Quanta Services Inc (PWR) 2009 Q2 法說會逐字稿

Welcome to the Quanta Services second quarter earnings conference call. (Operator Instructions)

I would now like to turn the conference over to Kip Rupp, Managing Partner of DRG&E. Please go ahead sir.

Thank you Mikayla and welcome everyone to the Quanta Services conference call to review 2009 second quarter results.

Before I turn the call over to management , I have the normal housekeeping details to run through. If you would like to be on the e-mail or fax distribution list to receive future press releases for Quanta or if you had any technical difficulty this morning and did not receive your e-mail or fax please call our offices at DRG&E at713-529-6600. Also if you like to listen to a reply of today's call, it will be available via webcast by going to Quanta's website at quantaservices.com. In addition, there is a telephonic recorded instant replay that will be available for next the 7 days, 24 hours per day, that can be accessed as set forth in the press release, by dialing 303-590-3030 and using the passcode 4125867#.

Please remember that information recorded on this call speaks only as of today, August 5, 2009, and therefore you are advised that any time sensitive information may no longer be accurate as of time of any replay of this call. Also this conference call will include forward-looking statements intended to qualify under the Safe Harbor From Liability established by the Private Securities Litigation Reform Act of 1995. These forward-looking statements include any statements reflecting Quanta's expectations, intentions, assumptions or beliefs about future events or performance or that do not solely relate to historical or current facts. Forward-looking statements involve certain risks, uncertainties and assumptions that are difficult to predict or are beyond Quanta's control and actual results may differ materially from those expected or implied as forward-looking statements. For additional information concerning some of the risks, uncertainties and assumptions, that could affect our forward-looking statements, please refer to the Company's annual report on Form 10-K for the year ended December 31, 2008, it's quarterly report on Form 10-Q for the quarter ended March 31, 2009 and it's other documents filed with Securities and Exchange Commission which may be obtained through the SEC's website at SEC.gov. Management cautions you -- cautions that you should not place undue reliance on Quanta's forward-looking statements and Quanta does not undertake any obligation to update any forward-looking statements to reflect events or circumstances after this call.

With that, I would like to turn this call over to Mr. John Colson, Quanta's Chairman and CEO.

Good morning everyone and welcome to the Quanta Services second quarter conference call. To start the call this morning, I will provide a general overview of the quarter, insight on the impact of the current economic conditions, developments in the industries we serve and perspectives on emerging opportunities. My comments will be followed by an operational review by Jim O'Neill, President and Chief Operating Officer and a review of financial results by James Haddox, our Chief Financial Officer. As always, we welcome your questions following our remarks.

Revenues for the second quarter were $813.4 million compared to $960.9 million in the prior year's second quarter. Diluted EPS for this quarter was $0.17 and gross margins increased by 40 basis points compared to the second quarter of 2008. We believe this is a considerable accomplishment considering the prolonged economic challenges in our industries.

We have made a deliberate effort to not pursue unprofitable or breakeven projects for the sake of growing revenues. We believe that Quanta's diverse customer base continues to strengthen our ability to navigate this challenging environment and maximize our financial performance.

For the second quarter of 2009, our largest customer made up 10.8% of our revenues. Our top 10 customers represented a 40.3% of our total revenues and our top 20 customers made up approximately 50% of revenues. These percentages are typically lower, but the increase in customer concentration in this quarter is due to several large projects during the quarter, including a large gas pipeline project and several large electric transmission projects.

The breakout of revenue also highlights the diversity of our business when divided by type of work. Our 2009 second quarter revenues were approximately 58% of revenues from electric power services, 20% from natural gas services, 12% from telecommunications and cable services, 7% from ancillary services, such as horizontal directional drilling and commercial and industrial wiring and, of course, 3% from dark fiber licensing.

Our employee count was 14,654 and June 30, 2009. This compares to 13,807 at March 31, 2009 and 16,659 and June 30, 2008. The increase in employees from first quarter to second quarter reflects the significant resource requirements of our recent large transmission and pipeline projects.

As we look forward, we believe demand for our strategic services will continue to grow over the long-term. In some cases, this demand can be considered overdue as we, along with our customers, observe the economic struggle and new laws proceed through the legislative process.

Meanwhile, we are working with our customers to help them meet reliability standards and prepare for future infrastructure requirements. The elements that will fuel our long-term success follow into specific categories. Strengthening of the nation's power delivery infrastructure, integration of new technologies to smarten the grid, incorporation of wind and solar generation into the grid and the associated transmission lines and substations, the evolution of natural gas as the clean transition and base load power for wind and solar, demand for fiber reliant, highband width telecommunications services that deliver voice, video and data, growth of 4G wireless technologies and growing need for secure and private networks and educational healthcare and government facilities.

We anticipate that these evolving developments to move our business forward as we apply our infrastructure expertise to support our customers' business strategies.

Overall during the second quarter, our operations and financial results were more significantly impacted by poor economic conditions than in prior quarters. In recent quarters, spending in power transmission, emergency restoration work, (inaudible) renewable initiatives have offset decreased revenues from telecom and natural gas customers. However, in the second quarter of 2009, all industries we serve experienced a decline in revenues, due primarily to reduce spending in a down economy. This was compound by general uncertainty as a new FCC Chairman took the helm, the American Clean Energy & Security Act was met with opposition and spending from the American Recovery & Reinvestment Act proved to be slow in coming. In many cases, this uncertainty has resulted in projects being put on hold as our customers ponder, plan and request government funding.

On the electric power front, the second quarter brought continued softness in electric distribution work, as utilities reduced maintenance of existing distribution lines and housing starts have yet to recover. Some utilities have seen load reductions for the quarter, while others have enjoyed high sales due to unusually hot weather in the southern United States.

Our transmission operations, which remains strong, generally did not offset the decrease in distribution spending. However, most indicators suggest that utilities, large and small, remain committed to strengthening of their power infrastructure, particularly as they integrate new, green generation sources.

The timing of this rebuild is complex and difficult to predict. However, so far we have not seen significant transmission project delays and are beginning to see signs of recovery in the distribution market. Jim will discuss these items further during his comments.

Moving to renewables, we continue to apply our expertise to meet the growing need for renewable infrastructure and grid connections across the country. We met key milestones on renewable related transmission projects in Texas and California during the quarter, however, the second quarter also saw a decreased momentum behind the development of renewable generation. This is primarily due to the holding pattern caused by the pending American Clean Energy & Security Act, compounded by a weak supply of tax equity financing in the market, heightened credit requirements and yet to be determined Federal grants and loan guarantees. The result has been a higher number of project delays and cancellations. However, we believe we may be approaching the bottom. We're beginning to see more activity in the market, not necessarily projects starting, but planning and bidding is again in progress at increased levels.

