Rick Vilsoet - VP and General Counsel Steven Nielsen - President and CEO Drew DeFerrari - SVP and CFO Tim Estes - COO.

John Rogers - D.A. Davidson Sean Eastman - KeyBanc Capital Markets Alex Rygiel - FBR Capital Markets Simon Leopold - Raymond James Adam Thalhimer - BB&T Capital Markets Christian Schwab - Craig Hallum Capital Group Alan Mitrani - Sylvan Lake Asset Management.

Ladies and gentlemen, thank you for standing by and welcome to the Dycom Results Conference Call. For the conference all participants are in a listen-only mode. There will be an opportunity for your questions and instructions will be given at that time. As a reminder, today's call is being recorded. I'll turn the conference now to Mr. Steven Nielsen.

Please go ahead..

Thank you, John. Good morning, everyone. I would like to thank you for attending this conference call to review our fourth quarter fiscal 2015 results. During the call, we will be referring to a slide presentation, which can be found on our website, www.dycomind.com under the heading Events.

Relevant slides will be identified by number throughout our presentation. Going to Slide 2, today we have on the call, Tim Estes, our Chief Operating Officer; Drew DeFerrari, our Chief Financial Officer; and Rick Vilsoet, our General Counsel. Now, I will turn the call over to Rick Vilsoet..

Thank you, Steve. Referring to Slide 3, except for historical information, the statements made by Company Management during this call may be forward-looking and are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995.

These forward-looking statements, including those relating to Company's outlook, are based on Management's current expectations, estimates and projections and involve known and unknown risks and uncertainties which may cause the Company's actual results and future periods to differ materially from forecasted results.

Those risks and uncertainties are more fully described in the Company's annual report on Form 10-K for the year ended July 26, 2014, and other periodic filings with the Securities and Exchange Commission. The Company assumes no obligation to update forward-looking statements.

Steve?.

Thanks Rick. Now moving to Slide 4, and a review of our fourth quarter results. As you review our results, please note that we've presented certain revenue amounts excluding revenues from businesses acquired during the fourth quarter of fiscal 2014, and the first and fourth quarters of fiscal 2015.

Certain revenue amounts excluding revenues from stimulus funded projects, adjusted EBITDA, and adjusted EPS all of which are non-GAAP financial measures in our release and comments. See Slides 13 through 16 for a reconciliation of non-GAAP measures to GAAP measures. Revenue increased significantly year-over-year to $578.5 million, an increase of 20%.

This quarter was impacted by a broad increase in demand from each and every one of our top five customers as we deployed 1 gigabit wireline networks and grew core market share. These factors offset the decline in work for rural customers receiving stimulus funding and a reduction in services for wireless carriers.

Gross margins increased 308 basis points as a percentage of revenue, reflecting a better mix of work types, increased revenue density, and broadly improved operating performance, while general and administrative expenses also improved year-over-year decreasing 31 basis points.

All of these factors produced adjusted EBITDA of $88.5 million or 15.3% of revenue and net income of $0.97 per share, compared to $0.48 in the year ago quarter.

Cash and availability under our credit facility totaled $321.6 million during the quarter, and in the first quarter of fiscal '16, we repurchased approximately 1,055,000 shares of our common stock for $66.5 million at an average price of $62.97 per share.

In addition, we acquired two businesses during the quarter for $22.1 million and subsequent to the end of the quarter purchased TelCom Construction for $48.6 million.

Our outstanding performance this entire fiscal year occurred within an industry environment where our customers continued to announce surprisingly positive news about their future plans.

These plans augur well for increased opportunities and encourage us to confidently contemplate the possibility of improved prospects even as we're currently producing very strong results. Going to Slide 5, today a number of major industry participants are deploying significant wireline networks across broad sections of the country.

These newly deployed networks are generally designed to provision bandwidth enabling 1 gigabit speeds to individual consumers. Recently, one industry participant articulated plans to deploy speeds to 10 gigabits.

These industry developments are producing opportunities across a broad array or our existing customers, which in aggregate are unprecedented for the industry. Currently, we're providing program management, engineering and design, aerial and underground construction and fulfillment services for 1 gigabit deployments.

