Greetings, and welcome to the Quanta Services Q2 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief 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. It is now my pleasure to introduce your host, Kip Rupp, Vice President, Investor Relations. Thank you, Kip. You may begin. Thank you, and welcome everyone to the Quanta Services Q2 2022 Earnings Conference Call. This morning, we issued a press release announcing our Q2 2022 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, August 4th, 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, but 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 in the presentation. 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 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 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. 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. Lastly, one administrative note regarding today's call. Quanta's Chief Financial Officer, Jayshree Desai, is recovering well from a planned but slightly accelerated medical procedure last week and will not be participating in today's conference call. Derrick Jensen, Quanta's Executive Vice President of Business Operations and former CFO, will review and comment on the company's Q2 financial performance and full year guidance in her stead. 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 Q2 2022 Earnings Conference Call. On the call today, I will provide operational and strategic commentary and will then turn it over to Derrick Jensen, who as Kip said, is making a curtain call appearance, filling in for Jayshree today. He will provide a review of our Q2 results and full year 2022 financial expectations. Following Derrick's comments, we welcome your questions. Our Q2 results continue our solid start to the year, with record quarterly revenues exceeding $4 billion for the first time in our history, as well as record quarterly adjusted EBITDA and adjusted earnings per share. We also believe momentum is building for a continued profitable growth next year, and we continue to see opportunities for multi-year expansion across our service lines, driven by our collaborative solutions-based approach, the growth of programmatic spending with existing and new customers, and stable megatrends. We are negotiating several large master service agreements or MSA renewals with utilities, have significant levels of limited notices to proceed for projects across our segments, and we are actively pursuing numerous larger transmission projects. As a result, we believe there is opportunity to achieve record backlog levels again in the coming quarters. Our electric power infrastructure solutions segment performed well overall during the quarter, despite some supply chain challenges causing delays and resource utilization inefficiencies. The impact on our business has been relatively limited and these challenges are not causing meaningful delays in our overall utility capital spending. We also believe these are shorter term conditions that have resulted in mostly short-term delays in the timing of certain electric transmission work. We continue to collaborate and partner with our customers to manage through these dynamics and work on potential mitigation solutions, which we believe will further enhance our relationships going forward. Demand for our services continue to be driven by broad-based business strength from utility grid modernization and system hardening initiatives, as well as our reputation for solid and safe execution. Additionally, our communications operations continue to execute well from both a revenue and margin perspective and remain on track for improved performance this year. Overall, our electric power outlook remains strong, driven primarily by increasing service line opportunities and market share gains on our base business. Incrementally, we continue to actively pursue large utility programs that are designed to modernize the grid, support growing electric vehicle penetration, and other new technology adoption, and harden systems to be more resilient to wildfire and severe weather events. To that end, in our earnings release this morning, we highlighted an MSA we secured in July to provide turnkey engineering, construction, and program management solutions in support of the deployment of a national electric vehicle direct current fast-charging network. This program brings together one of the largest auto manufacturers, North America's largest operator of travel centers, and the nation's largest public fast charging network for electric vehicles. These companies are collaborating on a fast-charging network that is expected to include as many as 2,000 DC charging stalls at hundreds of travel locations across the United States. We expect to begin engineering work on this program this year, with construction expected to begin in 2023. This is just one example of several large electric vehicle charging deployment programs that we have been pursuing. Additionally, we believe the need to modernize and enhance the power grid to enable higher levels of load growth and continuous power demand caused by growing electric vehicle penetration will create significant opportunity for Quanta. Renewable developers and utilities are leading the effort to reduce carbon emissions, many with significant carbon reduction commitments through aggressive efforts to expand their renewable generation portfolios. 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. Over the near and longer term, we believe substantial load growth, favorable public policy, and overall positive sentiment supporting a greener environment will continue to drive North America's power generation mix increasingly towards renewables. Our Renewable Energy Infrastructure Solution segment performed well during the quarter and successfully managed through general supply chain challenges and solar project timing disruption caused by the Department of Commerce's investigation into solar panel manufacturers in several Southeast Asian countries, the impact of which has since been mitigated through an executive order by President Biden. While the first six months of 2022 presented challenges to the renewable industry, we are on track and expect to build momentum through the rest of this year. Interestingly, due to the initial solar industry uncertainty and project delays caused by the Department of Commerce investigation, a number of renewable developers and utilities have moved forward projects in their wind portfolios to be built over the next several years. We believe this incremental wind activity could create a stacking effect in future years on top of existing industry expectations for accelerated solar and battery storage project investment. To that end, we're actively collaborating with existing and potential renewable generation customers on their multiyear programs, with some discussions and planning extending out to 2026. Additionally, we are pursuing several large high-voltage electric