HOUSTON, Aug. 5, 2021 /PRNewswire/ -- Quanta
Services, Inc. (NYSE: PWR) today announced results for the three
months ended June 30, 2021. Revenues
in the second quarter of 2021 were $3.00
billion compared to revenues of $2.51
billion in the second quarter of 2020, and net income
attributable to common stock was $117.0
million, or $0.81 per diluted
share, in the second quarter of 2021 compared to net income
attributable to common stock of $73.9
million, or $0.52 per diluted
share, in the second quarter of 2020. Adjusted diluted earnings per
share attributable to common stock (a non-GAAP measure) was
$1.06 for the second quarter of 2021
compared to $0.74 for the second
quarter of 2020.
"Quanta generated record second quarter revenues, net income,
adjusted EBITDA and earnings per share, led by the solid
performance and safe execution from our Electric Power
Infrastructure Solutions segment. Backlog of $17.0 billion at the end of the quarter set
another record, reflecting our collaborative approach with
customers and the growth of programmatic spending with existing and
new customers," said Duke Austin,
President and Chief Executive Officer of Quanta Services.
"Our customers' multi-year programs to modernize and harden
utility infrastructure, along with their efforts to achieve
carbon-neutrality through increased renewable generation investment
and electrification trends such as electric vehicles (EV), continue
to drive demand for our services and present incremental growth
opportunities. These opportunities include large, multi-year master
services agreements, larger high-voltage electric transmission
projects and large-scale EV infrastructure program engagements.
These dynamics, coupled with active broadband and 5G network
deployments and the opportunity for recovery of certain operations
that have been affected by the global pandemic, give us a positive
outlook for the remainder of this year and the belief that our
business and opportunities for profitable growth in 2022 and beyond
are gaining momentum."
Negatively impacting the results for the three months ended
June 30, 2021, was a provision for
credit loss of $23.6 million, or
$0.12 per diluted share, with respect
to outstanding receivables owed by Limetree Refining, LLC and its
affiliate, which are customers within Quanta's Underground Utility
and Infrastructure Solutions segment. In July 2021, Limetree Refining filed for bankruptcy
protection under Chapter 11 of the U.S. Bankruptcy Code, as
amended, after experiencing operational and financial difficulties
and shutting down operations at its refinery. The provision for
credit loss represents the current estimated amount of expected
loss associated with approximately $31.5 million of billed and unbilled
receivables owed to Quanta by the customers.
Certain other items impacted the second quarter of 2021 results
and are reflected as adjustments in the calculation of Quanta's
adjusted net income and adjusted diluted earnings per share
attributable to common stock and are further described in the
accompanying non-GAAP reconciliation of those non-GAAP financial
measures to net income and diluted earnings per share attributable
to common stock. Quanta completed two acquisitions during the first
six months of 2021 and seven acquisitions during the full year
2020. Therefore, Quanta's results include the results of the
acquired businesses from their respective acquisition dates. For
further information on the items that impacted comparability of
2021 and 2020, see the footnotes to the Supplemental Segment Data
table and the reconciliation of non-GAAP financial measures in the
accompanying tables.
RECENT HIGHLIGHTS
- Stock Repurchased - During the second quarter of 2021
and through August 4, 2021, Quanta
repurchased approximately $40.7
million of its outstanding common stock in the open market,
acquiring approximately 0.4 million shares. Year-to-date, Quanta
has repurchased approximately $58.4
million of its outstanding common stock in the open market,
acquiring approximately 0.7 million shares. As of August 5, 2021, Quanta's current stock repurchase
program authorized additional repurchases of up to approximately
$478.4 million of common stock.
- Holli Ladhani Joins Board of Directors - In July 2021, Quanta announced the
appointment of Holli C. Ladhani to
the company's board of directors. Ms. Ladhani is a seasoned
executive with extensive operational and financial experience and
possesses broad public company board experience. She previously
served as Chief Executive Officer of Select Energy Services, Inc.
and held chief executive officer and other executive management
roles at Rockwater Energy Solutions, Inc. and Dynegy Inc. She also
serves on the board of directors at Marathon Oil Corporation and
Priority Power Management, LLC and on the Board of Trustees at
Rice University.
- Quanta-ATCO Joint Venture, LUMA Energy, Commences Operation
and Maintenance of Puerto Rico's
Electric Power and Distribution System - In June 2021, Quanta announced that LUMA
Energy, LLC (LUMA), a joint venture between Quanta and Canadian
Utilities Limited, an ATCO Ltd. Company, commenced the operations
and maintenance of Puerto Rico's
electric power transmission and distribution (T&D) system under
a Supplemental Terms Agreement following nearly a year of
preparation to transition these responsibilities from the Puerto
Rico Electric Power Authority (PREPA) to LUMA. In June 2020, following a competitive process that
lasted for more than a year, Quanta announced that LUMA was
selected by the Puerto Rico Public-Private Partnership Authority
(P3) to operate, maintain and modernize Puerto Rico's T&D system under a 15-year
Operation and Maintenance Agreement, which is scheduled to commence
upon PREPA's exit from its Title III restructuring process.
- Publishes 2020 Corporate Responsibility Report - On
August 3, 2021, Quanta
announced the release of its 2020 Corporate Responsibility
Report and interactive microsite. The report discusses the
company's accomplishments last year, as well as Quanta's
commitments to People, Planet and Principles. The microsite is
intended to serve as a comprehensive, interactive resource to
showcase data, information, and relevant case studies from the
company in connection with topics related to ESG and the important
role Quanta plays in supporting a carbon-neutral future. Please
visit https://esg.quantaservices.com/ to access the microsite and
report.
RESULTS FOR THE SIX MONTHS ENDED JUNE 30,
2021
Revenues in the six months ended June 30, 2021
were $5.70 billion compared to
revenues of $5.27 billion in the six
months ended June 30, 2020, and net income attributable to
common stock was $206.8 million, or
$1.43 per diluted share, in the six
months ended June 30, 2021 compared to net income attributable
to common stock of $112.6 million, or
$0.78 per diluted share, in the six
months ended June 30, 2020. Adjusted diluted earnings per
share attributable to common stock (a non-GAAP measure) was
$1.89 for the six months ended
June 30, 2021 compared to $1.21
for the six months ended June 30, 2020.
FULL-YEAR 2021 OUTLOOK
The long-term outlook for
Quanta's business is positive. However, weather, regulatory,
permitting, project timing, execution challenges and other factors
have impacted the company's historical results, and may impact
Quanta's future financial results. More recently, the COVID-19
pandemic has significantly impacted certain of Quanta's operations
and various markets where Quanta operates, which has created
additional uncertainty. Therefore, Quanta's financial outlook for
revenues, margins and earnings reflects management's effort to
align these uncertainties with the backlog the company is executing
on and the opportunities expected to materialize during the
remainder of 2021.
Prior to the company's conference call, management will post a
summary of updated 2021 guidance expectations with additional
commentary in the "News and Events" and "Financial Info" areas of
the Investor Relations section of Quanta's website at
http://investors.quantaservices.com.
