenues and earnings. For the first quarter of 2021, we generated free cash flow, a non-GAAP measure, of $49 million, $115 million lower than 1Q20. However, 1Q20 included the collection of $82 million of insurance proceeds associated with the settlement of two pipeline project claims. Day sales outstanding, or DSO, measured 89 days for the first quarter, an increase of four days compared to the first quarter of 2020, and an increase of six days compared to December 31, 2020. These increases are primarily due to the expected ramp in work on two larger electric transmission projects in Canada in the first quarter and the timing of billing. The Canadian response to COVID has significantly hampered production, for which we will seek recovery and delay this in meeting certain billing milestones. We had approximately $200 million of cash at the end of the quarter, with total liquidity of approximately $2.1 billion and a debt-to-EBITDA ratio, as calculated under our credit agreement, of approximately 1.3x. Integration activities associated with acquisitions closed in the back half of 2020 are ongoing, and we closed another small acquisition during the first quarter of 2021. We continue to take an opportunistic view towards acquisitions and maintain the balance sheet strength to support strategic capital outlays in this area. Additionally, through the date of this earnings release, we acquired approximately $29 million worth of stock as part of our repurchase program. We remain committed to delivering shareholder value through prudent capital deployment. Turning to guidance. Based on the electric segment's strong first quarter and continued confidence in our ability to execute on the opportunities across the segment, we've increased the low end of our full-year expectations for segment revenues, resulting in a range between $8.4 billion and $8.5 billion for 2021. Similarly, we are increasing the low end of our full-year margin range for the segment, with 2021 operating margins now expected to range between 10.2% and 10.9%. Regarding the underground utility and infrastructure solution segment, while we had a nice start to the year, we are not yet in a position to change our full year expectations. Accordingly, we are reiterating our original full year guidance for the segment, with revenues expected to range between $3.65 billion and $3.85 billion, and segment margins ranging between 5.5% and 6%. These segment operating ranges support our increased expectations for 2021 annual revenues of between $12.05 billion-$12.35 billion and adjusted EBITDA, a non-GAAP measure, of between $1.1 billion and $1.2 billion. The midpoint of the range represents 10% growth when compared to 2020's record adjusted EBITDA. In addition to these improved operating expectations, our full year expectations for net income and adjusted net income, a non-GAAP measure, are expected to benefit from a reduced annual tax rate driven by higher benefits realized in the first quarter associated with the fair value of vested stock compensation awards. We now expect our full year tax rate to range between 25.25% and 25.75%. As a result, our increased expectation for full year diluted earnings per share attributable to common stock is now between $3.25 and $3.69, and our increased expectation for adjusted diluted earnings per share attributable to common stock, a non-GAAP measure, is now between $4.12 and $4.57. We are maintaining our free cash flow guidance for the year, expecting it to range between $400 and $600 million, and we will reiterate that quarterly free cash flow is subject to sizable movements due to various customer and project dynamics that can occur in the normal course of operations. For additional information, please refer to our outlook summary, which can be found in the financial info section of our IR website at quantaservices.com. Overall, we are pleased with the start to the year and remain confident in the strength of our operations and prospects for profitable growth. As our backlog continues to grow and our visibility into the duration of this infrastructure cycle continues to improve, we have increasing conviction in our ability to capitalize on the opportunities across our end markets. We firmly believe the repeatable nature of our base business solutions, coupled with opportunistic larger project deployments, disciplined capital allocation, and continued balance sheet strength, will be the key to delivering long-term shareholder value. This concludes our formal presentation, and we'll now open the line for Q&A. Operator? Thank you. At this time, we'll be conducting a question and answer session. We ask that you limit your questions to one with a single follow-up so that others may have the opportunity to ask questions. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question today is from Chad Dillard of Deutsche Bank. Please proceed with your question. Hi. Good morning, guys. Just wanted to dig a little bit into the infrastructure plan. Beyond the headline, $100 billion of funding for power infrastructure, can you talk about the potential changes from a policy perspective that you could see in this plan and whether that could actually have an impact on the process of construction or even before that, on the permitting side? Secondly, this bill has also allocated a decent amount of money to water pipe infrastructure. Is this an area of interest for Quanta, given its heritage of linear construction? Thanks. Good morning, Chad. The policy and the plan under the administration, I do think it benefits us. As always, states have a lot of say in right of ways and easements and permits. I do think that'll be a sticking point as we move forward. Even without the plan, I would say the sentiment around a carbon-free environment neutrality is there. We continue to see larger projects that are moving forward. It's a robust environment in my mind, with or without the federal funding. While it's good, I believe every bit of that would be incremental to anything we've commented on in the past. As far