Quanta Services, Inc. · NYSE:PWR
Quanta Services — Q3 2010 Earnings Presentation
35 slides from Quanta Services's earnings presentation, November 2010
Slide 1: Investor Presentation Third Quarter 2010
Investor Presentation Third Quarter 2010
Slide 2: Forward-Looking Statement Disclaimer
FORWARD-LOOKING STATEMENT DISCLAIMER This presentation (and oral statements regarding the subjects of this presentation) 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 forwa
Slide 3: Quanta is the Leading Specialty Contractor in the Utility Industry
Quanta is the Leading Specialty Contractor in the Utility Industry 3
Slide 4: Company Profile
COMPANY PROFILE Quanta Services is a leading provider of specialized contracting services offering complete infrastructure solutions. Approximate Revenue Breakdown* Primary infrastructure services: Electric Power Repair Infrastructure Services Maintenance 51% Installation Emergency respons
Slide 5: Quanta's Nationwide Presence
QUANTA’S NATIONWIDE PRESENCE Service Territory Headquarters Offices 5
Slide 6: Experienced Management
EXPERIENCED MANAGEMENT Years Experience 37 36 28 31 34 22 Operating unit executives have an average of > 25 years of experience 6
Slide 7: Diverse Customer Base
DIVERSE CUSTOMER BASE Our 10 largest customers accounted for approximately 38% of revenues in the first nine months of 2010. No customer accounted for more than 11% of revenues in the first nine months of 2010. 7
Slide 8: Quanta is the Largest & Most Diverse Contractor
QUANTA IS THE LARGEST & MOST DIVERSE CONTRACTOR Trailing twelve month revenues in millions, as reported $4,000 $3,000 TTM Revenues $2,000 $1,000 $0 Quanta MasTec Dycom MYR Group Pike Electric Power Natural Gas & Pipeline Telecommunications Fiber Optic Licensing Other Source: Public filings Quanta, M
Slide 9: Electric Power Overview
ELECTRIC POWER OVERVIEW
Slide 10: Electric Power Infrastructure
ELECTRIC POWER INFRASTRUCTURE 10
Slide 11: Utilities Committed to Reliability
UTILITIES COMMITTED TO RELIABILITY 11
Slide 12: Transmission Requirements by 2018
TRANSMISSION REQUIREMENTS BY 2018 Additional Transmission Circuit-Miles by NERC Reliability Region > 100kV 15,948 34,777 Total U.S. Circuit-Mile Additions by 2018 Circuit-miles 7,706 5,735 2,548 2,840 NERC Long-term Reliability Assessment - October 2010 12
Slide 13: Quanta's Role in Utility-Scale Solar
QUANTA’S ROLE IN UTILITY-SCALE SOLAR Strategic Partnerships System Optimization Power of One Supply Chain Construction Management Management Labor Management 13
Slide 14: Renewable Energy Revenues
RENEWABLE ENERGY REVENUES (in $ millions) 300 250 200 150 100 50 0 2008 2009 2010 E Source: Quanta estimates 14
Slide 15: Utility-Scale Solar Will Fuel Growth
UTILITY‐SCALE SOLAR WILL FUEL GROWTH Market Outlook by Customer Type 3 500 3,500 3 280 3,280 Residential 3,000 Commercial Utility 2,520 2,500 , 2,000 1,700 MW 1,500 1 200 1,200 1,000 500 470 325 0 2008 2009 2010 2011 2012 2013 Note: QRES Estimation of Projected Industry Growth 15
Slide 16: Natural Gas & Pipeline Overview
Natural Gas & Pipeline Overview
Slide 17: Natural Gas & Pipeline Overview
NATURAL GAS & PIPELINE OVERVIEW 17
Slide 18: North American Pipeline Construction Strong
NORTH AMERICAN PIPELINE CONSTRUCTION STRONG Planned & Under Construction 45,000 40,382 40,000 36,133 35,000 30,000 25,000 Miles 20,000 18,797 15,000 13,526 10,000 6,253 6,232 4,135 5,000 0 North Asia Pacific FSU- Eastern South and Africa Middle East West Europe America Region Europe Central & EU Ame
Slide 19: Shale Build Out Will Require Pipeline Infrastructure
SHALE BUILD OUT WILL REQUIRE PIPELINE INFRASTRUCTURE North American Unconventional and Shale Basins Montney Tight Gas Horn River Shale Mannville CBM Horseshoe Canyon CBM Powder River North Dakota/Montana Bakken Shale Green River Michigan Antrim Shale Uinta Marcellus/Huron Shales Piceance Fayettevill
Slide 20: Telecommunications Overview
Telecommunications Overview
Slide 21: Telecommunications Overview
TELECOMMUNICATIONS OVERVIEW Home Bandwidth Growth, 1970-2012 , , , , , , Bits per second , , , Year Source: BBP LLC 21