transmission projects designed to support renewable generation and overall system reliability, and these projects have made meaningful progress with permitting and approvals. We are the leading high-voltage electric transmission infrastructure solutions provider in North America and believe we are well-positioned to be selected for these projects. As we have commented previously about both proposed and enacted federal infrastructure legislation, our positive multiyear outlook is not dependent on them. However, we view the current climate-related components of the proposed Inflation Reduction Act as incremental positive for the renewable industry. We believe the passage of these provisions could accelerate renewable generation and related infrastructure investment over the coming years and provide Quanta with greater visibility into future opportunities for growth. We are particularly pleased with the performance of our underground utility and infrastructure solutions segment in Q2. Our industrial services operations continue to execute very well and experience strong demand as capital spending resumes and pent-up activity from two years of deferred maintenance moves forward. We also continue to experience solid demand for our gas utility and pipeline integrity operations, which are executing well and driven by regulated spend to modernize systems, reduce methane emissions, ensure environmental compliance, and improve safety and reliability. Looking to the coming years, we also continue to see emerging opportunities for Quanta's underground utility and infrastructure solutions operations to play an evolving and increasing role with customers as they move forward with strategies to reduce their carbon footprint and diversify their operations and assets towards greener business opportunities. Quanta is successfully executing on our strategic initiatives to drive operational excellence, total cost solutions for our clients, profitable growth and value for our stakeholders. Our strategic initiatives are designed to uniquely position us not only to capitalize on the mega-trends of our end markets, but also enhance our customer relationships and market positioning. As a result, we are able to collaborate with our clients to execute their capital deployment plans, even during challenging conditions like the ones we face today, with supply chain inflation, COVID-19, regulatory, and economic uncertainties. These dynamics are not easy to navigate, but we expect to continue to successfully manage through them. We believe we have taken a prudent approach to our guidance for the remainder of the year to incorporate these factors. It is during these times that Quanta demonstrates its resilience, which we believe shows the strength of our operations portfolio and platform of solutions. As I hope you gathered from my remarks this morning, demand for our services is robust across our portfolio and driven by long-term visible and resilient megatrends. As a result of our solid first half financial results, greater visibility and continued overall favorable end market drivers, we remain confident in our 2022 consolidated financial expectations. More importantly, as we look to the medium and long-term, we are incrementally more positive as energy transition and carbon reduction initiatives accelerate. We believe the infrastructure investment and renewable generation necessary to support these initiatives are still in the early stages of deployment. We have profitably grown the company and executed well in the past and expect to continue to do so. 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 for his review of our Q2 results and 2022 expectations. Derrick? Thanks, Duke, and good morning, everyone. I'll start by saying that we've received so many phone calls and emails for an encore performance that I'm doing one more quarter call, but after this call, I'm dropping the mic. As Kip commented, Jayshree is doing fine, and though she's not joining the call today, she has been overseeing the quarter and will be signing the certification for our filing. She will be delivering next quarter's call notes as I wander around backstage. With that, I'll turn to our earnings release, where today we announced record Q2 revenues of $4.2 billion. Net income attributable to common stock was $88 million or $0.59 per diluted share, and adjusted diluted earnings per share, a non-GAAP measure, was a record for Q2 at $1.54. Our electric power revenues were $2.2 billion, a quarterly record and a 21% increase when compared to Q2 of 2021. This increase was primarily due to growth in spending by our utility customers on grid modernization and hardening, resulting in increased demand for our electric power services, as well as approximately $80 million in revenues attributable to acquired businesses. Electric segment operating income margins in 2Q 2022 were 10.6% compared to 11.4% in 2Q 2021. The margin reduction is largely attributable to normal project variability. However, margins were pressured somewhat by inefficiencies attributable to supply chain disruptions impacting certain operations and elevated consumables costs. Despite those headwinds, we were able to deliver double-digit margins in line with our expectations for the quarter. Also included within our electric segment are our communications operations, which delivered improved sequential and quarter-over-quarter margins, putting us on pace for upper single-digit to double-digit margins for the year. Renewable energy infrastructure segment revenues for 2Q 2022 were $924 million, a substantial increase from 2Q 2021, primarily due to $490 million in revenues attributable to acquired businesses. Operating income margins in 2Q 2022 were 8.8%, comparable to the 9% in 2Q 2021. Underground utility and infrastructure segment revenues were a record $1.1 billion for the quarter, 30% higher than 2Q 2021, reflecting increased demand from our gas utility and industrial customers, as well as an increased contribution from larger pipeline projects. Operating income margins for the segment were 8.1%, 530 basis points higher than 2Q 2021. The margins reflect strong performance across the segment, most notably by our industrial operations, which had record quarterly revenues. One below the line item I want to mention is our other income and expense. As I discussed last quarter, we hold a common equity interest in a fixed wireless broadband technology provider, Starry Group Holdings, Inc. As required, we remeasured the fair value of this investment based on the market price of the publicly traded company stock as of June 30, 2022, which resulted in the recognition of an unrealized loss of $41.7 million during the quarter. While the unrealized loss is significant, we remain confident in the Starry business as well as our scalable wireless platform and see a bright future for the deployment of Starry's fixed wireless technology. We are not alone in this assessment. As a point of