MASTEC INC

Previous wording

We have experienced, and may continue to experience, direct and indirect negative effects on our business and operations from economic, market and regulatory conditions. We expect the remainder of 2024 to continue to be a dynamic macroeconomic environment, with elevated market interest rates and continuing levels of cost inflation and potential market volatility, any or all of which could adversely affect our costs and customer demand. The extent to which general economic, market and regulatory conditions could affect our business, operations and financial results is uncertain as it will depend upon numerous evolving factors that we may not be able to accurately predict, and, therefore, any future impacts on our business, financial condition and/or results of operations cannot be quantified or predicted with specificity. For additional information regarding the effects of general economic, market and regulatory conditions, see Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our 2023 Form 10-K.

Current wording

We have experienced, and may continue to experience, direct and indirect negative effects on our business and operations from economic, market and regulatory conditions. While the Federal Reserve decreased the Federal Funds rate to a range of 4.75% to 5.00% effective September 19, 2024, there continues to be uncertainty in the changing market and economic conditions, including the possibility of additional measures that could be taken by the Federal Reserve and other government agencies related to the overall macroeconomic environment. We expect the remainder of 2024 to continue to be a dynamic macroeconomic environment, with elevated market interest rates and continuing levels of cost inflation and potential market volatility, any or all of which could adversely affect our costs and customer demand. We will continue to monitor the market and economic conditions. The extent to which general economic, market and regulatory conditions could affect our business, operations and financial results is uncertain as it will depend upon numerous evolving factors that we may not be able to accurately predict, and, therefore, any future impacts on our business, financial condition and/or results of operations cannot be quantified or predicted with specificity. For additional information regarding the effects of general economic, market and regulatory conditions, see Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our 2023 Form 10-K.

Previous wording

We are a leading infrastructure construction company operating mainly throughout North America across a range of industries. Our primary activities include the engineering, building, installation, maintenance and upgrade of communications, energy, utility and other infrastructure, such as: wireless, wireline/fiber and customer fulfillment activities; power delivery infrastructure, including transmission, distribution, environmental planning and compliance; power generation infrastructure, primarily from clean energy and renewable sources; pipeline infrastructure, including for natural gas, water and carbon capture sequestration pipelines and pipeline integrity services; heavy civil and industrial infrastructure, including roads, bridges and rail; and environmental remediation services. Our customers are primarily in these industries. Including our predecessor companies, we have been in business for approximately 95 years. For the twelve month period ended June 30, 2024, we had an average of approxi mately 34,000 employees and 820 locations. Weoffer our services under the MasTec®and other service marks and we are ranked among the top five contractors within Engineering News-Record’s Top 400 Contractors.

Current wording

We are a leading infrastructure construction company operating mainly throughout North America across a range of industries. Our primary activities include the engineering, building, installation, maintenance and upgrade of communications, energy, utility and other infrastructure, such as: wireless, wireline/fiber and customer fulfillment activities; power delivery infrastructure, including transmission, distribution, environmental planning and compliance; power generation infrastructure, primarily from clean energy and renewable sources; pipeline infrastructure, including for natural gas, water and carbon capture sequestration pipelines and pipeline integrity services; heavy civil and industrial infrastructure, including roads, bridges and rail; and environmental remediation services. Our customers are primarily in these industries. Including our predecessor companies, we have been in business for approximately 95 years. For the twelve month period ended September 30, 2024, we had an average of approxi mately 33,000 employees and 800 locations. Weoffer our services under the MasTec®and other service marks and we are ranked among the top five contractors within Engineering News-Record’s Top 400 Contractors.

Previous wording

Estimated backlog represents the amount of revenue we expect to realize over the next 18 months from future work on uncompleted construction contracts, including new contracts under which work has not begun, as well as revenue from change orders and renewal options. Our estimated backlog also includes amounts under master service and other service agreements and our proportionate share of estimated revenue from proportionately consolidated non-controlled contractual joint ventures. Estimated backlog for work under master service and other service agreements is determined based on historical trends, anticipated seasonal impacts, experience from similar projects and estimates of customer demand based on communications with our customers. Based on current expectations of our customers’ requirements, we anticipate that we will realize approximately 45% of our estimated June 30, 2024 backlog in 2024. The following table presents 18-month estimated backlog by reportable segment as of the dates indicated:

Current wording

Estimated backlog represents the amount of revenue we expect to realize over the next 18 months from future work on uncompleted construction contracts, including new contracts under which work has not begun, as well as revenue from change orders and renewal options. Our estimated backlog also includes amounts under master service and other service agreements and our proportionate share of estimated revenue from proportionately consolidated non-controlled contractual joint ventures. Estimated backlog for work under master service and other service agreements is determined based on historical trends, anticipated seasonal impacts, experience from similar projects and estimates of customer demand based on communications with our customers. Based on current expectations of our customers’ requirements, we anticipate that we will realize approximately 25% of our estimated September 30, 2024 backlog in 2024. The following table presents 18-month estimated backlog by reportable segment as of the dates indicated:

Previous wording

Backlog is a common measurement used in our industry. Our methodology for determining backlog may not, however, be comparable to the methodologies used by others. Backlog differs from the amount of our remaining performance obligations, which are described in Note 1 – Business, Basis of Presentation and Significant Accounting Policies in the notes to the consolidated financial statements, which is incorporated by reference. As of June 30, 2024, total 18-month backlog differed from the amount of our remaining performance obligations due primarily to the inclusion of $7.2 billion of estimated future revenue under master service and other service agreements within our backlog estimates, as described above, and the exclusion of approximately $3.2 billion of remaining performance obligations and estimated future revenue under master service and other service agreements in excess of 18 months, which amount is not included in the backlog estimates above. Backlog expected to be realized in 2024 differs from the amount of remaining performance obligations expected to be recognized for the same period due primarily to the inclusion of approximately $1.8 billion of estimated future revenue under master service and other service agreements included within our backlog estimate, which is not included within our remaining performance obligations for the same period.

