##### Table of Contents



UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
 Washington, D.C.
    20549
  Form 10-Q
   þ

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934For the quarterly period ended
    June 30, 2007ORo

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period
    from           to   Commission file number
    001-32164
  INFRASOURCE SERVICES,
    INC.
 (Exact name of registrant as
    specified in its charter)
   Delaware

03-0523754(State or other jurisdiction
    of
    incorporation or organization)

(I.R.S. Employer
    Identification No.)   100 West
    Sixth Street, Suite 300, Media, PA (Address
    of principal executive offices) 19063 (Zip
    Code) (610) 480-8000
 (Registrants telephone
    number, including area code)
   þ o
  Rule 12b-2
 o þ o
  Rule 12b-2 o þ




---



##### 



For the
    Quarter Ended June 30, 2007FORM 10-Q
    INFRASOURCE SERVICES, INC. AND SUBSIDIARIES
    Table of Contents
  
  Page #Part I 
    FINANCIAL INFORMATIONItem 1.


Financial
    Statements (Unaudited)


3Condensed
    Consolidated Balance Sheets at December 31, 2006 and
    June 30, 2007


3Condensed
    Consolidated Statements of Operations for the three and six
    months ended June 30, 2006 and 2007


4Condensed
    Consolidated Statement of Shareholders Equity for the six
    months ended June 30, 2007


5Condensed
    Consolidated Statements of Cash Flows for the six months ended
    June 30, 2006 and 2007


6Notes to Condensed
    Consolidated Financial Statements


7Item 2.


Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations


20Item 3.


Quantitative and
    Qualitative Disclosures About Market Risk


29Item 4.


Controls and
    Procedures


30PART II 
    OTHER INFORMATIONItem 1.


Legal
    Proceedings


30Item 1A.


Risk
    Factors


31Item 2.


Unregistered Sales
    of Equity Securities and Use of Proceeds


31Item 3.


Defaults Upon
    Senior Securities


31Item 4.


Submission of
    Matters to a Vote of Security Holders


31Item 5.


Other
    Information


31Item 6.


Exhibits


31SIGNATURES


32Rule 13a-14(a)/Rule 15d-14(a) Certification of Chief Executive OfficerRule 13a-14(a)/Rule 15d-14(a) Certification of Chief Financial OfficerCertification pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code   2




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##### Table of Contents



PART I 
    FINANCIAL INFORMATION  ITEM 1.
    FINANCIAL
    STATEMENTS INFRASOURCE
    SERVICES, INC. AND SUBSIDIARIES



Condensed
    Consolidated Balance Sheets  December 31,


June 30,2006


2007(Unaudited)(In thousands, exceptshare data)Current assets:Cash and cash equivalents

$
26,209


$
18,868Contract receivables (less
    allowances for doubtful accounts 
    of $3,770 and $4,865, respectively)


166,780



144,359Costs and estimated earnings in
    excess of billings


59,012



76,397Inventories


5,443



4,421Deferred income taxes


8,201



7,006Other current assets


6,384



11,900Current assets 
    discontinued operations


746



184Total current assets


272,775



263,135Property and equipment (less
    accumulated depreciation 
    of $73,302 and $81,218, respectively)


154,578



176,183Goodwill


146,933



147,276Intangible assets, net


900



747Deferred charges and other assets,
    net


5,529



4,862Assets held for sale


517



400Total assets

$
581,232


$
592,603Current liabilities:Current portion of long-term debt
    and short-term borrowings

$
1,154


$
10,055Other liabilities 
    related parties


766



940Accounts payable


47,846



33,744Accrued compensation and benefits


27,951



24,111Other current and accrued
    liabilities


22,096



25,586Accrued insurance reserves


36,166



35,272Billings in excess of costs and
    estimated earnings


23,245



20,977Deferred revenues


6,188



6,611Total current liabilities


165,412



157,296Long-term debt, net of current
    portion


50,070



50,043Deferred revenues


16,347



15,617Other long-term
    liabilities  related party


900



Deferred income taxes


3,750



2,233Other long-term liabilities


5,568



6,494Total liabilities


242,047



231,683Commitments and contingenciesShareholders equity:Preferred stock, $.001 par
    value (authorized  12,000,000 shares; 
    0 shares issued and outstanding)






Common stock, $.001 par value
    (authorized  120,000,000 shares;
    issued 40,263,739 and 41,045,771 shares, respectively, and
    
    outstanding  40,233,869 and 41,015,901, respectively)


40



41Treasury stock, at cost
    (29,870 shares)


(137
)


(137
)Additional paid-in capital


288,517



301,727Retained earnings


50,785



58,774Accumulated other comprehensive
    income (loss)


(20
)


