Greetings and welcome to the Quanta Services Second Quarter 2021 Earnings Conference Call. [Operator Instructions]. It is now my pleasure to introduce your host, Mr. Kip Rupp, Vice President, Investor Relations. Thank you, sir. Please go ahead.

Thank you, and welcome, everyone, to the Quanta Services Second Quarter 2021 Earnings Conference Call. This morning, we issued a press release announcing our second quarter results, which can be found on -- in the Investor Relations section of our website at quantaservices.com, along with a summary of our 2021 outlook and commentary that we will discuss this morning. Additionally, we'll use a slide presentation this morning to accompany our prepared remarks, which is viewable through the call's webcast and is also available on the Investor Relations section of the Quanta Services website. Please remember that information reported on this call speaks only as of today, August 5, 2021. And therefore, you're advised that any time-sensitive information may no longer be accurate as of any replay of this call. This call will include forward-looking statements intended to qualify under the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. These include all statements reflecting Quanta's expectations, intentions, assumptions or beliefs about future events or performance, but that do not solely relate to historical or current facts. Forward-looking statements involve certain risks, uncertainties and assumptions that are difficult to predict or beyond Quanta's control, and actual results may differ materially from those expressed or implied. For additional information concerning some of these risks, uncertainties and assumptions, please refer to the cautionary language included in today's press release, along with the company's periodic reports and other documents filed with the Securities and Exchange Commission, which are available on Quanta's or the SEC's website. You should not place undue reliance on forward-looking statements, and Quanta does not undertake any obligation to update such statements and disclaims any written or oral statements made by any third party regarding the subject matter of this call. Please also note that we will present certain historical and forecasted non-GAAP financial measures in today's call, including adjusted diluted EPS, backlog, EBITDA and free cash flow. Reconciliations of these measures to their most directly comparable GAAP financial measures are included in our earnings release. Lastly, if you would like to be notified when Quanta publishes news releases or other information, please sign up for e-mail alerts through the Investor Relations section of quantaservices.com. We also encourage investors and others interested in our company to follow Quanta IR and Quanta Services on the social media channels listed on our website. With that, I would like now to turn the call over to Mr. Duke Austin, Quanta's President and CEO. Duke?

Thanks, Kip. Good morning, everyone, and welcome to the Quanta Services Second Quarter 2021 Earnings Conference Call. On the call today, I will provide operational and strategic commentary and will then turn it over to Derrick Jensen, Quanta's Chief Financial Officer, who will provide a review of our second quarter results and full year 2021 financial expectations. Following Derrick's comments, we welcome your questions. This morning, we reported solid results with record second quarter revenues and earnings per share. Backlog of $17 billion at the end of the quarter was also a record, which we believe reflects the benefits of our collaborative approach with customers and the continued advancement of our long-term growth strategies. We continue to see opportunities for multiyear growth across our service lines driven by our solution-based approach and the growth of programmatic spending with existing and new customers. Our electric power solutions operations had another strong quarter, with record revenues and better-than-expected margins, reflecting solid and safe execution, favorable end market conditions and continued momentum as a result of ongoing grade modernization, system hardening and renewable energy interconnections. Our Electric Power backlog continues to increase, driven primarily by significant multiyear master service agreements with utilities, which adds to the substantial MSA backlog growth from the first quarter. We are proud of our execution and confident in our strong market position to capitalize on the opportunities created by favorable long-term trends, driving utility investment and demand for our comprehensive solutions. As an example, one of our largest electric customers in the Western United States recently announced a major new multiyear program to underground approximately 10,000 miles of electric distribution power lines and high fire-threat districts in the utility service territory. This initiative is in the planning stages and is expected to incorporate input from numerous stakeholders and…