reference, the analyst community has an average price target for Starry above $9 per share. Our total backlog was $19.9 billion, a reduction of $0.6 billion compared to last quarter. The reduction is primarily attributable to our multiyear MSAs, which saw a reduction in estimated value due to one quarter's worth of backlog turning into recognized revenues during Q2. Our 12-month backlog is a record $11.6 billion, a slight increase compared to last quarter, indicating consistent levels of committed work over the near-term. With the continued demand for our services and robust activity across all of our segments, we fully expect backlog to remain strong and to report new record levels of backlog in subsequent quarters. For Q2 of 2022, we had free cash flow, a non-GAAP measure, as $14 million compared to $126 million of free cash flow in 2Q 2021. Free cash flow for the quarter was below our expectations, with the shortfall largely attributable to timing on certain renewable contract awards, which typically have favorable cash terms, and continued elevated working capital requirements associated with the large ongoing Canadian renewable transmission project, driving an increase in contract assets, which we've discussed in prior quarters. Regarding the Canadian renewable transmission project, we continue to work with the customer to address the growing contract asset balance. Extensive schedule delays, primarily due to COVID restrictions and its impact on remote locations of the project, have extended production schedules through another build season. This and other factors have negatively impacted our ability to meet contractual billing milestones and have also increased costs as a direct result. Discussions are ongoing with the customer, with the revised build schedule agreed to by both parties. We have engaged in discussions regarding adjusting billing milestones and remain confident in our cost position, but resolution of certain of these amounts will likely extend beyond this year and have impacted free cash flow and will continue to impact DSO in the near-term. The estimated impact of these dynamics is currently increasing DSOs by as much as five to six days. On a positive note, another previously discussed large Canadian electric transmission project that dealt with similar challenges received customer approval for a significant portion of the contract asset associated with change orders during the quarter. The approved amounts were billed during the quarter, and we expect collection in 3Q 2022, with resolution of a smaller remaining balance expected by the end of the year. Days sales outstanding, or DSO, measured 81 days for Q2 of 2022, a decrease of two days compared to Q2 of 2021, and an increase of one day compared to year-end. The decrease from 2Q 2021 was primarily due to the favorable impact of the acquisition of Blattner, which historically operates with a lower DSO than certain of our other larger operating companies. This positive impact was partially offset by the previously discussed working capital dynamics associated with the two large Canadian transmission projects. As of June 30, 2022, we had total liquidity of approximately $1.8 billion and a debt-to-EBITDA ratio of 2.4 as calculated under our credit agreement. We expect continued earnings growth and cash generation to support our ability to efficiently deleverage over the following quarters while continuing to create stockholder value through our dividend and repurchase programs as well as strategic acquisitions. As of July 31, 2022, we've acquired approximately $104 million worth of stock since the beginning of the year as part of our repurchase program. In July, we acquired a utility contractor in the West that specializes in underground construction. Turning to our guidance, we had a solid first half of the year, and we remain confident in our ability to deliver against the guidance we laid out on our last call. However, the composition of our earnings across our segments is slightly different than our initial expectations, which we believe reflects the benefit and strength of our portfolio of solutions. We continue to see strong demand for the services across our electric segment, and we now expect revenues to range between $8.5 billion and $8.6 billion, a $200 million increase from our previous range. However, as Duke commented, portions of our transmission operations are being negatively impacted by customer-driven material delays, and accordingly, we're moving labor and equipment to address our customers' growing distribution needs. This shuffling of resources is creating inefficiencies as we also grow headcount, which we expect will slightly pressure margins in the back half of the year. As a result, we now expect margins for the segment to range between 10.6%-10.8%, still a double-digit operating profile, but slightly below our previous expectations. Our renewable segment was negatively impacted by the uncertainty on project timing attributable to potential supply chain disruptions. However, we've seen some improvement in that regard over the last month. We currently see the opportunity for the back half of the year to be stronger, with full-year revenues now expected to range between $4 billion-$4.2 billion, a $200 million increase from our previous range, and operating margins continuing to range between 8.5%-9%. Our underground segment has had a great start to the year. Given the solid performance to date and improved visibility into the remainder of the year, we are tightening our full-year range of expectations. We now expect full-year revenues for the segment to range between $4.1 billion and $4.2 billion, with margins expected to range between 7% and 7.5%, which puts our previous midpoint expectation as the new low end of the margin range. With regard to free cash flow, we are lowering our full-year expectations primarily due to the Canadian transmission project dynamics we're working through, but also due to incremental revenue growth that will require additional working capital. Accordingly, we now expect free cash flow for the year to range between $550 million and $750 million. Due to the lower free cash flow coupled with increased interest rates on our variable rate debt, we now expect full-year interest expense to range between $120 million and $123 million. In the aggregate, our consolidated expectations for full-year diluted earnings per share attributable to common stock are now expected to range between $3.32 and $3.65, and full-year adjusted diluted earnings per share attributable to common stock, a non-GAAP financial measure, to range between $6.10 and $6.44. Additionally, we now expect adjusted EBITDA, a non-GAAP measure, to range between $1.64 billion and $1.71 billion for the year. For quarterly commentary and additional details on our financial expectations, please refer to our outlook summary, which can be found in the Financial Info section of our IR website at quantaservices.com. From