Mastec, Inc. · NYSE:MTZ
Mastec — Investor Presentation (May 2011)
35 slides from Mastec's investor presentation, May 2011
Slide 1: MasTec Corporate Overview
MasTec Corporate p Overview May 2011 NYSE: MTZ
Slide 2: Forward Looking Statements
Forward Looking g Statements This presentation release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act. These statements are based on management’s current expectations and are subject to a number of risks, uncertainties, and assumptions, includi
Slide 3: Key Investment Highlights
Key Investment Highlights MasTec, an infrastructure construction services provider, is generating noteworthy results Ourr six O si markets all offer double-digit do ble digit gro growth th opport opportunities–and nities and useful sef l diversification Wireless, pipeline, electrical transmission, a
Slide 4: Double-Digit Revenue Growth
Double-Digit g Revenue Growth 19% Growth $2,750 Q1-11 Revenue Base 42% Growth 28% CAGR $2,308 2007 through 2011E Non- MSA, $1,623 41% ns MSA, Guidance e In Million $1,379 59% $1,038 $940 $839 2005 2006 2007 2008 2009 2010 2011E 4 Note: 2011 Guidance as of May 4, 2011
Slide 5: Double-Digit EBITDA Growth
Double-Digit g EBITDA Growth 18% Growth $285 57% Growth $241 41% CAGR 2007 through 2011E Guidance e In Millions $ $153 $111 $73 $ $58 $65 2005 2006 2007 2008 2009 2010 2011E Notes: 2011 Guidance as of May 4, 2011 5 2007 Pro forma, excluding effect of charges for legacy litigation, claims and other d
Slide 6: Transformation Into Higher Growth-Higher Margins
Transformation Into Higher g Growth-Higher g Margins g 2007 Business Mix 2010 Business Mix Government Government Install-to- the-home Install-to- Wireline Energy & the-home Industrial Energy & Wireless Industrial Wireline Wireless Largest Customer 44% Largest Customer ~24% Revenue ~$1 Billion Revenu
Slide 7: Six Key Markets Capable of Double-Digit Growth
Six Key y Markets Capable p of Double-Digit g Growth Significant Scale –Top Contractor Wireless Natural gas and oil pipeline Install-to-the-home/DirecTV Renewables/alternative energy — wind, wind solar solar, biofuel/biomass, biofuel/biomass etc. etc Greatest Growth Potential (from a small b
Slide 8: MasTec Pipeline Construction Continues Strong Growth
MasTec Pipeline p Construction Continues Strong g Growth We do gathering lines, mid-stream, long Revenue from Pipeline ($ in millions) haul interstate pipeline and related $574 facilities Balanced portfolio with over 50% from shales and other mid-stream projects Have union and non-union capability $
Slide 9: Natural Gas Pipeline Construction is Expected to Remain Robust
Natural Gas Pipeline p Construction is Expected p to Remain Robust Future pipeline infrastructure will be mostly influenced by the shift to relatively new shale production areas (1) U.S. Annual expenditures for pipeline infrastructure are expected to increase to levels of $5.0 billion to $7.5 billio
Slide 10: Shale Gas Exploration Creates New Demand for Pipelines
Shale Gas Exploration p Creates New Demand for Pipelines p Shale gas plays drive business New industrial users Marcellus Gathering systems Bakken Antrim Mid-stream pipelines Long-haul pipelines Woodford 275 mile Ruby Pipeline project started July 2010 Barnett DOE expects 900 of next 1,000 U.