The following forward-looking statements are based on current
expectations, and actual results may differ materially. Quanta now
expects revenues to be between $12.20
billion and $12.45 billion,
net income attributable to common stock to be between $491 million and $543
million, diluted earnings per share attributable to common
stock to be between $3.40 and
$3.76 and adjusted diluted earnings
per share attributable to common stock (a non-GAAP measure) to be
between $4.32 and $4.68 for the full year of 2021. Additionally,
Quanta now expects EBITDA (a non-GAAP measure) to be between
$1.04 billion and $1.11 billion, adjusted EBITDA (a non-GAAP
measure) to be between $1.13 billion
and $1.21 billion, and free cash flow
(a non-GAAP measure) to be between $400
million and $600 million for
the full year of 2021.
NON-GAAP FINANCIAL MEASURES
The financial measures not
prepared in conformity with generally accepted accounting
principles in the United States
(GAAP) that are utilized in this press release are provided to
enable investors, analysts and management to evaluate Quanta's
performance excluding the effects of certain items that management
believes impact the comparability of operating results between
reporting periods. In addition, management believes these measures
are useful in comparing Quanta's operating results with those of
its competitors. These measures should be used in addition to, and
not in lieu of, results prepared in conformity with GAAP.
Please see the accompanying tables for reconciliations of the
following non-GAAP financial measures for Quanta's current and
historical results and full-year 2021 expectations (as applicable):
adjusted diluted earnings per share attributable to common stock (a
non-GAAP measure) to diluted earnings per share attributable to
common stock; adjusted net income attributable to common stock,
EBITDA and adjusted EBITDA (non-GAAP measures) to net income
attributable to common stock; free cash flow (a non-GAAP measure)
to net cash provided by operating activities; and backlog (a
non-GAAP measure) to remaining performance obligations.
CONFERENCE CALL INFORMATION
Quanta Services has
scheduled a conference call for 9:00 a.m.
Eastern Time on August 5, 2021, which will also be
broadcast live over the Internet. Quanta will utilize a slide
presentation to accompany its prepared remarks, which will be
viewable through the webcast and will also be available in the
"News and Events" and "Financial Info" areas of the Investor
Relations section of Quanta's website prior to the start of
the call. To participate in the call, dial 1-201-689-8345 or
1-877-407-8291 at least 10 minutes before the conference call
begins and ask for the Quanta Services Second Quarter Earnings
Conference Call or visit the Investor Relations section of the
Quanta Services website at
http://investors.quantaservices.com to access the Internet
broadcast. Please allow at least 15 minutes to register and
download and install any necessary audio software. For those who
cannot participate live, shortly following the call a digital
recording will be available on the company's website and a
telephonic replay will be available through August 12, 2021 by dialing 1-877-660-6853 and
referencing the conference ID 13718737. For more information,
please contact Kip Rupp, Vice
President - Investor Relations at Quanta Services, at 713-341-7260
or investors@quantaservices.com.
ABOUT QUANTA SERVICES
Quanta Services is a leading
specialized contracting services company, delivering comprehensive
infrastructure solutions for the utility, communications, pipeline,
and energy industries. Quanta's comprehensive services include
designing, installing, repairing and maintaining energy and
communications infrastructure. With operations throughout
the United States, Canada, Australia and select other international
markets, Quanta has the manpower, resources and expertise to safely
complete projects that are local, regional, national or
international in scope. For more information, visit
www.quantaservices.com.
FOLLOW QUANTA IR ON SOCIAL MEDIA
Investors and others
should note that while Quanta announces material financial
information and makes other public disclosures of information
regarding Quanta through SEC filings, press releases and public
conference calls, it also utilizes social media to communicate this
information. It is possible that the information Quanta posts on
social media could be deemed material. Accordingly, Quanta
encourages investors, the media and others interested in our
company to follow Quanta, and review the information it posts, on
the social media channels listed in the Investor Relations
section of the Quanta Services website.
Cautionary Statement About Forward-Looking
Statements
This press release (and oral statements regarding
the subject matter of this press release, including those made on
the conference call and webcast announced herein) contains
forward-looking statements intended to qualify for the "safe
harbor" from liability established by the Private Securities
Litigation Reform Act of 1995. Forward-looking statements include,
but are not limited to, statements relating to projected revenues,
net income, earnings per share, EBITDA, margins, cash flows,
liquidity, weighted average shares outstanding, capital
expenditures, tax rates and other operating or financial results;
expectations regarding Quanta's business or financial outlook;
expectations regarding opportunities, technological developments,
competitive positioning, future economic and regulatory conditions
and other trends in particular markets or industries; expectations
regarding the COVID-19 pandemic, including the continued and
potential impact of the COVID-19 pandemic and of governmental
responses to the pandemic on Quanta's business, operations, supply
chain, personnel, financial condition, results of operations, cash
flows and liquidity; expectations regarding Quanta's plans,
strategies and opportunities; the potential benefits from, and
future financial and operational performance of, acquired
businesses and our investments, including our investment in LUMA
Energy, LLC; the expected outcome of pending and threatened legal
proceedings; beliefs and assumptions about the collectability of
receivables; the business plans or financial condition of Quanta's
customers, including with respect to the COVID-19 pandemic and
transitioning to a carbon-neutral economy; the potential impact of
commodity prices and production volumes on Quanta's business,
financial condition, results of operations, cash flows and demand
for Quanta's services; expected realization of remaining
performance obligations and backlog; the future demand for and
availability of labor resources in the industries Quanta serves;
future capital allocation initiatives, including the amount and
timing of, and strategies with respect to, any future stock
repurchases or expectations regarding the declaration, amount and
timing of any future cash dividends; the ability to deliver
increased value or return capital to stockholders; the expected
value of contracts or intended contracts with customers, as well as
the scope, services, term or results of any awarded or expected
projects; the development of and opportunities with respect to
future projects, including renewable and other projects designed to
support transition to a carbon-neutral economy and larger electric
transmission and pipeline projects; the impact of existing or
potential legislation or regulation; potential opportunities that
may be indicated by bidding activity or discussions with customers;
and possible recovery of pending or contemplated insurance claims,
change orders and claims asserted against customers or third
parties; as well as statements reflecting expectations, intentions,
assumptions or beliefs about future events, and other statements
that do not relate strictly to historical or current facts. These
forward-looking statements are not guarantees of future
performance, involve or rely on a number of risks, uncertainties,
and assumptions that are difficult to predict or are beyond our
control, and reflect management's beliefs and assumptions based on
information available at the time the statements are made. We
caution you that actual outcomes and results may differ materially
from what is expressed, implied or forecasted by our
forward-looking statements and that any or all of our
forward-looking statements may turn out to be inaccurate or
incorrect. Forward-looking statements can be affected by inaccurate
assumptions and by known or unknown risks and uncertainties
including, among others, market, industry, economic, financial or
political conditions that are outside of the control of Quanta,
including economic, energy, infrastructure and environmental
policies and plans that are adopted or proposed by the U.S. federal
or state governments and other governments in territories or
countries in which we operate and weakness in capital markets or
the ongoing and potential impact on financial markets and worldwide
economic activity of the COVID-19 pandemic and governmental