We continue to work with customers to develop utilities scaled, photo (inaudible) solar solutions, whether full-engineered for pure construct, or panel installation or grid interconnects. Our resources, successful project history and flexible approach are garnering attention. Our services are unique in structure and deliver efficiency and added value to the customer.

In the second half of this year and into 2010, we expect customers to release projects currently on hold. We also anticipate the application of our unique solar value proposition to take center stage over the next few years. The transition to renewable energy will not occur overnight or even in a decade. And the reality is that it will not represent a majority percentage of our power source for decades to come, if ever.

This brings a larger focus on natural gas as a transitional fuel. It's cleaner than oil and coal and has less of an impact on the environment and domestic resources are ample and the continued exploration of the various US shale formations bode well for that in the future, not to mention that right now the price is very low. Obviously, natural gas services have a promising future and we continue to pursue this opportunity.

We had a decrease in revenues in the quarter from our telecommunication services. This was influenced largely by reduced spending by telecom service providers related to their fiber build-outs. However, there are indications to support our belief that the second quarter may represent the bottom of this decrease as well.

Two developments that are significant, AT&T, Verizon and other large service providers continued support their annual deployment goals for 2009. With significantly lower spending in the first half of the year, it is likely that more of this spending will occur in the second half of this year and into 2010.

The Commerce and Agriculture Departments are moving rapidly to award the first phase of ARRA benefits to support broadband deployment to unserved and underserved rural areas. These awards will most likely to be fulfilled by rural municipalities and rural telcos. Quanta has a long history of strong reputation for quality service.

We currently expect to see growth in the third quarter of 2009 in our telecom services compared to the second quarter of 2008. Excuse me, that should be third quarter of 2008. Looking forward, we are optimistic that the second quarter represents a low point of the economy's negative impact on our business. We expect to see increased spending in many of the industries that we serve in the second half of the year. However, spending in the second half of the year may still not be at a level to counterbalance the softness of the first half of the year.

We continue to believe that future growth of our business will be strong. We believe our healthy balance sheet, superior services, extensive training and a variable workforce will ensure that we emerge from this challenging economic environment stronger than ever and poised and prepared for growth.

Now I'll turn the call over to Jim O'Neill who will talk in more detail about operational accomplishments during the quarter.

Thank you John and good morning everyone. We have successfully navigated the challenging economic climate in the first half of 2009 and at the same time pursued significant growth opportunities created by industry drivers and legislative developments. We are optimistic about our future and have positioned the Company to maximize these opportunities, primarily by leveraging the diversity of our organization.

Let's begin with a review of our electric power operations. In the second quarter of 2009, revenues from electric power operations, including $15 million in emergency restoration work, were approximately $471 million. This compared to approximately $532 million in the second quarter of 2008, which included $23 million in emergency restoration work. Electric power revenues were negatively impacted in the quarter by the ongoing softness in the distribution market as our customers continued to curtail maintenance spending.

While we performed significant transmission work in the second quarter, it was not enough to offset the decrease in distribution revenues, however, we believe things are improving. Certain customers have indicated plans to add crews to their distribution system in the second half of this year. This is a positive indicator that the electric power distribution market will soon recover.

We believe the future of our electric transmission operations remain strong as well. To date, there have been no cancellations or significant delays in our project pipeline. During the quarter, our electric power operations made significant progress on several of our major projects. We began installing Smart Meters throughout the Houston area under a five-year contract with CenterPoint Energy and [Itron]. To date, we have met all key milestones with the deployment of more than 45,000 of the 2.2 million meters.

Our role in the implementation of new technologies extends beyond meter installations. We are leading key initiatives with our customers, independent system operators and technology and communication equipment providers, to file applications with the Department of Energy for stimulus funding for Smart grid deployments.

Our work on the Southern California Edison Tehachapi Project continued to proceed on schedule. During the quarter, we utilized our helicopter resources to complete foundation installation and lattice transmission tower erection through the Angeles National Forest, which reduced installation time and minimized environmental impact.

We also progressed on the construction of 120 miles of the 345,000-volt transmission line from Woodward, Oklahoma to Oklahoma City for Oklahoma Gas and Electric. This project was recently recognized for safety achievement of completing 250,000 man hours without a recordable injury. Several of our operating units are working simultaneously on this line performing foundation installation, structure placement and wire stringing. This project is expected to complete in the first half of 2010.

The vast majority of our services to be performed under our master agreement with Northeast Utilities, valued at approximately $950 million, will occur in 2010 and beyond. Currently, we have four Quanta companies engaged to perform constructability reviews, substation design and construction, technical planning and load analysis, energized and routine transmission maintenance and distribution construction. Also, work under our five-year contract between national grid and the new Energy Alliance, which is a joint venture between a Quanta operating unit and Balfour Beatty infrastructure, is the in the initial phase of the contract.

We continue to provide transmission infrastructure services under our $194 million contract with the Lower Colorado River Authority, or LCRA. And work under the $256 million addendum for the construction of transmission infrastructure for the Competitive Renewable Energies Zone, or CREZ, is expected to begin as early as the fourth quarter of this year and extend into 2013. The trial project is now underway in the construction phase with foundation, tower assembly and erection underway, while wire stringing operations will begin in mid-September. The construction phase will last about 2 1/2 years with targeted completion by early to mid-2011.

We continue to be optimistic that we are entering into the early stages of a significant investment cycle in the transmission infrastructure driven by two primary factors, the reliability of the current grid and renewable energy. Additionally, the American Clean Energy & Security Act has the potential to streamline the siding process, right-away acquisition and jurisdictional challenges faced by our customers today. This act will by no means impact our customers or our business in the near term, but if passed as proposed, could accelerate future transmission projects.

The renewable energy market has been challenging during the first half of 2009. However, we're optimistic about the future. On July 9, the US Treasury Department provided details on the new cash grant program for renewable energy projects. The Treasury Department began accepting applications on August 1. Treasury officials anticipate at least $3 billion to be paid under the program. Also, last week the Department of Energy announced it will provide up to $30 billion in loan guarantees for renewable energy projects and an additional $750 million will be provided for projects that increase the reliability, efficiency and security of the nation's transmission system.

