A significant portion of our services are performed under master service agreements and other arrangements with customers that extend for periods greater than one year. We are currently a party to approximately 190 of these agreements. Master service agreements generally are for contract periods of one or more years and contain customer specified service requirements, such as discrete unit pricing for individual tasks. To the extent that such contracts specify exclusivity, there are often a number of exceptions, including the ability of the customer to issue to others work orders valued above a specified dollar limit, the self-performance of the work by the customer's in house workforce, and the ability to use others when jointly placing facilities with another utility. In most cases, a customer may terminate these agreements for convenience with written notice.
The remainder of our services are provided pursuant to contracts for specific projects. Long-term contracts relate to specific projects with terms in excess of one year from the contract date. Short-term contracts for specific projects are generally three to four months in duration. A portion of our contracts include retainage provisions under which 5% to 10% of the contract invoicing is withheld by the customer pending project completion.
We recognize revenues under the percentage of completion method of accounting using the units of delivery or cost-to-cost measures. A significant majority of our contracts are based on units of delivery and revenue is recognized as each unit is completed. Revenues from contracts using the cost-to-cost measures of completion are recognized based on the ratio of contract costs incurred to date to total estimated contract costs. Revenues from services provided under time and materials based contracts are recognized when the services are performed.
The following table summarizes our revenues from long-term contracts, including multi-year master service agreements, as a percentage of contract revenues from continuing operations:

                                                             For the Three Months Ended                           For the Six Months Ended
                                                    January 24, 2009           January 26, 2008          January 24, 2009           January 26, 2008
Multi-year master service agreements                             69.8 %                     69.8 %                    66.2 %                     69.0 %
Other long-term contracts                                        15.8 %                     15.9 %                    18.9 %                     17.3 %

Total long-term contracts                                        85.6 %                     85.7 %                    85.1 %                     86.3 %

The percentage of revenue from long-term contracts varies based on the mix of work performed during each period. During the three and six months ended January 24, 2009, revenue from total long-term contracts declined compared to the comparable prior period as more work was performed for contracts with terms of one year or less. Additionally, revenue during the six months ended January 24, 2009 included revenue for services performed under short-term contracts related to the hurricanes that impacted the Southern United States.

A significant portion of our revenue comes from several large customers. The following table reflects the percentage of total revenue from customers contributing at least 2.5% of our total revenue from continuing operations in the three or six month periods ended January 24, 2009 and January 26, 2008:

                                                                           For the Three Months Ended
                                                                  January 24, 2009           January 26, 2008
AT&T, Inc                                                                      19.7 %                     20.1 %
Comcast Corporation                                                            15.4 %                     11.7 %
Verizon Communications, Inc.                                                   14.8 %                     16.9 %
Time Warner Cable, Inc.                                                         8.2 %                      9.3 %
Embarq Corporation                                                              5.9 %                      6.2 %
Charter Communications, Inc.                                                    4.7 %                      4.9 %
Windstream Corporation                                                          3.6 %                      1.7 %
Qwest Communications International, Inc.                                        1.9 %                      2.5 %



                                                                            For the Six Months Ended
                                                                   January 24, 2009           January 26, 2008
Verizon Communications, Inc                                                     17.4 %                     17.4 %
AT&T, Inc.                                                                      17.4 %                     19.2 %
Comcast Corporation                                                             15.8 %                     12.0 %
Time Warner Cable, Inc.                                                          8.0 %                      9.2 %
Embarq Corporation                                                               5.7 %                      6.0 %
Charter Communications, Inc.                                                     4.8 %                      5.1 %
Windstream Corporation .                                                         3.4 %                      1.7 %
Qwest Communications International, Inc.                                         2.6 %                      2.4 %

Cost of earned revenues includes all direct costs of providing services under our contracts, including labor costs for direct employees and amounts for subcontractors, operation of capital equipment (excluding depreciation and amortization), and insurance claims and related costs. For a majority of the contract services we perform, our customers provide all necessary materials and we provide the personnel, tools, and equipment necessary to perform installation and maintenance services. Materials supplied by our customers, for which the customer retains the financial and performance risk, are not included in our revenue or costs of sales. In addition, cost of earned revenues for the three and six months ended January 26, 2008 includes amounts related to the settlement of a legal matter as discussed under Results of Operations. We retain the risk of loss, up to certain limits, for claims related to automobile liability, general liability, workers' compensation, employee group health, and locate damages. Locate damage claims result from property and other damages arising in connection with our underground facility locating services. A change in claims experience or actuarial assumptions related to these risks could materially affect our results of operations.

