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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

FORM 10-Q

ý

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the quarterly period ended March 31, 2011ORo

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period
from                             to


Commission file number: 1-08325



MYR GROUP INC.(Exact name of registrant as specified in its charter)

Delaware(State or other jurisdiction of
incorporation or organization)

36-3158643(I.R.S. Employer Identification No.)Three Continental
Towers                 60008-42101701 Golf Road, Suite 3-1012(Zip Code)Rolling Meadows, IL(Address of principal executive offices)(847) 290-1891(Registrant's telephone number, including area code)




Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act
of 1934 (the "Exchange Act") during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.    Yes ý    No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data
File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such
shorter period that the registrant was required to submit and post such
files).    Yes o    No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a
smaller reporting company. See definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer o

Accelerated filer ý

Non-accelerated filer o (Do not check if a smaller reporting company)

Smaller reporting company o


Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act).    Yes o    No ý

As of April 29, 2011 there were 20,131,139 outstanding shares of the registrant's $0.01 par value common stock.

WEB SITE ACCESS TO COMPANY'S REPORTS

MYR
Group Inc.'s internet Web site address iswww.myrgroup.com. Our annual reports on Form 10-K, quarterly reports on
Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to section 13(a) or 15(d) of the Exchange Act will be
available free of charge through our Web site as soon as reasonably practicable after they are electronically filed with, or furnished to, the Securities and Exchange Commission ("SEC").



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INDEX



PagePart IFinancial InformationItem 1.

Financial StatementsConsolidated Balance Sheets
As of March 31, 2011 (unaudited) and December 31, 2010


1Unaudited Consolidated Statements of Operations
For the Three Months Ended March 31, 2011 and 2010


2Unaudited Consolidated Statements of Cash Flows
For the Three Months Ended March 31, 2011 and 2010


3Notes to Consolidated Financial Statements


4Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operation


13Item 3.

Quantitative and Qualitative Disclosures About Market Risk


24Item 4.

Controls and Procedures


24Part IIOther InformationItem 1.

Legal Proceedings


26Item 1A.

Risk Factors


26Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds


26Item 3.

Defaults Upon Senior Securities


26Item 4.

(Removed and Reserved)


26Item 5.

Other Information


26Item 6.

Exhibits


27


Throughout
this report, references to "MYR Group," the "Company," "we," "us" and "our" refer to MYR Group Inc. and its consolidated subsidiaries, except as otherwise indicated or
as the context otherwise requires.

i

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MYR GROUP INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data)

March 31,
2011

December 31,
2010(unaudited)ASSETSCurrent assets:Cash and cash equivalents

$
44,713

$
62,623Accounts receivable, net of allowances of $924 and $947, respectively


91,856


107,172Costs and estimated earnings in excess of billings on uncompleted contracts


35,410


29,299Deferred income tax assets


10,544


10,544Receivable for insurance claims in excess of deductibles


8,385


8,422Refundable income taxes





2,144Other current assets


3,012


3,719Total current assets


193,920


223,923Property and equipment, net of accumulated depreciation of $51,044 and $46,878, respectively


103,064


96,591Goodwill


46,599


46,599Intangible assets, net of accumulated amortization of $1,972 and $1,888, respectively


11,120


11,204Other assets


1,397


1,831Total assets

$
356,100

$
380,148LIABILITIES AND STOCKHOLDERS' EQUITYCurrent liabilities:Accounts payable

$
33,950

$
41,309Billings in excess of costs and estimated earnings on uncompleted contracts


42,825


45,505Accrued self insurance


34,133


34,044Accrued income taxes


258


Other current liabilities


18,272


17,974Total current liabilities


129,438


138,832Long-term debt, net of current maturities


10,000


30,000Deferred income tax liabilities


17,971


17,971Other liabilities


686


636Total liabilities


158,095


187,439Commitments and contingenciesStockholders' equity:Preferred stock$0.01 par value per share; 4,000,000 authorized shares; none issued and outstanding at March 31, 2011 and December 31,
2010





Common stock$0.01 par value per share; 100,000,000 authorized shares; 20,130,389 and 20,007,081 shares issued and 20,127,079 and 20,007,081 shares
outstanding at March 31, 2011 and December 31, 2010, respectively


201


200Additional paid-in capital


146,024


145,149Retained earnings


51,860


47,360Treasury stock3,310 and 0 shares, respectively


(80
)

Total stockholders' equity


198,005


192,709Total liabilities and stockholders' equity

$
356,100

$
380,148


The accompanying notes are an integral part of these consolidated financial statements.

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MYR GROUP INC.        UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS        (In thousands, except per share data)

Three months ended March 31,2011

2010Contract revenues

$
150,294

$
148,889Contract costs


128,705


133,720Gross profit


21,589


15,169Selling, general and administrative expenses


13,953


10,564Amortization of intangible assets


84


84Gain on sale of property and equipment


(71
)

(190
)Income from operations


7,623


4,711Other income (expense)Interest income


29


11Interest expense


(210
)

(203
)Other, net


(22
)

(30
)Income before provision for income taxes


7,420


4,489Income tax expense


2,920


1,709Net income

$
4,500

$
2,780Income per common share:Basic

$
0.23

$
0.14Diluted

$
0.21

$
0.13Weighted average number of common shares and potential common shares outstanding:Basic


19,983


19,821Diluted


20,934


20,733


The
accompanying notes are an integral part of these consolidated financial statements.

2

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MYR GROUP INC.        UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS        (In thousands)

Three months ended March 31,2011

2010Cash flows from operating activities:Net income

$
4,500

$
2,780Adjustments to reconcile net income to net cash flows provided by operating activitiesDepreciation and amortization of property and equipment


4,247


3,940Amortization of intangible assets


84


84Stock-based compensation expense


348


424Excess tax benefit from stock-based awards


(169
)

(16
)Gain on sale of property and equipment


(71
)

(190
)Other non-cash items


44


21Changes in operating assets and liabilitiesAccounts receivable, net


15,316


14,301Costs and estimated earnings in excess of billings on uncompleted contracts


(6,111
)

(1,153
)Receivable for insurance claims in excess of deductibles


37


(370
)Other assets


3,241


541Accounts payable


(5,856
)

(9,544
)Billings in excess of costs and estimated earnings on uncompleted contracts


(2,680
)

(6,989
)Accrued self insurance


89


295Other liabilities


775


(3,491
)Net cash flows provided by operating activities


13,794


633Cash flows from investing activities:Proceeds from sale of property and equipment


71


190Purchases of property and equipment


(12,223
)

(1,382
)Net cash flows used in investing activities


(12,152
)

(1,192
)Cash flows from financing activities:Payments on term loan


(20,000
)

Payments of capital lease obligations





(16
)Employee stock option transactions


359


103Excess tax benefit from stock-based awards


169


16Purchase of Treasury stock


(80
)

Net cash flows provided by (used in) financing activities


(19,552
)

103Net decrease in cash and cash equivalents


(17,910
)

(456
)Cash and cash equivalents:Beginning of period


62,623


37,576End of period

$
44,713

$
37,120


The
accompanying notes are an integral part of these consolidated financial statements.