These two loan guarantee solicitations are being funded partly through the American Recovery & Reinvestment Act or ARRA. While this ARRA loan guarantee program has been widely expected by the renewable energy industry, we consider this important progress. We expect significant increases in renewable energy activity beginning as soon as the second half of this year.

We are in the process of finalizing the contract details of with Cleantech America Inc for the engineering and design of Cal Renew One, a 5-megawatt utility scale solar facility in Mendota, California. We have received notice to proceed on this project and construction is to be expected to be completed this year. This solar project demonstrates the utilization of our full-engineering procurement and construction or EPC capabilities in the utility scale segment.

Our national footprint positions us to also transfer our eight PC capabilities for utility-scale projects to distributed generation opportunities, primarily with large commercial customers. Additionally, we believe our customer relationships will enable us to bring distributive solar solutions to our utility customers. We currently anticipate the completion of approximately 20-megawatts of utility-scale and distributed solar projects between now and year-end, which includes the Cal Renew One project. None of these projects were on backlog as of June 30, 2009.

In 2010, we anticipate significant growth in the development of utility-scale and large commercial distributive solar PV projects. Solar PV is an integral component for our customers to achieve their renewable portfolio standards. Quanta's ability to leverage our total EPC capability results in the lowest balance of system cost to our customers. As the largest specialty transmission and distribution electric power contractor in the nation, we are able to transfer a best practices and deploy local resources to any project.

Our range of services minimizes the need for subcontractors eliminating, any third-party profit margins, or project management oversight required to manage outside resources. We are working diligently with select technology partners to provide the most cost-effective solar generation solutions to our customers.

We're also seeing an increase in activity from our wind generation customers. Our EPC capabilities are critical to customers that need to accelerate their project pipeline to more efficiently meet aggressive renewable portfolio standards. However, due to the longer development lead time in wind as compared to solar, we do not expect full recovery to levels of the activities we saw in 2008 until sometime in mid-2010.

We will not achieve our goal of generating $300 million in renewable revenues this year due to the delays associated with project funding and guarantees under the stimulus program and tighter credit markets. However, we remain committed to the goal that in 3 to 5 years, our renewable revenues will be 20% to 30% of our overall company revenues. The positive signs we are seeing in our renewable business today were expected to occur last February. As a result our goals have shifted out six months, but have not changed. Additionally, solar revenues for the year ending 2009 will approach $50 million, a five-fold increase over our solar revenues in 2008.

Now, let's turn our attention to our natural gas operations. In the second quarter of 2009, revenues from our natural gas operations were approximately $166 million. This compared to approximately $202 million in the second quarter 2008. In early July, we successfully completed ahead of schedule, our transmission gas pipeline project for Midcontinent Express Pipeline, a joint venture between Kinder Morgan and Energy Transfer Company. This project, which started in April, required the installation of 74 miles of 36-inch natural gas pipeline in less than 3 1/2 months. At the peak of this project, we had more than 1200 employees working on this pipeline. We believe the success and timely completion of this project positions us well to obtain future gas transmission opportunities.

During the quarter gas revenues associated with a gas gathering services declined due to depressed natural gas prices and a continued decline in drilling activity in the tight shale gas fields. Also, gas distribution work remained consistent, but at lower levels, as customers continued to upgrade existing infrastructure to comply with corporate requirements.

The American Clean Energy & Securities Act of 2009, if enacted, will legislate enhanced American energy independence and reduced national carbon footprint. While coal is currently the nation's major fuel for electric power, natural gas is the fastest growing fuel. According to the Department of Energy, more than 90% of the fossil fuel power plants to be built in the next 20 years will likely be fueled by natural gas. Also, natural gas is likely to be the primary fuel to offset the intermintency of renewable generation. Because of these dynamics, we believe the demand for natural gas may increase significantly over the coming years and if this occurs, the nation's existing natural gas transportation pipeline infrastructure is likely to be insufficient to meet future demands. We're optimistic about the outlook of the natural gas industry and are continuing to evaluate opportunities in this area.

In the second quarter of 2009, revenues from telecommunications and broadband cable operations were approximately $97 million. This compares to approximately $157 million in the second quarter of 2008. While this area of our business has, no doubt, been adversely impacted by the economic downturn, we continue to believe that the second quarter of 2009 may have been the bottom of the decline. This is supported by the fact that neither AT&T nor Verizon have revised their 2009 fiber deployment targets. In fact, AT&T recently announced that CapEx spending in the second half of 2009 will increase 35% over the first half of the year.

Our role in the deployment of fiber for both AT&T and Verizon is strategic. As an example, we recently developed a combined services package for one of our customers, which supports their goals of fiber deployment, cost reductions, reduced cycle time and increased subscriber penetration. This type of innovation in the marketplace differentiates Quanta in supporting our customer's deployment goals.

In recent weeks, both AT&T and Verizon have announced Smart grid initiatives. AT&T has joined forces with Cooper Power to deliver various outage adviser and capacitor banks status product. Meanwhile, Verizon has established a Smart grid joint venture with Qualcom.

The emergence of Smart grid technologies and applications in telecom will showcase the strength of our diverse service offerings and the potential to apply our expertise across telecommunications and electric power customers.

The roll-out of stimulus funds related to increasing broadband deployments to underserved and unserved rural areas is gaining momentum. The Department of Commerce and Department of Agriculture began accepting applications on July 14. The awards anticipated to occur in November, will most likely be secured by municipalities, states and rural telephone companies, areas where Quanta has enjoyed a long history of success. In fact, we are assisting many of our customers with the application process. It is important to note that grantees are required to complete these projects within three years of award.

As to wireless opportunities, Verizon and AT&T have announced plans to roll out Long-Term Evolution or LTE wireless in 2010. We expect to see deployment plans firm up late this year and result in increased demand for our installation services in 2010.

Municipalities and government entities will also leverage grants from a broadband stimulus package to upgrade their wireless communication infrastructure to support Public Service and Emergency Communications.

In summary, we are proud of our Management and Operation's teams ability to improve gross margins in the challenging business environment. In looking forward, the opportunities for our business are clear, particularly as it relates to the strengthening of the nation's transmission infrastructure and building mandated renewable energy generation. Our diverse service offerings, strong balance sheet and strategic solutions for our customers, position as for continued growth as spending in the industries we serve return.

Now, I turn the call over to James Haddox, our CFO.

Thanks, Jim and good morning everyone. Today, we announced second quarter revenues of $813.4 million, compared to $960.9 million in the prior year's second quarter, reflecting a decrease of approximately 15.4% quarter-over-quarter for the reasons John and Jim mentioned earlier.