responses thereto; quarterly variations in operating results,
liquidity, financial condition, cash flows, capital requirements
and reinvestment opportunities, including the ongoing and potential
impact to Quanta's business, operations and supply chains of the
COVID-19 pandemic; the severity, magnitude and duration of the
COVID-19 pandemic, including impacts of the pandemic and business
and governmental responses thereto on Quanta's operations,
personnel and supply chains and on commercial activity and demand
across Quanta's business and its customers' businesses, as well as
Quanta's inability to predict the extent to which the COVID-19
pandemic will adversely impact its business, financial performance,
results of operations, financial position, liquidity, cash flows,
the prices of its securities and achievement of its strategic
objectives; trends and growth opportunities in relevant markets,
including Quanta's ability to obtain future project awards; the
time and costs required to exit and resolve outstanding matters
related to Quanta's Latin American operations, as well as the
business and political climate in Latin
America; delays, deferrals, reductions in scope or
cancellations of anticipated, pending or existing projects as a
result of, among other things, the COVID-19 pandemic, weather,
regulatory or permitting issues, environmental processes, project
performance issues, claimed force majeure events, protests or other
political activity, legal challenges, reductions or eliminations in
governmental funding, or customer capital constraints; the effect
of commodity prices and production volumes on Quanta's operations
and growth opportunities and on customer capital programs and
demand for Quanta's services; the successful negotiation,
execution, performance and completion of anticipated, pending and
existing contracts; risks associated with operational hazards that
arise due to the nature of Quanta's services and the conditions in
which Quanta operates, including, among others, wildfires and
explosions; unexpected costs, liabilities, fines or penalties that
may arise from legal proceedings, indemnity obligations,
reimbursement obligations associated with letters of credit or
bonds, multiemployer pension plans (e.g., underfunding of
liabilities, termination or withdrawal liability) or other claims
or actions asserted against Quanta, including amounts not covered
by, or in excess of the coverage under, third-party insurance; the
outcome of pending or threatened legal proceedings; potential
unavailability or cancellation of third-party insurance coverage,
as well as the exclusion of coverage for certain losses, potential
increases in premiums for coverage deemed beneficial to Quanta, or
the unavailability of coverage deemed beneficial to Quanta at
reasonable and competitive rates (e.g., coverage for wildfire
events); damage to Quanta's brand or reputation arising as a result
of cyber-security, environmental and occupational health and safety
matters, corporate scandal, failure to successfully perform a
high-profile project, involvement in a catastrophic event (e.g.,
fire, explosion) or other negative incident; disruptions in, or
failure to adequately protect, Quanta's information technology
systems; Quanta's dependence on suppliers, subcontractors,
equipment manufacturers and other third-parties, and the impact of
the COVID-19 pandemic on these service providers; Quanta's ability
to attract and the potential shortage of skilled labor, as well as
Quanta's ability to retain key personnel and qualified employees;
Quanta's dependence on fixed price contracts and the potential to
incur losses with respect to these contracts, including as a result
of inaccurate estimates of project costs or inability to meet
project schedule requirements or achieve guaranteed performance or
quality standards for a project; estimates and assumptions relating
to financial results, remaining performance obligations and
backlog; inability to successfully complete remaining performance
obligations or realize backlog; adverse weather conditions, natural
disasters and other emergencies, including wildfires, pandemics
(including the ongoing COVID-19 pandemic), hurricanes, tropical
storms, floods earthquakes and other geological- and
weather-related hazards; Quanta's ability to generate internal
growth; competition in Quanta's business, including the ability to
effectively compete for new projects and market share; the future
development of natural resources; the failure of existing or
potential legislative actions and initiatives to result in demand
for Quanta's services; fluctuations of prices of certain materials
used in Quanta's or its customers' businesses, including as a
result of the imposition of tariffs, governmental regulations
affecting sourcing of certain materials and equipment and other
changes in U.S. trade relationships with foreign countries;
cancellation provisions within contracts and the risk that
contracts expire and are not renewed or are replaced on less
favorable terms; loss of customers with whom Quanta has
long-standing or significant relationships; the potential that
participation in joint ventures or similar structures exposes
Quanta to liability or harm to its reputation as a result of acts
or omissions by partners; Quanta's inability or failure to comply
with the terms of its contracts, which may result in additional
costs, unexcused delays, warranty claims, failure to meet
performance guarantees, damages or contract terminations; the
inability or refusal of customers or third-party contractors to pay
for services, which could be attributable to, among other things,
the COVID-19 pandemic or current challenged energy market, and
which could result in the inability to collect our outstanding
receivables, failure to recover amounts billed to, or avoidance of
certain payments received from, customers in bankruptcy or failure
to recover on change orders or contract claims; technological
advancements and other market developments that could reduce the
demand for Quanta's services; budgetary or other constraints that
may reduce or eliminate tax incentives or government funding for
projects, which may result in project delays or cancellations;
risks associated with operating in international markets, including
instability of foreign governments, currency exchange fluctuations,
and compliance with unfamiliar foreign legal systems and business
practices, the U.S. Foreign Corrupt Practices Act and other
applicable anti-bribery and anti-corruption laws, complex U.S. and
foreign tax regulations and international treaties; inability to
successfully identify, complete, integrate and realize synergies
from acquisitions, including the inability to retain key personnel
from acquired businesses; the potential adverse impact of
acquisitions and investments, including the potential increase in
risks already existing in Quanta's operations and poor performance
or decline in value of acquired businesses or investments; the
adverse impact of impairments of goodwill, other intangible assets,
receivables, long-lived assets or investments; difficulties arising
from Quanta's decentralized management structure; the impact of the
unionized portion of Quanta's workforce on its operations,
including labor stoppages or interruptions due to strikes or
lockouts; inability to access sufficient funding to finance desired
growth and operations, including the ability to access capital
markets on favorable terms, as well as fluctuations in the price
and trading volume of Quanta's common stock, debt covenant
compliance, interest rate fluctuations and other factors affecting
financing and investing activities; the ability to obtain bonds,
letters of credit and other project security; significant
fluctuations in foreign currency exchange rates; new or changed tax
laws, treaties or regulations; inability to recognize deferred tax
assets; and other risks and uncertainties detailed in Quanta's
Annual Report on Form 10-K for the year ended December 31, 2020, Quanta's Quarterly Report on
Form 10-Q for the quarter ended March 31,
2021 and June 30, 2021 (when
filed) and any other documents that Quanta files with the
Securities and Exchange Commission (SEC). For a discussion of these
risks, uncertainties and assumptions, investors are urged to refer
to Quanta's documents filed with the SEC that are available through
Quanta's website at www.quantaservices.com or through the
SEC's Electronic Data Gathering and Analysis Retrieval System
(EDGAR) at www.sec.gov. Should one or more of these risks
materialize, or should underlying assumptions prove incorrect,
actual results may vary materially from those expressed or implied
in any forward-looking statements. Investors are cautioned not to
place undue reliance on these forward-looking statements, which are
current only as of this date. Quanta does not undertake and
expressly disclaims any obligation to update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise. Quanta further expressly disclaims any
written or oral statements made by any third party regarding the
subject matter of this press release.