Current wording

Backlog is a common measurement used in our industry. Our methodology for determining backlog may not, however, be comparable to the methodologies used by others. Backlog differs from the amount of our remaining performance obligations, which are described in Note 1 – Business, Basis of Presentation and Significant Accounting Policies in the notes to the consolidated financial statements, which is incorporated by reference. As of September 30, 2024, total 18-month backlog differed from the amount of our remaining performance obligations due primarily to the inclusion of $7.4 billion of estimated future revenue under master service and other service agreements within our backlog estimates, as described above, and the exclusion of approximately $3.0 billion of remaining performance obligations and estimated future revenue under master service and other service agreements in excess of 18 months, which amount is not included in the backlog estimates above. Backlog expected to be realized in 2024 differs from the amount of remaining performance obligations expected to be recognized for the same period due primarily to the inclusion of approximately $0.8 billion of estimated future revenue under master service and other service agreements included within our backlog estimate, which is not included within our remaining performance obligations for the same period.

Previous wording

There were no material changes in our critical accounting estimates or policies during the three month period ended June 30, 2024, and other than the update to the reporting unit structure of the Power Delivery operating segment as described above, there were no material changes during the six month period ended June 30, 2024.

Current wording

Other than the update to the reporting unit structure of the Power Delivery operating segment and the change in the estimated useful lives of certain machinery and equipment, as described above, there were no material changes in our critical accounting estimates or policies during the nine month period ended September 30, 2024.

Previous wording

(a) For thethree month period ended June 30, 2023, Communications, Clean Energy and Infrastructure and Power Delivery EBITDA included$4.6 million,$16.4 million and$0.3 million, respectively, of acquisition and integration costs related to certain acquisitions, and Corporate EBITDA included$1.4 million of such costs, and, for the six month period ended June 30, 2023,$13.5 million,$21.7 million,$1.9 million and$2.7 million, of such costs were included in EBITDA of the segments and Corporate, respectively. These acquisition and integration activities were completed in the fourth quarter of 2023.

Current wording

(a) For thethree month period ended September 30, 2023, Communications, Clean Energy and Infrastructure and Power Delivery EBITDA included$4.8 million,$15.3 million and$0.5 million, respectively, of acquisition and integration costs related to certain acquisitions, and Corporate EBITDA included$0.5 million of such costs, and, for the nine month period ended September 30, 2023,$18.3 million,$36.9 million,$2.5 million and$3.2 million of such costs were included in EBITDA of the segments and Corporate, respectively. These acquisition and integration activities were completed in the fourth quarter of 2023.

Previous wording

Revenue. For the six month period ended June 30, 2024, consolidated revenue totaled $5,648 million as compared with $5,459 million for the same period in 2023, an increase of approximately $189 million, or 3%. Revenue in our Oil and Gas segment increased by approximately $608 million, or 102%, whereas revenue decreased in our Power Delivery segment by approximately $205 million, or 14%, in our Communications segment by approximately $118 million, or 7%, and in our Clean Energy and Infrastructure segment by approximately $99 million, or 6%. See below for details of revenue by segment.

Current wording

Revenue. For the three month period ended September 30, 2024, consolidated revenue totaled $3,252 million as compared with $3,257 million for the same period in 2023, a decrease of approximately $5 million. Revenue in our Oil and Gas segment decreased by approximately $174 million, or 26%, whereas revenue increased in our Communications segment by approximately $103 million, or 12%, in our Power Delivery segment by approximately $47 million, or 7%, and in our Clean Energy and Infrastructure segment by approximately$39 million, or 4%. See below for details of revenue by segment.

Previous wording

Communications Segment. Communications revenue was $825 million for the three month period ended June 30, 2024 as compared with $869 million for the same period in 2023, a decrease of $44 million, or 5%. The decrease in revenue was driven primarily by lower levels of wireline and install-to-the-home project activity due, in part, to customer project timing in our wireline businesses and, for our install-to-the-home activities, changes in consumer behavior resulting in lower demand. These decreases were offset, in part, by an increase in utility project work.

Current wording

Communications Segment. Communications revenue was $927 million for the three month period ended September 30, 2024 as compared with $824 million for the same period in 2023, an increase of $103 million, or 12%. The increase in revenue was driven primarily by higher levels of wireless, wireline and utility project activity. These increases were offset, in part, by a decrease in our install-to-the-home activities due, in part, to changes in consumer behavior resulting in lower demand.

Previous wording

Clean Energy and Infrastructure Segment. Clean Energy and Infrastructure revenue was $942 million for the three month period ended June 30, 2024, as compared with $970 million for the same period in 2023, a decrease of $27 million, or 3%, due primarily to lower levels of renewable and certain industrial and other infrastructure project work, offset, in part, by higher levels of heavy civil project activity, due to various factors affecting timing of project work.

Current wording

Clean Energy and Infrastructure Segment. Clean Energy and Infrastructure revenue was $1,138 million for the three month period ended September 30, 2024, as compared with $1,100 million for the same period in 2023, an increase of $39 million, or 4%, due primarily to higher levels of heavy civil project activity and certain industrial and other infrastructure project work, offset, in part, by lower levels of renewable work, due to various factors affecting timing of project work.