as water, we do some water now. Anything involves craft skill labor, we're right in there on it, looking at it. We believe that's kind of our core to us is our ability to perform that. We do look at water quite a bit. I'm not signaling anything on that. Just we do look at it. Got you. Okay. Just a question. I know that your utilities and underground guide on the revenue side hasn't necessarily changed, but just curious about how you're thinking about the industrial business in particular. Can you talk about how it trended in 1Q versus your expectations? Has there been any change in terms of how you're thinking about guidance for that business? Are you still expecting flat for this year? When we look at the underground business, we look at these businesses as a portfolio. I would just say the LDC business, the integrity business there is working out nicely. We like where we sit from a base business and repeatable, sustainable model. The industrial business was down, as we've talked about through COVID-19. We do see signs of life there. We have a really nice model. The things that we perform on the industrial sector are certainly necessary. There's signs of life there. As Derrick commented, I think when we get to the second quarter, we'll know a lot more about where the economy is going and what we think about the industrial side. In my mind, certainly opportunity on the backside of the year in 2022 looks really robust. Great. Thank you. The next question is from Sean Eastman of KeyBanc Capital Markets. Please proceed with your question. Hi, guys. Thanks for taking my questions. I just wanted to start on the underground segment. Obviously, the margins there in the first quarter stood out. I was surprised you didn't call out the Winter Storm Uri. I would assume the Stronghold business would have been dislocated around that. I was just wondering if we could flesh out whether there was something else. Got a lot of press and certainly loss of life, but really, it was three or four days. While it was an impact to the quarter, the industrial sector performed well. We did some emergency work, but very little when we think about it. All in all, I just think it's performing better than we anticipated a bit. We do see signs of life in that business, but all in all, it's really the portfolio of the company that performed throughout. Okay, got it. That's helpful. I hate to do this, guys, just following this 1Q performance, I mean, $4.12 at the low end. What set of operating conditions put us there at this point? It just seems hard to get down there, just be helpful to sort of frame that low-end case at this point. Yeah. As you can see, we raised the low end of the guidance here for the first quarter to some way to comment to that we continue to think that there's strength in the business model itself. Yeah. We very regularly put through a range of guidance on an annual basis that considers a low end because of the fact we work in a volatile workspace. Oftentimes, it comes down to the way that the weather patterns impact the year, more specifically in the fourth quarter. The fourth quarter is where substantial types of inclement weather can come in and really impact the type of dynamic, let alone the fact that through the year, we work in a range of circumstances creating volatility. We think it's always prudent to recognize those circumstances. What I would also say is we think we have a tendency to execute throughout, I think also as we've seen us do the last few years. As we stand here today, we think our business model's intact. We think we continue to do the margin improvements that we think are available to us. It's just the right thing to do to recognize the volatility of what we work in. Okay. Terrific. Thanks for the time. Thank you. The next question is from Noelle Dilts of Stifel. Please proceed with your question. Hi, guys. Good morning. Given the challenge that you're facing with the telecom subcontractor that you're working through, could you kind of just remind us of your model there? I think at one point you were kind of 50% self-performed, 50% subcontracting. Could you touch on kind of where you'd like to see that go and how you're thinking about investing in training folks to work on the self-perform side? Thanks. Thanks, Noelle. As we discussed earlier, we kind of threw out a $770 million-type number on telecom as guidance, and I think in my mind, the opportunity is still there for us to perform at those levels. I wouldn't call it such as a problem other than we had some shallow ditch. We identified it. We're remediating it through rework. We'll go after, when I say go after, we'll work with the subcontractor to try to recoup that and go forward. That being said, we like the business. It is about a 50/50 model as we stand today. We continue to see broadband activity, book work, like the business a lot and on our way to $1 billion in it organically for the most part. I would just say, I think the company's done a real nice job. It is part of the electric segment. We probably wouldn't have talked about it, honestly, if it was just normal stuff. Since it was telecom, Derrick and I thought. We talk about the good all the time, we'll take our lumps and talk about the bad a little bit here and move forward. In general, it just shows the strength of the quarter of the electric segment as well. If you look at it and you do an add back, call it $10 million-$15 million of impact on the telecom business, you can see the quarter would have been substantially higher in the electric segment. Thanks. That all makes sense. Second, just given what we're seeing with commodity price increases in steel and concerns about availability, what are you kind of watching around that dynamic? Are there any concerns about some of the larger transmission poles getting to you on time? Just kind of curious how you're thinking about the supply chain challenges that are kind of dominating headlines right now. Thanks. I mean, we're seeing some challenges in commodities, not really impacting us at this