These services are being provided across the country in dozens of metropolitan areas to a number of customers. Revenues and opportunities driven by this new industry standard accelerated during the fourth quarter of fiscal 2015.

Customer spending modulations have diminished and customers are publicly outlining multiyear initiatives, which are being implemented and managed in some instances through monthly build-out objectives on a market by market basis. As network strategies affirmed, timing uncertainty has receded.

It is increasingly likely that in retrospect, calendar year 2015 will be clearly seen as the foundational year for massive investment cycle in wireline networks, reminiscent of and perhaps more meaningful than the one that occurred in the 1990s.

We remain confident that our competitively unparalleled scale and market share as well as our robust financial strength positions us well to deliver valuable services to our customers for those opportunities which have the highest likelihood of benefiting our shareholders.

Now moving to Slide 6, during the quarter we experienced the effects of an overall industry environment, which showed clear signs of acceleration. Organic revenue grew 18.2%, while revenue excluding services provided for stimulus funded projects grew organically at a rate of 22.2%.

Our top five customers combined produced 64.3% of revenue, increasing 31% organically while all other customers increased 0.7% organically. Of note for the second consecutive quarter, each one of our top five customers grew organically. AT&T was our largest customer at 19.1% of total revenue or $110.4 million. AT&T grew 13% organically year-over-year.

Growth in wireline services more than offset an expected year-over-year decline in wireless. Revenue from CenturyLink was $90.5 million or 15.6% of revenue. CenturyLink grew 42.1% organically. Revenue from Comcast was $72 million or 12.4% of revenue. Comcast was our third largest customer and grew organically 23.1%.

Verizon was Dycom's fourth largest customer for the quarter at 9.1% of revenue or $52.6 million. Verizon grew organically at 36.2%. Revenue from a customer was requested that we not disclose our identity was $46.8 million or 8.1% of revenue. It was our fifth largest customer.

Going to Slide 7, backlog at the end of the fourth quarter was $3.68 billion versus $2.912 billion at the end of the third quarter of 2015, an increase of approximately $768 million. Of this backlog, approximately $1.619 billion is expected to be completed in the next 12 months.

Both backlog calculations reflect solid performance as we continue to book new work and renew existing work. We continue to anticipate substantial future opportunities across a broad array of our customers.

For CenturyLink, we renewed construction and maintenance agreements in Oregon, Nevada, Utah, Wyoming, Colorado, Wisconsin, Tennessee, Alabama, Ohio, Pennsylvania, New Jersey, Virginia, North Carolina, and Florida. From Verizon, we received construction and maintenance and underground facility locating services agreements for Delaware and Virginia.

With Colombia Gas, we expanded our underground facility locating services contract in Virginia. From Comcast, we received construction service agreements in Connecticut and Pennsylvania, and finally we secured rural and municipal broadband builds in Oregon, California, Utah, New Mexico, Minnesota, Wisconsin, Kentucky, Tennessee, and South Carolina.

Headcount increased during the quarter to 11,159. Now I will turn the call over to Drew for his financial review and outlook..

Thanks Steve and good morning, everyone. Going to Slide 8, contract revenues for Q4 of 2015 were $578.5 million and organic growth was at 18.2%, reflecting solid growth from a number of our top customers. Acquired businesses contributed in aggregate $11.8 million of revenue in the current period.

Adjusted EBITDA increased to 15.3% of revenue or $88.5 million compared to 11.9% or $57.5 million in the year ago period. Gross margins increased over 300 basis points from improved customer opportunities, lower fuel prices, and improved productivity compared to Q4 of '14.

G&A as a percent of revenue was slightly down year-over-year and reflects our scale of operations, cost of recently acquired businesses and an increase in performance based compensation from strong operating results. The strength of the performance this quarter resulted in earnings per share of $0.97 compared to non-GAAP EPS of $0.48 in Q4 '14.

Our effective tax rate came in at 37.8% for the full year and slightly lower for Q4. The rate difference was approximately $0.02 in EPS in the quarter. Turning to Slide 9, our cash flows and balance sheet continue to reflect the strength of our business. Operating cash flows of $18.4 million reflects solid earnings and changes in working capital.

During Q4 our combined DSOs of AR and cost and excess of billing net declined by two days to 90 days. During the quarter we completed work on a stimulus project on which the customer owed us for past due balances.

