Quanta Services Reports 2009 Fourth Quarter and Annual Results

Fourth Quarter Revenues of $985.4 million

GAAP Diluted EPS of $0.21 in 4Q09

Adjusted Diluted EPS of $0.31 in 4Q09

HOUSTON, Feb. 22 /PRNewswire-FirstCall/ -- Quanta Services, Inc. (NYSE: PWR) today announced results for the three and 12 months ended Dec. 31, 2009. As previously announced, Quanta completed the acquisition of Price Gregory Services, Incorporated (Price Gregory) on Oct. 1, 2009.  Therefore, these reported results of operations include the results of Price Gregory from Oct. 1, 2009 through Dec. 31, 2009 and are compared to the pre-acquisition historical results of Quanta for prior fiscal periods.

Revenues in the fourth quarter of 2009 were $985.4 million compared to revenues of $921.5 million in the fourth quarter of 2008. For the fourth quarter of 2009, net income attributable to common stock was $43.9 million or $0.21 per diluted share, as compared to $46.5 million or $0.24 per diluted share in the fourth quarter of 2008. Adjusted diluted earnings per share (a non-GAAP measure) was $0.31 for the fourth quarter of 2009 compared to $0.27 for the fourth quarter of 2008.  See the attached table for a reconciliation of this non-GAAP measure to the reported GAAP measure.  

"Our customers and demand for our services continue to be negatively impacted by slow economic conditions. During these difficult times, however, we have continued our strategy of not pursuing low-margin work.  The success of this strategy is reflected in the improvement of our gross margins for the full year 2009 over 2008 even though we had a reduction in our emergency restoration revenues of $127 million in 2009.  While our strategy has adversely affected our revenues and backlog, we are confident that it will benefit our company and shareholders over the long term," said John R. Colson, chairman and CEO of Quanta Services.  "Although we are forecasting a challenging first quarter of 2010, we continue to expect meaningful recovery in the second half of 2010 with a modest increase in spending by our customers."

Revenues for the 12 months of 2009 were $3.32 billion compared to $3.78 billion for the 12 months of 2008. For the 12 months of 2009, Quanta reported net income attributable to common stock of $162.2 million or $0.81 per diluted share, compared to $157.6 million or $0.87 per diluted share for the 12 months of last year. Included in net income attributable to common stock for the 12 months of 2009 is $22.4 million of income, or a benefit of $0.11 per diluted share, from the release of income tax contingencies in the third quarter of 2009.  Adjusted diluted earnings per share was $0.90 for the 12 months of 2009 as compared to $1.03 for the 12 months of 2008. See the attached table for a reconciliation of this non-GAAP measure to the reported GAAP measure.

See note (a) to the Consolidated Statements of Operations in this press release for an explanation of 2008 amounts that have been retrospectively restated as a result of the adoption of new accounting pronouncements effective Jan. 1, 2009.

OUTLOOK

Quanta and its customers continue to operate in a challenging business environment caused partly by the economic downturn and weak capital markets. Therefore, management cannot predict the timing or extent of the impact that these conditions may have on demand for Quanta's services, particularly in the near term. The following forward-looking statements are based on current expectations and actual results may differ materially.

Quanta expects revenues for the first quarter of 2010 to range between $700 million and $750 million. Diluted earnings per share for the first quarter of 2010 are estimated to be $0.07. Quanta expects adjusted diluted earnings per share (a non-GAAP measure calculated on the same basis as the historical adjusted diluted earnings per share presented in this release) for the first quarter of 2010 to be approximately $0.11. Amortization of intangibles, non-cash interest expense and non-cash stock compensation expenses are forecasted to be $11.6 million for the first quarter of 2010.

Quanta expects revenues for the full year 2010 to range between $3.9 billion and $4.2 billion. Diluted earnings per share for the full year 2010 are estimated to be between $0.90 and $1.00. Quanta expects adjusted diluted earnings per share (a non-GAAP measure calculated on the same basis as the historical adjusted diluted earnings per share presented in this release) for the full year 2010 to range from $1.06 to $1.16. Amortization of intangibles, non-cash interest expense and non-cash stock compensation expenses are forecasted to be approximately $61.0 million for the full year 2010.