515Total shareholders equity


339,185



360,920Total liabilities and
    shareholders equity

$
581,232


$
592,603    3




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##### Table of Contents



INFRASOURCE
    SERVICES, INC. AND SUBSIDIARIES



Condensed
    Consolidated Statements of Operations  Three Months


Three Months


Six Months


Six MonthsEnded


Ended


Ended


EndedJune 30, 2006


June 30, 2007


June 30, 2006


June 30, 2007(Unaudited)(In thousands, except per share data)Revenues

$
254,261


$
239,572


$
468,536


$
443,376Cost of revenues


218,386



200,531



403,810



375,940Gross profit


35,875



39,041



64,726



67,436Selling, general and
    administrative expenses


22,612



23,831



45,305



49,439Merger related costs






483







4,057Provision for uncollectible
    accounts


41



780



31



943Amortization of intangible assets


237



93



494



153Income from operations


12,985



13,854



18,896



12,844Interest income


173



144



409



472Interest expense


(1,682
)


(1,050
)


(3,793
)


(2,093
)Write-off of deferred financing
    costs


(4,296
)






(4,296
)


Other income, net


1,487



2,074



1,584



2,187Income from continuing operations
    before income taxes


8,667



15,022



12,800



13,410Income tax expense


3,506



5,863



5,172



5,240Income from continuing operations


5,161



9,159



7,628



8,170Discontinued operations:Income (loss) from discontinued
    operations (net of income tax expense (benefit) of $112, $4,
    $111 and $(7), respectively)


166



6



165



(11
)Net income

$
5,327


$
9,165


$
7,793


$
8,159Basic income per share:Income from continuing operations

$
0.13


$
0.23


$
0.19


$
0.20Income (loss) from discontinued
    operations










0.01



Net income

$
0.13


$
0.23


$
0.20


$
0.20Weighted average basic common
    shares outstanding


39,735



40,590



39,626



40,434Diluted income per share:Income from continuing operations

$
0.13


$
0.22


$
0.19


$
0.20Income (loss) from discontinued
    operations














Net income

$
0.13


$
0.22


$
0.19


$
0.20Weighted average diluted common
    shares outstanding


40,336



41,252



40,242



41,014    4




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##### Table of Contents



INFRASOURCE
    SERVICES, INC. AND SUBSIDIARIES



Condensed
    Consolidated Statements of Shareholders Equity  AccumulatedAdditional


OtherCommon Stock


Treasury Stock


Paid-In


Comprehensive


RetainedShares


Amount


Shares


Amount


Capital


Income (Loss)


Earnings


Total(Unaudited)(In thousands, except share amounts)Balance as of December 31, 2006


40,263,739


$
40



(29,870
)

$
(137
)

$
288,517


$
(20
)

$
50,785


$
339,185Cumulative effect of adopting new
    accounting pronouncement


























(170
)


(170
)Repurchase and retirement of common
    stock


(2,600
)














(87
)










(87
)Stock options exercised and
    restricted stock vested


581,211



1











4,595











4,596Income tax benefit from stock
    options exercised


















5,404











5,404Adjustment for shares of restricted
    stock issued under employee stock plan


137,231



























Issuance of restricted stock


12,100



























Issuance of shares under employee
    stock purchase plan


54,090















1,001











1,001Share-based compensation expense


















2,297











2,297Net income


























8,159



8,159Other comprehensive income






















535







535Balance as of June 30, 2007


41,045,771


$
41



(29,870
)

$
(137
)

$
301,727


$
515


$
58,774


$
360,920    5




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##### Table of Contents



INFRASOURCE
    SERVICES, INC. AND SUBSIDIARIES



Condensed
    Consolidated Statements of Cash Flows  Six Months


Six MonthsEnded


EndedJune 30, 2006


June 30, 2007(Unaudited)(In thousands)Cash flows from operating
    activities:Net income

$
7,793


$
8,159Adjustments to reconcile net income
    to cash provided by operating activities:Loss (income) from discontinued
    operations  net of taxes


(165
)


11Depreciation


13,603



10,666Amortization of intangibles


494



153Gain on sale of assets


(1,355
)


(2,232
)Deferred income taxes


(643
)


(1,510
)Share-based compensation


1,825



2,297Write-off of deferred financing
    costs


4,296



Provision for uncollectible accounts


31



943Excess tax benefits from
    share-based compensation


(416
)


(5,131
)Other


604



1,124Changes in operating assets and
    liabilities:Contract receivables, net


17



21,478Costs and estimated earnings in
    excess of billings, net


(4,986
)


(19,653
)Inventories and other current assets


966



677Deferred charges and other assets


446



312Accounts payable


(5,389
)


(14,173
)Other liabilities 
    related parties


(12
)


Other current liabilities


10,980



(536
)Other liabilities


150



1,135Net cash flows provided by
    operating activities of continuing operations


28,239



3,720Net cash flows provided by
    operating activities of discontinued operations


