Quanta Services 2014 Investor Day Welcome Kip Rupp, CFA Vice President, Investor Relations
Quanta Services 2014 Investor Day Agenda Welcome Jim ONeil Company Overview & Strategy Discussion President & Chief Executive Officer with Q&A Operating Discussions with Q&A Electric Power Fiber Optic Licensing & Other Duke Austin…
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Overview & Strategy Discussion Jim ONeil President & Chief Executive Officer Quanta Services 2014 Investor Day February 25, 2014
Quanta Services 2014 Investor Day Key Takeaways Quanta is a growth company North America is in a multiyear investment cycle for infrastructure Quanta provides infrastructure solutions with unmatched scope and scale Quanta is the…
Company Overview Vision for Success Vision To be the leading infrastructure solutions provider in markets that we serve, creating exceptional value for our customers, employees and shareholders Key Elements of Success Demonstrate…
Company Overview Quanta Services Today Industry leading safety performance Recognized market leader in electric power and oil and gas pipeline construction in North America Entrepreneurial business model and culture Broad,…
Company Overview Focused on Energy Infrastructure Estimated Revenue by Contract Type* 2013 Consolidated Revenue = 6.5 Billion Fixed Price Cost Plus 46% 20% Oil & Gas Electric Power Infrastructure 69% 29% Unit Price 34%…
Company Overview Blue Chip Customer Base No single customer accounted for more than 10% of revenues for 2013 The 10 largest customers accounted for approximately 34% of revenues in 2013 Strong relationships with the…
Company Overview Experienced Management Yrs. Exp. Jim ONeil 34 President & Chief Executive Officer Duke Austin 25 Chief Operating Officer Derrick Jensen 22 Chief Financial Officer Operating unit executives have an average…
2012 Investor Day Benchmarking What We Said vs. What Happened What We Said: March 7, 2012 What Happened: 2012 through 2013 2011 is a transition year and we are excited Revenues and adjusted diluted EPS(a) increased about growth…
Multiyear Infrastructure Investment Cycle All Segments Have Double Digit Growth Opportunities Electric Power See double digit growth opportunities driven by: Need to repair, replace, upgrade and maintain transmission and distribution…
Strategies for Differentiation & Growth Quanta Services 2014 Investor Day Page 14
Strategies for Differentiation & Growth Initiatives to Grow the Business Over the Next Five Years Establish programs to continuously improve safety, leadership development, operational performance standards and results Leverage and…
Strategies for Differentiation & Growth Initiatives to Grow the Business Over the Next Five Years Establish programs to continuously improve safety, leadership development operational performance standards and results OSHA Frequency…
Strategies for Differentiation & Growth Initiatives to Grow the Business Over the Next Five Years Establish programs to continuously improve safety, leadership development operational performance standards and results Have invested in…
Strategies for Differentiation & Growth Initiatives to Grow the Business Over the Next Five Years Leverage and grow leadership position in existing services to expand in current markets and penetrate new ones 2007 EPC Solar Electric…
Strategies for Differentiation & Growth Initiatives to Grow the Business Over the Next Five Years Leverage and grow leadership position in existing services to expand in current markets and penetrate new ones Expansion into Offshore Oil…
Strategies for Differentiation & Growth Initiatives to Grow the Business Over the Next Five Years Create additional platforms to continue profitable growth for the longterm Expansion into Australia We see a 1 billion annual revenue…
Strategies for Differentiation & Growth Initiatives to Grow the Business Over the Next Five Years Create additional platforms to continue profitable growth for the longterm Strategic Initiative Strategic Rationale Acquisitions Company…
Strategies for Differentiation & Growth The Right Strategies Positioned for Profitable Growth Quanta is in the midst of a multiyear growth cycle Quanta is executing on a comprehensive strategy that will allow the company to grow…
Questions & Answers
Appendix Reconciliation of Oil & Gas Infrastructure Services Segment Operating Income, As Adjusted ( in millions) 12/31/2011 Revenues 1,011.2 Operating income as reported (78.3) Add back: Multiemployer pension plan 32.6…