General and administrative costs include all of our costs at the corporate level, as well as costs of our subsidiaries' management personnel and administrative overhead. These costs primarily consist of employee compensation and related expenses, including stock-based compensation, legal and professional fees, provision or recoveries of bad debt expense, and other costs that are not directly related to the provision of services under customer contracts. Our senior management, including the senior managers of our subsidiaries, perform substantially all of our sales and marketing functions as part of their management responsibilities and, accordingly, we have not incurred material sales and marketing expenses.
From time to time, the Company and its subsidiaries are party to various claims and legal proceedings. Additionally, as part of our insurance program, we retain the risk of loss, up to certain limits, for claims related to automobile liability, general liability, workers' compensation, employee group health, and locate damages. For these claims, the effect on our financial statements is generally limited to the amount of our insurance deductible or insurance retention. It is the opinion of our management, based on information available at this time, that none of the pending claims or proceedings will have a material effect on our condensed consolidated financial statements.
We are subject to concentrations of credit risk related primarily to our cash and equivalents, trade accounts receivable and costs and estimated earnings in excess of billings. Cash and equivalents include cash balances on deposit in banks, money market accounts, overnight repurchase agreements, and other financial instruments having an original maturity of three months or less. We maintain substantially all of our cash and equivalents at financial institutions we believe to be of high credit quality. A substantial portion of the balances are held as cash in operating accounts with these financial institutions and are within the current insurance levels of the Federal Deposit Insurance Corporation ("FDIC"). These balances, at times, may not be subject to or may exceed the FDIC limit. To date we have not experienced any loss or lack of access to cash in our operating accounts. However, we can provide no assurances that access to our cash and equivalents will not be impacted by adverse conditions in the financial markets.
We grant credit under normal payment terms, generally without collateral, to our customers, which primarily include telephone companies, cable television multiple system operators, electric utilities and others. Consequently, we are subject to potential credit risk related to changes in business and economic factors that impact our customers, which may be heightened as a result of the current financial crisis and volatility of the markets. We generally have certain statutory lien rights with respect to services provided. Some of our customers have experienced significant financial difficulties in the past, and others may experience financial difficulties in the future. These difficulties expose us to increased risk related to collectability of amounts due for services performed. We believe that none of our significant customers were experiencing significant financial difficulty that would impact the collection of our trade accounts receivable and costs in excess of billings as of January 24, 2009. One of our customers has stated publicly that it intends to implement a financial restructuring through a Chapter 11 filing to be initiated on or before April 1, 2009. Additionally, this customer stated that its intended restructuring plan contemplates paying trade creditors in full. This customer represented 4.7% and 4.8% of our contract revenues during the three and six months ended January 24, 2009, respectively. As of January 24, 2009, we had $5.6 million of trade accounts receivable and costs and estimated earnings in excess of billings from this customer, or 3.3%, respectively, of our outstanding receivable balances. We believe these balances are collectible as of January 24, 2009. However, there can be no assurances this customer will implement its financial restructuring as currently contemplated, which may adversely affect our ability to collect these receivables or the receivables related to work that may be performed in the future.

