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Quanta Services Reports 2012 Third Quarter Results

              Quanta Services Reports 2012 Third Quarter Results

Record Quarterly Revenue & Operating Income

Revenues Increase 35% to $1.69 Billion

Raises Full Year 2012 Guidance

PR Newswire

HOUSTON, Oct. 31, 2012

HOUSTON, Oct. 31, 2012 /PRNewswire/ --Quanta Services, Inc. (NYSE: PWR) today
announced results for the three and nine months ended Sept.30, 2012. Revenues
in the third quarter of 2012 were $1.69 billion compared to revenues of $1.25
billion in the third quarter of 2011. Net income attributable to common stock
was $96.4 million, or $0.45 per diluted share, in the third quarter of 2012,
versus $52.0 million, or $0.25 per diluted share, in the third quarter of
2011. Included in net income attributable to common stock for the third
quarter of 2012 was $7.1 million of income, or a net benefit of $0.03 per
diluted share, from the release of income tax contingencies. Adjusted diluted
earnings per share (a non-GAAP measure) were $0.48 for the third quarter of
2012 compared to $0.29 in the third quarter of 2011. Adjusted diluted earnings
per share are GAAP diluted earnings per share before the impact of the release
of tax contingencies as well as non-cash items such as amortization of
intangible assets and non-cash compensation expense, all net of tax, as shown
in the detailed reconciliation in the attached table.

(Logo: http://photos.prnewswire.com/prnh/20110810/MM50805LOGO )

"Our strong results are indicative of sound execution and increasing demand
for our services, as well as the confidence our customers continue to have in
Quanta," said Jim O'Neil, president and chief executive officer of Quanta
Services. "Revenues from our electric power segment grew 32 percent in the
third quarter and, as anticipated, the results of our natural gas and pipeline
segment continued to improve despite an absence of large-diameter pipeline
projects. We are focused on a solid finish to 2012 and looking forward to a
strong 2013."

Revenues for the nine months ended Sept. 30, 2012, were $4.63 billion compared
to revenues of $3.11 billion in the nine months ended Sept. 30, 2011. For the
first nine months of 2012, net income attributable to common stock was $207.6
million, or $0.98 per diluted share. Included in net income attributable to
common stock for the first nine months of 2012 are the previously discussed
benefits from the release of income tax contingencies. The 2012 results
compare to net income attributable to common stock of $66.2 million, or $0.31
per diluted share, for the first nine months of last year. Adjusted diluted
earnings per share were $1.10 for the nine months ended Sept. 30, 2012,
compared to $0.43 for the nine months ended Sept. 30, 2011. See the attached
table for a reconciliation of non-GAAP measures to the reported GAAP measures.

RECENT HIGHLIGHTS

  oSecured Contract for Nation's Longest Energized Transmission Line
    Reconductor - In September, Quanta announced that American Electric Power
    (AEP) selected the company to rebuild 66 miles of a 345-kilovolt power
    line near Corpus Christi, Texas. Quanta is performing this work in an
    energized state utilizing proprietary processes and equipment to avoid
    service outages to AEP's customers during construction. This project is
    the first of five phases of energized transmission upgrades AEP has
    planned in the area, which are projected for completion by March 2016.
    Once completed, this first phase will represent the longest span of
    transmission line in the United States rebuilt in an energized state.
  oSelected for Eldorado-Ivanpah Transmission Project & Red Bluff Substation
    Project - In August, Quanta announced that Southern California Edison
    (SCE) selected PAR Electrical Contractors Inc. (PAR), a Quanta Services
    company, to install transmission infrastructure for SCE's Eldorado-Ivanpah
    Transmission Project. Quanta's scope of services for the project includes
    the replacement of a portion of an existing 115-kilovolt electric
    transmission line with 35 miles of double-circuit, 220-kilovolt electric
    transmission line. In addition, SCE selected PAR to construct its Red
    Bluff Substation Project in eastern Riverside County, Calif. Under the
    contract, PAR is also constructing the two transmission line segments
    associated with the substation.

