Welcome to MasTec's Second Quarter 2019 Earnings Conference Call, initially broadcast on August 2, 2019. Let me remind participants that today's call is being recorded. At this time, I would like to turn the call over to Marc Lewis, MasTec's Vice President of Investor Relations. Marc?

Thanks, Savanna. Good morning, everyone. Welcome to MasTec's second quarter 2019 earnings conference call. The following statement is made pursuant to the Safe Harbor for forward-looking statements described in the Private Securities Litigation Reform Act of 1995. In these communications, we may make certain statements that are forward-looking such as statements regarding MasTec's future results, plans and anticipated trends in the industries where we operate. These forward-looking statements are the company's expectations of the day of the initial broadcast of this conference call and the company does not undertake to update these expectations based on subsequent events or knowledge. Various risks, uncertainties and assumptions are detailed in our press releases and filings with the Securities and Exchange Commission. Should one or more of these risk or uncertainties materialize or should any of our underlying assumptions prove incorrect actual results may actually differ significantly from results expressed or implied in these communications. In today's remarks by management, we will be discussing adjusted financial metrics as discussed and reconciled in yesterday's press release and supporting schedules. In addition, we may use certain non-GAAP financial measures in this conference call. A reconciliation of any non-GAAP financial measures not reconciled in these comments to the most comparable GAAP financial measure can be found in our earnings press release, our 10-Q or in the posted PowerPoint presentation located in the Investors and News section of our website located at mastec.com. With us today, we have Jose Mas, Chief Executive Officer; and George Pita, our Executive Vice President and CFO. The format of the call will be opening remarks and analysis by Jose followed by a financial review from George. These discussions will be followed by question and answer period and we expect the call to last for about 60 minutes. We had another great quarter and have a lot of important things to talk about today. So I'll turn the call over to Jose. Jose?

Thanks, Marc. Good morning and welcome to MasTec's 2019 second quarter call. Today, I'll be reviewing our second quarter results as well as providing my outlook for the markets we serve. First, some second quarter highlights. Revenue for the quarter was by $1.939 billion, a 20% increase versus last year's second quarter. Adjusted EBITDA was $241 million a 26% increase versus last year's second quarter. Adjusted earnings per share was $1.60, a 54% increase versus last year’s second quarter. Cash flow from operations was roughly $400 million and backlog at quarter end was $7.8 billion. In summary, we had another excellent quarter. For me the most exciting thing about this quarter is that it could have been even better and more importantly what this quarter says about our future. While our Oil & Gas segment had another very strong quarter our Power Generation and Transmission segments performed above the expectations. We are very excited about our prospects in both of those segments and expect them to continue to grow in both revenues and earnings. We believe those two segments have considerable growth opportunities and will be a much larger portion of MasTec’s revenue overtime. We’re also very excited about our opportunities in the communication segment. In 2015 we spoke a lot about our expected growth in the pipeline market, and the significant investments we were making to prepare ourselves to be a market leader in that segment for years to come. What we are doing today and communications is reminiscent of that exact opportunity. Today, we are investing in people, equipment and relationships to take advantage of what we believe will be a significant increase in work activity related to the deployment of 5G. While we would obviously love to see growth in revenues and earnings faster, our wireline and…

Thanks, Jose, and good morning, everyone. Today I'll cover second quarter financial results, including cash flow, liquidity and capital structure, as well as our increased guidance expectation for 2019. As Marc indicated at the beginning of the call, our discussion of financial results and guidance will include non-GAAP adjusted earnings and adjusted EBITDA. Reconciliation and details of non-GAAP measures can be found in our press release, on our website, or in our SEC filings. Here are a few highlights regarding our second quarter 2019 performance. In summary, we had better than expected second quarter 2019 results across all measures. And this strong momentum is affording us the opportunity to raise our 2019 guidance expectation to new record levels. On the balance sheet side, we had record second quarter cash flow from operations and $287 million in net debt reduction from ordinary course cash collections. We ended the second quarter with our day sales outstanding net of BIEC or DSOs at 77 days, a normal level within the targeted range for our business. And we continue to expect record cash flow from operations for the annual 2019 period. On the income statement side, second quarter revenue, adjusted EBITDA and adjusted diluted earnings per share all significantly exceeded our expectation. Second quarter 2019 revenue of $1.94 billion increased 20% from last year's level, with growth in all segments. Second quarter revenue exceeded our expectations by approximately $140 million. Second quarter 2019 adjusted EBITDA was approximately $241 million, or 12.4% of revenue, representing the largest second quarter adjusted EBITDA level in MasTec history. This performance level exceeded second quarter 2018 levels by approximately $50 million or 26%. Adjusted EBITDA also exceeded our expectation by approximately $41 million and adjusted EBITDA margin rate of 12.4% of revenue exceeded our expectation by 130 basis points.…

