Quanta Services Reports Fourth Quarter and Annual Results

Achieved Record Revenues and Backlog

Diluted EPS of $0.18 in 4Q07

Diluted Cash EPS of $0.23 in 4Q07

HOUSTON, Feb. 21 /PRNewswire-FirstCall/ -- Quanta Services, Inc. (NYSE: PWR) today announced results for the three and twelve months ended December 31, 2007. On August 30, 2007, Quanta completed the acquisition of InfraSource Services, Inc. (InfraSource) through an all-stock merger. Therefore, these reported results of operations include the results of InfraSource from September 1, 2007 through December 31, 2007 and are compared to the pre-merger historical results of Quanta for prior fiscal periods.

Revenues in the fourth quarter of 2007 were a record high of $879.0 million, compared to revenues of $585.2 million in the fourth quarter of 2006. For the fourth quarter of 2007, income from continuing operations was $33.5 million or $0.18 per diluted share as compared to a loss from continuing operations of $31.2 million or a loss of $0.27 per diluted share for the fourth quarter of 2006. For the fourth quarter of 2007, cash earnings per diluted share (a non-GAAP measure that represents diluted earnings per share before certain non-cash charges) were $0.23. See the attached table for a reconciliation of this non-GAAP measure to the most comparable GAAP measure and to see other non-GAAP measures and the related reconciliations for comparable periods. Fourth quarter of 2006 results include a non-cash goodwill impairment charge of $56.6 million, net of tax, or $0.46 per diluted share.

"2007 was another good year for Quanta, finishing with a strong fourth quarter. Revenues, operating margins, and core business growth were all strong or improved over comparable periods. Customer spending remains robust and our ability to translate that spending to backlog continues," said John Colson, chairman and chief executive officer of Quanta Services. "Now that the integration of InfraSource is substantially complete, we believe 2008 should continue our four-year trend of strong internal revenue growth and margin improvement. Our 12-month backlog of $2.355 billion at year-end represents an increase of $297 million or 14%, when compared to last year- end's pro forma 12-month backlog including InfraSource. Since the end of the third quarter of 2007, our total backlog has increased approximately $880 million or 23% to a record level of $4.67 billion at year-end."

Revenues for the 12 months of 2007 were a record high of $2.66 billion, compared to $2.11 billion for the 12 months of 2006. For the twelve months of 2007, the company reported income from continuing operations of $133.1 million, or earnings per diluted share of $0.87, compared to income from continuing operations of $16.2 million, or earnings per diluted share of $0.14 for the twelve months of 2006. Included in income from continuing operations for 2007 is $33.2 million of income, or a benefit of $0.20 per diluted share, from the release of income tax contingencies due to the expiration of various statutes of limitations related to federal and state tax returns as well as the settlement of a multi-year audit by the Internal Revenue Service in the first quarter of 2007. For the twelve months ended December 31, 2006, the $56.6 million non-cash goodwill impairment charge, which was recorded in the fourth quarter, impacted annual earnings per share by $0.44 per diluted share for the year.

The non-GAAP measures in this press release and the attached table are provided to enable investors to evaluate quarterly and annual performance excluding the effects of certain items that management believes impact the comparability of operating results between reporting periods.

OUTLOOK

The following statements are based on current expectations. These statements are forward-looking, and actual results may differ materially.

Quanta expects revenues for the first quarter of 2008 to range from $ 810 million to $840 million, with diluted earnings per share of approximately $0.10 to $0.11. Revenues for the first quarter of 2007 were $569.0 million, which included approximately $55 million in emergency restoration revenues. The first quarter of 2007 was also favorably impacted by $15.3 million of income, or a benefit of $0.10 per diluted share, primarily due to the settlement of a multi-year audit by the Internal Revenue Service in the first quarter of 2007 resulting in $0.23 earnings per diluted share from continuing operations. The first quarter of 2007 does not include InfraSource results as the acquisition did not occur until the third quarter of 2007. Quanta expects cash earnings per diluted share (a non-GAAP measure that represents diluted earnings per share before amortization and non-cash compensation expenses, both net of tax) for the first quarter of 2008 to range from $0.15 to $0.16. Amortization and non-cash stock compensation expenses are forecasted to be approximately $15 million for the first quarter of 2008.