We collected a substantial portion of the balances and the remaining balance of $6.8 million is expected to be collected during fiscal 2016. Capital expenditures net of disposals were $23.6 million during Q4 '15 and gross CapEx was approximately $25.9 million.

During the fourth quarter of 2015 and the first quarter of 2016 we spent a total of $66.5 million to repurchase approximately 1,055,000 shares of our common stock at an average price of $62.97 per share. Additionally, yesterday our Board authorized an additional $50 million for the repurchase of shares over the next 18 months.

During Q4 we completed two acquisitions, Venture Communications and Moll's Utility Services for a total of $22.1 million. Subsequent to the end of the quarter, we completed the acquisition of TelCom Construction for a purchase price of $48.6 million.

TelCom is based in Clearwater Minnesota provides construction and maintenance services for telecommunications providers throughout the U.S. On our senior credit facility, we ended the quarter with $150 million outstanding on the term loan and $95.3 million drawn on a revolving facility.

In summary, we continue to maintain a strong balance sheet and our liquidity is over $321 million with availability on our credit agreement and cash on hand. Now going to our outlook on Slide 10, as we look ahead to Q1, we anticipate revenues which range from $615 million to $635 million.

This outlook includes an expectation of more than $30 million of revenue from businesses acquired in fiscal 2015 and Q1 2016. We expect firm and strengthening end market opportunities and a broad range of demand from several large customers including one gigabit deployments and growing core market share.

Gross margin percent is expected to expand from Q1 '15 and reflects a solid mix of customer growth opportunities. Total G&A costs are expected to be at or below 8.5% of revenue reflecting our increase in scale, acquired G&A and acquisition costs and higher performance based compensation including share based award expense.

For the full-year fiscal 2016, capital expenditures net of disposals are expected to be approximately $125 million. Our net CapEx investment is expected to support growth including recent contract awards and will also support the additional CapEx for our newly acquired businesses.

Depreciation and amortization is expected to increase on a combined basis and is expected to range from $27.8 million to $28.4 million from the increase in net capital expenditures and from the incremental cost of our recently acquired businesses. Interest expense is expected at approximately $7.4 million.

Other income from asset sales is expected to range from $900,000 to $1.3 million. Taxes are expected near 38% for fiscal 2016. The applicable factors are expected to generate an adjusted EBITDA margin percent which expands from the Q1 '15 result and earnings which are currently expected to range from $0.96 to $1.04 per diluted share.

We expect approximately 34.3 million diluted shares during Q1 '16 with shares gradually increasing in subsequent quarters.

Now going to Slide 11, looking ahead to Q2 of fiscal 2016, our outlook reflects normal winter weather patterns and we currently expect total revenue growth percent of high teens or slightly better as a percentage of revenue compared to Q2 '15.

This outlook includes an expectation of more than $20 million of revenue from the businesses that we acquired since Q2 '15. We expect margins to increase over the Q2 '15 results. Each year our second quarter gross margins declined sequentially from our first quarter due to seasonality.

Our results are impacted by inclement weather, fewer available work days due to the holidays, reduced daylight work hours and the restart of calendar payroll taxes. G&A expense is expected in line as a percent of revenue year-over-year and includes non-cash stock-based compensation of approximately $4.1 million.

Adjusted EBITDA margin percent is currently expected to increase from Q2 '15.

Other factors influencing results include depreciation and amortization on a combined basis, which is expected to range from $29.7 million to $30.4 million from the increase in net capital expenditures and from the incremental cost of our recently acquired businesses, interest expense of approximately $7.3 million and other income from asset sales, which ranges from $2 million to $2.5 million.

Finally, as a result of our 52, 53-week calendar, I would like to remind you that our fiscal 2016 will include 53 weeks of operations with the extra week of operations included in Q4 2016. Now I will turn the call back to Steve..

Thanks Drew. Moving to Slide 12, within an improving economy, we experienced the effects of a solid industry environment and capitalized on our significant strengths. First and foremost we maintained strong customer relationships through our markets. We continue to win and extend contracts at attractive pricing.

