Earnings Call: Q4 2020

Feb 25, 2021

Good morning. My name is Lara, and I will be your conference operator today. At this time, I would like to welcome everyone to the EMCOR Group 4th Quarter and Full Year 2020 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. Keypad. Ms. Jamie Baird with FTI Consulting, you may begin. Thank you, Lara, and good morning, everyone. Welcome to the Amcor Group Conference Call. We are here today to of Investors, the Company's 20 2Q4 and Full Year Results, which were reported this morning. I would now like to turn the call over to Kevin Maff, Executive Vice President of Shared Services, who will introduce management. Kevin, please go ahead. Thanks, Jamie, and good morning, everyone. And as always, thank you for your interest in EMCOR. We welcome you to our earnings conference call for the Q4 full year of 2020. What a year it's been. For those of you who are accessing the call via the Internet and our website, welcome to you as well. Hopefully, you have arrived beginning of our slide presentation that will accompany our remarks today. We are on Slide 2. This presentation and discussion contains certain forward looking statements and certain non GAAP financial information. Page 2 describes in detail the forward looking statements and the non GAAP financial information disclosures. I encourage everyone to review both disclosures in conjunction with our discussion and accompanying slides. The next slide depicts the executives who are with me to discuss the quarter and full year 2020 results. They are Tony Guzzi, Chairman, President and Chief Executive Officer Mark Pampa, our Executive Vice President and Chief Financial Officer and our Executive Vice President and General Counsel, Maxine Mauricio. For call participants not accessing the conference call via the Internet, this presentation, including the slides, will be archived in the Investor Relations section of our website under Presentations. You can find us at emcorgroup.com. With that being said, please let me turn the call over to Tony. Tony? Yes. Let me start the call this morning by congratulating Maxine on her promotion and also welcoming Ron Johnson as our newest EMCOR Director. Maxine, congratulations and Ron, welcome to EMCOR's Board. I'm going to be covering Pages 4 through 8 here in my opening comments. 1st, I'd like to welcome all of you and thank you for your interest and or investment in EMCOR. In 2020, we had a terrific year despite an extremely challenging operating environment. We delivered extraordinary results through disciplined execution and Resilience. I am extremely proud of our EMCOR team. I don't think any of us could have imagined this high level of performance when we started to understand the impact of COVID-nineteen on our operations in March of 2020. In 2020, we had $8,800,000,000 in revenues and set records on an adjusted basis for earnings per diluted share of $6.40 operating income of $490,000,000 performance in its financial commentary, inclusive of the Q4 and full year 2020 performance. We delivered these stellar results because we have diversity in demand for our services and we have end markets that have proved resilient and have provided us with opportunities to execute well for our customers. These results are a testament to our skilled employees and our subsidiary, segment and corporate leadership who kept focused and resolute through the ever changing environment in 2020. Across our company, we worked hard to keep our employees safe and it was our number one priority throughout the year. We innovated and found ways to maintain and even improve our productivity. We became leaner and even more expeditious in our decision making and we're able to leverage technology to connect our leadership effectively to the front lines despite COVID-nineteen protocols. We did not let obstacles become excuses. Instead, we overcame obstacles and we delivered exceptional results. I now want to highlight some of our segment I now want to highlight some of our segment performance. Our Electrical Construction segment performed well with 8.4 percent operating income margins. Despite the disruptions in some of our operations from COVID-nineteen induced shutdowns, We still posted outstanding results. These results were driven by excellent execution in the commercial sector, driven by data center and telecommunication and really excellent execution across all market sectors. We performed The work well and really innovated on the means, the methods and the scheduling, so that we could not only keep our employees safe, but enhance our productivity. Our Mechanical Construction segment had an exceptional year by any measure. We also had 8.4% operating income margins with exceptional performance across the commercial sector, again driven by telecommunications and data centers, and we also had strength in warehousing, manufacturing, Water and Wastewater and the Healthcare end markets. We showed great innovation through increased use of BIM or Building Information Modeling and Prefabrication and worked hard to keep our employees safe and productive. We believe in both of our construction segments that we not only met, but we exceeded our customers' expectations. Our United States Building Services segment team showed grit and resilience as they faced the COVID-nineteen disruption In late March, April May, with many of our customer sites not acceptable, bookings off as much as 40% in some of our subsidiary companies and in some of our product lines and a very cautious resumption of decision making by our customers to allow us to resume service and projects. We did rebound robustly from mid June forward and we're well prepared to execute project work for our customers that optimize their equipment and control systems, improve the wellness of their facilities through indoor air quality or IAQ solutions and sought to help our customers return to work safely and productively. We also served as the boots on the ground for our customers to keep lightly occupied buildings, campuses and schools operational, functioning and safe over the past 10 months. We are well positioned to keep serving our customers as they reopen and seek to make their building safe, efficient and productive for their employees. Our U. K. Building Services segment mirrored the performance of our U. S. Building Services segment. We navigated the severe lockdown actions in the U. K. Changes that enhanced our leaders' responsiveness by making our organization even flatter, more aligned and leaner, which has led to crisper and more efficient decision making. Our U. K. Team continues to win in the market as we have a culture of innovation and execution. As you all know, our Industrial Services segment mostly serves the downstream oil and gas or refining and petrochemical markets. These end markets had a severe dislocation of demand as planes stopped flying and people stopped driving. And this segment was also impacted at the beginning of the year with a disruption in the global oil and gas markets. We cut costs aggressively and maintain profitability on an EBITDA basis. We are well positioned when demand for our services returns, which is not likely to happen until the Q4 of this year. We expect a larger, more sophisticated, well capitalized service providers to emerge stronger. And yes, we are clearly one of them. We exit 2020 with our remaining performance obligations or RPOs at an all time high of $4,600,000,000 13.8% higher than the year ago period. We have very strong RPOs and are continuing to benefit from the very strong demand for data center construction, logistics and supply chain support, especially with our fire protection trade, healthcare, water and wastewater, And we expect manufacturing to be as strong also as 2021 progresses. We expect to benefit from increasing demand for IAQ, that's Indoor Air Quality and Building Efficiency Projects and Solutions. We depart 2020 with an exceptional balance sheet that allows us the room to grow and build for the future, while we're continuing to return cash to our shareholders through dividends and share repurchases. 