Quanta Services, Inc. (PWR) Q1 2011 Earnings Report, Transcript and Summary

Good day, ladies and gentlemen. Thank you for standing by. Welcome to the Quanta Services First Quarter 2011 Earnings Conference Call. [Operator Instructions] This conference is being recorded today, Wednesday, May 4, 2011. I would now like to turn the conference over to Kip Rupp, with DRG&L. Please go ahead.

Great. Thank you, Alicia, and welcome, everyone, to Quanta Services conference call to review our first quarter of 2011 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 email 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 email or fax, please call our offices at DRG&L at (713) 529-6600. You can also sign up for email information alerts by going to the Investors & Media section of Quanta Services website at quantaservices.com. A replay of today's call will be available via webcast on Quanta's website at quantaservices.com. In addition, a telephonic recorded instant replay will be available for the next 7 days, 24 hours a day, that can be accessed as set forth in the press release. Please remember that information reported on this call speaks only as of today, May 4, 2011, and therefore you are advised that any time-sensitive information may no longer be accurate as of the time of any replay of this call. 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 to or are beyond Quanta's control, and actual results may differ materially from those expected or implied as forward-looking statements. Management caution is 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. For additional information concerning some of the risks, uncertainties and assumptions that could affect Quanta's forward-looking statements, please refer to the company's annual report on Form 10-K for the year ended December 31, 2010, its quarterly reports on Form 10-Q and its other documents filed with the Securities and Exchange Commission, which may be obtained through the SEC's website at sec.gov. With that, I would now like to turn the call over to Mr. John Colson, Quanta's Chairman and CEO. John?

Good morning, everyone, and welcome to Quanta Services First Quarter 2011 Conference Call. To start the call this morning, I will provide a summary of the quarter results with added insight on the impact of current industry circumstances and overall economic conditions. My comments will be followed by an operational review by Jim O'Neil, President and Chief Operating Officer; and a review of financial results by James Haddox, Chief Financial Officer. Following our remarks, we'll welcome your questions. Revenues for the first quarter increased [Audio Gap] is related to permitting and regulatory issues. This, coupled with other items, had a significant negative impact on operating income for the quarter. Our expectation at the time of our fourth quarter conference call was to achieve diluted earnings per share between $0.02 and $0.03. However, we are reporting today a first quarter of 2011 loss of $0.08 per diluted share. The first quarter shortfall was attributable to the following issues: 2 gas transmission pipeline projects underperformed; 1 project incurred cleanup costs of $10 million more than expected as the project schedule required it to be completed; and unpredictable winter weather. Restrictive regulations imposed by the Bureau of Land Management compounded this negative outcome. Another pipeline project was $16 million less profitable than forecasted. This project had been bid before we owned the company and was delayed 2 years, resulting in additional costs which are currently being negotiated under a change order. A small portion of the project was performed during the fourth quarter of 2010. However, the substantial majority of the work was performed and completed during the first quarter. The project was located northwest of Edmonton, Alberta, Canada and was significantly impacted by exceptional snowfall and warm weather, as well as complicated directional drilling. Also, construction start delays occurred on 3 major electric power transmission projects: Southern California Edison's Tehachapi project Segment 6 was delayed due to the prolonged permitting process for construction in the Angeles National Forest. The overhead portion of San Diego Gas & Electric Sunrise PowerLink project and Northeast Utilities Greater Springfield Reliability project were also impacted by similar environmental forbidding delays. Lastly, mostly due to these and other project delays, we had higher unallocated equipment costs as transmission equipment remained idle while waiting on these jobs to start. These costs and delays, along with other circumstances, resulted in submitted and pending change orders and claims in excess of over $60 million. Because of existing ongoing negotiations, uncertainty regarding the timing of booking these change orders and the potential for additional delays and subsequent costs that could impact the amounts claimed, none of the claims are included in our first quarter results. We expect positive contributions to the future earnings as these negotiations progress throughout the remainder of the year. Two other issues affected the quarter. We reorganized the distribution portion of our Natural Gas division to reflect current demand and to effectively meet customer needs. Severance and other reorganization costs of approximately $2 million were incorporated in the quarter results. The more majority of which were originally anticipated to occur later in the year. Additionally, we mobilized under our new gas outsourcing agreement with Puget Sound Energy. This resulted in approximately $2 million of start up costs that will be recouped as the job progresses. A portion of these costs were originally anticipated to occur later in the year, but these costs were, nonetheless, higher than we anticipated during the first quarter. Jim will provide additional information on the near and far term expectations of these projects and current timelines. The U.S. Chamber of Commerce recently commissioned an economic study of delayed energy projects. They identified 351 projects that had been delayed due to regulatory inefficiencies, permitting delays or NIMBY, or "not in my back yard" issues. Of the 351 projects, 30 were electric power transmission projects and more than 40 were related to natural gas and oil projects. As discussed in our fourth quarter and year end conference call, we knew that the first quarter, which is seasonally the worst quarter, would continue to present a tough operating environment. At the time of our last call though, we did not anticipate that some of our larger projects would continue to be subject to delays. It is important to note that we believe these are short-term circumstances. Also, as we move forward through the year on numerous Electric Power and Natural Gas contracts, we remain, as always, committed to ensuring acceptable margins. While we experienced delays at construction starts, we believe these are temporary setbacks and not indicative of larger problems. It remains a commitment by our customers, the nation's leading utilities, to strengthen the power grid system and integrate renewable resources into the grid. Our optimism at the second quarter of 2011 will bring increased project activity remains valid for several reasons: Transmission projects will start in 2011, while they have been slower to start than anticipated, business backlog is building for later in 2011 and into 2012 and beyond. Electric Power transmission and distribution spending is expected to increase approximately 14% over the next 2 years according to the Edison Electric Institute. The first quarter saw a continued momentum behind Texas Competitive Renewable Energy Zone, or CREZ, transmission build-out. We expect several additional CREZ utilities field work contracts in the coming weeks. There has been some stabilization of the housing market with sales of new homes rising 12% in March. Housing starts are a prerequisite to distribution spending. Looking to the future, industry experts project an increase of power investment over the next several years. Organizations such as Edison Electric Institute and the North American Electric Reliability Council stand by their projections that investment in reliability and interconnections will increase every year for the next 5 to 10 years. We believe that Quanta remains the leader in providing electric transmission infrastructure services, and that through our commitment to ensuring value for all of our stakeholders while delivering efficient project management and applying our safety leadership capabilities keeps us the leader in the delivery of infrastructure services. The Pipeline industry remains in somewhat of a holding pattern as politics determine the fate of many large pipeline projects. Yet our nation seeks to reduce dependence on foreign energy resources. As we watch gasoline prices rise, the focus on exploring and leveraging domestic shale resources is returning. We continue to see activity increase relative to the CREZ exploration of U.S. shale formations and the Canadian oil sands, and believe we are well-positioned to support the transport of product from these sources. Our Telecommunications division performed as we anticipated with relatively flat revenues. We do not anticipate that revenues in this area will begin to -- we do anticipate that revenues in this area will begin to increase in the second quarter, with the second half of the year seeing significant project activity as stimulus projects get into full strength. Jim will provide more details concerning our Telecom segment in his remarks. Our first quarter was challenging due to 4 Pipeline segment results, unallocated idle equipment costs associated with electric transmission delays, as well as start up costs and reorganization costs in our Natural Gas Distribution operations. We expect the second quarter to be a transition period, the second half this year to be robust in the Electric Power and Telecom segments. We anticipate several meaningful electric transmission announcements over the next several weeks, and if we are successful, these projects will have a significant positive impact on this year's results. Despite the current challenges, we remain optimistic about the long-term outlook for Quanta. Reflecting this optimism, our Board approved a stock purchase program authorizing Quanta [audio gap to purchase up to $100 million of common stock in the open market or otherwise from time to time. Given our strong balance sheet and substantial free cash flow generated over the last several years, we are pleased to have the ability to continue funding our growth strategy, while enhancing stockholder returns. As you know, this is my last quarter to address our stakeholders as the CEO of Quanta. On May 19, I will take on the role of Executive Chairman of Quanta Services. Jim O'Neil will take on the role of CEO, in addition to continuing his role as President. After 13 years at the helm of Quanta, it is time to transition the leadership of the company's day-to-day operations to Jim, with whom I've worked with for over a decade. I have the utmost confidence that the company will be in good hands. I will continue in a full-time role and will meet with investors from time to time. I look forward to working with him, our executive team and our Board as we further our commitment to delivering value to our investors, our customers and our employees. Now I'll turn the call over to Jim, who will present the details of our operations. Jim?