Quanta Services,
Inc. and Subsidiaries
|
Condensed
Consolidated Statements of Operations
|
For the Three and
Six Months Ended June 30, 2021 and 2020
|
(In thousands, except
per share information)
|
(Unaudited)
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June
30,
|
|
June
30,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Revenues
|
$
|
2,999,816
|
|
|
$
|
2,506,231
|
|
|
$
|
5,703,397
|
|
|
$
|
5,270,326
|
|
Cost of services
(including depreciation)
|
2,552,105
|
|
|
2,150,967
|
|
|
4,882,796
|
|
|
4,582,866
|
|
Gross
profit
|
447,711
|
|
|
355,264
|
|
|
820,601
|
|
|
687,460
|
|
Equity in earnings of
integral unconsolidated affiliates
|
7,450
|
|
|
1,045
|
|
|
12,633
|
|
|
1,045
|
|
Selling, general and
administrative expenses
|
(270,110)
|
|
|
(227,852)
|
|
|
(513,462)
|
|
|
(458,645)
|
|
Amortization of
intangible assets
|
(21,291)
|
|
|
(17,779)
|
|
|
(42,646)
|
|
|
(35,687)
|
|
Asset impairment
charges
|
(2,319)
|
|
|
—
|
|
|
(2,319)
|
|
|
—
|
|
Change in fair value
of contingent consideration liabilities
|
210
|
|
|
2,238
|
|
|
573
|
|
|
(520)
|
|
Operating
income
|
161,651
|
|
|
112,916
|
|
|
275,380
|
|
|
193,653
|
|
Interest
expense
|
(13,109)
|
|
|
(8,654)
|
|
|
(25,584)
|
|
|
(22,660)
|
|
Interest
income
|
2,909
|
|
|
275
|
|
|
3,026
|
|
|
1,034
|
|
Other income
(expense), net
|
8,471
|
|
|
3,247
|
|
|
12,143
|
|
|
(6,580)
|
|
Income before income
taxes
|
159,922
|
|
|
107,784
|
|
|
264,965
|
|
|
165,447
|
|
Provision for income
taxes
|
40,951
|
|
|
32,989
|
|
|
54,675
|
|
|
49,149
|
|
Net income
|
118,971
|
|
|
74,795
|
|
|
210,290
|
|
|
116,298
|
|
Less: Net income
attributable to non-controlling interests
|
1,938
|
|
|
849
|
|
|
3,496
|
|
|
3,666
|
|
Net income
attributable to common stock
|
$
|
117,033
|
|
|
$
|
73,946
|
|
|
$
|
206,794
|
|
|
$
|
112,632
|
|
|
|
|
|
|
|
|
|
Earnings per share
attributable to common stock:
|
|
|
|
|
|
|
|
Basic
|
$
|
0.83
|
|
|
$
|
0.53
|
|
|
$
|
1.48
|
|
|
$
|
0.79
|
|
Diluted
|
$
|
0.81
|
|
|
$
|
0.52
|
|
|
$
|
1.43
|
|
|
$
|
0.78
|
|
|
|
|
|
|
|
|
|
Shares used in
computing earnings per share:
|
|
|
|
|
|
|
|
Weighted average basic
shares outstanding
|
140,276
|
|
|
139,856
|
|
|
140,199
|
|
|
142,154
|
|
Weighted average
diluted shares outstanding
|
144,607
|
|
|
143,521
|
|
|
144,523
|
|
|
145,213
|
|
Quanta Services,
Inc. and Subsidiaries
|
Condensed
Consolidated Balance Sheets
|
(In
thousands)
|
(Unaudited)
|
|
|
June
30,
|
|
December
31,
|
|
2021
|
|
2020
|
ASSETS
|
|
|
|
CURRENT
ASSETS:
|
|
|
|
Cash and cash
equivalents
|
$
|
212,473
|
|
|
$
|
184,620
|
|
Accounts receivable,
net
|
2,570,457
|
|
|
2,716,083
|
|
Contract
assets
|
669,313
|
|
|
453,832
|
|
Inventories
|
62,154
|
|
|
50,472
|
|
Prepaid expenses and
other current assets
|
219,538
|
|
|
183,382
|
|
Total current
assets
|
3,733,935
|
|
|
3,588,389
|
|
PROPERTY AND
EQUIPMENT, net
|
1,606,057
|
|
|
1,560,656
|
|
OPERATING LEASE
RIGHT-OF-USE ASSETS
|
239,721
|
|
|
256,845
|
|
OTHER ASSETS,
net
|
600,819
|
|
|
435,713
|
|
OTHER INTANGIBLE
ASSETS, net
|
403,931
|
|
|
435,655
|
|
GOODWILL
|
2,136,133
|
|
|
2,121,014
|
|
Total
assets
|
$
|
8,720,596
|
|
|
$
|
8,398,272
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
CURRENT
LIABILITIES:
|
|
|
|
Current maturities of
long-term debt and short-term debt
|
$
|
11,176
|
|
|
$
|
14,764
|
|
Current portion of
operating lease liabilities
|
81,404
|
|
|
85,134
|
|
Accounts payable and
accrued expenses
|
1,535,334
|
|
|
1,509,794
|
|
Contract
liabilities
|
503,219
|
|
|
528,864
|
|
Total current
liabilities
|
2,131,133
|
|
|
2,138,556
|
|
LONG-TERM DEBT, net
of current maturities
|
1,353,542
|
|
|
1,174,294
|
|
OPERATING LEASE
LIABILITIES, net of current portion
|
166,280
|
|
|
178,822
|
|
DEFERRED INCOME
TAXES
|
187,582
|
|
|
166,407
|
|
INSURANCE AND OTHER
NON-CURRENT LIABILITIES
|
392,265
|
|
|
391,221
|
|
Total
liabilities
|
4,230,802
|
|
|
4,049,300
|
|
TOTAL STOCKHOLDERS'
EQUITY
|
4,486,732
|
|
|
4,344,181
|
|
NON-CONTROLLING
INTERESTS
|
3,062
|
|
|
4,791
|
|
TOTAL
EQUITY
|
4,489,794
|
|
|
4,348,972
|
|
Total liabilities and
equity
|
$
|
8,720,596
|
|
|
$
|
8,398,272
|
|
Quanta Services,
Inc. and Subsidiaries
|
Supplemental
Segment Data
|
For the Three and
Six Months Ended
|
June 30, 2021
and 2020
|
(In thousands, except
percentages)
|
(Unaudited)
|
|
Segment
Results
|
Quanta reports its
results under two reportable segments: (1) Electric Power
Infrastructure Solutions and (2) Underground Utility and
Infrastructure Solutions, as set forth below.
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Electric Power
Infrastructure Solutions
|
$
|
2,147,775
|
|
|
71.6
|
%
|
|
$
|
1,792,918
|
|
|
71.5
|
%
|
|
4,207,895
|
|
|
73.8
|
%
|
|
3,559,945
|
|
|
67.5%
|
Underground Utility
and Infrastructure Solutions
|
852,041
|
|
|
28.4
|
|
|
713,313
|
|
|
28.5
|
|
|
1,495,502
|
|
|
26.2
|
|
|
1,710,381
|
|
|
32.5
|
Consolidated
revenues
|
$
|
2,999,816
|
|
|
100.0
|
%
|
|
$
|
2,506,231
|
|
|
100.0
|
%
|
|
$
|
5,703,397
|
|
|
100.0
|
%
|
|
$
|
5,270,326
|
|
|
100.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Electric Power
Infrastructure Solutions before equity in earnings of integral
unconsolidated affiliates
|
$
|
229,449
|
|
|
10.7
|
%
|
|
$
|
182,850
|
|
|
10.2
|
%
|
|
$
|
423,301
|
|
|
10.1
|
%
|
|
$
|
311,608
|
|
|
8.8
|
%
|
Equity in earnings of
integral unconsolidated affiliates (a)
|
7,450
|
|
|
N/A
|
|
1,046
|
|
|
N/A
|
|
12,633
|
|
|
N/A
|
|
1,046
|
|
|
N/A
|
Electric Power
Infrastructure Solutions (b)
|
236,899
|
|
|
11.0
|
%
|
|
183,896
|
|
|
10.3
|
%
|
|
435,934
|
|
|
10.4
|
%
|
|
312,654
|
|
|
8.8%
|
Underground Utility
and Infrastructure Solutions (c)
|
23,937
|
|
|
2.8
|
%
|
|
21,250
|
|
|
3.0
|
%
|
|
32,750
|
|
|
2.2
|
%
|
|
52,527
|
|
|
3.1%
|
Corporate and
Non-Allocated Costs (d)
|
(99,185)
|
|
|
N/A
|
|
(92,230)
|
|
|
N/A
|
|
(193,304)
|
|
|
N/A
|
|
(171,528)
|
|
|
N/A
|
Consolidated operating
income
|
$
|
161,651
|
|
|
5.4
|
%
|
|
$
|
112,916
|
|
|
4.5
|
%
|
|
$
|
275,380
|
|
|
4.8
|
%
|
|
$
|
193,653
|
|
|
3.7%
|
|
(a) Equity in
earnings of integral unconsolidated affiliates includes
unconsolidated affiliates that are operationally integral to the
operations of
|
Quanta and primarily
consists of equity in earnings related to LUMA.