Thanks, Duke, and good morning, everyone. Today, we announced record second quarter 2021 revenues of $3 billion. Net income attributable to common stock was $117 million or $0.81 per diluted share. And adjusted diluted earnings per share, a non-GAAP measure, was $1.06. Our electric power revenues were $2.1 billion, a record for the second quarter and a 20% increase when compared to the second quarter of 2020. This increase was driven by continued growth in base business activities as well as contributions from larger transmission projects and revenues from acquired businesses of approximately $70 million. Electric segment operating income margins in 2Q '21 were 11% versus 10.3% in 2Q '20, led by continued execution strength, coupled with increased revenues, which contributed to improved equipment utilization and fixed cost absorption. Operating margins also benefited from approximately $7 million of income associated with our LUMA joint venture. Our communications operations, included within the electric segment, delivered mid-single-digit margins during the quarter. Due to some of the subcontractor and quality issues we identified in the first quarter, we transitioned field leadership on several projects, which led to more normalized margins during the quarter. Those transition activities have been completed, and we expect our communications operations will return to margins at or near double digits for the remainder of the year, similar to the second half of 2020. Underground utility and infrastructure segment revenues were $852 million for the quarter, 19% higher than 2Q '20, due primarily to increased revenues from gas distribution and industrial services, partially offset by reduced revenues from larger pipeline projects. Our industrial operations and non-U.S. markets within this segment remain pressured by COVID-19 dynamics, impacting core quarter revenues and margins. However, last year's second quarter results were more adversely impacted by pandemic-related disruptions. Second quarter operating income margins for…

[Operator Instructions]. Our first question this morning is coming from Chad Dillard of Bernstein.

So my first question is just on the MSA part of your business. So to what extent are your customers entering these agreements to lock up labor? And is this like a primary motivating factor? Or is there -- are there other things at play that are driving some of the momentum? And then just like secondly, how much of your labor rates -- like, I guess, like what's the structure of like the labor rates that you're negotiating there? Are they passed through? And I'm talking more about like the portion of your labor that's nonunion.

Yes. Chad, thanks. When we look at our MSA work going forward, I think when we're working with the customers in a collaborative manner, we're looking at their capital spend, they're working with us, and we're looking at that body of work or that body of capital over time and providing solutions to them through an MSA form. So it allows us to work with them in a strategic manner on a go-forward basis. And yes, somewhat to lock up resources, but also to make sure from a constructability and a prudency manner that we can go out and deliver it. I think when you look at labor and look at what we've done with labor and our ability to perform and perform at a cost and on time, we've been able to do that. And so the clients are recognizing that, and that's why we're having these conversations in a long-term manner and also independent services. As far as how we look at escalations in labor, we do pricing and escalations on all of our labor as we move forward. So that's something that we do and have done for the past 50 years.

That's helpful. And then just a second question, more on some of the newer parts of your business, grid storage and charging station work that you're starting to do. So how transferable are the competitive advantages that you have on some of your large transmission work to those areas? How much of the business is comprised of revenue from those sources? And then I guess can you just talk about just like the contract structure, fixed versus reimbursable?

Yes. There's two parts to most of these projects when you're thinking about renewables or anything really for that matter, battery storage. Your interconnections or substations and your collector systems that allow you to push the generation or storage onto the grid, so we're certainly involved in that on a daily basis. It's fairly technical and that's part of this. And the risk on the battery is big battery. So both of those things are something that we do quite often and very transferable from our standpoint on a go-forward basis, so something that we believe is right down the fairway for us. And when we look at pricing, it's both fixed, both unit-based, both lump sum either way, but we're very comfortable in that -- those type of projects. And we're not taking output risk or we're not taking product risk either on any of that.

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

Nice quarter. It'd be great to get a little more color on the market share opportunity surrounding the front-end capabilities, engineering, permitting. It seems like you've already been capturing share there. How significant is that? And why exactly are those front-end capabilities helping you capture more programmatic spend?

I think we set out -- the company set out 6, 7 years ago to really work with the client at the customer level to develop a relationship-based discussion to provide them with resources for capital. And so when the customers have been struggling to get their capital spend because of permitting, because of engineering or whatever it may be, we felt like we can make a difference there, and there wouldn't be an intermediary between us and the client. And we felt like from a constructability position, we could better service the client to build. And so that, from our standpoint, we could deliver the resources, we could talk to the client on the front side of the business and deliver a capital project that was at the best cost to the rate payer. And that's how we look at it. We look at it from a rate payer standpoint and work with the client to deliver the best product we can in a prudent manner.

Okay. That's really interesting. And maybe shifting over to underground. Just as you guys are tracking the business here year-to-date, I mean, are you seeing anything structural in terms of change in those business lines that would preclude us from kind of getting back to a prepandemic run rate? Or should we still think about this business as kind of marching back up to that prepandemic EBIT run rate as the economy continues to reopen?

Yes. Sean, I think when you look at the company, you look at the portfolio, we are getting operating leverage out of these larger operating units within our -- in the company. And when you look at the quarter, the second quarter, if you look at adjusted EBITDA in the second quarter, it's double digits. We set out to produce double-digit EBITDA, we're doing it. And yes, there's opportunities in our industrial segment on a go-forward basis to pick those up into higher upper single digits like we talked about before and also that piece of the segment. But in general, we're still looking at this in a portfolio. And we don't care if it's underground gas or underground electric, we are there to make sure that we fully utilize our resources and fully utilize equipment to produce the highest margin we can, no matter what the segment is.

