================================================================================

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

---------------------

FORM 10-Q

---------------------

<Table>

(MARK ONE)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2001

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM TO .
</Table>

COMMISSION FILE NO. 001-13831

---------------------

QUANTA SERVICES, INC.
(Exact name of registrant as specified in its charter)

<Table>

DELAWARE 74-2851603
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
</Table>

1360 POST OAK BLVD.
SUITE 2100
HOUSTON, TEXAS 77056
(Address of principal executive offices)

REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE:
(713) 629-7600

---------------------

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 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 [X] No [ ]

59,605,129 shares of Common Stock were outstanding as of November 9, 2001.
As of the same date, 1,152,055 shares of Limited Vote Common Stock were
outstanding.

================================================================================

QUANTA SERVICES, INC. AND SUBSIDIARIES

INDEX

<Table>
<Caption>
PAGE
----

PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements
QUANTA SERVICES, INC. AND SUBSIDIARIES
Consolidated Balance Sheets............................... 1
Consolidated Statements of Operations..................... 2
Consolidated Statements of Cash Flows..................... 3
Notes to Condensed Consolidated Financial Statements...... 4
ITEM 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations....................... 10
ITEM 3. Quantitative and Qualitative Disclosures About
Market Risk............................................... 14

PART II. OTHER INFORMATION
ITEM 2. Changes in Securities............................... 14
ITEM 6. Exhibits and Reports on Form 8-K.................... 14
Signature................................................... 15
</Table>

QUANTA SERVICES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE INFORMATION)

<Table>
<Caption>
DECEMBER 31, SEPTEMBER 30,
2000 2001
------------ -------------
(UNAUDITED)

ASSETS

CURRENT ASSETS:
Cash and cash equivalents................................. $ 17,306 $ 2,779
Accounts receivable, net of allowance of $15,612 and
$34,642................................................ 466,869 522,110
Costs and estimated earnings in excess of billings on
uncompleted contracts.................................. 71,842 74,712
Inventories............................................... 19,874 23,085
Deferred income taxes and other current assets............ 26,516 41,745
---------- ----------
Total current assets.............................. 602,407 664,431
PROPERTY AND EQUIPMENT, net................................. 341,029 387,392
OTHER ASSETS, net........................................... 24,627 20,409
GOODWILL, net............................................... 906,031 1,034,564
---------- ----------
Total assets...................................... $1,874,094 $2,106,796
========== ==========

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
Current maturities of long-term debt...................... $ 8,772 $ 8,309
Accounts payable and accrued expenses..................... 215,684 225,729
Billings in excess of costs and estimated earnings on
uncompleted contracts.................................. 27,981 28,027
---------- ----------
Total current liabilities......................... 252,437 262,065
LONG-TERM DEBT, net of current maturities................... 318,602 406,448
CONVERTIBLE SUBORDINATED NOTES.............................. 172,500 172,500
DEFERRED INCOME TAXES AND OTHER NON-CURRENT LIABILITIES..... 61,599 78,232
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Preferred Stock, $.00001 par value, 10,000,000 shares
authorized:
Series A Convertible Preferred Stock, 3,444,961 shares
issued and outstanding................................ -- --
Common Stock, $.00001 par value, 300,000,000 shares
authorized, 56,400,546 and 59,888,977 shares issued and
outstanding, respectively.............................. -- --
Limited Vote Common Stock, $.00001 par value, 3,345,333
shares authorized, 1,765,912 and 1,284,066 shares
issued and outstanding, respectively................... -- --
Additional paid-in capital................................ 882,344 944,635
Retained earnings......................................... 186,612 258,223
Treasury Stock, at cost, -- and 986,000 common shares,
respectively........................................... -- (15,307)
---------- ----------
Total stockholders' equity........................ 1,068,956 1,187,551
---------- ----------
Total liabilities and stockholders' equity........ $1,874,094 $2,106,796
========== ==========
</Table>

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

QUANTA SERVICES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE INFORMATION)
(UNAUDITED)

<Table>
<Caption>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------------- -----------------------
2000 2001 2000 2001
-------- -------- ---------- ----------

REVENUES........................................ $487,845 $504,472 $1,245,108 $1,526,832
COST OF SERVICES (including depreciation)....... 368,462 394,249 954,408 1,196,903
-------- -------- ---------- ----------
Gross profit.................................. 119,383 110,223 290,700 329,929
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES.... 36,040 45,281 99,506 147,809
GOODWILL AMORTIZATION........................... 5,337 6,569 14,164 19,426
-------- -------- ---------- ----------
Income from operations........................ 78,006 58,373 177,030 162,694
OTHER INCOME (EXPENSE):
Interest expense.............................. (6,928) (9,046) (17,871) (27,412)
Other, net.................................... 816 57 2,203 (502)
-------- -------- ---------- ----------
INCOME BEFORE INCOME TAX PROVISION.............. 71,894 49,384 161,362 134,780
PROVISION FOR INCOME TAXES...................... 31,202 23,061 70,031 62,471
-------- -------- ---------- ----------
NET INCOME...................................... 40,692 26,323 91,331 72,309
DIVIDENDS ON PREFERRED STOCK.................... 234 234 698 698
-------- -------- ---------- ----------
NET INCOME ATTRIBUTABLE TO COMMON STOCK......... $ 40,458 $ 26,089 $ 90,633 $ 71,611
======== ======== ========== ==========
BASIC EARNINGS PER SHARE........................ $ .55 $ .34 $ 1.32 $ .94
======== ======== ========== ==========
DILUTED EARNINGS PER SHARE...................... $ .53 $ .34 $ 1.23 $ .92
======== ======== ========== ==========
SHARES USED IN COMPUTING EARNINGS PER SHARE:
Basic...................................... 73,685 77,552 69,057 76,941
======== ======== ========== ==========
Diluted.................................... 78,696 78,206 75,571 78,184
======== ======== ========== ==========
</Table>