Thank you, John, and good morning, everyone. In the first quarter of 2011, revenues from our Electric Power segment were approximately $567 million, an increase of 24% compared to approximately $457 million in revenue for the first quarter of 2010. The increase in this segment's revenues was primarily related to the acquisition of Valard. Excluding Valard's revenues, this segment achieved 15% revenue growth for the quarter. 12-month backlog in the Electric Power segment was $1.88 billion at March 31, 2011. This is a 47% increase over 12-month backlog at March 31, 2010. Total backlog was up 19.8% to $4.34 billion at March 31, 2011, compared to the same period last year. We expect Electric Power segment revenues to increase approximately 34% for the full year of 2011 compared to 2010, despite the late starts on 3 major transmission projects this year. Northeast Utilities expects required permits for the Massachusetts Department of Environmental Protection for the Greater Springfield Reliability Project to be issued in the third quarter of this year. This project is the first of 3 major transmission programs for Northeast Utility's portion of the New England East-West Solution, or NEEWS project. This delay has not impacted specialized energized services and limited construction activity is provided to support end-use infrastructure upgrade initiatives throughout their service area. Southern California Edison anticipates required environmental permits to now be issued in the July time frame at the earliest. These are primarily the water quality permits for that Tehachapi project Segment 6, which will be constructed in the Angeles National Forest. We are currently engaged in limited construction activities on this project and construction of Segment 11 is scheduled to start in November of this year. San Diego Gas & Electric now anticipates required environmental permits for the Sunrise PowerLink project to be issued in September of this year. We have initiated work on the underground portion of this project. While certain power transmission projects have been delayed, others are moving forward on schedule. Our work for Central Maine Power Company on the Maine Reliability Project is now moving into the early construction phase. We currently have about 70 personnel on this project, and this project is expected to complete in 2015. During the first quarter, construction continued on National Grid's Rhode Island Reliability Project, which is also part of a NEEWS initiative. This work is focused primarily in North Smithfield and will continue southward. This project is approximately 20% complete, with completion expected in early 2013. In addition, our alliance is performing substation renovation for this project. Construction remains scheduled to begin this summer on the Rockdale, Wisconsin project under our contract with American Transmission Co. This project includes construction of a new 32-mile, 345,000-volt transmission line standing from Rockdale to West Middleton. For ITC, we continue to work on several transmission lines in substation projects in the Michigan and Iowa area. We have also received notification to construct the 18-mile Hugo-to-Valliant 345,000-volt line in Oklahoma. In Canada, we continue to work on the 108-mile double-circuit, 500,000-volt Bruce to Milton transmission reinforcement project for Hydro One, which is expected to complete in the summer of 2012. Looking forward, we expect other projects to gain momentum later in 2011. Our work for CapX2020 should begin in the second half of 2011 and continue into 2015. CapX2020 is a joint initiative of 11 transmission owning utilities, proposing to build infrastructure under what is expected to be the largest transmission expansion in the upper Midwest in 30 years. We expect to realize revenues of approximately $330 million associated with this project. We recently finalized the first contract under this agreement. Construction on the Bemidji to Grand Rapids project is expected to begin in July of this year. We also expect BC Hydro to announce their construction partner on the Northwest Transmission Line and the interior lower demand online in the next 2 months. During our fourth quarter conference call, we announced that we were awarded contracts for [audio gap] transmission line and substation work for Lone Star Transmission related to the Texas Competitive Renewable Energy Zone, or CREZ. Construction activities are expected to begin in July of this year. LCRA sales phase to Kendall line is expected to begin construction in the fourth quarter of this year, and the Buttes [ph] to Bighill [ph]line in the first quarter of 2012. In addition, we continue to perform smaller CREZ and non-CREZ transmission projects for LCRA throughout this year. CREZ utilities, EPC, West and Sharyland are in the final stages of determining their construction partners for the remaining CREZ transmission projects, and we expect contract awards in the coming weeks. Portions of this work are expected to begin later this year. As we enter into the second half of this year, we anticipate a transmission construction market unlike anything the industry has ever experienced. By the end of this year, we should be performing work on no less than 10 major electric transmission projects, barring any unforeseen regulatory hurdles or other delays. We are currently forecasting electric distribution revenues to be flat for the year of 2011 compared to the full year 2010. Today, we have not seen any meaningful indicators that our customers will increase distribution spending this year. We continue to see momentum in the Renewable Energy portion of our business during the quarter. Revenues from Renewable Energy Services for the first quarter of 2011 totaled $65 million, compared to $27 million during the same period last year. Of this total, Solar accounted for approximately $50 million and Wind Energy accounted for approximately $15 million. We are scheduled to accomplish our renewable energy goal of $350 million for the full year of 2011. Recently, Lincoln Renewable Energy announced that it has selected Quanta Services subsidiary for the construction of the 10-megawatt Oak Solar facility in New Jersey. Under this agreement, Quanta will provide engineering, procurement and construction services, as well as operate and maintain the facility once the project is commissioned. Construction is projected to begin in June with an estimated project completion date of December of 2011. During the quarter, we continued to work under 3 EPC contracts for utility-scale solar installations, jointly owned by U.S. Energy America and NRG Solar. We expect to substantially complete these projects by the end of the second quarter, nearly one month ahead of schedule. Also during the quarter, we continued work on our third utility-scale solar project at the Denver International Airport under our contract with Constellation Energy. This project is expected to be completed in the second quarter. We continue to expect double-digit growth in Renewable Energy revenues for the full year of 2011 compared to 2010, with Solar opportunities contributing significantly to the increase. Although we remain very active in Wind Construction, we do not expect significant momentum in this market throughout 2011. During the quarter, revenues from our Natural Gas and Pipeline segment were approximately $177 million. This compares to approximately $189 million for the first quarter of 2010. 