Previous wording

Power Delivery Segment. Power Delivery revenue was $1,208 million for the six month period ended June 30, 2024, as compared with $1,412 million for the same period in 2023, a decrease of $205 million, or 14%. The decrease in revenue was primarily due to lower levels of project activity, including timing-related decreases in transmission and distribution-related project work, primarily due to regulatory effects, offset, in part, by an increase in substation-related project activity.

Current wording

Power Delivery Segment. Power Delivery revenue was $713 million for the three month period ended September 30, 2024, as compared with $665 million for the same period in 2023, an increase of $47 million, or 7%. Acquisitions contributed $11 million of revenue for the three month period ended September 30, 2024, and organic revenue increased by approximately $37 million, as compared with the same period in 2023, due primarily to higher levels of project activity, including for transmission and substation-related project work, offset, in part, by a decrease in distribution-related project work, primarily due to regulatory effects.

Previous wording

Oil and Gas Segment. Oil and Gas revenue was $572 million for the three month period ended June 30, 2024, as compared with $342 million for the same period in 2023, an increase of $231 million, or 67%, due primarily to higher levels of project activity, including from increased demand and project timing-related increases in large-diameter and midstream project activity due to improved market and regulatory conditions, partially offset by a reduction in pipeline integrity services.

Current wording

Oil and Gas Segment. Oil and Gas revenue was $498 million for the three month period ended September 30, 2024, as compared with $672 million for the same period in 2023, a decrease of $174 million, or 26%, due primarily to lower levels of project activity, including from large-diameter project activity and pipeline integrity services, offset, in part, by an increase in midstream project activity due to improved market conditions.

Previous wording

Costs of revenue, excluding depreciation and amortization. Costs of revenue, excluding depreciation and amortization, increased by approximately $76 million, or 2%, to $4,920 million for the six month period ended June 30, 2024 from $4,844 million for the same period in 2023. Higher levels of revenue contributed an increase of $168 million in costs of revenue, excluding depreciation and amortization, whereas improved productivity resulted in a decrease of approximately $92 million. Costs of revenue, excluding depreciation and amortization, as a percentage of revenue decreased by approximately 160 basis points to 87.1% of revenue for the six month period ended June 30, 2024 from 88.7% of revenue for the same period in 2023. The basis point decrease was due to a combination of improved project efficiencies and project mix, primarily within our Oil and Gas and Clean Energy and Infrastructure segments, and the positive effects of certain project close-outs, offset, in part, by reduced productivity from the effects of certain overhead costs incurred to maintain operating capacity in support of expected future project work. See “Analysis of EBITDA by Segment” below for discussion of operating capacity effects by segment.

Current wording

Costs of revenue, excluding depreciation and amortization. Costs of revenue, excluding depreciation and amortization, decreased by approximately $68 million, or 2%, to $2,789 million for the three month period ended September 30, 2024 from $2,857 million for the same period in 2023. Lower levels of revenue contributed a decrease of $4 million in costs of revenue, excluding depreciation and amortization, and improved productivity resulted in a decrease of approximately $64 million. Costs of revenue, excluding depreciation and amortization, as a percentage of revenue decreased by approximately 200 basis points to 85.8% of revenue for the three month period ended September 30, 2024 from 87.7% of revenue for the same period in 2023. The basis point decrease was due to a combination of improved project efficiencies and project mix, primarily within our Oil and Gas and Clean Energy and Infrastructure segments, and the positive effects of certain project close-outs, offset, in part, by the effects of certain overhead costs incurred to maintain operating capacity in support of expected future project work. See “Analysis of EBITDA by Segment” below for discussion of operating capacity effects by segment.

Previous wording

Amortization of intangible assets. Amortization of intangible assets was $34 million, or 1.1% of revenue, for the three month period ended June 30, 2024, as compared with $42 million, or 1.5% of revenue, for the same period in 2023, a decrease of approximately $8 million, or 20%, due to a combination of the effects of timing of amortization for certain assets and the completion of amortization for certain intangible assets associated with prior year acquisitions. As a percentage of revenue, amortization of intangible assets decreased by approximately 30 basis points as compared with the same period in 2023.

Current wording

Amortization of intangible assets. Amortization of intangible assets was $34 million, or 1.1% of revenue, for the three month period ended September 30, 2024, as compared with $42 million, or 1.3% of revenue, for the same period in 2023, a decrease of approximately $8 million, or 19%, due to a combination of the effects of timing of amortization for certain assets and the completion of amortization for certain intangible assets associated with prior year acquisitions. As a percentage of revenue, amortization of intangible assets decreased by approximately 20 basis points as compared with the same period in 2023.

Previous wording

General and administrative expenses. General and administrative expenses totaled $167 million, or 5.6% of revenue, for the three month period ended June 30, 2024, as compared with $176 million, or 6.1% of revenue, for the same period in 2023, a decrease of approximately $9 million, or 5%. The decrease in general and administrative expenses was primarily due to a $20 million reduction in acquisition and integration costs, an increase in gains on sales of assets, net, and a decrease in various administrative costs, including information technology expenses, offset, in part, by increases in compensation and the effects of timing of ordinary course legal matters. Overall, general and administrative expenses decreased by approximately 50 basis points as a percentage of revenue for the three month period ended June 30, 2024 as compared with the same period in 2023.

Current wording

General and administrative expenses. General and administrative expenses totaled $169 million, or 5.2% of revenue, for the three month period ended September 30, 2024, as compared with $181 million, or 5.5% of revenue, for the same period in 2023, a decrease of approximately $12 million, or 7%. The decrease in general and administrative expenses was primarily due to a reduction of $18 million in acquisition and integration costs, an increase in gains on sales of assets, net, and a decrease in various administrative costs, including information technology expenses, offset, in part, by an increase in compensation expense and the effects of timing of ordinary course legal matters. Overall, general and administrative expenses decreased by approximately 40 basis points as a percentage of revenue for the three month period ended September 30, 2024 as compared with the same period in 2023.