Our next question is coming from Jamie Cook of Credit Suisse.

I guess just two questions. First question, can you help us understand the expectation, what the margins were in the communications business this quarter? I'm just trying to understand what that was relative to your electric power business because the margin performance there continues to be strong. So I'm just trying to understand the underlying performance there. And then, Duke, I guess, more a strategic question. The balance sheet is in great shape. You have great -- obviously, a lot of organic growth opportunity ahead of you. But when you think about some of these adjacent markets that you're trying to grow in, I'm just wondering if there's opportunities on the M&A side that the market is underappreciating and/or opportunities within underground utility that could potentially help accelerate the margin improvement in that segment.

Yes. Thanks, Jamie. Telecom, kind of mid-single digits in the quarter, moving towards parity to electric on the forecast going forward. I think we're very close to that. As far as the balance sheet, when we look at it, obviously, we value everything against our stock. There's no shortage of opportunity in the market for sure. But we've transformed the company a little while back, and I think we're really proud of what we've done, and we're going to be prudent about how we go forward. There is places that we see that provide opportunity, both regionally and structurally, within the service line segments that we'll be looking at. But we look at a lot of different things and think about a lot of it strategically over the next decade, and we'll position the company properly going forward. But right now, we can grow the company organically as well. We've done that with Puerto Rico. I think it's still unnoticed. It's still undervalued. The opportunity there that we got in service this quarter, it's just amazing what the company has done and the people of this company. So I just -- that opportunity is large, and we're proud of it. As far as underground, we have a significant amount of underground out in the West, probably some of the largest in the West. So we're able to perform within the segments on the underground that we see. But if we can enhance the margins and certainly, we'll look at those acquisitions as we move forward.

Nice quarter.

Our next question is coming from Ian MacPherson of Piper Sandler.

I think what really stands out to me with your results is the continued momentum in the backlog for electric power. Duke, you've been very purposeful in your language for quarters that the infrastructure bill is not -- your multiyear growth outlook is not reliant or predicated on that in particular. But just anecdotally, do you see -- is your increasing MSA backlog, in some way, leaking in the utilities expectation, not only of all of the secular trends for the business, but also some expectation of that bill? Or do you see the bill still as an incremental layer of commitments from your customers that would materialize in more of a binary fashion once it's resolved?

Yes. When we look at the infrastructure bill, I don't think anything we've talked about -- anything on a go-forward basis that we talked about, we can do without the bill. The bill itself, there's large transmission, 2030 projects out there that are not utility-based. For the most part, they're difficult that if you got some DOE backstop and things like that, it would certainly move those forward. That would be great for the industry, great for the renewable sentiment and things of that nature. So no issues there, and it would certainly be additive to anything we've talked about. But that being said, the sentiment around renewables and the interconnections and what's needed, I spoke to my script about redundancy. And it goes unrecognized, the way technology and the way EV and the way any kind of intermittency affects any kind of infrastructure, that you need constant throughput. So data, electric, it doesn't matter. You need the redundancy if you're going to depend on it. And that's the issue, is we haven't started really to get ready for EV, and the modernization of the distribution system to handle electric vehicles is something that's just starting and has a long runway. So I think that, along with the great interconnects and the stacking effects that you see within the infrastructure bill, will only support growth going forward in anything that we've said on a go-forward basis.

That's great. Derrick, I wanted to ask you also about the guidance, and sorry to ask a sort of a trite -- this guidance conservative type of question. But when we look at your prompt year backlog relative to the size of your second half of this year, total revenues, that ratio is looking as conservative as it has in several years, going back probably 5 years or so, and by a fair margin. So I wanted to ask what the -- is there more of a stretched-out tenor of that prompt backlog that should explain that or other factors at play?

Sure. So we do have a component of larger projects that will continue into the '22 period versus the back half of this year. Some of that is a little bit of work that I called out there in my prepared remarks. So that's putting a little bit of kind of higher ratio to that. And then beyond that, I mean, it's still yet -- as we look at electric power, we continue to look at it. There are opportunities in the range of the guidance there, but some of it is still yet from a ratio perspective at work drifting into '22, considering where we're at.