Slide 22: Innovative Solutions
INNOVATIVE SOLUTIONS • Comprehensive services take fiber projects from conception to the consumer • Cost-effective methodology supports customer goals • Patent-pending micro-trench solution – Cuts and vacuums a trench less than one-inch wide and no deeper than one foot. – Utilizes an environmentally
Slide 23: Summary
SUMMARY Quanta holds a strong market position in the industries we serve History of successful strategy implementation Acquisitions Outsourcing Proprietary Methodologies and Technologies Geographic, service and customer diversity allow Quanta to navigate uncertain economic conditions and
Slide 24: Financial Overview
Financial Overview ¢ *
Slide 25: "As Reported" Revenues
“AS REPORTED” REVENUES ($ in millions) $4,000 $3,780 $3,000 $2,825 $3,500 $3,318 $3,000 $2,500 $2,656 $2,333 $2,500 $2,000 $2,000 $1,500 $1,500 $1,000 $1,000 $500 $500 $0 $0 2007* 2008 2009** 9 Mo 09 9 Mo 10 Electric Power Natural Gas & Pipeline Telecommunications Fiber Optic Licensing *Includes the
Slide 26: Backlog at September 30, 2010
BACKLOG AT SEPTEMBER 30, 2010 ($ in millions) Twelve-Month Backlog Total Backlog $3,000 $6,000 $5,649 $5,724 $2,577 $5,193 $2,471 $2,475 $5,000 $2,500 $2,000 $4,000 $1,500 $3,000 $1,000 $2,000 $500 $1,000 $0 $0 2008 2009 3Q 2010 2008 2009 3Q 2010 Electric Power Natural Gas & Pipeline Telecommunicati
Slide 27: Historical Income Statement Data
HISTORICAL INCOME STATEMENT DATA ($ in millions) 9 Months Ended 2007* 2008 2009** 9/30/2009 9/30/2010 Revenues $2,656 $3,780 $3,318 $2,333 $2,825 % Growth 25.9% 42.3% (12.2%) (18.4%) 21.1% Gross Profit 429 635 593 403 475 % Margin 16.1% 16.8% 17.9% 17.3% 16.8% SG&A Expenses 241 309 312 218 245 % Rev
Slide 28: Cash Flow from Operations
CASH FLOW FROM OPERATIONS ($ in millions) $400 $377 $350 $300 $250 $243 $219 $200 $150 $100 $50 $0 2007* 2008 2009** * Includes the results of InfraSource subsequent to Sept. 1, 2007. ** Includes the results of Price Gregory Services subsequent to Oct. 1, 2009. 28
Slide 29: Strong Balance Sheet
STRONG BALANCE SHEET ($ in millions) 12/31/2008 12/31/2009 9/30/2010 Cash and Equivalents $ 437.9 $ 699.6 $ 411.2 Other Debt 1.2 3.4 0.3 3.75% Convertible Subordinated Notes 122.3 126.6 -- Total Debt 123.5 130.0 0.3 Stockholders’ Equity 2,682.4 3,110.6 3,238.1 Total Capitalization $ 2,805.9 $ 3,240.
Slide 30: Cash Availability
CASH AVAILABILITY ($ in millions) $1,200 $986.3 $1,000 $752.7 $286.7 $800 $725.0 $600 $314.8 $283.8 $400 $699.6 $200 $437.9 $441.2 $0 12/31/2008 12/31/2009 9/30/2010 Cash Credit Facility (unused) 30
Slide 31: Investment Highlights
INVESTMENT HIGHLIGHTS Strong financial profile Industry fundamentals support opportunity for significant growth Need to upgrade power transmission infrastructure Continued outsourcing by our customers Increased focus on renewable power generation Opportunities under American Recovery and
Slide 32: Appendices: Operating Income
Appendices: Operating Income
Slide 33: Reconciliation of Operating Income, as Adjusted
RECONCILIATION OF OPERATING INCOME, AS ADJUSTED Twelve Months Ended Nine Months Ended ($ in millions) 12/31/2007 12/31/2008 12/31/2009 9/30/2009 9/30/2010 Operating income, as reported $ 169.4 $ 289.2 $ 242.1 $ 169.7 $ 201.7 Add back: Amortization of intangible assets 18.8 36.3 39.0 15.3 28.3 Non-ca
Slide 34: Forward-Looking Statement Disclaimer
FORWARD-LOOKING STATEMENT DISCLAIMER This presentation (and oral statements regarding the subjects of this presentation) forward-looking statements" reflecting assumptions, expectations, projections, intentions or beliefs about future events that are intended to qualify for the "safe harbor" from li
Slide 35: Forward-Looking Statement Disclaimer
FORWARD-LOOKING STATEMENT DISCLAIMER Estimates and assumptions in determining our financial results and backlog; Our ability to continue to meet the requirements of the Sarbanes-Oxley Act Our ability to successfully identify, complete and integrate other acquisitions; of 2002; The potential