34



550Net cash flows provided by
    operating activities


28,273



4,270Cash flows from investing
    activities:Acquisitions of businesses, net of
    cash acquired


(10,565
)


(835
)Proceeds from derivatives






62Proceeds from sales of equipment


2,331



3,060Additions to property and equipment


(18,886
)


(33,405
)Net cash flows used in investing
    activities of continuing operations


(27,120
)


(31,118
)Net cash flows used in investing
    activities of discontinued operations


34



Net cash flows used in investing
    activities


(27,154
)


(31,118
)Cash flows from financing
    activities:Borrowings of short and long-term
    debt


75,000



10,000Repayments of long-term debt and
    capital lease obligations


(83,833
)


(1,127
)Debt issuance costs


(1,133
)


Repurchase of common stock






(87
)Excess tax benefits from
    share-based compensation


416



5,131Proceeds from exercise of stock
    options and employee stock purchases


1,908



5,596Net cash flows provided by (used
    in) financing activities


(7,642
)


19,513Cash and cash equivalents:Net decrease in cash and cash
    equivalents


(6,523
)


(7,335
)Cash and cash
    equivalents  beginning of period


31,639



26,209Effect of exchange rates on cash


8



(6
)Cash and cash
    equivalents  end of period

$
25,124


$
18,868Supplemental Disclosure of Non-Cash
    Investing Activities:Accounts payable balance related to
    purchases of property and equipment

$
1,444


$
3,118    6




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##### Table of Contents



INFRASOURCE
    SERVICES, INC. AND SUBSIDIARIES
  Notes to Condensed Consolidated Financial Statements
 (Unaudited)
  1.
    Organization
    and Basis of Presentation        Planned
    Merger:
     7




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##### Table of Contents



INFRASOURCE
    SERVICES, INC. AND SUBSIDIARIES
  Notes to
    Condensed Consolidated Financial
    Statements  (Continued)
 (Unaudited)
    Basis
    of Presentation:
  Form 10-K
    2.
    Recent
    Accounting Pronouncements       8




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##### Table of Contents



INFRASOURCE
    SERVICES, INC. AND SUBSIDIARIES
  Notes to
    Condensed Consolidated Financial
    Statements  (Continued)
 (Unaudited)
      3.
    Discontinued
    Operations      December 31,


June 30,2006


2007(In thousands)Inventory

$
687


$
134Deferred income taxes


59



50Total current assets


746



184Total assets

$
746


$
184Net assets

$
746


$
184     Three Months


Three Months


Six Months


Six MonthsEnded


Ended


Ended


EndedJune 30, 2006


June 30, 2007


June 30, 2006


June 30, 2007(In thousands)Revenues

$
3,766


$
235


$
6,731


$
516Income (loss) before income taxes


278



10



276



(18
)   4.
    Costs And
    Estimated Earnings In Excess Of Billings     9




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##### Table of Contents



INFRASOURCE
    SERVICES, INC. AND SUBSIDIARIES
  Notes to
    Condensed Consolidated Financial
    Statements  (Continued)
 (Unaudited)
  5.
    Goodwill
    and Intangible Assets    December 31,


June 30,2006


2007(In thousands)Goodwill

$
146,933


$
147,276Intangible assets:Volume agreements


4,561



2,061Non-compete agreements


20



20Total intangible assets


4,581



2,081Accumulated amortization:Volume agreements


(3,681
)


(1,333
)Non-compete agreements






(1
)Total accumulated amortization


(3,681
)


(1,334
)Intangible assets, net

$
900


$
747     December 31,


June 30,2006


2007Infrastructure Construction
    Services

$
136,540


$
136,883Telecommunications Services


10,393



10,393Total

$
146,933


$
147,276     For the Year Ended December, 31,(In thousands)2007 (excludes the six months
    ended June 30, 2007)

$
2732008


3012009


1622010


3Thereafter


8Total

$
747   6.
    Computation
    of Per Share Earnings   10




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##### Table of Contents



INFRASOURCE
    SERVICES, INC. AND SUBSIDIARIES
  Notes to
    Condensed Consolidated Financial
    Statements  (Continued)
 (Unaudited)
    Three Months


Three Months


Six Months


Six MonthsEnded


Ended


Ended


EndedJune 30, 2006


June 30, 2007


June 30, 2006


June 30, 2007(In thousands)Income from continuing operations

$
5,161


$
9,159


$
7,628


$
8,170Income (loss) from discontinued
    operations, net of tax expense (benefit) of $112, $4, $111 and
    $(7), respectively