2020 was an extraordinary year and we performed exceptionally well, which is a real testament to our people, our subsidiary leaders, our segment staff and leadership and our corporate staff and leadership. And really I'd just like to thank all of them. I will now turn the discussion over to Mark. Thank you, Tony, and good morning to everyone participating on the call today. For those accessing this presentation via the webcast, we are now on Slide 7. Over the next several slides, I will provide a detailed discussion of our Q4 results before moving to our full year performance, some of which Tony outlined during his opening commentary. As a reminder, all financial information discussed during this morning's call is included in our consolidated financial statements within both our earnings release announcement and Form 10 ks filed with the Securities and Exchange Commission earlier today. So let's discuss EMCOR's 4th quarter performance. Consolidated revenues of $2,300,000,000 in quarter 4 are down $122,400,000 or 5.1 percent from 2019. Our 4th quarter results include $55,400,000 of revenues attributable to businesses acquired pertaining to the period of time that such businesses were not owned Amcor in last year's Q4. Acquisition revenues positively impacted both our United States Mechanical Construction and United States Building Services segments. Excluding the impact of businesses acquired, Q4 2020 consolidated revenues decreased $177,900,000 or 7 point 4% organically. Our segment performance was mixed within the quarter with most of our reportable segments experiencing quarter over quarter organic revenue declines. In general, we have seen reductions in revenues in those geographies or market sectors, which are continuing to be most significantly impacted by the COVID-nineteen pandemic. However, when we consider the incremental revenue generated from our acquisitions, we were successful in generating 4th quarter revenue growth from 3 of our 5 reportable segments. Specific segment revenue performance for the quarter is as follows. United States Electrical Construction segment revenues of $493,500,000 decreased $71,000,000 or 12.6 percent from quarter 4, 2019. Revenues declined across multiple market sectors due to the continuing impact of the COVID-nineteen pandemic, including the associated containment and mitigation measures as well as the curtailment of capital spending by some of our customers. Consistent with my 3rd quarter commentary, This segment experienced a significant reduction in revenues from industrial project work within the manufacturing market sector where certain of our electrical businesses perform services for both midstream and upstream oil and gas customers. Additionally, this segment's operations that serve of Palo Alto, New York and California markets continue to face revenue headwinds as these geographies remain some of the most restrictive with regards to COVID protocols. United States Mechanical Construction segment revenues of $969,400,000 increased $73,800,000 or 8.2 percent from quarter 4 2019. Excluding acquisition revenues of $24,200,000 the segment's revenues increased $49,600,000 of 5.5 percent organically. Revenue growth within the quarter was broad based across most market sectors with commercial and healthcare representing the most significant period over period increases. These revenue gains were partially offset by a quarterly revenue decline and Manufacturing Market Sector Activity due to the completion or substantial completion of certain large projects during the early part of 2020. This Its revenue performance represents an all time quarterly record for our United States Mechanical Construction segment and surpasses the previous record set and 20 nineteen's Q4. EMCOR's total domestic construction business 4th quarter revenues of $1,460,000,000 increased $2,700,000 or less than 0.25%. United States Building Services revenues of 568,100,000 increased $29,100,000 or 5.4 percent. However, when excluding acquisition revenues of $31,200,000 this segment's quarterly revenues decreased $2,100,000 or 40 basis points. Revenue gains within their Mobile Mechanical Services division Resulting from incremental contribution from acquired companies and their commercial site based services division due to new contract awards or scope expansion on certain existing contracts were partially offset by a quarter over quarter revenue decline within this segment's Energy Services division due to reduced large project activity when compared to 20 nineteen's Q4. Consistent with our United States Mechanical Construction Services segment, revenue performance within our United States Building Services segment represents an all time quarterly record. United of Space Industrial Services revenues of $135,500,000 decreased by $163,700,000 or 54.7 percent as this segment continues to be impacted by the negative macroeconomic conditions and uncertainty within the markets in which it operates. Cost control and cash preservation actions taken by customers of this segment have resulted in the suspension of capital spending programs and the curtailment of maintenance activity, which has severely impacted demand for our industrial service offerings. With the rise in telecommuting And the various restrictions on travel in response to COVID-nineteen, there have been significant reductions in both vehicle miles driven and airline miles traveled, which is further prolonging the weakened demand the segment has been experiencing since late quarter 1 of 2020. United Kingdom Building Services segment revenues of $115,000,000 increased $9,400,000 or 8.9 percent from last year's quarter. Revenue gains for the quarter resulted from strong project activity as well as incremental revenue from new contract awards. Additionally, Q4 2020 revenues were positively impacted by $2,900,000 as a result of favorable foreign exchange rate movement in the period. Please turn to Slide 8. Selling, general and administrative expenses of $244,600,000 reflect an increase of $3,700,000 from quarter 4 2019. The current period includes approximately $4,400,000 of incremental expenses from businesses acquired, inclusive of intangible asset amortization, resulting in an organic quarter over quarter decrease of approximately $700,000 a reduction in salaries expense due to a decrease in headcount necessitated by lower organic revenue as well as reduced travel and entertainment expenses due to a combination of cost avoidance measures as well as restricted company travel were the primary reasons for the organic decline in SG and A. These decreases were largely by an increase in quarterly incentive compensation expense due to EMCOR's actual operating performance exceeding its previously forecasted 2020 full year results. As a percentage of revenues, selling, general and administrative expenses totaled 10.7% in quarter 4 2020 versus 10% in the year ago period. The quarter over quarter increase can be attributed to the reduction in our consolidated quarterly revenues without a commensurate decrease in certain of our fixed overhead costs, including those of our Industrial Services segment, as we do not deem the current operating environment to be permanent. Our assessment continues to be based on our evaluation of future market opportunities, and we expect to see some return to normalcy in industrial maintenance and capital of the company's operations, where we ultimately moved beyond the depressed demand caused by the COVID-nineteen pandemic. Reported operating income for the quarter of 137,600,000 represents a $14,700,000 or 12 percent increase when compared to operating income of $122,900,000 in last year's 4th quarter. This operating income performance eclipses our previously established all time quarterly record, which was achieved in 20 20's Q3. Our 4th quarter operating margin was 6%, which compares favorably to the 5.1% of operating margin reported in 20 nineteen's 4th quarter. We experienced the operating margin expansion within each of our reportable segments other than our U. S. Industrial Services segment, which which is reporting an operating loss for the 4th quarter and our U. K. Building Services segment, which achieved a consistent margin in each year's quarterly period. Specific quarterly performance by reportable segment is as follows. Our United States Electrical Construction segment had operating income of 43,400,000 which increased by $2,100,000 from the comparable 2019 period. Reported quarterly operating margin is 8.8% and represents 150 basis point improvement over 20 nineteen's Q4. This increase in both operating income dollars and operating margin is largely attributable to increased gross profit contribution from commercial market sector activities, inclusive of numerous telecommunications construction projects. These gross profit gains were partially offset by reduced gross profit contribution from the transportation and manufacturing market sectors due to both the closeout of projects in prior periods as well as the continued headwinds attributable to the COVID-nineteen pandemic. 