Good morning ladies and gentlemen, thank you so much for standing by. Welcome to the Quanta Services’ First Quarter Earnings Conference Call. During today's presentation, all parties will be in a listen-only mode. Following the presentation, the conference will be open for questions. [Operator Instructions]. As a reminder, this conference is being recorded today on Wednesday, the 7th of May, 2008. I will now turn the conference over to Mr. Ken Dennard with DRG&E. Please go ahead. Ken Dennard - Investor Relations, DRG&E: Thank you, Michael, and welcome everyone to Quanta Services' conference call to review 2008 first quarter results. Before I turn the call over to management, I have the normal housekeeping detail to run through. If you’d like to be on the e-mail or fax distribution list to receive future press releases for Quanta or if you had any technical difficulties this morning and did not receive your e-mail or fax, please call our offices at DRG&E, that number is 713-529-6600. Also, if you’d like to listen to a replay of today's call, it will be available via webcast by going to Quanta's website at www.quantaservices.com. In addition, there is a telephonic recorded instant replay that will be available for the next week, and that will be accessed as set forth in the press release with the number 303-590-3000, using the pass code 11113666. Please remember that information reported on this call speaks only as of today, May 7th, 2008 and therefore you're advised that any time-sensitive information may no longer be accurate as of the time of any replay listening. 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, but are not limited to, projected…

Good morning everyone and welcome to the Quanta Services’ first quarter 2008 conference call. To start the call this morning, I will provide a general overview of the quarter, insight on current market conditions, and our perspective on the future. My comments will be followed by a review of our Electric Power and Natural Gas Operations by John Wilson, President of those operations, and a review of financial results by James Haddox, our Chief Financial Officer. Ken Trawick, President of Quanta's Telecom and Cable Operations, is also present to answer questions. After our prepared remarks, we will open the call for questions. The first quarter of 2008 set the stage for another outstanding year for Quanta. The quarter's results include revenue contribution by operations added through the acquisition of InfraSource in August of 2007. Revenues for the quarter were approximately $844.4 million. This compares to $569 million in the first quarter of 2007, which did not include InfraSource. Internal revenue growth was approximately 15% compared to the first quarter of 2007, including InfraSource and excluding emergency restoration revenues from both periods. Quanta's growth is not isolated to revenues however. Margins continued to improve in the first quarter and operating income grew significantly. While there is talk that the recession in the housing market has declined, our first quarter results were not significantly impacted. It’s no accident that our first quarter performance was outstanding and that our outlook for the future is optimistic. We’ve built our company to have a diverse customer base and the flexibility to shift our operations to meet growing needs in the industries we serve. Our optimism about the future of Quanta is primarily attributable to two factors. One, our unique business model, which provides diverse revenue streams and the flexibility to respond to changing customer demand…

Thanks, John, and good morning everyone. Today, we announced record first quarter revenues of $844.4 million compared to $569 million in the prior year's first quarter, resulting in an increase of $275.4 million or 48%. Pro forma for the acquisition of InfraSource, revenues in the first quarter of 2007 would have been $772.8 million. This year's first quarter revenues included emergency restoration revenues of approximately $22 million compared to approximately $58 million being earned in pro forma revenues in 1Q '07. Excluding emergency restoration revenues from both periods, pro forma revenue growth would have been about 15% in the first quarter. When I refer to pro forma information throughout my discussion, I'm referring to data prepared on a combined company basis taking into account the acquisition of InfraSource, as if it occurred on January 1st of 2007. The as-reported results of operations covered in my discussion include the results of InfraSource for the first quarter of 2008 and are compared to Quanta's pre-merger historical results for the first quarter of 2007. I want to remind you that we've changed our methodology for compiling revenue by industry. During the first half of 2007, we discussed revenues by type of customer. However, we now discuss revenue by type of work performed, for example, in the past when we performed telecom work for utility, the associated revenues would have been classified as utility work. Under our current methodology, these revenues will be classified as telecom work. Keep in mind, many times we may be performing all types of work on one job at the same time, which requires us to estimate revenues and costs by type of work. However, we believe that the information about type of work is directionally accurate. On an as-reported basis, revenues from electric power work during the first…

Thank you, sir. Ladies and gentlemen, we will begin the question-and-answer session at this time. [Operator Instructions]. Our first question is from the line of Tahira Afzal. Please state your company name followed by your question.