Also, I think it's important to note the amount of storm we had last year versus what you see this year is significant. I mean Derrick can tell you the numbers, but basically, we don't forecast storm in any of our models. So there's -- we're doing this without the storm as well.

Yes. Well, I mean, to that point, as a reminder, 2020, we had $442 million of storm work. And as it stands here today, our current forecast is only anticipating about $200 million. So we have a year-over-year headwind in overall revenue numbers. And actually, to be even a little bit -- even more specific, when we talk about in our guidance having a double-digit revenue growth opportunity in electric power, to put that in context, for the third quarter of last year, we did $207 million of emergency restoration work versus, as we come up to the rest of this year, right now, you're looking at only about another $80 million or $90 million forecast. So being able to achieve that type of growth in the back end of the year on top of that storm work is -- we're pretty proud of that.

Our next question is coming from Noelle Dilts of Stifel.

Congrats on the nice quarter. I was hoping that -- one of your competitors expressed some concern that higher steel and other raw material costs and, maybe to some extent, labor costs could potentially cause utilities to reevaluate the economics of projects and maybe just defer a bit. Could you comment on what you're hearing from your customers on that front and how you're thinking about that type of risk?

Yes. Noelle, I mean, we stay pretty close to it. We're not -- there's some effect to steel a bit. Labor, some. When we look at it, we're not seeing the big impacts or anything like that, maybe incidental here or there, but nothing that what I would say structurally -- that is impacting the work going forward. I think anything that we're doing is necessary. If you're going towards any kind of 2030-, 2050-type sentiment and you're bringing in this many electric vehicles and you want this much renewables, it's necessary to move forward. And we're not -- we're just not seeing it.

Okay. And then sorry if you hit on this, I missed a small amount of your commentary. But in -- around Stronghold, could you discuss in terms of how you're thinking about really moving into 2022 and to what extent you think there is work that's kind of the backlog of work that's built up in the system or kind of the potential for emergent work as you start to get into these facilities in a more meaningful way?

Yes. I think we talked about this before. We need to go back in kind of the '08, '09 time frame. They had some kind of demand that went into '11, '12 and beyond. I think we're going to see the same thing starting in '22. Back half of this year has got some pickup in it. But as we start to see traffic, and we're seeing some of it now. But again, I predicated on some sort of a normalized economy and pandemic-related effects as we move forward. That being said, I think '22, either way, is going to be the start of a multiyear, tight maintenance and nice margins into more of a normal basis for Stronghold.

Our next question is coming from Steven Fisher of UBS.

So this is the highest Q2 electric margin in possibly 8 years, and that's even with a mid-single-digit telecom margin. So I'm wondering if you're thinking about any structurally higher level of margin here as the grid and telecom opportunities really take shape. It was encouraging to hear you talk about the benefits of utilization because I would think that would only improve as the volume ramps up. Or is there that trade-off that's going to come in about investments that you need to make to support the growth that might be somewhat mitigating of that? Just curious how we think about sort of the structural margin direction from here.

When we look at the offices, the structural issues have start increasing. I think year-over-year, we're up 3,500 employees or so in North America, and that's with the downturn in Lat Am. So when we think about putting those resources on when -- the electric segment is a mature segment that we're able to do that without really margin decline. So you're seeing that we're utilizing those offices also to work on gas, telecom from a margin standpoint and grab as much operating leverage as we can on a portfolio basis. So that's there. I think structurally, the thing that's different is you have the impacts of Puerto Rico, which Derrick can comment on, that is also driving that margin profile up. We are getting good utilization out of the resources. The funding capabilities are certainly helping us become more efficient. The training that we've put into -- that we've invested in with our line schools and how we're getting people to the field quicker is helping and deferring some of the later costs that we would normally see because we're getting it done upfront. So we're really -- I think the impacts of the things that we've done 5, 6 years ago are starting to take place today.

Okay. Great. And then on the credit loss, not terribly concerned about this as a bigger picture item, but I should ask, what's the risk of others like this? Do you have any other customers that have a profile like Limetree in any part of your business? Are you taking any actions to strengthen your credit protection going forward? I'm just thinking that it might become more relevant depending on who your partners are on this EV charging infrastructure plan. Or were there some newer companies out there?

Yes. There's always lessons learned on something that goes the wrong way from any kind of standpoint. So sure, I mean, we'll learn. But I think, for the most part, the credit risk of the company and the people that we work for are very solid. And this was kind of a long process that the EPA came in, and we couldn't see it coming. And I think, in general, the job itself is profitable, and we ended up with this write-off. And certainly, I don't think we'll be talking about it again. Yes. And structurally, the company doesn't have these kind of things with it. But I'll let Derrick comment.