12-month backlog in the Natural Gas segment was $669 million, down $300 million or 31% from the same period last year. Since our fourth quarter conference call, our customers have announced very few contract awards. We remain either short listed as a bidder or are in negotiations on approximately $1.8 billion in pipeline opportunities. Roughly half of these projects are scheduled to start this year. These figures do not include TransCanada's Keystone XL project where we were also one of several bidders. However, because we are now in May and we still have limited visibility of future potential awards, we are revising the revenue forecast for this segment down approximately 29% for the full year of 2011 compared to 2010. The transmission pipeline business is inherently volatile. Our ability to forecast this segment has become increasingly difficult due to the short project cycles, large project nature and delays related to increased regulatory requirements, including new restrictive rules on government land. With this said, we are well aware of these challenges and are working to minimize the volatility of this segment, as well as improve our forecasting process. We remain very bullish on the pipeline business over the medium and long term. We continue to see robust drilling activity in certain unconventional shale formations. Additionally, as all prices continue to remain substantially above $78 a barrel, activity in the Canadian oil sands is gaining momentum. The Pipeline and Hazardous Materials Safety Administration, or PHMSA, is implementing more stringent pipeline integrity requirements that should also create pipeline replacement programs throughout the United States. We believe Quanta is well-positioned throughout Canada and the United States to capitalize on new and existing pipeline infrastructure and related facility upgrades. We continue to be optimistic that we will be awarded a meaningful project opportunity that would generate revenue this year. We expect pipeline activity to increase significantly in 2012, especially if the Keystone XL project receives regulatory approval. This project alone is expected to absorb almost half of the industry's construction capacity. During the quarter, we initiated work under our new 5-year contract with Puget Sound Energy for a Natural Gas construction and maintenance services across the utility's 6-county service area. This contract is expected to produce approximately $400 million in revenue during its 5-year term. In the first quarter of 2011, revenues from our Telecommunications segment were approximately $79 million compared to $78 million in the first quarter of 2010, a relatively flat revenue growth for the quarter. Total backlog in this segment increased approximately 82% to $534 million at March 31, 2011, compared to March 31, 2010. Although the first quarter results from the Telecom segment were seasonally challenged, we expect revenues for the full year of 2011 to increase 20% to 25% compared to 2010, with significantly improved margins. The majority of this increase should occur in the second half of this year, with the increase attributable primarily to stimulus projects, 4G network upgrades and fibers to the cell site build-outs by carriers. Our optimism is influenced partly by the growth in mobile and intelligent devices and the robust networks that support them. Mobile devices are projected to outnumber laptops and computers in only 2 years, which is expected to drive the global wireless connections to increase to $50 billion by 2020, and the carriers are reacting. Verizon recently indicated that it expects to deploy LTE services to 175 markets by year end. Our in-site plant and wireless groups are experiencing an increase in demand for their services. Since the close of the first quarter, we have been awarded a project with an original equipment manufacturer, or OEM, to provide engineering, procurement, installation and turn-up and test services to over 3,600 cell sites in support of that fiber-to-the-cell site contract for an incumbent local exchange carrier. This project is not currently included in our backlog due to the timing of the award. During the quarter, we also initiated engineering and other preconstruction activities for our KINBER, a Keystone Initiative for Network Based Education and Research, under our largest single stimulus award. Under this contract, we are providing engineering and construction for a 1,600-mile fiber range throughout 39 counties in Pennsylvania. In the first quarter of 2011, revenues from our Fiber Optic Licensing segment were approximately $26 million. This compares to approximately $24 million in revenue for the first quarter of 2010. We expect strong revenue growth in this segment based on a robust order environment for the second half of this year. For example, during the 2010 E-Rate season ending in March of this year, we realized a substantial increase in new contract orders compared to the 2008 and 2009 E-Rate seasons, which will drive revenue growth later this year and into next year. In addition, we continue to see meaningful growth in the carrier vertical driven by increased bandwidth demands, both wireline and wireless. In summary, we continue to see momentum related to electric power transmission contract awards, renewables and telecommunications spending. This momentum should start building late in the second quarter and into the second half of this year. Revenue growth on our Electric Power and Telecommunications segments should offset the revenue decline in our Natural Gas and Pipeline segment if backlog does not materialize for this year. Despite a very disappointing first quarter, we believe our overall business in the industries we serve are on the verge of substantial growth and exceptional margins. Now I will turn the call over to James Haddox, our CFO.