166



6



165



(11
)Net income

$
5,327


$
9,165


$
7,793


$
8,159Weighted average basic common
    shares outstanding


39,735



40,590



39,626



40,434Effect of dilutive stock options
    and restricted stock


601



662



616



580Weighted average diluted common
    shares outstanding


40,336



41,252



40,242



41,014Basic income per share

$
0.13


$
0.23


$
0.20


$
0.20Diluted income per share

$
0.13


$
0.22


$
0.19


$
0.20     7.
    Share-based
    Compensation Plans    Three Months


Three Months


Six Months


Six MonthsEnded


Ended


Ended


EndedJune 30, 2006


June 30, 2007


June 30, 2006


June 30, 2007(In thousands)Stock option expense

$
639


$
736


$
1,301


$
1,440Restricted stock expense


115



251



218



632Employee stock purchase plan expense


201



107



306



225Total share-based compensation
    expense

$
955


$
1,094


$
1,825


$
2,297Share-based compensation expense
    included in:Cost of revenues

$
127


$
102


$
244


$
198Selling, general and administrative
    expenses


828



992



1,581



2,099Total share-based compensation
    expense

$
955


$
1,094


$
1,825


$
2,297Total tax benefit related to
    share-based compensation expense

$
386


$
427


$
737


$
898    11




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##### Table of Contents



INFRASOURCE
    SERVICES, INC. AND SUBSIDIARIES
  Notes to
    Condensed Consolidated Financial
    Statements  (Continued)
 (Unaudited)
    Form 10-K/A.
  Stock
    Options
       12




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##### Table of Contents



INFRASOURCE
    SERVICES, INC. AND SUBSIDIARIES
  Notes to
    Condensed Consolidated Financial
    Statements  (Continued)
 (Unaudited)
    Six Months


Six MonthsEnded


EndedJune 30, 2006


June 30, 2007Weighted Average Assumptions:Expected volatility


44%



40%Dividend yield


0%



0%Risk-free interest rate


4.93%



4.49%Expected holding period (in years)


6.25



6.25       Weighted


WeightedAverage


AverageExercise


RemainingNumber of


Price per


Contractual


AggregateOptions


Share


Life


Intrinsic ValueOutstanding as of
    December 31, 2006


2,230,989


$
11.79Granted


7,000



24.81Exercised


(557,711
)


8.24Cancelled


(79,877
)


15.15Outstanding as of June 30,
    2007


1,600,401


$
12.92



7.9 years


$
38,705Exercisable as of June 30,
    2007


272,076


$
11.39



7.1 years


$
6,995     Restricted
    Stock
  Time-based:
  Weighted-Number of


Average Grant-Shares


Date Fair ValueUnvested shares at
    December 31, 2006


77,331


$
17.15Shares issued


12,100



24.81Shares vested


(23,500
)


20.41Unvested shares at June 30,
    2007


65,931


$
17.39    13




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##### Table of Contents



INFRASOURCE
    SERVICES, INC. AND SUBSIDIARIES
  Notes to
    Condensed Consolidated Financial
    Statements  (Continued)
 (Unaudited)
    Performance-based:
    Weighted-Number of


Average Grant-Shares


Date Fair ValueUnvested shares at
    December 31, 2006


87,200


$
20.55Shares forfeited


(3,800
)


20.55Unvested shares at June 30,
    2007


83,400


$
20.55   Employee
    Stock Purchase Plan
    8.
    Concentration
    of Credit Risk     14




---



##### Table of Contents



INFRASOURCE
    SERVICES, INC. AND SUBSIDIARIES
  Notes to
    Condensed Consolidated Financial
    Statements  (Continued)
 (Unaudited)
  9.
    Comprehensive
    Income    Three Months


Three Months


Six Months


Six MonthsEnded


Ended


Ended


EndedJune 30, 2006


June 30, 2007


June 30, 2006


June 30, 2007(In thousands)Net income

$
5,327


$
9,165


$
7,793


$
8,159Fair value adjustments on
    derivative instruments


(480
)


39



(480
)


39Foreign currency translation
    adjustment


126



441



111



496Comprehensive income

$
4,973


$
9,645


$
7,424


$
8,694       10.
    Segment
    Information     15




---



##### Table of Contents



INFRASOURCE
    SERVICES, INC. AND SUBSIDIARIES
  Notes to
    Condensed Consolidated Financial
    Statements  (Continued)
 (Unaudited)
    InfrastructureFor the Three Months Ended

Construction


Telecommunication


Corporate andJune 30, 2006

Services


Services


Eliminations


Total(In thousands)Revenues

$
241,227


$
9,503


$
3,531


$
254,261Income (loss) from operations as
    adjusted


13,273



4,743



(3,839
)


14,177Depreciation


5,657



1,007



59



6,723Share-based compensation


604



38



313



955Amortization


237











237Total assets


398,480



90,959



83,738



573,177Capital expenditures


3,700



5,527



101



9,328Reconciliation:Income (loss) from operations as
    adjusted

$
13,273


$
4,743


$
(3,839
)