The accompanying notes are an integral part of these condensed consolidated
financial statements.
2

QUANTA SERVICES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)

<Table>
<Caption>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
-------------------- ---------------------
2000 2001 2000 2001
--------- -------- --------- ---------

CASH FLOWS FROM OPERATING ACTIVITIES:
Net income attributable to common stock................... $ 40,458 $ 26,089 $ 90,633 $ 71,611
Adjustments to reconcile net income attributable to common
stock to net cash provided by (used in) operating
activities --
Depreciation and amortization........................... 14,972 20,397 40,377 58,555
(Gain) loss on sale of property and equipment........... (249) 96 (192) 851
Deferred income tax provision........................... 3,652 4,388 5,998 487
Preferred stock dividend................................ 234 234 698 698
Changes in operating assets and liabilities, net of
non-cash transactions --
(Increase) decrease in --
Accounts receivable, net.............................. (29,173) (27,370) (96,164) (40,457)
Costs and estimated earnings in excess of billings on
uncompleted contracts............................... (10,811) 3,418 (11,419) (1,982)
Inventories........................................... (3,436) 2,325 (6,680) (1,687)
Prepaid expenses and other current assets............. (156) (3,201) 37 412
Increase (decrease) in --
Accounts payable and accrued expenses................. 3,171 (24,765) 14,735 (102)
Billings in excess of costs and estimated earnings on
uncompleted contracts............................... 3,990 (6,104) 3,823 (46)
Other, net............................................ (438) (302) (375) (1,764)
--------- -------- --------- ---------
Net cash provided by (used in) operating
activities........................................ 22,214 (4,795) 41,471 86,576
--------- -------- --------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of property and equipment.............. 301 739 1,186 2,650
Additions of property and equipment....................... (21,881) (18,443) (65,203) (72,800)
Cash paid for acquisitions, net of cash acquired.......... (128,827) (31,267) (214,486) (113,719)
Notes receivable.......................................... -- -- -- 2,658
Net proceeds from sale of business........................ -- -- 2,410 --
--------- -------- --------- ---------
Net cash used in investing activities............... (150,407) (48,971) (276,093) (181,211)
--------- -------- --------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings (payments) under bank lines of credit...... (85,760) 66,580 (138,946) 93,700
Proceeds from other long-term debt........................ 232,588 422 384,270 1,992
Payments on other long-term debt.......................... (5,984) (2,822) (23,059) (14,727)
Debt issuance costs....................................... (5,854) -- (7,958) --
Issuances of stock, net of offering costs................. 8,696 4,623 18,069 8,721
Purchase of treasury stock................................ -- (15,307) -- (15,307)
Exercise of stock options................................. 429 277 9,766 5,729
--------- -------- --------- ---------
Net cash provided by financing activities........... 144,115 53,773 242,142 80,108
--------- -------- --------- ---------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS........ 15,922 7 7,520 (14,527)
CASH AND CASH EQUIVALENTS, beginning of period.............. 2,373 2,772 10,775 17,306
--------- -------- --------- ---------
CASH AND CASH EQUIVALENTS, end of period.................... $ 18,295 $ 2,779 $ 18,295 $ 2,779
========= ======== ========= =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid for --
Interest................................................ $ 6,207 $ 15,429 $ 13,453 $ 32,803
Income taxes............................................ 20,814 28,019 58,069 34,194
</Table>

The accompanying notes are an integral part of these condensed consolidated
financial statements.
3

QUANTA SERVICES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

1. BUSINESS AND ORGANIZATION:

Quanta Services, Inc. is a leading provider of specialized contracting
services, offering end-to-end network solutions to the electric power,
telecommunications and cable television industries. Our comprehensive services
include designing, installing, repairing and maintaining network infrastructure.
Reference herein to the "Company" includes Quanta and its subsidiaries. The
consolidated financial statements of the Company include the accounts of Quanta
and its wholly owned subsidiaries. All significant intercompany accounts and
transactions have been eliminated in consolidation.

Since its inception and through 2000, Quanta acquired 77 businesses. The
Company has acquired seven additional businesses through September 30, 2001 for
an aggregate consideration of approximately 2.1 million shares of common stock
and $112.3 million in cash. The Company intends to continue to acquire, through
merger or purchase, similar companies to expand its national and regional
operations.

In the course of its operations, the Company is subject to certain risk
factors, including but not limited to: rapid technological and structural
changes in the industries the Company serves, risks related to internal growth
and operating strategies, risks associated with an economic downturn, the
collectibility of receivables, risks related to acquisition financing and
integration, significant fluctuations in quarterly results, risks associated
with contracts, management of growth, dependence on key personnel, availability
of qualified employees, unionized workforce, competition, recoverability of
goodwill, potential exposure to environmental liabilities and anti-takeover
measures.