Hi, this is Tahira from KeyBanc. Guys, many congratulations on a super quarter.

Thank you.

Thanks.

If I look at your 15% organic growth rate contributions for first quarter, definitely better than I thought, is this something that you see as sustainable as you progress through the year? And what do you think could be the risks to this particular growth rate, if there are any?

We anticipate and as projected double-digit internal growth for the foreseeable future for the company. I think that the only things that we could see that possibly can [inaudible] be a long deep recession that could affect some of our customers’ spending. Typically, our customers are not affected by shallow or short-term recessions to any extent, but I think a long-term deep recession might affect that growth to some degree.

Okay, great. Thanks for that. And it's interesting you mentioned The Brattle Group presentation, because I attended that at the Edison Electric Institute. And from all the senior utility representatives there versus the state regulators, the only thing that this seemed to agree on was that the transmission spending mandate was pretty clear and the spending was there. I did feel that the utilities were incrementally more aggressive in terms of pushing these projects through and I just wanted to gauge what you are seeing from your clients?

Yes, we are seeing the same thing... that thanks for the support. That's helpful to have a second party confirm what we’ve been seeing, but yes we are seeing our utility customers being aggressive towards their transmission build out. We don't want to get into a position where we are a hyponym and responding to every headline that our customers are producing, but certainly the momentum is there on the utility side and continues to be there, because… partially because their balance sheets are very strong right now and they have incentives from the Energy Policy Act as well.

Okay, well thank you very much. I'll get back in the queue with additional questions. Thank you.

Thank you.

Thank you. Our next question is from the line of Alex Rygiel. Please state your company name followed by your question.

Thank you, FBR. Good morning gentlemen.

Good morning.

Couple of quick questions. First, James or John or John, approximately what was your annual revenue from the wind and solar customers in 2007 and about what do you think it could be in 2008?

We really don't have the statistic for 2007, but it was fairly minimal. I am guessing less that $50 million for the whole year, is that your guess too James, I’ll let…?

[inaudible].

It could be double of what Wilson talked about for 2008 depending on how successful we are in some of these projects that we are bidding. We are seeing… some pressure is on pricing, as contractors are coming from other sectors into the wind business. But we’ve been fairly successful and I expect to have some success in the quarter, it could be double what Wilson was talking about, which would be nearly $300 million.

And then as it relates to your gas business in the Barnett Shale, you also go through same sort of analysis '07 versus '08?

Well, I don’t what James is looking at, he has got that information. I don't know if we have it, particularly for '07 because it wasn't particularly as strong in '07 or a consequence in '07. But certainly in '08, we are doing a lot more work up there and that's intentional. I mean we've been focusing on doing more work in the oilfields and gas fields, as that’s a faster growing market and a better margin business than the traditional gas distribution business.

And one last question, as it relates...

James had not come up with that number. So, we'll... again it was probably not a consequence in '07.

One last question as it relates to the TrAIL project, is that in either one of the backlog figures at this time?

It's in the full backlog, the multi-year backlog, yes.

Not much in the 12-month backlog though.

No, but the infinity backlog.

It's in the infinity total backlog, but not much is in the 12-month backlog.

Great, thank you.

Thank you. Our next question is from the line of Sanjay Shrestha. Please state your company name followed by your question.

Great. Lazard Capital Markets. Again, congratulations guys both on the quarter and the outlook here. Just a quick question, John, I think you mentioned it in passing a little bit that you guys don't get impacted unless it’s a prolonged slowdown more than a quarter or two. So, can you talk about it a little bit as to, let's say, it ends up becoming that type of a slowdown. So, is it fair to say that you guys just weather that storm and you would not see any impact at all to the growth rate that you guys are seeing right now? And can you tell us a little bit of a historical data point as it relates to what you've seen in the business that you guys are in as to some of the past slowdowns and the impacts of it?

