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Quanta Services (NYSE:PWR)

Q3 2010 Earnings Call

November 03, 2010 9:30 am ET

Executives

James O'Neil - President and Chief Operating Officer

James Haddox - Chief Financial Officer

Kip Rupp - Managing Partner

John Colson - Chairman, Chief Executive Officer, Chairman of Merger, Acquisition & Disposition Committee and Chairman of Small Merger, Acquisition & Disposition Committee

Analysts

Stuart Bush - RBC Capital Markets Corporation

Scott Levine - JP Morgan Chase & Co

Alexander Rygiel - FBR Capital Markets & Co.

Stephen Sanders - Stephens Inc.

Craig Irwin - Wedbush Securities Inc.

Tahira Afzal - KeyBanc Capital Markets Inc.

Carter Shoop - Deutsche Bank AG

Adam Thalhimer - BB&T Capital Markets

Sanjay Shrestha - Lazard Capital Markets LLC

John Rogers - D.A. Davidson & Co.

Jeffrey Beach - Stifel, Nicolaus & Co., Inc.

Daniel Mannes - Avondale Partners, LLC

Justin Hauke

David Martin Lowish

Will Gabrielski - Gleacher & Company, Inc.

Jamie Cook - Crédit Suisse AG

Operator

Good day, ladies and gentlemen. Thank you for standing by. Welcome to the Quanta Services Third Quarter 2010 Earnings Conference Call. [Operator Instructions] I would now like to turn the conference over to Kip Rupp of DRG&L. Please go ahead, sir.

Kip Rupp

Okay, thank you, Luke, and welcome, everyone, to Quanta Services conference call for the year 2010 third quarter results. Before I turn the call over to management, I have the normal housekeeping details to run through.

If you would like to be on the e-mail or fax distribution list to receive future press releases for Quanta, or if you had any technical difficulties this morning and did not receive your e-mail or fax, please call our offices at DRG&L at (713) 529-6600. You can also sign up for e-mail information and alerts by going through the Investors & Media section of Quanta's website at quantaservices.com.

If you would like to listen to a replay of today's call, it will be available via webcast by also going to Quanta's website at quantaservices.com. In addition, there's a telephonic recorded instant replay that will be available for the next seven days, 24 hours a day, that can be accessed to set forth in the press release. Please remember that information recorded on this call speaks only as of today, November 3, 2010, and therefore you're 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 or beyond Quanta's control and actual results may differ materially from those expected or implied as forward-looking statements. Management cautions that you should not place undue reliance on Quanta's forward-looking statements, and Quanta does not undertake any obligation to update any forward-looking statements to reflect events or circumstances after this call.

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, 2009, 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?

John Colson

Good morning, everyone, and welcome to Quanta Services Third Quarter 2010 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 the financial results by James Haddox, our Chief Financial Officer. As always, we welcome your questions following our remarks.

Revenues for the third quarter increased over 50% to $1.2 billion compared to $780.8 million in the prior year's third quarter. Third quarter revenues for 2010 include revenues for Price Gregory, which was acquired on October 1, 2009. Additional activity in our Electric Power segment was the other main contributor to our revenue increase. Emergency Restoration revenues had no significant effect on the quarterly comparison.

The revenues in our Electric Power and Natural Gas Pipeline segments were about as expected for the quarter, however, various weather and regulatory-related project delays reduced our margins. We believe this is a temporary impact that affected our third quarter and will affect our fourth quarter. But we remain committed to maintaining appropriate margins for our work. This is the first decline in margins that we have had in 12 consecutive quarters. We did achieve notable accomplishments this quarter and are starting to see increased project momentum in certain segments of our business.

During the quarter, we secured contracts for the construction of two solar facilities totaling approximately 39 megawatts near Avenal, California. Work under this contract with Avenal Solar Holdings has already been initiated. We were awarded a 200-mile fiber project in North Carolina. This is the first construction project we have secured under the broadband stimulus program awards. The groundbreaking ceremony on this project was held last month.

Work progressed in our contract with the construction of 200 miles of natural gas pipelines in Wyoming for Bison Pipeline LLC, and we've progressed with construction of two solar parks in Ontario, Canada totaling 18 megawatts under our contract with SunEdison. Subsequent to the third quarter end, we completed the acquisition of Valard construction, one of Canada's largest electric power line contractors. Valard is expected to contribute $225 million to $250 million of revenues in 2011. With an expanded Canadian footprint, we are better positioned to leverage the emerging opportunities in the Canadian energy market.

Although there have been some delays, some projects, such as the Northeast Utilities, New England East-West Solution have begun. We also expect the Sunrise project in California to start soon following several months of delays. Additionally, five of the six utilities charge for building transmission lines in Texas, Competitive Renewable Energy Zone or CREZ, have issued bid request, and we are participating in most of them. Two BC Hydro projects are also out to bid.

The latest report for the North American Electric Reliability Corporation, or NERC, reinforces that reliability concern continue [indiscernible] in some regions, particularly where electric transmission facilities have not been allowed to be constructed as planned. NERC reports that more than 39,000 circuit miles of new high-voltage transmission lines are projected to be added in the United States over the next 10 years. Regional delays, however, continue to plague projects. NERC estimates that across North America, 10 projects comprised with almost 6,500 miles of transmission that are considered delayed. Most of these are 400,000 volts or larger.

Our Natural Gas and Pipeline segment has also seen a robust bidding season for projects that would commence in 2011. The quarter brought significant activity on the Bison project as well as other large transmission pipeline spreads. However, a couple of projects were negatively impacted by record rainfall. The pipeline explosion in California and other high visibility events have placed scrutiny on the country's aging pipeline infrastructure. More than 98,000 miles or 35% of the pipelines in the United States were built before 1960, meaning that many are approaching or past their 50-year life span.

New legislation is already drafted and bill has introduced to enhance natural gas pipeline safety standards, to improve oversight and increase public communications regarding pipelines. As this legislation progresses, it has the potential to drive demand for pipeline integrity testing, maintenance and new construction, all services which we offer our customers.

Additionally, the widescale focus of reducing carbon emissions continues to place attention on natural gas as a clean fuel choice. Although the production opportunity related to unconventional basin is still in its infancy, infrastructure is being put in place now to facilitate movement of natural gas as it is produced in the future. This is a secular spending trend and is occurring despite natural gas prices being at lower levels.

