QUANTA SERVICES INC, QUANTA SERVICES MANAGEMENT ...

Fiber Optic Licensing Segment Results
Revenues for this segment increased $19.5 million, or 22.4%, to $106.8 million for the year ended
December 31, 2010. This increase in revenues was primarily a result of our continued network expansion and the
associated revenues from licensing the right to use point-to-point fiber optic telecommunications facilities.
Operating income increased $8.6 million, or 19.4%, to $52.7 million for the year ended December 31, 2010,
primarily as a result of the increased revenues discussed above. Operating income as a percentage of revenues for
the year ended December 31, 2010 remained relatively constant.
Corporate and Non-allocated Costs
Certain selling, general and administrative expenses and amortization of intangible assets are not allocated
to segments. Corporate and non-allocated costs for the year ended December 31, 2010 increased $20.5 million to
$136.6 million. The increase was primarily due to an increase in salaries and benefits costs of approximately
$11.1 million from increased non-cash stock compensation as well as higher personnel and incentive
compensation expenses associated with current levels of operating activity. In addition, acquisition and ongoing
integration costs of $10.6 million were incurred in 2010 compared to $2.8 million in 2009. Also, the costs for the
ongoing implementation of technology solutions increased $1.5 million during the year ended December 31,
2010 as compared to the year ended December 31, 2009.
Liquidity and Capital Resources
Cash Requirements
We anticipate that our cash and cash equivalents on hand, which totaled $315.3 million as of
December 31, 2011, existing borrowing capacity under our credit facility, and our future cash flows from
operations will provide sufficient funds to enable us to meet our future operating needs and our planned capital
expenditures, as well as facilitate our ability to grow in the foreseeable future.
Capital expenditures are expected to total $190 million to $225 million for 2012. Approximately $40 million
to $50 million of the expected 2012 capital expenditures are targeted for the expansion of our fiber optic
networks.
We also evaluate opportunities for strategic acquisitions from time to time that may require cash, as well as
other opportunities to make investments in customer-sponsored projects where we anticipate performing services
such as project management, engineering, procurement or construction services. These investment opportunities
exist in the markets and industries we serve and may take the form of debt or equity investments, which may
require cash.
Management continues to monitor the financial markets and general national and global economic
conditions. We consider our cash investment policies to be conservative in that we maintain a diverse portfolio of
what we believe to be high-quality cash investments with short-term maturities. We were in compliance with our
covenants under our credit facility at December 31, 2011. Accordingly, we do not anticipate that any weakness in
the capital markets will have a material impact on the principal amounts of our cash investments or our ability to
rely upon our existing credit facility for funds. To date, we have experienced no loss of or lack of access to our
cash or cash equivalents or funds available under our credit facility; however, we can provide no assurances that
access to our invested cash and cash equivalents or availability under our credit facility will not be impacted in
the future by adverse conditions in the financial markets.
48