$
14,177Less: Amortization and
    shared-based compensation


841



38



313



1,192Income (loss) from operations


12,432



4,705



(4,152
)


12,985Interest income


558



553



(938
)


173Interest expense


(1,679
)


(317
)


314



(1,682
)Write-off of deferred financing
    costs


(3,535
)


(677
)


(84
)


(4,296
)Other income, net


1,482



5







1,487Income (loss) before income taxes

$
9,258


$
4,269


$
(4,860
)

$
8,667   16




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##### Table of Contents



INFRASOURCE
    SERVICES, INC. AND SUBSIDIARIES
  Notes to
    Condensed Consolidated Financial
    Statements  (Continued)
 (Unaudited)
  InfrastructureFor the Three Months Ended

Construction


Telecommunication


Corporate andJune 30, 2007

Services


Services


Eliminations


Total(In thousands)Revenues

$
228,031


$
11,606


$
(65
)

$
239,572Income (loss) from operations as
    adjusted


14,162



6,510



(5,148
)


15,524Depreciation


4,001



1,300



202



5,503Share-based compensation


475



88



531



1,094Merger related costs










483



483Amortization


93











93Total assets


427,148



103,220



62,235



592,603Capital expenditures


3,595



16,426



1,841



21,862Reconciliation:Income (loss) from operations as
    adjusted

$
14,162


$
6,510


$
(5,148
)

$
15,524Merger related costs










483



483Less: Amortization and share-based
    compensation


568



88



531



1,187Income (loss) from operations


13,594



6,422



(6,162
)


13,854Interest income


3,515



257



(3,628
)


144Interest expense


(929
)


(169
)


48



(1,050
)Other income, net


2,080



(6
)






2,074Income (loss) before income taxes

$
18,260


$
6,504


$
(9,742
)

$
15,022   InfrastructureFor the Six Months Ended

Construction


Telecommunication


Corporate andJune 30, 2006

Services


Services


Eliminations


Total(In thousands)Revenues

$
443,769


$
19,576


$
5,191


$
468,536Income (loss) from operations as
    adjusted


21,641



9,222



(9,648
)


21,215Depreciation


11,496



1,993



114



13,603Share-based compensation


1,136



59



630



1,825Amortization


494











494Total assets


398,480



90,959



83,738



573,177Capital expenditures


9,055



9,697



134



18,886Reconciliation:Income (loss) from operations as
    adjusted

$
21,641


$
9,222


$
(9,648
)

$
21,215Less: Amortization and
    shared-based compensation


1,630



59



630



2,319Income (loss) from operations


20,011



9,163



(10,278
)


18,896Interest income


989



1,033



(1,613
)


409Interest expense


(3,382
)


(642
)


231



(3,793
)Write-off of deferred financing
    costs


(3,535
)


(677
)


(84
)


(4,296
)Other income, net


1,456



2



126



1,584Income (loss) before income taxes

$
15,539


$
8,879


$
(11,618
)

$
12,800   17




---



##### Table of Contents



INFRASOURCE
    SERVICES, INC. AND SUBSIDIARIES
  Notes to
    Condensed Consolidated Financial
    Statements  (Continued)
 (Unaudited)
  InfrastructureFor the Six Months Ended

Construction


Telecommunication


Corporate andJune 30, 2007

Services


Services


Eliminations


Total(In thousands)Revenues

$
420,261


$
23,063


$
52


$
443,376Income (loss) from operations as
    adjusted


17,703



11,991



(10,343
)


19,351Depreciation


7,792



2,510



364



10,666Share-based compensation


980



180



1,137



2,297Merger related costs










4,057



4,057Amortization


153











153Total assets


427,148



103,220



62,235



592,603Capital expenditures


5,510



22,832



5,063



33,405Reconciliation:Income (loss) from operations as
    adjusted

$
17,703


$
11,991


$
(10,343
)

$
19,351Merger related costs










4,057



4,057Less: Amortization and share-based
    compensation


1,133



180



1,137



2,450Income (loss) from operations


16,570



11,811



(15,537
)


12,844Interest income


6,634



602



(6,764
)


472Interest expense


(1,804
)


(334
)


45



(2,093
)Other income, net


2,188



(2
)


1



2,187Income (loss) before income taxes

$
23,588


$
12,077


$
(22,255
)

$
13,410     Three Months


Three Months


Six Months


Six MonthsEnded


Ended


Ended


EndedJune 30, 2006


June 30, 2007


June 30, 2006


June 30, 2007Electric Transmission

$
59,447


$
60,830


$
117,207


$
119,178Electric Substation


58,102



46,696



96,851



92,997Utility Distribution and
    Industrial Electric


32,259



37,205



69,602



67,223Total Electric


149,808



144,731



283,660



279,398Natural Gas


72,303



56,913



126,229



94,730Telecommunications


29,742



33,237



54,054



58,393Other


2,408



4,691



4,593



10,855$
254,261


$
239,572


$
468,536


$
443,376    18




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##### Table of Contents



INFRASOURCE
    SERVICES, INC. AND SUBSIDIARIES
  Notes to
    Condensed Consolidated Financial
    Statements  (Continued)
 (Unaudited)
  11.
    Related
    Party Transactions          12.
    Debt    13.
    Commitments
    and Contingencies       19