While Telecom revenues decreased quarter-over-quarter, we are starting to see allocations of stimulus funding with dozens of projects being bid. Our organizations, which were awarded stimulus funds in the summer and early fall, are progressing through the environmental permitting process. When this is complete, employees [ph] will move to the engineering phase and the award of construction contracts. We have secured over $50 million of these projects in the past 60 days. Many of these were awarded after the 1st of October, so they're not included in our backlog numbers at September 30.

If we continue to believe that 2011 and beyond will bring strong demand for our services and increase infrastructure spending in the industries we serve, our strong balance sheet, strategic comprehensive of service offerings and extensive resources remain our competitive advantages through which we will maintain our leading position in the industries we serve.

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

James O'Neil

Thank you, John, and good morning, everyone. As John stated, the industries we serve are currently in transition. During the third and into the fourth quarters, we experienced certain challenges in meeting our financial goals. However, we are beginning to see meaningful indicators of increased spending, strong bidding productivity and release of stimulus funds. We believe these developments will positively affect our business in 2011 and beyond. My review will provide more detail on the [indiscernible] factors contributing to both the third and fourth quarters.

Starting with our Electric Power Segment in the third quarter of 2010, revenues from this segment were approximately $532.6 million. This compares to approximately $512.8 million in revenue for the third quarter of 2009. Twelve-month backlog in the Electric Power segment was up $147 million compared to backlog at June 30 of 2010.

We are also seeing positive indications that distribution spending, which has been at low levels since the fourth quarter of last year, are showing signs of recovery. In addition, the much anticipated large transmission projects, which were previously awarded to us, are moving toward the construction phase. Several of these projects were previously forecasted to begin in the third and fourth quarters based on project awards and start dates communicated to us by our customers. Subsequently, start dates for three of these projects were pushed out adversely impacting revenues and margins for the second half of the year.

During the past month, we started preliminary preparations on San Diego Gas & Electric Sunrise Powerlink Project. Recently, we were also awarded another major contract for the site preparation, tower foundation and assembly and stringing conductor on a large transmission project on the West Coast.

In late September, Northeast Utilities' Greater Springfield Reliability Transmission Project received the remaining key approvals to proceed with construction of its $714 million transmission project, which is part of Northeast Utilities New England East-West Solution or NEWS projects. This much-anticipated project will provide stronger interconnections across Connecticut, Massachusetts and Rhode Island. We have initiated work under this contract and expect to receive materials late in the fourth quarter. Construction will be in full swing in 2011 with completion anticipated in 2015.

Bidding activity in effect of Competitive Renewable Energy Zone or CREZ has increased significantly at the past several weeks. Since our last earnings call, we have submitted proposals to five of the six CREZ utilities for services ranging from engineering, substation construction, transmission construction or comprehensive engineer procure and construct or EPC services. We are currently developing three more proposals, which will be submitted over the next two weeks. We expect awards to be made over the next several months. We also continue to work on lower Colorado River Authority's CREZ and non-CREZ transmission projects. Work under our contract with Allegheny energy on its rail project progressed on schedule during the quarter. Currently, 97% of the structures and 80% of the conductors have been installed. This project is expected to complete in the first quarter of 2011.

BC Hydro has recently prequalified contractors on the northwest and interior to lower mainland transmission lines. We expect contractor selection to occur in the first quarter and construction to begin in the second quarter of next year. We believe our recent acquisition of Valard Construction, one of Canada's largest electric power EPC contractors, positions Quanta with the necessary resources to potentially capitalize on these projects as well as other growth opportunities throughout Canada.

We continue to make progress with the deployment of smart technologies such as meters, switches and required system upgrades to support CenterPoint's smart grid initiatives. Additionally, we have been actively supporting smart grid efforts for other utilities across the U.S. For example, in Louisiana, we are conducting smart meter change-out services and installation of automatic meter-reading substation equipment. We are performing similar substation work in Alabama. In Florida, we've successfully installed a pilot program, and we'll start the full smart meter deployment later this month. Water meters and reservoir [ph] systems are part of this project as well. For a different customer, we are installing smart single phase electric meters. And in Ohio, we are supporting 8-piece rollout of smart meters by the end of the year.

The third quarter brought increased momentum to the renewable portion of our business. We remain on track to meet our 2010 renewable energy revenue projections. Renewable revenues for the third quarter of 2010 totaled $91 million compared to $34 million for the same period last year. Our year-to-date were notable revenue through 9/30 2010 as $182 million compared to $61 million over the same period last year. In the third quarter, we continue to work under an EPC contract with SunEdison for two 9 megawatts solar parks in Ontario Canada. Both solar facilities are near completion.

During the quarter, we secured to EPC contracts or utility scale of solar installation owned jointly by Eurus Energy America and NRG solar. Under the contracts, we are providing comprehensive design and construction services for the 20-megawatt Sun City Project and the 19-megawatt Sand Drag Project. Engineering is almost completed and construction has recently started. We had expected these projects to begin construction on September 1.

Also, during the quarter, we were awarded a contract by Constellation Energy for the construction of a 4.4-megawatt solar facility at the Denver International Airport. Upon completion, this will be the third utility scale of solar project we have installed at the BIA.

In all, we expect strong double-digit growth in renewable revenues next year. Largely due to the growth in the PV solar industry, which is projected grow from a 1 gigawatt to a 2-gigawatt market. While wind installations across the U.S. continue to be at low levels, it remains an active part of our business, and we expect moderate growth over the next several years.

During the quarter, revenues from our Natural Gas and Pipeline segment were approximately $552 million. This compares to approximately $132 million in the third quarter of 2009. Most of this revenue growth is attributable to the operations of Price Gregory, which we acquired at the beginning of the fourth quarter of 2009. During the quarter, we were in full construction mode on 8 transmission pipeline projects using all of our non-spreads.

Two of our pipeline projects generated lower gross margins for the quarter compared to our third and fourth quarter forecast due to adverse weather conditions. One project in Kansas experienced above average rainfall and in some areas over twice the average throughout most of the project. As a result, this project incurred substantial cost overruns due to slower production and planning. This project mobilized in the beginning of the third quarter and is now more than 95% complete.