point. We'll watch it fairly closely on the larger projects to make sure that our material comes in on time. We don't have commodity risk per se, our jobs, if they're impacted, we'll work, collaborate with the customer on those impacts. In general, we're able to work through most of those areas where we do have impacts. I would tell you, in my mind, Canada is probably one of the ones that have impacted the most, I don't think it's really material per se. It's just how it's delivered. For the most part, that's been more of a COVID issue than material in my mind, no really commodity impact at this point. Okay, great. Thank you. The next question is from Michael Dudas of Vertical Research. Please proceed with your question. Good morning, gentlemen. Morning, Mike. Morning. You called out an MSA that you assigned earlier this year. When you think about your MSAs with these customers, typically there are several a year. Are they long-term with annual kind of budget requirements? Are there any margin or utilization benefits from that type of an agreement and the work that you flow through relative to one or two-off type opportunities that arise from maybe that same or other customer base? Mike, we really don't call them out that much. The reason why we called out the last is fairly incremental, one of the things that we've continued to talk about is kind of that hasn't started really ramping yet. We were primarily signaling that ramp by calling it out and the incremental backlog growth on this MSA. Typically, when we think about it, the 85%-90% of the business is kind of base business is MSA-type business. In my mind, that's how we look at it. We book MSAs and re-up them probably monthly, in my mind. There's no real systematic way. I do think our backlog will continue to grow to record levels. We will have MSAs that renew that are larger. We continue to see a robust environment. Even when we have an MSA, the growth on the MSA is there as well. We take a pretty prudent look at it to make sure that from our standpoint, the next 12 months and beyond are what the backlog would interpret. In my mind, we're doing a good job with that, and our customer base certainly is spending the capital. The macro market is there on our end, we see those MSAs just grow. My follow-up, Duke, is you mentioned again in the certain remarks partnership with broadband opportunity. When we see from the administration and the Infrastructure Plan, the money they want to spend on broadband, is the private sector doing enough to make this happen? Are these two, three, four-year out type opportunities? It sounds that way, but I just want to get a sense here from that point. What made this unique partnership to call out that you entered into with this company, and are others like that going to help the growth in getting to that billion-dollar target that you've put out in the medium term? Mike, we've talked a bunch about how the infrastructure and the utilities and broadband are converging. I think when we looked at it, we continued to look at the role in the underserved markets that were out there, and for the last two years have really tried to find the solution with our customer in a collaborative effort to utilize that infrastructure. We found technology and a company that had the capabilities to do that, work with clients. I do think it's broad-based, small cell-type deployment that you'll see ongoing. When we have a programmatic way to do that on this, we'll have a programmatic way to do it with every one of our customers. It's really beneficial for us to be on the front side of this, providing the solution, pushing the Rural Digital Opportunity Fund forward, and not just waiting for something to come to us. We're actually out making sure this happens in front of it, not just waiting on an RFP or get commoditized with labor. I think that's part of what we're saying as a solution-based provider, is we're out in front of that with technology. Excellent. Thanks, Duke. Yes. The next question is from Brent Thielman of D.A. Davidson. Please proceed with your question. Hey, great. Thank you. Hey, Duke, any color on some of the larger project pursuits in the electric power business in 2021 that you're seeing and maybe how that could potentially influence the segment through the year? I think the guidance for the business is sort of more reflective of the programmatic spending you see with the customers, but I'm wondering if there are some other larger projects that can potentially layer on here this year. I could name them for five minutes. What I'm concerned about is just in general, we start talking about it. In my mind, we got a long ways to go on some permitting. It's a robust environment out there. We're around every one of them. Everyone you can name, I could name them for days. There's a bunch of nice projects moving the renewables and the interconnections. Almost every RTO regional plan has a large piece of work in it. Not only one, probably two or three. In order to get to what the plan and the carbon-free footprint, you need a significant amount of transmission. In order to do that, we need big projects. Certainly, they're tough on the permitting side. The administration said that they're going to help that. There's some that are ongoing that are closer than others. I believe MidAmerica and some of that on the Buffett call, he talked about it as well. There's a bunch of projects that are out there around the edges on. Okay. Appreciate that. I guess another question I have is just, are you seeing anything that suggests your customers are shifting from capital plans from the gas portion of the business toward the electrical portion of the business? I just wonder if these commitments and. Sort of profound interest in grid reliability are stealing any thunder from the gas programs that drive the underground segment? I would say we're seeing our pipeline customers try to build solar. We're seeing quite a bit of that happen, per se. The LDC business, it's a safety concern as well as reliability of just what