[Operator Instructions] And we will take our first question from Jamie Cook with Credit Suisse. Please go ahead.

Hi, good morning, and congratulations on a nice quarter. My first question, Jose, on the Oil & Gas business. The margins obviously have been much better than people expected. You talked about some awards you want post the quarter close. So how do we think about backlog as you sort of exit 2019 in Oil & Gas? And what's the margin trajectory given what we've seen so far, and just the tightness in the market? And then my second question, I guess, I would say is on the Communication side, obviously long-term fundamentals look very positive there, the margins have been a little lower this year because of investments. So, how do we think about that investment unwind in 2020 or will that continue to be a weigh down the margins a bit? Thank you.

Sure. So on the Oil & Gas side, I think we've been outperforming for a series of quarters. And, George alluded to the fact that, we're kind of upping our full year margin guidance. If you look at the first half margins this year, we're at about 18.4%, if you take the implied guidance, we're talking about having a full year of -- in the 16%, 17% range. So as we think about second half, what really drives that is the percentage of work that we're doing in cost plus versus the other type of work that we're doing. We expect margin profiles to hold steady, we think the only thing that will really move that is what percentage of cost plus work we're doing at any given time, which is slightly less margin. So if you think about second half, the upside for us is, can we -- how much is cost plus bring, we've taken conservative views on that in the second half. So if we have upside in the second half of the year it’s probably going to be in outperformance of Oil & Gas margins. But more importantly to the question, I think when you think about 2020, and 2021, we think we're going to be able to deliver on the same type of margin profile. The business is good…

As 2019?

As 2019, yes.

Okay. And what's the revenue trajectory, when we think of 2020, just given how strong the growth has been?

Look, we're not ready to guide for 2020 yet, I don't think you're going to see a significant reduction in revenues next year. But I think it's kind of early right now, we talked about being somewhat fully committed for 2020. A lot happens between now and then. So things change, things get better, some projects get delayed. So it's too early for us to guide for 2020. But generally speaking, it's shaping up to be another great year, with a similar margin profile as to what we're experiencing in 2019.

Well, great.

For your Communications question, I mean, obviously, if you go back the last few years, we've been trending anywhere from 10% to 12% from a Communication margin profile, we know that we have 200 basis points of margin improvement that we think we're going to realize in the near-term as early as 2020. So our expectation is margins are going to improve in 2020. We think we're making all the investments today to make that happen. We believe that during this cycle, we have a chance of hitting peak margins from a historical level, not in 2020, but over -- throughout the cycle. And we think we're well positioned and again we would all love to see it come sooner. But I think when you look at what's happening from a macro perspective, it's coming. And we have to be patient, we have to make the right investments, and then I think we’ll benefit from it. I said it in this in the prepared remarks and I really believe it. I feel, we talked a lot about in 2015 as to what we thought what was going to happen in the pipeline market, we've executed there. I think the result speak for themselves. And I think it's very reminiscent of what's happening today in Communications. I think we're putting ourselves in a position to be a market leader and to excel in this market for a very long time.

Great, thanks. And George, nice job on free cash flow. I'll get back in queue.

Thank you.

Thanks, Jamie.

And our next question will come from Tahira Afzal with KeyBanc. Please go ahead.

Hi, Jose. Congratulations on a phenomenal quarter.

Thank you, Tahira.