4th 4th quarter operating income of our United States Mechanical Construction Services segment of $100,400,000 represents a $31,500,000 increase from last year's quarter, While operating margin in the quarter of 10.4% represents a 270 basis point improvement over 2019. This segment has continued to experience strength in the majority of the market sectors we serve, most notably demonstrated by increased gross profit contribution from project activity in the commercial, healthcare and institutional market sectors. In addition, our mechanical construction segment experienced a more favorable mix of work than in the prior year and benefited from strong performance by our fire protection operations. Our combined U. S. Construction business is reporting a 9.8% operating margin and $143,700,000 of operating income, which has increased from 20 nineteen's Q4 by $33,500,000 or 30.4 percent. Operating income for United States Building Services of $28,000,000 represents a $3,800,000 increase from last year's 4th quarter and operating Mechanical Services division, inclusive of incremental contribution from acquired companies. In addition, this segment continues to benefit from reduced levels of general and administrative expenses due to cost mitigation actions implemented in response to the COVID-nineteen pandemic. Our United States Industrial Services segment operating loss of $8,200,000 represents a decline of $21,300,000 which compares to operating income of $13,100,000 in last year's Q4. As mentioned earlier on today's call, as well as during my commentary on each of our last 2 quarterly conference calls. Our Industrial Services segment has been significantly impacted by the adverse macroeconomic conditions within the oil and gas industry, Including the dramatic decline in demand for refined oil products resulting from travel restrictions and other containment and mitigation measures imposed in response to COVID-nineteen. These conditions have resulted in considerable reductions in capital spending by certain of our customers, which has led to a decrease in demand for this segment's service offerings. This environment was further exasperated by an active hurricane season, which resulted in the suspension of planned maintenance activities that would have occurred during both quarters of 3 and 4 of 2020. Tony will speak to our 2021 expectations overall as well as our expectations for this segment later in this morning's call. United Kingdom Building Services operating income of $4,200,000 represents an increase of approximately $300,000 over quarter 4 of 2019. Operating margin was 3.7% for both quarter periods. We are now on Slide 9. Additional financial items of significance for the quarter not previously addressed are as follows: Quarter 4 gross profit of $383,900,000 or 16.8 percent of revenues is improved over last year's quarter by $19,100,000 160 basis of gross margin. Restructuring expenses in 2020's Q4 pertain to the realignment of management resources within our combined U. S. Construction operations. Diluted earnings per common share of $1.45 compares to $1.54 per diluted share in last year's 4th quarter. Adjusting our 2020 quarterly performance for the negative impact on our income tax rate resulting from the non deductible portion of the non cash impairment charges recorded during the Q2 of 2020. Non GAAP diluted earnings per share for the quarter ended December 31, 2020 is $1.86 which favorably compares to last year's Q4 by $0.32 of nearly 21%. Our tax rate for quarter 4 of 2020 is 41.8%, which is significantly higher than the tax rate for the corresponding 2019 period due to the non deductibility of the majority of the impairment charges just referenced. My last comment on Slide 9 is with respect to our $259,500,000 of operating cash flow in the quarter, which favorably compares to $178,800,000 of operating cash flow in the year ago period and reflects the continued effective management of working capital by our subsidiary leadership teams. Our operating cash flow was aided by the organic decline in revenues, which resulted in a contraction in accounts receivable. Additionally, the deferral of the employer's portion of Social Security taxes in the United States benefited our cash flow by approximately $35,200,000 during the Q4 of 2020. On a full year basis, The Social Security tax deferrals coupled with the deferral value added tax in the United Kingdom has favorably impacted our 12 month operating cash flow by approximately $117,300,000 These amounts will be repaid in 20212022 and obviously will have the opposite effect on our operating cash flow in such future periods. Please turn to slide 10. With the 4th Quarter commentary complete, I will now augment Tony's introductory remarks on EMCOR's annual performance. Consolidated revenues of $8,800,000,000 represent a decrease of $377,600,000 or 4.1 percent when compared to our record annual revenues in 2019 of $9,170,000,000 Our year to date results include $269,600,000 of revenues attributable to businesses acquired pertaining to the period of time that such businesses were not owned by EMCOR in the 2019 period. Acquisitions positively impacted each of the United States Electrical Construction, United States Mechanical Construction and United States Building Services Segments. Excluding the impact of businesses acquired, revenues decreased organically 7.1%, primarily as a result of the significant revenue contraction experienced during quarter 2 as the majority of our operations were most significantly impacted by the COVID-nineteen pandemic during such period. In addition, our annual Revenues were negatively impacted by a decrease in demand for certain of our service offerings within our United States Electrical Construction Services and United States Industrial Services segments as a result of the adverse conditions experienced within the oil and gas industry. Discrete segment revenue performance for full year 2020 is as follows. United States Electrical Construction segment revenues of $1,970,000,000 decreased $243,200,000 or 11 percent from 20 nineteen's $2,220,000,000 of revenues. Acquisitions contributed $25,400,000 of incremental revenues resulting in an organic decline of $268,500,000 or 12.1 percent. Revenue contraction within the majority of the market sectors in which we operate, most notably the commercial and manufacturing market sectors were the primary drivers of this year's year over year decrease. As I mentioned in my commentary on our 4th quarter results, although this segment has a diverse geographic footprint, a number of its operating companies within both of New York and California markets were severely impacted by COVID protocols, which resulted in a decrease in the number of short duration project opportunities as well as various project delays. These impacts coupled with the completion or substantial completion of certain large projects in 2019 contributed to the decline in organic annual revenues. In addition, and as previously referenced, certain of our operations in the segment, which are exposed to the upstream and midstream oil and gas sector, experienced a significant decline in demand in 2020. Partially offsetting these revenue reductions were increased revenues from project activities within the institutional and hospitality market sectors during the year. United States Mechanical Construction Revenues of 3,490,000,000 increased $145,200,000 or 4.3 percent compared to 2019. Acquisitions contributed $188,800,000 of incremental revenues to this segment, which when excluded results in an organic revenue decline of $43,700,000 or 1.3 percent from 2020. This organic decrease can be largely attributed to reduced project volume within the manufacturing market sector with a heavy concentration in the food processing submarket sector as a result of the completion or substantial completion of certain large projects in 2019. Similar to our United States Electrical Construction segment. This segment additionally experienced the negative effects of the COVID-nineteen pandemic, which resulted in a reduced number of short duration project opportunities during calendar 2020. United States Building Services segment revenues of $2,110,000,000 increased $3,200,000 or less than 0.5 percent. Acquisitions contributed $55,400,000 of revenues resulting in an organic revenue decline of 2.5% compared to full year 2019. The decrease in project and building controls activities within the segment's Mobile Mechanical Services division, largely as a result of the impact of Services division for the primary contributors to such organic revenue reduction. In addition, this segment experienced a decrease in revenues from its Government Services division as a result of the loss of certain contracts not renewed pursuant to rebid. These revenue contractions were partially offset by increased customer demand for certain services aimed at improving the indoor air quality within their facilities as well as an increase in revenues within the segment's commercial site based services division as a result of new contract awards and scope expansion on certain existing contracts. United States Industrial Services segment