Previous wording

Interest expense, net. Interest expense, net of interest income, was approximately $51 million, or 1.7% of revenue, for the three month period ended June 30, 2024, as compared with approximately $59 million, or 2.1% of revenue, for the same period in 2023, a decrease of approximately $9 million, or 15%. The decrease in interest expense, net, was primarily due to a reduction in our variable rate debt outstanding under our credit facility and term loans, offset, in part, by an increase in interest expense from our 5.900% Senior Notes and accounts receivable financing arrangements.

Current wording

Interest expense, net. Interest expense, net of interest income, was approximately $47 million, or 1.4% of revenue, for the three month period ended September 30, 2024, as compared with approximately $63 million, or 1.9% of revenue, for the same period in 2023, a decrease of approximately $16 million, or 25%. The decrease in interest expense, net, was primarily due to a reduction in our variable rate debt outstanding under our credit facility and term loans, offset, in part, by an increase in interest expense from our 5.900% Senior Notes and accounts receivable financing arrangements.

Previous wording

Equity in earnings of unconsolidated affiliates, net. Equity in earnings or losses of unconsolidated affiliates includes our share of income or losses from equity method investments. For the three month periods ended June 30, 2024 and 2023, equity in earnings from unconsolidated affiliates, net, totaled approximately $6 million and $7 million, respectively, and related primarily to our investments in the Waha JVs.

Current wording

Equity in earnings of unconsolidated affiliates, net. Equity in earnings or losses of unconsolidated affiliates includes our share of income or losses from equity method investments. For both the three month periods ended September 30, 2024 and 2023, equity in earnings from unconsolidated affiliates, net, totaled approximately $7 million, and related primarily to our investments in the Waha JVs.

Previous wording

Other income, net. Other income, net, was $1 million for the three month period ended June 30, 2024, as compared with $4 million for the same period in 2023. For the three month period ended June 30, 2024, other income, net, included approximately $4 million of expense, net, from changes to estimated Earn-out accruals, offset by other miscellaneous income, net, including from legal and other settlements. The three month period ended June 30, 2023 included approximately $2 million of income, net, from changes to estimated Earn-out accruals, as well as other miscellaneous income, net.

Current wording

Other expense (income), net. Other expense, net, was $3 million for the three month period ended September 30, 2024, as compared with $17 million of other income, net for the same period in 2023. For the three month period ended September 30, 2024, other expense, net, included approximately $2 million of expense, net, from changes to estimated Earn-out accruals and approximately $2 million of expense, net, from the changes in the fair value of additional contingent payments to former owners of an acquired business, offset, in part, by other miscellaneous income, net, including from legal and other settlements. For the three month period ended September 30, 2023, other income, net, included approximately $5 million of income, net, from changes to estimated Earn-out accruals, and $7 million of other miscellaneous income, net, including from insurance and other settlements, $7 million of income from changes in the fair value of additional contingent payments to the former owners of an acquired business and approximately $3 million of impairment losses on an investment.

Previous wording

Provision for income taxes. Income tax expense was $19 million for the three month period ended June 30, 2024, as compared with $3 million for the same period in 2023. Pre-tax income totaled $63 million for the three month period ended June 30, 2024, as compared with $20 million for the same period in 2023. For the three month period ended June 30, 2024, our effective tax rate was 30.7% as compared with 14.9% for the same period in 2023. Our effective tax rate in the second quarter of 2024 included the effect of an increase in non-deductible expenses whereas the same period in 2023 included the benefit from certain prior period tax return adjustments.

Current wording

Provision for income taxes. Income tax expense was $32 million for the three month period ended September 30, 2024, as compared with $8 million for the same period in 2023. Pre-tax income totaled $137 million for the three month period ended September 30, 2024, as compared with $23 million for the same period in 2023. For the three month period ended September 30, 2024, our effective tax rate was 23.0% as compared with 33.1% for the same period in 2023. Our effective tax rate in the third quarter of 2024 included the effect of a lower state income tax rate partially offset by an increase in non-deductible expenses whereas the same period in 2023 included a benefit of approximately $4 million related to certain prior period tax return adjustments.

Previous wording

Clean Energy and Infrastructure Segment. EBITDA for our Clean Energy and Infrastructure segment was $47 million, or 5.0% of revenue, for the three month period ended June 30, 2024, as compared with $33 million, or 3.4% of revenue for the same period in 2023, an increase in EBITDA of approximately $14 million, or 43%. As a percentage of revenue, EBITDA increased by approximately 160 basis points, or $15 million, due to a combination of improved productivity and a reduction of approximately $16 million in certain acquisition and integration costs, offset, in part, by the effects of certain overhead costs incurred to maintain operating capacity in support of expected future project work. Lower levels of revenue resulted in a decrease in EBITDA of approximately $1 million.

Current wording

Clean Energy and Infrastructure Segment. EBITDA for our Clean Energy and Infrastructure segment was $85 million, or 7.5% of revenue, for the three month period ended September 30, 2024, as compared with $42 million, or 3.9% of revenue, for the same period in 2023, an increase in EBITDA of approximately $43 million, or 100%. As a percentage of revenue, EBITDA increased by approximately 360 basis points, or $41 million, due to a combination of improved productivity and efficiencies, including from certain renewable, industrial and infrastructure project work, and a reduction of approximately $15 million in certain acquisition and integration costs, offset, in part, by the effects of certain overhead costs incurred to maintain operating capacity in support of expected future project work. Higher levels of revenue resulted in an increase in EBITDA of approximately $1 million.