Secondly, the strength of those relationships and the extensive market presence they've created has allowed us to be at the forefront of evolving industry opportunities. The end market drivers of these opportunities remain firm and are strengthening.

Telephone companies are deploying fiber-to-the-home and fiber-to-the-node technologies to enable video offerings and 1 gigabit high speed connections. These deployments are accelerating and impacting our business.

Some of those telephone companies previously deploying fiber-to-the-node architectures are transitioning to fiber-to-the-home deployments, while others are beginning to provision video over their fiber-to-the-node architectures. Cable operators are continuing to deploy fiber to small and medium businesses and with increased urgency.

Some are doing so in an anticipation of the customer sales process. Overall cable capital expenditures and new build opportunities are expanding; dramatically increased speeds to consumers are being planned. New projects resulting from the Connect America Fund 1 are deploying fiber deeper into rural networks.

More are expected as new multi-year opportunities emerge through the balance of this calendar year. And customers are consolidating supply change, creating opportunities from market share growth.

Within this context, we believe we're uniquely positioned, managed and capitalized to meaningfully experience an improving industry environment to the benefit of our shareholders.

We remain encouraged that our major customers possess significant financial strength and remain committed to multi-year capital spending initiatives, which in most cases are meaningfully accelerating and expanding in scope.

We remain confident in our strategies, the prospects for our company, the capabilities of our dedicated employees and the experience of our Management Team as we grow our business in capitalization. Now John, we will open the call for questions..

[Operator Instructions] And first we'll go to the line of John Rogers with D.A. Davidson. Please go ahead..

Hi. Good morning and congratulations on the great quarter.

I guess Steven the first question I had was as your customers start to add to the 1 gagabit service, I am curious what their -- what you're seeing in terms of competition as one carrier announces they're going into a city? Are the other carriers immediately responding also trying to build out in the city and how does Dycom participate in that with multiple carriers trying to compete the build out networks?.

So I think John that because these networks are big undertakings and really part of multi-year plans, my sense is that the deployment is broad. I assume that our customers are cognizant of competition, but I really think it's about what they see as the opportunity to grow revenue and to make their service more attractive first and foremost.

And while they are not going to competition, my sense is that they're doing this because it makes good sense for them..

Okay.

But -- to another word, as one carrier announces that, are you seeing other carriers then step up and try and compete, are they driving each other?.

Well I think if you look at the overlap of announcements amongst telephone companies, a new entrant as well as the cable companies, there is clearly overlap right and that is a function really of the consolidation of the industry, which we've been a beneficiary of because as these customers make network decisions, it impacts very broad sections of the country.

So in that way it's a little bit different than the 90s where you have many more providers and so kind of the change in consensus took a while to roll out here, a big company makes a big decision and they want to get it done..

Okay.

I am just trying to understand kind of how the cycle plays out and then versus the previous big upticks, the one you've seen over the past decades, could you talk a little bit Steve, you mentioned there is less competition or the contractors are a little bit more consolidated, can you put a little more color around that, what -- how many competing bids there are within a market area versus what we saw 10 years ago?.

Yes John, I wouldn't say there is less competition. Our customers are pretty good at making sure that they have fair costs. I think the issue is that as the telecom industry has consolidated for our customers, they've gotten bigger, they would like to work with bigger companies and that's created opportunities for us to scale up and do acquisitions.

I think our success as well as others in the industry will attract competition, but we've seen that before and we're not concerned as long as we do a good job for our customers, there will be plenty of opportunities..

Okay. Thanks. I'll get back in the queue..

Next we'll go to Tahira Afzal with KeyBanc Capital Markets. Please go ahead..

Hi gentlemen. This is Sean on for Tahira this morning. Congrats on a great fiscal year. Very impressive stuff. My first question guys is when you're looking at bookings this year on a sequential basis, total backlog grew quite notably, but the 12 month backlog stayed pretty flat.

So, I was just curious if there is some kind of shift in profile in terms of what you guys booked in the first quarter. And then also for Drew, if you're able to break out the acquisition content added to backlog this quarter, that would be very helpful..

So Sean on the backlog, we clearly had a number of renewals, which increased the total backlog. It's not unusual for the next 12 months backlog due to seasonality and a portion of the business where we have annual contracts to be relatively flat through the middle of the year just based on the seasonality of the cycle.