a long-term perspective, the tailwinds behind our end market remain robust. We believe our industry-leading solutions differentiate us from our peers and present management with the opportunity to deliver significant stockholder value through organic growth and strategic capital deployment through 2026 and beyond. I'll now turn it back over to our operator for Q&A. Operator? Thank you. We will now be conducting a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate that 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 key. In the interest of time, we ask that participants limit themselves to one question and one follow-up and rejoin the queue for any additional questions. One moment, please, while we poll for questions. Thank you. Our first question comes from Jamie Cook with Credit Suisse. Please proceed with your question. Hi, good morning and congrats on a nice quarter. I guess, Duke, my first question, you know, the market has talked about, and you sort of alluded to, supply chain labor, you know, inflationary pressures. Can you talk to where that is most pronounced, sort of how you're managing through that, and to what degree do you see that as a risk of project delays and/or to your guidance? And then, you know, my second question, Derrick, I'll guess I'll ask you because this will be the last time I get to ask you a question on a public call. Was pleasantly surprised by the underground, you know, margins in the quarter. Can you talk about, you know, how much of that was just the industrial businesses picking up, or is there anything structural going on there, you know, that you feel more confident that margins we're closer to getting your margins to your targeted range? Thank you. Yeah. Thank you, Jamie. I think when we look at supply chain, as we're building crew counts and things of that nature, there is some small impacts on minor material throughout the utility system. It does create some inefficiencies with our crews, especially when we're building. Those impacts, coupled with some inflationary pressures on consumables, it does pressure a bit. I do not think that's something that, you know, given the guidance, we took all that into account. If it does levelize or if it does get better throughout the quarter, the end of the year, certainly it'll move upwards. It's utilizations and the build up for future years and working with the client in a collaborative manner, which is, you know, what the company has done in the past and will continue to do on a go-forward basis, all for really the outer years. I think it's really important for us to make sure that we're building these crews while working with the client on these minor material issues throughout the system. We don't really see the impacts. It's not, you know, solar. We talked extensively about that last quarter and worked through that and like I thought we would. Really nothing there to speak of. All in all, really good from our standpoint. Macro markets are strong, not seeing large supply chain issues. The ones that we are, I think it's opportunities for us to work with the client. I just say a little bit on the margin, and I'll give it to Derrick. We've said all along that we view the company as a portfolio and that we get to double-digit EBITDA, adjusted EBITDA margins and through the portfolio, and I think it's prevalent, it resonates. We continue to see the portfolio rise throughout. It's really whether it's industrial, Canada or whatever, the whole portfolio continues to move forward and upward, but I'll let Derrick comment. Yeah. I would say that unique to the quarter, there wasn't anything individual I'd call out. It was really a kind of across the segment performance. Industrial led the way, you know, record revenues for them. Solid margins. They're looking to be into a pre-COVID type of performance levels for the rest of this year. But the entire segment is seeing improvements, better utilizations, good execution, utilizing some of those resources still yet on the electric power side as well as a reminder. You know, it's all still yet towards our path of being able to execute in that group in that upper single-digit profile, and we're seeing that through this year and it bodes well as we go forward. Okay. Congrats. Derrick, I'm sure you'll miss these calls. Thanks. Thanks, Jamie. Thank you. Our next question is from Steven Fisher with UBS. Please proceed with your question. Thanks. Good morning. Just looking at the decline in the backlogs here a little bit, just focusing in on renewables. To what extent was that decline a function of, you know, some of the tariff dynamics in the quarter and the uncertainties that that brought with it? Because if that's the case, that's understandable. I guess, what is your expectation or is it your expectation that that backlog in renewables will start growing again as soon as Q3? I know you've got some limited notice to proceed, but, you know, should we expect that backlog to start growing again in the near-term? Yeah. Thanks, Steve. The renewable backlog, when we look at it and the amount of inbound calls, it's probably one of the most robust times that we've had at the company. From that standpoint, I believe the backlog will build substantially throughout the year in the renewable segment. Timing, the LNTPs are really more so when you say limited notice to proceed, we do not put those in backlog. As that becomes contract, then we'll put them in. I just. The amount of LNTPs to contract that time has elongated a bit through the cycle, just, you know, primarily around the solar impact as well as some of the wind portfolio moving up. We see that growing throughout the year, timing of which it could be Q4, it could be Q3, maybe early next year. You know, again, we reiterated where we think the segment, where we thought Blattner would be, and I continue to be more confident about where that renewable segment's going today than I've ever been. I'll add to everything that Duke said, I'll add that, you know, we've always talked about how backlog can be lumpy, you know, for Quanta as a whole. I'll emphasize that in previous calls, we've commented that it could be more so in this renewable segment, right? It is an aggregate of project-type dynamics that there's a little bit less base business component to it. So you might see a little bit more ups and downs at any given point in time, and that doesn't necessarily indicate the trend. We continue to feel quite confident in the multi-year market. Okay. Just a follow-up. Can you give us a sense of the size of that EV charging MSA? And I think you mentioned a bunch of other MSAs you have in the works. How many of those are completely new types of arrangements versus renewals of what you already have? Thank you. Yeah. Yeah, Steve, it's meaningful. I would say it's more about, you know, for us, when it's gonna get started, how it's looking on a go-forward basis. We're having the same discussions with multiple clients, multiple