Slide 11: Just Entered Canadian Energy Infrastructure Market
Just Entered Canadian Energy gy Infrastructure Market Fabcor, located in the energy corridor of Northwest Canada , provides pipeline and facility construction services to the oil and gas industry Acquired Fabcor during April 2011 Fabcor’s list of customers include most major oil and gas companies in
Slide 12: Growth in Renewables
Growth in Renewables The Case for Renewables U.S. Energy Consumption: Non-hydro Renewables 10 Less dependence on foreign oil; both for 9 economic and national securityy reasons 8 Historical Projections j adrillion BTUs Extension of the 1603 Investment Tax Credit 7 6 for renewable energy through the
Slide 13: Renewable Portfolio Standards
State RPS/Goal By Year: Renewable Portfolio Standards Arizona 15% 2025 California 33% 2020 Colorado 30% 2020 Connecticut 27% 2020 Delaware 20% 2019 Florida 20% N/A Hawaii 40% 2030 Illinois 25% 2025 Iowa 105 MW N/A Kansas 20% 2020 Maine 40% 2017 Maryland 20% 2022 Massachusetts 15% 2020 Michigan 10% 2
Slide 14: Growth for Solar
Growth for Solar Photovoltaics (PV) Solar electric installations in 2010 totaled 956 megawatts (MW) to reach a cumulative installed capacity p y of 2.6 g gigawatts g ((GW)) Grid-connected PV installations grew 102% in 2010 to reach 878 MW Concentrating Solar Power (CSP) The 75 MWac Martin Next Gener
Slide 15: Renewables are in Remote Areas and Need Transmission Lines
Renewables are in Remote Areas and Need Transmission Lines Renewables are located in remote areas where there are inadequate transmission lines to bring the power to the grid MasTec is bidding on renewables related transmission line projects 15
Slide 16: Growth in Transmission and Substations
Growth in Transmission and Substations Federal incentives added $11B for Estimated Annual Spending of Large grid improvements Transmission Projects ($ in billions) Latest NERC projections identify an $9 $7 additional 33,923 circuit miles of >100 kV transmission lines under $3 constr ction or planned
Slide 17: MasTec Becoming Key Transmission Contractor
MasTec Becoming g Key y Transmission Contractor MasTec organic growth in non-union transmission and substation work Have both union and non-union capability Nationwide platform with the acquisitions of Three Phase (Northeast) and EC Source Services (Southwest) Construction of EHV electrical systems
Slide 18: EC Source: Platform to Capture Growth in Transmission Market
EC Source: Platform to Capture p Growth in Transmission Market MasTec recently acquired Extra High Voltage (EHV) transmission contractor EC Source Services, LLC The owner/founder of EC Source, Martin J. Maslonka, is well known in heavy transmission circles and previously founded and built a rapidly
Slide 19: Growth in Heavy Industrial / Power
Growth in Heavy y Industrial / Power A “Gem” within Wanzek Construction Completed 99 MW combined heat power plant Natural gas and oil pipeline growth adds opportunities for compressor and pump stations and treatment plants – good resume Competitive natural gas price dictates more gas fired electrica
Slide 20: Communications Growth Lead by Wireless Data Traffic
Communications Growth Lead by y Wireless Data Traffic 35.0x Trraffic Relative to 2009 >20.0x 5.0x 2009 2010 2011 2012 2013 2014 MasTec Awarded AT&T 8-state Wireless Region Industry Forecast of Mobile Data Traffic Major CAPEX going to wireless as mobile traffic The Federal Gov’t Gov t has allocated $
Slide 21: Growth in Install-to-the-Home
Growth in Install-to-the-Home MasTec’s DIRECTV Offerings MasTec’s DIRECTV Footprint Exclusive install-to-the-home provider for DIRECTV in all markets MasTec serves High revenue visibility through Master Service Agreement Over 60% of truck rolls relate to maintenance and upgrades of existing customer