OUTLOOK

The overall outlook for Quanta's business is positive. However, the company's
customers continue to experience regulatory and permitting challenges on
projects, and economic conditions continue to create uncertainty. It is
difficult for management to predict the timing or extent of the impact that
these issues may have on demand for Quanta's services, particularly in the
near-term. The following forward-looking statements are based on current
expectations, and actual results may differ materially.

As a result of Quanta's strong performance in the third quarter and improved
visibility in the fourth quarter, the company is raising its financial
forecast for the fourth quarter and full year of 2012. Quanta expects revenues
for the fourth quarter of 2012 to range between $1.55 billion and $1.65
billion and diluted earnings per share to be $0.37 to $0.39. Included in our
estimate of GAAP diluted earnings per share for the fourth quarter of 2012 is
a net tax benefit of approximately $0.02 per share associated with certain tax
contingency releases due to the expiration of certain statutes of limitations
during the fourth quarter. Quanta expects adjusted diluted earnings per share
(a non-GAAP measure) for the fourth quarter of 2012 to be $0.40 to $0.42. This
non-GAAP measure is estimated on a similar basis as the calculations of
historical adjusted diluted earnings per share presented in this press
release. Amortization of intangibles and non-cash stock compensation expense
are forecasted to be approximately $9.1 million and $6.9 million for the
fourth quarter of 2012.

Quanta expects revenues for the full year 2012 to range between $6.2 billion
and $6.3 billion. Diluted earnings per share for the full year 2012 are
estimated to be between $1.35 and $1.37. Quanta expects adjusted diluted
earnings per share for the full year 2012 to range from $1.50 to $1.52.
Quanta's previous full-year 2012 revenues, diluted earnings per share and
adjusted diluted earnings per share forecast was $5.9 billion to $6.1 billion,
$1.15 to $1.25 and $1.35 to $1.45.

NON-GAAP FINANCIAL MEASURES

The non-GAAP measures in this press release and on Quanta's website are
provided to enable investors, analysts and management to evaluate Quanta's
performance excluding the effects of certain items that management believes
impact the comparability of operating results between reporting periods. In
addition, management believes these measures are useful in comparing Quanta's
operating results with those of its competitors. These measures should be used
as an addition to, and not in lieu of, results prepared in conformity with
GAAP. Reconciliations of other GAAP to non-GAAP measures not included in the
table attached to this press release can be found on the company's website at
www.quantaservices.com in the "Investors& Media" section.

CONFERENCE CALL INFORMATION

Quanta Services has scheduled a conference call for Oct. 31, 2012, at 9:30
a.m. Eastern Time. To participate in the call, dial 480-629-9866 at least 10
minutes before the conference call begins and ask for the Quanta Services
conference call. Investors, analysts and the general public will also have the
opportunity to listen to the conference call over the Internet by visiting the
company's website at www.quantaservices.com. To listen to the call live on the
Web, please visit the Quanta Services website at least 15 minutes early to
register, download and install any necessary audio software. For those who
cannot listen to the live event, an archive will be available shortly after
the call on the company's website at www.quantaservices.com. A replay will
also be available through Nov. 7, 2012, and may be accessed at 303-590-3030,
using the pass code 4572253#. For more information, please contact Kip Rupp,
vice president - Investor Relations at Quanta Services, by calling
713-341-7260 or emailing investors@quantaservices.com.

ABOUT QUANTA SERVICES

Quanta Services is a leading specialized contracting services company,
delivering infrastructure solutions for the electric power, natural gas and
pipeline and telecommunication industries in North American and in certain
international markets. Quanta's comprehensive services include designing,
installing, repairing and maintaining network infrastructure. Additionally,
Quanta licenses point-to-point fiber optic telecommunications infrastructure
in certain markets and offers related design, procurement, construction and
maintenance services. With operations throughout North America and in certain
international markets, Quanta has the manpower, resources and expertise to
complete projects that are local, regional, national or international in
scope.