Our second project in the Florida Panhandle was impacted by the Tropical Storm Bonnie and Tropical Depression number five which also significantly increased project cost. This project mobilized in the third quarter and is now 90% complete. Both the Kansas and Florida jobs remain profitable despite the adverse weather conditions. The remaining five pipeline transmission projects are on schedule, and we anticipate completion as planned. Our transmission pipeline construction revenues will exceed $900 million for the full year 2010.

12-month backlog of our Natural Gas and Pipeline segment decreased $354 million at September 30 as compared to June 30, 2010. This reduction was expected as we neared completion on existing project and are now just entering into the bidding season for 2011 which expands into the second quarter of next year. Despite these challenges, the Natural Gas and Pipeline segment generated a respectable 9.6% operating income. We have already identified more than $2 billion in potential pipeline construction opportunities not yet awarded and expect backlog in this segment to increased significantly over the next two quarters.

In the third quarter of 2010, revenues from our Telecom segment were approximately $93.6 million this quarter compared to approximately $114 million in the third quarter of 2009. This decrease in revenue is due primarily to decrease spending by service providers on their Fiber To The Home initiatives. However, during the last several weeks, we have seen increased activity relative to stimulus projects and in wireless long-term evolution or LTE initiatives. 12-month backlog in this segment increased $19 million compared to June 30, 2010.

We recently were awarded a contract by MCNC, an independent nonprofit organization that employs advanced networking technology and systems to continuously improve learning and collaboration throughout North Carolina's education community. Under this agreement, Quanta will install approximately 200 miles of fiber in the Western Florida and North Carolina. We have also recently been awarded a project in Oregon for similar fiber installation services funded by the broadband stimulus program. Although slow to be funded, we continue to view stimulus projects as an important opportunity over the next three years. We believe we are well-positioned to provide the required engineering, outside plant construction and equipment installation services to our customers awarded funds under this federal program.

Since our last call, we have secured several contracts for engineering services on stimulus project as our customers successfully progress to the required environmental impact process. Between now and the end of the year, we expect most-approved stimulus projects will complete the environmental assessment phase. We consider this a favorable indicator of customer spending to come as the phase of contracts released, instruction will increase throughout the end of the year and into the first half of 2011. As projects reach the construction phase, we will capture our share of these projects that have a three-year window to complete construction and commission.

Looking forward, we expect long-term evolution or LTE initiatives to continue to gain momentum over the next 12 to 24 months. We're in the final stages of negotiation on certain LTE awards and expect WiMAX and LTE initiatives to stimulate capital spending by wireless carriers over the next several years. In the third quarter of 2010, revenues from our Fiber Licensing segment were approximately $28 million. This compares to approximately $22 million of revenue for third quarter of 2009. Backhaul fiber from cell sites related to LTE initiatives is proving to be a nice opportunity for our Fiber Licensing business moving forward.

In summary, project delays and weather-related performance issues did affect the third quarter results as well as our estimate for fourth quarter revenues and margins. However, we believe the issues are short-term and our business outlook is bullish. We're seeing positive indicators in all of the industries we serve. This leads us to believe that 2011 and beyond will be strong years for infrastructure spending as customer work to address aging systems, strengthening their networks to support demand for new technologies and plan for the future of energy and communications.

Now I will turn the call over to James Haddox, our Chief Financial Officer.

James Haddox

Thanks, Jim, and good morning, everyone. Today, we announced revenues of $1.21 billion for the third quarter of 2010 compared to $780.8 million in the prior year third quarter. Net income attributable to common stock for the quarter was $62.8 million or $0.30 per diluted share. Our GAAP results were in line with our guidance for the third quarter. However, included in our GAAP earnings per diluted share for the third quarter of 2010 is $9.4 million of income or a benefit of $0.04 per diluted share due to the release of income tax contingencies from the exploration of various statutes of limitations related to federal and state tax returns.

As I've said, consolidated revenues for the quarter were $1.21 billion reflecting growth of approximately 54.5% when compared to last year's third quarter. The growth in consolidated revenues in 3Q '10 was driven primarily by an increase in revenues from our Natural Gas and Pipeline infrastructure services segment as a result of the major acquisition on October 1, 2009 as well as an increase in revenues in our Electric Power infrastructure services segment. These increases were partially offset by decreased revenues from our Telecommunications infrastructure services segment primarily due to the decrease in spending by our customers on their FTT [ph] build-out initiatives.

Our consolidated gross margin declined by 310 basis points from 18.9% in 3Q '09 to 15.8% in 3Q 10. The decrease in gross margin was primarily due to lower margins in our Electric Power infrastructure services and Telecom infrastructure services segments, partially offset by improved margins in our Natural Gas and Pipeline infrastructure services segment despite the weather issues discussed previously. Although our natural gas margins were higher in 3Q '10 than 3Q '09, these margins were still lower than our overall gross margins, and as a result, our overall gross margins were negatively impacted by the segment making up a higher proportion of total revenues in the current quarter.

Our G&A expenses increased $11.0 million to $82 million quarter-over-quarter. The majority of this increase was due to additional administrative expenses associated with the acquisition in 4Q of '09. For the third quarter of 2010, we recorded $3.3 million in losses on the sale of equipment compared to $1.0 million in 3Q of '09. Selling, general and administrative expenses as a percentage of revenues decreased from 9.1% to 6.8% of revenues during the third quarter of 2010 primarily due to the substantial increase in revenues.

Our consolidated operating margins before amortization expense decreased 90 basis points from 9.8% in 3Q of 09 to 8.9% in 3Q of 2010. Amortization of intangible assets increased from $5.4 million in 3Q '09 to $13.4 million from 3Q '10 due to the increase in intangibles amortization resulting from a large acquisition completed in 4Q of '09.

Going further down into the details of our results by segment, Electric Power infrastructure services segment revenues were up about $19.8 million quarter-over-quarter or about 3.9%. Electric distribution and renewable revenues increased, but were partially offset by a reduction from Electric Power transmission services revenues due to the timing of major projects. Emergency restoration revenues were lower than expected and came in at about $10 million per quarter.

Operating margins in the Electric Power infrastructure services segment was 11.3% from the third quarter compared to 13% in last year's third quarter, primarily due to decreased margins on electric distribution services and electric transmission, partly due to continued pricing pressures on our distribution projects and certain prior margin transmission projects completing in last year's third quarter that were not replaced with comparable margin projects this year. Again, due to the timing of major projects.