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MYR GROUP INC.        NOTES TO CONSOLIDATED FINANCIAL STATEMENTS        (Amounts in thousands, except share and per share data)

1. Organization and Business

MYR Group Inc. (the "Company") consists of the following wholly owned subsidiaries: The L. E. Myers Co., a Delaware corporation; Hawkeye Construction, Inc., an
Oregon corporation; Harlan Electric Company, a Michigan corporation; Sturgeon Electric Company, Inc., a Michigan corporation; MYR Transmission Services, Inc., a Delaware corporation;
ComTel Technology Inc., a Colorado corporation; MYRpower, Inc., a Delaware corporation and Great Southwestern Construction, Inc., a Colorado corporation.

The
Company performs construction services in two business segments: Transmission and Distribution ("T&D"), and Commercial and Industrial ("C&I"). T&D customers include electric
utilities, cooperatives and municipalities nationwide. The Company provides a broad range of services, which includes design, engineering, procurement, construction, upgrade, maintenance and repair
services with a particular focus on construction, maintenance and repair throughout the continental United States. The Company also provides C&I electrical contracting services to facility owners and
general contractors in the western United States.

2. Basis of Presentation

Interim Consolidated Financial Information

The accompanying consolidated financial statements of the Company have been prepared in accordance with accounting principles generally
accepted in the United States of America ("U.S. GAAP") for interim financial reporting and pursuant to the rules and regulations of the SEC. Certain information and note disclosures typically
included in financial statements prepared in accordance with U.S. GAAP have been omitted in accordance with these rules and regulations. In the opinion of management, the accompanying
consolidated financial statements contain all adjustments (consisting of only normal recurring adjustments) necessary to state fairly the financial condition of the Company as of March 31,
2011, and the results of operations, and cash flows for the three months ended March 31, 2011 and 2010. The results of operations for the three months ended March 31, 2011 are not
necessarily indicative of the results for the full year or the results for any future periods. The consolidated balance sheet as of December 31, 2010 has been derived from the audited financial
statements as of that date. These financial statements should be read in conjunction with the audited financial statements and related notes for the year ended December 31, 2010, included in
the Company's annual report on Form 10-K.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the period reported.
The most significant estimates are related to the accounts receivable reserve, estimates to complete on contracts, insurance reserves, the valuation
allowance on deferred taxes, recoverability of goodwill and intangibles, and estimates surrounding stock-based compensation. Actual results could differ from these estimates.

4

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MYR GROUP INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Amounts in thousands, except share and per share data)

2. Basis of Presentation (Continued)

Recently Issued Accounting Pronouncements

Typically, changes to U.S. GAAP are established by the Financial Accounting Standards Board ("FASB") in the form of accounting
standards updates ("ASU's") to the FASB's Accounting Standards Codification ("ASC"). The Company considers the applicability and impact of all ASU's. The Company, based on its assessment, determined
that any recent ASU's not listed below are either not applicable to the Company or have minimal impact on our consolidated financial statements.

In
January 2010, the FASB issued ASU No. 2010-06 to ASC 820 which required new disclosures and clarified existing disclosures about fair value measurement.
Specifically, this update amends ASC 820 to now require: (a) a reporting entity to disclose separately the amounts of significant transfers in and out of Level 1 and
Level 2 fair value measurements and to describe the reasons for the transfers; and (b) in the reconciliation for fair value measurements using significant unobservable inputs, a
reporting entity should present separately information about purchases, sales, issuances, and settlements. In addition, this update clarifies the requirements of the following existing disclosures:
(a) for purposes of reporting fair value measurement for each class of assets and liabilities, a reporting entity needs to use judgment in determining the appropriate classes of assets and
liabilities; and (b) a reporting entity should provide disclosures about the valuation techniques and inputs used to measure fair value for both recurring and nonrecurring fair value
measurements. This update became effective for interim and annual reporting periods beginning after December 15, 2009, except for the disclosures about purchases, sales, issuances, and
settlements in the roll forward of activity in Level 3 fair value measurements, which became effective for interim and reporting periods beginning after December 15, 2010. The adoption
of this standard modification did not have an impact on the Company's consolidated financial condition, results of operations or cash flows, and there were no material impacts to the Company's
financial statement disclosures.

3. Fair Value Measurements

The accounting guidance provided by ASC 820 defines fair value, establishes methods used to measure fair value, and expands disclosure requirements about fair value measurements. The
fair value accounting guidance establishes a three-tier hierarchy of fair value measurement, which prioritizes the inputs used in measuring fair value based upon their degree of
availability in external active markets. These tiers include: Level 1 (the highest priority), defined as observable inputs, such as quoted prices in active markets; Level 2, defined as
inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3 (the lowest priority), defined as unobservable inputs in which little or no
market data exists, therefore requiring an entity to develop its own assumptions.

As
of March 31, 2011, the carrying value of cash and cash equivalents, accounts receivable and payable, accrued liabilities, and certain other financial assets and liabilities
approximated fair value due to the short maturities of these instruments.

As
of March 31, 2011, the Company held cash equivalents that were subject to the disclosure requirements of the fair value accounting guidance. These items included money market
funds held in deposit at a national bank and short-term certificates of deposit held on account under the Certificate of Deposit Account Registry Services (CDARS) program. The combined net
carrying value of the Company's cash equivalents was $25,076, which was equal to the fair value at March 31, 2011 based

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MYR GROUP INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Amounts in thousands, except share and per share data)

3. Fair Value Measurements (Continued)

upon
Level 1 inputs. The reduction from the December 31, 2010 net carrying value of $45,342 was primarily due to $20,000 in prepayments made on the Company's term loan.

The
carrying amount reported in the consolidated balance sheet as of March 31, 2011 for long-term debt was $10,000. The reduction from the December 31, 2010
carrying amount
of $30,000 was due to prepayments made on the Company's term loan. Using a discounted cash flow technique that incorporates a market interest rate adjusted for risk profile based upon Level 3
inputs, the Company estimated the fair value of its debt to be $9,895 at March 31, 2011.

4. Supplemental Cash Flows

Supplemental disclosures of cash flow information are as follows:

Three months ended March 31,2011

2010Cash paid during the period for:Income taxes

$
288

$
1,365Interest expense


168


183Noncash investing activities:Acquisition of property and equipment for which payment was pending


1,846


211


As
of March 31, 2011, the Company had recorded additional property and equipment of approximately $1,846 for which payment was pending. As of December 31, 2010, the Company
had purchased $3,349 of property and equipment for which payment was pending, all of which was paid during the three months ended March 31, 2011.