Quanta Services has scheduled a conference call for February 21, 2008, at 9:30 a.m. Eastern time. To participate in the call, dial (303) 262-2005 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 web site at http://www.quantaservices.com. To listen to the live call on the web, please visit the Quanta Services web site at least fifteen minutes early to register, download and install any necessary audio software.

For those who cannot listen to the live web cast, an archive will be available shortly after the call on the company's web site at http://www.quantaservices.com. A replay will be available through February 28, 2008, and may be accessed by calling (303) 590-3000 and using the pass code 11108953. For more information, please contact Karen Roan at DRG&E by calling (713) 529-6600.

Quanta Services is a leading specialized contracting services company, delivering infrastructure network solutions for the electric power, natural gas, telecommunications and cable television industries. The company's comprehensive services include engineering, designing, installing, repairing and maintaining network infrastructure nationwide. With operations in all 50 states and Canada, 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 web cast 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 and earnings per share and other projections of financial and operating results, capital expenditures, growth in particular markets, benefits of the Energy Policy Act of 2005, statements relating to the business plans or financial condition of utilities and our other 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, completion of Quanta's year-end audit; quarterly variations in operating results; adverse changes in economic conditions and trends in relevant markets; the ability to effectively compete for market share; potential failure of the Energy Policy Act of 2005 to result in increased spending on the electrical power transmission infrastructure; unexpected costs or unexpected liabilities that may arise from the merger with InfraSource Services, Inc.; the potential adverse impact on Quanta's business or its financial results as a result of the merger, including the inability to retain key personnel or the failure to realize expected synergies; estimates and assumptions in determining financial results; 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 successful performance and completion of contracts; cancellation provisions within contracts and the risk that contracts are not renewed or are replaced on less favorable terms; the ability to generate internal growth; the ability to successfully identify, complete and integrate acquisitions, the financial distress of Quanta's casualty insurance carrier that may require payment for losses that would otherwise be insured; potential exposure to environmental liabilities; liabilities for claims that are self-insured or for claims that Quanta's casualty insurance carrier fails to pay; potential liabilities relating to occupational health and safety matters; beliefs and assumptions about the collectibles of receivables; the inability of customers to pay for services; rapid technological and structural changes that could reduce the demand for services; the ability to obtain performance bonds; the ability to attract skilled labor and retention of key personnel and qualified employees; the impact of a unionized workforce on operations and the ability to complete future acquisitions; potential shortage of skilled employees; growth outpacing infrastructure; potential exposure to environmental liabilities; risks associated with operating in international markets; requirements relating to governmental regulation and changes thereto; the ability to continue to meet the requirements of the Sarbanes-Oxley Act of 2002; the cost of borrowing, availability of credit, debt covenant compliance and other factors affecting financing activities; the adverse impact of goodwill impairments; the potential conversion of outstanding convertible subordinated notes; and other risks detailed in Quanta's Annual Report on Form 10-K for the year ended December 31, 2006, Quanta's Quarterly Reports on Form 10-Q for the quarters ended March 31, 2007, June 30, 2007 and September 30, 2007 and any other documents of Quanta filed 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 web site at http://www.quantaservices.com or through the SEC's Electronic Data Gathering and Analysis Retrieval System (EDGAR) at http://www.sec.gov.

     Contacts: James Haddox, CFO      Ken Dennard / ksdennard@drg-e.com
               Reba Reid              Kip Rupp / krupp@drg-e.com
               Quanta Services Inc.   DRG&E
               713-629-7600           713-529-660

                             - Tables to follow -


                    Quanta Services, Inc. and Subsidiaries
                    Consolidated Statements of Operations
       For the Three and Twelve Months Ended December 31, 2007 and 2006
                 (In thousands, except per share information)


                                 Three Months Ended     Twelve Months Ended
                                    December 31,           December 31,
                                 2007        2006       2007        2006