Our Natural Gas and Pipeline infrastructure services segment revenues increased quarter-over-quarter, approximately 319% to about $551.7 million in 3Q '10 due primarily to the contribution of gas transmission revenues from the major acquisition in 4Q of '09. Operating margin in Natural Gas and Pipeline infrastructure services segment was 9.6% in 3Q of '10 compared to 1.6% for 3Q '09. This increase is primarily due to the increased revenues from gas transmission services, which typically earn higher margins from the remainder of gas business.

Revenues from our Telecommunications infrastructure services segment decreased approximately $20.4 million or 17.9% to approximately $93.6 million in 3Q '10 primarily due to lower revenues from fiber-to-the-premise build-out initiatives as a result of reduced capital spending of our customers during the third quarter of 2010 as compared to third quarter of the prior-year. Operating margins in the Telecommunications infrastructure services segment were 6.0% in 3Q '10 compared to 10.8% in 3Q of '09. This decreases is a result of less revenues available to cover fixed cost and overall lower margins on work being done in the third quarter of 2010 as compared to the third quarter of 2009.

Fiber Optic Licensing segment revenues were approximately $28.1 million for the third quarter of 2010 for an increase of about 25.7% as a result of our continued investment in fiber optic network expansion and the associated revenues from the licensing of point-to-point fiber-optic telecommunications facilities. Operating margins in the Fiber Optic Licensing segment were 47.2% in 3Q of '10, which is typical for this segment.

When discussing operating margins by segment, we did not allocate certain selling, general and administrative expenses and amortization expense for our segments. Therefore the previous discussion about operating margins by segment excludes the effect of such expenses. Corporate and unallocated cost had increased to about $16 million to $37.8 million in the third quarter of 2010 as compared to 3Q 2009, primarily due to $7.9 million in increased amortization expense of intangible assets associated with the major acquisition in 4Q of '09. $1.8 million of higher salaries and related benefits cost primarily due to increased personnel in our business development and technology areas and $1.4 million in additional professional fees and acquisition cost.

Net income attributable to common stock for the quarter was $62.8 million or $0.30 per diluted share. Net income attributable to common stock in 3Q '09 was $63.4 million or $0.32 per diluted share. The third quarter of 2010 includes $9.4 million of income or a benefit of $0.04 per share, and the third quarter of 2009 included $22.4 million of income or a benefit of $0.11 per diluted share in both cases from the release of income tax contingencies due to the expiration of various statutes of limitations related to federal and state tax returns.

Adjusted diluted earnings per share is calculated in today's press release, rose to $0.32 for the third quarter of 2010 as compared to $0.25 for 3Q '09. Cash flow from operations less net capital expenditures of about $24.5 million resulted in approximately $79.2 million of negative free cash flow for the quarter. The negative free cash flow during the third quarter of 2010 was due to an increase in working capital required as revenues increased $336 million or 39% over the second quarter of 2010.

EBITDA for the third quarter of 2010 was about $108 million or 9.0% of revenues compared to the $76.6 million or 9.8% of revenues for the third quarter of 2009. Adjusted EBITDA was about $141.4 million for the third quarter of 2010 compared to $103.5 million for third quarter of 2009.

Our days sales outstanding or DSOs were 76 days at September 30, 2010, versus 79 days at June 30, 2010, and 79 days at September 30 of 2009. Comps in excess of billings, which is the component of the DSO calculation, was $266 million as of September 30 and is substantially higher than at year-end in compares to $62.4 million as of the third quarter of last year. This increase is primarily due to increased working capital requirements associated with the Natural Gas and Pipeline infrastructure services segment due to the seasonal ramp-up of the larger gas transmission projects in the third quarter of 2010. These projects represented a significant portion of the total cost from excess balance. However, since quarter end the predominant amount of balance has been billed on these projects. Various other projects during the period have billing milestones that were not met until after quarter end. We anticipate substantial billings in the fourth quarter on these projects as well. Despite the significant increase in cost in excess to billings, days sales outstanding for the quarter were three days lower than at June 30 '10 or September 30 '09. The calculation of EBIT and EBITDA and adjusted EBITDA, all non-GAAP measures and the definitions of these DSOs can be found in the Investors & Media section of our website at quantaservices.com.

At the end of the quarter we had about $441 million in cash. We had $191 million in letters of credit outstanding under our $475 million credit facility primarily to secure our insurance program, and no outstanding revolving loan is leased which left $284 million of availability under the facility. The combination of our cash balance and availability under our credit facility gives us about $725 million in total liquidity as of September 30, 2010, of which we used about $119 million in October of 2010 for the acquisition of balance.

We received a few questions regarding the acquisition of Valard, so we thought we'd take this opportunity to provide more information. In order to help analysts with their models, the purchase price paid per dollar was in the mid-five multiple on a trailing 12-month EBITDA. Valard is expected to have a negative effect on our fourth quarter EPS due to contributing only two months of operations, which will be more than offset by amortization of backlog and acquisition-related expenses. Valard currently has approximately $100 million in backlog for 2011, and we expect Valard to contribute between $225 million and $250 million of revenues in 2011.

We have not yet completed the property and intangibles valuation work on Valard as of the acquisition date. However, we anticipate that Valard's pre-amortization results will be $0.06 to $0.09 accretive to Quanta's 2011 result. We currently estimate amortization expenses for Valard to be in the $9 million to $11 million range for 2011.

Concerning our outlook for the future, we estimate revenues for the fourth quarter of 2010 to be from $950 million to $1.05 billion, and that include revenues from Valard for a portion of the quarter. Our estimates for 4Q '10 EPS based on revenues are between $950 million and $1.05 billion. It's $0.15 to $0.17 per diluted share on a GAAP basis. This estimate compares to $0.21 in GAAP EPS in 4Q '09.