Electric Power Duke Austin Chief Operating Officer Quanta Services 2014 Investor Day February 25, 2014
Electric Power Key Takeaways We continue to see double digit growth opportunities Quantas customers are investing capital in transmission and distribution infrastructure at historic levels Growth opportunities exist throughout the…
Electric Power Unmatched Resources & Expertise Electric Power Services Differentiators Transmission Largest T&D Contractor in North Distribution America Substations Reputation & Track Record Emergency Restoration Safe Project…
Electric Power Transmission & Distribution (T&D) Growth Drivers The North American electric grid requires significant investment due to aging infrastructure, decades of underinvestment and changing needs Top 10 Industry Issues Facing…
Electric Power North American Transmission Spending Has Not Peaked We believe several items have caused concern about continued transmission growth opportunities Item Causing Concern Mitigating Considerations Edison Electric…
Electric Power North American Transmission Spending Has Not Peaked We believe several items have caused concern about continued transmission growth opportunities Item Causing Concern Mitigating Considerations Edison Electric…
Electric Power Various Estimates Call for Transmission Growth Stifel North American Electric Transmission KeyBanc Estimated Large Transmission Spending Forecast Awards Activity ( Billions) ( Billions) 92.1 28.8 26.6 22.1 24.3 3.3…
Electric Power Transmission Investment Dynamics Investment Drivers Restraining Factors Significant portion of the grid is approaching the Uncertain economic conditions end or is beyond its useful life Tepid load growth Favorable…
Electric Power Canadian T&D Investment is Increasing Quanta is the leading transmission and distribution contractor in Canada Transmission spending has accelerated over the past two years and is expected to increase over the next…
Electric Power Impact of Coal to Gas Generation Changes on Transmission A number of Independent System Operators (ISOs) and Regional Transmission Operators (RTOs) have identified and approved billions of transmission projects related…
Electric Power More Transmission Drivers Today Than In The Past There are more drivers supporting transmission spending today than there were several years ago Transmission Drivers: 2010 Transmission Drivers: 2014+ Decades of…
Electric Power Industry Leading Energized Services Is A Differentiator Many customers view energized services as the preferred solution for certain highvoltage transmission upgrades Quanta is the clear industry leader in…
Electric Power Distribution Investment Dynamics Investment Drivers Restraining Factors Significant portion of the grid is approaching Uncertain economic conditions the end or is beyond its useful life Tepid load growth More stringent…
Electric Power Significant Distribution Investment Is Needed The distribution system is more complex with exponentially more miles of wire and equipment versus the transmission system Age Profile of Investor Owned Utilities…
Electric Power The Opportunity is More Than Large Transmission Large transmission gets most of the attention, but there is a lot more going on Strategic relationships account for more than 50% of electric power segment revenues…
Electric Power Aging Utility Workforce Opportunity for Quanta Skilled resources are and will be strained in meeting the grids challenges % of Utility Workers By Age Group, 2011 50% of workers will be eligible for retirement in the…
Electric Power Managing Resources for Growth Quanta has the resources it needs to safely execute on backlog and to continue to pursue, win and safely execute on future projects Labor Tight labor market Recruiting, training and…
Electric Power Summary Well Positioned, Focused on Execution Significant transmission and Strong Backlog Provides Visibility distribution investment is expected in For the years ended Dec. 31, North America for many years 5,964 4,947…
Questions & Answers
Fiber Optic Licensing & Other Derrick Jensen Chief Financial Officer Quanta Services 2014 Investor Day February 25, 2014
Fiber Optic Licensing & Other Key Takeaways Quantas fiber optic licensing business is experiencing increased demand for its network and services and is poised for growth Quanta is making investments to expand its network and also…