    Revenues
                              $878,992    $585,229    $2,656,036  $2,109,632
    Cost of services
     (including depreciation)  728,117     493,864     2,227,289   1,796,916
       Gross profit            150,875      91,365       428,747     312,716
    Selling, general &
     administrative expenses    84,715      48,490       240,508     181,478
    Goodwill impairment              -      56,812             -      56,812
    Amortization of intangible
     assets                     12,427          91        18,759         363
       Operating income         53,733     (14,028)      169,480      74,063
    Interest expense            (5,254)     (5,408)      (21,515)    (26,822)
    Interest income              4,636       3,612        19,977      13,924
    Gain (loss) on early
     extinguishment of debt,
      net                          (23)          -           (34)      1,598
    Other income (expense),
     net                            45          38          (546)        425
       Income (loss) from
        continuing operations
        before income tax
        provision               53,137     (15,786)      167,362      63,188
    Provision for income taxes  19,596      15,375        34,222      46,955
    Income (loss) from
     continuing operations      33,541     (31,161)      133,140      16,233
    Income from discontinued
     operation                      46         703         2,837       1,250
       Net income (loss)       $33,587    $(30,458)     $135,977     $17,483

    Basic earnings (loss) per
     share:
    Income (loss) from
     continuing operations       $0.20      $(0.27)        $0.98       $0.14
    Income (loss) from
     discontinued operation          -        0.01          0.02        0.01
    Net income (loss)            $0.20      $(0.26)        $1.00       $0.15
    Weighted average basic
     shares outstanding        169,717     117,226       135,793     117,027

    Diluted earnings (loss)
     per share:
    Income (loss) from
     continuing operations       $0.18      $(0.27)        $0.87       $0.14
    Income from
     discontinued operation          -        0.01          0.02        0.01
    Net income (loss)            $0.18      $(0.26)        $0.89       $0.15
    Weighted average diluted
     shares outstanding        201,529     117,226       167,260     117,863


    The calculation of earnings per share is provided in the following table.


                    Quanta Services, Inc. and Subsidiaries
                   Calculation of Earnings (Loss) Per Share
       For the Three and Twelve Months Ended December 31, 2007 and 2006
                 (In thousands, except per share information)

                                             Three Months      Twelve Months
                                         Ended December 31, Ended December 31,
                                           2007     2006      2007     2006
    Income (loss) for basic earnings per
     share:
      From continuing operations         $33,541 $(31,161) $133,140  $16,233
      From discontinued operations            46      703     2,837    1,250
      Net income (loss)                  $33,587 $(30,458) $135,977  $17,483

    Weighted average shares outstanding
     for basic earnings per share        169,717  117,226   135,793  117,027

    Basic earnings (loss) per share:
       From continuing operations          $0.20   $(0.27)    $0.98    $0.14
       From discontinued operation             -     0.01      0.02     0.01
           Net income (loss)               $0.20   $(0.26)    $1.00    $0.15


    Income (loss) for diluted earnings
     per share:
     Income (loss) from continuing
      operations                         $33,541 $(31,161) $133,140  $16,232
     Effect of convertible subordinated
      notes under the "if-converted"
      method - interest expense addback,
      net of taxes                         3,199        -    12,795        -

      Income (loss) from continuing
       operations for diluted earnings per
       share                              36,740  (31,161)  145,935   16,232
    Income from discontinued operation        46      703     2,837    1,250
      Net income (loss) for diluted
       earnings per share                $36,786 $(30,458) $148,772   $7,482


    Calculation of weighted average
     shares for diluted earnings (loss)
     per share:
    Weighted average shares outstanding
     for basic earnings (loss) per share 169,717  117,226   135,793  117,027
    Effect of dilutive stock options and
     restricted stock                      1,161        -       816      836
    Effect of convertible subordinated
     notes under the "if-converted"
     method - weighted convertible shares
     issuable                             30,651        -    30,651        -
    Weighted average shares outstanding
     for diluted earnings (loss) per
     share                               201,529  117,226   167,260  117,863

    Diluted earnings (loss) per share:
       From continuing operations          $0.18   $(0.27)    $0.87    $0.14
       From discontinued operation             -     0.01      0.02     0.01
           Net income (loss)               $0.18   $(0.26)    $0.89    $0.15


