QUANTA SERVICES INC, QUANTA SERVICES MANAGEMENT ...

2010 compared to 2009
Electric Power Infrastructure Services Segment Results
Revenues for this segment decreased $19.6 million, or 0.9%, to $2.05 billion for the year ended
December 31, 2010. Revenues were negatively impacted primarily by a reduction in electric power transmission
services related to the timing of major transmission projects. Partially offsetting this decrease was an increase in
revenues from other electric power infrastructure services, as well as approximately $25.7 million in revenues
contributed from Valard, which was acquired on October 25, 2010. Additionally, revenues were positively
impacted by an increase of approximately $16.7 million in revenues from emergency restoration services, to
approximately $96.5 million in 2010 from approximately $79.8 million in 2009. This increase was primarily due
to the increased work associated with ice storms in the United States during the first quarter of 2010.
Operating income decreased $20.1 million, or 8.9%, to $206.0 million for the year ended December 31,
2010, while operating income as a percentage of revenues decreased to 10.1% for the year ended December 31,
2010 from 10.9% for the year ended December 31, 2009. These decreases were primarily the result of lower
levels of profit being contributed from higher margin electric transmission services due to the timing of major
transmission projects discussed above, coupled with a more competitive pricing environment for smaller scale
transmission projects and distribution services. In addition, margins were lower on emergency restoration
services performed in 2010 as compared to 2009.
Natural Gas and Pipeline Infrastructure Services Segment Results
Revenues for this segment increased $618.6 million, or 78.8%, to $1.40 billion for the year ended
December 31, 2010. This increase was due to the incremental contribution of natural gas transmission service
revenues primarily from the operations of Price Gregory, which was acquired on October 1, 2009.
Operating income increased $56.5 million, or 90.2%, to $119.2 million for the year ended December 31,
2010. Operating income as a percentage of revenues increased to 8.5% for the year ended December 31, 2010
from 8.0% for the year ended December 31, 2009. The increases in operating income and operating margin were
primarily due to the increased revenue contributions resulting from the acquisition of Price Gregory, which led to
a change in the mix of services to a greater volume of higher margin gas transmission services in 2010 as
compared to 2009, as well as the impact of higher overall revenues on this segment’s ability to cover fixed costs.
Telecommunications Infrastructure Services Segment Results
Revenues for this segment decreased $5.4 million, or 1.4%, to $372.9 million for the year ended
December 31, 2010, primarily due to lower revenues from fiber build-out initiatives as a result of continued
reduced capital spending by our customers during 2010 as compared to 2009. This decrease in revenues was
partially offset by an increase in the volume of work associated with long-haul fiber installation during the year
ended December 31, 2010 as compared to 2009.
Operating income decreased $10.5 million, or 41.4%, to $14.9 million for the year ended December 31,
2010, as compared to operating income of $25.3 million for the year ended December 31, 2009. Operating
income as a percentage of revenues decreased from 6.7% for the year ended December 31, 2009 to 4.0% for the
year ended December 31, 2010. These decreases were primarily due to the impact of losses incurred during the
first quarter of 2010 as a result of weather related slowdowns impacting this segment’s productivity, coupled
with lower overall margins on work performed in 2010 as compared to 2009 due to a change in the mix of the
types of services performed during 2010 as a result of continued reduced capital spending by our customers.
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