Jose, I mean, given you've got, you're appropriately assuming, maybe flattish scenario for pipeline next year. Do you think, you can still on aggregate grow EBITDA next year nicely from all the other segments? I assume you can based on all the bottoms up and commentary you've provided, but would love to get a sense of that?

Look, I think if you do the math, we think we can grow EBITDA even if Oil & Gas shrinks. Communication is going to be better in 2020, Transmission is going to be better in 2020, Power Gen is going to be better in 2020. We feel very strongly that our pipeline business is going to do very well in 2020. But regardless of your own individual outlook on what might happen in Oil & Gas, EBITDA for MasTec should be really strong in 2020, compared to 2019.

Perfect. Thanks. Jose, in your prepared commentary, you talked about, significant opportunity from Dish as you look forward. As you said, the last time you said that was about pipeline in 2012, when you took that business from $1 billion in annual revenue to $3.5 billion. When you think significant, how sizable could it be? Can you frame that versus your let's say AT&T business right now?

Well, look, it's very exciting. It's a new entrant into the market. That's going to be a significant competitor in the wireless market. We think they’re well positioned, they obviously have an enormous amount of spectrum. I think they've shown over the course of the last few months, their commitment to being a significant player in that space. We've had a relationship with them for a long time. We have a current relationship with them on the wireless business. So I think we're very well positioned and I think it's going to play out time will tell. But yes, it could be a very significant opportunity for MasTec and we'll see, we've got to earn it, we’ve got to perform, but the opportunity is there.

Thanks, Jose.

Tahira, thank you again, I know you got a recent promotion. So I don't know how many calls you're going to stay with us on. But I want to thank you for your support on MasTec overall these years and congrats on your promotion.

Thank you very much, Jose.

Thanks, Tahira.

And our next question will come from Steven Fisher with UBS.

Thanks. Good morning.

Good morning, Steven.

So you guys talked about some of the big bookings prospects in Oil & Gas and some of the verbal selections. I guess, what are the biggest gating factors on when those will actually get booked? How much permitting risk is there versus any sort of capital budgeting discipline risk? And so, what's your confidence in the timing? And how should we think about the risk and margin trade off of what's coming?

Well, again, I think we've taken a conservative view, even as we look at backlog. Backlog is extremely strong. The reported backlog is extremely strong from a historical context. When you layer into the fact that we've got a lot of awards that aren't even in that number, that number is substantially greater than what's reported. We have to -- obviously finalize documents and some of those projects still need some things to get going. But, I think it just speaks to the long-term outlook of that business and how strongly and how good we feel about it. All projects are in different phases, I think one of the changes in our business over the last couple years is backlog is now made up of many more projects and what was historically right historically we’d have one or two big projects that was the main driver of our backlog, today that's not the case. There's a lot of projects that make up our backlog, which we think probably de-risk it a little bit in diversifies our customer base a little bit. Something else that we're relatively proud of, if you look at our top customers from a percentage of revenue as companywide. Diversification is a lot better in MasTec, our top customers a smaller percentage than it's historically been. So I think we're doing a really good job within the segment and across the company to further diversify our scope of services to diversify our customer base and to diversify the number of projects that we're working on.

Great, that's helpful. And then just on the Communications as you think about this ramp up over the next year. What aspect of the telecom spending, do you expect to drive your biggest incremental revenue next year versus this year? Would it be on the small cell side, towers, fiber which of those pieces do you think you'll see the most incremental revenues on?

I think they all have potential for growth. Obviously, the fiber builds have a lot of -- there has been a lot of awards relative to fiber. I think the revenues associated with that will significantly pick up in 2020 versus where they've been this year. So that's an obvious driver of growth. When I think about that question, and I probably put it in a longer term sense. I think the wireless opportunities, whether it's small cell or towers or a combination of everything, is going to be a significant driver of our business for a very long time.

Terrific, thanks a lot.

Thank you.

Our next question will come from Noelle Dilts from Stifel. Please go ahead.

Thanks. And again, congratulations on the nice quarter.

Thank you, Noelle.