This year's second quarter revenues included emergency restoration revenues of approximately $15 million, compared to approximately $23 million being earned in 2Q 2008. Excluding all emergency restoration revenues from both periods, revenue decreased approximately 14.9% in the second quarter.

Revenues from electric power work during the second quarter of 2009 decreased by approximately $61 million to $471 million or about a 12% decrease compared to the second quarter of 2008. Excluding all emergency restoration revenues from both periods, electric power revenues would have decreased about 11%.

While revenues from electric transmission work continued an upward trend, decreasing revenues from electric distribution work offset this increase. Gas work decreased approximately $36 million to $166 million into 2Q 2009 or about 18% quarter-over-quarter. Our gas work declined quarter-over-quarter, due primarily to a slowdown in customer spending for gas compressor stations, which was a result of the decline in gas prices.

Revenues from telecom and cable work decreased from about $157 million into 2Q 2008 to about $97 million in 2Q 2009 or about 38%, due primarily to cutbacks in spending on FTTX deployment by AT&T and to a lesser extent, Verizon.

Revenues from ancillary work increased a modest amount. Dark fiber revenues contributed approximately $23 million in the second quarter compared to $13 million in last year's second quarter for about 69% growth, as a result of our continued investment in dark fiber network expansion.

We generated gross margins of 16.9% for the second quarter of 2009 compared to gross margins of 16.5% during the second quarter of 2008 for an increase of 40 basis points. Gross margins from electric work were higher as a result of a larger component of higher-margin transmission services. Gross margins also increased in our ancillary business due to the elimination of low margin contracts. Partially offsetting these higher margins were lower margins in our gas and telecom industries due to lower revenues and increased competition.

Our G&A expenses decreased from $76.3 million in 2Q 2008 to $73 million in the second quarter of 2009, primarily as a result of our cost-cutting initiatives and lower bonus expenses, partially offset by higher expenses associated with our renewable energy initiative and implementation of an IT solution.

G&A expenses are up from 7.9% of revenues in 2Q 2008 to 8.9% in 2Q 2009, primarily due to lower revenues quarter-over-quarter. G&A was down sequentially from $73.6 million in 1Q 2009.

EBITDA for the second quarter of 2009 was about $65 million, or 8% revenues compared to about $82 million, or 8.6% of revenues for the second quarter of 2008. The decrease in EBITDA margins was due to the increase in gross margins being more than offset by the increased G&A percentage. The calculation of EBITDA is set forth in the Financial News section of our website at quantaservices .com.

Amortization of intangible assets decreased from $9.9 million in 2Q 2008 to $4.9 million in 2Q 2009, due primarily to the runoff of amortization of the intangible asset associated with InfraSource's backlog.

Interest expense decreased from $9.7 million in 2Q 2008 to $2.8 million in 2Q 2009. Interest expense in 2Q 2008 included $4.5 million of noncash interest expense associated with the adoption of FSP APB 14-1. Interest expense in 2Q 2009 includes about $1.1 million noncash interest expense associated with the adoption of 14-1.

During 4Q 2008, our $270 million convertible secured was converted into equity, thus eliminating the interest expense associated with it. Interest income decreased from $2.1 million in the second quarter of 2008 to $0.6 million in the second quarter of 2009, primarily due to lower interest rates.

Net income attributable to common stock for the quarter was $33.6 million or $0.17 per diluted share compared to $37.7 million or $0.21 per diluted share in 2Q 2008. Adding back noncash amortization of intangibles, noncash interest expense and noncash compensation expense, net of taxes, would have resulted in an adjusted net income attributable to common stock of $40.1 million compared to adjusted net income attributable to common stock of $49.5 million in 2Q 2008.

A reconciliation GAAP net income and attributable to common stock to adjusted net income attributable to common stock is provided in the titles attached to our press release issued today.

Our diluted share count in 2Q 2008 was about 197 million versus about 198 million shares for 2Q 2009. Cash flow from operations totaled approximately $59 million for the quarter. Cash flow from operations, less net capital expenditures of about $43 million, resulted in approximately $16 million in free cash flow for quarter. Cash flow from operations for the first six months of 2009 total about $171 million. Deducting net CapEx of $82 million year-to-date, yielded free cash flow of $89 million for the first six months of 2009.

EBITDA was $90 million for the second quarter of 2009, representing a decrease of approximately 15.5% over EBITDA in the second quarter of 2008. The calculation of this non-GAAP measure can be found in the Financial News section of our website at quantaservices.com. We've also posted to our website a calculation of adjusted EBITDA.

Our days sales outstanding or DSOs, were 79 days in June 30, 2009 versus 83 days at March 31, 2009 and 81 days at June 30, 2008. The definition of days sales outstanding can be found in the Financial News section of our company website.

Now I will turn to a discussion of backlog. A 12-month backlog is defined as the amount of work expected to be completed over the next 12 months under signed contracts. Total backlog includes the amount of revenue we expect to derive in the future from signed contracts for project work and a master service agreements. A more detailed definition of backlog can be found in the Financial News section of our company website. Our total backlog of work at June 30, 2009, was approximately $5.528 billion, which is $238 million or about 5% higher than the total backlog at June 30, 2008, primarily due to the award of several major long-term transmission projects since that time.

Total backlog has decreased $273 million or 5% since March 31, 2009, due to the awarded the $250 million LCR (inaudible) extension during the quarter is being more than offset by contract burn and a more conservative view being taken toward MSA work.

Our 12-month backlog currently stands at $2.224 billion. This compares to a 12-month backlog of $2.395 billion at June 30, 2008 and represents a decrease about $170 million or 7%.

Our June 30, 2009 12-month backlog of $2.224 billion also compares to a 12-month backlog of $2.524 billion as of March 31, 2009, a decrease of $300 million or approximately 12%.

At the end of the quarter we had about $524 million in cash and $317 million available in borrowing capacity under $475 million credit facility. We had about $158 million of letters of credit outstanding, primarily to secure our insurance program. The combination of our cash balance and availability under our credit facility, gives us about $841 million in total liquidity.

Concerning our outlook for the future, our estimate of revenues for the third quarter of 2009 is from $840 million to $870 million. This compares to revenues of $1.053 billion in last year's third quarter. However, last year's third quarter included about $115 million in emergency restoration revenues versus $21 million in emergency work being included in our 3Q 2009 forecast.