Thanks, Jim, and good morning, everyone. Today, we announced revenues of $849 million for the first quarter of 2011, compared to $748.3 million in the prior year's first quarter, reflecting growth of approximately 13.5% quarter-over-quarter. The net loss attributable to common stock for the quarter was $17.6 million, or a loss of $0.08 per diluted share. The growth in consolidated revenues in 1Q '11 was driven primarily by an increase in revenue from our Electric Power Infrastructure Services segment up 24% quarter-over-quarter. A portion of this growth resulted from an acquisition during the fourth quarter of 2010. However, excluding the acquisition, the Electric Power segment's revenues would have grown 14.9% quarter-over-quarter. This revenue increase is partially offset by decreased revenues from our Natural Gas and Pipeline Infrastructure Services segment of 6.4%. Our consolidated gross margin declined from 17.3% in 1Q '10 to 8.4% in 1Q '11. The decrease is primarily due to the impact of operating losses incurred by the Natural Gas and Pipeline Infrastructure Services segment, which John previously discussed. Selling, general and administrative expenses increased $10.5 million to $91.5 million as compared to last year's first quarter. We completed a major acquisition during the fourth quarter of 2010, which resulted in an increase in G&A expenses of $2.1 million quarter-over-quarter. Selling, general and administrative expenses also increased as a result of increased salaries and benefits costs of approximately $6.3 million, associated with additional personnel and salary increases and includes $1.7 million in severance costs associated with the reorganization of certain of our gas operations. In addition, we had increased legal costs of approximately $1.0 million associated with ongoing litigation during the first quarter of 2011. Selling, general and administrative expenses as a percentage of revenues remained consistent at 10.8%. Our consolidated operating margin before amortization expense decreased from 6.5% in 1Q '10 to a negative 2.4% in 1Q 2011 as a result of the lower gross margins. Amortization of intangible assets increased from $5.8 million in 1Q '10 to $6.3 million in 1Q '11 due to the increase in amortization related to intangibles associated with the acquisition we completed in the 4Q of '10, partially offset by the runoff of amortization related to backlog intangible assets recorded from our prior acquisitions. Drilling further down into the details of our results by segment, Electric Power segment revenues were up about $109.6 million quarter-over-quarter or about 24%. Revenues were favorably impacted by $41.6 million in revenues from the acquisition of Valard, which was acquired during the fourth quarter of 2010. The remaining increase was due primarily to higher revenues from renewable projects and an increase in other Electric Power Infrastructure Services, primarily due to increased spending by our customers. Emergency restoration revenues decreased $36.4 million to $16.5 million in the first quarter of 2011, partially offsetting the increased revenues and other Electric Power Service lines. The operating margin in the Electric Power segment was 5.5% in the first quarter compared to 8.7% in the last year's first quarter, primarily due to the lower revenues from Emergency Restoration Services, which typically generate higher margins. A more competitive pricing environment for our distribution services and higher margins associated with the closeout of certain electric transmission projects during 2010 as compared to electric transmission projects at earlier stages in 2011, which include contingencies. Margins in the first quarter of '11 were also negatively affected by idle equipment costs associated with the delayed projects previously discussed. Our Natural Gas and Pipeline segment revenues decreased quarter-over-quarter, approximately 6.4% to about $176.8 million in 1Q '11, primarily due to the timing of project awards. Operating margins in the Natural Gas and Pipeline segment was a negative 20.9% in 1Q '11 compared to a positive 9.7% in 1Q '10. These decreases are primarily due to cost overruns on 2 projects, severance costs and upfront mobilization costs in our Gas division, as John previously discussed. Revenues from our Telecommunications segment increased approximately $1.2 million or 1.5% to approximately $79.4 million in 1Q of '11. Operating margins in the Telecommunications segment were negative 4.5% in 1Q '11 compared to a negative 1.0% in 1Q '10. This decrease in margin is the result of decreases in the body of work associated with long-haul installations that was replaced with lower margin, fiber-to-the-premise build-out initiatives during the current period and adverse weather conditions experienced in the northern U.S. Fiber Optic Licensing segment revenues were approximately $26.3 million for the first quarter of 2011, or an increase of about 8.1% as the results of our continued investment in fiber optic network expansion and the associated revenues from licensing the right to use point-to-point fiber optic telecommunications facilities. Operating margins in the Fiber Optic Licensing segment were 45.8% in 1Q '11, which is lower than operating margins of 49.9% in 1Q '10, primarily due to higher selling and marketing expenses in this segment. When discussing operating margins by segment, we do not allocate certain selling, general and administrative expenses and amortization expense to our segments. Therefore, the previous discussion about operating margins by segment excludes the effects of such expenses. Corporate and unallocated costs increased about $2.4 million to $29.7 million in the first quarter of 2011 as compared to 1Q 2010, primarily due to higher salaries and benefits costs of approximately $2.2 million associated with additional personnel and salary increases. The net loss attributable to common stock for the quarter was $17.6 million or a loss of $0.08 per diluted share. Net income attributable to common stock in 1Q '10 was $23.7 million or $0.11 per diluted share. The adjusted diluted loss per share as calculated in today's press release was $0.05 for the first quarter of 2011 as compared to adjusted diluted earnings per share of $0.15 for 1Q '10. Cash flow used in operations, less net capital expenditures of about $34 million resulted in approximately $39 million in negative free cash flow for the quarter. The negative free cash flow during the first quarter of 2011 was primarily due to the operating losses incurred during the first quarter of 2011. This compares to the prior year's first quarter, which had a negative free cash flow of $39.2 million. EBITA for the first quarter of 2011 was a negative $20.7 million or negative 2.4% of revenues compared to about $48.1 million or 6.4% of revenues for the first quarter of 2010. Adjusted EBITDA was about $11.7 million for the first quarter of 2011 compared to $80.7 million for the first quarter of 2010. Our days sales outstanding, or DSOs, were 84 days at March 31 of 2011, versus 68 days at December 31 of 2010, and 80 days at March 31 of 2011, an increase due to the timing of milestone payments on major projects. The calculation of EBITA and EBITDA and adjusted EBITDA, all non-GAAP measures, and the definitions of these and of DSOs can be found on the Investors & Media section of our website at quantaservices.com. At the end of the quarter, we had about $503 million in cash. We also had $188 million in letters of credit outstanding under our $475 million credit facility, primarily to secure our insurance program with no outstanding loans, leaving $287 million of availability. The combination of our cash balance and availability under our credit facility gave us about $790 million in total liquidity as of March 31, 2011. Concerning our outlook for the future, our estimate for 2Q '11 EPS based on revenues of between $925 million and $975 million is $0.14 to $0.16 per diluted share on a GAAP basis. This estimate compares to $0.16 in GAAP EPS in 2Q of '10. Our GAAP EPS forecast for 2Q '11 includes an estimate of $15.2 million for non-cash compensation expenses and amortization expenses. Excluding these expenses, our non-GAAP adjusted diluted earnings per share for the quarter is expected to be $0.18 to $0.20. Our estimate for 2011 EPS based on revenues of between $4.1 billion and $4.4 billion is $0.65 to $0.80 per diluted share on a GAAP basis. This estimate compares to $0.72 in GAAP EPS in 2010. Our GAAP EPS forecast for 2011 includes an estimate of $50 million for non-cash compensation expenses and amortization expenses. Excluding these expenses our non-GAAP adjusted diluted earnings per share for 2011 are expected to be $0.80 to $0.95. We're currently forecasting net income attributable to noncontrolling interest to be approximately $2 million in the second quarter of 2011 and $9.6 million for the whole year. This ramp-up over 2010 is due to increases of work on existing joint venture projects, as well as increased amounts associated with our contract with Central Maine Power. For additional guidance, we're currently projecting our GAAP tax rate to be approximately 39.5% to 40.5% for 2011, and we expect our diluted share count to be about 215 million shares for 2011. We expect CapEx for all of 2011 to be approximately $180 million to $210 million, which includes CapEx for our Fiber Licensing segment of about $35 million. This compares to CapEx for all of 2010, in total of about $150 million. This concludes our formal presentation. And we'll now open the line for Q&A. Operator?