|
(b) Included in
Electric Power Infrastructure Solutions operating income for the
three and six months ended June 30, 2020 are $15.2 million and
$31.5 million of operating losses related to Quanta's Latin
American operations, which negatively impacted operating income
margin for the three and six months ended June 30, 2020 by 80
basis points and 90 basis points. As of December 31, 2020, Quanta
had substantially completed its exit of these
operations.
|
(c) Included in
operating income for the Underground Utility and Infrastructure
Solutions segment for the three and six months ended June 30, 2021
were a $23.6 million provision for credit loss related to
receivables from a customer that declared bankruptcy in July 2021
and its affiliate and a $2.3 million asset impairment charge
related to the planned sale of certain equipment that is not
utilized in Quanta's core operations. The provision for credit loss
related to the receivables negatively impacted operating margins
for the three and six months ended June 30, 2021 by approximately
280 basis points and 160 basis points.
|
(d) Included in
corporate and non-allocated costs for the three months ended June
30, 2021 and 2020 are $1.6 million and $0.6 million of acquisition
and integration costs. Included in corporate and non-allocated
costs for the six months ended June 30, 2021 and 2020 are $3.3
million and $2.5 million of acquisition and integration
costs.
|
Quanta Services, Inc. and
Subsidiaries
Supplemental Data
(In
millions)
(Unaudited)
Remaining Performance Obligations and Backlog (a non-GAAP
measure)
Quanta's remaining performance obligations represent
management's estimate of consolidated revenues that are expected to
be realized from the remaining portion of firm orders for fixed
price contracts not yet completed or for which work has not yet
begun. For purposes of calculating remaining performance
obligations, Quanta includes all estimated revenues attributable to
consolidated joint ventures and variable interest entities,
revenues from funded and unfunded portions of government contracts
to the extent they are reasonably expected to occur and revenues
from change orders to the extent management believes additional
contract revenues will be earned and are deemed probable of
collection.
While backlog is not a defined term under GAAP, it is a common
measurement used in Quanta's industry. Quanta believes this
non-GAAP measure enables it and its investors to more effectively
forecast its future results and better identify future operating
trends that may not otherwise be apparent. Quanta's remaining
performance obligations, as described above, are a component of
Quanta's backlog calculation, which also includes estimated orders
under master service agreements (MSAs), including estimated
renewals, and non-fixed price contracts expected to be completed
within one year. Quanta's methodology for determining backlog may
not be comparable to the methodologies used by other companies.
The following table reconciles Quanta's total remaining
performance obligations to its backlog by reportable segment along
with estimates of amounts expected to be realized within 12
months:
|
June 30,
2021
|
|
December 31,
2020
|
|
June 30,
2020
|
|
12
Month
|
|
Total
|
|
12
Month
|
|
Total
|
|
12
Month
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
Electric Power
Infrastructure Solutions
|
|
|
|
|
|
|
|
|
|
|
|
Remaining performance
obligations
|
$
|
2,670.9
|
|
|
$
|
3,606.6
|
|
|
$
|
2,511.2
|
|
|
$
|
3,547.8
|
|
|
$
|
2,490.8
|
|
|
$
|
3,812.8
|
|
Estimated orders under
MSAs and short-term, non-fixed price contracts
|
3,833.4
|
|
|
9,032.0
|
|
|
3,559.4
|
|
|
7,433.4
|
|
|
2,847.3
|
|
|
5,871.5
|
|
Backlog
|
$
|
6,504.3
|
|
|
$
|
12,638.6
|
|
|
$
|
6,070.6
|
|
|
$
|
10,981.2
|
|
|
$
|
5,338.1
|
|
|
$
|
9,684.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Underground Utility
and Infrastructure Solutions
|
|
|
|
|
|
|
|
|
|
|
|
Remaining performance
obligations
|
$
|
734.4
|
|
|
$
|
820.6
|
|
|
$
|
327.2
|
|
|
$
|
437.5
|
|
|
$
|
670.3
|
|
|
$
|
1,371.8
|
|
Estimated orders under
MSAs and short-term, non-fixed price contracts
|
1,740.2
|
|
|
3,518.4
|
|
|
1,868.8
|
|
|
3,713.7
|
|
|
1,652.1
|
|
|
2,872.1
|
|
Backlog
|
$
|
2,474.6
|
|
|
$
|
4,339.0
|
|
|
$
|
2,196.0
|
|
|
$
|
4,151.2
|
|
|
$
|
2,322.4
|
|
|
$
|
4,243.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
Remaining performance
obligations
|
$
|
3,405.3
|
|
|
$
|
4,427.2
|
|
|
$
|
2,838.4
|
|
|
$
|
3,985.3
|
|
|
$
|
3,161.1
|
|
|
$
|
5,184.6
|
|
Estimated orders under
MSAs and short-term, non-fixed price contracts
|
5,573.6
|
|
|
12,550.4
|
|
|
5,428.2
|
|
|
11,147.1
|
|
|
4,499.4
|
|
|
8,743.6
|
|
Backlog
|
$
|
8,978.9
|
|
|
$
|
16,977.6
|
|
|
$
|
8,266.6
|
|
|
$
|
15,132.4
|
|
|
$
|
7,660.5
|
|
|
$
|
13,928.2
|
|
Quanta Services, Inc. and
Subsidiaries
Reconciliation of Non-GAAP Financial
Measures
Adjusted Net Income and
Adjusted
Diluted Earnings Per Share
Attributable to Common
Stock
For the Three and Six Months
Ended
June 30, 2021 and 2020
(In thousands,
except per share information)
(Unaudited)
The following table presents the non-GAAP measures of adjusted
net income attributable to common stock and adjusted diluted
earnings per share attributable to common stock for the three and
six months ended June 30, 2021 and 2020, which, when used in
connection with net income attributable to common stock and diluted
earnings per share attributable to common stock, are intended to
provide useful information to investors and analysts as they
evaluate Quanta's performance. Management believes that the
exclusion of certain items from net income and diluted earnings per
share attributable to common stock enables it and Quanta's
investors to more effectively evaluate Quanta's operations period
over period and better identify operating trends that may not
otherwise be apparent. However, these non-GAAP measures should not
be considered as alternatives to net income attributable to common
stock and diluted earnings per share attributable to common stock
or other measures of performance that are derived in accordance
with GAAP. As to certain of the items below, (i) non-cash
stock-based compensation expense may vary due to acquisition
activity, changes in the estimated fair value of performance-based
awards, forfeiture rates, accelerated vesting and amounts granted;
(ii) amortization of intangible assets is impacted by Quanta's
acquisition activity, and therefore can vary from period to period;
(iii) acquisition and integration costs vary period to period
depending on the level of Quanta's acquisition activity, (iv) asset
impairment charges can vary from period to period depending on
economic and other factors; (v) change in fair value of contingent
consideration liabilities varies from period to period depending on
the performance in post-acquisition periods of certain acquired
businesses; and (vi) impairments of non-integral unconsolidated
affiliates vary from period to period depending on various market
factors outside Quanta's influence or control. Because adjusted net
income attributable to common stock and adjusted diluted earnings
per share attributable to common stock, as defined, exclude some,
but not all, items that affect net income attributable to common
stock and diluted earnings per share attributable to common stock,
they may not be comparable to similarly titled measures of other
companies. The most comparable GAAP financial measures, net income
attributable to common stock and diluted earnings per share
attributable to common stock, and information reconciling the GAAP
and non-GAAP financial measures, are included below.