Based on a number of indicators, it appears that growth in economic activity has slowed substantially. At the present time, the rate at which the economy will slow and the impact that it will have on our customers has become increasingly uncertain. The economic slowdown, and the current crisis in the financial and credit markets have created a challenging business environment for us and our customers. We are closely monitoring the effects that changes in economic and market conditions may have on our customers and our business. Acquisitions
As part of our growth strategy, we may acquire companies that expand, complement, or diversify our business. We regularly review opportunities and periodically engage in discussions regarding possible acquisitions. Our ability to sustain our growth and maintain our competitive position may be affected by our ability to identify acquisition opportunities and successfully integrate any businesses acquired.
Discontinued Operations
During fiscal 2007, Apex Digital, LLC ("Apex") notified its primary customer of its intention to cease performing installation services in accordance with its contractual rights. Effective December 2006, this customer, a satellite broadcast provider, transitioned its installation service requirements to others and Apex ceased providing these services. As a result, we have discontinued the operations of Apex and presented its results separately in the accompanying condensed consolidated financial statements for all periods presented. The cessation of these installation services has not had any material effect on our condensed consolidated financial position or results of operations. Critical Accounting Policies and Estimates The discussion and analysis of our financial condition and results of operations are based on our condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these condensed consolidated financial statements requires management to make certain estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. On an ongoing basis, we evaluate these estimates and assumptions, including those related to recognition of revenue for costs and estimated earnings in excess of billings, allowance for doubtful accounts, accrued insurance claims, the fair value of goodwill and intangible assets, asset lives used in computing depreciation and amortization, compensation expense for performance-based stock awards, income taxes and the outcome of contingencies, including legal matters. Application of these estimates and assumptions requires the exercise of judgment as to future uncertainties and, as a result, actual results could differ materially from these estimates. Please refer to "Management's Discussion and Analysis of Financial Condition and Results of Operations-Critical Accounting Policies and Estimates" included in our Annual Report on Form 10-K for the year ended July 26, 2008 for further information regarding our critical accounting policies and estimates.

Goodwill and Intangible Assets - We account for goodwill in accordance with SFAS No. 142, "Goodwill and Other Intangible Assets", ("SFAS No. 142"). Our reporting units and related indefinite-lived intangible asset are tested annually during the fourth fiscal quarter of each year in order to determine whether their carrying value exceeds their fair market value. Should this be the case, the value of the reporting unit's goodwill or indefinite-lived intangible assets may be impaired and written down. Goodwill and indefinite-lived intangible assets are also tested for impairment on an interim basis if an event occurs or circumstances change between annual tests that would more likely than not reduce the fair value below the carrying value. If we determine the fair value of the goodwill or other identifiable intangible asset is less than their carrying value, an impairment loss is recognized in an amount equal to the difference. Impairment losses, if any, are reflected in operating income or loss in the consolidated statements of operations.
In accordance with SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets," ("SFAS No. 144"), we review finite-lived intangible assets for impairment whenever an event occurs or circumstances change which indicates that the carrying amount of such assets may not be fully recoverable. Recoverability is determined based on an estimate of undiscounted future cash flows resulting from the use of the asset and its eventual disposition. An impairment loss is measured by comparing the fair value of the asset to its carrying value. If we determine the fair value of the asset is less than the carrying value, an impairment loss is incurred in an amount equal to the difference. Impairment losses, if any, are reflected in operating income or loss in the consolidated statements of operations.
We use judgment in assessing goodwill and intangible assets for impairment. Estimates of fair value are based on our projection of revenues, operating costs, and cash flows considering historical and anticipated future results, general economic and market conditions as well as the impact of planned business or operational strategies. In order to measure fair value, we employ a combination of present value techniques which reflect market factors. Changes in our judgments and projections could result in a significantly different estimate of the fair value and could result in an impairment.
Our goodwill resides in multiple reporting units. The profitability of individual reporting units may suffer periodically from downturns in customer demand and other factors which reflect the cyclical nature of our business, the high level of competition existing within our industry, the concentration of our revenues within a limited number of customers and the level of overall economic activity. Individual reporting units may be relatively more impacted by these factors than the Company as a whole. Specifically during times of economic slowdown, our customers may reduce their capital expenditures and defer or cancel pending projects. As a result, demand for the services of one or more of the reporting units could decline resulting in an impairment of goodwill or intangible assets and could adversely affect our operations, cash flows and liquidity.
We tested our reporting units goodwill for impairment in the fourth quarter of fiscal 2008 and determined our Stevens Communications ("Stevens") and Nichols Communications ("Nichols") reporting units were impaired and consequently recognized goodwill impairment charges of approximately $5.9 million and $3.8 million, respectively. The estimate of fair value of these reporting units was based on our projection of revenues, operating costs, and cash flows considering historical and anticipated future results, general economic and market conditions as well as the impact of planned business and operational strategies. The key assumptions used to determine the fair value of our reporting units during the fiscal 2008 annual impairment analysis were:
(a) expected cash flow for a period of seven years; (b) terminal value based upon terminal growth rates of between 2% and 4%; and (c) a discount rate of 12% which was based on our best estimate during the period of the weighted average cost of capital adjusted for risks associated with the reporting units. We believe the assumptions used in the fiscal 2008 annual impairment analysis were consistent with the risk inherent in the business models of our reporting units and within our industry at the time the analysis was performed.