Sure, thanks. So when I look at your guidance for the year, it's obviously really strong second quarter, very strong third quarter guidance, and fourth quarter is just a bit below where consensus was. Could you just help us understand if maybe there is -- that's reflective of somewhat of a shift in maybe the work on MVP, or how you're thinking about the timing of the ramp up on Communications? And just trying to understand some of the puts and takes as it relates to timing?

Sure. We didn't offer fourth quarter guidance. I know there were some projections out there. I think there are some conservatism built into the fourth quarter relative to both Communications and Oil & Gas. Obviously, we've got the MVP project that we're not sure if that will finish in 2019, or 2020. I think there's a chance that it goes in 2019. And those are kind of the variables that we've got to work with as we work on projections. We've obviously had a very strong first half of the year from our minds, we haven't really changed second half projections relative to where we originally kind of laid out. So as we perform and we get more visibility into the coming six months then I think it's obviously an opportunity for us to be. And I think the numbers that we’ve put out are relatively conservative numbers that we think we're going to hit. And there's probably upside relative to those numbers based on both of those initiatives that I spoke about.

Thanks. And then just on the pipeline side, just to clarify a bit. I mean, it still sounds like you're seeing a lot of opportunity on the large project side. I mean, we've been looking at, obviously a significant number of larger projects that are out there for 2020 and 2021. I just want to understand if there is -- are you feeling more or less constructive about the market? And, if you -- you kind of referenced even if there were a decline, you still feel like you'd be able to grow EBITDA. I guess, is there an element of your business where you're a little bit worried about the timing or is really just timing more than anything offset kind of what drive if you were to see a decline?

To be clear I am more constructive, I am less constructive, I'm not trying to signal anything in the comments. I know that, one of the shareholder concerns of MasTec for a long period of time has been sustainability of our Oil & Gas business. I disagree with that assessment, I think we've got a very sustainable business, that's going to be strong for a long time. I'm just making the point that even if the contrarian position, even if you take the contrarian position, which shows our Oil & Gas business going down. The rest of the segments of MasTec could more than make up for it. And I'm just making that point. Not that I expect that to happen. But I think it's important for us to give shareholders as much information as we can relative to the prospects of all of our businesses. So we still feel very strong, and very good about our Oil & Gas prospects for multiple years out. But we feel just as strong and better about our other businesses.

And the second part of that question was really in terms of what you're saying with Kingsley and Canada? Do you think that those businesses will -- elements of your Oil & Gas business will show growth as you get into 2020?

Yes. I mean, obviously, you know, the reason we made the Kingsley acquisition was because we felt really good about where it could potentially go. It's -- we haven't owned it for that long. So I think it's only going to get better. There are tremendous opportunities for them to grow their business and be a big player in that market. As it relates to Canada, from a revenue perspective, we're actually having a pretty good year. We expect revenues to be up north of 60%, this year in 2019, verses 2018. When you think about our pipeline business, we still have a drag. Like is Canada still a drag on our business. We lost about 8% on that business last year from an EBITDA perspective. We're still going to lose a couple points of EBITDA on that business this year, a lot of it has to do with just utilization and size of the business. So it's significantly improved in 2019 versus 2018, but it's an area of the business that could continue to improve. So even within our pipeline numbers as you see them today, there are opportunities for improvement. There are opportunities for every areas to get better. We fully expect Canada to be a catalyst for margins in Oil & Gas pipeline next year, will it really move the needle or not, time will tell. But we feel good about the prospects and what's happening in the market there today, much better than we did in the last year anyway.

Thanks very much.

Thank you, Noelle.

Our next question will come from Alex Rygiel from B. Riley FBR. Please go ahead.

Thank you, Jose and George, very nice quarter.

Thanks, Alex.

Couple of random questions here, you talked about very strong margins in the small pipeline business. Can you update us on what your mix is in oil and gas between the sort of power projects and larger projects and how you see that trending over the next year or two?

I would expect it to kind of maintain at the levels that it’s at, we're probably somewhere in that -- guessing because I don’t have the number in front of me 60-40 split smaller projects to larger projects. And I would probably expect it to be somewhere in that mix range.