Previous wording

Power Delivery Segment. EBITDA for our Power Delivery segment was $51 million, or 8.1% of revenue, for the three month period ended June 30, 2024, as compared with EBITDA of $57 million, or 8.1% of revenue for the same period in 2023, a decrease in EBITDA of approximately $6 million, or 10%. As a percentage of revenue, EBITDA was flat and lower levels of revenue resulted in a decrease in EBITDA of approximately $5 million.

Current wording

Power Delivery Segment. EBITDA for our Power Delivery segment was $55 million, or 7.6% of revenue, for the three month period ended September 30, 2024, as compared with EBITDA of $57 million, or 8.5% of revenue, for the same period in 2023, a decrease in EBITDA of approximately $2 million, or 4%. As a percentage of revenue, EBITDA decreased by 80 basis points, or $6 million, primarily due to timing and mix of project activity, and effects of certain overhead costs incurred to maintain operating capacity in support of expected future project work, including due to regulatory effects, whereas higher levels of revenue resulted in an increase in EBITDA of approximately $4 million.

Previous wording

Oil and Gas Segment. EBITDA for our Oil and Gas segment was $228 million or 18.9% of revenue, for the six month period ended June 30, 2024, as compared with $92 million, or 15.3% of revenue for the same period in 2023, an increase in EBITDA of $136 million, or 149%. As a percentage of revenue, EBITDA increased by approximately 360 basis points, or $43 million, due primarily to improved productivity, including as a result of improved operating leverage from higher levels of revenue and project efficiencies, as well as the effects of project mix. Higher levels of revenue contributed an increase in EBITDA of approximately $93 million.

Current wording

Oil and Gas Segment. EBITDA for our Oil and Gas segment was $103 million, or 20.7% of revenue, for the three month period ended September 30, 2024, as compared with $97 million, or 14.5% of revenue, for the same period in 2023, an increase in EBITDA of $6 million, or 6%. As a percentage of revenue, EBITDA increased by approximately 620 basis points, or $31 million, due primarily to improved project efficiencies, as well as the effects of project mix. Lower levels of revenue contributed a decrease in EBITDA of approximately $25 million.

Previous wording

Other Segment. EBITDA from Other businesses totaled approximately $3 million and $7 million for the three month periods ended June 30, 2024 and 2023, respectively. EBITDA from Other businesses relates primarily to equity in earnings from our investments in the Waha JVs, offset, in part, by losses from other businesses and investments.

Current wording

Other Segment. EBITDA from Other businesses totaled approximately $7 million and $4 million for the three month periods ended September 30, 2024 and 2023, respectively. EBITDA from Other businesses relates primarily to equity in earnings from our investments in the Waha JVs, offset, in part, by losses from other businesses and investments.

Previous wording

Corporate. Corporate EBITDA was negative $69 million for the three month period ended June 30, 2024, as compared with EBITDA of negative $39 million for the same period in 2023, for a decrease in EBITDA of approximately $30 million. For the three month period ended June 30, 2024, Corporate EBITDA included approximately $11 million of a loss on debt extinguishment and $4 million of expense, net, from changes to estimated Earn-out accruals. For the three month period ended June 30, 2023, Corporate EBITDA included approximately $2 million of income, net from changes to estimated Earn-out accruals. Corporate expenses for the three month period ended June 30, 2024 not related to the above-described items increased by approximately $13 million as compared with the same period in 2023, due primarily to increases in information technology and other administrative expenses as well as the effects of timing of ordinary course legal and other settlement matters.

Current wording

Corporate. Corporate EBITDA was negative $58 million for the three month period ended September 30, 2024, as compared with EBITDA of negative $31 million for the same period in 2023, for a decrease in EBITDA of approximately $27 million. For the three month period ended September 30, 2024, Corporate EBITDA included approximately $2 million of expense, net, from changes to estimated Earn-out accruals and approximately $2 million of expense, net, from the changes in the fair value of additional contingent payments to former owners of an acquired business. For the three month period ended September 30, 2023, Corporate EBITDA included approximately $5 million of income, net from changes to estimated Earn-out accruals and $7 million of income from changes in the fair value of additional contingent payments to former owners of an acquired business. Corporate expenses for the three month period ended September 30, 2024 not related to the above-described items increased by approximately $11 million as compared with the same period in 2023, due primarily to the effects of timing of ordinary course legal and other settlement matters and other administrative expenses.

Previous wording

Six Months Ended June 30, 2024 Compared to Six Months Ended June 30, 2023

Current wording

Nine Months Ended September 30, 2024 Compared to Nine Months Ended September 30, 2023

Previous wording

Revenue. For the three month period ended June 30, 2024, consolidated revenue totaled $2,961 million as compared with $2,874 million for the same period in 2023, an increase of approximately $87 million, or 3%. Revenue in our Oil and Gas segment increased by approximately $231 million, or 67%, whereas revenue decreased in our Power Delivery segment by approximately $66 million, or 9%, in our Communications segment by approximately $44 million, or 5%, and in our Clean Energy and Infrastructure segment by approximately$27 million, or 3%. See below for details of revenue by segment.

Current wording

Revenue. For the nine month period ended September 30, 2024, consolidated revenue totaled $8,900 million as compared with $8,716 million for the same period in 2023, an increase of approximately $185 million, or 2%. Revenue in our Oil and Gas segment increased by approximately $433 million, or 34%, whereas revenue decreased in our Power Delivery segment by approximately $157 million, or 8%, in our Clean Energy and Infrastructure segment by approximately $60 million, or 2%, and in our Communications segment by approximately $15 million, or 1%. See below for details of revenue by segment.