Our GAAP EPS forecast for 4Q '10 includes an estimate of $5.6 million to non-cash compensation expenses. $7.5 million is related to acquisition expenses and $10.2 million of amortization expense. Excluding these expenses, our non-GAAP adjusted diluted earnings per share for the fourth quarter is expected to be between $0.23 and $0.25. For additional guidance, we're currently projecting our GAAP tax rate to be approximately 45% for 4Q 2010. This rate is higher than normal due to the assumed non-deductibility for tax purposes of the acquisition expenses previously mentioned. We expect our diluted share count to be about 214 million shares for 4Q of 2010, and we expect CapEx for all of 2010 to be approximately $170 million to $180 million. This compares to CapEx for all of '09 of $165 million.

This concludes our formal presentation, and we'll now open the line for Q&A. Luke?

Question-and-Answer Session

Operator

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

Tahira Afzal - KeyBanc Capital Markets Inc.

First question is in regards to your existing electric transmission drawbacks. If you can talk about how Northeast Utilities, CREZ, TrAIL and Sunrise Powerlink are ramping up into the fourth quarter, what is your expectation? And if you can talk about what you think the ramp will be in 2011. And then if you can just also highlight -- my estimate is still a huge chunk, if not half of your Transmission business still comes from small to mid-size projects, if you can talk about what the outlook for that business looks, which has obviously been soft in the past.

John Colson

Well, there's a number of projects that are moving forward in the fourth quarter, just getting started that won't have much positive impact on the fourth quarter but should have an impact, positive impact, on 2011. The Sunrise Project has just now getting started. The National Grid Project is cranking up. I think we're installing footings on that project at this time. Northeast Utilities project is ramping up, but you won't see much activity from here until 2011. National Grid, I think, I've mentioned that the Colorado River Authority Project or CREZ is ongoing and will be for several years, it's up to speed. The TrAIL Project is one that will carry over into 2011. It's in full construction mode now as well. And then you've got a few things that are out there that should start in 2011. The main reliability project, that's three different projects and we might pick up one of those. We have CREZ, I think Jim outlined that there were five utilities that are bidding CREZ that we should've reasonably think we should pick up at least one of those projects. And then there's several projects in Canada. One, Canada Hydro, that's just getting started with Valard and we will be doing in 2011. And then there's BC Hydro project that are coming and some others I think that reasonably should expect to get started in 2011. So if my count's right, we have six large transmission projects in hand with the possibility of doing another two or three for a total of nine big transmission projects for 2011. Then we are talking about some smaller transmission projects. We haven't seen much change in direction there. It's very competitive market as people have moved out of the distribution market and into the small transmission market, trying to earn some revenues there. But one thing we are seeing is some increased spending on the distribution side. We're hearing it from our customers. We're seeing that some of the material suppliers in their conference calls are talking about increased orders from the utilities for distribution materials. And in fact, we're seeing some ramp-up in distribution spending with the request for additional crews. Hopefully, that answers your question.

Operator

Our next question comes from the line of Jamie Cook with Credit Suisse.

Jamie Cook - Crédit Suisse AG

A couple of questions. One, I appreciate the color on the weather issues in the quarter, but is there any way you can quantify what the hit was in Q3 and what you're assuming in Q4? And then my two follow-up questions, it sounds like there's a lot bidding activity on the electric utility transmission side. Is there any way you could quantify sort of the bids you have outstanding today versus last year, sort of like you did on the gas side? I think on the gas side, you said you had like $2 billion in bids outstanding that should materialize I guess over the next two quarters or so. And any color on that as well?

John Colson

I think maybe would help to quantify the two jobs at the end of the quarter that had the weather issues, had about $30 million in cost overruns compared to forecast. On those two jobs, we built like 400 miles of 36 and 42-inch pipeline and just over a four-month period the jobs, of course, obviously have moved very rapidly. So you can make up significant project shortfalls in one week with good weather or have a pretty bad shortfall in a week with bad weather. We also have contract adders and changed orders that are reviewed and submitted related to the quarter, and we also have other spreads working during the same period that obviously could offset the production downfalls on those two, and in fact they did, because the shortfall was not that great. Bottom line is that we'd be able to project what these contracts are going to do. It's very difficult because of the speed which are moving. And normally, one project does better than you expect than one does worse. But these two because of the significant amount of rainfall were more difficult than normal than they get for. Probably I think Jim has said about $2 billion of transmission work that we're looking at this time.

James O'Neil

Yes. $2 billion of work that is either been bid or is going to be bid.

John Colson

And that's electric?

James O'Neil

That's electric.

John Colson

And then there's another $2 billion on the pipeline side as well.

James O'Neil

That's correct.

Jamie Cook - Crédit Suisse AG

How would that have compared just to last year? You know what I mean? I'm trying figure out how much bidding activity's up in those two markets relative to last year. Is it up 30%? Just round numbers.

John Colson

Yes. I think pipeline is about the same as last year's bidding season. I don't think there's going to be a tremendous increase there. There should be some increase. We're expecting revenues to increase next year on the pipeline side, but so far bidding season is not 30% more or anything like that. But on the transmission electric side, I think it's probably 30% or 40% more than we've seen at the same time last year. Maybe as much as 50% [indiscernible] but that's significantly more than we've seen last fourth quarter.

Operator

Our next question comes from the line of Will Gabrielski with Gleacher & Company.

Will Gabrielski - Gleacher & Company, Inc.

You mentioned another win in California on the transmission side. I'm not sure if you can disclose who the customer was there or what the project is, but can you disclose what that was in your third quarter backlog?

John Colson

It was not in third quarter backlog, and the contract was [indiscernible] we were awarded six and 11.

Will Gabrielski - Gleacher & Company, Inc.

The other question, I guess, your revenue for the quarter came in around the midpoint of the range that you have guided for, yet you talked about weather delays and cost overruns on some pipeline projects and delayed start-ups on transmission, which impacted your margins. So I'm just curious, I'm still trying to reconcile those two points because it looks like you had good revenue performance. So how far behind schedule were you? Or how good could this quarter have been, I guess, if I add back to $39 million? And in cost overrun, you talked about it's certainly positive, and how much of that do you think you're recovering in Q4, if any?

John Colson

Well, the one thing we hate to do is to set in this conference call some have to explain the weather downturns or why things that the margins are down and so forth. So we were fairly conservative in our estimates because we are seeing delays in projects, and so we anticipate some delays. However, the weather just got us in this particular one, and it was significant weather. If we would have had some project start as we have been told by our customers they would, that certainly would made up for some of the shortfall. But unfortunately, that's just not the case, but it is certainly work that we have in hand and will be doing some day and hopefully, next year. It's not going to be a robust fourth quarter. We've got winter weather coming on in these projects that are just now beginning to ramp up, but it won't be full swing until later on. But I think I mostly spoke on the project [ph]. It was in backlog at the end of the third quarter.