Yes. I mean, Steve, as you look at over the years, I mean, our allowance for credit losses is generally below $10 million against a very large net position. A credit situation is very, very rare in our situation. We have a high-quality customer base, some of the largest, best companies in the U.S. market. So this is an anomaly. It's a very unusual type of event. We have very few times that we end up finding ourselves in an LP or some other structure like that versus the primary operating company. So we're not really concerned about, on a go-forward basis, this being something of indication. But yes, to your point and Duke's point, we'll continue to monitor that as we take on any new customers.

Our next question is coming from Marc Bianchi of Cowen.

I wanted to start by asking about the power line undergrounding in California and the initiative that's announced by the customer there. Maybe if you could help put into context what that could mean for revenue. I think they've talked about getting up to 1,000 miles a year kind of run rate there. Help us think about what that means for your business and also, once all that's installed, if there's sort of a loss of revenue that might come from maintenance work that revolves around handling the stuff that would have previously been overhead.

Yes. So the opportunity, we've talked about it. It's large. It's early. So we'll be working with the client, one of our larger customers. California is one of our largest states. So in my mind, when we look at it, obviously, we think it's -- we're in a unique position, unique opportunity for us. It's very hard at this stage to judge what that means for us on a go-forward basis, especially in California. So we'll be prudent about how we talk about it until we know more. We'll work with the client, like we always have. And I do think it benefits us both near and long term. And no, it doesn't -- the effects of undergrounding something doesn't prevent someone from having maintenance. It does help with fire. It does help on certain things, but there will still be plenty of maintenance. That does cut out trimming of trees, which we don't do. So -- but the maintenance on underground and transformers and wire and everything else that goes along with it is certainly there. We do it on a daily basis today. There's a lot of underground within the system today that we maintain, rehab, do many, many things within that realm of possibility. So I think the opportunities are large. In the past, I would have said it didn't make sense to underground. But given the fact that -- what you're seeing with loss of life and the amount, the dollars that are spent on fire, I think it makes a lot of sense. It's a bold kind of big project. But when you think about what's going on, you're always under the gun of bankruptcy or something within fire, it makes perfect sense. I think it's smart, long term, and we'll be working with the client.

Yes. Okay. Super. The other one I had relates to the EV charging opportunities that you've mentioned in your prepared remarks. I think we all kind of know maybe what those look like, but the revenue opportunity is maybe a bit harder for us to get our hands around. Could you maybe talk to sort of the range of revenue opportunity per project? And are you potentially going to be partnering with a company that's building out EV charging? Or are you going to be kind of serving everybody? How do we think about your strategy to participate in that market?

I think we're in a unique position to -- in a prudent way and a cost-effective way, to install battery charging systems, especially high-voltage battery chargers. So we'll be working with the utilities, working with the OEMs, working with manufacturers of vehicles. So all of them. I think, for us, we're happy to try to facilitate that build. But the underlying -- and to quantify it, I'm not sure about how large that piece of it is. What I will say is what's necessary is a distribution system behind it to support that. Is -- from our standpoint, over the next 15 years, 20 years, the amount of work that needs to be done to modernize these distribution systems to allow you to install these charging systems is extremely significant.

Our next question is coming from Michael Dudas of Vertical Research.

Duke, maybe you could share some of your early thoughts on the transition down in Puerto Rico. I guess it was June 1. So it's been a couple of months. Certainly, there's obviously some -- a lot of press and noise about the changes, which is to be expected. But how has that gone? And you really talked about the opportunities in Puerto Rico, and you've talked about potential larger projects in the future. Is there any kind of visibility on the timing on that front that we could maybe look forward some time in 2022 and beyond?

I think the funding -- the infrastructure bill also discussed the funding in Puerto Rico as well. So that's beneficial down there for sure. There's already frame of funding that's appropriated to the island. It should start next year. As far as where we sit and how we think about it, the grid was in bad shape. And I feel like from Quanta's standpoint, our partner's standpoint there, ATCO, that we did a really nice job under extreme difficult situation on the island. And every day, it gets better. Every day, we modernize that system, not from the lack of social media and propaganda, we've made a difference already. We'll continue. I think we'll look back in the next 3 to 4 years and be extremely proud of what we've done as a company. And the people in the island will benefit and see the benefit of what's being done. We really like where we sit. We're having good discussions all throughout the island with not only local -- the economy and the people and everything around it. So the opportunity there is large, and we look forward to the future there. And I commend our people and everything they did to throw their sleeves up and take a lot of heat but also deliver on the back side of it.