Fiber Optic Licensing & Other Segment Overview Fiber Optic Licensing Fiber Optic Licensing & Other Segment For the years ended Dec. 31, Through our Sunesys operating unit, we are a ( in millions) leading provider of fiber…
Fiber Optic Licensing & Other Fiber Optic Licensing Primary Markets Operating Unit Description Sunesys is a leading provider of fiber infrastructure, managed services, wireless NJ/NYC backhaul and high performance connectivity in…
Fiber Optic Licensing & Other Fiber Optic Licensing Favorable Characteristics Challenging Characteristics Recurring revenue with medium to long Capital intensive term contracts Ongoing capex needs to maximize asset High visibility…
Fiber Optic Licensing & Other Fiber Optic Licensing Drivers North America Internet Protocol Traffic MetroOnly Internet Protocol Traffic (Petabytes per Month) (Petabytes per Month) 40,672 23% CAGR 35,225 34,457 28% CAGR 28,732…
Fiber Optic Licensing & Other Growth Opportunity Expanding Lit Services Offering Lit Services Rationale Growth Strategy Greatly expands addressable market and Continue successbased expansion with growth opportunity focus on existing…
Fiber Optic Licensing & Other Prudently Invest for Growth & Value Maximization Expansion of lit services offering positions Quanta to meet customer demands for broader suite of network solutions. Provides opportunity for customer and…
Fiber Optic Licensing & Other Summary Growing demand for fiber optic networks is being driven by increasing consumer, business and wireless Internet Protocol traffic Quantas fiber optic licensing business is experiencing…
Questions & Answers
Oil & Gas Infrastructure Duke Austin Chief Operating Officer Quanta Services 2014 Investor Day February 25, 2014
Oil & Gas Infrastructure Key Takeaways We continue to see double digit growth opportunities Unconventional shales and Canadian oil sands are energy resource game changers for North America and require significant development of…
Oil & Gas Infrastructure Leading Market Position, Comprehensive Solutions Oil & Gas Infrastructure Services Differentiators Mainline Pipeline Largest Pipeline Contractor in Shale Gathering Pipeline North America Compressor, Metering…
Oil & Gas Infrastructure Strong U.S. Oil & Gas Production Trends U.S. Shale Liquids Projections to 2022 U.S. Natural Gas Production by Source 19902040 (trillion cubic feet) (In thousands of barrels per day) Upside Potential…
Oil & Gas Infrastructure Significant U.S. Pipeline & Related Spending Through 2025 U.S. Oil & Gas Direct Capital Investment Average Annual Investment by ( Billions) Transport Mode: 2014 2025 ( Billions) 70 60 Pipelines 54.8 50 40…
Oil & Gas Infrastructure Canadian Oil Production Is Expected to Grow Canadian Oil Sands & Conventional Production (Millions of barrels per day) Source: Canadian Assoc. of Petroleum Producers Growing Canadian oil production…
Oil & Gas Infrastructure Canadian LNG Export Terminal Development Potential Canadian West Coast LNG Export Projects Est. In Project Operator Partners Location Pipeline Provider License mtpa bcf/d Trains Service Kitimat LNG Chevron Apache…
Oil & Gas Infrastructure Approaching Uncharted Territory in North American Pipeline Industry North America is simultaneously experiencing: Active shale development of gathering infrastructure in the U.S. Increasing mainline activity…
Oil & Gas Infrastructure Expansion into Australia Market Overview The Australian market represents one of the most dynamic / leading edge energy markets in the world with its coal seam gas (CSG) and LNG export facilities development…
Oil & Gas Infrastructure Expansion into Offshore Oil and Gas Infrastructure Services Market Overview Continued Growth in Global Oil & Gas Production: By 2035, global oil and natural gas production is expected to increase 14% and 50%,…
Oil & Gas Infrastructure Pipeline Testing, Repair & Replacement Significant Growth Opportunity 95k Miles of Oil Spending to Pipelines (1) Stringent Increase Est. 30% of More 321k Miles of Standards Significantly Pipelines Tougher…
Oil & Gas Infrastructure Comprehensive Services Positions Well for Opportunities Mainline Pipeline Gathering Pipeline & Facilities Largest player in North America with 912 Local presence in the active liquid rich shales spreads of…
Oil & Gas Infrastructure Strong Drivers, Comprehensive Solutions for Growth Unconventional shales and Canadian Strong Backlog Indicates Growth oil sands are energy resource game For the years ended Dec. 31, changers in North America…