programs. It's also the ancillary effect on the utility system, and I'll continue to say that is more important of what happens to the system. Really the utility spend against EV charging and what's necessary to make that work on a consistent basis day-to-day, you know, it's substantial and it's substantially more than the EV charging network itself. You know, we are seeing those projects come to, you know, come to fruition here. Thank you. Our next question is from Chad Dillard with Bernstein. Please proceed with your question. Hi. Good morning, guys. Good morning. Morning. I wanted to go back to your comment about electric power margins and bringing it down this quarter. Can you just like break out the impact from headcount, the customer-driven material delays, and I think you mentioned consumables? Just like, is there any opportunity to recover this? Just like how broad-based are these issues in your portfolio? I don't think the issue is systemic. I don't think it's elongated. We're building crews. Normally, the company runs right through it. We did increase headcount around 1,000 in the quarter. It does create some pressure, minor material delays with that, with some inflationary pressure on consumables. All together, you know, look, it does impact us a little bit. I do not think it's. We're gonna work with our clients long-term. We're a company that really collaborates. So I don't see us getting any recovery on it. We'll work through it. It'll be a long-term for us over the next 10 years, the gains today for the next, you know, the future. So in my mind, a little bit of margin pressure, not bad. We'll work through it. I'm not... When we look outward against what we've seen in the past, if you think about storm, our guidance is like $100 plus million, and last year we did $400 million in the last two quarters. We're not baking any of that in. It'll depend on utilization, and we give prudent guidance, and I believe there's upside potential to the back half given, you know, where we sit, if we get supply chain coming through or any kind of major storm event. Got it. That's helpful. It's almost been a year since you've acquired Blattner or at least announced the acquisition. Just curious to get some, you know, update on progress on what you're seeing in terms of sell-through, you know, from legacy Quanta customers into Blattner. You know, are you seeing an uptick in regulated utility appetite to shift, you know, their mix towards renewables? I think the business itself, we continue to be pleased with where we sit. We're making good progress on synergies. We constantly are in contact with our clients about both wind, solar, not only on utilities or developers, but also our UI segment. All of our customers are really looking towards a carbon free footprint. When we think through it, we thought that we could sit at the tip of the spear on energy transition. We think we're at the tip of the spear on energy transition with Blattner, and certainly believe that every bit today as we did before, and we're proving it out every day. Thank you. Our next question is from Justin Hauke with Baird. Please proceed with your question. Hi. Good morning, guys, and good morning, Derrick. I guess last time we'll talk this way on these calls. I guess I had a question on the guidance with the upside from the JV contribution from LUMA. I guess you know it implies the base Segment margins are a little bit lower, but I was more interested in kind of where the upside is coming from that. I know there was opportunity for earn-outs and some additional project pickups. I'm wondering if it's from that or is this the base contract expanded and there still is more opportunity from those other items? Yeah. It's really the latter. And a lot of it was associated with just basically some carry through some cost management side of the equation on activities that we're doing. As of yet, we haven't started, you know, anything for the new project type dynamics, which would be incremental to the base project. Those things are still yet to come. They're imminent. But right now the differential this quarter is basically kind of cumulative cost management type dynamics. Looking forward, you can see that we're still forecasting the contribution to be comparable to our previous forecast levels for Q3 and Q4. Okay. Yeah, I do think we're seeing some FEMA funding coming through down on the island, and I do think there'll be opportunities for us in 2023 to actually perform some construction that's outside the contract. Another little bit of cleanup there is that line item has multiple joint ventures, not just the LUMA joint venture. We had a few joint ventures that actually executed quite well during the quarter. Not all of that variance is unique to LUMA. Okay. Thank you for that. I guess my second question is just going back to Black & Veatch again. The revenue contribution in that for the segment, at least from M&A, $490 million, that's kind of comparable to what it was in Q1. I guess we would have thought there would have been maybe a little bit more tick up. You guys have been pretty upfront about the challenges from the tariffs on the renewables business here in the first half, but I'm just curious, with your outlook for that business, are you still thinking $2.5 billion of revenue contribution, or is that a little bit different this year than maybe what was originally planned? No, we reiterated our guidance on the acquisition as well as the segment. I obviously, I mean, I think in our minds, it's every bit as good as what we have said. I think the longer term, even 2023, the build in 2023 and beyond is greater than we thought. Thank you. Our next question is from Noelle Dilts with Stifel. Please proceed with your question. Hi, guys. Thanks for taking my question. I wanted to dig into the cost side a little bit more just because, you know, I think it's been tough from a cost perspective, kind of across the industry. You've discussed before that fuel is a relatively small percentage of your total cost at, I think, about 2%. Could you speak to, you know, how you've dealt with fuel cost increases in the quarter and the extent to which you've been able to pass them on to customers? Also sort of with labor and equipment and components, have you been able to pass that through reasonably well, or have there been instances where you've had to go back to the customer and get some relief? I'm just kind of curious, you know, what the process has been like for some of those challenges in the quarter? Thanks. Thanks, Noelle. The costs certainly have increased, but typically, we're able to work through those through scale, through collaborating with the client. You know, we are building crews, and I do think the build is really what's causing most of our issues, as well as the inefficiencies of the supply chain. It's not necessarily the fuel or the inflation. We can usually work through those kind of pressures. You know, we work with