revenues of $797,500,000 decreased $290,100,000 or 26.7 percent from 20 2019's $1,090,000,000 of revenues. At the risk of sounding repetitive, for most of 2020, The segment has been severely impacted by negative conditions and uncertainty within the markets in which it operates due to the dislocation between crude oil supply and demand resulting from COVID-nineteen and geopolitical tensions within OPEC. In addition, during the back half of twenty twenty, The segment experienced suspension and deferral maintenance and capital projects by its customers as a result of hurricane and tropical storm activity in the United States Gulf Coast region. Revenues of our United Kingdom Building Services segment for 2020 increased 1.7% to $430,600,000 primarily as a result of new maintenance contract awards within the commercial and institutional market sectors. Revenues were also favorably impacted by $2,300,000 as a result of exchange rate movement and the pound sterling year over year. Please turn to Slide 11. Selling, general and administrative expenses of $903,600,000 represent 10.3% of revenues as compared of $893,500,000 or 9.7 percent of revenues in 2019. Full year 2020 SG and A includes 29 $9,600,000 of incremental expenses, inclusive of intangible asset amortization pertaining to businesses acquired. Excluding such incremental amounts, Our SG and A has decreased $19,400,000 on an organic basis, primarily as a result of certain cost reductions resulting from or actions taken in response of the COVID-nineteen pandemic. As referenced during my quarter commentary, the increase in SG and A as a percentage of revenues is a result of the organic decrease in our revenue without a commensurate decrease in certain of our fixed overhead costs as we do not deem the current operating environment to be permanent. 2020 year to date operating income is $256,800,000 adjusting this amount to exclude the non cash impairment loss on goodwill, identifiable intangible assets and other long lived assets recorded in the Q2. Our non GAAP operating income for the year was $489,600,000 This compares to operating income of $460,900,000 for full year 2019 and represents a $28,700,000 or 6.2 percent improvement year over year. Despite the headwinds experienced in 2020, 3 of our 5 segments achieved higher operating income and higher operating margins than that of the prior year. Of the 2 segments which did not, United States Building Services is reporting a modest decline of just over 1%, while our United States Industrial Services segment suffered a significant year over year reduction, resulting in an operating loss for 2020. With regard to each segment's discrete performance, I will start with our Electrical United States Electrical Construction segment. Their 2020 operating income of $166,500,000 represents an all time segment record and is an increase of $4,800,000 or 3% compared to the prior year. Operating margin for 2020 is 8.4%, which is 110 basis points higher than 2019. This year over year improvement in operating income dollars was due to a reduction in selling, general and administrative expenses due to cost control measures enacted during the course of 2020. The increase in operating margin for the year was a result of an increase in gross profit margin, given favorable project execution and a more profitable mix of work within this segment. These improvements in gross profit margin were partially offset by an increase in the ratio of selling, general and administrative expenses to revenues as a result of the year over year revenue contraction within the Electrical Construction segment. United States Mechanical Construction operating income of $292,500,000 increased $67,500,000 or 30 percent over 2019 levels and operating margin reached 8.4% versus 6.7% in the prior year. Acquired companies contributed incremental operating income of $9,300,000 inclusive of $12,700,000 of amortization expense associated with identifiable intangible assets. The increase in operating income for 2020 It was primarily due to strong project performance throughout the year and the majority of the market sector served by this segment, resulting in an increase in annual gross profit. The 170 basis point improvement in operating margin was also a result of our solid project execution and improved gross profit margin, most notably within the manufacturing and commercial market sectors. These increases in gross profit and gross profit margin were partially offset by an increase in selling, of administrative expenses, primarily as a result of an increase in incentive compensation expense due to the improved year over year operating performance for this segment. United States Building Services operating income for 2020 of $113,400,000 declined by $1,300,000 or 1.2 percent due to a reduction in year over year large project activity within this segment's Energy Services division as well as decreased project and building control opportunities within their Mechanical Services division due to both temporary closure and restricted access to certain customers' facilities impacted by the COVID-nineteen pandemic. These reductions were partially offset by incremental operating income contribution from companies acquired, which totaled $4,500,000 inclusive of $3,200,000 of amortization expense associated with identifiable intangible assets. In addition, this segment experienced increased gross profit resulting from greater demand for certain services aimed at improving indoor air quality as various customers made changes to their HVAC systems in advance of their employees returning to work as recommended by the Center For Disease Control. Operating margin of 5.4% was consistent with the prior year as a reduction in gross profit margin was offset by a decrease in the ratio of selling, general and administrative expenses to revenues due to certain cost reduction measures taken during 2020. Our United States Industrial Services segment incurred an operating loss of $2,800,000 for 2020 as compared to operating income of $44,300,000 in 20.19. As referenced numerous times during this morning's call, the segment was the most severely impacted by the pandemic as well as the other macroeconomic factors affecting the oil and gas industry. This segment implemented significant cost reductions during the year in an effort to mute the year over year decline. However, as previously discussed, This segment's overhead structure includes a significant investment in fixed infrastructure, including plant and equipment. As we view current market conditions as to be temporary that infrastructure is needed to respond to changes in demand patterns once they ultimately recover. Operating income of our United Kingdom Building Services segment of $20,700,000 or 4.8 percent of revenues compares to operating income of $18,300,000 or 4.3 of revenues in the prior year. The $2,300,000 improvement is largely due to an increase in gross profit from new maintenance contract awards, While the 50 basis point expansion in operating margin is attributable to both the increase in gross profit margin as well as reduction in the ratio of selling and general and administrative expenses to revenues. SG and A of the segment benefited from various cost control initiatives implemented by our U. K. Team. We are now on Slide 12. Additional key financial data on Slide 12 not addressed during my full year commentary is as follows. Year to date gross profit of $1,400,000,000 is greater than 20 nineteen's gross profit by $39,500,000 while gross margin of 15.9 percent is higher than last year's 14.8 percent by 110 basis points. Total restructuring costs of $2,200,000 are increased from 2019 due to actions taken during 2020 to both realign certain management functions as well as right size our cost structure in light of the revenue headwinds we faced. Diluted earnings per common share is $2.40 compared to $5.75 per diluted share a year ago. When adjusting this amount for the impact of the non cash impairment charges recorded in 20 20 2nd quarter, non GAAP diluted earnings per share was $6.40 as compared to the same $5.75 in last year's annual period. This represents a $0.65 or 11.3 percent improvement year over year. We are now on Slide 13. As outlined on the slide, EMCOR's liquidity profile remains strong despite the headwinds we faced during the course of 2020. Our cash balance has increased from $358,800,000 at December 31, 2019 to $902,900,000 at the end of 2020. Operating cash flow of $806,400,000 aided by the FICA and VAT cash tax deferrals previously referenced was the primary driver of this increase. Operating cash flow was partially offset by cash used in investing activities of nearly $95,000,000 predominantly representing payments for acquisitions of businesses and capital expenditures, as