[Operator Instructions] Our first question is from the line of Tahira Afzal with KeyBanc Capital Markets.

Couple of questions because I know I only have one follow-up. You mentioned on your prepared commentary that you expect some CREZ awards to come in potentially over the next few weeks, and they could contribute significantly to 2011. I would like to know how much of this you've built into guidance and how much it will be potential upside if it does come true? And then as a follow-up, obviously, on the Pipeline business, if you could give us some visibility on really how contained all these losses are, give us comfort around that to the extent that you've been through your other projects and do not see similar project issues coming up. And really, in retrospect, really looking at the Pipeline business and putting into perspective for us whether this has been a wise acquisition for you.

This is Jim. In regard to the CREZ awards, we do expect the remaining CREZ utilities to make announcements of their construction partner in the coming weeks, and we have baked our expectations for those awards on what we would win into our guidance for the year. In regards to Pipeline, the 2 projects that we had the losses on, they are fully contained. The one that was in the Dakota area, that's been finished. The cleanup has been finished and settled and everything is done other than the change orders that we're pursuing and as well as the project in Canada. That project is completed other than the change orders that we're pursuing there as well.

This is John. About the Pipeline business, it's a very good business. I think we've been -- we have some reasons to think that we should improve our forecasting ability on that business. We know there's volatility in this business. We are trying to improve our forecasting and trying also to take some of the volatility of that business by taking on more maintenance work cathodic protection, more recurring revenues in that portion of the business to take some of that project volatility out. I believe just off the top of my head, that we've owned the company about 6 quarters and during those 6 quarters, they'd brought in about $160 million of EBITD, and we paid about $350 million for them. So even in the very difficult times, it's been a very good acquisition. But those 2 projects, by the way, if we get a reasonable amount of the change orders that we've asked for, one of those projects will break even and one will actually make some money. So they're not terrible projects, but they were certainly underestimated by us in what they were going to do for the quarter.

Got it. And I guess as a follow-up, could you talk about your cash allocation going forward? Obviously, a buyback is sort of welcome, and would love to get a sense of whether you could potentially expand that or whether you see good opportunities.

You cut out on the middle of that question. What was the last part of the question?

Opportunities in terms of other acquisitions.

Yes, we've still got opportunities for acquisitions and for increased needs for working capital based on what we're seeing in pending or potential contracts awards. So we still have use for our capital, both on the acquisition side for funding working capital and potentially for doing some interim financing or project financing in the future.

The next question is from the line of Will Gabrielski with Gleacher & Co.

So I'll ask them all at once here. The other transmission projects you've won, like CapX2020 CREZ work, are there any stealth permitting issues that could creep up on us like the Tehachapi around the expected start-up dates? And is any of that or anything else that's not permitted included in your 2011 guidance at this point? And then, separate from that but within T&D, if things were -- started to break your way a little bit here, what would industry utilization look like over the next 12 months, and how tight can it get? Can you compare it to maybe some past periods?

Will, on the permitting question, I believe -- and this could change obviously, but from what we're hearing from our customers, the only projects that are having permitting delays are the ones that we mentioned. The other projects are moving forward on schedule. And then, industry capacity is already tight, and it's going to get even tighter, obviously, as we enter into the second half of the year. I mean we're going to be on a minimum of 10 major transmission projects at the end of the year just ourselves. So the industry, as I would say, is near capacity right now on transmission projects as the industry construction resources mobilize on our projects throughout the country and in Canada, and it's going to be very, very tight, which is good for us. We like that. We feel like we have the resources required to pursue not only the opportunities, the many opportunities we have in hand, but to pursue future opportunities that we expect to be awarded between now and the end of the year and into next year.

But CapX2020, those projects, you don't see any potential permitting issues? Have you talked to the utilities today or the operators that they have all the permits in hand that they need to begin construction or are we still waiting on any?

I think that there's always potential for delays in any of these projects. However, whenever you're crossing BLM forest service lands or government lands of any nature, the opportunity for more delays is higher than when you're crossing normal lands. You do have the factor of NIMBY, not in my backyard, that you have to face with CapX2020, and I'm sure there will be some delays in some projects, but the odds increase tremendously when you're crossing federal lands or state lands or government lands as well.

The next question is from the line of Dan Mannes with Avondale Partners.

This is Brian Shore in for Dan. If you could talk about the $60 million that you talked about in change orders, kind of talk about any of the potential timing there, and B, whether this is included in the guidance or it presents upside looking forward?