Forward-Looking Statements

This press release (and oral statements regarding the subject matter of this
release, including those made on the conference call and webcast announced
herein) contains forward-looking statements intended to qualify for the "safe
harbor" from liability established by the Private Securities Litigation Reform
Act of 1995. Forward-looking statements include, but are not limited to,
projected revenues, earnings per share, margins, capital expenditures and
other projections of financial and operating results; expectations regarding
our business outlook, growth or opportunities in particular markets; the
expected value of contracts or intended contracts with customers; the scope,
services, term and results of any projects awarded or expected to be awarded
for services to be provided by Quanta; potential opportunities that may be
indicated by bidding activity or similar discussions with customers; the
potential benefits from acquisitions; the business plans or financial
condition of our customers; and Quanta's strategies and plans, as well as
statements reflecting expectations, intentions, assumptions or beliefs about
future events, and other statements that do not relate strictly to historical
or current facts. Although Quanta's management believes that the expectations
reflected in such forward-looking statements are reasonable, it can give no
assurance that such expectations will prove to be correct. These statements
can be affected by inaccurate assumptions and by a variety of risks and
uncertainties that are difficult to predict or beyond our control, including,
among others, quarterly variations in operating results, including as a result
of weather, site conditions, project schedules, regulatory and environmental
restrictions, bidding and spending patterns and other factors that may affect
the timing of or productivity on projects; adverse economic and financial
conditions, including weakness in the capital markets; trends and growth
opportunities in relevant markets; delays, reductions in scope or
cancellations of anticipated, pending or existing projects, including as a
result of weather, regulatory or environmental processes, project performance
issues or capital constraints that may impact our customers; the successful
negotiation, execution, performance and completion of anticipated, pending and
existing contracts; the ability to obtain awards of projects on which we bid
or are otherwise discussing with customers; the ability to attract skilled
labor and retain key personnel and qualified employees; potential shortage of
skilled employees; dependence on fixed price contracts and the potential to
incur losses with respect to these contracts; estimates relating to the use of
percentage-of-completion accounting; the ability to generate internal growth;
the ability to effectively compete for new projects and market share; the
failure of renewable energy initiatives, the economic stimulus package or
other existing or potential legislative actions to result in increased demand
for Quanta's services; liabilities associated with multi-employer pension
plans, including underfunding of liabilities and termination or withdrawal
liabilities; the possibility of an increase in the liability associated with
Quanta's partial withdrawal in the fourth quarter of 2011 from a
multi-employer pension plan, including as a result of successful legal
challenges by the pension plan; unexpected costs or liabilities that may arise
from lawsuits or indemnity claims related to the services Quanta performs;
liabilities for claims that are self-insured or not insured; potential
additional risk exposure resulting from any unavailability or cancellation of
third party insurance coverage, the exclusion of coverage for certain losses,
or potential increases in premiums for coverage deemed beneficial to Quanta;
cancellation provisions within contracts and the risk that contracts are not
renewed or are replaced on less favorable terms; the potential that
participation in joint ventures exposes us to liability and/or harm to our
reputation for actions or omissions by our partners; our failure to comply
with the terms of our contracts, which may result in unexcused delays,
warranty claims, damages or contract terminations; the effect of natural gas,
natural gas liquids and oil prices on Quanta's operations and growth
opportunities; the future development of natural resources in shale areas; the
inability of customers to pay for services; the failure to recover on payment
claims against project owners or to obtain adequate compensation for
customer-requested change orders; the failure of our customers to comply with
regulatory requirements applicable to their projects, including those related
to awards of stimulus funds, potentially resulting in project delays or
cancellations; budgetary or other constraints that may reduce or eliminate
government funding of projects, including stimulus projects, which may result
in project delays or cancellations; estimates and assumptions in determining
financial results and backlog; the ability to realize backlog; risks
associated with operating in international markets, including instability of
foreign governments, currency fluctuations, tax and investment strategies and
compliance with the laws of foreign jurisdictions as well as the Foreign
Corrupt Practices Act; the ability to successfully identify and complete
acquisitions, to effectively integrate acquired businesses and their
operations, and to realize potential synergies from acquisitions; the
potential adverse impact resulting from uncertainty surrounding acquisitions,
including the ability to retain key personnel from the acquired businesses and
the potential increase in risks already existing in Quanta's operations; the
adverse impact of goodwill or other intangible asset impairments; the adverse
impact of impairments of investments in third parties; growth outpacing our
decentralized management infrastructure; requirements relating to governmental
regulation and changes thereto; inability to enforce our intellectual property
rights or the obsolescence of such rights; risks associated with the
implementation of an information technology solution; the impact of a
unionized workforce on operations and the ability to complete future
acquisitions; potential liabilities relating to occupational health and safety
matters; our dependence on suppliers, subcontractors and equipment
manufacturers and their ability to perform their obligations; risks associated
with Quanta's fiber optic licensing business, including regulatory changes and
the potential inability to realize a return on capital investments; beliefs
and assumptions about the collectability of receivables; the cost of
borrowing, availability of credit, fluctuations in the price and volume of
Quanta's common stock, debt covenant compliance, interest rate fluctuations
and other factors affecting financing and investment activities; the ability
to access sufficient funding to finance desired growth and operations; the
ability to obtain performance bonds; the ability to continue to meet the
requirements of the Sarbanes-Oxley Act of 2002; potential exposure to
environmental liabilities; rapid technological and structural changes that
could reduce the demand for services; the potential impact of incurring
additional healthcare costs arising from federal healthcare reform, and other
risks detailed in Quanta's Annual Report on Form 10-K for the year ended
December31, 2011 and Quanta's Quarterly Reports on Form 10-Q for the quarters
ended March 31, 2012 and June 30, 2012 and any other documents that Quanta
files with the Securities and Exchange Commission (SEC). Should one or more of
these risks materialize, or should underlying assumptions prove incorrect,
actual results may vary materially from those expressed or implied in any
forward-looking statements. You are cautioned not to place undue reliance on
these forward-looking statements, which are current only as of this date.
Quanta does not undertake and expressly disclaims any obligation to update or
revise any forward-looking statements, whether as a result of new information,
future events or otherwise. For a discussion of these risks, uncertainties and
assumptions, investors are urged to refer to Quanta's documents filed with the
SEC that are available through the company's website at www.quantaservices.com
or through the SEC's Electronic Data Gathering and Analysis Retrieval System
(EDGAR) at www.sec.gov.