well as cash used in financing activities, which totaled $172,000,000 and consisted of the repurchase of our common stock, net repayments under our credit facility and dividends paid to our stockholders. Working capital has increased by over $236,000,000 as a result of the increase in our cash balance, partially offset by a reduction in accounts receivable given the lower organic revenue during the period, as well as an increase in contract liabilities due to advanced billing on certain long term construction projects. Other changes in key balance sheet positions of note are as follows. Goodwill has decreased since December 31, 2019 as a result of the non cash impairment charge recognized during the quarter of 2020, partially offset by an increase in goodwill resulting from businesses acquired or purchase price adjustments made during the year. Our identifiable intangible asset balance has decreased since the end of last year, largely due to $60,000,000 of amortization expense recorded during 2020, which was partially offset by incremental intangible assets recognized as a result of the acquisition of 3 businesses during calendar 2020. Total debt has decreased by $35,700,000 since the end of 2019, reflecting our net financing activity during the year. EMCOR's debt to capitalization ratio has decreased to 11.9% from 13.2% in the year ago period. Lastly, our stockholders' equity has decreased slightly since December 2019 as our net income was offset by share repurchases, dividend payments and post retirement plan liability adjustments made during 2020. Our balance sheet in conjunction with the credit available to us continues to put us in a position to invest in our business and achieve our strategic objectives as we look forward to 2021 years beyond that. With my portion of the formal slide presentation concluded, I would like to get a drink of water and return the call back to Tony. Tony? Hey, Mark. That's a well deserved drink of water. And Thanks, Mark. And I'm on Page 14, remaining performance obligation or of our IPO by segment and market segments. I'll go through the numbers briefly and then go deeper into the market trends we are seeing. As I stated in the statement in my remarks, Total RPOs at the end of 2020 were a shade under $4,600,000,000 or $559,000,000 or 13.8 percent when compared to the year ago level of $4,030,000,000 The strength of our RPOs and the associated bidding activity surprises a bit given the uncertainty of the pandemic's economic dislocation Fiscally strong construction and service providers, prosper. It's still a little too early to tell, but 2020 and now into 2021, sure I'm sorry, I should probably repeat my mic was on. So I'm going to go on to Page 14, remaining performance obligations by segment and market sector. Look, they're up $559,000,000 or 13.8 percent for those that inherit. And really there's a flight to quality a lot of times when you move from 2020 into 2021, and this certainly looks like one of those times. Our domestic construction segments experienced strong project growth in 2020, With RPOs increasing $495,000,000 or 15.2 percent since the end of 2019, as we continued and continue to see demand for electrical and mechanical systems, both in new construction and retrofit projects. Our United States Building Services segment RPOs increased in the quarter as this segment's small project repair service work continue to rebound from its abrupt, almost hard stop at the beginning and the height of COVID-nineteen. Some of this resumption is a return of regularly scheduled maintenance on mechanical systems and then the return of small project work. And some is focused, as you'd imagine, around modifications and improvements in IAQ, Indoor Air Quality, which I will discuss in detail in a few slides. It was quite a recovery from the March, April and May time frame when the segment was hit especially hard, as described earlier with bookings on 40% in many cases. Over on the right side of the page, we show RPOs by market sector. Throughout 2020, we experienced strong year over year growth in the commercial, healthcare and water and wastewater sectors. Commercial projects, which make up 41% of Total RPOs increased $297,000,000 or close to 19% for the year. As we stated last quarter and continue to experience in the Q4 of this year, Demand for hyper data scale data center construction has high demand, as does high-tech manufacturing and warehousing and logistics also remain strong. We are a nationwide leader in this section of the commercial market sector. And quite frankly, I don't see any let up in this activity anytime soon. We are also in part 1 design discussion on several large design build food process opportunities. For the year, Telkor project RPOs increased $207,000,000 or 56 percent and water and wastewater project RPOs grew similarly by 57% to $173,000,000 As one might surmise, given the impact of the pandemic, health care as a sector of the nonresidential construction market is expected to be slightly higher in 2021 and likely better than that for us as our customers build new facilities and retrofit existing facilities. By the way, RPOs in these three market sectors are all time highs for us since we transitioned to RPO reporting from backlog reporting in the March of 2018. The nonresidential market, as measured by the U. S. Census Bureau for put in place activity, remains a very large market. It was roughly $800,000,000,000 at the end of December 31, 2020. It's down 5% in 2020. However, it is not a uniform market given its size and breadth and opportunities still exist. On the next page, I will discuss how well thought and patient capital allocation strategy has allowed this growth in our RPO base and growth to occur despite choppy and uncertain overall markets. And on nonresidential market, they decreased 5%. Now on Page 15, capital allocation. We have long had a major market presence in mechanical and electrical construction services and have continued to allocate capital to fill in the white space either geographically or by adding capability in these important segments. Further, we have used our capital to build leading capabilities in HVAC service, building controls and mechanical system retrofit. We have built that capability and capacity through organic growth and acquisition in a sustained manner over many years. We are also one of the country's leading Life Safety Contractors, and this activity mostly resides in our mechanical, and that is the sprinkler fitters and electrical, fire alarm and security installation and upgrade and Low Voltage Systems Construction segments. Again, these capabilities were built over a long period of time through acquisition and organic investment. These are concrete examples where we have built successful platforms that allow us to have the capability to serve a broad spectrum of customers with the right products and specialty trade capabilities. Our investment decisions and patience have allowed us to build and maintain capability through cycles and serve a diverse set of customer opportunities. We have not only invested in over 20 acquisitions and we spent around 5 of $55,000,000 on those acquisitions since 2017 until today, but we also have returned significant cash to our shareholders through share repurchases and dividends. I'm now on Page 16 titled Resilient Markets. As we discussed on the previous 2 pages. We have shown that we have very good diversity of demand at Amcor and we have used that capital to grow organically and through acquisition to allow us to build upon such diversity of demand and resiliency in our business. This is not an accident, But it is a part of our long term capital allocation strategy as discussed on the previous page. For example, EMCOR's data center capabilities were built enhanced over a very long period of time. We started building the largest data centers in the country for financial institutions and the original hosting providers almost 20 years ago. Today, we've built data centers that are 5 times larger to 7 times larger than these previous large data centers. We have continued to grow that capability over the last 5 years and expanded through organic investment or acquisition or a combination of both. We are one of the leaders in the specialty contracting for these complex facilities. That's all the electrical trades, mechanical trades and sprinkler fitters. Data center construction is a good market for us and we expect it to be for the foreseeable future. It is also a growing part of our maintenance activities. We are fortunate to have other markets that have shown resiliency. We continue to support our customers' e commerce growth primarily through our life safety services in the construction of large cold storage and other warehouse facilities as our