5. Contracts in Process

The net asset (liability) position for contracts in process consisted of the following:

March 31,
2011

December 31,
2010Costs incurred on uncompleted contracts

$
869,146

$
810,463Estimated earnings


101,322


92,102970,468


902,565Less: Billings to date


977,883


918,771$
(7,415
)
$
(16,206
)


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MYR GROUP INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Amounts in thousands, except share and per share data)

5. Contracts in Process (Continued)

The
net asset (liability) position for contracts in process included in the accompanying consolidated balance sheets was as follows:

March 31,
2011

December 31,
2010Costs and estimated earnings in excess of billings on uncompleted contracts

$
35,410

$
29,299Billings in excess of costs and estimated earnings on uncompleted contracts


(42,825
)

(45,505
)$
(7,415
)
$
(16,206
)


6. Income Taxes

The difference between the U.S. federal statutory tax rate of 35% and the Company's effective tax rates for the three months ended March 31, 2011 and 2010 was principally due to
state income taxes.

The
Company had approximately $672 and $612 of total unrecognized tax benefits as of March 31, 2011 and December 31, 2010, respectively, which was included in other
liabilities in the accompanying consolidated balance sheets. For the three months ended March 31, 2011, the Company recorded an additional $60 in unrecognized tax benefits related to the net
activity of current and prior year positions.

The
Company's policy is to recognize interest and penalties related to income tax liabilities as a component of income tax expense in the consolidated statements of operations. The
amount of interest and penalties charged to income tax expense as a result of the unrecognized tax benefits was an expense of $34 and a benefit of $2, for the three months ended March 31, 2011
and 2010, respectively.

The
Company is subject to taxation in various jurisdictions. The Company continues to remain subject to examination by U.S. federal authorities for certain open tax years (2009 and
2010), and by various state authorities for the years 2006 through 2010.

7. Commitments and Contingencies

Letters of Credit

At both March 31, 2011 and December 31, 2010, the Company had one outstanding irrevocable standby letter of credit
totaling $15,000 related to the Company's payment obligation under its insurance programs.

Leases

The Company leases real estate and construction and office equipment under operating leases with terms ranging from one to five years.
As of March 31, 2011, future
minimum lease payments for these operating leases were as follows: $4,834 for the remainder of 2011, $4,232 for 2012, $1,797 for 2013, $548 for 2014, and $106 for 2015.

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MYR GROUP INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Amounts in thousands, except share and per share data)

7. Commitments and Contingencies (Continued)

The
Company has guaranteed the residual value of the underlying assets under certain equipment operating leases at the date of termination of such leases. The Company has agreed to pay
any differences between this residual value and the fair market value of each underlying asset as of the lease termination date. As of March 31, 2011, the maximum guaranteed residual value was
approximately $552. The Company does not believe that significant payments will be made as a result of the difference between the fair market value of the leased equipment and the guaranteed residual
value. However, there can be no assurance that future payments will not be required.

Purchase Commitments for Construction Equipment

As of March 31, 2011, the Company has approximately $9,450 in outstanding purchase orders for certain construction equipment
with cash outlay requirements scheduled to occur in the second quarter.

Employment Agreements

As of December 31, 2009, the Company had recorded a contingent severance payment liability of approximately $1,628 related to
the employment agreements it entered into with six executive officers in December 2007. The liability represented the amount the named executive officers would have been eligible to receive under the
terms of the employment agreements if they were to voluntarily terminate employment without "good reason" (as defined in the employment agreements.) In March 2010, the Company amended and restated the
employment agreements, and, among other things, removed the provision for severance pay that would have been payable upon a voluntary termination without good reason. The revised severance pay
provisions in the employment agreements are all under the employer's control. As a result, the Company eliminated the $1,628 liability related to this provision. The benefit of reversing this
liability was included as a reduction to selling, general and administrative expenses in the accompanying consolidated statement of operations for the three months ended March 31, 2010.

Surety Bonds

In certain circumstances, the Company is required to provide performance bonds in connection with its future performance on contractual
commitments. The Company has indemnified its sureties for any expenses paid out under these performance bonds. As of March 31, 2011, the total amount of outstanding performance bonds was
approximately $818,500, and the estimated cost to complete these bonded projects was approximately $408,751.

Collective bargaining agreements

Many of the Company's subsidiaries' field labor employees are covered by collective bargaining agreements. The agreements require the
subsidiaries to pay specified wages, provide certain benefits and contribute certain amounts to multi-employer pension plans. If a subsidiary withdraws from one or more multi-employer pension plans or
if the plans were to otherwise become underfunded, the subsidiary could be assessed liabilities for additional contributions related to the underfunding of these plans. Although the Company has been
informed that several of the multi-employer pension plans to which our subsidiaries contribute have been labeled with a "critical" status, the Company is not aware of any potential significant
liabilities related to this issue.

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MYR GROUP INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Amounts in thousands, except share and per share data)

7. Commitments and Contingencies (Continued)

Litigation and Other Legal Matters

The Company is from time to time party to various lawsuits, claims, and other legal proceedings that arise in the ordinary course of
business. These actions typically seek, among other things, compensation for alleged personal injury, breach of contract and/or property damages, punitive damages, civil penalties or other losses, or
injunctive or declaratory relief. With respect to all such lawsuits, claims and proceedings, the Company records reserves when it is probable that a liability has been incurred and the amount of loss
can be reasonably estimated. The Company does not believe that any of these proceedings, separately or in the aggregate, will have a material adverse effect on the Company's financial position,
results of operations or cash flows.

The
Company is routinely subject to other civil claims, litigation and arbitration, and regulatory investigations arising in the ordinary course of our present business as well as in
respect of our divested businesses. Some of these include claims related to our current services and operations, and asbestos-related claims concerning historic operations of a predecessor affiliate.
The Company believes that it has strong defenses to these claims as well as adequate insurance coverage in the event any asbestos-related claim is not resolved in our favor. These claims have not had
a material impact on the Company to date and the Company believes that the likelihood that a future material adverse outcome will result from these claims is remote. However, if facts and
circumstances change in the future, the Company cannot be certain that an adverse outcome of one or more of these claims would not have a material adverse effect on the Company's financial condition,
results of operations, or cash flows.

8. Stock-Based Compensation

The Company maintains two award plans under which stock-based compensation has been granted, the 2006 Stock Option Plan (the "2006 Plan") and the 2007 Long-Term Incentive
Plan (the "LTIP"). Upon the adoption of the LTIP, which was approved by the Company's shareholders, awards were no longer granted under the 2006 Plan. The LTIP provides for grants of
(a) incentive stock options qualified as such under U.S. federal income tax laws, (b) stock options that do not qualify as incentive stock options, (c) stock appreciation rights,
(d) restricted stock awards, (e) performance awards, (f) phantom stock, (g) stock bonuses, (h) dividend equivalents, or (i) any combination of such awards.