We will have little bit cost plus work in the second half of the year, right. So your time for the full year I think our mix it will have more cost-plus larger project work in the second half for the year, I think the overall mix this year will probably be representative of expectation going forward for next year.

That’s helpful. In the Electric Transmission margins were really good in the second quarter, is that a function of just the volume coming through the system and therefore should we kind of reset our expectation level a little bit higher for where margins could be in Electrical Transmission over the next year or two?

I think when we're looking at, we're certainly looking at improvement on the transmission side as we move into 2020. I think this year our expectation generally speaking, I mentioned in the remarks is in the same, low to mid-single digit. So I wouldn’t certain change our expectations for 2019. But certainly as we look out into 2020, we expect to have a lot more utilization, we expect to have growth and with that should come margin expansion.

And to be clear, while we did well in the second quarter, relative to what expectations were, those aren’t the kind of margins that we're looking for in that business. We expect that business to be at double digits; we think that we can be at double digits in the near future. So while it was improving and it was better and I think it shows that we can perform in that business with volume that's not our desired margin range right and we think we know we can do better.

Excellent, thank you.

Thank you, Alex.

And our next question comes with Andy Kaplowitz with Citi. Please go ahead.

Good morning, guys. Nice quarter.

Thank you, Andy.

Jose, last time when we see this kind of ramp up like we're seeing in Power Generation the risk of project execution goes up and margin there was a little below your initial expectations for the year, I know you talked about weather, but can you talk about your confidence level that Power Gen margin will improve to that mid-single digit range that you are guiding to in the second half of the year as your revenue ramp up continues.

Look I highlighted it in the prepared comments, because I think what that group has done is remarkable, 2017 revenues in that entire segment were $299 million for the year, this quarter it was $250 million, next quarter is probably going to exceed, their full year 2017 revenue. So the fact that they been able to grow the business that rapidly over a two year period. They grew 71% year-over-year. There's a lot of inefficiencies that happen when you're growing at those levels to be able to grow at those levels and to stay profitable and they continue to drive margins, we think is a feed of its own. I think we we've been very cognizant of risk profile as we’ve grown that business and I think that like we've done in the pipeline business, we’ve mitigated the risk profile of that business, we're taking very little risk. I think the risk of a project performing poorly for us, returning bad for us is very limited and we've done that by design. So I think that will prove out as coming quarters and coming years proved. Lot of opportunities in that market, we’ve built a really good reputation a really good name for ourselves across a number of those end markets and we are just really excited about what's happening, we think the opportunity and the potential there continues to be significant. So we expect that business to continue to grow in 2020 and the margins will with it. There is no way that we can double that business or triple that business over the last couple of years and not have some margin impact with all the investments that we’re making to get bigger and the investments in people, in hiring to be able to deliver for our customer. So irrespective of some fluctuations from quarter-to-quarter, I feel really good about the long-term margin profile that business being in the mid-to-high single digits.

That’s helpful, Jose. And you made a comment in the prepared remarks that you’d like to your wireline and wireless business grow faster despite growing double digit, as the growth of wireline and wireless not that what you thought it would be in 2019, or is really the slow ramp up of Communications solely because of the decline in install-to-the-home. And then how should we think about the install-to-the-home decline, because it end up being a bigger headwind on revenue and margin through 2020 or by the time you get to 2020, it really should be too small to be a big headwind?

So the second part of the question, I think by the time we get to 2020, it will be small enough that it really won't impact our numbers in a meaningful way. The first part of the question, I think, when we think about Communications, we’ve always said we expected ramped to be second half of 2019 event. We've -- I think we've been extremely consistent on that for a long period of time. Has it pushed out a little bit maybe more into 2020. The answer is, yes. Right. I think, we do have some customers that are still trying to figure out exactly how they're going to deploy certain things we've got obviously some of the Verizon permitting issues, have been very -- they've been prevalent and spoken about by many people. So we're seeing some of that as well. So I think we're months maybe behind where we originally thought, which in the overall scheme of things isn't significant. But yes, we're probably a little bit lighter in the second half of 2019 than we originally thought. But it doesn't change our long-term outlook of what we expect to happen in both wireline and the wireless markets.