Operator

Our next question comes from the line of Steve Sanders with Stephens Inc.

Stephen Sanders - Stephens Inc.

First, a question on the gas pipeline side. You talked about the level of bidding activity. Can you talk a little bit about the competition and sort of how the margins steal in that business going forward relative to historical levels? And then the second question, and Jim, I think you gave a piece of the spill [ph], on the electric transmission project that you bid early in the second quarter, where are we on seeing awards there? And then as you look at these CREZ bids, I think you talked about seeing some awards over the next few months, what could cause the delay there?

James O'Neil

Steve, on the question on the job that was bid in the second quarter, that was one of those jobs wants the hedge fee [ph]. And where we just asked about that, and yes, we recently were awarded that, and it will start that work at the beginning of the year. We're beginning to mobilize now. The question on the gas side on the amount of bidding activity that we're seeing and the amount of competition, you're going to have -- this project is very similar to that Fayetteville express line that we had last year. You've got a lot of capacity on the market right now, but bidding season is just starting. This area, the southern part of this Rex [ph] job we just bid is -- there's a lot of -- not the Rex [ph] job but the Excel project. There's a lot of [indiscernible]. So we're seeing the same amount or more activity this year. And the good thing about is sign up capacity of the market, and we've seen plenty of activity. So we're not worried about it, we've got projects out there that we feel will be awarded over the next couple of quarters.

Operator

Our next question comes from the line of Alex Rygiel with FBR Capital Markets.

Alexander Rygiel - FBR Capital Markets & Co.

John, James, your 12-month backlog is down year-over-year. Your total backlog is down year-over-year. Your fourth quarter guidance organically, excluding the acquisitions, suggesting revenues are down 7.5% to possibly up 2% year-over-year. With all that stated, how should we think about revenue growth in 2011. And I know you're not giving us projections at this time, but how should we think about it?

John Colson

I think that the shortfall and backlog is all related to gas. We've mentioned that we've been awarded $50 million worth of telephone work in the last 60 days, and I told you about the transmission projects so forth. That shortfall's really in gas. The gas bidding season, it hasn't started until, actually, right now. So I'm not too concerned about our backlog being down, I think we will have growth in 2011, and hopefully we'll do double-digit growth in 2011. You have any color you want to add to that, James?

James Haddox

No. Just, I mean, you're right, backlog in gas. Well, price pressure was in backlog in gas in last year and in backlog this year. But that's really, the backlog is down in gas and that's due to the bidding season not really cranking up in gas...

John Colson

And burning off its $500 million.

James Haddox

We should see significant increase. That's right, it's burning off $500 million during the quarter. We should see significant increases in backlog over the next quarter or two.

Alexander Rygiel - FBR Capital Markets & Co.

I noticed that Northeast Utilities have lowered its CapEx budget for 2011 through '13 by about 25%, is that reflected in your backlog?

John Colson

That doesn't really affect any of the projects that we're working off. So no, it doesn't affect our backlog.

James O'Neil

Northern Utilities transmission backlog was forecasted out for 2011 through 2015, and they added additional $845 million of additional transmission projects forecasted. So we hear about delays on one of the projects which is supposed to be built out several years from now, one of the newest projects lines, but the transmission backlog is good. And we have the $950 million MOU we have with Northeast Utilities to upgrade their transmission infrastructure through 2015 and may have increased our CapEx budget for transmission over the same period.

Operator

Our next question comes from the line of Jeff Beach [Stifel, Nicolaus & Co.].

Jeffrey Beach - Stifel, Nicolaus & Co., Inc.

There's a number of electric transmission projects in the continental U.S. across the country that I think you've bid on or are bidding on. Have any other projects already been awarded either to you or competitors that you can talk about? And some of these domestic projects, can you expand on your expectations of timing of seeing those awards?

James Haddox

Yes. We've talked about -- we were awarded a part of Tehachapi. Some other pieces of Tehachapi went to competitors. But mainly, reliability project, the bid is here but those projects have not been announced as far as who is going to receive those. The Mona to Oquirrh Project has been awarded to a competitor. Is there anything else, Jim, that I missed?

James O'Neil

I think the LS Power line was awarded, we believe, to L.E. Myers. The Mona to Oquirrh line is still trying to determine who -- they're still reviewing this until the final stages. So I don't think we're going to probably win that project.

Jeffrey Beach - Stifel, Nicolaus & Co., Inc.

And there is a number of projects within CapEx 2020. Any commentary there about whether there's been award activity?

James O'Neil

No. We're providing indicative pricing on that and working with them, but there has been no firm RF fees. I don't know a project yet. We'll probably expect that in the middle of next year.

Operator

Our next question comes from the line of Scott Levine with JPMorgan.

Scott Levine - JP Morgan Chase & Co

On the Gas business, if we normalize to the $30 million in cost overruns, in the quarter, it looks your Gas Pipeline business is going to math right as mid-teens. I'm wondering if the profitability, the underlying business, is kind of consistent with your expectations. And then secondarily, if we think about next year, the bidding season's just getting started. Absent execution with your expectations, what are your expectations for the Gas Business margins in 2011 versus '10? Or is it really too early to say given where we are in the bidding season today?

John Colson

Yes. It's probably too early, but we don't expect to see any major shifts in the market on those projects. There should be more work in 2011 than there is in '10. So margin should be well in execution risk aside. We very seldom to get those kinds of swings and those kinds of projects. Those are just very fast-track projects that had a tremendous amount of rain. That's really unusual.

Scott Levine - JP Morgan Chase & Co

On the renewable side, I think, Jim, you said that you expected double-digit growth in '11 in your prepared comments. I just want to confirm if that's right. And maybe to talk anecdotally about the mix of wind and solar in '11 versus '10, if you could at this point?

James O'Neil

Yes, I mean solar, we believe solar is going to have a huge growth in the United States going from a 1 gigawatt to 2-gigawatt market, and we think we will be able to achieve double-digit growth in solar. We think wind will be flat to slightly up. But overall, we think renewables will generate double-digit growth. Solar will probably be at least half or maybe 2/3 of that revenue mix next year.