customers transform their warehouse networks to allow for more fast paced growth. We continue to believe that we are very well positioned to support our customers as they build more resiliency into their supply chains by reassuring projects. We also continue to seek a significant opportunity for large and small design build food processing clients. Healthcare is also a good market for us and has been for a very long period of time. These are complex facilities that are seeking to become more flexible into the delivery of their care in the long term. Water and wastewater is a market that we believe will have significant opportunity for us and has significant opportunity for us today and also in the next 3 to 5 years, especially in Florida. And finally, as I have discussed previously, is our position as a leading HVAC services contractor. We are in a compelling position to provide indoor air quality solutions and services. We see very strong demand currently and expect this to continue over many years. We have experienced and are continuing to experience strong demand for upgrading enhancing HVAC and building control systems for both energy efficiency and flexibility of demand and use. This has always been a good market for EMCOR for many years and it spans all market sectors. As discussed, serving these resilience markets is not by chance. We built this capability over many years and we have some of the best field leadership, trade supervision and skilled tradespeople in the industry to execute in these markets. I'm now going to wrap this up on Page 1718. As we enter 2021, we are still in the world of COVID-nineteen mitigation and restriction. The oil and gas markets are still depressed and the non residential market is expected to decline by another 3% to 5%. Despite that less than cheery backdrop, we expect to continue to perform well in 2020. We expect revenues of $9,200,000,000 and expect to earn $6.20 to $6.70 in earnings per diluted share. 2021 should be another year of outstanding performance. We will have to execute very well to maintain the 2020 record levels of operating income margins of 8.4% in our Electrical and Mechanical Construction segments. We do expect to increase revenues, which may help us mitigate this challenge. Underlying this range are the following assumptions. Our Industrial Services segment does not materially improve until the 4th quarter, We gained strong momentum headed into 2020 as demand for refined products will continue to be challenged during 2021, especially through the end of the second quarter. The non residential construction market will decline modestly. We will continue to execute well in our more resilient rock market sectors to include manufacturing, commercial driven by data centers and logistics and warehousing, Water and Wastewater, Energy Retrofits and Healthcare. Our end market diversity has been and continues to be a real strength of EMCOR. We do not expect a more restrictive COVID-nineteen environment than what we are operating in today. We do expect a more normal pre COVID-nineteen operating environment to emerge as the year progresses. We are operating near 100% capability on our jobs with no meaningful COVID-nineteen induced issues. Our leadership and trades people have learned how to work and even prosper under the COVID precautions. We have learned to plan and execute, but always have the mindset that our employee safety comes first, which is nothing new or novel for us as it is one of our core values. We expect to continue to help our customers improve their facilities' air quality with indoor air quality solutions, improve energy efficiency through replacement projects and optimizing their systems. And we are going to help them bring back their employees back to work with improved peace of mind through our efforts. Our ability to move to the upper range of our earnings guidance range will depend on the following. The nonresidential market, especially our more resilient markets are stronger than projected because the bounce back is faster as the U. S. And the U. K. Normalizes from COVID-nineteen restrictions. Our refining and petrochemical customers begin to gain more comfort with improved demand for refined products It increased their scope for this year's work performed by us. Our momentum in indoor air quality and efficiency projects continues to not only increase, But accelerates further and our productivity stays strong as we transition to more normal operating conditions. I I'm going to talk a little bit about what happened in Texas last week as we have a significant business in Texas. Clearly, the power disruption in Texas This last week affected not only EMCOR's business operations, customer sites, but also more importantly, our employees and their families. Many of our customers went to Skeleton Staffs for 3 to 5 days and many shut down operations almost completely. We have mostly resumed operations in our industrial Services and also our construction services and building service customer sites. We will be there to help our customers complete their planned turnarounds, Execute on planned maintenance and repairs related to the storm and to resume project work already underway or that was ready to start in the last few weeks. We have we may have work that was planned for the Q1 that will now extend into the Q2 that and it may have had more activity in The Q1 that it will now have. We have discussed capital allocation earlier in the presentation in detail. We expect to continue to be balanced capital allocators as we have shown on the previous pages. We have more capital to allocate and balance, but we know how to do that. And however, our guidance contemplates that we will continue to be disciplined allocators between organic growth investments, acquisitions, share repurchases and dividends. And without Laura, I will take questions. Thank you, sir. So your first question will come from the line of Mr. Grant Tillman from D. A. Davidson. Sir, your line is now live. Go ahead, please. Hey, thank you. Good morning. Congrats on a great quarter, great year. Thank you. Tony, you've gone from sort of a temporary low in demand To what feels like some real urgency in the market to secure specialty service providers like yourself. I guess I'm wondering, is this an environment now where We feel like you can be even more selective about what you're after versus 3 or 6 months ago. Does this overall pressure on the non res market that You think happens in 2021, does that still leave some loose capacity out there and more competitiveness even on these more technical jobs? No, we didn't flinch. We don't operate in an environment where we just try to fill capacity. Couple of things we don't pay attention to is market share. We try to figure out the best opportunities for our market. And we really don't pay attention to chasing low bids to just fill up our companies. So, yes, somewhere back in May, there was nonsense floating around the market where people came back and wanted a COVID discount. And we respectively said no. We are disciplined bidding. We have discipline on capital allocation. That doesn't change whether it's good markets or bad markets. Okay. And margins continue to be exceptional in Businesses. I guess I'm wondering, do these upticks in healthcare, Water, wastewater, some of the other technical areas in the business. I mean, I assume that offers some more margin tailwinds as we Look, business is always a mix, and it's a mix not only of end markets, sir, but also contract structure. We pay attention at this point where we're at right now, I think Mark would concur with me, we're a lot more focused on our margin dollars than Margin percentages, we like these margin percentages. We've always said that our businesses operate in a band. We're up to the upper end of that band. The midpoint of this band Fine with more volume and I feel really good about how we're executing in the field right now. Mark? Yes. Thank you, Brett. I'd like to add, clearly, our performance in the last two calendar years has been quite exceptional from a margin contribution basis and it certainly distorts the averages if you look at them for certainly over the short period. And I think Tony mentioned the discipline with regards to bidding and ultimately project and customer selection earlier to your first question. That hasn't changed and it's not going to change. And ultimately, if it makes sense for us to participate, we're going to do whatever we need to participate. And we know what our track record is and we don't see any reason why that's going to change as we go forward in time. Yes. And I think it ties a little bit into the capital allocation. We're not big capital organic capital users of fixed investment in our business. But we do know how to supply