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

Nice quarter. I wanted to ask a quick question about 2022. You had a couple of positive comments just in your prepared remarks. What kind of growth do you think you can generate next year?

I think we've talked about kind of double-digit growth on the 85% of the business. We still see that high single-upper-digit growth. There's stacking of larger projects. We've commented many times, and I'll say it again, we believe we can grow EPS double digits as long as we can use our balance sheet. And we still believe that. We still believe that we can grow it year-over-year. And that's what we -- that's how we look at it.

And then quickly, on inflation and materials availability, Duke, are those issues today? And is it a risk going forward?

We're not seeing the impacts of that at this point. There's certainly some, I would say, noise in the system, but we're not seeing those impacts with material deliveries and things of that nature. It makes some of the work a little difficult. It gets out of sequence here or there, but we're typically able to overcome that and move around. Some of the projects are larger. We're moving on to something different and able to overcome any kind of material delay. We're working with the client way upfront. And when we talk about front end and things we can do, if we're working with the client way upfront, it allows us to work with them. We know the delays coming so we can move with our resources around and stay productive, stay prudent, and it helps both us and the client long term. And that's the beauty of a collaboration. So we're not seeing those impacts.

Our next question is coming from Andy Kaplowitz of Citigroup.

Duke or Derrick, can you give us a little more color into how big your Canadian and Australian businesses are these days within underground utility? And then how much are you projecting them to decline this year? And then alternatively, it seems like refining and petrochemical customers, at least in the U.S., have increased their maintenance spend already and are executing more turnarounds, and the catalyst companies are seeing more activities. So can you give us more color regarding the levels of improvement you've seen already within the industrial services business?

I'll stick to industrial service business. I'll let Derrick comment on the numbers. So the industrial service business, when you look at it, we believe it's rebounding. We're booking the '22 type seasons. We see '22 coming back to a more normal state, maybe better. It's really early. But the demand for '22 and beyond, we see it. We're talking to the clients about catalyst replacements and things like that, that are coming back. So we think it's -- parting kind of later this year into '22, it's going to be nice business, a more normalized state going forward and talking to client [indiscernible].

Yes. And as a percentage, it's still running pretty consistent, between the 10% and 15% range of total revenues for the underground group.

And then you've gotten a lot of questions, obviously, on electric power backlog. I mean it did have another $1 billion sequential jump in Q2. So do you sense that your utility customers are getting more in line than they have before in the past to secure your services? And is there a way to think about how far out you are fully utilized? I mean are you basically fully utilized through '22 at this point in that business?

Some of the things that you're seeing, you're seeing multiyear agreements, there were falling capital spends, you're seeing multiyear capital spends being talked about when that wasn't the case 5 years ago. And so we are staying in front of that with the client. So that's some of your backlog growth. And when you think about year-over-year, we're up 3,000, something like that, call it, very close to it, year-over-year, that's the kind of growth that we're putting on from a people aspect within these segments. So I think those are the type of numbers that you'll see going forward, which delivers sort of kind of 85% double-digit type growth that we discussed.

And some of that backlog is also renewals. We have renewals that -- we have MSAs that are rolling off or historical and then we're coming through and we're renewing that. And you have a bigger pop into it, and that's a part of what's in that equation now. But -- so yes, with the same level of visibility on the renewal as we had in the previous execution.

But Derrick, to that point, the renewables are all bigger, right? And they're decently bigger? Is that the case?

Yes. I mean each time we were seeing the renewals, right, we're building off of growth. And so the visibility is to have those play out, attack into a little bit larger number overall.

Thank you. At this time, I would like to turn the floor back over to Quanta Services management team for any closing comments.

Yes. I want to thank the people of LUMA in Puerto Rico. That was -- June 1 was a tough day. And I think from our standpoint, it's monumental. We did a nice job down there and the safety that we've been able to encompass throughout. And so I commend them and everyone and anyone that are in the fields. It doesn't go unnoticed here. So I want to thank them first. And thank you for participating in our conference call. We appreciate your questions and your ongoing interest in Quanta Services. Thank you. This concludes the call.

Ladies and gentlemen, thank you for your participation. This concludes today's event. You may disconnect your lines at this time, and have a wonderful day.