Quanta Services, Inc. and Subsidiaries

Consolidated Statements of Operations

For the Three and Nine Months Ended September 30, 2012 and 2011

(In thousands, except per share information)

(Unaudited)


                       Three Months Ended          Nine Months Ended
                       September 30,               September 30,
                       2012          2011          2012          2011
Revenues               $ 1,685,201   $ 1,250,819   $ 4,627,074   $ 3,110,692
Cost of services
(including             1,404,767     1,056,129     3,915,718     2,691,021
depreciation)
Gross profit           280,434       194,690       711,356       419,671
Selling, general and
administrative         124,276       92,414        345,633       273,444
expenses
Amortization of        10,504        8,295         29,447        21,432
intangible assets
Operating income       145,654       93,981        336,276       124,795
Interest expense       (967)         (738)         (2,510)       (1,248)
Interest income        384           226           1,179         761
Other income           1,138         (528)         993           (394)
(expense), net
Income before income   146,209       92,941        335,938       123,914
taxes
Provision for income   45,353        37,341        115,291       50,306
taxes
Net income             100,856       55,600        220,647       73,608
Less: Net income
attributable to        4,458         3,606         13,004        7,407
noncontrolling
interests
Net income
attributable to common $ 96,398      $ 51,994      $ 207,643     $ 66,201
stock
Earnings per share
attributable to common
stock:
Basic earnings per     $ 0.45        $ 0.25        $ 0.98        $ 0.31
share
Diluted earnings per   $ 0.45        $ 0.25        $ 0.98        $ 0.31
share
Weighted average
shares used in
computing earnings per
share:
Basic                  213,150       210,583       212,564       213,400
Diluted                213,242       210,692       212,650       214,055



Quanta Services, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(In thousands)

(Unaudited)