Stock Options

On March 24, 2011, the Company granted options to purchase 90,080 shares of the Company's common stock to various employees,
including the Company's executive officers. The grant date fair value of these options, using the Black-Scholes-Merton option-pricing model, was approximately $11.88 per share. These options will vest
ratably over a three-year period. The Company issued 65,873 new shares to option holders upon the
exercise of vested stock options in the three months ended March 31, 2011. Total intrinsic value of options exercised was $1,060 for the three months ended March 31, 2011.

Restricted Stock

On March 24, 2011, the Company granted restricted stock awards covering 41,230 shares of common stock to various employees,
including the Company's executive officers, and 17,367 shares of

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MYR GROUP INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Amounts in thousands, except share and per share data)

8. Stock-Based Compensation (Continued)

common
stock to eligible members of the Board of Directors. The grant date fair value of the restricted stock was $24.18, which was equal to the closing market price of the Company's common stock on
the date of grant. Also on March 24, 2011, a total of 11,128 shares of restricted stock from a prior grant became vested and taxable to the individual holder of the restricted stock awards. The
Company repurchased 3,310 shares at $24.18 per share for a total cost of $80. These shares were repurchased to settle shares withheld for taxes due by holders of the restricted stock awards. The
Company's repurchases of shares of common stock are recorded at cost and result in a reduction of stockholders' equity.

Performance Awards

On March 24, 2011, the Company granted performance stock awards covering 34,179 shares of common stock, at target level, to
certain key management personnel, including the Company's executive officers. The grant date fair value of the performance stock awards was $24.18, which was equal to the closing market price of the
Company's common stock on the date of grant. The performance stock awards will cliff vest on the third anniversary of the performance period, subject to the achievement of certain specified levels of
the Company's average return-on-equity ("ROE") over the performance period.

Stock-Compensation Expense

The Company recognizes stock-based compensation expense on a straight-line basis over the vesting period. Stock-based
compensation cost is adjusted for
changes in estimated and actual forfeitures and also for changes in estimated performance shares that will be earned. The Company recognized stock-based compensation expense of approximately $348 and
$424 for the three months ended March 31, 2011 and 2010, respectively, which was included in selling, general and administrative expenses in the accompanying consolidated statements of
operations. Stock-based compensation expense for the three months ended March 31, 2011 included a net reduction in expense of $162 for a change in the estimated forfeiture rates for the various
awards and a change in the estimated number of performance shares that are expected to be earned. As of March 31, 2011, there was approximately $5,246 of total unrecognized stock-based
compensation cost related to awards granted under the LTIP, net of estimated forfeitures. Total unrecognized compensation cost will be adjusted for any future changes in estimated and actual
forfeitures.

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MYR GROUP INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Amounts in thousands, except share and per share data)

9. Segment Information

The information in the following table was derived from internal financial reports used for corporate management purposes:

Three months ended
March 31,2011

2010Contract revenues:T&D

$
118,025

$
102,834C&I


32,269


46,055$
150,294

$
148,889Operating income (loss):T&D

$
13,543

$
6,123C&I


852


2,214General Corporate


(6,772
)

(3,626
)$
7,623

$
4,711


10. Earnings Per Share

Basic earnings per share is calculated by dividing net income by the weighted average number of shares outstanding for the reporting period. Diluted earnings per share is computed
similarly, except that it reflects the potential dilutive impact that would occur if dilutive securities were exercised into common shares.

The
Company has issued restricted stock awards which vest over a service period that ranges from three to five years. These awards contain non-forfeitable rights to dividends
or dividend equivalents. Awards containing such rights that are unvested are considered to be participating securities and would be included in the computation of earnings per share pursuant to the
two-class method. Under the two-class method, earnings are allocated between the Company's common stockholders and participating securities. The application of the
two-class method during the three months ended March 31, 2011 and 2010 did not have a material impact on the earnings per share calculation.

The
weighted average number of common shares used to compute basic and diluted net income per share was as follows:

Three months ended
March 31,2011

2010Weighted average basic common shares outstanding


19,983,115


19,821,127Potential common shares arising from stock options and restricted stock


951,180


912,160Weighted average diluted common shares outstanding


20,934,295


20,733,287


For
the three months ended March 31, 2011 and 2010, potential common shares related to the assumed exercise of 90,080 and 106,912 stock options, respectively, were excluded from
the diluted

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MYR GROUP INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Amounts in thousands, except share and per share data)

10. Earnings Per Share (Continued)

earnings
per share calculation because the exercise price of those options was greater than the average market price of the common shares (anti-dilutive). For the three months ended
March 31, 2011 and 2010, potential common shares related to the unvested portion of performance awards of 59,755 and 40,741, respectively, were excluded from the denominator of the diluted
earnings per share calculation as either the underlying performance obligation was not met as of the end of those periods or the inclusion would have been anti-dilutive for the applicable
three-month period. For the three months ended March 31, 2010, 40,741 potential common shares related to the unvested portion of restricted stock were excluded from the denominator of the
diluted earnings per share calculation as the inclusion would have been anti-dilutive for the three-month period.

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ITEM 2.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION

The following discussion should be read in conjunction with the accompanying consolidated financial statements
as of March 31, 2011 and December 31, 2010, and for the three months ended March 31, 2011 and 2010, and with our annual report on Form 10-K for the year ended
December 31, 2010 (the "2010 Annual Report"). In addition to historical information, this discussion contains forward-looking statements that involve risks, uncertainties and assumptions that
could cause actual results to differ materially from management's expectations. Factors that could cause such differences are discussed herein under the captions labeled "Cautionary Statement
Concerning Forward-Looking Statements and Information" and "Risk Factors," as well as in the 2010 Annual Report. We assume no obligation to update any of these forward-looking
statements.

Overview

We are a leading specialty contractor serving the electrical infrastructure market in the United States. We are one of the largest
national contractors servicing the T&D sector of the United States electric utility industry. Our T&D customers include electric utilities, cooperatives and municipalities. We provide a broad range of
services which includes design, engineering, procurement, construction, upgrade, maintenance and repair services with a particular focus on construction, maintenance and repair throughout the
continental United States. We also provide C&I electrical contracting services to facility owners and general contractors in the western United States.

Our
results have been driven primarily by successful bids for, and execution of, large projects, our ability to capitalize on increased infrastructure spending in our markets and the
breadth of our customer base. We believe our centralized fleet and skilled workforce provide us with a competitive advantage as planned increased spending in the transmission infrastructure market
could result in an increase in demand for a limited supply of specialized equipment and labor. We expect to grow our business organically, as well as through selectively considered strategic
acquisitions that may improve our competitive position within our existing markets, expand our geographic footprint or strengthen our fleet.