Yes. This is James. It does present some potential upside. The change orders that we're pursuing, the timing of that, we expect that we will get those resolved sometime during the next 3 to 6 months, maybe sooner rather than later. But it's hard to give you the magnitude of what might turn into profits, because some of these would be recognized over -- under percentage completion accounting would be recognized under the remaining portion of the contract once it's settled. Some of them, change orders that we're pursuing on contracts that have already gotten completed would flow through our income statement as the change orders are approved. I think that in the last 9 months of this year's, kind of spread out across the quarters, we've got somewhere between $8 million to $10 million of estimated change orders that should affect our P&L. And that number could go up, but it's hard to predict it because it's subject to negotiation of the change orders and determination of which contracts they apply to and whether it should be accounted for under PLC accounting.

Just so I'm clear, the $8 million to $10 million, that's within the $60 million?

Yes.

Okay. And then just second, can you talk a little bit about what you're seeing in the Telecom segment? Obviously, you guys have grown backlog pretty tremendously driven by stimulus. Is there still more out there to go get? And just kind of what you're seeing, initially, as some of that starts to flow but really looking forward to the back half of the year. I mean what are your expectations about the potential upside there?

Well, we have more visibility probably in Telecom than any of the other segments because we were involved in helping our customers pursue stimulus money, and we've engineered many of these projects. So we've got good visibility in the Telecom. We think that we've seen maybe half of the opportunities right now. Before -- between now and the end of the year, we should expect more awards that are meaningful. But what we have baked into our forecast right now and the significant growth is what we know we have in hand today. And the acceleration of that we will see in constructing those projects in the second half of this year. But there will be more to add to backlog as we move through the year.

The next question is from the line of Jamie Cook with Crédit Suisse.

It's actually Peter Chang, in for Jamie. My first question is on the Electric Transmission. It's back to the guidance question. First of all, do you have an expectation of a BC Hydro win in the back half of your year? And then, I don't know if you could quantify sort of how much from CapX2020 and Lone Star that you actually have in guidance in the event that maybe there is or is not a permitting issue in the future.

Yes. Peter, we need to be careful on any future awards. Our customers are very sensitive to that. We're shortlisted on both of the BC Hydro projects, both the Northwest Transmission and the ILM line, and we should hear about announcements here over the next month or maybe a little bit longer. In regards to our CapX2020, there's very little revenue baked in this year, probably $20 million to $30 million for the line that we're expected to start this year. Most of that revenue will be captured in outside of -- in '12 and beyond. As far as Lone Star, Lone Star is going to start in July. It has a completion date of 2012, so a significant part of that revenue can be generated this year. We've been asked not to disclose that amount, that contract amount, by our customer, but it's certainly a nice-sized project that warrants an announcement, it's over $100 million for sure, for certain.

Fair enough. My follow-up question or my other question would be on the Pipeline business. Given sort of the depressed nature of that business in 2011, are you seeing very competitive bids out there on the $1.8 billion in bids outstanding? How should we think about pricing for 2012 and later on some of these projects? Or do you think because it's a large number of bids that pricing is actually -- could be a positive?

I'm being commended to remain disciplined on pricing. The bidding environment is no different than it has been in past years -- you're going to have those contractors that would go take the work cheaper than what we would pursue. So we're actually very excited about the Pipeline outlook. We just feel that we needed to take our projections back for this year since we are in May, but those opportunities still exist. We think that the Pipeline construction capacity is going to tighten significantly going into '12 and that'll be very good for pricing as we move into next year.

The next question is from the line of Scott Levine with JPMorgan

Sticking with gas, I was hoping you might provide a little bit more color on the bidding season. Obviously, your 12 months backlog is down, and your total backlog in the business is up. And I think it builds seasonally during this time of year. So I was hoping you might be able to help us look through the seasonality, really understand how the bidding season came in relative to your expectations. And secondly, given your comments about KeystoneXL and its implications for '12, how important is that job, specifically, in terms of assessing growth in the business next year and beyond?

Well, I think typically, in a typical year you do have seasonality in gas and you would expect that backlog. You wouldn't have much backlog for the remainder of any year. But '12 is going to be such a robust year that we should build 12-month backlog as we go through this year for 2012 work. As far as Keystone and its implications to us, I think the point we were trying to make is that if Keystone goes, that the industry capacity is going to be tightened significantly, because that project alone will take up half the construction capacity, which will be good for pricing in the industry. We have been shortlisted on that job, but as far as the meaningfulness of that job to us, we're looking at $1.8 billion worth of projects outside of that Keystone project. So I think we're pretty [Audio Gap] [Technical Difficulties]

As my follow-up question, regarding the share buyback announcement, can you talk about the meaningfulness of that, how that came about and maybe whether that has any -- whether it says anything about the M&A pipeline? I guess, your general thoughts on uses of cash flow given the introduction of buyback here this morning.

We, through these past several years, have had strong cash flow. And we anticipate going forward, we will as well. And looking at things, our acquisition pipeline is robust, and our need for working capital is robust. But having taken that into consideration, we still think there's enough cash to do a stock buyback at this time.

The next question is from the line of Craig Irwin with Wedbush Securities.

I wanted to ask for a little bit more color around the change orders out there and just clarify previous comments about the $10 million in the pipeline segment from cleanup costs and the $15 million from forecast profitability, if that was something you're specifically requesting in the negotiations. But more precisely on the change orders, if you could discuss -- maybe a little bit of color on who the counterparties are in a couple of these jobs? And the process to complete the negotiation process, is there some sort of arbitration that has to happen? Does anything have to go before a utility commissions for you to actually get payment? And if you could mention maybe your experience in recovering change orders in the past.

Certainly. When I talk about the $60 million, we've already reduced the number of somewhat for expectations of our winning those change order discussions. We do not like to sue our customers. But of course, court is always an option in the end if we can't come to satisfactory negotiation. I wouldn't want to disclose the amounts or the customers' names on any of those change orders as we're in negotiations. And obviously, they're very sensitive. Many of these are related from delays that weren't their fault. They certainly weren't our fault. But they're trying to enhance their shareholder value as we are trying to enhance ours. And most of these discussions are not adversarial. They're a matter of who's going to accept the responsibility for these delays and these problems that are -- were unanticipated, of course, by our customer. But they were also unanticipated by us. Some of them related to delays for permitting. Some of them were new interpretations of old rules by current government officials, more stringent rules. And so they're friendly discussions generally, and not very adversarial, and we've already discounted them. When we say $60 million, it's -- obviously, there's more than that in discussions. So we've already discounted them somewhat. But it's impossible to predict how much of that $60 million we will get as negotiations go on, and the timing of it is difficult because some of these projects are continuing to be delayed and we'll have additional cost overruns to look at.