Our estimate for 3Q 2009 EPS based on revenues of between $840 million and $870 million is from $0.20 to $0.21 per diluted shares on a GAAP basis. Our GAAP EPS forecast includes an estimate of $11.2 million for our amortization non-cash compensation expenses and non-cash interest expense. Excluding this expenses, our non-GAAP adjusted earnings per diluted share for the quarter is expected to be $0.23 to $0.24.

This EPS outlook is based on our gross margins being the same or better than last year's third quarter, even with last year having $115 million of high-margin emergency restoration work. This demonstrates our effort to grow or maintain margins even if it requires us to sacrifice revenue growth.

For additional guidance, we are currently projecting our tax rate for the third quarter to be approximately 41.6%. We expect our diluted share count to be about 198 million shares during the third quarter. We expect CapEx for all of 2009 to be approximately $175 million. This compares to CapEx for all 2008 of $186 million.

In summary, considering the economic environment we are faced with, we're pleased with our second quarter. While we had hoped that our backlog would have continued to increase going into the last half of the year, our customers cut back spending and slowed the award of new contracts, particularly alternative energy. However, we continue to believe that the long-term drivers of double digit growth in our business are valid and will promote expansion of our business in the years to come.

This concludes our formal presentation and we will now open the lines for Q&A. Mikayla?

Thank you, sir,. We will now begin the question and answer session. (Operator Instructions) Our first question comes from the line of Carter [Shoup] of Deutsche Bank. Please go ahead.

Good afternoon. I wanted to start off asking a question about the distribution market. You suggested that it might be bottoming as some customers are expecting a tickup in CapEx. Can you elaborate on that point and help us understand if that is a trend you're seeing in a few customers our several customers?

I think I would describe it as a few customers. Some of our customers -- utilities customers in the North and Northeast have had a fairly mild winter, which means that their revenues are down from the services that they provide from their electricity sales. So, they're having a pretty tough time of it. While in the South, some utilities, because it has been very hot down here, are doing very well with their electricity sales, so their income is up for the year and I would say we're seeing a few right now. We don't anticipate that utilities can hold spending on maintenance down for any length of time. A year is quite a long time for that. So, we expect them to start coming back with some spending, but right now I would say we're seeing a few utilities that are expressing an interest in adding crews in the second half of the year.

Great. Thanks. That's helpful. In regards to the transmission market, can you make some comments about the lower voltage, more regional transmission business, how it performed sequentially in 2Q and what your outlook is for the second half of the year?

Yes. Most of the transmission activity we saw was the large high-voltage projects. The lower voltage regional projects are fairly slow. I would say akin to the distribution market in that regard.

In regard to transmission -- while we are talking about transmission and projects, we are not likely to go out and bid projects at low margins during this time period and wind up with a bunch of low-margin work in our backlog to have to work out after the economy recovers and spending comes back. So, what we have put in backlog today for next year or for 2011, we don't want to have a bunch of cheap work in there from low-margin projects. So, we're being very selective. It is hurting our backlog somewhat, it temporarily, I think, but it is intentional action on our part.

Thank you, our next question comes from the line of Alex Rygiel with FBR Capital Markets. Please go ahead.

Thank you and good morning gentlemen. James, could break out your backlog by customer segment?

Yes. I will do that and then I will also give you a discussion of the increase and decrease at the same time, Alex. Total backlog, I will give a total backlog and then I'm going to give you a 12-month backlog. Total backlog on electric, as of June 30, 2009 is $3.981 billion. Total backlog on gas is $579 million. Total backlog on telecom is $402 million. Total backlog on ancillary is $171 million. Total dark fiber backlog is $394 million. On the 12-months backlog, electric backlog is $1.376 billion. That is down about $117 million since March 31, 2009. The positives on electric, which you saw in total backlog, were that we were awarded the $256 million increase in the or LCRA (inaudible) award, but only about 10% of that contract goes into 12-month backlog because it is expected to start in the latter part of 2010.

Offsetting that though were just normal contract burn and we also put some more conservatism into our MSAs, particularly as they related to distribution work. Also we had no major new contract awards that contributed during the quarter that contributed to 12-month backlog. The gas backlog for the 12-month was $367 million. That is down about $137 million since March. The reason for that is because the major contract that we announced with Kinder Morgan and Mid America was mostly completed during the quarter. That was a rush, that was a hurry-up contract, so most of that contract was performed in the second quarter. We were awarded one medium-sized gas contract during the quarter, but when you combine that or take that contract and offset it against contract burn on Kinder Morgan and we then we had further adjustments to MSAs in gas due to the current outlook. So, when you combine that, all of those things combined net it down to a decrease of $137 million.

Telecom backlog for the 12 months is $282 million. That is down about $37 million from March. Once again, that is lowering estimates on MSAs. Fewer awards of municipal and RUS-dependent work, while they're waiting on stimulus money and no significant wireless awards relative to 4G, as those are expected to come out in the fourth quarter. Ancillary 12-month backlog was $113.1 million. That is down $11 million from March and that is just due to general economic conditions and margin discipline as John talked about. Dark fiber 12-month backlog is up $5 million and that is just due to general rollout of the fiber networks. The (inaudible) backlog is $2.224 billion.

James, as we sit here and look at your total, or your 12-month backlog being down about 7% year-over-year, how should we think about revenues over the next 12 months? Should we also think about a similar decline over the next 12 months?

I actually think that is dependent on how much we see the pickup in bidding activity in the third and fourth quarter and changes in attitudes that the utilities and the gas companies may have toward MSAs. As John and Jim mentioned, we are thinking that things are going to be picking up and that there's going to be more activity, and potentially, there could actually be some action relative to utility spending and gas spending in the fourth quarter, as these companies, as our customers get more confident about the future and they may have budget money left over. But, we are not taking that into account in backlog right now.

Thank you. Our next question comes from the line Tahira Afzal with Keybanc. Please go ahead.

Good morning gentlemen. I just had a couple of questions. Is it fair to say, you have kind of redefined in a way your backlog definition, if you are taking a more conservative approach in MSAs. So, the $5.5 billion, is that apples-to-apples versus the $5.8 billion in first quarter and if it is, are you seeing a downtake on your MSA side and is that why you're down taking a more conservative approach?

Well, Tahira, I don't know that the change in MSA or the more conservatism in MSA affects the total backlog as much as it does the 12-month backlog because the total backlog is dependent upon awards of major contracts during the quarter versus contract burn. So, you can from time to time see total backlog decrease just because of contract burn with no mega-contracts being awarded during the quarter. So, as a percentage, because the total backlog number is so much larger as a percentage, I would say the conservatism on MSAs has a lesser effect on the total backlog than it does on the 12-month backlog.