Operator

Our next question comes from the line of David Lowish with Generation.

David Martin Lowish

I have a question now that the mid terms are out of the way. What impact do you think that will have on your operating environment? Will it make some of these delays go away? Or do you think it's still going to be a slight headwind? And my second question on the Valard acquisition up in Canada, is that a unionized workforce? And how do you see that playing out?

John Colson

The election, I think, it's a little early to make any projections on what the election will do. I expect to see continued headwinds on these permits and approvals. Hopefully, it will help but I'm not certain that we're going to see much impact from the elections. Valard operates both open shop and union.

Operator

Our next question comes from the line of Sanjay Shrestha with Lazard Capital Markets.

Sanjay Shrestha - Lazard Capital Markets LLC

So on the natural gas cost overrun, if you exclude that, that's like a $0.09 hit to the quarter. Are you guys expecting that to continue in Q4, and that's why your margin guidance for Q4 is what it is as implied by your EPS guidance? Or what's the status of this project? And how much are we completed, how much is left to be done?

James O'Neil

Well, the two projects that we talked about that had weather-related issues are about 90% complete, and yes they will have an impact on fourth quarter because of POC accounting. We carry margins across the entire jobs, so there will be impact in the fourth quarter.

Sanjay Shrestha - Lazard Capital Markets LLC

So when you really think about all the bidding activity, large transmission projects, large natural gas work, and this has been a year where things sort of seem to have move to the right before they really hit the backlog or P&L benefit. So as you take a sit right now and look at all the opportunity that's out there and think about '11 and '12, so how do you kind of think about it as to the backlog trends? Should we see this meaningful sequential uptick in backlog into Q4, therefore a stronger '11? Or is that a gradual uptick in Q4 backlog and it's really now more in second half in '12 kind of a growth rate, which is more robust and meaningful rather than in '11 growth rate? How do you think about that?

James O'Neil

Sanjay, it's difficult. I mean the bidding season for gas is in the fourth quarter and into the first quarter. And taking what the backlog is at fourth quarter, hopefully we'll have some increase in the gas transmission backlog. Seasonal business and its annual, so you're going to have backlog burn off at strong rates after three quarters. And then you're going to build that out into the fourth and first quarters. So I think once we get through the first quarter, we'll have a pretty good bill for backlog for the year. Right now, we're just going to be able to provide you forecast and the amount of bidding activity that we're seeing in the Gas business.

Operator

Our next question comes from the line of Carter Shoop with Deutsche Bank.

Carter Shoop - Deutsche Bank AG

First, a clarification. The $30 million for the Natural Gas business that's caused overruns, can you split that between 3Q and 4Q? Or did you actually say that was all in 3Q?

James Haddox

That's all in 3Q.

Carter Shoop - Deutsche Bank AG

Do you have a sense of how much that would be then in 4Q?

James Haddox

Actually, a piece of it would fall into 3Q because the costs were incurred by the cost of the percentage. In purchase accounting, you would lower the percentage profit on the third and the fourth quarter as a result of that. So some of it would into the third quarter, which is probably what would be maybe 10% to 15%. I mean the jobs were about 70% complete on average at the end of the third quarter.

Jamie Cook - Crédit Suisse AG

So roughly speaking, $20 million in 3Q on an accounting basis, $10 million in 4Q?

James Haddox

That's pretty right.

Carter Shoop - Deutsche Bank AG

And then in regards to the bidding activity on the transmission side, you're talking about that business being up, the bidding activity being up over 30%, 40%. Is that for the entire transition business? Or is that just for these large contracts?

John Colson

I was speaking to those large contracts.

Operator

Our next question comes from the line of Adam Thalhimer with BB&T Capital Markets.

Adam Thalhimer - BB&T Capital Markets

Does it feel like for you guys that we're at the bottom of the cycle?

John Colson

It sure feels better than it has. The second quarter conference call, I think, was we were pretty beat up and feeling pretty bad.

Adam Thalhimer - BB&T Capital Markets

That was apparent, yes.

John Colson

This quarter, I think, we're much more optimistic. We are finally seeing those awards on the Telecom side comp. And I said, we're working on -- we've been awarded a number of projects and we'll be working on in 2011. Because how do I know that? Well, because we're working on starting to work on them this quarter. So it looks like that once you get started, [indiscernible] have to stop and then of course there's the bidding activity. Finally, we're seeing the CREZ projects come out and others as well. And of course gas pipeline looks good too. So it looks like maybe we're going to see some touch on it here on our business over the next few quarters.

Adam Thalhimer - BB&T Capital Markets

And then as a follow-up, you mentioned you had a nice string of year-over-year increases in gross margin, unfortunately, that was broken this quarter. How many quarters do we have to go through before gross margin starts to flatten out and increase again on a year-over-year basis?

John Colson

It's hard to say. The first quarter is always difficult because it's a winter quarter, you know it, and weather has a big impact on productivity. But I would expect that because of these big projects that are ongoing at second quarter, we should be back on track with margins. Maybe the first quarter, but it's hard to say in the first quarter because of the impact of the winter weather. Of course we're not giving guidance next year yet, but to try to answer your question, I think second quarter next year we ought to be back on track.

Operator

Our next question comes from the line of Stuart Bush with RBC Capital Markets.

Stuart Bush - RBC Capital Markets Corporation

I was hoping you could expand a little bit on your feelings about Tehachapi awards. I know you got six and 11 out of the -- expands six and 11 out of the total eight available. Is that indicative that there's more aggressive pricing environment out there? It seemed like you guys were set up well given that you did the first portion at Tehachapi? And then I wanted to follow up also on your thoughts about the oil pipeline business especially the TransCanada Keystone Excel Project and where you stand there and how you think that progresses through next year?

John Colson

Yes. We're happy with the awards with Tehachapi. Of course, we'd like to do it all, but there are other competitors out there. I think that having done the last Tehachapi job probably bodes well for us getting the projects that we did get because they are across the national forest lands, and we're pretty experienced in doing that and have a good reputation of being general on the environment, so forth. So I think our experience did help us, but there are other competitors out, unfortunately, we're just not going to get all of them. Do you want to address the gas question, Jim?