                                                                                               September 30,  December 31,

                                                                                                    
                                                                                               2012  2011
ASSETS
CURRENT ASSETS:
Cash and cash equivalents                                                                      $  128,210     $  315,349
Accounts receivable, net                                                                       1,441,021      1,066,273
Costs and estimated earnings in excess of billings on uncompleted contracts                    378,958        206,159
Inventories                                                                                    55,916         71,416
Prepaid expenses and other current assets                                                      132,322        105,957
Total current assets                                                                           2,136,427      1,765,154
PROPERTY AND EQUIPMENT, net                                                                    1,057,046      971,696
OTHER ASSETS, net                                                                              191,896        153,830
OTHER INTANGIBLE ASSETS, net                                                                   199,085        207,224
GOODWILL                                                                                       1,670,816      1,601,210
Total assets                                                                                   $  5,255,270   $  4,699,114
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Notes payable                                                                                  $  19          $  56
Accounts payable and accrued expenses                                                          771,506        618,925
Billings in excess of costs and estimated earnings on uncompleted contracts                    153,827        162,095
Total current liabilities                                                                      925,352        781,076
LONG-TERM DEBT                                                                                 125,000        —
DEFERRED INCOME TAXES AND OTHER
                                                                                               534,674        528,775
 NON-CURRENT
LIABILITIES
Total liabilities                                                                              1,585,026      1,309,851
TOTAL STOCKHOLDERS' EQUITY                                                                     3,662,899      3,381,952
NONCONTROLLING INTERESTS                                                                       7,345          7,311
TOTAL EQUITY                                                                                   3,670,244      3,389,263
Total liabilities and equity                                                                   $  5,255,270   $  4,699,114





Quanta Services, Inc. and Subsidiaries

Supplemental Data

(Unaudited)


Segment Results
Quanta reports its results under four reporting segments: (1) Electric Power Infrastructure Services, (2)
Natural Gas and Pipeline Infrastructure Services, (3) Telecommunications Infrastructure Services and (4)
Fiber Optic Licensing, as set forth below (in thousands, except percentages).
                   Three Months Ended September 30,            Nine Months Ended September 30,
                   2012                    2011                  2012                  2011
Revenues:
Electric Power     $ 1,089,256  64.6  %  $ 822,689    65.8  %  $ 3,037,000  65.6  %  $ 2,056,232  66.1  %
Natural Gas and      397,459    23.6       259,014    20.7       1,096,247  23.8       645,495    20.8
Pipeline
Telecommunications   169,858    10.1       140,679    11.2       409,436    8.8        326,494    10.5
Fiber Optic          28,628     1.7        28,437     2.3        84,391     1.8        82,471     2.6
Licensing
Consolidated       $ 1,685,201  100.0 %  $ 1,250,819  100.0 %  $ 4,627,074  100.0 %  $ 3,110,692  100.0 %
revenues
Operating income
(loss):
Electric Power     $ 136,378    12.5  %  $ 100,199    12.2  %  $ 356,863    11.8  %  $ 198,661    9.7   %
Natural Gas and    23,207       5.8      (4,035)      (1.6)    27,498       2.5      (42,263)     (6.5)
Pipeline
Telecommunications 22,224       13.1     15,832       11.3     44,420       10.8     21,238       6.5
Fiber Optic        14,092       49.2     14,231       50.0     42,919       50.9     39,448       47.8
Licensing
Corporate and                                                             
Non-Allocated      (50,247)      N/A    (32,246)     N/A      (135,424)    N/A      (92,289)      N/A
Costs
Consolidated       $ 145,654    8.6   %  $ 93,981     7.5   %  $ 336,276    7.3   %  $ 124,795    4.0   %
operating income



Backlog
Backlog represents the amount of revenue that Quanta expects to realize from
work to be performed in the future on uncompleted contracts, including new
contractual arrangements on which work has not yet begun. Backlog estimates
include amounts under long-term maintenance contracts or master service
agreements (MSAs), in addition to construction contracts. Quanta estimates the
amount of work to be disclosed as backlog as the estimate of future work to be
performed by using recurring historical trends inherent in the current MSAs,
factoring in seasonal demand and projecting customer needs based upon ongoing
communications with the customer. Generally, Quanta's customers are not
contractually committed to specific volumes of services under Quanta's MSAs,
and many of the company's contracts may be terminated with notice. There can
be no assurance as to Quanta's customers' requirements or that Quanta's
estimates are accurate. In addition, many of Quanta's MSAs, as well as
contracts for fiber optic licensing, are subject to renewal options. For
purposes of calculating backlog, Quanta has included future renewal options
only to the extent that the renewals can reasonably be expected to occur.

