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What changed in Quanta Services's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Quanta Services's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+370 added−383 removedSource: 10-K (2025-02-20) vs 10-K (2024-02-22)

Top changes in Quanta Services's 2024 10-K

370 paragraphs added · 383 removed · 294 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

64 edited+23 added−19 removed95 unchanged
Biggest changeGENERAL Recent Acquisitions In January 2024, we acquired two businesses located in the United States including: a business that provides specialty environmental solutions to industrial companies (which will be primarily included in the Underground and Infrastructure segment) and a business that specializes in testing, manufacturing and distributing safety equipment and supplies (which will be primarily included in the Electric Power and Renewable Energy segments).
Biggest changeDuring the year ended December 31, 2024, we also acquired seven additional businesses located in the United States, including: a business that provides specialty environmental solutions to utility, industrial and petrochemical companies (primarily included in the Underground and Infrastructure segment); a business that specializes in testing, manufacturing and distributing safety equipment and supplies (primarily included in the Electric Power and Renewable Energy segments); a business that specializes in electrical infrastructure services for substations, data centers and governmental entities (primarily included in the Electric Power segment); a business that manufactures transmission and distribution equipment for the electric utility industry (primarily included in the Electric Power and Renewable Energy segments); a business that provides services and equipment 7 related to aerial telecommunications infrastructure and networks (primarily included in the Electric Power segment); a business that provides services related to fiber optic networks (primarily included in the Electric Power segment); and a business that specializes in designing, manufacturing, and distributing liquid-filled power transformers primarily for electrical companies and utilities (primarily included in the Electric Power and Renewable Energy segments).
We also believe that customers in this segment are implementing strategies to reduce carbon emissions produced from their operations, which are providing incremental opportunities for our services, including the development of infrastructure for blending hydrogen into natural gas flow and carbon capture projects, which could include building or repurposing pipeline infrastructure.
We also believe that customers in this segment are implementing strategies to reduce carbon emissions produced from their operations, which are providing incremental opportunities for our services and could include building or repurposing pipeline infrastructure, including the development of infrastructure for blending hydrogen into natural gas flow and carbon capture projects.
Services performed generally include: • design, engineering, procurement, new construction, upgrade and repair and maintenance services for natural gas systems for gas utility customers; • pipeline protection, integrity testing, rehabilitation and replacement services; • catalyst replacement services, high-pressure and critical-path turnaround services, instrumentation and electrical services, piping, fabrication and storage tank services for the midstream and downstream industrial energy markets, as well as specialty cleaning and environmental solutions for the industrial energy and petrochemical markets; • engineering and construction services for pipeline systems, storage systems and compressor and pump stations and the fabrication of pipeline support systems and related structures and facilities; • trenching, directional boring and mechanized welding services related to the services described above; and • engineering, construction and maintenance services for energy transition and carbon-reduction related projects, such as alternative fuel facilities, carbon capture systems and hydrogen facilities.
Services performed generally include: • design, engineering, procurement, new construction, upgrade and repair and maintenance services for natural gas systems for gas utility customers; • pipeline protection, integrity testing, rehabilitation and replacement services; 6 • catalyst replacement services, high-pressure and critical-path turnaround services, instrumentation and electrical services, piping, fabrication and storage tank services for the midstream and downstream industrial energy markets, as well as specialty cleaning and environmental solutions for the industrial energy and petrochemical markets; • engineering and construction services for pipeline systems, storage systems and compressor and pump stations and the fabrication of pipeline support systems and related structures and facilities; • trenching, directional boring and mechanized welding services related to the services described above; and • engineering, construction and maintenance services for energy transition and carbon-reduction related projects, such as alternative fuel facilities, carbon capture systems and hydrogen facilities.
ITEM 1. Business OVERVIEW Quanta Services, Inc. (together with its subsidiaries, “Quanta,” “we,” “us” or “our”) is a leading provider of comprehensive infrastructure solutions for the electric and gas utility, renewable energy, communications, pipeline and energy industries in the United States, Canada, Australia and select other international markets.