Previous wording

Communications Segment. Communications revenue was $1,558 million for the six month period ended June 30, 2024, as compared with $1,675 million for the same period in 2023, a decrease of $118 million, or 7%. The decrease in revenue was driven primarily by lower levels of wireless, wireline and install-to-the-home project activity due, in part, to customer project timing in our wireless and wireline businesses and, for our install-to-the-home activities, changes in consumer behavior resulting in lower demand. These decreases were offset, in part, by an increase in utility project work.

Current wording

Communications Segment. Communications revenue was $2,485 million for the nine month period ended September 30, 2024, as compared with $2,500 million for the same period in 2023, a decrease of $15 million, or 1%. The decrease in revenue was driven primarily by lower levels of wireline and install-to-the-home project activity due, in part, to customer project timing in our wireline business and, for our install-to-the-home activities, changes in consumer behavior resulting in lower demand. These decreases were offset, in part, by an increase in wireless and utility project work.

Previous wording

Clean Energy and Infrastructure Segment. Clean Energy and Infrastructure revenue was $1,696 million for the six month period ended June 30, 2024, as compared with $1,795 million for the same period in 2023, a decrease of $99 million, or 6%, due primarily to lower levels of renewable and certain industrial and other infrastructure project work, offset, in part, by higher levels of heavy civil project activity, due to various factors affecting timing of project work.

Current wording

Clean Energy and Infrastructure Segment. Clean Energy and Infrastructure revenue was $2,834 million for the nine month period ended September 30, 2024, as compared with $2,895 million for the same period in 2023, a decrease of $60 million, or 2%, due primarily to lower levels of renewable project work, due to various factors affecting timing of project work offset, in part, by higher levels of other infrastructure project work and heavy civil project activity.

Previous wording

Power Delivery Segment. Power Delivery revenue was $637 million for the three month period ended June 30, 2024, as compared with $703 million for the same period in 2023, a decrease of $66 million, or 9%. The decrease in revenue was primarily due to lower levels of project activity, including timing-related decreases in transmission and distribution-related project work, primarily due to regulatory effects, offset, in part, by an increase in substation-related project activity.

Current wording

Power Delivery Segment. Power Delivery revenue was $1,920 million for the nine month period ended September 30, 2024, as compared with $2,077 million for the same period in 2023, a decrease of $157 million, or 8%. Acquisitions contributed $11 million of revenue for the nine month period ended September 30, 2024, whereas organic revenue decreased by approximately $168 million, as compared with the same period in 2023, due primarily to lower levels of project activity in distribution-related project work, including due to regulatory effects, offset, in part, by an increase in transmission and substation-related project activity.

Previous wording

Oil and Gas Segment. Oil and Gas revenue was $1,206 million for the six month period ended June 30, 2024, as compared with $598 million for the same period in 2023, an increase of $608 million, or 102%, due primarily to higher levels of project activity, including from increased demand and project timing-related increases in large-diameter and midstream project activity due to improved market and regulatory conditions, offset, in part, by a reduction in pipeline integrity services.

Current wording

Oil and Gas Segment. Oil and Gas revenue was $1,704 million for the nine month period ended September 30, 2024, as compared with $1,271 million for the same period in 2023, an increase of $433 million, or 34%, due primarily to higher levels of project activity, including from project timing-related increases in large-diameter and midstream project activity due to improved market and regulatory conditions, offset, in part, by a reduction in pipeline integrity services and other infrastructure-related work.

Previous wording

Costs of revenue, excluding depreciation and amortization. Costs of revenue, excluding depreciation and amortization, increased by approximately $56 million, or 2%, to $2,540 million for the three month period ended June 30, 2024 from $2,485 million for the same period in 2023. Higher levels of revenue contributed an increase of $75 million in costs of revenue, excluding depreciation and amortization, whereas improved productivity resulted in a decrease of approximately $20 million. Costs of revenue, excluding depreciation and amortization, as a percentage of revenue decreased by approximately 70 basis points to 85.8% of revenue for the three month period ended June 30, 2024 from 86.5% of revenue for the same period in 2023. The basis point decrease was due to a combination of improved project efficiencies and project mix, primarily within our Oil and Gas and Clean Energy and Infrastructure segments, and the positive effects of certain project close-outs, offset, in part, by reduced productivity from the effects of certain overhead costs incurred to maintain operating capacity in support of expected future project work. See “Analysis of EBITDA by Segment” below for discussion of operating capacity effects by segment.

Current wording

Costs of revenue, excluding depreciation and amortization. Costs of revenue, excluding depreciation and amortization, increased by approximately $8 million, or 0.1%, to $7,709 million for the nine month period ended September 30, 2024 from $7,701 million for the same period in 2023. Higher levels of revenue contributed an increase of $163 million in costs of revenue, excluding depreciation and amortization, whereas improved productivity resulted in a decrease of approximately $155 million. Costs of revenue, excluding depreciation and amortization, as a percentage of revenue decreased by approximately 170 basis points to 86.6% of revenue for the nine month period ended September 30, 2024 from 88.4% of revenue for the same period in 2023. The basis point decrease was due to a combination of improved project efficiencies and project mix, primarily within our Oil and Gas and Clean Energy and Infrastructure segments, and the positive effects of certain project close-outs, offset, in part, by reduced productivity from the effects of certain overhead costs incurred to maintain operating capacity in support of expected future project work. See “Analysis of EBITDA by Segment” below for discussion of operating capacity effects by segment.

Previous wording

Amortization of intangible assets. Amortization of intangible assets was $67 million, or 1.2% of revenue, for the six month period ended June 30, 2024, as compared with $84 million, or 1.5% of revenue, for the same period in 2023, a decrease of approximately $17 million, or 20%, due to a combination of the effects of timing of amortization for certain assets and the completion of amortization for certain intangible assets associated with prior year acquisitions. As a percentage of revenue, amortization of intangible assets decreased by approximately 30 basis points as compared with the same period in 2023.