you have on any given day. You can see the freeze. In Texas, you saw actually pipe freeze, which caused problems on your plant. I think all that integrity that needs to be done is a safety concern as well as a balance until we figure out carbon free, and you can't do that without significant amount of transmission. The company sits in a really nice place on either side of that. Very good. Thank you. Yeah. The next question is from Steven Fisher of UBS. Please proceed with your question. Thanks. Good morning. I just wanted to come back to the telecom business and the challenge in the quarter. If you could just sort of talk a little bit more broadly about why you do need to go the route of subcontract models in the first place, because it seems like that is perhaps bringing in an element of additional execution risk here. The bigger picture, I guess I'm seeing, is that you have a great market opportunity across your businesses at the moment, and I guess I'm just wondering what you might be able to do to enhance your potential to execute smoothly and capture that upside market opportunity without some of the risks of the hiccups here. Yeah, Steve, I think when you look at the business, our performance from a margin standpoint in the segment, we beat our expectations. I think we've raised the guidance on the year. We continue to do it. We look at it as a portfolio. We're getting operating leverage out of all of our offices, whether they're doing telecom, gas, or electric. We're reporting in segments. We may run the offices a little different than that. Overall, the performance of the company is exceptional in the field. The model around telecom, it was an organic growth strategy around it. It does have probably 50% of subcontract. It's due to the fact that it ramps up and down, and we're not going to invest in something that just ramps like that because it continues to weigh on it. We want some balance in it, and the balance allows us to have some variable cost in our equipment and things of that nature. Our returns are better that way in my mind, so that's the way we run the telecom business, and that's how we'll go forward with it. That being said, we did have an instance in my QA/QC issue in the quarter. We'll do a better job of catching that next time or now for that matter and try to claw back all we can. All in all, we're performing really well across the board in my mind. Okay, that's very helpful. I just want to ask you about Puerto Rico. It sounds like you're working towards a timely transition there, but in the event that there is some delay, can you just talk about what the possible implications might be for the rest of the year? I think there's some implications for some incentive potential, but you may not have expected any incentives this quickly anyway, and maybe when we should think about when the real opportunities for incentives on that contract might be. Thank you. Yeah, I don't think we anticipated that this year. It'll be in the next year for the incentive-based piece of it. We do anticipate going into service there in June. The transformation will happen. We'll take over in June. From that standpoint, that'll move on. As far as work coming through the FEMA funds, that'll be into next year, in my mind, before you see any of it. That's also an opportunity next year in Puerto Rico. All in all, it's moving along like it should, and we're pleased with where we sit. We had commented previously that we thought that post-transition, we would see on an annual basis a run rate contribution of around $0.25. That is excluding inflation adjustments, excluding all incentives, and excluding any incremental construction opportunities. All of those things would stay at the upside opportunities for us. Terrific. Thanks. Thanks, Steve. The next question is from Adam Thalhimer of Thompson Davis. Please proceed with your question. Hey, good morning, guys. Nice quarter. I wanted to start on the energy side. Curious, Duke, if you've seen any pickup just from the rise in oil prices, particularly around pipelines? I would not say pipelines we've seen much there. Just our industrial business status is signs of life there. I think it'll get better. We've not seen pipeline movement. Our Canadian operations, we see some long-term pipe, but not really in the lower 48 in my mind. It's pretty slow as far as I'm concerned, and I think we've transferred the business over to a more repetitive, sustainable business anyway. Nothing that affects us in my mind. Okay. You talked about a fixed wireless award. Can you give a little bit more detail on that? I was curious if that was like a tier 1 telco or kind of an emerging player? Some detail on that would be helpful. Thanks. Yeah. We made an investment in the quarter in some technology and a service provider there on fixed wireless. To really look at the RDOF funds, the rural development funds, as well as the underserved, so not a Tier 1 carrier, but certainly someone that would put it out across the lower 48 and beyond, from that model in a programmatic way. As the Tier 1s move forward, we'll have the ability to also do that in a programmatic way. Really, I think it's the convergence of the electric, such as your cooperatives, your municipalities, and the way to solve these issues around broadband. It makes a lot of sense. We've worked on it quite a bit, and this was our opportunity, really, to push it forward. Maybe something we'll hear more about in the coming quarters. Thanks. The next question is from Andrew Kaplowitz of Citigroup. Please proceed with your question. Hey, good morning, guys. Andy. Duke, we know signing longer term electric power MSAs is one of your main strategies, does electric power MSAs being up over 40% over the last year give you more confidence regarding Quanta's ability to grow the core business, maybe even toward the middle to higher end of the longer term guide you have? We know you talk about mid-single digits to low teens. Do you start getting visibility even into 2022 in that regard? I think we've talked about