ITEM 1. Business OVERVIEW Quanta Services, Inc. (together with its subsidiaries, “Quanta,” “we,” “us” or “our”) is a leading provider of comprehensive infrastructure solutions for the electric and gas utility, renewable energy, technology, communications, pipeline and energy industries in the United States, Canada, Australia and select other international markets.
We operate a fleet of owned and leased trucks and trailers, support vehicles and specialty construction equipment, as well as various proprietary technologies that enhance our service offerings. We have a large and diverse customer base, including many of the leading companies in the utility, renewable energy, communications, industrial and energy delivery markets.
We operate a fleet of owned and leased trucks and trailers, support vehicles and specialty construction equipment, as well as various proprietary technologies that enhance our service offerings. We have a large and diverse customer base, including many of the leading companies in the utility, renewable energy, technology, communications, industrial and energy delivery markets.
We also grant stock-based compensation broadly throughout our organization, including to management and key operations personnel at the majority of our operating companies, which we believe is a key component of our compensation programs that helps to align 12 incentives throughout our decentralized organization. We also enter into employment agreements with our executive officers and certain other key personnel.
We also grant stock-based compensation broadly throughout our organization, including to management and key operations personnel at the majority of our operating companies, which we believe is a key component of our compensation programs that helps to align incentives throughout our decentralized organization. We also enter into employment agreements with our executive officers and certain other key personnel.
We also continue to invest in our education and training capabilities at the Quanta Advanced Training Center and other dedicated training facilities, which provide programs for, among other things, beginning linemen, energized electric power services, telecommunications services, industrial services, lead and cable splicing, directional drilling, gas distribution services and pipeline integrity training.
We also continue to invest in our education and training capabilities at the Quanta Advanced Training Center and other dedicated training facilities, which provide programs for, among other things, beginning linemen, energized electric power services, telecommunications services, 12 industrial services, lead and cable splicing, directional drilling, gas distribution services and pipeline integrity training.
Additionally, with respect to our downstream industrial services, including our high-pressure and critical-path turnaround services, as well as our capabilities with respect to instrumentation and electrical services, piping, fabrication and storage tanks services, and other industrial services, we are focused on processing facilities located along the 6 U.S.
Additionally, with respect to our downstream industrial services, including our high-pressure and critical-path turnaround services, as well as our capabilities with respect to instrumentation and electrical services, piping, fabrication and storage tanks services, and other industrial services, we are focused on processing facilities located along the U.S.
Accordingly, we encourage investors, the media and others interested in our company to follow Quanta, and review the information we post, on the social media channels listed on our website in the Investors / Social Media section. 14 This Annual Report, our website and our social media channels contain information provided by other sources that we believe is reliable.
Accordingly, we encourage investors, the media and others interested in our company to follow Quanta, and review the information we post, on the social media channels listed on our website in the Investors / Social Media section. This Annual Report, our website and our social media channels contain information provided by other sources that we believe is reliable.
In addition, we could be held liable for significant penalties and damages under certain environmental laws and regulations or be subject to revocation of certain licenses or permits, which could materially and adversely affect our business, results of 10 operations and cash flows.
In addition, we could be held liable for significant penalties and damages under certain environmental laws and regulations or be subject to revocation of certain licenses or permits, which could materially and adversely affect our business, results of operations and cash flows.
There can be no assurance, however, that our competitors will not develop the expertise, experience and resources to provide services that are superior in both price and quality to our services, or that we will be able to maintain or enhance our competitive position.
There can be no assurance, however, that our competitors will not develop the expertise, 9 experience and resources to provide services that are superior in both price and quality to our services, or that we will be able to maintain or enhance our competitive position.
While the overall impact on our operations continues to evolve, various aspects of climate change, as well as market and societal concerns about the future impact of climate change, have resulted and are expected to continue to result in operational opportunities and challenges.
While the overall impact on our operations continues to 13 evolve, various aspects of climate change, as well as market and societal concerns about the future impact of climate change, have resulted and are expected to continue to result in operational opportunities and challenges.