So, we don't see anything in particular changing the profile other than clearly it was a good quarter and it builds a real foundation to the business when you have that kind of increase in backlog. The backlog contribution in the quarter from the acquisitions that were closed in the quarter is negligible for the number, small number..

Okay. That's great, awesome. And then secondly, I was just going to ask the AT&T and DIRECTV deal closing, any comments on what it might mean for the pace of growth for Dycom and the end customer would be helpful..

Sure, AT&T had an Analyst Day on August 12, and if you haven't seen it, I recommend you go to the video of the Q&A session at about minute ten and watch for the next five minutes and I think it is for itself..

All right. All right. Well that's what I'll do. And congrats again guys, take care..

Our next question is from Alex Rygiel with FBR Capital. Please go ahead..

Good morning Steve, very nice quarter..

Thanks Alex..

Could you talk a little bit more about the Connect America Funds Part II? Is it in your backlog yet, when might it come into your backlog if at all? Is it in your guidance yet and how did the recent acquisitions position you for those CAF opportunities?.

So, the short answer is, it's not into projections yet. We're having a number of discussions with customers around CAF work beyond that. For competitive reasons, clearly we're not going to go into any detail. So, it's not into projections. It's not in the backlog.

Particularly, two of the three acquisitions have broad exposure to one of the CAF recipients through a part of the country that those really enhance our exposure, and so we think that's an upside to both acquisitions..

And again, when might we start to see this come through backlog or is this something that actually may not necessarily kind of be recognized in backlog in the future?.

Well, it depends on what the eventual arrangements are. Some portion of it will flow through -- potentially through our master contract agreements, and so that will just come through as the work activity flows through those contracts.

Others may come in others forms once again, which we're not going to spend some time on for competitive reasons, but we definitely see real opportunity there..

And then you said a couple things in your prepared remarks, first you referenced multiyear plans with monthly build plans being discussed. First obviously that sounds like you're getting much better visibility into your customer's plans. It that true and then secondly, you talked about increased revenue density.

Can you talk about the impacts of that on your P&L?.

Sure.

So with respect to the comment on the monthly build targets, we've been involved in a number of these large network architecture rollouts, and when our customers have really gotten their plans together and when they're beyond trial phase and into deployment phase, they've generally managed these programs on a very granular level because they're important to them and so they're just an indicator for us as to how important these initiatives are when people are being held accountable for monthly build targets.

So that is just an indicator of what we see and your second question Alex?.

Increased revenue density and how it impacts your P&L?.

So I think one of the advantages that we have versus others in the industry is with a broad footprint of existing relationships that we have. We generally are not stretching to expand our local presence in anticipation of some of these larger projects.

So we tend to be in the market at least in some fashion, and that just helps us leverage our existing office and warehouse facilities, our existing local management just helps us do a better job for the customer..

Very helpful. Thank you..

Our next question is from Simon Leopold with Raymond James. Please go ahead..

Great, Thank you very much for taking my questions. A couple of housekeeping I'd like to get out of the way and then some trending questions if we might.

So, as you might expect, if you could give us the split of cable and telco and then round out your top 10 list please?.

Sure, Simon this is Drew. Good morning. So the split Telco was at 62.1%, Cable was at 28.5%. Facility locating at 6.2%. Electrical and other at 3.1%, to round out the top ten, Windstream was number six at 5.3% of revenue. Time Warner Cable was number seven at 4.9% of revenue, Charter Communications was number eight at 2.6% of revenue.

Corning was number nine at 2% of revenue and Questar Gas was number 10 at 0.9% of revenue..

Great, thank you for that. I wanted to see if we could talk a little bit about the trends around small cells. We picked up some conflicting comments where AT&T has sounded I'll say less enthusiastic about small cells as an area for investment where many other carriers remain upbeat.

I'd like to get your perspective in terms of how you see the industry and then how you see it contributing to your business going into the next year or so..

Sure. So I would say at this point of business it’s certainly something we’re participating in primarily on indoor, DAS and small cell. We do some work for outside DAS. I would tell you that its certainly part of every carrier's technology roadmap that we can see although the urgency with which they’re addressing it varies from carrier to carrier.

