QUANTA SERVICES INC, QUANTA SERVICES MANAGEMENT ...

liability and auto liability claims were subject to a deductible of $3.0 million per occurrence, and workers’
compensation claims were subject to a deductible of $2.0 million per occurrence. Additionally, for the policy
year ended July 31, 2009, our workers’ compensation claims were subject to an annual cumulative aggregate
liability of up to $1.0 million on claims in excess of $2.0 million per occurrence. Our deductibles were generally
lower in periods prior to August 1, 2008.
Performance risk. Margins may fluctuate because of the volume of work and the impacts of pricing and
job productivity, which can be impacted both favorably and negatively by weather, geography, customer
decisions and crew productivity. For example, when comparing a service contract between a current quarter and
the comparable prior year’s quarter, factors affecting the gross margins associated with the revenues generated by
the contract may include pricing under the contract, the volume of work performed under the contract, the mix of
the type of work specifically being performed and the productivity of the crews performing the work.
Productivity can be influenced by many factors, including where the work is performed (e.g., rural versus urban
area or mountainous or rocky area versus open terrain), whether the work is on an open or encumbered right of
way, the impacts of inclement weather or the effects of environmental restrictions or regulatory delays. These
types of factors are not practicable to quantify through accounting data, but each of these items may individually
or in the aggregate have a direct impact on the gross margin of a specific project.
Selling, General and Administrative Expenses
Selling, general and administrative expenses consist primarily of compensation and related benefits to
management, administrative salaries and benefits, marketing, office rent and utilities, communications,
professional fees, bad debt expense, acquisition costs, gains and losses on the sale of property and equipment,
letter of credit fees and maintenance, training and conversion costs related to the implementation of an
information technology solution.
Results of Operations
As previously discussed, we completed the acquisition of five businesses during 2011, which included three
electric power infrastructure services companies based in Canada, one electric power infrastructure services
company based in the United States and one natural gas and pipeline infrastructure service contractor based in
Australia. During 2010, we acquired one electric power infrastructure services company based in Canada. During
2009, we acquired one natural gas and pipeline infrastructure services company that provides services in North
America as well as three other businesses providing infrastructure services in the electric power, natural gas and
pipeline and telecommunications industries. The results of these acquisitions have been included in the following
results of operations beginning on their respective acquisition dates. The following table sets forth selected
statements of operations data and such data as a percentage of revenues for the years indicated (dollars in
thousands).
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