Right. I guess this my 37th, going on my 38th year in the business and I've seen two major slowdowns in the utility business. One obviously was in 2001, when the telecommunications market collapsed as... and the energy trading business collapsed with Enron, those sorts of things.

Sure.

The utilities had made major investments in the telecommunications business and we were separate when the telecommunications market collapsed. The other major downturn was back in the late ‘70s-early ‘80s when the interest rates were 17% and 18%, and it's the first fuel crisis we had, the Iran contour crisis, and we had shortage of fuel. Those two are the only downturns in my 38-year career. For instance, in 1990, so-called recession, we balanced right through that, didn't see it. And that's because I mean... what we said before about our utility customers, they are supplying electricity even in a downturn and many of their projects are long-term projects that have momentum. And so they are not affected by short-term downturns in the economy.

Got it. Got it, terrific. And one another quick follow-up on that then, so with the inflation in the… continued I should say rather than inflation in the energy prices and the commodity inflation. If you… when you look at your backlog right now, I know lot of that is a pass through for you guys and shouldn't impact you, but when you look at your backlog right now and the profitability in that backlog, is this continued commodity and the energy inflation starting to kind of eat up on what could have been your profit opportunity or your profit opportunity continues to improve as the backlog continues to grow and we get the double benefit, both the top line growth, as well as the margin growth and that's what should really help you significantly and simulate the earnings growth. Can you guys talk about that a little bit?

Sure. Commodity prices really don't affect us, because our utility customers and our telecom customers generally furnish the materials. Materials make up less than 10% of our revenues, so it's very small impact from commodities. And the pricing in our backlog continues to grow and that's because of primarily increased demand. So, our pricing in backlog continues to be accretive to our existing margins.

All right. One last question, I said one last, I lied, but one more up on the wind energy side. So, it's not just a transmission benefit you guys are seeing, you are also getting into the wind farm business. While it's not that big of a portion of your revenue right now, but would it be fair to characterize you guys as like one of the top-three contractors serving that market, so you are in a driving seat to really benefit as that market continues to grow?

No, I wouldn't say we are in the top-three. We are probably… if you count the transmission lines that serve the wind-generating facilities, we're probably in the top-three to five. But if you take out the transmission lines, which we think is more traditional electrical revenues, we may be in the top ten.

Okay, okay. That's great, once again congratulations guys.

Thank you.

And our next question is from the line of Jamie Cook. Please state your company name followed by your question.

Hi, good morning. Credit Suisse and congratulations.

Good morning.

I guess my first question back on… to ask Sanjay’s question a little bit differently, are you seeing any of your customers delay spending because they have to… because of rising material or labor cost because they have to absorb that?

No, we are really not seeing too much delay because of material cost, most of the commodity pricing has been built into their budgets going forward. I think that there was probably some delays in 2006-2007, as they didn't have enough money in their budgets to survive the materials, but I think most of them recognize that commodity prices are up, material prices are up, and they’ve built that into their budgets. So, I don't know of any and John you can speak up if you know of any, but I don't know of any of the spend delays specifically because of...

Poor labor?

Price material. John R. Wilson - President, Electric Power & Natural Gas Operations: At the present time, many of our projects we have ongoing we haven't seen any material delays to us at all.

Okay. And then I guess just my second question, you guys on your… I didn't hear in your prepared remarks, in your last quarter you talked about two projects that you could potentially win. Is one of them the wind farm that you talked about in the Northwest in Oregon that you would get in the second quarter? John R. Wilson - President, Electric Power & Natural Gas Operations: No, that was not the projects at all. There was one project, transmission project back on the East Coast and we have been notified that we were not successful. The other one is in the western part of the United States that we're still waiting to hear on that one.

Do we have an update on timing on that or potential for other more larger projects in 2008? John R. Wilson - President, Electric Power & Natural Gas Operations: The timing on the one in the West is what you are asking?