See the table below.
Quanta Services,
Inc. and Subsidiaries
|
Reconciliation of
Non-GAAP Financial Measures
|
Adjusted Net
Income and
|
Adjusted Diluted
Earnings Per Share
|
Attributable to
Common Stock
|
For the Three and
Six Months Ended
|
June 30, 2021
and 2020
|
(In thousands, except
per share information)
|
(Unaudited)
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June
30,
|
|
June
30,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Reconciliation of
adjusted net income attributable to common stock:
|
|
|
|
|
|
|
|
Net income
attributable to common stock (GAAP as reported)
|
$
|
117,033
|
|
|
$
|
73,946
|
|
|
$
|
206,794
|
|
|
$
|
112,632
|
|
Adjustments:
|
|
|
|
|
|
|
|
Acquisition and
integration costs
|
1,567
|
|
|
647
|
|
|
3,328
|
|
|
2,530
|
|
Asset impairment
charges (a)
|
2,319
|
|
|
—
|
|
|
2,319
|
|
|
—
|
|
Change in fair value
of contingent consideration liabilities
|
(210)
|
|
|
(2,238)
|
|
|
(573)
|
|
|
520
|
|
Impairments of
non-integral unconsolidated affiliates (b)
|
—
|
|
|
5,536
|
|
|
—
|
|
|
8,679
|
|
Income tax impact of
adjustments (c)
|
(841)
|
|
|
(1,070)
|
|
|
(1,202)
|
|
|
(2,971)
|
|
Adjusted net income
attributable to common stock before certain non-cash
adjustments
|
119,868
|
|
|
76,821
|
|
|
210,666
|
|
|
121,390
|
|
Non-cash stock-based
compensation
|
23,923
|
|
|
21,980
|
|
|
42,610
|
|
|
36,892
|
|
Amortization of
intangible assets
|
21,291
|
|
|
17,779
|
|
|
42,646
|
|
|
35,687
|
|
Income tax impact of
non-cash adjustments (c)
|
(11,788)
|
|
|
(10,366)
|
|
|
(22,230)
|
|
|
(18,929)
|
|
Adjusted net income
attributable to common stock
|
$
|
153,294
|
|
|
$
|
106,214
|
|
|
$
|
273,692
|
|
|
$
|
175,040
|
|
|
|
|
|
|
|
|
|
Weighted average
shares:
|
|
|
|
|
|
|
|
Weighted average
shares outstanding for diluted and adjusted diluted earnings per
share
|
144,607
|
|
|
143,521
|
|
|
144,523
|
|
|
145,213
|
|
|
|
|
|
|
|
|
|
Earnings per share
attributable to common stock:
|
|
|
|
|
|
|
|
Diluted earnings per
share attributable to common stock (d)
|
$
|
0.81
|
|
|
$
|
0.52
|
|
|
$
|
1.43
|
|
|
$
|
0.78
|
|
Adjusted diluted
earnings per share attributable to common stock (d)
|
$
|
1.06
|
|
|
$
|
0.74
|
|
|
$
|
1.89
|
|
|
$
|
1.21
|
|
|
(a) The amount for
the three and six months ended June 30, 2021 reflects an asset
impairment charge related to the planned sale of certain equipment
that is not utilized in Quanta's core operations.
|
(b) The amounts for
the three and six months ended June 30, 2020 represent
impairments associated with two non-integral unconsolidated
affiliates that were negatively impacted by the decline in demand
for refined products during the first and second quarters of 2020.
As of June 30, 2021, one of the investments had been sold, and
Quanta's basis in the remaining investment was $8.1 million. These
impairment losses are included in "Other income (expense), net" in
the accompanying condensed consolidated statements of
operations.
|
(c) The income tax
impact of adjustments that are subject to tax is determined using
the incremental statutory tax rates of the jurisdictions to which
each adjustment relates for the respective periods.
|
(d) Both diluted and
adjusted diluted earnings per share attributable to common stock
for the three and six months ended June 30, 2021 include a
provision for credit loss of $23.6 million, or $0.12 per
diluted share, related to receivables from a customer that declared
bankruptcy in July 2021 and its affiliate.
|
Quanta Services, Inc. and
Subsidiaries
Reconciliation of Non-GAAP Financial
Measures
EBITDA and Adjusted EBITDA
For the
Three and Six Months Ended
June 30, 2021 and
2020
(In thousands)
(Unaudited)
The following table presents the non-GAAP financial measures of
EBITDA and adjusted EBITDA for the three and six months ended
June 30, 2021 and 2020, which, when used in connection with
net income attributable to common stock, are intended to provide
useful information to investors and analysts as they evaluate
Quanta's performance. EBITDA is defined as earnings before
interest, taxes, depreciation and amortization, and adjusted EBITDA
is defined as EBITDA adjusted for certain other items as described
below. Management believes that the exclusion of these items from
net income attributable to common stock enables it and Quanta's
investors to more effectively evaluate Quanta's operations period
over period and to identify operating trends that might not be
apparent when including the excluded items. However, these measures
should not be considered as an alternative to net income
attributable to common stock or other measures of performance that
are derived in accordance with GAAP. As to certain of the items
below, (i) non-cash stock-based compensation expense varies from
period to period due to acquisition activity, changes in the
estimated fair value of performance-based awards, forfeiture rates,
accelerated vesting and amounts granted; (ii) acquisition and
integration costs vary from period to period depending on the level
of Quanta's acquisition activity; (iii) equity in (earnings) losses
of non-integral unconsolidated affiliates varies from period to
period depending on the activity and financial performance of
non-integral unconsolidated affiliates, including gain or loss on
sales of investments accounted for using the equity method of
accounting; (iv) asset impairment charges can vary from period to
period depending on economic and other factors; and (v) change in
fair value of contingent consideration liabilities varies from
period to period depending on the performance in post-acquisition
periods of certain acquired businesses. Because EBITDA and adjusted
EBITDA, as defined, exclude some, but not all, items that affect
net income attributable to common stock, such measures may not be
comparable to similarly titled measures of other companies. The
most comparable GAAP financial measure, net income attributable to
common stock, and information reconciling the GAAP and non-GAAP
financial measures, are included below. See notes below.