Quanta Services has scheduled a conference call for Feb. 22, 2010, at 9:30 a.m. Eastern time.  To participate in the call, dial (480) 629-9820 at least ten 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 www.quantaservices.com. To listen to the call live 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 webcast, an archive will be available shortly after the call on the company's Web site at www.quantaservices.com. A replay will also be available through March 1, 2010, and may be accessed at (303) 590-3030 and using the pass code 4233173#.  For more information, please contact Karen Roan at DRG&E by calling (713) 529-6600 or email kcroan@drg-e.com.  

The non-GAAP measures in this press release and on the company's Web site are provided to enable investors, analysts and management to evaluate Quanta's performance excluding the effects of certain items that management believes impact the comparability of operating results between reporting periods.  In addition, management believes these measures are useful in comparing Quanta's operating results with those of its competitors.  These measures should be used as an addition to, and not in lieu of, results prepared in conformity with GAAP.  Reconciliations of other GAAP to non-GAAP measures not included in this press release can be found on the company's Web site at www.quantaservices.com in the "Financial News" section.

Quanta Services is a leading specialized contracting services company, delivering infrastructure solutions for the electric power, natural gas and pipeline and telecommunication industries. The company's comprehensive services include designing, installing, repairing and maintaining network infrastructure nationwide. Additionally, Quanta licenses point-to-point fiber optic telecommunications infrastructure in select markets and offers related design, procurement, construction and maintenance services. With operations throughout North America, 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 webcast 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 and capital expenditures; growth or opportunities in particular markets; the impact of renewable energy initiatives, the recently enacted economic stimulus package and other existing or potential legislative actions on future spending by customers; the potential benefits from acquisitions, including Price Gregory; the expected value of, and the scope, services, term and results of any related projects awarded under, agreements for services to be provided by Quanta; statements relating to the business plans or financial condition of our 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, quarterly variations in operating results; continuing declines in economic and financial conditions, including volatility in the capital markets; trends and growth opportunities in relevant markets; delays, reductions in scope or cancellations of existing projects, including as a result of capital constraints that may impact our customers; 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 negotiation, execution, performance and completion of pending and existing contracts; the ability to generate internal growth; the effect of natural gas and oil prices on Quanta's operations and growth opportunities; the ability to effectively compete for new projects and market share; the failure of renewable energy initiatives, the recently enacted economic stimulus package or other existing or potential legislative actions to result in increased demand for Quanta's services; cancellation provisions within contracts and the risk that contracts are not renewed or are replaced on less favorable terms; the inability of customers to pay for services; the failure to recover on payment claims against project owners or to obtain adequate compensation for customer-requested change orders; the failure to effectively integrate Price Gregory and its operations or to realize potential synergies, such as cross-selling opportunities, from the acquisition; the ability to attract skilled labor and retain key personnel and qualified employees; potential shortage of skilled employees; estimates and assumptions in determining financial results and backlog; the ability to realize backlog; the ability to successfully identify, complete and integrate acquisitions; the potential adverse impact resulting from uncertainty surrounding acquisitions, including the ability to retain key personnel from the acquired businesses and the potential increase in risks already existing in Quanta's operations; the adverse impact of goodwill or other intangible asset impairments; growth outpacing infrastructure; unexpected costs or liabilities that may arise from lawsuits or indemnity claims related to the services Quanta performs; liabilities for claims that are self-insured; potential additional risk exposure resulting from any unavailability or cancellation of third party insurance coverage; inability to enforce our intellectual property rights or the obsolescence of such rights; risks associated with the implementation of an information technology solution; potential liabilities relating to occupational health and safety matters; the potential that participation in joint ventures exposes us to liability and/or harm to our reputation for failures of our partners; risks associated with operating in international markets; risks associated with our dependence on suppliers, subcontractors and equipment manufacturers; risks associated with Quanta's fiber optic licensing business, including regulatory changes and the potential inability to realize a return on capital investments; beliefs and assumptions about the collectability of receivables; the cost of borrowing, availability of credit, fluctuations in the price and volume of Quanta's common stock, debt covenant compliance, interest rate fluctuations and other factors affecting financing and investment activities; the ability to obtain performance bonds; the impact of a unionized workforce on operations and the ability to complete future acquisitions; the ability to continue to meet the requirements of the Sarbanes-Oxley Act of 2002; potential exposure to environmental liabilities; requirements relating to governmental regulation and changes thereto; rapid technological and structural changes that could reduce the demand for services; the ability to access sufficient funding to finance desired growth and operations; the potential conversion of Quanta's outstanding convertible subordinated notes; provisions of our corporate governing documents could make an acquisition of our company more difficult; and other risks detailed in Quanta's Annual Report on Form 10-K for the year ended December 31, 2008, Quanta's Quarterly Reports on Form 10-Q for each of the quarters in 2009, and any other documents that Quanta files 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 www.quantaservices.com or through the SEC's Electronic Data Gathering and Analysis Retrieval System (EDGAR) at www.sec.gov.