The following table presents Quanta's total backlog by reportable segment as
of Sept. 30, 2012, Sept.30, 2011, and Dec.31, 2011 along with an estimate of
the backlog amounts expected to be realized within 12 months of each balance
sheet date (in millions):



                   Backlog as of
                   September 30, 2012      September30, 2011      December31, 2011
                   12 Month    Total       12 Month    Total       12 Month    Total
Electric Power     $ 2,857.2   $ 4,803.9   $ 2,321.2   $ 4,856.3   $ 2,365.5   $ 4,960.0
Natural Gas and    867.5       1,517.7     687.9       1,366.0     768.2       1,347.2
Pipeline
Telecommunications 349.0       519.4       328.3       530.5       336.0       529.5
Fiber Optic        97.7        431.5       101.6       418.6       102.8       402.0
Licensing
Total              $ 4,171.4   $ 7,272.5   $ 3,439.0   $ 7,171.4   $ 3,572.5   $ 7,238.7



Quanta Services, Inc. and Subsidiaries

Reconciliation of Non-GAAP Financial Measures

For the Three and Nine Months Ended September 30, 2012 and 2011

(In thousands, except per share information)
(Unaudited)


The non-GAAP measure of adjusted diluted earnings per share is provided to
enable investors to evaluate performance excluding the effects of items that
management believes impact the comparability of operating results between
periods. As to certain of the items below, (i) amortization of intangible
assets is impacted by Quanta's acquisition activity, which can cause these
amounts to vary from period to period; (ii) non-cash compensation expense may
vary due to acquisition activity, factors influencing the estimated fair value
of performance-based awards, estimated forfeiture rates and amounts granted
during the period, (iii) acquisition costs vary period to period depending on
the level of Quanta's acquisition activity ongoing during the period, and (iv)
tax contingency releases vary period to period depending on the level of
reserves for uncertain tax positions and the expiration dates of various
federal and state tax statutes of limitations.
                   Three Months Ended              Nine Months Ended
                   September 30,                   September 30,
                   2012             2011           2012            2011
Adjusted diluted
earnings per
share:
Net income
attributable to    $   96,398       $  51,994      $  207,643      $  66,201
common stock (GAAP
as reported)
Adjustments:
 Impact of tax
contingency        (7,139)          —              (7,139)         —
releases ^(a)
 Acquisition    1,060            632            1,961           632
costs, net of tax
Adjusted net
income
attributable to
common stock       90,319           52,626         202,465         66,833
before certain
non-cash
adjustments
Non-cash
stock-based        4,354            2,877          13,245          9,889
compensation, net
of tax
Amortization of
intangible assets, 6,871            5,621          19,234          14,311
net of tax
Adjusted net
income
attributable to    $   101,544      $  61,124      $  234,944      $  91,033
common stock for
adjusted diluted
earnings per share
Calculation of
weighted average
shares for
adjusted diluted
earnings per
share:
Weighted average
shares outstanding 213,150          210,583        212,564         213,400
for basic earnings
per share
Effect of dilutive 92               109            86              128
stock options
Effect of shares   —                —              —               527
held in escrow
Weighted average
shares outstanding
for adjusted       213,242          210,692        212,650         214,055
diluted earnings
per share
Adjusted diluted   $   0.48         $  0.29        $  1.10         $  0.43
earnings per share
^(a) Reflects the elimination of tax benefits primarily associated with the
expiration of various federal and state tax statutes of limitations during the
third quarter of 2012.



Contacts: Derrick Jensen, CFO
          Investors - Kip Rupp, CFA
          Media - Reba Reid
          Quanta Services, Inc.
          713-629-7600

SOURCE Quanta Services, Inc.

Website: http://www.quantaservices.com