smartly. And I think some of the margin stretch you're seeing, in fact, I know some of the margin improvement we're seeing is because our means and methods have gotten better. We have gotten the implementation of technology not only from point sighting and job sighting as we lay out a job and Think about how that's going to construct on the site. Our prefabrication in both our mechanical and electrical business continues to get stronger. We're going to put more full time resources against that to make sure best practice is spread throughout the company. And then that is enabled by what I would say is as good as anybody or maybe better than anybody use building information modeling. Our subsidiary leadership And our segment leadership really understand this technology and how to implement it to drive efficiencies for our customers and for our employees to not only build faster And smarter but safer. And that's really helped us in this COVID environment because our means and methods and planning has always been good, But it really became exceptional over the past year. And I'd tie in another point here. I agree with you on the point that these more technically complicated systems, but the contract structure So typically, a water and wastewater job, a very good work and we have a terrific team that does that work, is not going to be as profitable as a quick turn commercial job doing energy efficiency work. I mean, it's just that's just not how it works. And just something that I'd caution everybody on, Contract structure and type of work matters. And again, like I said earlier, margin dollars actually matter too. Yes. That's helpful color. My last one is just on the indoor air quality opportunity. We've been talking about this for the last few quarters, Seems to be perking up. One of the questions I had, Tony, is there anything about That type of work that might require additional investment in your platform and capabilities, things to address that opportunity, you feel like the platform is set to address that as we go forward. It's set. Training matters. And we have great training platform set, And we have some people that drive that training for us. And that's an underlying strength of EMCOR that's only gotten better through this COVID period. We're using our technological tools Drive out training faster and to a broader group of people as are we leveraging our peer groups better from data centers, low voltage, BIM, Prefabrication and just our standard electrical and mechanical construction. Our guys are really sharing means and methods and how to service different customer demands. And that's one of the benefits of being EMCOR. The amount of learning that can go on across our organization, That sounds like a soft benefit, but when you're dealing with technical people, technical supervision and trades, it matters a lot. These are highly skilled people that know how to take the information, tailor it to their local market and their customers and drive a more effective solution for those customers. That's not easily replicated by a mom and pop contractor. Understood. Thank you. Thank you, sir. Your next question will come from the line of Mr. Adam Thalhimer from Thompson Davis. Sir, your line is now live. Go ahead, please. Good morning, Adam. Hey, good morning, guys. Great quarter, good outlook. Hey, Tony, it's been a long time since I've tried I've been taking up my revenue forecast to try to match consensus, pretty healthy revenue guide for this year. Just curious, how does that slowdown at a segment level, the revenues for 2021. Look, let's we don't give segment guidance, but I mean, you have to look The RPOs and that will give you an indication of segment, right? Clearly, our Electrical and Mechanical segments are our biggest segments and their RPOs are up healthy And Building Services Has Momentum Building. We're going to take a pass on having any discussion while we see revenues flowing out for the year in Industrial Services. And you can see our commentary. We're not expecting anything heroic there until we get into 2022 when we think the market will recover. And then the minus 3% to 5% for kind of general non res, is that basically in line with what you've been thinking for the last 3 to No, that has not changed. Adam, I think the wildcard that I can't really Prognosticate on. These are consensus from every source that comes out and our guys are looking at it and gals are looking at the same thing you're looking at To get there. It really hasn't changed. We didn't try to make an estimate back in the height of COVID restrictions back in April, May, June last year, and we thought that was sort of a silly event to try to project 2021 at that time. Things have really sort of solidified here in the of 5 months, both from our external sources and the way we view the market from a compilation of those external sources. I think the one thing none of us quite understand yet Is on especially on the smaller project side and the delay of award on the large project side there for a couple of months. What does this disruption that we all experienced in March, April, May last year, how does that manifest itself in a nonresidential market that has less restriction this year. Is that baked into the forecast? Is it not? I don't think anybody could figure that out and I certainly can't either. Okay. Last one for me. Is it geographically focused, Tony? I mean, you threw in a little comment about weak New York and In a weaker California. The way Mark said that is California, New York were weak in 2020, weaker Because of COVID induced shutdowns and where you really see that is some of the quicker turn construction work and then also not being able to revenue on sites Because some of the sites were shut down in 2020, so we're catching back up. Here's what I would say. California, I think it should be okay. We do some very good energy savings work there, control systems work on the building services side. And on the construction side, we see our customers getting busy again and booking work. New York City is a different animal for a lot of people, right? I think the commercial part of New York City will be fine for us going out through Q3 when it should start rebounding as people come back to work and the city becomes Busy again. I think the part that will remain challenged for us and it's part of what we do, right? We did the Tappan Zee Bridge. We did Brooklyn Battery Tunnel. We are good electrical infrastructure providers of electrical services to those infrastructure projects in New York City and Metro Area. Clearly, those agencies that control that work are trying to figure out what their Well, looks like part of which rests with this stimulus plan with its aid to state and local governments. Whatever happens there, we'll see. And then that'll take a while to trickle down and figure out how to rebuild these folks' budgets to allow them to work on some Actually maintenance infrastructure projects or capital projects in the future in New York City metro area. That's a very specific comment for us. Yes, that should be a strength for you. It is. Give it enough time. Yes. Okay. I'll turn it over. Thanks, guys. Yes. Thank you, sir. Your next question will come from the line of Ms. Noelle Dilts from Stifel. Ma'am, your line is now live. Go ahead, please. Hi, guys. And again, congrats on the strong quarter outlook. My first question was just looking at kind of the strength in data centers. And so looking at the growth in RPOs, you've obviously seen a lot of growth on the mechanical side. So I was just curious, When you look at some of those data center opportunities, could you speak to the extent to which you're doing kind of both electric and mechanical work? Is there still some opportunity to sort of cross sell those services? And are there any services you might look to add through acquisition that might kind of strengthen your offering or expand your offering in that market? Thanks. Yes. Good question, Noelle. I mean, We don't necessarily bundle the services together, electric and mechanically, but we work with the same customers. They know the EMCOR companies are there When we have both capabilities in the market and they're both can execute well. So yes, I mean, it's something we look to do. I think we've made acquisitions to strengthen our market presence. An example of that is what we did with a company we bought in Central Iowa, which was a terrific company and it's really been aided. They're good at what they do and I think they would Agree that they've been aided by EMCOR's strength in data center construction. And I would say the BKI acquisition, although many things that terrific team can do, Data Centers being one of it in markets we weren't in, in Oklahoma, Alabama, Georgia and South