SFAS No. 142 requires that goodwill and indefinite lived intangible assets be tested for impairment between annual tests if an event occurs or circumstances change that would more likely than not reduce their fair value below their carrying amount. From October 2008 through the present, our market capitalization has been significantly impacted by the extreme volatility in the U.S. equity and credit markets and has traded below the book value of shareholders' equity. As a result, we evaluated whether the decrease in our market capitalization reflected factors that would more likely than not reduce the fair value of the reporting units below their carrying value. Based on a combination of factors, including the current economic environment, the sustained period of decline in our market capitalization, and the implied valuation and discount rate assumptions in our industry, we concluded that there were sufficient indicators to perform an interim impairment test.
The fiscal 2009 interim impairment analysis utilized the same valuation techniques used in our annual fiscal 2008 impairment analysis. However, we employed a higher discount rate in the fiscal 2009 analysis based on current economic conditions and industry valuation comparisons. The higher discount rate used in the fiscal 2009 interim fair value calculation resulted in a substantial decline in the fair value of the reporting units. The key assumptions used to determine the fair value of our reporting units during this interim impairment analysis were: (a) expected cash flow for a period of seven years; (b) terminal value based upon terminal growth rates of between 2% and 4%; and (c) a discount rate of 18% which was based on our best estimate of the weighted average cost of capital adjusted for risks associated with the reporting units. We believe the assumptions used in the fiscal 2009 interim impairment analysis are consistent with the risk inherent in the business models of our reporting units and within our industry as of January 24, 2009.
As a result of the impairment analysis, we determined that the estimated fair value of the Broadband Installation Services ("Broadband Express"), C-2 Utility Contractors ("C-2"), Ervin Cable Construction ("Ervin"), Nichols, Stevens, and UtiliQuest reporting units were less than their respective carrying values at January 24, 2009. As a result, we performed a second step of the impairment analysis to determine the implied fair value of each reporting unit's goodwill. The activities in the second step included a hypothetical valuation of all of the tangible and intangible assets of the reporting units as if they had been acquired in separate business combinations. Our interim impairment analysis is not yet complete; however, we have recognized a preliminary goodwill impairment charge of $94.4 million. This preliminary charge included impairments at Broadband Express for $14.8 million, C-2 for $9.2 million, Ervin for $15.7 million, Nichols for $2.0 million, Stevens for $2.4 million and UtiliQuest for $50.5 million. After the preliminary impairment charges recognized, the C-2, Nichols, and Stevens reporting units have no remaining goodwill, while Broadband Express, Ervin, and UtiliQuest have $19.7 million, $7.4 million and $35.6 million remaining goodwill, respectively, as of January 24, 2009. We expect to complete our impairment analysis in the third quarter of fiscal 2009. Accordingly, an adjustment to the preliminary impairment charge may be required when we finalize our analysis. The goodwill impairment charge did not affect our compliance with our financial covenants and conditions under our revolving credit agreement or senior subordinated notes.
During our interim impairment test, the estimated fair value of the Globe Communications ("Globe"), Prince Telecom ("Prince"), and TCS Communications ("TCS") reporting units exceeded their carrying value by a margin of approximately 25% or less. Additionally, there is no excess margin of fair value over carrying value for the Broadband Express, Ervin, and UtiliQuest reporting units, as their carrying values were written down to their estimated fair values during the three months ended January 24, 2009. As a result, the goodwill and intangible asset balances of these reporting units may have an increased . . .