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June
30,
|
|
June
30,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
|
|
|
|
|
|
|
Net income
attributable to common stock (GAAP as reported)
|
$
|
117,033
|
|
|
$
|
73,946
|
|
|
$
|
206,794
|
|
|
$
|
112,632
|
|
Interest
expense
|
13,109
|
|
|
8,654
|
|
|
25,584
|
|
|
22,660
|
|
Interest
income
|
(2,909)
|
|
|
(275)
|
|
|
(3,026)
|
|
|
(1,034)
|
|
Provision for income
taxes
|
40,951
|
|
|
32,989
|
|
|
54,675
|
|
|
49,149
|
|
Depreciation
expense
|
62,757
|
|
|
54,526
|
|
|
124,864
|
|
|
108,936
|
|
Amortization of
intangible assets
|
21,291
|
|
|
17,779
|
|
|
42,646
|
|
|
35,687
|
|
Income taxes and
depreciation included in equity in earnings of integral
unconsolidated affiliates
|
2,150
|
|
|
407
|
|
|
3,651
|
|
|
407
|
|
EBITDA
(a)
|
254,382
|
|
|
188,026
|
|
|
455,188
|
|
|
328,437
|
|
Non-cash stock-based
compensation
|
23,923
|
|
|
21,980
|
|
|
42,610
|
|
|
36,892
|
|
Acquisition and
integration costs
|
1,567
|
|
|
647
|
|
|
3,328
|
|
|
2,530
|
|
Equity in (earnings)
losses of non-integral unconsolidated affiliates
|
(658)
|
|
|
5,829
|
|
|
(1,343)
|
|
|
8,512
|
|
Asset impairment
charges (b)
|
2,319
|
|
|
—
|
|
|
2,319
|
|
|
—
|
|
Change in fair value
of contingent consideration liabilities
|
(210)
|
|
|
(2,238)
|
|
|
(573)
|
|
|
520
|
|
Adjusted
EBITDA
|
$
|
281,323
|
|
|
$
|
214,244
|
|
|
$
|
501,529
|
|
|
$
|
376,891
|
|
|
(a) The calculations
of EBITDA for the three and six months ended June 30, 2020
have been amended to conform to the current period calculation of
EBITDA.
|
(b) The amount for
the three and six months ended June 30, 2021 reflects an asset
impairment charge related to the planned sale of certain equipment
that is not utilized in Quanta's core operations.
|
Quanta Services, Inc. and
Subsidiaries
Reconciliation of Non-GAAP Financial
Measures
Free Cash Flow and Other Non-GAAP
Definitions
For the Three and Six Months Ended
June 30, 2021 and 2020
(In thousands)
(Unaudited)
Reconciliation of Free Cash Flow:
The non-GAAP measure of free cash flow, when used in connection
with net cash provided by operating activities, is intended to
provide useful information to investors and analysts as they
evaluate Quanta's ability to generate the cash required to maintain
and potentially expand its business. Free cash flow is defined as
net cash provided by operating activities less net capital
expenditures. Net capital expenditures is defined as capital
expenditures less proceeds from the sale of property and equipment
and from insurance settlements related to property and equipment.
Management believes that free cash flow provides useful information
to Quanta's investors because free cash flow is viewed by
management as an important indicator of how much cash is provided
or used by routine business operations, including the impact of net
capital expenditures. Management uses this measure for capital
allocation purposes as it is viewed as a measure of cash available
to fund debt payments, acquire businesses, repurchase common stock,
declare and pay dividends and transact other investing and
financing activities. However, this measure should not be
considered as an alternative to net cash provided by operating
activities or other measures of performance that are derived in
accordance with GAAP. The most comparable GAAP financial measure,
net cash provided by operating activities, and information
reconciling the GAAP and non-GAAP financial measures, are included
below.
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June
30,
|
|
June
30,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Net cash provided
by operating activities
|
$
|
188,948
|
|
|
$
|
497,479
|
|
|
$
|
314,561
|
|
|
$
|
725,028
|
|
Less: Net capital
expenditures:
|
|
|
|
|
|
|
|
Capital
expenditures
|
(74,898)
|
|
|
(48,148)
|
|
|
(158,384)
|
|
|
(116,257)
|
|
Proceeds from sale of
property and equipment
|
11,720
|
|
|
7,826
|
|
|
18,950
|
|
|
12,814
|
|
Net capital
expenditures
|
(63,178)
|
|
|
(40,322)
|
|
|
(139,434)
|
|
|
(103,443)
|
|
Free Cash
Flow
|
$
|
125,770
|
|
|
$
|
457,157
|
|
|
$
|
175,127
|
|
|
$
|
621,585
|
|
Other Non-GAAP Definitions:
Days Sales Outstanding:
Days Sales Outstanding is
calculated by using the sum of current accounts receivable, net of
allowance (which includes retainage and unbilled balances), plus
contract assets, less contract liabilities, and divided by average
revenues per day during the quarter.
Total Liquidity:
Total liquidity includes Quanta's
cash and cash equivalents and availability under Quanta's senior
credit facility.
Quanta Services, Inc. and
Subsidiaries
Reconciliation of Non-GAAP Financial
Measures
Estimated Adjusted Net Income and
Adjusted Diluted Earnings Per Share
Attributable to
Common Stock
For the Full Year 2021
(In thousands,
except per share information)
(Unaudited)
The following presents the non-GAAP measures of adjusted net
income attributable to common stock and adjusted diluted earnings
per share attributable to common stock, which, when used in
connection with net income attributable to common stock and diluted
earnings per share attributable to common stock, are intended to
provide useful information to investors and analysts as they
evaluate Quanta's performance. Management believes that the
exclusion of certain items from net income and diluted earnings per
share attributable to common stock enables it and Quanta's
investors to more effectively evaluate Quanta's operations period
over period and better identify operating trends that may not
otherwise be apparent. However, these non-GAAP measures should not
be considered as alternatives to net income attributable to common
stock and diluted earnings per share attributable to common stock
or other measures of performance that are derived in accordance
with GAAP. As to certain of the items below, (i) non-cash
stock-based compensation expense may vary due to acquisition
activity, changes in the estimated fair value of performance-based
awards, forfeiture rates, accelerated vesting and amounts granted;
(ii) amortization of intangible assets is impacted by Quanta's
acquisition activity, and therefore can vary from period to period;
(iii) acquisition and integration costs vary period to period
depending on the level of Quanta's acquisition activity; (iv) asset
impairment charges can vary from period to period depending on
economic and other factors; and (v) change in fair value of
contingent consideration liabilities varies from period to period
depending on the performance in post-acquisition periods of certain
acquired businesses. Because adjusted net income attributable to
common stock and adjusted diluted earnings per share attributable
to common stock, as defined, exclude some, but not all, items that
affect net income attributable to common stock and diluted earnings
per share attributable to common stock, they may not be comparable
to similarly titled measures of other companies. The most
comparable GAAP financial measures, net income attributable to
common stock and diluted earnings per share attributable to common
stock, and information reconciling the GAAP and non-GAAP financial
measures, are included below.