Thanks, Jose.

Thank you, Andy.

And our next question will come from Andy Wittmann with Baird. Please go ahead.

Great, thanks. I was going ask a little bit more on Electric Transmission. I think the commentary sounded quite positive there. And you guys have been talking about some of these -- I think you've called them larger awards that have been awarded but not yet signed. I was just hoping for a little bit of refresher within the number of the awards potentially the size of the awards that those included? And what needs to happen for those to come through? I know you -- when you first announced them a few quarters ago, you said, it's going to take some time. A little bit of time has passed and so I was just kind of hoping for an update as to how those are evolving and when those could wind up in backlog and then ultimately going into the ground?

Yes. So if you look at backlog in Transmission on a year-over-year basis, at first blush, it looks like it was a reduction. So, last year it was $632 million, this year it’s $489 million. It's in I think, part of that story is we had a significant amount of Puerto Rico work because we had won that large Puerto Rico contract, so there was about $250 million in that backlog associated with Puerto Rico. So when you back that out in the second half of 2018, and you compare it to 2019, we actually had really nice year-over-year backlog growth, sequential growth. And if you back out Puerto Rico really strong year-over-year growth, some of those contracts have come into fruition, which is what's driving backlog, others we're still waiting to finalized contracts. We feel we've got a chance to significantly increase backlog in the coming quarters in that segment. Again, some of those jobs will start in 2020, some of those jobs will have a very little work in 2020 and be more 2021 projects. Bottom line is that market right now is doing really well, it's very healthy. Lot of projects are out there, we feel really good that we're going to win our share, and that our business is going to grow in conjunction with that.

Great, that's all I had. Thank you.

Thank you, Andy.

And our next question comes from Chad Dillard with Deutsche Bank. Please go ahead.

Hi. Good morning, guys.

Good morning, Chad.

So just want to ask a bigger picture question here. So as the 5G rollout gains momentum, what is the mix of work shift -- how is the mix of work shift from laying fiber on the ground to more aerial installation associated with the tower, the small cells. What does that transition mean from a market share or win rate perspective for MasTec? And what does it mean from a margin perspective?

So it's -- they're all going to happen concurrently. It's not like carriers are waiting for all of the fiber to get laid before they can start the rest of their work, right. There's a significant amount of fiber in the ground already today in this country that people are trying to tap into, to build whether it's do tower work on the existing infrastructure to build or to build small cells. So the networks of tomorrow are going to incorporate a little bit of all of that, right. You're going to have to have macro, the macro network is not going anywhere, the macro network is going to get touched. The small cell network is really what's going to densify the network. And then you've got an enormous amount of fiber needs, because now you have this new small cell network that has hundreds of thousands, not millions of touch points across the country that have to be connected. So that's, where the opportunity lies, right. And I think, we've always been well positioned on the fiber side, we’ve won our fair share of that, the reality is when you think about pure wireless, which is that where I say the tower work and the small cell would fall we’ve been a market leader for a long time. We think we’re one of the very few with only wireless contractors in America today that has the capabilities of touching power poles of doing things associated with that. The reality is that everybody is going to build the small cell network and a little bit of a different capacity. Some are going to use electrical distribution networks, some are going to use street light poles, some are going to use their own poles that they create. So the opportunities are there, they are vast, they are very different, they are complex which is part of the reason that this -- the deployment has taken a little bit longer than have expected. But those are good things for MasTec because the complexity and the challenges add to the need for customers to use large vendors with the prudent skill set, which I think we have. So, again, very excited about what’s coming and very excited about the way we play in that overall scheme and the benefits we bring to our customers.

That’s helpful. And you mentioned that you’re fully traded on Oil & Gas large pipeline in 2020. I was just curious to get a sense for just the character of that work, how does the fixed price versus reimbursement mix differ versus 2019? How’s it like a geographic mix differ versus 2019? And if you can share with us how you are thinking about that in 2021? And also can you quantify the Oil & Gas closeouts in the quarter?