These dynamics necessitate the development and construction of related infrastructure, including high-voltage electric transmission and substation infrastructure, that is necessary to interconnect and transmit electricity from new renewable energy generation facilities into the existing electric power grid and enhance grid reliability. Additionally, we believe various legislative and policy objectives throughout North America support these industry and market trends.
These dynamics necessitate the development and construction of related infrastructure, including high-voltage electric transmission and substation infrastructure, that is necessary to interconnect and transmit electricity from new renewable energy generation facilities into the existing electric power grid. Additionally, we believe various legislative and policy objectives throughout North America support these industry and market trends.
We are 11 also subject to, and must comply with, extensive regulations relating to worker health and safety, including the regulations of the Occupational Safety and Health Administration.
We are also subject to, and must comply with, extensive regulations relating to worker health and safety, including the regulations of the Occupational Safety and Health Administration.
We believe these market dynamics and technological 13 advances provide significant opportunities for us, including increased demand for our renewable energy infrastructure services, as well as our portfolio of electric power infrastructure services. The increasing focus on climate change has also impacted markets within our Underground and Infrastructure segment.
We believe these market dynamics and technological advances provide significant opportunities for us, including increased demand for our renewable energy infrastructure services, as well as our portfolio of electric power infrastructure services. The focus on climate change has also impacted markets within our Underground and Infrastructure segment.
Additionally, approximately 32% of our employees as of December 31, 2023 were covered by collective bargaining agreements, which require the payment of specified wages, the observance of certain workplace rules and the payment of certain amounts to multiemployer pension plans and employee benefit trusts.
Additionally, approximately 32% of our employees as of December 31, 2024 were covered by collective bargaining agreements, which require the payment of specified wages, the observance of certain workplace rules and the payment of certain amounts to multiemployer pension plans and employee benefit trusts.
Material Resources Equipment We depend on the availability of a wide range of equipment to perform our services and operate a fleet of owned and leased trucks and trailers, as well as support vehicles and specialty construction and support equipment, such as bucket trucks, digger derricks, sidebooms, dozers, backhoes, excavators, trenchers, generators, boring machines, cranes, robotic arms, wire pullers, tensioners and helicopters.
Material Resources Equipment We depend on the availability of a wide range of equipment to perform our services and operate a fleet of owned and leased trucks and trailers, as well as support vehicles and specialty construction and support equipment, such as bucket trucks, digger derricks, sidebooms, dozers, backhoes, excavators, trenchers, generators, boring machines, cranes, robotic arms and helicopters.
We operate primarily in the United States; however, we derived approximately 14.2%, 15.7% and 14.7% of our revenues from foreign operations, primarily in Canada and Australia, during the years ended December 31, 2023, 2022 and 2021. Electric Power Services Our Electric Power segment provides comprehensive services primarily for the electric power and also for the communications markets.
We operate primarily in the United States; however, we derived approximately 8.7%, 14.2% and 15.7% of our revenues from foreign operations, primarily in Canada and Australia, during the years ended December 31, 2024, 2023 and 2022. Electric Power Services Our Electric Power segment provides comprehensive services primarily for the electric power and also for the communications markets.
However, customers often consider other factors in choosing a service provider, including technical expertise and experience, safety ratings, financial and operational resources, geographic presence, industry reputation and dependability, which we expect to benefit larger service providers such as us. In addition, competition may lessen as industry resources, such as labor supplies, approach capacity.
However, customers often consider other factors in choosing a service provider, including technical expertise and experience, breadth of solutions offerings, safety ratings, financial and operational resources, geographic presence, industry reputation and dependability, which we expect to benefit larger service providers such as us. In addition, competition may lessen as industry resources, such as labor supplies, approach capacity.
To the extent these rules are finalized, we or our customers could incur increased costs related to the assessment and disclosure of climate-related risks.
To the extent these rules are implemented, we or our customers could incur increased costs related to the assessment and disclosure of climate-related risks.