---



##### Table of Contents



Item 2.
    MANAGEMENTS
    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
    OPERATIONS  Forward-Looking
    and Cautionary Statements
  Form 10-Q,
  Form 10-K
    Introduction
  Form 10-Q Form 10-K.
  Overview
   20




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##### Table of Contents




    Revenues decreased $14.7 million, or 6%, to
    $239.6 million as compared to the three months ended
    June 30, 2006. Natural gas revenues decreased
    $15.4 million, or 21%, due primarily to a decline in
    housing starts.
    Gross profit increased $3.2 million, or 9%, to
    $39.0 million, as compared to the three months ended
    June 30, 2006. During the second quarter of 2006, we
    incurred a $6.6 million charge on an electric transmission
    contract and earned performance bonuses of $2.3 million for
    strong operating performance on certain electric distribution
    and substation projects. Excluding these items, gross profit
    decreased $1.1 million, due primarily to lower
    profitability on electric transmission construction projects and
    lower revenue in our natural gas business, which was caused
    primarily by a decline in housing starts. Partially offsetting
    these declines were higher gross profits resulting from an
    increase in the volume of dark fiber lease revenue and gross
    profits generated by RUE following its December 2006 acquisition.
    In July 2007, we were awarded a contract for the construction of
    a 73-mile
    long, 500 kV electric transmission line in California, known as
    the Tehachapi Renewable Transmission Project. The estimated
    contract value is $93.2 million.
    During June and July 2007, we acquired $14.4 million of
    dark fiber related assets.    Three Months


Three Months


Six Months


Six MonthsEnded


Ended


Ended


EndedJune 30, 2006


June 30, 2007


June 30, 2006


June 30, 2007Electric Transmission


23
%


25
%


25
%


27
%Electric Substation


23
%


19
%


20
%


21
%Utility Distribution and
    Industrial Electric


13
%


16
%


15
%


15
%Total Electric


59
%


60
%


60
%


63
%Natural Gas


28
%


24
%


27
%


21
%Telecommunications


12
%


14
%


12
%


13
%Other


1
%


2
%


1
%


3
%    21




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##### Table of Contents



Backlog as of


Increase/


Increase/June 30,


June 30,


(Decrease)


(Decrease)End Market

2006


2007


($)


(%)(In millions)Electric Transmission

$
214.7


$
134.5


$
(80.2
)


(37.4
)%Electric Substation


136.5



157.4



20.9



15.3
%Utility Distribution and
    Industrial Electric


88.1



191.9



103.8



117.8
%Total Electric


439.3



483.8



44.5



10.1
%Natural Gas


247.4



196.5



(50.9
)


(20.6
)%Telecommunications


221.4



222.0



0.6



0.3
%Other


7.7



17.0



9.3



120.8
%Total

$
915.8


$
919.3


$
3.5



0.4
%   Backlog as of


Increase/


Increase/March 31,


June 30,


(Decrease)


(Decrease)End Market

2007


2007


($)


(%)(In millions)Electric Transmission

$
171.8


$
134.5


$
(37.3
)


(21.7
)%Electric Substation


181.1



157.4



(23.7
)


(13.1
)%Utility Distribution and
    Industrial Electric


203.0



191.9



(11.1
)


(5.5
)%Total Electric


555.9



483.8



(72.1
)


(13.0
)%Natural Gas


231.5



196.5



(35.0
)


(15.1
)%Telecommunications


237.7



222.0



(15.7
)


(6.6
)%Other


22.4



17.0



(5.4
)


(24.1
)%Total

$
1,047.5


$
919.3


$
(128.2
)


(12.2
)%     Backlog as of


Increase/


Increase/June 30,


June 30,


(Decrease)


(Decrease)2006


2007


($)


(%)(In millions)ICS

$
781.5


$
791.9


$
10.4



1.3
%TS


134.3



127.4



(6.9
)


(5.1
)%Total

$
915.8


$
919.3


$
3.5



0.4
%   Backlog as of


Increase/


Increase/March 31,


June 30,


(Decrease)


(Decrease)2007


2007


($)


(%)(In millions)ICS

$
923.1


$
791.9


$
(131.2
)


(14.2
)%TS


124.4



127.4



3.0



2.4
%Total

$
1,047.5


$
919.3


$
(128.2
)