Our
business is directly impacted by the level of spending on transmission and distribution infrastructure throughout the United States and the level of commercial and industrial
activity. We believe that the recent economic conditions in the United States have caused some of our customers in certain areas of our business to reduce or delay their capital spending programs,
and, as a result, competition has increased for the projects available for us to bid. The timing of the work on large project awards is subject to regulatory approvals, permitting,
right-of-way acquisitions, financing, engineering, material procurement and other factors.

We
had consolidated revenues, for the three months ended March 31, 2011, of $150.3 million, of which 78.5% was attributable to our T&D customers and 21.5% was attributable
to our C&I customers. For the three months ended March 31, 2011 our net income and EBITDA(1) were $4.5 million and $11.9 million, respectively, compared to $2.8 million and
$8.7 million, respectively, for the three months ended March 31, 2010.

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Three months ended
March 31,(dollars in thousands)

2011

2010Reconciliation of Net Income to EBITDA:Net Income

$
4,500

$
2,780Add:Interest expense (income), net


181


192Provision for income taxes


2,920


1,709Depreciation & amortization


4,331


4,024EBITDA

$
11,932

$
8,705




Three months ended
March 31,(dollars in thousands)

2011

2010Reconciliation of EBITDA to Net Cash FlowsProvided By Operating Activities:EBITDA

$
11,932

$
8,705Add/(subtract):Interest income (expense), net


(181
)

(192
)Provision for income taxes


(2,920
)

(1,709
)Depreciation & amortization


(4,331
)

(4,024
)Adjustments to reconcile net income to net cash flows provided by operating activities


4,483


4,263Changes in operating assets and liabilities


4,811


(6,410
)Net cash flows provided by operating activities

$
13,794

$
633


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Backlog

We refer to our estimated revenue on uncompleted contracts, including the amount of revenue on contracts for which work has not begun,
less the revenue we have recognized under such contracts, as "backlog." We calculate backlog differently for different types of contracts. For our fixed-price contracts, we include the full remaining
portion of the contract in our calculation of
backlog. A client's intention to award the Company work is not counted as backlog unless there is an actual award to perform a specific scope of work. For our unit-price,
time-and-equipment, time-and-materials and cost-plus contracts, our projected revenue for a three-month period is included in the
calculation of backlog, regardless of the duration of the contract, which typically exceeds such three-month period. These types of contracts are generally awarded as part of master service agreements
("MSAs") that typically have a one- to three-year duration from execution. Given the duration of our contracts and MSAs and our method of calculating backlog, our backlog at
any point in time may not accurately represent the revenue that we expect to realize during any period and our backlog as of the end of a fiscal year may not be indicative of the revenue we expect to
generate in the following fiscal year and should not be viewed or relied upon as a stand-alone indicator.

Certain
projects that we undertake are not completed in one accounting period. Revenue on construction contracts is recorded based upon the
percentage-of-completion accounting method determined by the ratio of costs incurred to date on the contracts (excluding uninstalled direct materials) to management's estimates
of total contract costs. Projected losses are provided for in their entirety when identified. There can be no assurance as to the accuracy of our customers' requirements or of our estimates of
existing and future needs under MSAs, or of the values of our cost or time-dependent contracts and, therefore, our current backlog may not be realized as part of our future revenues.

Subject
to the foregoing discussions, the following table summarizes the amount of our backlog that we believe to be firm as of the dates shown and the amount of our current backlog that
we reasonably estimate will not be recognized within the next twelve months (dollars in thousands):

Backlog at March 31, 2011Total

Amount estimated to
not be recognized
within 12 months
of March 31, 2011

Total Backlog at
March 31, 2010T&D

$
523,737

$
233,476

$
142,900C&I

$
80,196

$
17,128

$
56,600$
603,933

$
250,604

$
199,500


Changes
in backlog from period to period are primarily the result of fluctuations in the timing and revenue recognition of contracts. The increase in backlog from the first quarter of
2010 was primarily related to several large contracts that were awarded within our T&D segment late in 2010 and in the first quarter of 2011.

Project Bonding Requirements

Approximately 24.1% and 30.5% of our business by revenue, for the three-month periods ended March 31, 2011 and 2010,
respectively, required surety bonds or other means of financial assurance to secure contractual performance. These bonds are typically issued at the face value of the contract awarded. If we fail to
perform or pay our subcontractors or vendors, the customer may demand that the surety provide services or make payments under the bond. In such a case, we would likely be required to reimburse the
surety for any expenses or outlays it incurs. To date, we have not been required to make any reimbursements to our surety for claims against the surety bonds. As of

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March 31,
2011, we had approximately $818.5 million in original face amount of surety bonds outstanding. Our estimated remaining cost to complete these bonded projects was approximately
$408.8 million as of March 31, 2011. As of March 31, 2011, the total amount of bonded backlog was approximately $454.9 million, which represented approximately 75.3% of our
backlog.

Consolidated Results of Operations

The following table sets forth selected consolidated statements of operations data and such data as a percentage of revenues for the
period indicated:

Three months ended March 31,2011

2010(dollars in thousands)

Amount

Percent

Amount

PercentContract revenues

$
150,294


100.0
%
$
148,889


100.0
%Contract costs


128,705


85.6


133,720


89.8Gross profit


21,589


14.4


15,169


10.2Selling, general and administrative expenses


13,953


9.3


10,564


7.1Amortization of intangible assets


84


0.1


84


0.1Gain on sale of property and equipment


(71
)

(0.1
)

(190
)

(0.2
)Income from operations


7,623


5.1


4,711


3.2Other income (expense)Interest income


29





11


Interest expense


(210
)

(0.2
)

(203
)

(0.2
)Other, net


(22
)




(30
)

Income before provision for income taxes


7,420


4.9


4,489


3.0Income tax expense


2,920


1.9


1,709


1.1Net income

$
4,500


3.0
%
$
2,780


1.9
%


Three Months Ended March 31, 2011 Compared to Three Months Ended March 31, 2010

Revenues.Revenues increased $1.4 million, or 0.9%, to $150.3 million for the three months ended March 31, 2011 from
$148.9 million for the three months ended March 31, 2010. The majority of the increase in revenues was the result of an increase in revenues from several medium-sized T&D projects
(between $3.0 million and $10.0 million in contract value), which was substantially offset by a decrease in revenues from a few large C&I projects (greater than $10.0 million in
contract value).

Gross profit.Gross profit increased $6.4 million, or 42.3%, to $21.6 million for the three months ended March 31, 2011
from
$15.2 million for the three months ended March 31, 2010. As a percentage of overall revenues, gross margin increased to 14.4% for the three months ended March 31, 2011 from 10.2%
for the three months ended March 31, 2010. The increase in gross profit as a percentage of revenues was mainly attributable to an overall increase in contract margins on a few large
transmission projects (greater than $10.0 million in contract value) of approximately $5.8 million as a result of increased productivity levels, cost efficiencies, added work and
effective contract management. These large projects, which generated above-normal margins in the current period, will be substantially completed in the second quarter. Gross profit also increased by
approximately $1.2 million on T&D projects with contract values less than $10 million, which was mostly offset by a decrease in gross profit on C&I projects with contract values less
than $10 million.