The board of directors of the Company has authorized a Stock Repurchase
Plan under which up to $75 million of the Company's common stock may be
repurchased. Under the Stock Repurchase Plan, the Company may conduct purchases
through open market transactions in accordance with applicable securities laws,
and through November 9, 2001, the Company has repurchased 986,000 shares of
common stock for $15.3 million. The amount of shares purchased and the timing of
any purchases will be based on a number of factors, including the number of
shares needed for replenishment of employee benefit plans, the market price of
the stock, market conditions and as the Company's management deems appropriate.

Interim Condensed Consolidated Financial Information

These unaudited condensed consolidated financial statements have been
prepared pursuant to the rules of the SEC. Certain information and footnote
disclosures, normally included in annual financial statements prepared in
accordance with accounting principles generally accepted in the United States,
have been condensed or omitted pursuant to those rules and regulations. The
Company believes that the disclosures made are adequate to make the information
presented not misleading. In the opinion of management, all adjustments,
consisting only of normal recurring adjustments, necessary to fairly present the
financial position, results of operations and cash flows with respect to the
interim consolidated financial statements have been included. The results of
operations for the interim periods are not necessarily indicative of the results
for the entire fiscal year. The results of the Company have historically been
subject to significant seasonal fluctuations.

It is suggested that these condensed consolidated financial statements be
read in conjunction with the audited financial statements and notes thereto of
Quanta Services, Inc. and subsidiaries included in the Company's Annual Report
on Form 10-K, which was filed with the SEC on April 2, 2001.

Use of Estimates and Assumptions

The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires management to make
estimates and assumptions that affect (i) the reported amounts of assets and
liabilities, (ii) the disclosure of contingent assets and liabilities known to
exist as of the date the
4

QUANTA SERVICES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

financial statements are published and (iii) the reported amount of net revenues
and expenses recognized during the periods presented. The Company reviews all
significant estimates affecting its consolidated financial statements on a
recurring basis and records the effect of any necessary adjustments prior to
their publication. Adjustments made with respect to the use of estimates often
relate to improved information not previously available. Uncertainties with
respect to such estimates and assumptions are inherent in the preparation of
financial statements. The accompanying consolidated balance sheets include
preliminary allocations of the respective purchase price paid for the companies
acquired during the latest 12 months using the "purchase" method of accounting
and, accordingly, are subject to final adjustment.

Self-Insurance

The Company is insured for workers' compensation, employer's liability,
auto liability and general liability claims, subject to a deductible of $500,000
per accident or occurrence. Losses up to the deductible amounts are accrued
based upon the Company's estimates of the ultimate liability for claims incurred
and an estimate of claims incurred but not reported. The accruals are based upon
known facts and historical trends and management believes such accruals to be
adequate.

2. PER SHARE INFORMATION:

Earnings per share amounts are based on the weighted average number of
shares of common stock and common stock equivalents outstanding during the
period. The weighted average number of shares used to compute basic and diluted
earnings per share for the three and nine months ended September 30, 2000 and
2001 is illustrated below (in thousands):

<Table>
<Caption>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------------- -----------------
2000 2001 2000 2001
-------- -------- ------- -------

NET INCOME:
Net income attributable to common stock...... $40,458 $26,089 $90,633 $71,611
Dividends on Preferred Stock................. 234 234 698 698
------- ------- ------- -------
Net income for basic earnings per share...... 40,692 26,323 91,331 72,309
------- ------- ------- -------
Effect of convertible subordinated notes
under the "if converted" method --interest
expense addback, net of taxes............. 847 -- 1,838 --
------- ------- ------- -------
Net income for diluted earnings per share.... $41,539 $26,323 $93,169 $72,309
======= ======= ======= =======
WEIGHTED AVERAGE SHARES:
Weighted average shares outstanding for basic
earnings per share, including convertible
Preferred Stock........................... 73,685 77,552 69,057 76,941
Effect of dilutive stock options............. 2,529 654 2,459 1,243
Effect of convertible subordinated notes
under the "if converted"
method -- weighted convertible shares
issuable.................................. 2,482 -- 4,055 --
------- ------- ------- -------
Weighted average shares outstanding for
diluted earnings per share................ 78,696 78,206 75,571 78,184
======= ======= ======= =======
</Table>

Pursuant to EITF Topic D-95, "Effect of Participating Convertible
Securities on the Computation of Basic Earnings Per Share," the impact of the
Series A Convertible Preferred Stock has been included in the

QUANTA SERVICES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

computation of basic earnings per share and prior period amounts have been
restated accordingly. For the three and nine months ended September 30, 2000,
there were approximately 0.4 million and 0.2 million stock options,
respectively, excluded from the computation because the options' exercise prices
were greater than the average market price of the Company's common stock. For
the three and nine months ended September 30, 2001, stock options of
approximately 5.5 million and 2.4 million, respectively, were excluded from the
computation of diluted earnings per share because the options' exercise prices
were greater than the average market price of the Company's common stock. For
the three and nine months ended September 30, 2001 the effect of assuming
conversion of the convertible subordinated notes would be antidilutive and they
were therefore excluded from the calculation of diluted earnings per share.