Carolina. And then we've built both organically and through acquisition, over the last couple of years, our capability to service not only data centers, but warehousing logistics and the fire protection, which for us means sprinkler fitter work. I would say we probably are one of the leaders or have a very strong technical position to serve those very complex structures. So, I don't think we're looking to get into the concrete business, the curtain wall business, the landscaping business around data centers, but we will continue to look to strengthen our electrical, mechanical, building controls and life safety offerings into those facilities And also the other facilities that are supporting e commerce. Okay. And then on U. S. Industrial Services, Obviously, the market remains very challenged, but you do have some competitors that have either announced that they're looking to kind of exit or sell some of those operations or at least streamline permanently streamline some of their operations. Do you think as the market comes back that might kind of strengthen your competitive position and potentially allow you to gain some share as you move forward. Look, we've got very good management team. We've got good operators In our local product lines and companies there. And we're one of the leading providers. We think we can help Those facilities continue to become more efficient, stronger, help them as they look to do things that they've worked on for a while like introduce renewable diesel, And we look to be there to help them. I certainly don't think that this would be the time to exit a market on the bottom that I think will come back, Because I'm pretty sure we're going to be using refined products for quite some time and then we have the ability to continue to strengthen pipeline networks in the midstream. So, yes, I like being one of the leading providers. And I just point out here, It's less than 8% or so of what we do. We achieved what we did in 20 2020 with no significant contribution. They were profitable on an EBITDA basis. And from where we look at it now going The back half of this year and into 2022. It should be upside from there. Okay, great. And then last question, there are some There have been some reported shortages of things like copper cabling and other equipment. And obviously, we're hearing a lot about construction input costs, increasing raw material costs. Are you is that something you're concerned about or watching or kind of impacting how you're thinking about the timing of projects at all? No. The way we think about that is we will get supply. I'm very I've been here a long time. I can count on one hand the number of times we've been supply constrained. And why is that so? We have very strong national relationships with some of the best distributors and suppliers in the business. And our guys can look all the way back through the distributor to Distributor Partners. And because of that, we get rewarded in times of shortages. The other thing is on the smaller jobs, those jobs are constantly repricing, right, Because they have quick turns. On the larger jobs, again, because we've been good customers, because we are thoughtful in the way we approach supply chain, We typically can lock in what we need on those longer term jobs and where we can't, we're relatively successful in a time of escalating commodity prices, making sure that's built into the contract. Okay. Very helpful. Thank you. Thanks, Joel. Thank you. Your next question will come from the line of Mr. Sean Eastman from KeyBanc. Sir, your line is now live. Go ahead please. Hi, team. So you beat the top end of the pre COVID earnings guidance. So not a bad outcome there. Congrats on that. I just wanted to level set on the guidance for 2021. So clearly, The top line growth is pretty solid in the mid single digits, but we're not getting the same flow through on the earnings growth guidance. So Just wanted to understand the moving pieces there. Is the biggest kind of chunk of that sort of just an assumed normalization in the construction segment margin 2021 or am I not thinking about that correctly? I think it's saying we could operate within the bands that we operate in and when we're executing well. And some of that has to do with mix and timing of projects. We can't sit here in March and know Exactly how our significant work will roll out, how much will be finished this year, how much won't be finished this year, how things will accelerate through the year. So we take a tempered view when you get to the bottom end, which is still very strong margin performance. And also, I think we are working to understand better Become the progression in Industrial Services and that's sort of a hedge against that progression in Industrial Services. Mark? Yes, Sean, to really kind of amplify Tony's comment, and I Hearken back to kind of commentary we had in 2019. 2020 was an unusual year for a whole host of reasons that everybody on this call is Very aware of. But we had more significant work complete in 2020 And that leads to an uptick in margins as we close our projects, right, as those projects mature. And as we look at how the revenues are going to develop for 21. We don't see the same level of significant project completion occurring in the calendar year. That's not to say that we're not going to get the same level of performance, but it certainly leads itself to an environment that would lead you to believe that at least on the electrical and mechanical side, You might see margins flat to slightly back up towards more historical averages. I mean, we're clearly well ahead of the 5 year and 10 year average For both of those segments. That's not to say that we're not striving to reset the bar at these new levels, But it's clearly mix dependent and more so it's clearly it's dependent on project lifecycle. And it's just too early in the year to make that call. Exactly. And look, we're talking 10 to 30 basis points on either side of this. I mean, we're not we don't foresee a margin big margin decrement. We also don't see a big margin pick Not either. So we're talking like Mark said, this could be a couple of projects finish or start. And we're certainly not going to say, hey, we don't want to start that project Because we're worried about we don't want to take that big work because we're worried about margin dilution on of 10 or 15 basis points. I mean, you would agree that would be silly. Yes. No, that makes sense. Really helpful. And obviously, another sort of perspective in a normalized environment because even though the recovery the pace of the recovery is hard to determine here, It still seems like that will be a nice little tailwind in the out year, assuming life's getting back to normal, slowly through the year, right? Yes. Our goal is to strive to get back to consistently 4.5% to 6.5% first. And after that, if mix helps us, we can do better. But that margin in that business needs to be rebuilt, right? It needs to demand needs to resume, Resumption of capacity needs to resume. All those things need to happen. And if we get into that band first, then we can worry about margin uptick from there. It's not going to be this immediate snapback. I don't think it will come in through time as customers get more comfortable with scope increase. I mean, that's really how you perform here. You get to scope increase. I mean, that's really how you perform here. You get to the site, the scope increases on the site, you have the overhead already dedicated to that site, And we can do better. And also customers are willing to spend on the ancillary services and it's mix dependent too. The more we can do cleaning and shop operations As a percentage of our mix, the better we're going to do, because it absorbed overhead and it also is look, what we're doing there is a little more proprietary Versus just standard turnaround field services. Got it. Okay, great. Thanks, guys. Very helpful. Thank you. You're welcome. Thank you, sir. And the presenters, I am now I'm not seeing any more further questions from the line. I'll be turning the call over back to you for any closing remarks. Thank you all very much for listening. Long call, it always is at the end of the year call. I think I heard 4 times or 5 times That our execution was good, but also that we have a very positive outlook on our view of 2021 with what we know today. And of course, I'd always like to thank all of our employees. It's been a heck of a year, and we're performing, And we've learned how to work with adversity, being over contractors. We know how to adapt and overcome. Thank you all very much. Thank you, sir. Thank you so much, presenters. And again, thank you everyone for participating. This concludes today's conference. You may now disconnect. Stay safe and have a lovely day.