the client on that. I do think it's just the culmination of all three kind of in a quarter, you see a little bit of pressure. Actually, internally, we're on kind of where we thought we would be from a margin standpoint. It's the guide going forward that we've been prudent on, and I believe in my mind, it's pressured the overall segment margins, not where we sit in the first six months. Can we operate through that in the latter half? Maybe. We certainly take a prudent approach to guidance. We thought we should at least acknowledge that there is some pressure, but we're not seeing the pressure that. You know, we're not gonna talk about fuel and crew counts and those things on a daily basis. We can work through those on the way that we get cost recovery as well as get more efficient as a company and scale. Okay. You know, in the past, we've talked about your how to think about labor costs, given that you're, you know, union and you typically have some visibility, you know, as it relates to the electric workforce. Any updated thoughts on, you know, how we should think about coming labor cost increases and what the conversations with the unions are like, and generally how to think about, you know, overall, what that looks like as we're kind of ending this year and heading into 2023? No, I think when you look at the company, that's our core is skilled labor and our ability to work with unions as well as you know all of our trade associations I think are really important. The way that we set our classes, the way that we've done our training for the last six, seven years, the amount that we've put into this, in my mind, we're really helping and collaborating with the client and talking through any kind of escalations in the future. We've worked really nicely to collaborate on these things. Even you know the inflationary bill that has some of the language in it, we've worked through all that. We sit in a really good position there, Noelle, and I think we've got those covered going forward. Thank you. Our next question is from Mike Dudas with Vertical Research Partners. Please proceed with your question. Good morning, gentlemen. Morning. Morning. Can you maybe share some thoughts on the opportunities that you're seeing, I'm sure they're quite broad, on the high voltage transmission projects, the larger ones. Given where your base business is, how selective do you plan on being? What kind of room do you think you have on the EP side for those types of projects? Even on the pipeline side, there's been quite a bit of news lately from Washington about certain pipelines and certain opportunities and change in some regulatory aspects. Yeah, just share your appetite on both sides. Has it changed much in the last six, 12 months? You know, given the cash flow issues that Quanta may be seeing out of Canada, how selective you might be given the base business seem to be doing quite well. No, when we look at the large transmission, certainly it's a robust environment. We're talking a lot. I do think the states have a lot of say. You know, even if FERC has good visibility and there is a large number of projects that get sited, it's still tough on those big projects. That said, we are in the middle of quite a few, more so now than in the past, so we are looking at a lot of bigger projects. I wouldn't say we're around the edges on them all. We try to collaborate with the client on these, and certainly for us, it's about planning and helping up front, so we have a success in the future. I think that's our job, is to work with the client to be successful on these larger projects. Canada, it's always. We've been, you know, through five or six projects. Takes a little bit to get cash. We always work through those with the client. We worked through one successfully in the quarter. We'll work through the next one, this other one, through the remaining of this year and the next. We are executing well. We're known for northern climes. Our people in the field are world-class, and that project is remarkable, what we've done through COVID. So I'm highly confident in where we sit there and our collectibility there, as well as getting our cash flow a little better than it is today. Canada was certainly impacted more so than the lower forty-eight when you look at COVID and things of that nature, especially with 12 camps on a job. Look, I think both Canada from the pipe side, even some in the lower 48, there is some projects moving around, but our base business is robust. Those are all really additive in our thinking to the future versus where we sit. Anything there would be additive the way I see it. We're really not gonna chase shiny objects. We're really working on our base business, and if those shiny objects happen to come in, it will only increase our guidance going forward. Thanks, Duke. Thank you. Our next question is from Adam Thalhimer with Thompson Davis & Co. Please proceed with your question. Hey, good morning, guys. Nice quarter. Hey, first question, I wanted to ask about your MSAs. Did those have inflation protections baked into them coming into this year? Or is that something you need to work on as you renegotiate those going forward? They're all different, but I would say we typically have some escalations, labor escalations for sure, which is typically around 60%, 70% of the project. Normally that's in there. And some of the consumables would be in there. Again, fuel's about 2% of cost. It's really the build up, your training, all the things that are necessary to put new people in the field, which we've done a nice job through the colleges and the pre-apprentices. That coupled with some of the inflationary pressures certainly in the quarter, I would say we just took a prudent approach in the future on guidance. We're really on target, the way I see it, for the quarter. I agree. Okay. I wanted to ask about the EV charging opportunity. Is the big opportunity for Quanta, is it actually installing the bay, or is there substation and transformer work behind that that's more meaningful for you guys? I think it's both, but what I would tell you is it's hundred times more meaningful on the backside than it is on the station itself or the bay itself. The reason is the load is really at the distribution level, particularly. As that happens, to get the load to the distribution level is substantial, both in from the generation standpoint through the sub, down through into the distribution side of the business. It's like, you know, big pipe going into a little pipe that doesn't have any room, so you need bigger pipe all the way through. In my mind, it's just a lot on the system that needs to be modernized. We're in the early stages of starting that distribution build across North America. Thank you. Our next question is from Alex Rygiel with B. Riley. Please proceed with your question. Thank you. Duke, you've been through many different economic cycles. Can you talk to us a little bit about your experiences at the