I guess what I'm trying to put into perspective is if I look over the last three quarters and I try to nix out some of the larger projects, you're were running at maybe let's say $700 million in normalized backlog and if I look at the implied bookings for a second quarter on the total backlog of $540 million, that seems much lower especially given since you have the LCRA award. To then extent, could you comment on that? That would be helpful.

That differential could possibly be what you're talking about as far as MSA -- changes in MSA. Just say, more conservatism on MSA, that could be accounting for that.

Thank you. Our next question comes from the line of Jamie Cook with Credit Suisse. Please go ahead.

Hi. Good morning. One. I just want to add a follow-up question on the distribution business. John, this has been a lagger for awhile, but I guess with housing starts potentially reaching the bottom, I'm just trying to figure out historically when housing starts start to recover how soon after do you see that and how you are preparing for that? And just a second question, the -- sequentially, if we look at the margins, they are down third quarter versus Q2 if you just back into your guidance. I know there is less storm work, but I'm just trying to figure out what the other drivers are, just because sequentially using Q3 is up pretty dramatically from Q2?

Yes. I will address the first part about distribution and then let James handle the margin question. The distribution market, our distribution market is less reliant on new home starts than many people think that it is. If you recall, home starts started declining three years ago. The first place it affected us was in the Denver market where we started seeing housing starts decline tremendously. It occurred then on for two years and it really didn't affect us too much because most of our distribution business wasn't really related just to new home starts. Where we got hurt was when utilities started diverting money from distribution maintenance. They started doing that, I guess, in the fourth quarter of last year, is when it really started down. They really haven't started recovering.

Utilities are spending because sometimes our CapEx is equal to what it has been in the past because they are spending on transmission, but distribution spending is way down and some major utilities have actually almost ceased their maintenance and only doing what is absolutely necessary. There are a number of reasons for that, but primarily because of the economic situation. They're seeing their revenues decline, they are seeing the cost of money increase and they are seeing uncertainty in their ability to get any rate increases from their public service commissions. And this varies from state to state and utility to utility.

So, with housing starts maybe bottoming, that is a good sign, but I don't think that is the thing we need to see to really improve our distribution maintenance projects. What we need to see there is utilities going back to doing distribution projects and spending money on distribution. What Jim talked about there with Smart grid, that bodes very well for distribution spending, obviously. Many utilities, I think most all of the utility customers we have are applying for some money for Smart grid. Those are matching funds, as you know, where the government matches 50% with utility.

So, I think that is going to bode well for the future, but we're taking a pretty conservative view until we start seeing some of that spending. As you know in our master service agreements, particularly on the telecom side, with fiber to the premise, we are very conservative because we don't put any of that in backlog until we actually start the project in many cases. James, do you want to address the question about -- ?

Jamie, would you repeat your question about margins because I'm not sure I understood it?

No -- I was just -- if you look at your implied margins for the third quarter versus the second quarter are they are down sequentially?

That is what is confusing me because they are not.

Oh, then maybe I'm doing the calculation -- I am sorry down year-over-year. So, I'm just trying to figure out the drivers. There's probably less storm work, but if there is any more color you can give on that?

Well, I mean, down year-over-year. The guidance that we gave was that we thought that we could maintain or maybe even improved gross margins year-over-year, but with revenues being lower, and therefore G&A expenses will be higher as a percentage of revenue, so they are down slightly year-over-year at the operating margin line, but we think we can maintain or improve gross margins.

Thank you. Our next question comes from the line of Sanjay Shrestha with Lazard. Please go ahead.

Thank you. Good morning. A couple of quick questions. First off, on the natural gas side, you mentioned that you are being strategic about what might be the next growth opportunity there and has the generation increased on the natural gas side. There could be more transmission and structural related work, but at the same time as the price stays depressed, there is near (inaudible) potential impact on the wind energy side. So, how should we think about putting it all together? Is is one of those weak second half and fantastic 2010 and 2011? How should we put all of that together?

This is Jim, I think on the gas side again is the tight credit markets right now and the depressed gas prices, which you have a couple of phenomenons going on. You've got depressed exploration and production activity, but you have got a pretty robust transportation pipeline infrastructure, replumbing going on right now. Trying to replumb the infrastructure from the tight shale formations to the load centers. So, that tends to be a pretty active outlook there for us in gas on the transmission side. So, I think the outlook there is pretty robust and we think that gas prices will begin to come back into 2010 with the modeling that we have seen and it will come back, as well on the gas-gathering side.

The distribution side and a lot of it is for compliance work and we see that continuing for several years going forward. That is going to be ongoing revenue.

Okay. On the follow up then, not so much on the natural gas side, it sounds like you are focused more on profitability, but rather than the new business. So, with that sort of a backdrop, can you give this some more detail as to, I think John, you mentioned that you're just not going after every single transmission business, but if you could update us as to the transmission opportunity near-term, long-term, as to some of the larger and the smaller size projects and the second part to that question, how big are the solar and the wind opportunity you see here now in the second half, even though it's not going to be (inaudible) and is there a massive pent-up demand for 2010 and 2011and if you could into some more granularity on that?

Okay. Let me tackle the transmission. Nothing really has changed in the high voltage transmission market. There utilities are to continuing to spend and in fact, probably taking money from their distribution maintenance and putting it towards their transmission growth because it is a higher margin business for them. So, nothing has really changed there. The same projects that we have talked about are still out there and are still on track to be bid and to be built -- are pretty much on schedule. There is the normal 2 to 3 month delays on permits. The normal 2 or 3 months delays for right-away acquisition and hearings and those kinds of things, but nothing unusual as far as the transmission market is concerned.

Now, the lower voltage, as someone asked earlier, the lower voltage, small-scale transmission work, we're talking 69 KB and that sort of transmission line, is more related to the distribution market and it is not very robust right now. And probably won't be until we see distribution spending or the economy recover so that we see some commercial spending and distribution spending by our utility customers.

Jim, you want to take the question and put some color to the rest of the year as far as renewables are concerned?

Yes, Sanjay. The whole renewable industry, I think that the stimulus package has almost had a negative effect on our business, because most of our customers have been on hold since the beginning of the year waiting for more clarity around the application process. Yes. I do believe we're going to see significant activity through the end of this year and into next year. Certainly we will see a significant increase. We take our models and we just shift them out six months and nothing has changed. Hopefully. That is our projections. We do see a pretty robust pipeline and feel that we are on target to hit 20% to 30% of our overall revenues in 3 to 5 years will be from renewables.