3. INCOME TAXES:

Certain of the businesses the Company has acquired were S corporations for
income tax purposes and, accordingly, any income tax liabilities for the periods
prior to the acquisitions are the responsibility of the respective stockholders.
Effective with the acquisitions, the S corporations converted to C corporations.
Accordingly, an estimated deferred tax liability has been recorded to provide
for the estimated future income tax liability as a result of the difference
between the book and tax bases of the net assets of these former S corporations.
For purposes of these consolidated financial statements, federal and state
income taxes have been provided for the post-acquisition periods.

4. NEW ACCOUNTING PRONOUNCEMENTS:

In July 2001, the Financial Accounting Standards Board (the FASB) issued
SFAS No. 141, "Business Combinations." SFAS No. 141 requires that all business
combinations initiated after June 30, 2001, be accounted for using the purchase
method. The FASB also issued SFAS No. 142, "Goodwill and Other Intangible
Assets." SFAS No. 142 requires that goodwill be assessed at least annually for
impairment by applying a fair-value based test. Goodwill will no longer be
subject to amortization over its estimated useful life. In addition, acquired
intangible assets are required to be recognized and amortized over their useful
lives if the benefit of the asset is based on contractual or legal rights. While
most provisions of SFAS No. 142 are effective for the Company beginning January
1, 2002, goodwill and intangible assets acquired after June 30, 2001, are
subject immediately to the non-amortization and amortization provisions of the
statement, respectively. The Company is currently analyzing the provisions of
SFAS No. 142 and has not yet made a determination of the impact the adoption
will have on the consolidated financial statements.

In August 2001, the FASB issued SFAS No. 144, "Accounting for the
Impairment/Disposal of Long-Lived Assets." SFAS No. 144 addresses the financial
accounting and reporting for the impairment of disposal of long-lived assets.
The Company is required to and will adopt SFAS No. 144 on January 1, 2002 and
believes that the adoption will not have a material effect on its consolidated
results of operations or financial position.

5. DEBT:

Credit Facility

The Company currently has a $350.0 million credit facility with 14
participating banks. The credit facility is secured by a pledge of all of the
capital stock of the Company's subsidiaries and the majority of the Company's
assets and is to provide funds to be used for working capital, to finance
acquisitions and for other general corporate purposes. Amounts borrowed under
the credit facility bear interest at a rate equal to either (a) the London
Interbank Offered Rate (the 30 day LIBOR rate was 2.69% at September 30, 2001)
plus 1.00% to 2.00%, as determined by the ratio of the Company's total funded
debt to EBITDA (as defined in the credit facility) or (b) the bank's prime rate
(which was 6.00% at September 30, 2001) plus up to 0.25%, as determined by the
ratio of the Company's total funded debt to EBITDA. Commitment fees of 0.25% to
0.50%
6

QUANTA SERVICES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(based on certain financial ratios) are due on any unused borrowing capacity
under the credit facility. The credit facility matures June 14, 2004. The
Company's subsidiaries guarantee the repayment of all amounts due under the
facility and the facility restricts pledges on all material assets. The credit
facility contains usual and customary covenants for a credit facility of this
nature including the prohibition of the payment of dividends on common stock,
certain financial ratios and indebtedness covenants and the consent of the
lenders for acquisitions exceeding a certain level of cash consideration. As of
September 30, 2001, $186.6 million was borrowed under the credit facility, and
the Company had $39.6 million of letters of credit outstanding, resulting in a
borrowing availability of $123.8 million under the credit facility.

Senior Secured Notes

In March 2000, the Company closed a private placement of $150.0 million
principal amount of senior secured notes primarily with insurance companies. In
September 2000, the Company issued an additional $60.0 million principal amount
of senior secured notes. The resulting $210.0 million of senior secured notes
have maturities ranging from five to ten years with a weighted average interest
rate of 8.41% and, pursuant to an intercreditor agreement, rank equally in right
of repayment with indebtedness under the Company's credit facility. The senior
secured notes have financial covenants similar to the credit facility. Proceeds
from this private placement were used to reduce outstanding borrowings under the
credit facility.

Convertible Subordinated Notes

On July 19, 2000 the Company issued $150.0 million principal amount of
convertible subordinated notes and, on August 7, 2000, the Company issued an
additional $22.5 million principal amount of convertible subordinated notes due
to the exercise of the underwriters' over-allotment option. Net proceeds from
the offering were used to repay outstanding indebtedness under the credit
facility. The convertible subordinated notes bear interest at 4.0% per year and
are convertible into shares of the Company's common stock at a price of $54.53
per share. The convertible subordinated notes require semi-annual interest
payments beginning December 31, 2000, until the notes mature on July 1, 2007.
The Company has the option to redeem the notes beginning July 3, 2003.