Slide 22: Financial Highlights
Financial Highlights Sustainable long-term growth in diversified markets Predictable contractual revenue base Predictable, Double-digit revenue and income growth potential Significantly Si ifi tl expanded d d margins i Additional margin improvement opportunities Strong g cash flow and cash p posi
Slide 23: Expanding Margins
Expanding Margins EBITDA Margins – Continuing Operations Up 340 Basis Points Since 2007 10.4% 10.4% 9.4% 8.0% 6.9% 6.9% 7.0% Q1-11 EBITDA Margin of Guidance 9.3% compared to 7.6% in Q1-10–best Q1 margin quarter since 2000 q 2005 2006 2007 2008 2009 2010 2011E 23 Note: 2007 Pro forma, excluding effec
Slide 24: Further Margin Expansion Opportunities
Further Margin Expansion Opportunities EBITDA margin goal of 10% or more 2007--7.0%(1) 2009--9.4% 2010--10.4% 2011--10.4% (2) Improved accountability and discipline Productivity gains Increased self self-perform perform work capturing more margin Scale – especially SG&A Mix – faster growth of proje
Slide 25: Strong Cash Flows
Strong Cash Flows 2010 Cash flow from operations of $218 million, nearly double 2009 2010 Free cash flow of $195 million, up 83% from $107 million in 2009 EBITDA Growth Trend: 2009– $153 million 2010– $241 million (up 57%) 2011– $285 million (up 18%) Q1-11 Cash flow from operations of $50 million,
Slide 26: Current MasTec Financial Strength
Current MasTec Financial Strength Record performance in important metrics – 2010 and Q1 2011 Summaryy of results for the q quarter ended March 31, 2011 Liquidity of $269 million (1) Revenue increased 37% from 2010--All Organic EBITDA increased 69% from 2010 Capital structure and ratios are in
Slide 27: Liquidity and Capital Structure
Liquidity q y and Capital p Structure MasTec, Inc. Principal Rate Maturity Debt Summary - as of March 31, 2011 Balance Liquidity and capital Revolving Credit Facility (LIBOR + 2.25%) $ - 2.56% (1) May 2013 structure are in excellent 7.625% Senior notes 150,000 7.63% February 2017 shape today 4.00% S
Slide 28: High Quality Customer Base
High Quality Customer Base 2010: 12 of Top 15 Customers Were Investment Grade MasTec’s Top 10 Customers for Q1-11 28
Slide 29: MasTec Summary
MasTec Summary (Still) Value-priced growth story, with margin expansion Infrastructure construction services Expect, on average, double-digit organic growth Key markets are diversified and growing Wireless Natural gas and oil pipelines Electrical Transmission Install-to-the-Home Renewables/a
Slide 30: Contact Information
Contact Information MasTec, Inc. 800 S. S Douglas Road Road, 12th Floor Coral Gables, FL 33134 J. Marc Lewis Vi P Vice President-Investor id t I t Relations R l ti (305) 406-1815 (305) 406-1886 fax marc.lewis@mastec.com www.mastec.com 30
Slide 31: Natural Gas Pipelines: End-to-End Services
Natural Gas Pipelines: p End-to-End Services 31
Slide 32: Renewables, Electrical & Heavy Industrial: End-to-End Services
Renewables, Electrical & Heavy Industrial: End End-to-End to End Services 32
Slide 33: Communications: End-to-End Services
Communications: End End-to-End to End Services 33
Slide 34: MasTec Reg. G GAAP Reconciliation
MasTec Reg. G GAAP Reconciliation Reconciling Items(1) 2005 2006 2007 2008 2009 2010 2011E(2) ($ in thousands) Revenues (As Reported/Guidance) $838,663 $940,421 $1,037,779 $1,378,663 $1,623,502 $2,308,031 $2,750,000 Income from Continuing Operations 21,331 40,050 6,283 66,602 70,748 90,387 108,000 (
Slide 35: MasTec Reg. G GAAP Reconciliation
MasTec Reg. g G GAAP Reconciliation Reconciling items ( 1) 2005 2006 2007 2008 2009 2010 2011E(2) ($ in millions) Income from continuing operations $21 $40 $6 $67 $71 $90 $108 Interest, net 19 10 9 14 25 29 34 Income tax provision - - - 1 8 64 69 Amortization 2 1 1 4 13 13 18 Depreciation 16 14 17 2