And as my follow-up in the Gas Services segment, the losses of $37 million in the quarter, segment operating losses of $37 million, can you give us a little bit more color on, aside from the 2 items that you mentioned, the proportionate contribution of whether any other factors in this performance below prior expectations? [Audio Gap] [Technical Difficulties]

Remember the question?

Yes, I think some more color on the Gas segment losses. I think the 2 jobs accounted for approximately $26 million. We had some reorganization charges that cost $2 million. We have the start-up cost on the Puget Sound gas contract of $2 million. And then the rest is just under allocated equipment in our Gas Transmission segment because we just don't have the work going on that we expected for the year and for the quarter. So I think that's really a summary. That's what contributed to the loss for the quarter.

The next question is from the line of Jeff Beach with Stifel, Nicolaus.

I think I've asked this before. The delays in the project awards in the gas pipelines, some oil pipelines, do you have any sort of a feeling yet as to why the delays at this point on those pipelines? A lot of them seem to be needed to move -- building volumes of gas and oil out of the shales. What's going on with the customers?

It's really not the customers, Jeff. It relates to government approvals. The projects that are inside a state are typically not being delayed. It's projects that go across state boundaries and projects that cross federal lands are the ones that have difficulty. And it's a new interpretation of the role of the Federal Government in monitoring and in environmental studies and those kinds of things that are causing the delays for our customers.

And on the project delays in Electric Transmission on projects that you've won, you're looking for very strong revenues for the year, for 2011. And when I looked at it, it looks like maybe you've built in some acceleration of work and it's kind of hard to tell to catch up. Is this accurate or is this kind of second half you're delayed 2 or 3 months and everything kind of -- the whole schedule pushes out 2 or 3 months where you have accelerated activity to produce a stronger second half than what you originally planned?

I don't think we're building any acceleration in on any particular project, Jeff. I think it's that we're starting more projects. Right now, we've just recently -- the first quarter, we had one project that was in full construction. Now we have 2 in full construction. And we're going to ramp up to where we have 10 in full construction by the end of the year, at least 10. So I think it's more a function of that we're starting to mobilize on contract awards into the construction phase. We'll have significantly more activity in the second half of the year compared to the first half of the year or even last year at this time.

And really, we wouldn't anticipate an acceleration of those projects until those projects start and we find out exactly when they do start. I think we will see some acceleration on those projects, but we haven't built that in. As Jim says, most of the higher revenues are due to more projects starting. I do expect that some of our customers are going to have to accelerate. Some of them have already committed to completion dates and some of them have started construction on other portions of the project. So I expect there will be acceleration, but we're not building that in to our guidance at this time.

The next question is from the line of Adam Thalhimer with BB&T Capital Markets.

Is your expectation that the Pipeline segment will be profitable in Q2?

That's the projections there, James, I think so. Depending, of course, on the amount of revenues that start. The Pipeline projects are profitable as far as they go individually. It's the amount of volume. Looking forward in second quarter, is there going to be sufficient volumes to carry the equipment allocations, overheads and so forth by the various companies?

Yes. Projection is that they will be profitable in Q2, yes. We have more than just pipeline transmission in our Gas segment. We're doing a lot of pipeline rehabilitation work and other MSA work, the Puget Sound contract. So that segment, we do expect it to be profitable in the second quarter.

Great. And when can you guys start buying back stock?

Well, technically, the program starts after our blackout period closes, which is 2 days after we announce our earnings. So that makes May the start date for the program. And then, we're subject to -- Yes, May 9. And then, we're subject to normal insider trading restrictions as a company just like we are officers of the company. So anytime that we have information that's not -- material nonpublic information, the company can't go into the program. But the program starts on Monday, May 9, under our current policy.

The next question is from the line of Alex Rygiel with FBR Capital Markets.

Year-over-year, the operating profit inside the Pipeline business appeared to decline about $55 million, of which you identified $30 million coming from project losses, the reorg and Puget Sound. And I suspect since revenues declined $12 million year-over-year, that the unallocated equipment expense is probably another $10 million or $11 billion, so that gets you to about $40 million of a year-over-year decline in the operating profit. How do we bridge the gap between that $40 million that we just identified and the $55 million that was reported?

I think that what you see, Alex, is timing. I can think of one thing off the top of my head that could affect it, and that's timing of some of the change orders that we're talking about. Because when we came into last year, I think we probably had some change orders rolling forward that we were negotiating, which would've had an effect, a positive effect on profits in the first quarter of last year, coming out of the cleanup of several jobs and determining the magnitude of the change orders, which couldn't be booked at year end because we were in the same position at year end last year that we're in at the end of the first quarter of this year.

We also had quite a nice project going on in Alaska last first quarter that's different than this first quarter.

And then, a quick follow-up if I may. Could you quantify the revenues implied in your full year 2011 guidance from CREZ projects and others that have not yet been awarded? And also provide a little bit more color with regards to the very significant growth in Telecom backlog of 35% sequentially in year-over-year and 60% to 80% year-over-year?

I think that we don't necessarily have CREZ. What we have in our projections is where our revenues are higher than our committed backlog. And so projects that we put in there are not identified specifically as a CREZ project or a BC Hydro project or an AEP project. We know we'll get some of those projects or a pipeline project or a Telecom project. We'll know we'll get some of the projects we're bidding. Based on the volume, we adjust our expectations. And if we have higher success, obviously, we'll have more revenues. Lower success, we'll have lower revenues. But there's a number of CREZ projects. We expect to get our share of those projects, and part of that is what we call in forecasting as uncommitted work.

And that's one of the reasons that we got a fairly wide range that we've given you guys for both revenues and earnings for the rest of the year. It's because of the timing and probability of awards of some of those CREZ projects. To answer your Telecom question, Alex, we got great visibility into our Telecom forecast. The thing is it's a lot of $5 million, $7 million, $10 million projects, so it's hard to quantify without stating what the announcements are because it's just a whole bunch of small projects, but we do have good visibility into that work.

Alex, this is Ken. Just to give you an idea, it's coming from several areas. Probably the largest single area is stimulus construction, then fiber to the backhaul to the sell sides is another big piece. Stimulus engineering is a big part of it. And then, some wireless stuff. It's also related to fiber backhaul, but it's the piece that takes place at the sell sides. So those are the kind of high-level sources of the backlog growth.