Well, yeah, and potential for other projects getting landed in '08 of more material size. John R. Wilson - President, Electric Power & Natural Gas Operations: Well, the one on the West, we really don't have any information, we are kind of sitting back and waiting on the customer to decide. The other large project that we mentioned in the last quarter call was LCRA, that project if you remember is approaching $200 million, I think 190 something million dollars and that project is getting underway now. I think we’ve probably been going at it for a couple of months now. So, revenues on that particular job will increase. Other large projects, right now we haven't seen… everything that we know of right now is on track. Matter of fact there has been a couple that we think not be under, where they are going to expedite them.

Okay. And then James, just my last question, your gross margin expansion in the first quarter was pretty impressive. Was there anything unusual on that number and as we look at the rest of the year, is that sort of a sustainable gross margin expansion number? Could we see that or could we see it accelerate from the first quarter level when I look at the delta?

I think… I don’t know that you’ll see the improvement accelerate on a year-over-year basis, Jamie, but margins should go up during the rest of the year, as the weather gets better. I don't think you will see... I mean we are not projecting that you are going to see that much improvement on a year-over-year basis.

Was there anything unusual in the first quarter there?

Well, it depends on which number you are talking about, because on an actual basis, on an as-reported basis dark fiber was not in last year and it was in this year.

Okay.

And even on a pro forma basis you saw about the same increase, which would include the dark fiber margins from last year. Other than dark fiber coming into the actual as-reported numbers, there was nothing really unusual.

Okay. And still on track to hit your target margins in the fourth quarter? I thought you said that last quarter.

Yes. We said that our core business would be within that 9% to 12% operating income range this year. We are on track for that.

Already. Thanks. Congratulations.

Thank you.

Thank you. Our next question is from the line of Jeff Beach. Please state your company name followed by your question. Just one moment, please. Jeffrey Beach - Stifel Nicolaus & Company, Inc.: Stifel Nicolaus. Again congratulations also on a great quarter.

Thank you. Jeffrey Beach - Stifel Nicolaus & Company, Inc.: Couple of questions. First, in the last six months you’ve won a couple of large what I call bundle transmission awards and you had indicated on the last conference call before this announcement of the Lower Colorado that you saw utilities looking at this. Are you negotiating or just in discussions with utilities that are looking at bundling up multiple years of work and associated with this on the contracts you’ve already won, there are multiple years. How are you protecting or building in the potential for higher margin, so how you are pricing those contracts?

First of all, yes, there are other utilities that are looking at the same thing and of course we are doing our best to convince them that their future success in building those projects is dependent upon Quanta Services and our resources, our abilities, our [inaudible], our equipment, our proprietary tools, so forth and… how are we protecting those margins? We are building in these contracts openers for various types of cost increase, labor increases, fuel adjustment clauses and those kinds of things and/or there on a cost-plus basis of some nature? Jeffrey Beach - Stifel Nicolaus & Company, Inc.: All right. And then, can you give us relative size of this Pauley acquisition that you made?

I think their revenues are going to be projected about $60 million this year. Jeffrey Beach - Stifel Nicolaus & Company, Inc.: Last thing, can you give us an update as to how you see this large amount of wind projects and I think there is some base load power coming in, in Texas and whether there might be some awards occurring this year, can you just discuss those opportunities?

Yes, we are expecting some awards this year related to the West Texas wind farms. There’s a number of things going on here in Texas, but if we don't get them awarded fairly soon, they are going to have wind farms with no place to send the energy. So, I expect something to happen this year in regard to the awards on those projects. Jeffrey Beach - Stifel Nicolaus & Company, Inc.: All right. Thank you.

You are welcome.

Thank you. Our next question is from the line of Curtis Woodworth. Please state your company name followed by your question.

Yes, good morning, JPMorgan.

Good morning. Curtis Woodworth – JPMorgan: John, coming back to kind of the bidding outlook for transmission, last year I think there was kind of like six major projects that went up for bid over call it $100 million and I think you won at least four of those. Is there a sense that this year you could see a similar type of activity or is it kind of too early to talk as we are just entering the bidding season?