6. SERIES A CONVERTIBLE PREFERRED STOCK:

In September 1999, the Company entered into a securities purchase agreement
with UtiliCorp pursuant to which the Company issued 1,860,000 shares of Series A
Convertible Preferred Stock, $.00001 par value per share, for an initial
investment of $186.0 million, before transaction costs. In September 2000,
UtiliCorp converted 7,924,805 shares of common stock into an additional
1,584,961 shares of Series A Convertible Preferred Stock at a rate of one share
of Series A Convertible Preferred Stock for five shares of common stock. The
holders of the Series A Convertible Preferred Stock are entitled to receive
dividends in cash at a rate of 0.5% per annum on an amount equal to $53.99 per
share, plus all unpaid dividends accrued. In addition to the preferred dividend,
the holders are entitled to participate in any cash or non-cash dividends or
distributions declared and paid on the shares of common stock, as if each share
of Series A Convertible Preferred Stock had been converted into common stock at
the applicable conversion price immediately prior to the record date for payment
of such dividends or distributions. However, holders of Series A Convertible
Preferred Stock will not participate in non-cash dividends or distributions if
such dividends or distributions cause an adjustment in the price at which Series
A Convertible Preferred Stock converts into common stock. At any time after the
sixth anniversary of the original issuance of the Series A Convertible Preferred
Stock, if the closing price per share of the Company's common stock is greater
than $20.00, then the Company may terminate the preferred dividend. At any time
after the sixth anniversary of the original issuance of the Series A Convertible
Preferred Stock, if the closing price per share of the Company's common stock is
equal to or less than $20.00, then the preferred dividend may, at the option of
UtiliCorp, be adjusted to the then

QUANTA SERVICES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

"market coupon rate," which shall equal the Company's after-tax cost of
obtaining financing, excluding common stock, to replace UtiliCorp's investment
in the Company.

UtiliCorp is entitled to that number of votes equal to the number of shares
of common stock into which the outstanding shares of Series A Convertible
Preferred Stock are then convertible. Subject to certain limitations, UtiliCorp
is entitled to elect three of the total number of directors of the Company. All
or any portion of the outstanding shares of Series A Convertible Preferred Stock
may, at the option of UtiliCorp, be converted at any time into fully paid and
non-assessable shares of common stock. The conversion price currently is $20.00,
yielding 17,224,805 shares of common stock upon conversion of all outstanding
shares of Series A Convertible Preferred Stock. The conversion price may be
adjusted under certain circumstances.

7. SEGMENT INFORMATION:

The Company operates in one reportable segment as a specialty contractor.
The Company provides comprehensive network solutions to the electric power,
telecommunications and cable television industries, including designing,
installing, repairing and maintaining network infrastructure. Each of these
services is provided by various Company subsidiaries and discrete financial
information is not provided to management at the service level. The following
table presents information regarding revenues derived from the industries noted
above.

<Table>
<Caption>
NINE MONTHS ENDED
SEPTEMBER 30,
-----------------------
2000 2001
---------- ----------
(IN THOUSANDS)

Electric power network services............................. $ 349,260 $ 578,669
Telecommunications network services......................... 525,536 488,586
Cable television network services........................... 204,994 212,230
Ancillary services.......................................... 165,318 247,347
---------- ----------
$1,245,108 $1,526,832
========== ==========
</Table>

The Company does not have significant operations or long-lived assets in
countries outside of the United States.

8. RELATED PARTY TRANSACTIONS:

In September 1999, the Company entered into a strategic alliance agreement
with UtiliCorp. Under the terms of the strategic alliance agreement, UtiliCorp
will use the Company, subject to the Company's ability to perform the required
services, as a preferred contractor in outsourced transmission and distribution
infrastructure installation and maintenance and natural gas distribution
installation and maintenance in all areas serviced by UtiliCorp, provided that
the Company provides such services at a competitive cost. The strategic alliance
agreement has a term of six years.

The Company entered into a management services agreement in September 1999
with UtiliCorp for advice and services including financing activities; corporate
strategic planning; research on the restructuring of the electric power
industry; the development, evaluation and marketing of the Company's products,
services and capabilities; identification of and evaluation of potential U.S.
acquisition candidates and other merger and acquisition advisory services; and
other services that the Company may reasonably request. The management services
agreement required the Company to make quarterly payments to UtiliCorp of
$2,325,000 through September 30, 2005. In December 2000, the Company agreed to
conclude its obligations under the management services agreement with UtiliCorp
in exchange for a one-time payment to UtiliCorp of approximately $28.6 million.

QUANTA SERVICES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Management believes transactions with related parties were under terms no
less favorable to the Company than those arranged with other parties.

In September 2001, UtiliCorp announced that it intended to purchase a
sufficient number of shares of the Company's common stock to enable UtiliCorp to
consolidate the Company's financial statements with its own financial
statements. In October and November 2001, the Company engaged in discussions
with UtiliCorp and entered into a series of standstill agreements with UtiliCorp
that impose restrictions with respect to the purchase of Company common stock by
UtiliCorp and the adoption of any takeover defense measures by the Company. The
most recent extension of the agreement expired on November 13, 2001.

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

INTRODUCTION

The following discussion should be read in conjunction with the Condensed
Consolidated Financial Statements and related notes thereto included elsewhere
in this Quarterly Report on Form 10-Q. Except for the historical financial
information contained herein, the matters discussed in this Quarterly Report on
Form 10-Q may be considered "forward-looking" statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. Such statements include declarations regarding our intent,
belief or current expectations, statements regarding the future results of
acquired companies and our gross margins. Any such forward-looking statements
are not guarantees of future performance and involve a number of risks and
uncertainties. Actual results could differ materially from those indicated by
such forward-looking statements. Among the important factors that could cause
actual results to differ materially from those indicated by such forward-looking
statements are the risk factors identified in our Annual Report on Form 10-K,
which was filed with the SEC on April 2, 2001, which is available at the SEC's
Web site at www.sec.gov.