Current wording

Amortization of intangible assets. Amortization of intangible assets was $102 million, or 1.1% of revenue, for the nine month period ended September 30, 2024, as compared with $126 million, or 1.4% of revenue, for the same period in 2023, a decrease of approximately $25 million, or 19%, due to a combination of the effects of timing of amortization for certain assets and the completion of amortization for certain intangible assets associated with prior year acquisitions. As a percentage of revenue, amortization of intangible assets decreased by approximately 30 basis points as compared with the same period in 2023.

Previous wording

General and administrative expenses. General and administrative expenses totaled $333 million, or 5.9% of revenue, for the six month period ended June 30, 2024, as compared with $340 million, or 6.2% of revenue, for the same period in 2023, a decrease of approximately $7 million, or 2%. The decrease in general and administrative expenses was primarily due to a $35 million reduction in acquisition and integration costs, an increase in gains on sales of assets, net, and a decrease in various administrative costs, including information technology expenses, offset, in part, by an increase in the provision for credit losses, increases in compensation and the effects of timing of ordinary course legal and other settlement matters. Overall, general and administrative expenses decreased by approximately 30 basis points as a percentage of revenue for the six month period ended June 30, 2024 as compared with the same period in 2023.

Current wording

General and administrative expenses. General and administrative expenses totaled $501 million, or 5.6% of revenue, for the nine month period ended September 30, 2024, as compared with $521 million, or 6.0% of revenue, for the same period in 2023, a decrease of approximately $19 million, or 4%. The decrease in general and administrative expenses was primarily due to a $53 million reduction in acquisition and integration costs, an increase in gains on sales of assets, net, and a decrease in various administrative costs, including information technology expenses, offset, in part, by an increase in compensation expense, the provision for credit losses, an increase in other administrative expenses, and the effects of timing of ordinary course legal matters. Overall, general and administrative expenses decreased by approximately 30 basis points as a percentage of revenue for the nine month period ended September 30, 2024 as compared with the same period in 2023.

Previous wording

Interest expense, net. Interest expense, net of interest income, was approximately $103 million, or 1.8% of revenue, for the six month period ended June 30, 2024, as compared with approximately $112 million, or 2.1% of revenue, for the same period in 2023, a decrease of approximately $9 million, or 8%. The decrease in interest expense, net, was primarily due to a reduction in our variable rate debt outstanding under our credit facility and term loans, offset, in part, by an increase in interest expense from our 5.900% Senior Notes and accounts receivable financing arrangements.

Current wording

Interest expense, net. Interest expense, net of interest income, was approximately $150 million, or 1.7% of revenue, for the nine month period ended September 30, 2024, as compared with approximately $175 million, or 2.0% of revenue, for the same period in 2023, a decrease of approximately $25 million, or 14%. The decrease in interest expense, net, was primarily due to a reduction in our variable rate debt outstanding under our credit facility and term loans, offset, in part, by an increase in interest expense from our 5.900% Senior Notes and accounts receivable financing arrangements.

Previous wording

Equity in earnings of unconsolidated affiliates, net. For the six month periods ended June 30, 2024 and 2023, equity in earnings from unconsolidated affiliates, net, totaled approximately $15 million and $17 million, respectively, and related primarily to our investments in the Waha JVs.

Current wording

Equity in earnings of unconsolidated affiliates, net. For the nine month periods ended September 30, 2024 and 2023, equity in earnings from unconsolidated affiliates, net, totaled approximately $22 million and $23 million, respectively, and related primarily to our investments in the Waha JVs.

Previous wording

Loss on extinguishment of debt. We incurred a loss on debt extinguishment of approximately $11 million for the three month period ended June 30, 2024 in connection with the second quarter 2024 repayment of our 6.625% IEA Senior Notes and Three-Year Term Loan Facility.

Current wording

Loss on extinguishment of debt. We incurred a loss on debt extinguishment of approximately $11 million for the nine month period ended September 30, 2024 in connection with the second quarter 2024 repayment of our 6.625% IEA Senior Notes and Three-Year Term Loan Facility.

Previous wording

Other expense (income), net. Other expense, net, was $2 million for the six month period ended June 30, 2024, as compared with $10 million of other income, net, for the same period in 2023. For the six month period ended June 30, 2024, other expense, net, included approximately $2 million of income, net, from changes to estimated Earn-out accruals, approximately$10 million of asset impairment and other valuation adjustments related to certain fixed assets and approximately $6 million of other miscellaneous income, net, including from legal and other settlements. For the six month period ended June 30, 2023, other income, net, included approximately $2 million of income, net, from changes to estimated Earn-out accruals, approximately $3 million of income from the final settlement and expiration of certain warrants related to the acquisition of IEA and approximately $5 million of other miscellaneous income, including from legal and other settlements.

Current wording

Other expense (income), net. Other expense, net, was $5 million for the nine month period ended September 30, 2024, as compared with $26 million of other income, net, for the same period in 2023. For the nine month period ended September 30, 2024, other expense, net, included approximately $3 million of expense, net, from the changes in the fair value of additional contingent payments to former owners of an acquired business and approximately$10 million of asset impairment and other valuation adjustments related to certain fixed assets, offset, in part, by approximately $6 million of other miscellaneous income, net, including from legal and other settlements. For the nine month period ended September 30, 2023, other income, net, included approximately $7 million of income, net, from changes to estimated Earn-out accruals, approximately $3 million of income from the final settlement and expiration of certain warrants related to the acquisition of Infrastructure and Energy Alternatives, Inc. (“IEA”), approximately $19 million of other miscellaneous income, including from insurance and other settlements, and approximately $2 million of income from changes in the fair value of additional contingent payments to former owners of an acquired business, offset, in part, by approximately $3 million of impairment losses on an investment.