multi-year type growth, kind of mid to upper single digits on the 80% of the business, I would say at this point. At least we've talked about that growth long term, three to five years at least. We continue to see that. We've stated that quite a bit, and we think the MSA, the backlog that you're seeing, that grows there for a long period of time. I guess, Duke, what I'm asking there, though, is that does it give you confidence in sort of because it's a pretty wide range, between mid-single digits and low teens? Given sort of visibility you have, do you see actually a higher growth rate going forward? I know what the guidance is for this year, but just out of curiosity. You go back in time and you look at how we've grown the segment, we've grown the electric segment double-digits over the past 10 years on a CAGR basis. I would tell you that that's what we've done in the past. It's bigger numbers. We're being prudent about how we talk about it. Do we have the ability to grow in the double-digits? Yes. Let me ask you about, someone I think asked you about large projects. Let me tackle maybe slightly different way. You've talked in the past about this sort of $3 billion number and saying last quarter that you had quite a bit more than that in sort of opportunities. Is the funnel a lot larger than that, double that now? Any sort of thoughts about quantifying the funnel now? Is it sort of $5 billion, $6 billion? Just for perspective, Duke. If we talked about all the jobs that were out there's not enough material to talk about it to begin with. I think in our mind, we're being prudent about how we discuss it. The larger projects are growing, especially with the sentiment around bringing renewables in a carbon-free environment by 2030, 2050, even. The transmission corridors will have to exponentially get larger than they are now in a significant way. In order for that to happen, you're going to need large project dynamics for the next decade. I just wanted to follow up on one other thing that you talked about with the LUMA. LUMA's CEO recently talked about $10 billion in federal recovery funds now flowing in Puerto Rico. Do you think those funds just don't make their way into projects till next year, as you said? Or is it possible that it could happen as early as this year? You have about a billion-dollar budget down there, $600 of a billion-dollar budget down there a year on any given day. There is projects down on the island. What I would say is the FEMA funds are on top of that would come in. I would be prudent to say it would be next year. Great. Thanks, Duke. The next question is from Chigusa Katoku of Credit Suisse. Please proceed with your question. Hi, this is Chigusa Katoku. I'm for Jamie Cook. Our first question is, we were wondering if you have any concerns on securing labor this cycle, just given the current labor market and the robust outlook. If you could comment on what you're seeing in the pricing environment, that would be great. Thank you. Yeah, thank you for the question. From a labor standpoint, a tight labor market really suits us well. That's who we are. We really work on labor, have invested well over $100 million over the last six to seven years. Anytime you have a tight labor market, craft skill labor market, Quanta does really well. We're in a good position there. We pretty much regulate some of the way that we look at wages. We have ability to pass through those costs if they escalate. We're in good shape. As far as pricing power, I would just say in general, we'll stand by what we said in the past, the double-digit margins over time. At times you'll go higher and we're in good times now, so you're seeing some push on that, primarily around the utilizations and things of that nature that is pushing up your margins more so than pricing power. Thank you. The next question is from Min Cho of B. Riley Securities. Please proceed with your question. Hi, Derrick. This is Min Cho for Alex Rygiel at B. Riley Securities. Just one question really, Derrick. Given your continuation of strong cash flow and liquidity, just wanted to know if there was any shift in change to your capital allocation strategy, and wanted to know if there were any more opportunistic M&A opportunities that you're seeing in the current market. Thank you. No, I'd say that we're still committed to the same allocation strategy, really, that we've held for a number of years. We look at first leaning into the growth of the business on a working capital and CapEx front. Very much still yet look at the acquisition and investment side of the equation. Partly as an example, I've highlighted through Duke's comments here for the minority interest position here this quarter. Then as well with the buyback of stock and dividends. We still yet look at all of those. We like to have our balance sheet positioned well to be able to lean into all of those areas at any given time, not having to choose which one creates the most value at a point in time. I would say that acquisitions has historically been the largest component of recent years. We still see an active market there, ability to find good acquisitions. It'll be sporadic as we're opportunistic with the deployment of capital there, looking for strong management teams to supplement who we are. You can see over the last four or five years, we've probably averaged about $300 million on average deployment there. I wouldn't take exception to that kind of view as we go forward. Great. Thank you. There are no additional questions at this time. I would like to turn the call back to management for closing remarks. Yeah, I just want to thank everyone, our field leadership team and our men and women working in the field through the pandemic, through all the things that we've done well. We've performed well safely and it's to their credit. I want to thank you for participating in the conference call. We appreciate your questions and ongoing interest in Quanta Services. Thank you. This concludes our call. This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.