Thank you. Our next question comes from the line of Andrea Wirth with Robert W. Baird. Please go ahead.

Good morning. I wonder if you could just follow up a little bit on the transmission opportunities you're talking about. It sounded like nothing has really changed on the high voltage side. It sounds like people are still continuing to spend there, but it does sound like you have been walking away from projects. Is it fair to say that on the high-voltage side that the pricing has really deteriorated there or where is the pricing deterioration taking place?

We are seeing pricing hold up fairly well on the larger high-voltage projects. Some of the smaller projects, under $100 million projects, $40 million, $20 million, $10 million projects, pricing has deteriorated somewhat. We have not chased those revenues as we indicated earlier because we think this is probably a temporary situation with the spending by utilities. As soon as spending comes back, we're going to see a shortage of skilled workers in that market. And we certainly don't want to be tied up with a load of cheap work within a scare labor market. We're pretty disciplined. We're not perfect by any means, but we're pretty disciplined when it comes to pricing in the electric power side, so yes that has hurt our ability to capture some projects and hurt our backlog, but I think long-term is a better situation. I think it's a very short-term situation.

If you could just give us an update on CREZ specifically? Just wondering if you are surprised that there haven't been more projects released there and what is your expectation on timing to see more awards in that area?

Yes. We expect to see more awards in that area. No, I am not too surprised. We have always hit second or third quarter, I think. It may slip to the fourth quarter, but that is not unusual to see projects slip a quarter. I think everything is pretty much still intact. A lot of rumors, but no facts as far as what is going on there. If I had some facts different than what's in public, I would tell you, but I really don't have any facts. I think it is still coming.

Thank you. Our next question comes from the line of Jess Beach with Stifel Nicolaus. Please go ahead.

Good morning. Can you comment on the pace of recovery of spending by AT&T and Verizon on their upgrades. I am looking at the revenue. Guidance for the third quarter being up modestly and it sounds like that things are picking up, but it is going to hit the fourth quarter more than the third quarter. I would be interested in your description of how business is ramping up with those two companies?

Verizon, we have seen some rampup. Now, they have that Frontier merger or sale of product line to Frontier. That might have some impact on the Verizon work going forward, but right now it is ramping up. AT&T is slower. It could be that AT&T is ramping up in areas that don't necessarily affect us immediately. Of course, it takes capacity of the market and it is good for us in the long-term.

I think that we will, as you indicated probably see more activity as the year goes on and probably into the fourth quarter and be a stronger quarter than the third quarter, as it looks right now. We will approach that then we see it, but that's what we would guess at this point in time.

But another aspect at telecom that is pretty interesting is the rural telecom and municipal telecom that we expect will get some government aide. There is a lot of planning activity and engineering activity in that front and that could be a nice market for us as well.

And then as the follow-up, you commented that Texas CREZ looks on schedule. Can you comment about what is happening with some of the government stimulus, specifically into Bonneville Power and WAPA?. It looks like WAPA is moving ahead at several times the speed that I thought it might and whether there could be some large transmission awards out of WAPA in the next 12 months or less?

Yes, I would say that government spending is going to those government entities faster they are using it using faster than it is anywhere else that we know of because obviously, they were set up to spend that money. But, I think Bonneville will have some pretty large projects. Maybe at least one in the next 12 months. WAPA, yes probably, but it will probably be the end of that 12-month period that you're talking about before we see any big, significant projects from them.

Thank you. Your next question comes from the line of Steve [Gambuza] with Longbow Capital. Please go ahead.

Good morning. Could you comment on the mix of the electric power revenues in the second quarter between transmission distribution and renewables? Just with the --

Yes. I will. These again are approximate numbers because often we are building distribution lines on transmission lines and so forth, so those revenues get mixed. So, these are approximate numbers, but it was about 60% transmission, 30% distribution and about 10% other.

Which would be renewables?

Well, no that would be things like engineering, maybe EMR, that's a good one, installing Smart meters, that sort of thing.

Okay. And in the earlier comments, you mentioned that you have made some progress on the solar front, and you expect to -- I just want to make sure I've got these numbers correct. You expect to do $50 million in revenue in 2009 and that relates to approximately 20-megawatts of installation, is that correct?

That's correct.

Okay. And what would you expect your full-year wind related revenues to be in 2009?

I don't have that number with me.

Yes. We don't have that number handy.

Okay.

We'll get back to you.

Then the comments on -- it sounds like you're optimistic that the second quarter might reflect a bottom, as it relates to the telecom business and the distribution business. Should we then expect to see kind of sequential increases in 12-month backlog in Q3?

Yes, it depends somewhat on projects awarded and projects that are bid, but it also depends on their -- our outlook on these maintenance agreements. The work is out there. It's just building, almost noncalculatable backlog, because we know the work is there. We've had anecdotal reports from utilities that they have 1 1/2 years worth of work that they're needing to get done with no growth, 1 1/2 years of work with no growth. So, we're thinking that, yes, it's going to come back. I don't know how quickly. It probably will come back slowly. I don't see any catalyst to make it a very quick turnaround. I think it will be slow and steady growth, hopefully starting in the third quarter on.

Jeff, I've got that renewable number for you. It looks like we'll do about $60 million in wind and $50 million in solar, for $110 million in renewables this year.

Thank you. Our next question comes from the line of Peter Chrysler with GLG. Please go ahead.

Good morning, it's actually Rick [Schoeban]. How are you?

Great. How are you doing?

Good. My question is along the lines of your renewable outlook as well. You guys expressed optimism with regard to renewable wind and solar market, but when we look at what some of the companies, the utilities have said on the second quarter conference calls, for example, FPL had tempered their expectations and they're the largest developer of wind in the US. And some of the other utilities have been tempering expectations and lowering like the near-term outlook for wind and kind of providing some uncertainty around what may be like the next 3 to 5 years. What is it that you guys see that offsets the utility kind of slowdown and what is it that makes you guys optimistic?

Well, I think it depends upon where and who you are talking to. The renewable portfolio standards that are aggressive for some states on the western side of the country, and we're seeing a lot of opportunities there from a utility scale standpoint, not only a utility asset, but IPPs that are active and that have power purchase agreements with utilities. We're also seeing significant opportunity in the distributed solar and large commercial projects as well. So, there's significant activity that we're seeing. That leads to us believe that we've got significant opportunities there.