We derive our revenues from one reportable segment by providing specialized
contracting services and offering comprehensive network solutions. Our customers
include electric power, telecommunications and cable television companies, as
well as commercial, industrial and governmental entities.

We enter into contracts principally on the basis of competitive bids, the
final terms and prices of which we frequently negotiate with the customer.
Although the terms of our contracts vary considerably, most are made on either a
fixed price or unit price basis in which we agree to do the work for a fixed
amount for the entire project (fixed price) or for units of work performed (unit
price). We also perform services on a cost-plus or time and materials basis. We
are generally able to achieve higher margins on fixed price and unit price
contracts than on cost-plus contracts as a result of our experience in bidding
and performance. Our exposure to loss on fixed price contracts has historically
been limited by the high volume and relatively short duration of the fixed price
contracts we undertake. However, as we perform larger projects, our reported
margins may be significantly affected by actual results on these projects.

We complete most installation projects within one year, while we frequently
provide maintenance and repair work under open-ended, unit price master service
agreements which are renewable annually. We generally recognize revenue when
services are performed except when work is being performed under fixed price
contracts. We typically record revenues from fixed price contracts on a
percentage-of-completion basis, using the cost-to-cost method based on the
percentage of total costs incurred to date in proportion to total estimated
costs to complete the contract. Some of our customers require us to post
performance and payment bonds upon execution of the contract, depending upon the
nature of the work to be performed. Our fixed price contracts often include
payment provisions pursuant to which the customer withholds a 5% to 10%
retainage from each progress payment and remits the retainage to us upon
completion and approval of the work.

Cost of services consists primarily of salaries, wages and benefits to
employees, depreciation, fuel and other vehicle expenses, equipment rentals,
subcontracted services, insurance, facilities expenses, materials and parts and
supplies. Our gross margin, which is gross profit expressed as a percentage of
revenues, is typically higher on projects where labor, rather than materials,
constitutes a greater portion of the cost of services. We can predict material
costs more accurately than labor costs. Therefore, to compensate for the
potential variability of labor costs, we seek to maintain higher margins on our
labor-intensive projects. Certain of our subsidiaries were previously subject to
deductibles ranging from $100,000 to $1,000,000 for workers' compensation
insurance. Currently, we have a deductible of $500,000 per occurrence related to
workers' compensation, automobile and general liability claims. Fluctuations in
insurance accruals related to these deductibles could have an impact on gross
margins in the period in which such adjustments are made. Selling, general and
administrative expenses consist primarily of compensation and related benefits
to management, administrative salaries and benefits, marketing, office rent and
utilities, communications and professional fees.

RESULTS OF OPERATIONS

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

<Table>
<Caption>
THREE MONTHS ENDED SEPTEMBER 30, NINE MONTHS ENDED SEPTEMBER 30,
----------------------------------- ---------------------------------------
2000 2001 2000 2001
---------------- ---------------- ------------------ ------------------
(DOLLARS IN THOUSANDS)

Revenues.................... $487,845 100.0% $504,472 100.0% $1,245,108 100.0% $1,526,832 100.0%
Cost of services (including
depreciation)............. 368,462 75.5 394,249 78.2 954,408 76.7 1,196,903 78.4
-------- ----- -------- ----- ---------- ----- ---------- -----
Gross profit....... 119,383 24.5 110,223 21.8 290,700 23.3 329,929 21.6
Selling, general and
administrative expenses... 36,040 7.4 45,281 8.9 99,506 8.0 147,809 9.7
Goodwill amortization....... 5,337 1.1 6,569 1.3 14,164 1.1 19,426 1.3
-------- ----- -------- ----- ---------- ----- ---------- -----
Income from
operations....... 78,006 16.0 58,373 11.6 177,030 14.2 162,694 10.6
Interest expense............ (6,928) (1.4) (9,046) (1.8) (17,871) (1.4) (27,412) (1.8)
Other income, net........... 816 0.1 57 -- 2,203 0.1 (502) --
-------- ----- -------- ----- ---------- ----- ---------- -----
Income before income tax
provision................. 71,894 14.7 49,384 9.8 161,362 12.9 134,780 8.8
Provision for income
taxes..................... 31,202 6.4 23,061 4.6 70,031 5.6 62,471 4.1
-------- ----- -------- ----- ---------- ----- ---------- -----
Net income......... $ 40,692 8.3% $ 26,323 5.2% $ 91,331 7.3% $ 72,309 4.7%
======== ===== ======== ===== ========== ===== ========== =====
</Table>

THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2001, COMPARED TO THE THREE AND NINE
MONTHS ENDED SEPTEMBER 30, 2000

Revenues. Revenues increased $16.6 million and $281.7 million, or 3.4% and
22.6%, to $504.5 million and $1.53 billion for the three and nine months ended
September 30, 2001. This increase was primarily attributable to revenues of
$32.9 million and $103.6 million for the three and nine months ended September
30, 2001 from platform companies acquired subsequent to September 30, 2000 which
continued to exist as separate reporting subsidiaries, a full period of
contributed revenues for the three and nine months ended September 30, 2001 for
those companies acquired through September 30, 2000 and strong growth in
electric power and gas revenues as a result of increased outsourcing and
deregulation. The increase has been partially offset by decreased revenues from
telecommunications customers due in part to the continued inability of certain
of these customers to raise new capital and the overall downturn in the national
economy, which have negatively impacted the contracting for telecommunications
services.