(12.2
)%  22




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##### Table of Contents



Results
    of Operations
  Seasonality
    and Cyclicality
        Consolidated
    Results
  Three
    months ended June 30, 2007 compared to the three months
    ended June 30, 2006
  Three Months





Three MonthsEnded


% of


Ended


% ofJune 30, 2006


Revenue


June 30, 2007


RevenueRevenues

$
254,261



100.0
%

$
239,572



100.0
%Gross profit


35,875



14.1
%


39,041



16.3
%Selling, general and
    administrative expenses


22,612



8.9
%


23,831



9.9
%Merger related costs






0.0
%


483



0.2
%Provision for uncollectible
    accounts


41



0.0
%


780



0.3
%Amortization of intangible assets


237



0.1
%


93



0.1
%Income from operations


12,985



5.1
%


13,854



5.8
%Interest income


173



0.1
%


144



0.1
%Interest expense


(1,682
)


(0.7
)%


(1,050
)


(0.5
)%Write-off of deferred financing
    costs


(4,296
)


(1.7
)%


Other income, net


1,487



0.6
%


2,074



0.9
%Income from continuing operations
    before income taxes


8,667



3.4
%


15,022



6.3
%Income tax expense


3,506



1.4
%


5,863



2.5
%Income from continuing operations

$
5,161



2.0
%

$
9,159



3.8
%   Revenues:
  Gross profit:
 23




---



##### Table of Contents



Selling, general and administrative
    expenses:
  Provision for uncollectible accounts:
  Interest expense:
  Provision for income taxes:
  Discontinued operations, net of tax:
  Six
    months ended June 30, 2007 compared to the six months ended
    June 30, 2006
  Six Months





Six MonthsEnded


% of


Ended


% ofJune 30, 2006


Revenue


June 30, 2007


RevenueRevenues

$
468,536



100.0
%

$
443,376



100.0
%Gross profit


64,726



13.8
%


67,436



15.2
%Selling, general and
    administrative expenses


45,305



9.7
%


49,439



11.2
%Merger related costs






0.0
%


4,057



0.9
%Provision for uncollectible
    accounts


31



0.0
%


943



0.2
%Amortization of intangible assets


494



0.1
%


153



0.0
%Income from operations


18,896



4.0
%


12,844



2.9
%Interest income


409



0.1
%


472



0.1
%Interest expense


(3,793
)


(0.8
)%


(2,093
)


(0.5
)%Write-off of deferred financing
    costs


(4,296
)


(0.9
)%






Other income, net


1,584



0.3
%


2,187



0.5
%Income from continuing operations
    before income taxes


12,800



2.7
%


13,410



3.0
%Income tax expense


5,172



1.1
%


5,240



1.2
%Income from continuing operations

$
7,628



1.6
%

$
8,170



1.8
%   Revenues:
 24




---



##### Table of Contents



Gross profit:
  Selling, general and administrative
    expenses:
  Provision for uncollectible accounts:
  Interest expense:
  Provision for income taxes:
  Discontinued operations, net of tax:
  Segment
    Results
  Form 10-Q.
    Three
    months ended June 30, 2007 compared to the three months
    ended June 30, 2006
  Three Months


Three MonthsEnded


Ended


ChangeJune 30, 2006


June 30, 2007


$


%(In thousands)Revenues:Infrastructure Construction
    Services

$
241,227


$
228,031


$
(13,196
)


(5.5
)%Telecommunications Services


9,503



11,606



2,103



22.1
%Total segment revenues


250,730



239,637



(11,093
)


(4.4
)%Corporate and eliminations


3,531



(65
)


(3,596
)


(101.8
)%Total revenues

$
254,261


$
239,572


$
(14,689
)


(5.8
)%   25




---



##### Table of Contents



Three Months


Three MonthsEnded


Ended


ChangeJune 30, 2006


June 30, 2007


$


%(In thousands)Income from operations as adjusted:Infrastructure Construction
    Services

$
13,273


$
14,162


$
889



6.7
%Telecommunications Services


4,743



6,510



1,767



37.3
%Total segment income from
    operations as adjusted


18,016



20,672



2,656



14.7
%Corporate and eliminations


(3,839
)


(5,148
)


(1,309
)


(34.1
)%Total income from operations as
    adjusted

$
14,177


$
15,524


$
1,347



9.5
%   ICS
  Revenues:
  Income from operations as adjusted:
  TS
  Revenues:
  Income from operations as adjusted:
  Corporate
    Six
    months ended June 30, 2007 compared to the six months ended
    June 30, 2006
  Six Months


Six MonthsEnded


Ended


ChangeJune 30, 2006


June 30, 2007


$


%(In thousands)Revenues:Infrastructure Construction
    Services

$
443,769


$
420,261


$
(23,508
)


(5.3
)%Telecommunications Services


19,576



23,063



3,487



17.8
%Total segment revenues


463,345



443,324



(20,021
)