Do you guys have an estimate or any sort of indication for us as to how many megawatts would have to be announced or built over the next 5 years for us to be able to meet your targets?

Well, I think you need to start with the renewable portfolio standards and go back from there. We'll have significant opportunities. For us to double our revenues each year in renewables to meet that 3 to 5 year goal, that's a rather, I guess, conservative goal with the total renewable portfolio standards that are in place today. So, I think it's attainable. It's achievable. And that's without any Federal standards that the ACES, the American Clean Energy & Security Act may have in legislation.

Thank you. Our next question comes from the line of Mark Caruso with Millennium Partners. Please go ahead.

Hi. Good morning. Just a few clarifications. Earlier you guys were saying that you still feel good about double-digit growth, but then when Alex was asking about revenues being down in conjunction with backlog, it didn't sound like you affirmed that. So, I want to see if it's still possible to get double-digit growth on the top line next year, and then the second was, I know earlier you had talked about the pushing of the right of the renewable opportunity? I want to see how you guys think the Cash for Clunkers, taking some money away from the loan guarantee, is going to impact you guys, if it is at all?

Okay. It's too early to tell whether Cash for Clunkers will take any money away from that or not. That's talking $2 billion, which is not -- when you're talking in the realm of money that they're spending, $2 billion is not a lot. So, we'll have to wait and see on that, but I don't think that's going to affect too much. In regard to our backlog being down and still being able to achieve growth, yes, we think it's still possible, and we still think 2010 will be a better year than 2009, and we think that the shortfall in backlog is, first of all, lumpy with projects, often times a week or two or a month after the quarter closes, there's a project that we're awarded that would change the way backlog looks completely. So, we're not concerned about our backlog as much I think as some investors are. But, we're fairly optimistic at this point in time about 2010. Again, I hate to push things off, but it's again the backside of 2010, the first quarter obviously is not going to be a very strong quarter because of winter weather that we're going to be having. But after that, I think things start improving. What we're seeing right now, we're thinking that things are going to be quite a bit better in 2010 than they are in 2009.

So you guys are being disciplined, not chasing low-margin work, but as you see, the opportunities you see in renewable and elsewhere in discussions with customers, you still think double-digit revenue growth in 2010 is possible?

Yes, we do.

Then just one other quick question. On the -- and I apologize if someone asked this earlier. You guys were talking about the EPC work. Can you kind of quantify how much work the 20-megawatts would be of the EPC work, just real high level number?

90% of it would be EPC work.

I think the question was how much -- how many dollars per megawatt.

Oh, we're not going to -- yes, I don't want to go there. I mean, it's so competitive right now. I mean, that's the secret sauce, so we're not going to go there. We will provide the lowest cost solution, however to our customers from an EPC perspective.

And not to be cute, but it depends a lot on the location and the labor force and a lot of things. You just don't want to throw those kind of numbers out and try to verify them.

Thank you. We have a follow-up question from the line of Carter Shoup with Deutsche Bank. Please go ahead.

In regards to the gas business, can we talk a little bit about the near-term outlook for sales for 3Q and 4Q and then also discuss what some of the potential acquisitions in this market could look like?

We think that natural gas, as Jim indicated earlier, has a strong future, but it's a longer term than the next quarter or two. I don't think that the next quarter or two is going to see any really significant increase in gas revenues for us or anyone else and so we're looking longer term than the next -- than this year, and probably have to look at 2010 and late 2010 to see any pickup. We're looking at the future of gas, not necessarily now. What we're seeing is a product that's cheap and readily available. That bodes well for demand, but that demand is not going to increase in the next six months, or maybe even in the next year, but we look at natural gas as being the fuel of choice in the future to back up wind and solar, but also that we've seen predictions that 90% of the fossil fuel generation over the next 20 years will come from natural gas.

So, when we're talking about the future of natural gas. We're talking long-term future, not short-term future. And we wouldn't talk about acquisitions in any detail at all.

Thank you. Our next question is a follow-up from the line of Alex Rygiel with FBR Capital Markets. Please go ahead.

Hi, Alex.

Hi, John and James again. Two questions. First, on your electrical distribution business, did the revenues decline in the second quarter from the first quarter?

No, I think they were pretty flat, Alex. We expected they would increase, but actually they were fairly flat.

And then as it relates to your gas business, can you break that out to between your distribution business and your gathering business?

Yes, I guess -- let's just talk about kind of the third quarter, and compare it to 2008. Maybe that's a way to answer the question about gas. Pipelines facility business, which includes gathering, it also includes -- we include in that it category compressor stations, it's down from, say, $110 million in 2008 to about $50 million in third quarter 2009. Transmission -- now, this is forecast. This is -- certainly things can change. Transmission in 2008, $57 million to $55 million in 2009. Distribution gas from about $74 million in 2008, to about $65 million in 2009. Those are all in millions. So, it's down probably $120 million from 2008 levels. If you remember, 2008 gas prices were high, and things were booming in the gas fields, and then they started declining with the economy in the second half of the third quarter or, say, October and September or October, and then the fourth quarter was down in the gas business, and has been pretty much since. Does that help you?

Thank you. We have a follow-up question from the line of Tahira Afzal with Keybanc. Please go ahead.

Hi. Just wanted to get a since from you. Baker Hughes today indicated that rig count was stabilizing on the natural gas side. On your experience on the transmission side, how far down typically has the construction of pipelines picked up versus rig counts stabilizing?

It will take some time. We're not as dependent on rig count as we are demand for natural gas. What we're building is a new infrastructure from the oil shales, and, of course, those oil shales have developed through the first and second quarter of this year, but at a slower pace than they did last year. The Marcellus is opening up. More so in the past we've seen the Barnett was the primary source of revenues, but the Marcellus is picking up. But, what we need to he see is demand for this natural gas and gas turbine plants and backup facilities for solar and wind. Those kinds of things to really get to see robust gas market in the near future.

Thank you. And at this time I would like to turn the conference back over to management. Please continue.

Okay. Well, thanks again for your questions. I hope we got them answered. I would like to thank you again for your participation in our second quarter conference call. We appreciate your questions and ongoing interest in Quanta.

Ladies and gentlemen, that does conclude our conference for today. If you would like to listen to a replay of today's conference it will be available at 11:00 Eastern Standard Time today. If you would like to access the replay system, dial 303-590-3030, with the access code of 4125867 #. Once again, 303-590-3030 with the access code of 4125867 #. We would like to thank you for your participation and at this time you may now disconnect.