Gross profit. Gross profit decreased $9.2 million or 7.7% to $110.2
million for the three months ended September 30, 2001. As a percentage of
revenues, gross margin decreased from 24.5% for the three months ended September
30, 2000, to 21.8% for the three months ended September 30, 2001. Gross profit
increased $39.2 million or 13.5%, to $329.9 million for the nine months ended
September 30, 2001. Gross margin decreased from 23.3% for the nine months ended
September 30, 2000, to 21.6% for the nine months ended September 30, 2001. The
decrease in gross margins for both the three and nine months ended September 30,
2001 resulted from lower margins on work performed for telecommunications
customers due to increased pricing pressures, lower asset utilization and the
economic factors noted above, partially offset by higher margins received on
work performed for electric power customers. For the nine months ended September
30, 2001, margins were additionally impacted by poor weather conditions
experienced during the first quarter of 2001.

Selling, general and administrative expenses. Selling, general and
administrative expenses increased $9.2 million and $48.3 million, or 25.6% and
48.5%, to $45.3 million and $147.8 million for the three and nine months ended
September 30, 2001. Of this increase, $3.0 million and $7.5 million,
respectively, was attributable to the platform companies we acquired subsequent
to September 30, 2000. Selling, general and

administrative expenses also included a full period of costs in 2001 associated
with those companies acquired during the first nine months of 2000. For the nine
months ended September 30, 2001, selling, general and administrative expenses
reflect $19.4 million in charges including: a charge of $16.2 million to provide
allowances for accounts receivable risk associated with the continued decline in
the financial strength of certain customers in the telecommunications industry
and $3.2 million in charges associated with the realignment of field personnel
and discontinuance of negotiations regarding the acquisition of certain
telecommunications contractors. The remainder of the increase was attributable
to tuck-in acquisitions and the continued establishment of infrastructure to
facilitate our growth and to integrate our acquired businesses. As a percentage
of revenues, selling, general and administrative expenses increased due to the
items noted above.

Interest expense. Interest expense increased $2.1 million and $9.5
million, or 30.6% and 53.4%, to $9.0 million and $27.4 million for the three and
nine months ended September 30, 2001, primarily due to higher levels of debt
resulting from the acquisitions of the companies we purchased subsequent to
September 30, 2000 and higher levels of receivables due to lengthened customer
payment cycles.

Provision for income taxes. The provision for income taxes was $23.1
million and $62.5 million for the three and nine months ended, September 30,
2001, with effective tax rates of 46.7% and 46.4%, respectively, compared to
$31.2 million and $70.0 million for the three and nine months ended September
30, 2000, and an effective tax rate of 43.4%. The increase in the effective rate
is primarily due to less absorption of the non-deductible portion of goodwill
amortization.

Net Income. Net income decreased $14.4 million and $19.0 million, or 35.3%
and 20.8%, to $26.3 million and $72.3 million for the three and nine months
ended September 30, 2001, compared to $40.7 million and $91.3 million for the
three and nine months ended September 30, 2000.

LIQUIDITY AND CAPITAL RESOURCES

As of September 30, 2001, we had cash and cash equivalents of $2.8 million,
working capital of $402.4 million and long-term debt of $578.9 million, net of
current maturities. Our long-term debt balance at that date included borrowings
of $186.6 million under our credit facility, $210.0 million of senior secured
notes, $172.5 million of convertible subordinated notes and $9.8 million of
other debt. In addition, we had $39.6 million of letters of credit outstanding
under the credit facility.

During the nine months ended September 30, 2001, operating activities
provided net cash flow of $86.6 million. Changes in working capital accounts are
affected by the acquisitions throughout the period and as such are not
comparable to prior periods. We used net cash in investing activities of $181.2
million, including $113.7 million used for the purchase of businesses and
contingent consideration issued for an acquisition closed prior to December 31,
2000, net of cash acquired. Financing activities provided a net cash flow of
$80.1 million, resulting primarily from $93.7 million of borrowings from our
credit facility offset by $15.3 million used for the purchase of treasury stock.

