QUANTA SERVICES INC, QUANTA SERVICES MANAGEMENT ...

Sources and Uses of Cash
As of December 31, 2011, we had cash and cash equivalents of $315.3 million and working capital of
$984.1 million. We also had $191.4 million of letters of credit outstanding under our credit facility and $508.6
million available for revolving loans or issuing new letters of credit under our credit facility.
Operating Activities
Cash flow from operations is primarily influenced by demand for our services, operating margins and the
type of services we provide, but can also be influenced by working capital needs, in particular on larger projects,
due to the timing of collection of receivables and the settlement of payables and other obligations. Working
capital needs are generally higher during the summer and fall months due to increased demand for our services
when favorable weather conditions exist in many of the regions in which we operate. Conversely, working
capital assets are typically converted to cash during the winter months.
Operating activities provided net cash to us of $218.0 million during 2011 as compared to $240.3 million
during 2010 and $376.9 million during 2009. The decrease in operating cash flows for 2011 as compared to 2010
was primarily due to increased working capital requirements in the fourth quarter of 2011 as a result of an
increase in activities on certain major electric transmission projects. Operating cash flows in 2010 were also
negatively impacted, as compared to 2009, as a result of an increase in working capital levels at December 31,
2010 as compared to 2009 primarily due to the timing of production and billing milestones on certain large
natural gas transmission projects. Additionally, operating cash flows in 2009 were higher than in 2011 and 2010
primarily due to the collection of large accounts receivable and retainage balances in 2009 that were outstanding
at the end of 2008.
Investing Activities
During 2011, we used net cash in investing activities of $281.2 million as compared to $254.3 million and
$119.7 million used in investing activities in 2010 and 2009. Investing activities in 2011 included $172.0 million
used for capital expenditures, partially offset by $9.9 million of proceeds from the sale of equipment. Also
included in investing activities in 2011 were the $35.0 million capital contribution to acquire an equity interest in
HEP and investments made for acquisitions in the third and fourth quarters of 2011, which used cash in the
aggregate amount of $79.7 million. Investing activities in 2010 included $130.3 million of net cash used in
connection with our acquisition of Valard and $149.7 million used for capital expenditures, partially offset by
$25.7 million of proceeds from the sale of equipment. Investing activities in 2009 included $36.2 million of net
cash acquired primarily as a result of our acquisition of Price Gregory. During 2009, we also used $165.0 million
for capital expenditures, partially offset by $9.1 million of proceeds from the sale of equipment. Our industry is
capital intensive, and we expect the need for substantial capital expenditures to continue into the foreseeable
future to meet the anticipated demand for our services. In addition, we expect to continue to pursue strategic
acquisitions and investments, although we cannot predict the timing or magnitude of the potential cash outlays
for these initiatives.
Financing Activities
In 2011, we used net cash in financing activities of $158.7 million as compared to $145.7 million used by
financing activities in 2010 and $1.5 million provided by financing activities in 2009. Financing activities in
2011 primarily related to $149.5 million in common stock repurchases under our stock repurchase program as
well as the loan costs related to the amendment and restatement of our credit facility on August 2, 2011.
Financing activities in 2010 included $143.8 million in payments for the redemption of the aggregate principal
amount of our 3.75% Notes, described below in “Debt Instruments”, as well as $2.3 million in net repayments of
other borrowings during the year ended December 31, 2010. Additionally, we made a $2.4 million cash payment
to a noncontrolling interest as a distribution of profits. These outflows were partially offset by $2.2 million in tax
impacts from stock-based equity awards and $0.5 million received from the exercise of stock options. Net cash
provided by financing activities in 2009 resulted primarily from $2.0 million in net proceeds from borrowings,
coupled with cash inflows of $1.0 million from the exercise of stock options. These inflows were partially offset
by a $1.5 million tax impact from the vesting of stock-based equity awards.
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