beginning or an inflection point of an economic cycle, and how we might wanna think about sort of the next 12-18 months as to how that kind of might impact your core electrical power business? Yeah. Thanks, Alex. You know, normally in other cycles, typically, when you're looking at inflationary pressure, natural gas at $8, you know, it does impact the consumer. The consumer, in my mind, as you start increasing bills, you know, the regulators certainly look at this. The problem I think this time it's not a problem, it's what we're faced with as a country when we're going towards a carbon-free environment. EV penetration has already left the building. There's no choice, in my mind, other than to put capital into these systems in order to enhance and modernize them for those impacts. The only pressure you could do is just stop, and I don't believe the country is going to stop the carbon-free environment at this point. I'm not seeing. There is load growth now, and when you think about it, in the past, there was no load growth. You're getting 2%, 3%, 5% load growth in places, and that is offsetting some of the cost of capital going into the systems as well. The ultimate impact of the consumer for the grid build is not showing up. The fuel cost, I do think natural gas needs to regulate a bit, get down where it should be, and I do think that'll help the bill and everything else. I don't see the real impacts that we would've seen in the past. Look, we're always cautionary about the inflationary pressures. They're real in places, and we should be, you know, prudent about how we think about it, but we're not seeing it show up at all, yet. Sorry if I missed this, but what is your backlog within the telecom segment? What is this backlog telling you about organic growth, kind of on a go-forward 12-month basis? Is it accelerating? Can we see double-digit organic growth out of that segment? Yeah. You know, we're about $1 billion in backlog in telecom. We stay about $1 billion in backlog in telecom. We could build it, Alex. It's just something I find the carriers to be more cyclical and more spontaneous than our regulated utilities as well as our developers. We'll be cautious about that as we grow the business. We pace that growth on purpose. I do think the margins are upper single digits going to double digits, which is really what we're after. I'm happy where we sit. We could grow. I feel comfortable that our platform will allow us. The company's really worked hard on a portfolio. You're seeing it show up in the UI margins. I know we talked a lot about electric, we talked a lot about renewables, but that portfolio, the way that we're displacing G&A and the things that we've done internally in this management team has really bought into, you know, one single brand, one single location. You're seeing the impacts across the board at Quanta as we pick up the adjusted EBITDA. Thank you. Our next question comes from Andy Kaplowitz with Citigroup. Please proceed with your question. Good morning, everyone. Hey, Andy. Morning. Duke, maybe you could give us more color regarding your negotiations with utilities. Regarding re-upping MSAs, are MSAs of the existing customers continuing to increase given the amount of electric power work your customers have? Is there evidence of them moving to more outsourcing? Are you seeing evidence of new MSAs as your customers likely are quite tight with their own labor? I think when you look at the customer, we collaborate quite a bit. Nothing's changed there. We continue to have a robust environment, good macro markets, sit well in the marketplace. Our ability to execute in the field safely, on time, on budget, it makes it an easy conversation. It always has. As long as we continue to execute in the field, those conversations are pretty easy. Duke, maybe can you give us an update on what you're seeing in undergrounding, whether it's the PG&E project or anything else you're working on? Do you see undergrounding becoming a much more meaningful part of your business as you head into 2023? It's not only in the West. You're seeing undergrounding across the Gulf Coast for storm hardening. I do think undergrounding will be a big portion of the West going forward, but it is moving forward. You know, all the capital budgets, if you look back and you see where per mile, what the utilities in the West are anticipating in 2023, it's substantially different than in 2022. Early stages, the West is tough to work and, you know, there's a lot of permitting, a lot of environmental planning. I do think our front-end business, we talk about it quite a bit, that the engineering permitting, all the things that we're doing on the front end is really helping us get prepared for those builds and helping us with the client to reduce costs on that. I like where we sit there. I think it is something that you'll see in 2023 show up and also, you know, in the Gulf Coast. Appreciate it. Sure. Thank you. Our next question is from Sean Eastman with KeyBanc Capital Markets. Please proceed with your question. Hi, guys. Thanks for taking my questions. I wanted to come back to the comment about wind projects being pulled forward. What does the sort of comeback on the wind side tell us about the anticipated margin progression in the renewables segment? Because I thought that, and correct me if I'm wrong, but a lot of this year-over-year softness in the Blattner business that we're seeing in 2022 from a margin perspective is that softer wind dynamic. I wanted to check in on that. I don't know that we're seeing any margin issues with Blattner, but that being said, it's down a little bit. I don't think it has anything to do with the wind or the platform, whether it's wind or solar. I think it had everything to do with us taking a prudent approach to it, worried through inflationary pressures as well as guidance, and we did that. On a go-forward basis to scale, I don't think the mix of work impacts the margins there in the segment. The segment does have large electric transmission in it as well as substation interconnect. So those kind of things are in the segment. It's not just Blattner. I do think as we move forward, certainly the wind coming in helps, but we're every bit as, you know, happy with solar as well. I think when we see it, we thought we would have some delay in 2022. We did. We took that into account early, even when we made the acquisition. We also reiterated a long-term from the $3.6 billion in 2026. I do think that's pulled in. I think you'll see, you know, significant amount of growth there in 2023 as well as and beyond. Yeah, maybe color as well, as we've commented that we felt that Blattner would be able to execute at double-digit EBITDA levels, and they continue to execute at those levels. Yes. They do. Okay, great. Yeah, I didn't frame that question properly. I thought it was kind of exciting to see wind coming back in the mix. I guess, really it's not a margin dynamic. It's more just