No, I think we’ll see more than we saw last year. That is… consistent with what we’ve said previously is that we think 2008, we’ll see more projects bid of that magnitude then we did in 2007. I don't know if we can maintain our hit rate or not, but we were fairly successful in 2007, but there is no reason to think that there won't be more projects in 2008.

And given the success rate in '07 and the backlog you have today in transmission, assuming the visibility is pretty high, I mean do you… looking at your mix and what you have coming on, do you feel like the transmission part of your utility business could grow close to 15% to 20% this year?

Yes, we expect... we still have actually a lot of capacity, we can grow our transmission business significantly. So, it can grow dependent on the margins and depending on the success rate we have with some of these projects, but certainly we expect it to grow double digits.

Yes. And how do you kind of look at your capacity? How much, I guess, capacity do you have going forward?

It's a difficult measure because we are typically because our workforce is an hourly workforce and they don't get paid unless they are working. We are always at 100% capacity on labor, but we have significant labor resources that we are not paying today that we have available to increase our capacity. So, I don't want to say our capacity is unlimited, but certainly we are not anywhere near our capacity in transmission at this point of time.

Great. In terms of… obviously the components in the core business margins is very high, if you look at InfraSource and some of those assets are redeployed into maybe higher-margin projects. Their mix rate is pretty high on transmission substation, would it make sense that when that business becomes more fully utilized that the margin profile theoretically could be greater than your core mix of business? Will that not be true?

I don't know that. The InfraSource margins were slightly less than our margins when we acquired them and of course we consider that as synergy in order to not only improve our margins, but to get their margins to our level and improve their margins as well. And we've done, knock on wood, we’ve done well with that part and we expect to see that continue, but whether [ph]… and it’s going to be harder to measure because we are really one company now and we operate as one company in many areas. There’s a lot of synergistic things going between companies, so it’s hard to just measure one thing, but I think that the margins of both companies will be nearly the same if we could measure them.

Ladies and gentlemen, it’s coming up to the end of the analyst of this call. Our last question will be from the line of John Rogers. Please state your company name followed by your question. John Rogers - D.A. Davidson & Co.: D.A. Davidson. Thanks. John, you mentioned I think in your comments that you are seeing more competition coming into the market and I am just curious, is it larger companies chasing it or is it smaller companies trying to move up and go after some of this work?

I was talking about the wind farm business only. John Rogers - D.A. Davidson & Co.: Okay.

Okay. The question that I had was about what kind of competition we were seeing in wind farms and there’s a lot of competition in wind farms, but there is a lot of wind farms out there. And so it’s companies that are coming from the commercial building industry into the wind farm business, I think they can make that transition fairly well because in general those guys are project managers, they don't do the work themselves, they set that work out. And so even when they get the project, it’s likely that we’ll be subcontractor on portions of the work, but we are becoming more of the general contractor on these wind farms, building the entire farm ourselves with our in-house capabilities. John Rogers - D.A. Davidson & Co.: Okay. And on the transmission and distribution side of business, not a significant change there, but the bigger market still growing, presumably pricing still being pushed up.

That's right, we are seeing increased spending by our customers in telecom and electric power and we haven't seen any new additions to that market. John Rogers - D.A. Davidson & Co.: Okay. Great, thank you.

Great, thank you. Mr. Colson, please continue with any closing remarks.

Certainly. We certainly appreciate and want to thank you again for your participation in our first quarter conference call. We appreciate your questions and ongoing interest in Quanta. Good-bye for now.

All right, thank you. Ladies and gentlemen, this concludes the Quanta Services' first quarter earnings conference call. The conference will be available for replay after 11:30 Eastern Time today through May 14th at midnight Eastern Time. You may access the replay at any time by dialing 303-590-3000, enter the access code 11113666. That number again, 303-590-3000, input the access code 11113666. Thank you very much for your participation. You may now disconnect. Have a pleasant rest of your day.