We currently have a $350.0 million credit facility with 14 participating
banks. The credit facility is secured by a pledge of all of the capital stock of
our operating subsidiaries and the majority of our assets. We use the credit
facility to provide funds to be used for working capital, to finance
acquisitions and for other general corporate purposes. Amounts borrowed under
the credit facility bear interest at a rate equal to either (a) LIBOR plus 1.00%
to 2.00%, as determined by the ratio of our total funded debt to EBITDA (as
defined in the credit facility) or (b) the bank's prime rate plus up to 0.25%,
as determined by the ratio of our total funded debt to EBITDA. We pay commitment
fees of 0.25% to 0.50% (based on total funded debt to EBITDA) on any unused
borrowing capacity under the credit facility. Our subsidiaries guarantee
repayment of all amounts due under the credit facility, and the credit facility
restricts pledges of material assets. We agreed to usual and customary covenants
for a credit facility of this nature, including a prohibition on the payment of
dividends on common stock, certain financial ratios and indebtedness covenants
and a requirement to obtain the consent of the lenders for acquisitions
exceeding a certain level of cash consideration. As of November 9, 2001, we had
approximately $168.0 million in outstanding borrowings under the credit facility

and $47.8 million of letters of credit outstanding, resulting in a borrowing
availability of $134.2 million under the credit facility.

Our board of directors has authorized a Stock Repurchase Plan under which
up to $75 million of our common stock may be repurchased. Under the Stock
Repurchase Plan, we may conduct purchases through open market transactions in
accordance with applicable securities laws, and through November 9, 2001, we
have repurchased 986,000 shares of common stock for $15.3 million. The amount of
shares purchased and the timing of any purchases will be based on a number of
factors, including the number of shares needed for replenishment of employee
benefit plans, the market price of the stock, market conditions and as our
management deems appropriate.

Between January 1, 2001, and September 30, 2001, we acquired seven
companies for an aggregate consideration of 2.1 million shares of common stock
and $112.3 million in cash. The cash portion of such consideration was provided
by borrowings under our credit facility. The timing, size or success of any
acquisition effort and the associated potential capital commitments cannot be
predicted.

We anticipate that our cash flow from operations and our credit facility
will provide sufficient cash to enable us to meet our working capital needs,
debt service requirements, and planned capital expenditures for property and
equipment for at least the next 12 months. However, if companies we wish to
acquire are unwilling to accept our common stock as part of the consideration
for the sale of their businesses, we could be required to utilize more cash to
complete acquisitions. If sufficient funds were not available from operating
cash flow or through borrowings under the credit facility, we may be required to
seek additional financing through the public or private sale of equity or debt
securities. There can be no assurance that we could secure such financing if and
when we need it or on terms we would deem acceptable.

SEASONALITY; FLUCTUATIONS OF QUARTERLY RESULTS

Our results of operations can be subject to seasonal variations. During the
winter months, demand for new projects and new maintenance service arrangements
may be lower due to reduced construction activity. However, demand for repair
and maintenance services attributable to damage caused by inclement weather
during the winter months may partially offset the loss of revenues from lower
demand for new projects and new maintenance service arrangements. Additionally,
our industry can be highly cyclical. As a result, our volume of business may be
adversely affected by declines in new projects in various geographic regions in
the United States. Typically, we experience lower gross and operating margins
during the winter months. The timing of acquisitions, variations in the margins
of projects performed during any particular quarter, the timing and magnitude of
acquisition assimilation costs and regional economic conditions may also
materially affect quarterly results. Accordingly, our operating results in any
particular quarter may not be indicative of the results that can be expected for
any other quarter or for the entire year.

NEW ACCOUNTING PRONOUNCEMENTS

believes that the adoption will not have a material effect on its consolidated
results of operations or financial position.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

No material changes have occurred to the information previously provided in
our Annual Report on Form 10-K for the fiscal year ended December 31, 2000.

PART II -- OTHER INFORMATION

QUANTA SERVICES, INC. AND SUBSIDIARIES

ITEM 2. CHANGES IN SECURITIES

Between June 30, 2001, and September 30, 2001, the Company completed one
acquisition in which some of the consideration was unregistered securities of
the Company. The aggregate consideration paid in this transaction was $34.2
million in cash and 1,093,578 shares of common stock. This acquisition was not
affiliated with any other acquisition prior to such transaction.

All securities listed on the following table were shares of common stock.
The Company relied on Section 4(2) of the Securities Act of 1933, as amended, as
the basis for exemption from registration. For all issuances, the purchasers
were "accredited investors" as defined in Rule 501 promulgated pursuant to the
Securities Act of 1933, as amended. All issuances were to the owners of
businesses acquired in privately negotiated transactions, not pursuant to public
solicitation.

<Table>
<Caption>
NUMBER OF
DATE SHARES PURCHASERS CONSIDERATION
- ---- --------- ---------- -------------

8/15/01 1,093,578 Ten owners of North Houston Acquisition of North Houston
Pole Line Corp. and its Pole Line Corp. and its
affiliated entities affiliated entities
</Table>

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a)Exhibits.

<Table>
<Caption>
EXHIBIT
NUMBER DESCRIPTION
------- -----------

99.1 -- Standstill Agreement dated October 8, 2001 between Quanta
Services, Inc. and UtiliCorp United Inc. (amended on
November 7, 2001 to extend the term through 9:30 a.m.
(eastern standard time) on November 13, 2001) (previously
filed as an exhibit to Amendment No. 14 to UtiliCorp United
Inc.'s Schedule 13/D (No. 005-54689) and incorporated herein
by reference).
</Table>

(b) Reports on Form 8-K.

None.

SIGNATURE

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

QUANTA SERVICES, INC.

BY: /s/ DERRICK A. JENSEN
------------------------------------
Derrick A. Jensen
Vice President, Controller and
Chief Accounting Officer

Dated: November 14, 2001