Contacts: James Haddox, CFO    Kip Rupp / krupp@drg-e.com

          Reba Reid            Ken Dennard / ksdennard@drg-e.com

          Quanta Services Inc. DRG&E

          713-629-7600         713-529-6600




    
    
              Quanta Services, Inc. and Subsidiaries
              Consolidated Statements of Operations
              For the Three and Twelve Months Ended December 31, 2009 and 2008
              (In thousands, except per share information)
              (Unaudited)
    
                        Three Months Ended        Twelve Months Ended
                           December 31,               December 31,
                        ------------------        -------------------
                         2009        2008          2009         2008
                         ----        ----          ----         ----
                                  Restated(a)                Restated(a)
    
    Revenues           $985,423    $921,534    $3,318,126   $3,780,213
    Cost of services
     (including
     depreciation)      794,476     754,801     2,724,638    3,145,347
                        -------     -------       -------      -------
       Gross profit     190,947     166,733       593,488      634,866
    Selling, general
     & administrative
     expenses            94,823      82,265       312,414      309,399
    Amortization of
     intangible assets   23,692       6,836        38,952       36,300
                        -------     -------       -------      -------
       Operating income  72,432      77,632       242,122      289,167
    Interest expense     (2,832)     (2,849)      (11,269)     (32,002)
    Interest income         409       1,660         2,456        9,765
    Other income
     (expense), net        (405)        (66)          421          340
                        -------     -------       -------      -------
       Income before
        income taxes     69,604      76,377       233,730      267,270
    Provision for
     income taxes        25,159      29,888        70,195      109,705
                        -------     -------       -------      -------
       Net income        44,445      46,489       163,535      157,565
    Less: Net income
     attributable to
     noncontrolling
     interest               500           -         1,373            -
                        -------     -------       -------      -------
    Net income
     attributable to
     common stock       $43,945     $46,489      $162,162     $157,565
                        =======     =======       =======      =======
    Earnings per share
     attributable to
     common stock:
       Basic earnings
        per share         $0.21       $0.24         $0.81        $0.89
                        =======     =======       =======      =======
       Diluted earnings
        per share         $0.21       $0.24         $0.81        $0.87
                        =======     =======       =======      =======
    Weighted average
     shares used in
     computing
     earnings
     per share:
       Basic            208,293     195,531       200,733      178,033
                        =======     =======       =======      =======
       Diluted          209,987     197,525       201,311      196,975
                        =======     =======       =======      =======
    
    (a) Effective January 1, 2009, we adopted two new accounting
        pronouncements that each required retrospective application. One of
        these pronouncements was FASB Staff Position No. APB 14-1, "Accounting
        for Convertible Debt Instruments That May Be Settled in Cash upon
        Conversion (Including Partial Cash Settlement)" (FSP APB 14-1) (FASB
        Accounting Standards Codification (ASC) 470-20, Debt-Debt with
        Conversion and Other Options). FSP APB 14-1 (FASB ASC 470-20) requires
        us to bifurcate and separately value the debt and equity components of
        our convertible subordinated notes on our balance sheet. The recorded
        value of the equity component of our convertible notes is offset by
        the recognition of an adjustment to the carrying value of the
        convertible subordinated notes in the form of an original issuance
        discount which is amortized over the expected life of the convertible
        subordinated notes as a non-cash interest charge. As a result of the
        adoption of FSP APB 14-1 (FASB ASC 470-20), we recorded non-cash
        interest expense of $1.1 million and $4.2 million for the three and
        twelve months ended December 31, 2009 and $1.0 million and $14.5
        million for the three and twelve months ended December 31, 2008. The
        additional non-cash interest expense in 2008 reduced our previously
        reported diluted earnings per share from $0.88 to $0.87 for the twelve
        months ended December 31, 2008 and had no impact on reported diluted
        earnings per share for the three months ended December 31, 2008. In
        addition, we adopted FASB Staff Position No. EITF 03-6-1, "Determining
        Whether Instruments Granted in Share-Based Payment Transactions are
        Participating Securities" (FSP EITF 03-6-1) (FASB ASC 260, Earnings
        Per Share). Under FSP EITF 03-6-1 (FASB ASC 260), we are required to
        treat unvested share-based payment awards that contain non-forfeitable
        rights to dividends or dividend equivalents (whether paid or unpaid)
        as participating securities and to include such awards in the
        computation of both basic and diluted earnings per share. The adoption
        of FSP EITF 03-6-1 (FASB ASC 260) did not have a material impact on
        basic and diluted earnings per share in the three or twelve months
        ended December 31, 2009 or 2008. As a result of retrospectively
        applying both of these FSPs, our consolidated balance sheet as of
        December 31, 2008 and consolidated statements of operations for the
        three and twelve months ended December 31, 2008 have been
        retrospectively restated herein to reflect the impact of the adoption
        of these standards.
    