James O'Neil

Yes. There's 16 total spreads on the Excel project. And the first part was the south section that was awarded, and that took up six spreads and that the remaining work could be done as early as the second half of this year and into 2012. So we do think that the federal scrutiny over permitting or bring those pipelines into the U.S. from Canada has delayed that project somewhat. But we're hearing it'll be [indiscernible] good start as early as the second half of this next year, certainly into 2012.

Operator

Our next question comes from the line of John Rogers with D. A. Davidson.

John Rogers - D.A. Davidson & Co.

Jim, you made a comment in your prepared remarks, and I don't think i quite got it. Relative to gas pipeline construction this year saying, you thought it was $900 million. Is that the right number?

James O'Neil

We forecasted a year ago that price probably would do between $700 million and $900 million in revenue for the full year 2011. And we've been updating everyone on the calls, and I think the most recent, last second quarter call, we said they would be close to $900 million. And now we're saying that and forecasting that price order will exceed $900 million in revenues, which is essentially our gas transmission business.

John Rogers - D.A. Davidson & Co.

And then the second question I had, in terms of bidding activity, are you seeing any changes in the terms for the bids as it relates to the risks that are being put on to contractors or being pushed back to owners?

James O'Neil

No. There's been no change over the last two years. There are firm-priced contracts, and the contracts terms are consistent with what they've been in the past several years.

Operator

Our next question comes from the line of Justin Hauke with Robert W. Baird.

Justin Hauke

Just one last question on the guidance reduction, I guess. Just to make sure that I do understand this correctly, would it be fair to say that well over half of the guidance reductions for 4Q was driven by these cost overruns rather than delays? I guess the guidance for the full year is maybe a better way to talk about it.

John Colson

Well, it was actually a combination. I mean there was -- we definitely did take the guidance down related to pipeline, but also the other projects start-ups are occurring later than we had originally forecasted when we were in the second quarter. So there was some effect on pulling the estimates down on electric, particularly transmission, on the renewable side and on the Telecom side business. The majority of it was pipeline.

Justin Hauke

Just kind of a housekeeping question, but on Price Gregory and with your comment that it's going to be above $900 million for year, can you tell us what their contribution has been year-to-date through the third quarter in revenue?

James Haddox

We don't physically disclose those particular operating units for the quarter. I have the numbers, but I don't have them right here in front of me. I think the rate -- to back into that is the gas segment revenues, probably 85% to 90% of that is transmission revenue.

Operator

Our next question comes from the line of Dan Mannes with Avondale Partners.

Daniel Mannes - Avondale Partners, LLC

A quick follow-up on the pipe business, you talked about Keystone Excel and the TransCanada project. Could you talk a little bit more about maybe about how that fits in? First of all, is that included in that $2 billion of bidding that you brought up? And two, given some of the uncertainty on the regulatory side, do you have some risk and sort of waiting for that especially in relation with TransCanada? Or do you just bid what you bid? And if that isn't what you end up with, it's fine? I guess I'm just trying to understand bidding strategy given the size of that project.

James O'Neil

Yes. I mean the part that's been awarded on Xcel is not in the $2 billion and opportunities that we're saying. And we're saying $2 billion and opportunities in addition to the Xcel project to TransCanada.

Daniel Mannes - Avondale Partners, LLC

So the 10 spreads that are open are not included in the $2 billion.

James O'Neil

That's correct. We've got more than $2 billion in opportunities. We've risk weighted that, that it could potentially happen in '12 more likely than '11.

Daniel Mannes - Avondale Partners, LLC

So from a bidding perspective, that's not something you're necessarily expecting to get? Got it.

James O'Neil

No. We expect to bid on it if it comes out, but we're seeing $2 billion of projects that we believe will start in 2011.

James O'Neil

By the way, I have a follow-up number. On Price Gregory's year-to-date revenues through the nine months were about $670 million.

Operator

Our next question comes from the line of Craig Irwin with Wedbush Securities.

Craig Irwin - Wedbush Securities Inc.

Most of my questions have already been asked, but one question I have is really about the history of Price Gregory. I was wondering if they had any significant overruns in their past or if any of their predecessor companies really had a history of overruns given that the public financials actually showed some pretty impressive profitability. And whether or not the big teams that are bidding on the different gas projects coming up are really the same big teams that we're bidding for Price Gregory?

John Colson

Yes. There hasn't been any change in the bidding teams for Price Gregory. And yes, you have some projects through the years that are good and bad, and Price Gregory is doing very well. They had a couple of test projects that -- because we're a public company, we're very exposed. But they're doing very well, they're a great company, good bid team. We expect good things from them going forward. It's just unfortunately, no one can predict the weather as to bear us what we have there. It just -- it really hurt us, but that's the way it goes sometimes.

Craig Irwin - Wedbush Securities Inc.

So then last quarter, you mentioned one project, one solar project, 134-megawatt project that was really being pushed because of panel availability. I was wondering if it's something that you thought would come back in 2011 and might be part of your expectations for substantial growth in the solar market.

James O'Neil

Well, we're looking at several utility scale programs that would start in '11 in addition to that 130-megawatt program. That program is still on the table, and we're still working through issues there. So but there are plenty -- they're going to be several utilities scale opportunities in '11 that we haven't seen in the past.

John Colson

Also, let me finish up a little bit of question on Price Gregory there. If some of these other projects had not been pushed, for instance the solar project or a couple of the transmission projects if they hadn't been pushed to the right, then those shortfalls of Price Gregory would've gone unnoticed because we would've not had any issues now. Going forward and going backwards, sometimes when Price Gregory makes up, there's one transition project goes out or it's pushed to the right. So it's a good thing to have Price Gregory. They have more time, if should not, 99% of the time they're going to perform very well. And so it's a good company, and we're really proud to have them.

Operator

And this concludes this question-and-answer session. Management, please proceed with any closing remarks.

John Colson

Okay, I just like to thank you all again for your participation in our third quarter conference call. We appreciate your questions and your ongoing interest in Quanta Services. Thank you.

Operator

Ladies and gentlemen, this concludes the Quanta Services Third Quarter 2010 Earnings Conference Call. If you'd like to listen to a replay of today's conference, please dial (303) 590-3030 with the access code 4380675. AT&T would like to thank you for your participation. You may now disconnect.

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