                    Quanta Services, Inc. and Subsidiaries
                         Non-GAAP Financial Measures
       For the Three and Twelve Months Ended December 31, 2007 and 2006
                 (In thousands except per share information)


             Reconciliation of GAAP Earnings per Diluted Share to
                 As Adjusted Cash Earnings per Diluted Share



                                     Three Months Ended  Twelve Months Ended
                                         December 31,        December 31,
                                       2007       2006     2007       2006
    As reported income (loss) from
     continuing operations            $33,541   $(31,161)$133,140    $16,233
        Adjustments, net of tax:
        Impact of tax contingency
         releases (a)                       -          -  (33,224)         -
        Goodwill impairment (b)             -     56,593        -     56,593
    Adjusted income from continuing
     operations                        33,541     25,432   99,916     72,826
    Non-cash stock-based
     compensation, net of tax           2,000        866    5,712      3,683
    Amortization of intangible
     assets, net of tax                 7,580         55   11,443        221
    Adjusted income from continuing
     operations for calculation of
     adjusted cash earnings per
     diluted share                    $43,121    $26,353 $117,071    $76,730




    From continuing operations:
    As reported earnings (loss) per
     diluted shares                      $0.18 $(0.27)(c)    $0.87    $0.14
    As adjusted earnings (loss) per
     diluted shares                      $0.18  $0.19 (c)    $0.67    $0.58(c)
    As adjusted cash earnings (loss)
     per diluted shares                  $0.23  $0.20 (c)    $0.78    $0.60(c)


    (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 2007 and the settlement of a multi-year
        audit by the Internal Revenue Service in the first quarter of 2007.
    (b) The non-cash goodwill impairment charge recorded in the fourth quarter
        of 2006 was associated with one of the company's operating units that
        has historically served the cable TV industry.  This charge is a
        result of the annual impairment evaluation of the company's goodwill
        balances as required by SFAS No. 142, "Goodwill and Other Intangible
        Assets."
    (c) In accordance with GAAP, as a result of applying the if-converted
        method for calculating diluted earnings per share, shares have been
        adjusted assuming conversion of Quanta's convertible subordinated
        notes, and net income has been adjusted for an addback of related
        interest expense, net of tax.

The non-GAAP measures in this press release are provided to enable investors to evaluate quarterly and annual performance excluding the effects of certain items that management believes impact the comparability of operating results between reporting periods.


                    Quanta Services, Inc. and Subsidiaries
                    Condensed Consolidated Balance Sheets
                                (In thousands)

                                                 December 31,     December 31,
                                                     2007             2006
    ASSETS

    CURRENT ASSETS:
    Cash and cash equivalents                      $407,081         $383,687
    Accounts receivable, net                        719,672          507,761
    Costs and estimated earnings in excess
     of billings on uncompleted contracts            72,424           36,113
    Inventories                                      25,920           28,768
    Prepaid expenses and other current               79,665           34,300
    assets
                 Total current assets             1,304,762          990,629
    PROPERTY AND EQUIPMENT, net                     532,285          276,789
    ACCOUNTS AND NOTES RECEIVABLE, net                7,914            7,815
    OTHER ASSETS, net                                35,078           31,981
    OTHER INTANGIBLES, net                          152,695            1,448
    GOODWILL                                      1,355,098          330,495
                 Total assets                    $3,387,832       $1,639,157


    LIABILITIES AND STOCKHOLDERS' EQUITY

    CURRENT LIABILITIES:
    Current maturities of long-term debt           $271,011          $34,845
    Accounts payable and accrued expenses           420,815          270,897
    Billings in excess of costs and
     estimated earnings on uncompleted               65,603           28,714
     contracts
      Total current liabilities                     757,429          334,456
    CONVERTIBLE SUBORDINATED NOTES                  143,750          413,750
    DEFERRED INCOME TAXES AND OTHER NON-
            CURRENT LIABILITIES                     301,510          161,868
                 Total liabilities                1,202,689          910,074
    STOCKHOLDERS' EQUITY                          2,185,143          729,083
      Total liabilities and
       stockholders' equity                      $3,387,832       $1,639,157

SOURCE Quanta Services, Inc.