I think for us what we’re focused on is it places a premium on having good back haul, good fiber back haul and there are a number of intermediate term drivers to wireless where we see wireless quality and efficiency being contingent on more fiber deployments and so we’re seeing some of those fiber deployments.

So it's a driver, it’s not a primary driver of what we’re seeing right now..

Great. At its recent analyst meeting, AT&T talked about the fact that it's found better, more efficient ways to deliver fiber to the home that made it more cost effective for them.

I'm wondering if you've got some insight into what might be different about their tactics, and whether or not that has implications for your business either with them or in general in terms of fiber to the home construction..

I’m not going to talk about a specific client, I would say that there are number of technologies around the fiber cable itself and how its priced that’s make it more efficient. These are not technologies that are necessarily new to us.

We’ve seen them with a number of clients and I think its supportive of more deployments to the extent that the cost of the equipment and cables comes down that leaves more profitable deployments for our customers which is a good thing for us..

Great. And just one last one please.

Can you tell us the EBITDA multiples for the acquisitions you made?.

So Simon, historically we’ve said that we pay in a range of kind of four to six times. Besides that I’m not going to say that -- provide any detail other than to say that they were in line with what we’ve done for similar sized acquisitions..

That’s very helpful. Thank you for taking my questions and good report..

Thank you..

And next was Adam Thalhimer with BB&T Capital Markets. Please go ahead..

Hi, good morning guys..

Good morning, Adam..

Hey Steve, you talked about a 10 gigabit recent announcement which I think is tied in with DOCSIS 3.1. And I'm curious.

What does a DOCSIS 3.1 rollout mean for the actual infrastructure, the node, the fiber, and the stuff that you guys do?.

So that the comment that we made with respect of 10 gigabits was actually to some of the new supply connections over fiber. So that was our primary focus was over fiber. With respect to DOCSIS 3.1 that has similar capabilities in total. It's certainly is an opportunity for us. It requires CPE replacement.

It requires other electronic replacement and over time to get the full benefit of the capacity, it may very well entail node splits and other construction activities as traffic increases based on capability.

So it’s a good platform technology that provides both direct opportunities to us and subsequently may enable other opportunities for us after it’s fully deployed..

Okay. And if I go back to your comments in March and April of this year relative to this fiber cycle versus the 1990s, back then, I think you had said that this cycle was probably going to be in aggregate smaller than the 1990s cycle. And now you're kind of staying more in line if not slightly larger.

So I'm just curious what's changed in the last three or four months..

Well clearly we had visibility from one major customers that's completed a merger that had in part some commitments around fiber builds that will create a competitive response amongst others. I think we've continued to see good news for part of the industry in general. And so it feels like it will be as good or perhaps better for the industry.

I think we're clearly positioned better than we were in the 90s. The company is much larger, has better capability, more management than we had at that point in time. So we're looking forward to the opportunity..

Okay. Your unnamed customer, there were some press reports that they hired a construction manager to handle a number of the southeast cities.

How should we think about kind of trends from that customer going forward in light of that announcement?.

We’re not going to acknowledge one way or another who that customer is. It's their request. We’re very confident that if we do a good job to that customer, like every other customers that we've got some pretty robust growth opportunities..

Okay. And lastly, just on all other customers, that's such a big disparity that your top customer is growing 30% organically, the all others kind of flattish organically. When does that….

Adam that we talked about is we had drag as the stimulus projects completed in this quarter and the vast majority of the stimulus work was done by customer not in the top five and so that drag was primarily there.

To the extent we had some drag in wireless like everybody else in the industry and to the extent that wireless customers were not in the top five and that’s also going to be concentrated there. So you just have the two pockets that were little bit weaker in a very strong quarter happen to be below the top five..

Okay. Thanks..

Our next question is from Christian Schwab with Craig-Hallum. Please go ahead..

Great. Thanks for taking my questions. Great quarter guys.

When we look, Steve, at the acquisitions, can you rank relationship geography and labor, just actual talented labor, on reasons for the acquisitions? What's most important when you're looking at them?.

It’s always Management’s relationship with the customer and their ability to manage profitably. And obviously if we can do that in a geography that we're represented but they may be better represented. So we can expand the footprint, that's important, but it’s always about Management’s ability to provide good service for customers..