(4.3
)%Corporate and eliminations


5,191



52



(5,139
)


99.0
%Total revenues

$
468,536


$
443,376


$
(25,160
)


(5.4
)%  26




---



##### Table of Contents



Six Months


Six MonthsEnded


Ended


ChangeJune 30, 2006


June 30, 2007


$


%(In thousands)Income from operations as adjusted:Infrastructure Construction
    Services

$
21,641


$
17,703


$
(3,938
)


(18.2
)%Telecommunications Services


9,222



11,991



2,769



30.0
%Total segment income from
    operations as adjusted


30,863



29,694



(1,169
)


(3.8
)%Corporate and eliminations


(9,648
)


(10,343
)


(695
)


(7.2
)%Total income from operations as
    adjusted

$
21,215


$
19,351


$
(1,864
)


(8.8
)%   ICS
  Revenues:
  Income from operations as adjusted:
  TS
  Revenues:
  Income from operations as adjusted:
  Corporate
    Liquidity
    and Capital Resources
  Cash,
    Working Capital Requirements and Capital
    Expenditures
     27




---



##### Table of Contents



Sources
    and Uses of Cash
    Cash from operating activities from continuing
    operations.
  Cash from investing activities from continuing
    operations.
  Cash from financing activities from continuing
    operations.
  Related
    Party Transactions
  Form 10-Q Form 10-K/A
  Critical
    Accounting Policies and Estimates
  Form 10-K
  New
    Accounting Pronouncements
   28




---



##### Table of Contents



Item 3.
    QUANTITATIVE
    AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK      Interest Rates.
  Currency Risk.
   29




---



##### Table of Contents



Gasoline and Diesel Fuel.
  Item 4.
    CONTROLS
    AND PROCEDURES  Disclosure
    Controls and Procedures
  Rules 13a-15(e) 15d-15(e)
  Internal
    Control Over Financial Reporting
  Rules 13a-15(f) 15d-15(f)
 PART II 
    OTHER INFORMATION  Item 1.
    LEGAL
    PROCEEDINGS.       30




---



##### Table of Contents



Item 1A.
    RISK
    FACTORS.     Item 2.
    Unregistered
    Sales of Equity Securities and Use of Proceeds.    ISSUER
    PURCHASES OF EQUITY SECURITIES
  (d) MaximumNumber (or(c) Total Number


Approximate Dollar(a) Total





of Shares (or


Value) of Shares (orNumber of





Units) Purchased


Units) that May yetShares (or


(b) Average


as Part of Publicly


be Purchased UnderUnits)


Price Paid per


Announced Plans


the Plans orPeriod

Purchased


Share (or Unit)


or Programs


ProgramsApril 1 through April 30, 2007














May 1 through May 31, 2007


2,600
(1)

$
33.26



N/A



N/AJune 1 through June 30, 2007














     (1)
    
    Shares were purchased by the Company from certain non-employee
    directors to satisfy tax withholding obligations in connection
    with the vesting of restricted stock awards pursuant to the 2004
    Stock Plan. The Company has no publicly announced plans or
    programs to purchase shares of Company common stock.   Item 3.
    Defaults
    Upon Senior Securities.     Item 4.
    Submission
    of Matters to a Vote of Security Holders.     Item 5.
    Other
    Information.     Item 6.
    Exhibits.  2
.1

Agreement and Plan of Merger,
    dated as of March 18, 2007, by and among InfraSource
    Services, Inc., Quanta Services, Inc. and Quanta MS Acquisition,
    Inc.(2)3
.1

Restated Certificate of
    Incorporation of InfraSource Services, Inc.(1)3
.1.1

Certificate of Amendment to the
    Restated Certificate of Incorporation of InfraSource Services,
    Inc.(1)3
.2

Amended and Restated Bylaws of
    InfraSource Services, Inc.(1)3
.3

Specimen of Common Stock
    certificate of InfraSource Services Inc.(1)31
.1

Rule 13a-14(a)/Rule 15d-14(a)
    Certification of Chief Executive Officer.*31
.2

Rule 13a-14(a)/Rule 15d-14(a)
    Certification of Chief Financial Officer.*32
.1

Certification pursuant to
    Section 1350 of Chapter 63 of Title 18 of the
    United States Code.*     *
    
    Filed herewith(1)
    
    Filed as an exhibit to the Registrants Registration
    Statement on
    Form S-8
    (Registration
    No. 333-115648)
    filed with the Commission on May 19, 2004.(2)
    
    Filed as an exhibit to the Registrants Current Report on
    Form 8-K
    filed with the Commission on March 20, 2007. 31




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##### Table of Contents



SIGNATURES       By:
    /s/  TERENCE
    R. MONTGOMERY   Senior Vice President and Chief Financial Officer
   32