Selling, general and administrative expenses.Selling, general and administrative expenses increased approximately $3.4 million,
or 32.1%, to
$14.0 million for the three months ended March 31, 2011 from $10.6 million for the three months ended March 31, 2010. The increase was primarily due to an overall

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increase
in profit sharing and other employee-related compensation and benefit costs in the first quarter of 2011 coupled with the first quarter 2010 one-time elimination of a
$1.6 million severance liability as a result of amending the employment agreements of our six executive officers. As a percentage of revenues, these expenses increased to 9.3% for the three
months ended March 31, 2011 from 7.1% for the three months ended March 31, 2010.

Gain on sale of property and equipment.Gains from the sale of property and equipment decreased $0.1 million to $0.1 million
for the
three months ended March 31, 2011 from $0.2 million for the three months ended March 31, 2010. Gains from the sale of property and equipment are the result of routine sales of
property and equipment that are no longer useful or valuable to our ongoing operations.

Interest income.Interest income increased slightly for the three months ended March 31, 2011 as compared to the three months ended
March 31, 2010, primarily due to an increase in the amount of our average daily cash balance.

Interest expense.Interest expense remained consistent between the three-month periods ended March 31, 2011 and 2010. Increased
interest
expense from higher interest rates and an increase in the amount estimated to be payable to the IRS for interest computed under the IRS's look-back method for completed
long-term contracts mostly offset the interest expense decrease realized from the reduction in the balance of our term loan during the three months ending March 31, 2011.

Provision for income taxes.The provision for income taxes was $2.9 million for the three months ended March 31, 2011, with
an
effective tax rate of 39.4%, compared to a provision of $1.7 million for the three months ended March 31, 2010, with an effective tax rate of 38.1%. The increase in our overall effective
tax rate for the three months ended March 31, 2011 was mainly due to an increase in the accrual for uncertain tax positions.

Net income.Net income for the three months ended March 31, 2011 was $4.5 million compared to net income for the three months
ended
March 31, 2010 of $2.8 million.

Segment Results

The following table sets forth, for the periods indicated, statements of operations data by segment in thousands of dollars, segment
net sales as percentage of total net sales and segment operating income as a percentage of segment net sales.

Three months ended March 31,2011

2010(dollars in thousands)

Amount

Percent

Amount

PercentContract revenues:Transmission & Distribution

$
118,025


78.5
%
$
102,834


69.1
%Commercial & Industrial


32,269


21.5


46,055


30.9Total

$
150,294


100.0

$
148,889


100.0Operating income (loss):Transmission & Distribution

$
13,543


11.5

$
6,123


6.0Commercial & Industrial


852


2.6


2,214


4.8Total


14,395


9.6


8,337


5.6Corporate


(6,772
)

(4.5
)

(3,626
)

(2.4
)Consolidated

$
7,623


5.1
%
$
4,711


3.2
%


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Transmission & Distribution

Revenues for our T&D segment for the three months ended March 31, 2011 were $118.0 million compared to
$102.8 million for the three months ended March 31, 2010, an increase of $15.2 million or 14.8%. The increase in revenues was mostly the result of an increase in revenues from
several medium-sized T&D projects.

Revenues
from transmission projects represented 68.2% and 61.4% of T&D segment revenue for the three months ended March 31, 2011 and 2010, respectively. Additionally, for the
three months ended March 31, 2011, measured by revenue in our T&D segment, we provided 34.1% of our T&D services under fixed-price contracts, as compared to 22.0% for the three months ended
March 31, 2010.

Operating
income for our T&D segment for the three months ended March 31, 2011 was $13.5 million compared to $6.1 million for the three months ended March 31,
2010, an increase of approximately $7.4 million, or 121.2%. As a percentage of revenues, operating income for our T&D segment increased to 11.5% for the three months ended March 31, 2011
from 6.0% for the three months ended March 31, 2010. The increase in operating income, as a percentage of revenues, was mostly attributable to an overall increase in margins on a few large
transmission contracts of approximately $5.8 million as a result of increased productivity levels, cost efficiencies, added work and effective contract management. These large projects, which
generated above-normal margins in the current period, will be substantially completed in the second quarter. In addition, contract margins on several medium-sized T&D projects improved in the current
period by approximately $0.9 million.

Commercial & Industrial

Revenues for our C&I segment for the three months ended March 31, 2011 were $32.3 million compared to
$46.1 million for the three months ended March 31, 2010, a decrease of $13.8 million or 29.9%. The decrease in revenues was mainly due to fewer large projects being in production
in the first quarter of 2011 as compared to the first quarter of 2010, which was caused by an increase in the competition for the limited large projects available in the market.

For
the three months ended March 31, 2011, measured by revenue in our C&I segment, we provided 49.1% of our services under fixed-price contracts, as compared to 25.4% for the
three months ended March 31, 2010.

Operating
income for our C&I segment for the three months ended March 31, 2011 was $0.9 million compared to $2.2 million for the three months ended March 31,
2010, a decrease of $1.4 million, or 61.5%. As a percentage of revenues, operating income for our C&I segment decreased to 2.6% for the three months ended March 31, 2011 from 4.8% for
the three months ended March 31, 2010. The decrease in operating income, as a percentage of revenues, in the C&I segment was mainly attributable to an overall reduction in margins on projects
with contract values less than $10 million, of approximately $1.2 million. This decrease was mostly the result of lower overall margins due to pricing pressures over the past year, as
well as lower productivity levels on a few projects. The margin decrease was partially offset by an increase in margins on a few large projects.

Liquidity and Capital Resources

As of March 31, 2011, we had cash and cash equivalents of $44.7 million, positive working capital of $64.5 million
and long-term liabilities in the amount of $28.7 million, which consisted primarily of the long-term portion of our term loan facility, deferred income taxes and
FIN 48 liabilities. We also had a $15.0 million letter of credit outstanding under the 2007 Credit Agreement (the "Credit Agreement"). During the three months ended March 31,
2011, consolidated operating activities of our business resulted in net cash flow from operations of $13.8 million compared to $0.6 million for the three months ended March 31,
2010. Cash flow from operations is primarily influenced by demand for

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our
services, operating margins and the type of services we provide our customers and working capital changes. We used net cash in investing activities of $12.2 million, substantially all of
which was used for capital expenditures in our T&D segment. We used net cash for financing activities of $19.6 million, primarily for $20.0 million in prepayments on our term loan,
partially offset by $ 0.5 million net cash received from the exercise of stock options and the related tax benefits.