Previous wording

(Provision for) benefit from income taxes. Income tax expense was $8 million for the six month period ended June 30, 2024, as compared with $42 million of income tax benefit for the same period in 2023. Pre-tax income totaled $18 million for the six month period ended June 30, 2024, as compared with $106 million of pre-tax losses for the same period in 2023. For the six month period ended June 30, 2024, our effective tax rate was 47.0% as compared with 39.6% for the same period in 2023. Our effective tax rate for the six month periods ended June 30, 2024 and 2023 included the effect of an increase in non-deductible expenses and for the six month period ended June 30, 2023, our effective tax rate also included a net tax benefit of approximately $9 million from share-based payment awards and a benefit from certain prior period tax return adjustments.

Current wording

(Provision for) benefit from income taxes. Income tax expense was $40 million for the nine month period ended September 30, 2024, as compared with $34 million of income tax benefit for the same period in 2023. Pre-tax income totaled $155 million for the nine month period ended September 30, 2024, as compared with $83 million of pre-tax losses for the same period in 2023. For the nine month period ended September 30, 2024, our effective tax rate was 25.8% as compared with 41.4% for the same period in 2023. Our effective tax rate for both the nine month periods ended September 30, 2024 and 2023 included the effect of a lower state income tax rate partially offset by an increase in non-deductible expenses, whereas for the nine month period ended September 30, 2023, our effective tax rate also included a net tax benefit of approximately $9 million from share-based payment awards and a benefit of approximately $6 million related to certain prior period tax return adjustments.

Previous wording

Clean Energy and Infrastructure Segment. EBITDA for our Clean Energy and Infrastructure segment was $68 million, or 4.0% of revenue, for the six month period ended June 30, 2024, as compared with $39 million, or 2.1% of revenue, for the same period in 2023, an increase in EBITDA of approximately $29 million, or 76%. As a percentage of revenue, EBITDA increased by approximately 190 basis points, or $31 million, due to a combination of improved productivity and a reduction of approximately $22 million in certain acquisition and integration costs, offset, in part, by the effects of certain overhead costs incurred to maintain operating capacity in support of expected future project work. Lower levels of revenue resulted in a decrease in EBITDA of approximately $2 million.

Current wording

Clean Energy and Infrastructure Segment. EBITDA for our Clean Energy and Infrastructure segment was $153 million, or 5.4% of revenue, for the nine month period ended September 30, 2024, as compared with $81 million, or 2.8% of revenue, for the same period in 2023, an increase in EBITDA of approximately $72 million, or 89%. As a percentage of revenue, EBITDA increased by approximately 260 basis points, or $74 million, due to a combination of improved productivity and efficiencies, including from certain renewable, industrial and infrastructure project work, and a reduction of approximately $37 million in certain acquisition and integration costs, offset, in part, by the effects of certain overhead costs incurred to maintain operating capacity in support of expected future project work. Lower levels of revenue resulted in a decrease in EBITDA of approximately $2 million.

Previous wording

Power Delivery Segment. EBITDA for our Power Delivery segment was $79 million, or 6.5% of revenue, for the six month period ended June 30, 2024, as compared with EBITDA of $105 million, or 7.4% of revenue, for the same period in 2023, a decrease in EBITDA of approximately $26 million, or 25%. As a percentage of revenue, EBITDA decreased by approximately 90 basis points, or $11 million, due to a combination of reduced project efficiencies, including from the effects of certain overhead costs incurred to maintain operating capacity in support of expected future project work, project mix and a reduction in emergency restoration services, offset, in part, by a reduction of approximately $2 million in certain acquisition and integration costs. Lower levels of revenue resulted in a decrease in EBITDA of approximately $15 million.

Current wording

Power Delivery Segment. EBITDA for our Power Delivery segment was $133 million, or 6.9% of revenue, for the nine month period ended September 30, 2024, as compared with EBITDA of $161 million, or 7.8% of revenue, for the same period in 2023, a decrease in EBITDA of approximately $28 million, or 17%. As a percentage of revenue, EBITDA decreased by approximately 80 basis points, or $16 million, due to a combination of reduced project efficiencies and mix, including from the effects of certain overhead costs incurred to maintain operating capacity in support of expected future project work, including due to regulatory effects, offset, in part, by a reduction of approximately $3 million in certain acquisition and integration costs. Lower levels of revenue resulted in a decrease in EBITDA of approximately $12 million.

Previous wording

Oil and Gas Segment. EBITDA for our Oil and Gas segment was $135 million, or 23.6% of revenue for the three month period ended June 30, 2024, as compared with $77 million, or 22.5% of revenue for the same period in 2023, an increase in EBITDA of $58 million, or 75%. As a percentage of revenue, EBITDA increased by approximately 110 basis points, or $6 million, due primarily to improved productivity, including as a result of improved operating leverage from higher levels of revenue and project efficiencies, as well as the effects of project mix. Higher levels of revenue contributed an increase in EBITDA of approximately $52 million.

Current wording

Oil and Gas Segment. EBITDA for our Oil and Gas segment was $331 million or 19.4% of revenue, for the nine month period ended September 30, 2024, as compared with $189 million, or 14.9% of revenue, for the same period in 2023, an increase in EBITDA of $142 million, or 75%. As a percentage of revenue, EBITDA increased by approximately 460 basis points, or $78 million, due primarily to improved productivity, as well as the effects of project mix. Higher levels of revenue contributed an increase in EBITDA of approximately $64 million.