Yes, so on the fixed price, we do very little work on pure fixed price, most of the work that we do is unit price driven or it’s obviously in some of our larger projects today it’s been costs reversible. We don’t expect the mix of contract types to change as we look in 2020 to 2021. Our contracts again there’s a big difference between unit price and pure fixed price and fixed price have taken a lot of risk right for anything that happens and unit price should kind of pricing for whatever changes happen on the job. And then in reference to your question on closeouts there was no abnormal closeouts or anything of that nature that drove our second quarter I think it was consistent with the margin profile that we’ve been producing over a number of quarters and we expect that to continue.

Thank you.

Thanks.

And our next question will come from Adam Thalhimer with Thompson Davis. Please go ahead.

Hey, good morning guys. Great quarter.

Hey, Adam. How are you?

Hey. Jose, how many cruise have you added now in the Communications side and are you almost done with that?

I hope we are never done because it means the market is just getting stronger and bigger we’re on pace to add what we’ve talked about in the past. So we’re still adding a few hundred people a quarter and I think that that trend is going to continue at least through the balance of this year. So we didn’t’ expect that to stop, we actually expect that to go all the way through 2019. At this point some of those early adds that we made at the end of 2018 are now becoming a little bit more proficient and we’re seeing that in the data and in the statistics. So we’re feeling really good about the progress that we’re making there, but that’s something that we expect to continue throughout all of 2019.

Okay, that’s helpful. Thanks. And then, lastly core AT&T wireless, wireline what’s the outlook there for the back half?

Yes, so for us our big business with AT&T has been core wireless more so than core wireline. AT&T has slowed down some of their wireline spend for the second half of 2019 it doesn’t impact us greatly because we didn’t -- quite frankly we just -- wasn’t a huge market for us, it affects us a little bit, but it wasn’t a huge market. Core wireless should be significantly up versus where it was in 2018.

But wireless was a little disappointing in the first half?

No, I mean, it was up strong double-digits first quarter and second quarter. So our wireless business is having a great year from a revenue perspective. We’re making a lot of investments that are affecting margins, but not revenue.

Okay, thanks.

All right, Adam. Thank you.

And our final question will come from Brett Thielman with D.A. Davidson. Please go ahead.

Hey, thanks. Good morning, congrats.

Good morning.

Jose, transmission market does sound like it’s really heating up here, I guess, I'm curious kind of when do you feel like you start to hit capacity constraints in terms of the business you can take on there?

If you look a number of years back, that was a much bigger market for us than it is today. A lot of that key personnel remains with our company. So we feel really good about our ability to execute. We've been talking about, our growth appetite and our growth prospects in that business for a while now. I think, we're starting to see that come through backlog, which really supports, I think our outlook. So we feel really good about what we're going after, and our ability to execute on what we go after.

Okay. And, I guess, so much growth happening organically at MasTec. I'm just curious how much of your time, you're devoting to look into the M&A prospects these days? And also, I guess, just given the public success the company has had in the last several years, I'm curious whether that's steering more sellers toward you than maybe what you've seen in the past?

It's an interesting question, we've definitely seen a much more active M&A funnel than I think we've seen in the last couple years, we're actually seeing some more sizable, and some very interesting prospects. So we are still spending time on that. It's always been part of our strategy. We haven't been super active in the last couple of years, because we have been focused on meeting the organic growth opportunities at MasTec and I think those continue. One of the things that I'm really excited about in the quarter was, we finally got our cash flow dynamics back to normal, which give us an enormous amount of flexibility to be more aggressive going forward to make decisions that increase shareholder value. And those decisions can be anything like M&A or buybacks. So talking about the cash and the cash is coming is very different than actually having the cash and normalizing our cash flow situation. So now that that's been normalized, it allows us to focus on that and hopefully make the right decisions related to that. So pretty excited to be in that position.

Okay, great. Thank you.

Thank you.

And we have no further questions. I'd like to turn the conference back to Jose Mas for any additional or closing remarks.

Sure. So I'd like to thank everybody for their interest in MasTec and their participation in today's call. This concludes our second quarter of 2019 earnings call.

And this concludes today's conference. Thank you for your participation and you may now disconnect.