Questions & Answers
Appendix Reconciliation of Oil & Gas Infrastructure Services Segment Operating Income, As Adjusted ( in millions) 12/31/2011 Revenues 1,011.2 Operating income as reported (78.3) Add back: Multiemployer pension plan 32.6…
Financial Discussion Derrick Jensen Chief Financial Officer Quanta Services 2014 Investor Day February 25, 2014
Financial Discussion Key Takeaways Quanta is in a robust market environment and its strong financial profile positions it for continued growth Quantas backlog supports its positive outlook for 2014 and beyond Capital deployment…
Recent Financial Performance Revenue, GAAP and Adjusted Diluted EPS Has Been Growing For the Years Ended December 31, Revenue GAAP Diluted EPS Adjusted Diluted EPS ( in millions) 7,600* 1.87** * * 1.75 * 1.95* 6,523 1.54 1.71…
Recent Financial Performance Revenue and Operating Income Margin by Segment For the Years Ended December 31, Electric Power Oil & Gas Infrastructure Fiber Optic Licensing & Other ( in millions) ( in millions) ( in millions) 4,481…
Recent Financial Performance Strong Backlog 12Month Backlog Total Backlog ( in millions) ( in millions) 8,728 5,000 6,987 6,754 3,807 3,265 12/31/11 12/31/12 12/31/13 12/31/11 12/31/12 12/31/13 Electric Power Oil & Gas…
Recent Financial Performance Strong Balance Sheet to Support Growth Strategies ( in millions) 12/31/2011 12/31/2012 12/31/2013 Cash and Equivalents 315 395 489 Other Debt 2 LongTerm Debt Total Debt 2 Total Equity 3,389 3,772 4,241…
Recent Financial Performance Historical Cash Flow Cash Flow from Continuing Free Cash Flow from Operations Continuing Operations* For the Years Ending December 31, For the Years Ending December 31, ( in millions) ( in millions) 447…
Recent Financial Performance Corporate Developments Since 2012 Investor Day Corporate Development Rationale Divested telecom subsidiaries to Dycom To strategically focus on the energy Industries for aftertax net proceeds of…
Recent Financial Performance 2010 2013 Use of Capital & GoForward Priorities Use of Capital Priorities Working Capital (Amounts in millions) Capital Expenditures 221 5 Acquisitions 265 Stock Repurchase 1,035 Investments 719 700…
Summary Financial Strength & Flexibility for Growth Quanta is in a robust market environment and its strong financial profile positions it for continued growth Quantas backlog supports its positive outlook for 2014 and beyond…
Questions & Answers
Appendix Reconciliation of Oil & Gas Infrastructure Services Segment Operating Income, As Adjusted ( in millions) 12/31/2011 Revenues 1,011.2 Operating income as reported (78.3) Add back: Multiemployer pension plan 32.6…
Summary Jim ONeil President & Chief Executive Officer Quanta Services 2014 Investor Day February 25, 2014
Quanta is a Growth Company Strong Backlog Indicative of Growth Opportunities End Market Trends & Opportunities Strong Backlog & Visibility For the years ended Dec. 31, Significant electric T&D infrastructure investment needed for many…
MultiYear Infrastructure Investment Cycle This is the Most Dynamic Time in Our Industrys History Stifel North American Electric Transmission Est. North American Transmission Capital Spend: Spending Forecast 2014 2019 ( Billions) (…
MultiYear Infrastructure Investment Cycle Positive End Market Outlook & Visibility Oil & Gas Fiber Electric Infrastructure Licensing 2010 2011 2012 2013 2014 Quanta Services 2014 Investor Day Page 85
Sophisticated Infrastructure Solutions Unmatched Resources & Expertise Electric Power Services Differentiators Transmission Largest T&D Contractor in North Distribution America Substations Reputation & Track Record Emergency…
Quanta Services 2014 Investor Day A Path for Continued Growth Operational & Safety Excellence Dynamic EndMarket Trends Visible Growth Opportunities Innovative, Industry Leading Solutions Scale & Scope Financial…
Quanta Services 2014 Investor Day Key Takeaways Quanta is a growth company North America is in a multiyear investment cycle for infrastructure Quanta provides infrastructure solutions with unmatched scope and scale Quanta is the…
Questions & Answers
Investor Contact Corporate Office Kip Rupp, CFA 2800 Post Oak Blvd., Suite 2600 Vice President Investor Relations Houston, TX 77056 7133417260 7136297600 investorsquantaservices.com www.quantaservices.com Download the Quanta…
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