    
    
              Quanta Services, Inc. and Subsidiaries
              Calculation of Earnings Per Share
              For the Three and Twelve Months Ended December 31, 2009 and 2008
              (In thousands, except per share information)
              (Unaudited)
    
                        Three Months Ended        Twelve Months Ended
                           December 31,               December 31,
                        ------------------        -------------------
                         2009        2008          2009         2008
                         ----        ----          ----         ----
                                  Restated(1)                Restated(1)
    
    Income for diluted
     earnings per share:
       Net income
        attributable
        to common
        stock           $43,945     $46,489      $162,162     $157,565
       Effect of
        convertible
        notes
        under the
        'if-converted'
        method -
        interest
        expense
        addback,
        net of taxes          -          33             -       13,612
                        -------     -------       -------      -------
       Net income
        attributable
        to common
        stock for
        diluted
        earnings
        per share       $43,945     $46,522      $162,162     $171,177
                        =======     =======       =======      =======
    Calculation of
     weighted average
     shares for
     diluted earnings
       Weighted average
        shares
        outstanding
        for basic
        earnings
        per share       208,293     195,531       200,733      178,033
       Effect of
        dilutive stock
        options             162         158           192          342
       Effect of
        shares held
        in escrow         1,532           -           386            -
       Effect of
        convertible
        subordinated
        notes
        under the
        'if-converted'
        method -
        weighted
        convertible
        shares issuable       -       1,836             -       18,600
                        -------     -------       -------      -------
       Weighted average
        shares
        outstanding
        for diluted
        earnings
        per share       209,987     197,525       201,311      196,975
                        =======     =======       =======      =======
    Diluted earnings
     per share:           $0.21       $0.24         $0.81        $0.87
                        =======     =======       =======      =======
    
    (1) See Note (a) to the Consolidated Statements of Operations
    
    
    
              Quanta Services, Inc. and Subsidiaries
              Condensed Consolidated Balance Sheets
              (In thousands)
              (Unaudited)
                                            December 31,    December 31,
                                               2009            2008
                                               ----            ----
                                                             Restated(1)
                   ASSETS
    CURRENT ASSETS:
    Cash and cash equivalents                $699,629        $437,901
    Accounts receivable, net                  688,260         795,251
    Costs and estimated earnings in excess
     of billings on uncompleted contracts      61,239          54,379
    Inventories                                33,451          25,813
    Prepaid expenses and other
     current assets                           100,213          72,063
                                            ---------       ---------
        Total current assets                1,582,792       1,385,407
    PROPERTY AND EQUIPMENT, net               854,437         635,456
    OTHER ASSETS, net                          45,345          33,479
    OTHER INTANGIBLE ASSETS, net              184,822         140,717
    GOODWILL                                1,449,558       1,363,100
                                            ---------       ---------
        Total assets                       $4,116,954      $3,558,159
                                            =========       =========
              LIABILITIES AND EQUITY
    CURRENT LIABILITIES:
    Current maturities of long-term debt
     and notes payable                         $3,426          $1,155
    Accounts payable and accrued expenses     422,034         400,253
    Billings in excess of costs
     and estimated earnings on
     uncompleted contracts                     70,228          50,390
                                            ---------       ---------
        Total current liabilities             495,688         451,798
    CONVERTIBLE SUBORDINATED NOTES, NET       126,608         122,275
    DEFERRED INCOME TAXES AND OTHER
     NON-CURRENT LIABILITIES                  384,097         301,712
                                            ---------       ---------
        Total liabilities                   1,006,393         875,785
                                            ---------       ---------
    TOTAL STOCKHOLDERS' EQUITY              3,109,183       2,682,374
    NONCONTROLLING INTEREST                     1,378               -
                                            ---------       ---------
    TOTAL EQUITY                            3,110,561       2,682,374
                                            ---------       ---------
        Total liabilities and equity       $4,116,954      $3,558,159
                                            =========       =========
    