The next question is from the line of John Rogers with D.A. Davidson and Co.

Could you talk a little bit, I mean if go -- about margin expectations for these businesses or these segments a little longer term, specifically, on the Electric Power over the last number of years. It's kind of been low-double digits. Gas business is kind of, I mean all over the place. But what is your long term thoughts on reasonable margins for these businesses?

We expect that the margins in all of these businesses can and should be in the double-digit level when there is sufficient volume in that business and they're not in a depressed or recessionary time. But when our customer spending is normal or better than normal, they should be operating income in the double-digit level in all 3 segments -- 4 segments.

And, John, on the Electric Power side of it, is there a big difference between the distribution in the Transmission business as you see it now, in terms of margins? Or with equipment, I mean, in organizational overlap is it just -- are they closer to the same?

No, there are significant differences today between Transmission and Distribution. Distribution, quite a bit lower margin because there's just not enough volume there to support the higher margins. A lot of that work is inherently lower margin because it's maintenance work that's done on a cost-plus basis. So there's lower risk, therefore, lower margins in any case. Where the transmission work typically is some type of fixed price and therefore, incurs higher margins because it's higher risk. And of course, you have to harvest those margins, as we all know.

The next question is from the line of Steve Gambuzza with Longbow Capital Partners.

I'm just trying to figure out kind of the implied margin for the rest of the year given your sales and operating guidance -- excuse me, EPS guidance. I think in the last call, you said you'd be in that kind of 9% at 12% operating margin each quarter except the first quarter. But looking out across the balance of the year, it seems like your guidance would imply something around 10% for kind of average operating margin across the remainder of the year. Is that about right?

Yes, that's about right. Depending on which side of the range you use, I think the number, the implied number if you're on the low end is about 8.9% or something like that and the implied margin on the high-end is about 10%.

And I guess, just looking back historically, there hasn't really been a quarter where you've printed that kind of margin going back for a while. And it would seem with the Pipeline segment challenge, it would really fall on the Electric Power segment to really produce some strong results to hit that margin target. Is that a fair way to think about it?

That's fair, but also don't forget Telecom is coming on very strong as well. And of course, the Pipeline business has opportunities, as we've reiterated that time and again. But we're, certainly, more bullish on the Electric Power margins and Telecom margins. But the Pipeline segment has the opportunity [inaudible].

The next question is from the line of William Bremer with Maxim Group.

Can we go into the Nat Gas project area? You gave reference to 10 full-line construction projects on the Electrical Power. How many would you say that you're gunning for, for '11? And I guess, that's my first question. And second, can you give us an idea of where the MSAs or aftermarket activity falls within this segment as percent of revenue? And then, let's take that further throughout all your segments. Where does your MSAs or aftermarket as a percent fall within each segment?

That's a lot of questions. Let's try to break them down just a little bit. Most of the projects -- I think, Jim said that there were some $800 million worth of projects that we have bid, that we are either shortlisted on or we're negotiating that would start in 2011. That's a multitude of projects. I don't think we have the time today to talk about, and I don't have the information in front of me of where those projects exactly are, but you can bet that a lot of them are in the Marcellus and in the Eagle Ford shales. Those formations require fairly large pipe -- but particularly, the Marcellus is very difficult terrain, and is very much our sweet spot because they are very difficult projects and very difficult terrain.

A third of the opportunities are related to Canadian oil sands and those opportunities in that $800 million could start this year as well. We're looking at starts anywhere from June to July to some fourth quarter starts in the Pipeline business in that $800 million. Probably, half of those projects would complete this year, and half of them will start in the fourth quarter and go into next year. I think when you talk about MSAs, we do have MSA work in the Gas segment. Probably, I would guess $200 million to $300 million of the work that we have is the MSA work. We have work in Canada and Alaska that's year-round MSA work, as well as work through our pipeline integrity group that we're doing as well. So I think that pretty much answers the questions that you asked, Bill.

What about the Telecom sectors, can you provide the MSA activity there?

Yes. About 30% of the revenue in Telecom is MSA work.

And the next question is a follow-up from the line of Tahira Afzal with Keybanc Capital Markets.

My follow-up was answered, so thank you.

And the next question is a follow-up from the line of Will Gabrielski with Gleacher & Co.

Yes. Just going back to the gas pipeline and you mentioned weather -- it would probably make me comfortable to hear you talk about why weather is something that you think you can pursue through change orders. And is that a constant feature of a lot of your contracts or was that unique to this contract?

I think that when there are delays that puts you in more difficult weather patterns, it's subject to delay. If the projects were not delayed, obviously, you take the weather risk in your project bid.

So it was timing delay that pushed you into different weather patterns than you had assumed when you had bid these projects originally?

Yes. The Canadian project had to be done in the winter time, but the real issue there is that the weather was cold and so we built ice bridges. And then it warmed up unseasonably and forced out our ice bridges, and then we had to go back after it got cold again and put the ice bridges back in. That was a major part of that Canadian project. We knew it was going to be a winter time project. Obviously, you know it's going to be cold. But when it warmed up, that's unusual for Canada, and then of course the snow. And if we'd have done it the same time the year before, we wouldn't have had those issues. The other project was pushed from late summer and fall weather into winter weather completion. Snow impacted it.

And then, on pipeline integrity, how material can that be? It's kind of a catch 22 here that regulation is hurting you, but regulation might help you. Just wondering how big can pipeline integrity in some of these new regulations coming out possibly create a positive driver for the business?

Yes, I think -- well, that could be a huge opportunity for not only our company but the industry. I mean, it's pipeline and our customers are going to have to go through the more stringent inspection requirements that are going to require both our inspection services as well as our rehabilitation services. So it's a big opportunity going forward.

Thank you, ladies and gentlemen, that does conclude the question-and-answer session. I will turn it back over to management for any closing remarks.

Just again, I'd like to thank you for your participation in our first quarter conference call. We appreciate your questions and your ongoing interest in Quanta Services. Thank you very much.

Ladies and gentlemen, that concludes the conference call. If you would like to listen to a replay of today's conference, please dial (303) 590-3030, enter in access code of 4437101. AT&T would like to thank you for your participation, and you may now disconnect.