Okay. Great. When we think about AT&T's sizing up this potential 12.5 million new customers to light up for fiber over the next four years, would you expect the rollout to be similar to the heroic effort of Verizon, meaning we kind of start with a small number.

I think their numbers were roughly $1 million, $2 million, $3 million, $3 million when they did that.

Would you expect that type of rollout, or would you expect that they are better positioned to step on the gas a little bit faster since they've kind of been talking about this for an extended period of time before the government kind of stepped in and said you really have to do it..

So clearly the programs been underway for a period of time. So it’s not starting from a dead stop. They're a big customer that they have very strong skills around building these big networks and so I think they’ll be able to accomplish the objective.

That doesn’t mean it will be easy because there is lot of third parties that are involved in the process around permitting and other tactical details, but I think they're going to do as they always have to whatever they've committed to..

When we talk to people inside the industry, they suggest that the actual fiber to the home deployment cost, ;labor and engineering, construction, probably equates to 70% of the aggregate cost and you could play with those numbers and come anywhere from as little as $750 to $1,400 per home.

When we decide to look at the TAM just directionally, let's just assume they already some customers line up by five or say roughly a million. Now these are 11.5 million at $750 to lay that five around the average cost and then we assume a percentage of that will go areal versus buried when you're much better positioned obviously in buried.

You very quickly get to numbers well north of $2 billion that they're going to have to spend is that correct?.

So I think we can collapse that down to big and it is a big opportunity. We do participate on both areal and buried that because the fiber cable and electronics continue to decline in cost over time, there is a greater percentage of what they spend that's going to be for labor services.

There certainly are things that they will choose to do themselves, but it's a broad opportunity and however you lend the numbers, it comes out with a big number at the end..

When we look back at a Verizon's FiOS fiber build, our text kind of suggest is we will have 70% as much as 90% of that build was done by you and other competition.

Would you A, agree with that number and B, would you expect similar results in the next build?.

I've never seen any kind of market share numbers. I would acknowledge that particularly after our acquisition from Quanta and have their history that we deployed a lot of fiber optic cable. I think the number is probably more than 125 million lineal feet and still growing because we're still doing some work.

70% to 90% sounds like a large number to me, but as long as we do a good job at a fair price, we'll get our fair share, which is all we're looking to do..

Okay.

And then -- and lastly it seems to us I am wondering if you're feeling a little bit certainly spend more money again for the first time in a while, but as we look at the Connect America Part II and the transition and Tier 2, Tier 3 service providers business models versus getting free money in essence as an operating subsidy and having to transition their business models to a CapEx subsidy.

Our work suggest that everybody have kind of figured that out, so how they're going to figure out how to survive going forward or thrive. So CAF II projects should start emerging, I know you've kind of have answered the question, but it has to start happening in 2016 right..

Oh yes, absolutely. There are build out commitments in the FCC rule through the end of '17 and I am sure that customers are going through planning process that will turn into outside plan opportunities as we get into the early part of 2016, if not a little sooner..

Great, I don't have any other questions. Thank you..

And we'll go to Alan Mitrani with Sylvan Lake. Please go ahead..

Hi, thank you. Just a couple housekeeping questions actually first if you can, Steve you said wireless was down, other guys have reported wireless down meaningfully.

Can you give us the absolute level of wireless in the quarter and where it was for the year fairly?.

It was just a little bit over $30 and down call it 40% in line with everybody else..

Right.

And what about for the year?.

I don't have that number in front of me, but I think we really only saw that level of decline until we got into the second half of our fiscal year, first half of this calendar year. So the decline on a yearly basis is less than what we saw in the quarter..

Okay.

And then in the previous calls, you had thought that your serve the wireless might be basing out a little bit in a sense that next calendar year might be a better year for wireless, it that still your thought?.

No, that's absolutely right, it's not based on any kind of detail of understanding or where people's budgets are, but I think the general sense in the industry is that if we're talking about wireless, if you count today, the fourth quarter of '16 should be better than this quarter..

Okay. Great, and then on the CAF opportunity, I realize you got about $1 billion till everybody tells us and some guys have already come out like Frontier, so they're taking it all and other guys CenturyLink.