    (1) See Note (a) to the Consolidated Statements of Operations
    
    
    
            Quanta Services, Inc. and Subsidiaries
            Supplemental Data
            For the Three and Twelve Months Ended December 31, 2009 and 2008
            (In thousands)
            (Unaudited)
    
    Segment Results
    We report our results under four reporting segments: (1) Electric Power
    Infrastructure Services, (2) Natural Gas and Pipeline Infrastructure
    Services, (3) Telecommunications Infrastructure Services and (4) Fiber
    Optic Licensing.
    
    
                                        Three Months Ended December 31,
                                  ------------------------------------------
                                         2009                     2008
                                         ----                     ----
    Revenues:
       Electric Power            $516,349     52.4%      $565,660      61.4%
       Natural Gas and Pipeline   351,519     35.6%       229,168      24.9%
       Telecommunications          94,339      9.6%       107,879      11.7%
       Fiber Optic Licensing       23,216      2.4%        18,827       2.0%
                                 --------    ------      --------     ------
       Consolidated revenues     $985,423    100.0%      $921,534     100.0%
                                 ========    ======      ========     ======
    Operating income:
       Electric Power             $47,341      9.2%       $63,377      11.2%
       Natural Gas and Pipeline    54,506     15.5%        24,914      10.9%
       Telecommunications           6,662      7.1%         9,338       8.7%
       Fiber Optic Licensing       12,120     52.2%         9,482      50.4%
       Corporate and
        Non-Allocated Costs       (48,197)      N/A       (29,479)       N/A
                                 --------                --------    
       Consolidated
        operating income          $72,432      7.4%       $77,632       8.4%
                                 ========                ========     
    
    
                                        Twelve Months Ended December 31,
                                  ------------------------------------------
                                          2009                   2008
                                          ----                   ----
    Revenues:
       Electric Power          $2,067,845     62.3%    $2,301,566      60.9%
       Natural Gas and Pipeline   784,657     23.7%       879,541      23.3%
       Telecommunications         378,363     11.4%       536,778      14.2%
       Fiber Optic Licensing       87,261      2.6%        62,328       1.6%
                                 --------    ------      --------     ------
       Consolidated revenues   $3,318,126    100.0%    $3,780,213     100.0%
                                 ========    ======      ========     ======
    Operating income:
       Electric Power            $226,109     10.9%       247,671      10.8%
       Natural Gas and Pipeline    62,663      8.0%        76,169       8.7%
       Telecommunications          25,346      6.7%        41,917       7.8%
       Fiber Optic Licensing       44,143     50.6%        32,773      52.6%
       Corporate and
        Non-Allocated Costs      (116,139)      N/A      (109,363)       N/A
                                 --------                --------     
       Consolidated
        operating income         $242,122      7.3%      $289,167       7.6%
                                 ========                ========     
    
    Backlog 
    Backlog represents the amount of revenue that we expect to realize from
    work to be performed in the future on uncompleted contracts, including new
    contractual arrangements on which work has not yet begun.  The backlog
    estimates include amounts under long-term maintenance contracts in
    addition to construction contracts. We determine the amount of work under
    long-term maintenance contracts, or master service agreements (MSAs), to
    be disclosed as backlog as the estimate of future work to be performed by
    using recurring historical trends inherent in the current MSAs, factoring
    in seasonal demand and projected customer needs based upon ongoing
    communications with the customer. In many instances, our customers are not
    contractually committed to specific volumes of services under our MSAs,
    and many of our contracts may be terminated with notice. There can be no
    assurance as to our customers' requirements or that our estimates are
    accurate. In addition, many of our MSAs, as well as contracts for fiber
    optic licensing, are subject to renewal options. For purposes of
    calculating backlog, we have included future renewal options only to the
    extent the renewals can reasonably be expected to occur.  We also included
    in backlog our share of the work to be performed under contracts signed by
    joint ventures in which we have an interest.
    
    The table below provides the total backlog at the end of each period, with
    the 12 month column indicating what portion of such backlog is expected to
    be realized over the next 12 months.
    