The
changes in various consolidated balance sheet accounts (such as: accounts receivable, costs and estimated earnings in excess of billings on uncompleted contracts, accounts payable
and billings in excess of costs and estimated earnings on uncompleted contracts) are due to normal timing fluctuations in our operating activities. In particular, the gross amount of accounts
receivable, costs and estimated earnings in excess of billings on uncompleted contracts, accounts payable and billings in excess of costs and estimated earnings on uncompleted contracts provided cash
of $0.7 million during the three months ended March 31, 2011, compared to using cash of $3.4 million in the three months ended March 31, 2010.

We
anticipate that our cash and cash equivalents on hand, our $60.0 million borrowing availability under the Credit Agreement, and our future cash flow from operations will
provide sufficient cash to enable us to meet our future operating needs, debt service requirements, and planned capital expenditures. We expect that our capital spending in 2011 will be higher than
our 2010 capital spending, in part to satisfy equipment needs related to the commencement of several large projects. Although we believe that we have adequate cash and availability under our credit
facility to meet these needs, our involvement in large-scale initiatives to rebuild the United States electric power grid may require additional working capital, depending upon the size and duration
of the project and the financial terms of the underlying agreement.

Debt Instruments

On August 31, 2007, we entered into an agreement for a $125.0 million senior secured credit facility which provides for a
$75.0 million revolving credit line (which may be increased or decreased in accordance with the terms of the related credit agreement) and a $50.0 million term loan facility. At our
option, borrowings under the Credit Agreement bear interest at either (1) the greater of a prime rate or the federal funds rate plus a spread based upon our leverage ratio or (2) an
adjusted London Interbank Offered Rate ("LIBOR") plus a spread based upon our leverage ratio. There were $10.0 million of borrowings outstanding under the facility accruing interest at 1.3125%
(which was equal to an adjusted one-month LIBOR plus a spread of 1.0%) as of March 31, 2011. As of March 31, 2011, we had a $15.0 million letter of credit outstanding,
which reduced our borrowing capacity under the revolving credit line. The Credit Agreement expires on August 31, 2012. We had $60.0 million available under the Credit Agreement as of
March 31, 2011.

The
terms of the Credit Agreement require, among other things, that we adhere to a maximum leverage ratio and maintain a minimum EBITDA-based interest coverage ratio, both of which are
defined under the Credit Agreement and determined on a rolling four consecutive quarter basis. The EBITDA-based interest coverage ratio covenant requires us to have a ratio of EBITDA to interest
expense of not less than 3.0 to 1.0. We are also required to have a leverage ratio of no more than 3.0 to 1.0. As of March 31, 2011, our interest coverage ratio was in excess of 43.0 to 1.0 and
our leverage ratio was less than 1.0 to 1.0, both within the required covenant levels permitted under the Credit Agreement.

The
Credit Agreement also includes other specific limits or restrictions on additional indebtedness, liens and capital expenditure activity. Our obligations under the Credit Agreement
are secured by a lien on all of our property (including the capital stock of our subsidiaries) other than any property subject to a certificate of title, subject to a lease or similar interest and our
real property and fixtures. As of March 31, 2011, we were in compliance with all applicable debt covenants.

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Off-Balance Sheet Transactions

As is common in our industry, we enter into certain off-balance sheet arrangements in the ordinary course of business that
result in risks not
directly reflected in our balance sheets. Our significant off-balance sheet transactions include liabilities associated with non-cancelable operating leases, letter of credit
obligations and surety guarantees entered into in the normal course of business. We have not engaged in any off-balance sheet financing arrangements through special purpose entities.

Leases

We enter into non-cancelable operating leases for some of our facility, vehicle and equipment needs. These leases allow us
to conserve cash by paying a monthly lease rental fee for the use of facilities, vehicles and equipment rather than purchasing them. We may decide to cancel or terminate a lease before the end of its
term, in which case we are typically liable to the lessor for the remaining lease payments under the term of the lease.

We
have guaranteed the residual value of the underlying assets under certain of our equipment operating leases at the date of termination of such leases. We have agreed to pay any
difference between this residual value and the fair market value of each underlying asset as of the lease termination date. As of March 31, 2011, the maximum guaranteed residual value was
approximately $0.6 million. We believe that no significant payments will be made as a result of the difference between the fair market value of the leased equipment and the guaranteed residual
value. However, there can be no assurance that future significant payments will not be required.

We
typically have purchase options on the equipment underlying our long-term operating leases and many of our short-term rental arrangements. We continue to
exercise many of these purchase options as the need for equipment is on-going and the purchase option price is attractive.

Purchase Commitments for Construction Equipment

As of March 31, 2011, we had approximately $9.5 million in outstanding purchase orders for certain construction equipment
to be paid with the cash outlay scheduled to occur in the second quarter.

Letters of Credit

Some of our vendors require letters of credit to ensure reimbursement for amounts they are disbursing on our behalf, such as to
beneficiaries under our insurance programs. In addition, from time-to-time certain customers require us to post letters of credit to ensure payment to our subcontractors and
vendors under those contracts and to guarantee performance under our contracts. Such letters of credit are generally issued by a bank or similar financial institution. The letter of credit commits the
issuer to pay specified amounts to the holder of the letter of credit if the holder claims that we have failed to perform specified actions in accordance with the terms of the letter of credit. If
this were to occur, we would be required to reimburse the issuer of the letter of credit. Depending on the circumstances of such a reimbursement, we may also have to record a charge to earnings for
the reimbursement. Currently, we do not believe that it is likely that any claims will be made under any letter of credit.

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As of March 31, 2011, we had a $15.0 million letter of credit outstanding under the Credit Agreement primarily to secure obligations under our
casualty insurance program.

Surety Bonds

Many customers, particularly in connection with new construction, require us to post performance and payment bonds issued by a
financial institution known as a surety. These bonds provide a guarantee to the customer that we will perform under the terms of a contract and that we will pay subcontractors and vendors. If we fail
to perform under a contract or to pay subcontractors and vendors, the customer may demand that the surety make payments or provide services under the bond. We must reimburse the surety for any
expenses or outlays it incurs. Under our continuing indemnity and security agreement with the surety, with the consent of our lenders under the Credit Agreement, we have granted security interests in
certain of our assets to collateralize our obligations to the surety. We may be required to post letters of credit or other collateral in favor of the surety or our customers. Posting letters of
credit in favor of the surety or our customers reduces the borrowing availability under the Credit Agreement. To date, we have not been required to make any reimbursements to the surety for
bond-related costs. We believe that it is unlikely that we will have to fund significant claims under our surety arrangements in the foreseeable future. As of March 31, 2011, an
aggregate of approximately $818.5 million in original face amount of bonds issued by
the surety were outstanding. Our estimated remaining cost to complete these bonded projects was approximately $408.8 million as of March 31, 2011.