additive to that stronger visibility around growth for renewables into the out years. I'm not saying we can't increase margin on a go-forward basis in the segment. It's all scale. Look, if it's solar or wind, it doesn't matter. If you get more scale out of it and cover off G&A, we'll certainly increase the margins there. Okay. That's really helpful, Duke. Thanks for that. Moving over to the cash flows, just this, you know, this Canadian transmission project dynamic, is this more an element of working through the bureaucracy with the client versus some sort of point of contention with the client? Is that a fair comment, Derrick? This is Duke. I deal with them quite a bit, and we had two large projects, one just completed. No one's ever been through COVID in Canada, so it's, you know, justification of cost against where you're at for one part, and then the way the milestone billing works on the second one, you know, look, we didn't anticipate the delays and winter delays that we have today. Those milestones, we have to escalate them up, work with the clients to get paid earlier. We're working through those now. There's no contention. It's really a matter of fact, you know, going through it, justifying it and moving forward. A lot of paper, I would say, from my standpoint, a little more than normal. Look, it's, we've been through this many times in Canada. We'll get through it with good documentation. We know we've taken the same approach we've taken to every other one there. I'm highly confident that we'll work through this in the coming quarters. No, I agree. Thank you. Our next question is from Neil Mehta with Goldman Sachs. Please proceed with your question. Good morning, team. The first question was around the renewables legislation that's making its way through Congress right now. I recognize it's an unbelievably dynamic environment to try to process it, but just any early observations of what that could mean for the opportunity set in your business. Clearly it could be positive for renewable energy infrastructure solutions, but do you see a way it could also tie into the electric power infrastructure solutions as well? Yeah, for sure. Anything renewable, I'll go backwards on the question, but anything renewable in the legislation affects the grid, no question. Anything we're talking about impacts the backside of the grid. I think, yes, a substantial increase in utility spend either way. You know, look, the legislation's great. It's all incrementally positive. It's 780 pages. I'm not going to comment on it other than just to say it's positive for us in many ways, and if it does pass as stated, we're extremely happy. That makes sense. I just wanted to follow up on the free cash flow question. I think you provided some clarity around the specific project in Canada, but can you help us bridge between the previous free cash flow guidance and this one, and how much was that specific project versus other items? Thank you. That's why Derrick came back. He's gonna answer that. All right. That's why Derrick's never gonna do another one of these calls again. Look, I mean, the biggest portion of what drives our cash flow is the working capital demands of the business. We've talked at length about the fact that higher levels of growth put pressure on the working capital. At this stage, our organic revenue growth for the year will exceed double digits. In the past, we've talked about when you see that, you could start to see free cash flow conversions against EBITDA probably drifting down into like the 30%-40% range. I think if you look at the math, you're gonna see it running about 35%. You know, the uptick in the revenues for the year, about $400 million, running 10%-11%, trailing twelve months, working capital is gonna get you into about $40 million-$50 million of the uptick in, or the decrease in free cash flow associated with the uptick in the revenue guidance. I think it's all still running across the same formulas. Having said that, yeah, I think the remaining delta would largely be the individual timing of the project issues we were talking about. All right. Thank you, sir. Thank you. Our next question is from Gus Richard with Northland. Please proceed with your question. Yes. Good morning. Morning. Thanks for letting me ask question on Derrick 's second final farewell tour. High-powered semiconductors are kind of in limited supply. The largest supplier is in Germany. The OEMs that provide utilities with equipment are not high-volume customers, typically don't get favorable allocation. You know, I'm seeing lead times as long as 50 weeks for IGBTs, et cetera. I'm just wondering, my question is, you know, the supply chain issues that your customers are seeing, are they getting worse? Are they getting better? What are your customers saying about this? You know, is it gonna continue to cause disruptions in your business? Yeah, we're seeing, you know, really transformers, honestly, I think are the bigger thing. Distribution transformers are kind of what I see. A little stuff here or there, but that's really what we're focused on, trying to collaborate with the client on those at this point. Some transmission items are, you know, we've seen some delay in those as well. Our workforce is pretty nimble. We can move through these kind of issues and work with the client on those supply chains. The utility industry is very resilient. We're coming up with solutions on a daily basis in a collaborative manner. They collaborate quite a bit. I don't think this is long-term. We're working through all these issues. You can double-shift factories. You can do a lot of different things to expedite all the minor equipment. You know, look, there's always a big lag on your big HVDC transformers and turbines and those kind of things. I do think, you know, that is already baked in the system, and we're working through these minor issues with the client. It is a place where I believe Quanta can collaborate and move forward the business on that end, and certainly in front end of our business, the planning and the things that we're doing there is helping us be successful to execute, you know, in the field. Got it. That was it for me. Thank you. Oh, thank you. Thank you. There are no further questions at this time. I would like to turn the floor back over to management for any closing comments. First I wanna thank Derrick for stepping in here. It certainly eases the mind to have someone of his caliber here on the management team. It says a lot about the family aspect of the company. Jayshree's doing great, and she's listening to the call. Hey, Jayshree. We know you've done a lot here in the quarter to make this successful, so thank you. All the men and women in the field that make our job easy and make this call easy for us because you execute so well. We truly appreciate you and everyone that participated in the call today. Thanks for your interest in Quanta. This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.