    
                                            Backlog as of
                            ----------------------------------------------
                              December 31, 2009       September 30, 2009
                            ---------------------   ----------------------
                             12 Month      Total     12 Month      Total
                            ----------  ----------  ----------  ----------
    Electric Power          $1,312,141  $3,855,320  $1,294,112  $4,093,158
    Natural Gas
     and Pipeline              847,702   1,120,795     394,727     591,808
    Telecommunications         222,999     285,295     251,835     403,963
    Fiber Optic Licensing       87,786     387,373      85,839     395,220
                            ----------  ----------  ----------  ----------
    Total                   $2,470,628  $5,648,783  $2,026,513  $5,484,149
                            ==========  ==========  ==========  ==========
    
    
    
            Quanta Services, Inc. and Subsidiaries
            Reconciliation of Non-GAAP Financial Measures
            For the Three and Twelve Months Ended December 31, 2009 and 2008
            (In thousands, except per share information)
            (Unaudited)
    
    The non-GAAP measure of adjusted diluted earnings per share is provided to
    enable investors to evaluate quarterly and annual performance excluding
    the effects of items that management believes impact the comparability of
    operating results between periods. More particularly, (i) the release of
    tax contingencies generally occur at the expiration of statutory periods,
    resulting in variations in the timing and amounts of such releases from
    period-to-period; (ii) amortization of intangible assets and
    acquisition/integration costs are impacted by Quanta's acquisition
    activity, which can cause these amounts to vary from period-to-period;
    (iii) non-cash interest expense results from the requirements of FSP APB
    14-1 (FASB ASC 470-20) (see Note (a) to the Consolidated Statements of
    Operations) and varies from period-to-period depending on the amount of
    the convertible subordinated notes outstanding during the period; and (iv)
    non-cash compensation expense may vary due to acquisition activity and
    factors influencing the estimated fair value of performance-based awards.
    
                        Three Months Ended        Twelve Months Ended
                           December 31,               December 31,
                        ------------------        -------------------
    Adjusted diluted     2009        2008          2009         2008
    earnings             ----        ----          ----         ----
    per share:                    Restated(1)                Restated(1)
    
    Net income
     attributable to
     common stock
     (GAAP,
     as reported)       $43,945     $46,489      $162,162     $157,565
       Adjustments:
        Impact of tax
         contingency
         releases (2)         -           -       (22,446)           -
        Acquisition /
         Integration
         costs, net
         of tax           4,287           -         5,600            -
                        -------     -------       -------      -------
    Adjusted net income
     attributable to
     common stock
     before certain
     non-cash
     adjustments:        48,232      46,489       145,316      157,565
       Non-cash
        stock-based
        compensation,
        net of tax        3,196       2,617        12,123       10,182
       Non-cash interest
        expense,
        net of tax          725         671         2,817        9,681
       Amortization
        of intangible
        assets,
        net of tax       14,452       4,170        23,761       22,143
                        -------     -------       -------      -------
    Adjusted net income
     attributable to
     common stock after
     certain non-cash
     adjustments         66,605      53,947       184,017      199,571
    Effect of
     convertible
     subordinated
     notes
     under the
     "if-converted"
     method - interest
     expense addback,
     net of tax             949         981         3,794       10,331
                        -------     -------       -------      -------
    Adjusted net
     income
     attributable to
     common stock
     for adjusted
     diluted earnings
     per share          $67,554     $54,928      $187,811     $209,902
                        =======     =======       =======      =======
    Calculation of
     weighted average
     shares for
     adjusted diluted
     earnings per share:
    Weighted average
     shares outstanding
     for basic
     earnings
     per share          208,293     195,531       200,733      178,033
    Effect of dilutive
     stock options          162         158           192          342
    Effect of shares
     held in escrow       1,532           -           386            -
    Effect of
     convertible
     subordinated notes
     under the
     "if converted"
     method - weighted
     convertible shares
     issuable             6,415       8,250         6,415       25,015
                        -------     -------       -------      -------
    Weighted average
     shares outstanding
     for adjusted
     diluted earnings
     per share          216,402     203,939       207,726      203,390
                        =======     =======       =======      =======
    Adjusted diluted
     earnings
     per share            $0.31       $0.27         $0.90        $1.03
                        =======     =======       =======      =======
    
    (1) See Note (a) to the Consolidated Statements of Operations
    
    (2) 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 2009.

SOURCE Quanta Services, Inc.