Concentration of Credit Risk

We grant trade credit under normal payment terms, generally without collateral, to our customers, which include electric utilities,
governmental entities, general contractors and builders, owners and managers of commercial and industrial properties located in the United States. Consequently, we are subject to potential credit risk
related to changes in business and economic factors throughout the United States. However, we generally have certain statutory lien rights with respect to services provided. Under certain
circumstances such as foreclosures or negotiated settlements, we may take title to the underlying assets in lieu of cash in settlement of receivables. As of March 31, 2011, one customer
represented approximately 25.5% of total consolidated accounts receivable (excluding the impact of allowance for doubtful accounts). No other customer represented more than 10.0% of our total
consolidated accounts receivable as of March 31, 2011. For the three months ended March 31, 2011, revenues from two of our customers individually exceeded 10.0% of our total consolidated
revenues, with combined revenues from the two accounting for approximately 26.9% of our total consolidated revenues. Management believes the terms and conditions in its contracts, billing and
collection policies are adequate to minimize the potential credit risk.

New Accounting Pronouncements

For a discussion regarding new accounting pronouncements, please refer to Note 2. "Basis of PresentationRecently
Issued Accounting Pronouncements" in the accompanying Notes to Consolidated Financial Statements.

Critical Accounting Policies

The discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements,
which have been prepared in accordance with U.S. GAAP. The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts
of assets and liabilities, disclosures of contingent assets and liabilities known to exist at the date of the consolidated financial statements and the reported amounts of revenues and expenses during
the reporting period. We evaluate our estimates on an ongoing basis,

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based
on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. There can be no assurance that actual results will not differ from those
estimates. For further information regarding our critical accounting policies and estimates, please refer to Item 7. "Management's Discussion and Analysis of Financial Condition and Results of
OperationsCritical Accounting Policies" included in the 2010 Annual Report.

Cautionary Statement Concerning Forward-Looking Statements and Information

We are including the following discussion to inform you of some of the risks and uncertainties that can affect our company and to take
advantage of the protections for forward-looking statements that applicable federal securities law affords.

Various
statements contained in this quarterly report on Form 10-Q are forward-looking statements, including those that express a belief, expectation or intention, as
well as those that are not statements of historical fact. The forward-looking statements may include projections and estimates concerning the timing and success of specific projects and our future
production, revenue, income and capital spending. Our forward-looking statements are generally accompanied by words such as "anticipate," "believe," "estimate," "expect," "intend," "may," "objective,"
"outlook," "plan," "project," "possible," "potential," "should" or other words that convey the uncertainty of future events or outcomes. The forward-looking statements in this quarterly report on
Form 10-Q speak only as of the date of this quarterly report on Form 10-Q. We disclaim any obligation to update these statements (unless required by securities
laws), and we caution you not to rely on them unduly. We have based these forward-looking statements on our current expectations and assumptions about future events. While our management considers
these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks, contingencies and uncertainties, most of
which are difficult to predict and many of which are beyond our control. These and other important factors, including those discussed in Item 1A
"Risk Factors" in our 2010 Annual Report, may cause our actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by
these forward-looking statements.

These
risks, contingencies and uncertainties include, but are not limited to, the following:



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ITEM 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As of March 31, 2011, we were not party to any derivative instruments. We did not use any material derivative financial
instruments during the three months ended March 31, 2011 and 2010, including trading or speculation on changes in interest rates or commodity prices of materials used in our business.

Borrowings
under the Credit Agreement are based upon an interest rate that will vary depending upon the prime rate, the federal funds rate and LIBOR. If we borrow additional amounts
under the Credit Agreement, the interest rate on those borrowings will also be variable. If the prime rate, federal funds rate or LIBOR rise, our interest payment obligations will increase and have a
negative effect on our cash flow and financial condition. We currently do not maintain any hedging contracts that would limit our exposure to variable rates of interest. As of March 31, 2011,
we had $10 million of borrowings outstanding under the Credit Agreement. The Credit Agreement currently accrues annual interest at one-month LIBOR rates in effect at each month end
plus a spread of 1.00%, based upon our current leverage ratio, as defined in the Credit Agreement. An increase or decrease of 0.125% in the interest rate would have the effect of changing our interest
expense by $12,500 per year.

ITEM 4.    CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures designed to provide reasonable assurance that information required to be disclosed in
the reports we file or submit
pursuant to the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC, and that such information is accumulated and
communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Management,
together with our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Exchange Act
Rule 13a-15(e) and 15d-15(e)) as of the end of the period covered by this quarterly report on Form 10-Q. Based upon that evaluation, the Chief
Executive Officer and Chief Financial Officer concluded that our disclosure

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controls
and procedures were effective to provide reasonable assurance related to the matters stated in the above paragraph.

Changes in Internal Control Over Financial Reporting

There have been no changes in our internal control over financial reporting during the first quarter ended March 31, 2011 that
have materially affected, or that are reasonably likely to materially affect, our internal control over financial reporting.

Limitations on the Effectiveness of Controls

Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and
procedures or our internal control over financial reporting will detect or prevent all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable,
not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of
controls must be considered relative to their costs. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any
evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or
procedures may deteriorate. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake.
Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any system of controls
also is based in part upon certain assumptions about the likelihood of future
events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in
conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error
or fraud may occur and not be detected.

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PART II.OTHER INFORMATION

ITEM 1.    LEGAL PROCEEDINGS

For further discussion regarding legal proceedings, please refer to Note 7, "Commitments and
ContingenciesLitigation and Other Legal Matters" in the accompanying Notes to Consolidated Financial Statements.

ITEM 1A.    RISK FACTORS

As of the date of this filing, there have been no material changes to the risk factors previously discussed in Item 1A to our
2010 Annual Report. An investment in our common stock involves various risks. When considering an investment in our company, you should carefully consider all of the risk factors described in our 2010
Annual Report. These risks and uncertainties are not the only ones facing us and there may be additional matters that are not known to us or that we currently consider immaterial. All of these risks
and uncertainties could adversely affect our business, financial condition or future results and, thus, the value of our common stock and any investment in our company.

ITEM 2.    UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3.    DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.    (REMOVED AND RESERVED)

ITEM 5.    OTHER INFORMATION

None.

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ITEM 6.    EXHIBITS

Number

Description31.1

Certification of Chief Executive Officer pursuant to SEC Rule 13a-14(a)/15d-14(a) 31.2

Certification of Chief Financial Officer pursuant to SEC Rule 13a-14(a)/15d-14(a) 32.1

Certification of Chief Executive Officer pursuant to 18 U.S.C. §1350 32.2

Certification of Chief Financial Officer pursuant to 18 U.S.C. §1350 


Filed
herewith


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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.

MYR GROUP INC.(Registrant)May 9, 2011

/s/ MARCO A. MARTINEZ Vice President, Chief Financial Officer and Treasurer


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