So they're going to take a bunch, but can you talk about if customers do not choose to take the opportunity and then it goes out to auction to other providers, how long does that delay the build versus a customer who decides I am taking it all right now and could that delay the opportunity for you into later into fiscal '16 and into '17 then?.

So, so far the folks that have accepted the money have accepted essentially all of the money or a substantial portion of the money, more than half.

So to the extent that it does through an auction process in the rule, there is a schedule on that I think it's some time in '16 and so to the extent that somebody doesn’t take the money, there will be other opportunities down the road. Now that's a good thing. There is plenty to do in '16 and more to do in '17 wouldn't be a bad thing..

Okay.

And then one for Drew or for you, just there was only one line item in the balance sheet that just looked a little out of ordinary for me, the other accrued liabilities was up sequentially and year-over-year higher than normal or at least when I had seen it's a small number on an absolute basis, but was there something there versus for and then healthcare world, so accrued self insurance claims.

Anything for the healthcare law or any changes there or is it just the new employees that you have, so you're accruing more expenses potentially..

No Alan, so there is a couple of things there on the accrued liabilities, it's the income taxes payable sequentially is up….

No, it's the unfortunate part of record earnings as you have record taxes..

So that adds about $8.9 million on the self insurance. So we have a gross presentation there where there is a component in the other assets as well. So you'll see an increase in the other assets corresponding to the increase in the accrued insurance claims as well..

Excellent.

And then just two big questions, historically you haven't done work for DIRECTV in years Steve, but AT&T is your largest customer, is there any opportunity from the recent deal to gain share, not just for the AT&T as they do fiber, but at least in the historical DIRECTV markets where in the past it was neither economical or didn't make sense for you to do things as you talk about the opportunity there..

Alan, all I would say is obviously if there is opportunity, we'll address as they're a great customer. Our focus right now is clearly on what we do today and know how to do well and so perhaps it's one of our focus area, but that could change..

Okay. And then lastly it seems like a lot of the growth has come with the Telcos really spending with AT&T and CenturyLink and others, there are cable companies if you listen to their call, seem to be waking up and stressing CapEx as core to their business in terms of retaining customers especially with over the top potentially coming faster.

When do you think we see the more competitive cable response and the redesign of architecture, which could have a step function for you in the next couple of years? Is that calendar '16? Is it end of '15? Could you just talk a bit about what you see from the cable response to the Telco frame?.

I think we had a great quarter with Comcast growth was 23% organically. If you look at it on a year-over-year basis, it was up almost $50 million. So I think we're seeing good growth opportunities there. We grew with Time Warner. Charter is going through a cycle where they've complete their all digital conversion.

So that was down, but we've always had a good relationship with cable providers and we think that is certainly an opportunity in the future to grow the business for that even though we've had great growth year particularly for Comcast..

And then Drew, on the amortization, it seems like it went up because of the deals and the depreciation. Obviously you are spending more in your CapEx. But it seems like now the differential between the operating EPS let's call it and the cash EPS ex-amortization is actually going to increase in the next year or so up to $0.30 something.

When does that peak?.

Tell us when the business peaks, I'll tell you when CapEx is going to peak, but we don't think that's any time soon Alan. So as always we're going to invest. When we invest, that's a good thing.

It's what our customers in part hire us for because they know that the industry needs to grow capacity and so we're going to spend and so that line item will go up, the amortization those through an accelerated review over time normal purchase accounting, but the appreciation, that's a good thing..

Great. Thank you..

And we do have a follow-up from Christian Schwab. Please go ahead..

Yes, Steve on the lower total cost of fiber deployments, are you seeing any increase in micro-trenching?.

There is talk in the industry about micro-trenching and once again Christian given our scale in the business, you can probably assume that we know something about just about everything that's going on, but we have competitors and it's just another method of billing the work and it has its place and when it has its place, we have great capabilities in that area..

Awesome. Thank you..

And Mr. Nielsen, there are no further questions in queue..

Well, we thank everybody for your participation on the call today. We look forward to speaking to you next on our first quarter fiscal '16 call, it will be just before Thanksgiving. Thank you..

Ladies and gentlemen that does conclude your conference. Thank you for your participation and you may now disconnect..