Quanta Services,
Inc. and Subsidiaries
|
Reconciliation of
Non-GAAP Financial Measures
|
Estimated Adjusted
Net Income and
|
Adjusted Diluted
Earnings Per Share
|
Attributable to
Common Stock
|
For the Full Year
2021
|
(In thousands, except
per share information)
|
(Unaudited)
|
|
|
Estimated
Range
|
|
Full Year
Ending
|
|
December 31,
2021
|
Reconciliation of
estimated adjusted net income attributable to common
stock:
|
|
|
|
Net income
attributable to common stock (as defined by GAAP)
|
$
|
491,000
|
|
|
$
|
542,800
|
|
Non-cash stock-based
compensation
|
87,000
|
|
|
87,000
|
|
Amortization of
intangible assets
|
86,500
|
|
|
86,500
|
|
Acquisition and
integration costs
|
4,600
|
|
|
4,600
|
|
Asset impairment
charges (a)
|
2,300
|
|
|
2,300
|
|
Change in fair value
of contingent consideration liabilities
|
(600)
|
|
|
(600)
|
|
Income tax impact of
adjustments (b)
|
(46,800)
|
|
|
(46,800)
|
|
Adjusted net income
attributable to common stock
|
$
|
624,000
|
|
|
$
|
675,800
|
|
|
|
|
|
Weighted average
shares:
|
|
|
|
Weighted average
shares outstanding for diluted and adjusted diluted earnings per
share attributable to common stock
|
144,400
|
|
|
144,400
|
|
|
|
|
|
Diluted earnings
per share attributable to common stock and estimated adjusted
diluted earnings per share attributable to common
stock:
|
|
|
|
Diluted earnings per
share attributable to common stock (c)
|
$
|
3.40
|
|
|
$
|
3.76
|
|
Adjusted diluted
earnings per share attributable to common stock (c)
|
$
|
4.32
|
|
|
$
|
4.68
|
|
|
(a) The amount
reflects an asset impairment charge related to the planned sale of
certain equipment that is not utilized in Quanta's core
operations.
|
(b) The income tax
impact of adjustments that are subject to tax is determined using
the incremental statutory tax rates of the jurisdictions to which
each adjustment relates for the respective periods.
|
(c) Both diluted and
adjusted diluted earnings per share attributable to common
stock include a provision for credit loss of
$23.6 million, or $0.12 per diluted share, related to
receivables from a customer that declared bankruptcy in July 2021
and its affiliate.
|
Quanta Services, Inc. and
Subsidiaries
Reconciliation of Non-GAAP Financial
Measures
Estimated EBITDA and Adjusted
EBITDA
For the Full Year 2021
(In thousands)
(Unaudited)
The following table presents the non-GAAP financial measures of
estimated EBITDA and adjusted EBITDA, which, when used in
connection with estimated net income attributable to common stock,
is intended to provide useful information to investors and analysts
as they evaluate Quanta's performance. EBITDA is defined as
earnings before interest, taxes, depreciation and amortization, and
adjusted EBITDA is defined as EBITDA adjusted for certain other
items as described below. Management believes that the exclusion of
these items from net income attributable to common stock enables it
and Quanta's investors to more effectively evaluate Quanta's
operations period over period and to identify operating trends that
might not be apparent when including the excluded items. However,
these measures should not be considered as an alternative to net
income attributable to common stock or other measures of
performance that are derived in accordance with GAAP. As to certain
of the items below, (i) non-cash stock-based compensation expense
may vary due to acquisition activity, changes in the estimated fair
value of performance-based awards, forfeiture rates, accelerated
vesting and amounts granted; (ii) acquisition and integration costs
vary period to period depending on the level of Quanta's
acquisition activity; (iii) equity in (earnings) losses of
non-integral unconsolidated affiliates can vary from period to
period depending on the activity and financial performance of
non-integral unconsolidated affiliates, including gain or loss on
sales of investments accounted for using the equity method of
accounting; (iv) asset impairment charges can vary from period to
period depending on economic and other factors; and (v) change in
fair value of contingent consideration liabilities varies from
period to period depending on the performance in post-acquisition
periods of certain acquired businesses. Because EBITDA and adjusted
EBITDA, as defined, exclude some, but not all, items that affect
net income attributable to common stock, such measures may not be
comparable to similarly titled measures of other companies. The
most comparable GAAP financial measure, net income attributable to
common stock, and information reconciling the GAAP and non-GAAP
financial measures, are included below.
|
Estimated
Range
|
|
Full Year
Ending
|
|
December 31,
2021
|
|
|
|
|
Net income
attributable to common stock (as defined by GAAP)
|
$
|
491,000
|
|
|
$
|
542,800
|
|
Interest expense,
net
|
47,000
|
|
|
47,000
|
|
Provision for income
taxes
|
158,200
|
|
|
179,800
|
|
Depreciation
expense
|
249,200
|
|
|
249,200
|
|
Amortization of
intangible assets
|
86,500
|
|
|
86,500
|
|
Income taxes and
depreciation included in equity in earnings of integral
unconsolidated affiliates
|
8,700
|
|
|
8,700
|
|
EBITDA
|
1,040,600
|
|
|
1,114,000
|
|
Non-cash stock-based
compensation
|
87,000
|
|
|
87,000
|
|
Acquisition and
integration costs
|
4,600
|
|
|
4,600
|
|
Equity in (earnings)
losses of non-integral unconsolidated affiliates
|
(1,300)
|
|
|
(1,300)
|
|
Asset impairment
charges (a)
|
2,300
|
|
|
2,300
|
|
Change in fair value
of contingent consideration liabilities
|
(600)
|
|
|
(600)
|
|
Adjusted
EBITDA
|
$
|
1,132,600
|
|
|
$
|
1,206,000
|
|
|
(a) The amount
reflects an asset impairment charge related to the planned sale of
certain equipment that is not utilized in Quanta's core
operations.
|
Quanta Services, Inc. and
Subsidiaries
Reconciliation of Non-GAAP Financial
Measures
Estimated Free Cash Flow
For the Full
Year 2021
(In thousands)
(Unaudited)
The non-GAAP measure of estimated free cash flow, when used in
connection with estimated net cash provided by operating
activities, is intended to provide useful information to investors
and analysts as they evaluate Quanta's ability to generate the cash
required to maintain and potentially expand its business. Free cash
flow is defined as net cash provided by operating activities less
net capital expenditures. Net capital expenditures is defined as
capital expenditures less proceeds from the sale of property and
equipment and from insurance settlements related to property and
equipment. Management believes that free cash flow provides useful
information to Quanta's investors because free cash flow is viewed
by management as an important indicator of how much cash is
provided or used by routine business operations, including the
impact of net capital expenditures. Management uses this measure
for capital allocation purposes as it is viewed as a measure of
cash available to fund debt payments, acquire businesses,
repurchase common stock, declare and pay dividends and transact
other investing and financing activities. However, this measure
should not be considered as an alternative to net cash provided by
operating activities or other measures of performance that are
derived in accordance with GAAP. The most comparable GAAP financial
measure, net cash provided by operating activities, and information
reconciling the GAAP and non-GAAP financial measures, are included
below.
|
Estimated
Range
|
|
Full Year
Ending
|
|
December 31,
2021
|
Net cash provided
by operating activities
|
$
|
725,000
|
|
|
$
|
925,000
|
|
Less: Net capital
expenditures
|
(325,000)
|
|
|
(325,000)
|
|
Free Cash
Flow
|
$
|
400,000
|
|
|
$
|
600,000
|
|
Contacts:
|
Derrick Jensen,
CFO
|
Media – Liz
James
|
|
Kip Rupp, CFA, IRC –
Investors
|
Sard Verbinnen &
Co
|
|
Quanta Services,
Inc.
|
(281)
881-5170
|
|
713-629-7600
|
|
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SOURCE Quanta Services, Inc.