We provide engineering, procurement, construction, upgrade and repair and maintenance services for infrastructure within each of these industries, including electric power transmission and distribution networks; substation facilities; wind and solar generation and transmission and battery storage facilities; communications and cable multi-system operator networks; gas utility systems; pipeline transmission systems and facilities; and downstream industrial facilities.
We provide engineering, procurement, construction, upgrade and repair and maintenance services for infrastructure within each of these industries, including electric power transmission and distribution networks; substation facilities; wind and solar generation and transmission and battery storage facilities; electrical systems for data center, commercial and industrial facilities; communications and cable multi-system operator networks; gas utility systems; pipeline transmission systems and facilities; and downstream industrial facilities.
Additionally, certain new legislation, such as the IRA and the IIJA, as well as other policy and economic incentives and overall public sentiment, are expected to support and encourage renewable projects that can potentially increase demand for our services over the long term.
Additionally, certain legislation, such as 11 the IRA and the IIJA, as well as other policy and economic incentives and overall public sentiment, are designed to support and encourage renewable projects that can potentially increase demand for our services over the long term.
Our operations are subject to various federal, state, local and international laws and regulations, including: • licensing, permitting and inspection requirements applicable to contractors and engineers; • regulations relating to worker safety (e.g., Occupational Safety and Health Administration regulations) and environmental protection; • permitting and inspection requirements applicable to construction projects; • wage and hour regulations (e.g., Fair Labor Standards Act) and regulations associated with our collective bargaining agreements and unionized workforce; • regulations relating to sourcing and transportation of equipment and materials, including licensing and permitting requirements; • regulations regarding engagement of suppliers and subcontractors that meet diversity-ownership or disadvantaged-business requirements; • regulations relating to aviation activities; • building and electrical codes; • applicable U.S. and non-U.S. anti-corruption regulations; • immigration regulations applicable to U.S. and cross-border employment; and • special bidding, procurement and other requirements on government projects.
Our operations are subject to various federal, state, local and international laws and regulations, including: • licensing, permitting and inspection requirements applicable to contractors and engineers; • regulations relating to worker safety (e.g., Occupational Safety and Health Administration regulations) and environmental protection; • permitting and inspection requirements applicable to construction projects; • wage and hour regulations (e.g., Fair Labor Standards Act) and regulations associated with our collective bargaining agreements and unionized workforce; • regulations relating to sourcing and transportation of equipment and materials, including licensing and permitting requirements; • regulations regarding engagement of suppliers and subcontractors that meet diversity-ownership or disadvantaged-business requirements; • regulations relating to aviation activities; • building and electrical codes; • applicable U.S. and non-U.S. anti-corruption regulations; • immigration regulations applicable to U.S. and cross-border employment; and • special bidding, procurement, cybersecurity and other requirements on government projects, as well as obtaining and maintaining security clearance required for certain government projects.
This segment also includes (i) the majority of the financial results of our advanced training facility and our postsecondary educational institution, which specializes in pre-apprenticeship training, apprenticeship training and specialized utility task training for electric workers, as well as training for the gas distribution and communications industries and (ii) our portion of earnings of our unconsolidated integral affiliates, which includes, among others, our 50% equity interest in LUMA Energy, LLC (LUMA), a joint venture that was selected to operate, maintain, and modernize the approximately 18,000-mile electric transmission and distribution system in Puerto Rico.
This segment also includes (i) the majority of the financial results of our advanced training facility and our postsecondary educational institution, which specializes in pre-apprenticeship training, apprenticeship training and specialized utility task training for electric workers, as well as training for the gas distribution and communications industries; (ii) our portion of earnings of our unconsolidated integral affiliates, which includes, among others, our 50% equity interest in LUMA Energy, LLC (LUMA), a joint venture that was selected to operate, maintain, and modernize the approximately 18,000-mile electric transmission and distribution system in Puerto Rico; and (iii) financial results associated with our power transformer and circuit breaker manufacturing operations.
Services performed generally include: • design, procurement, new construction, upgrade and repair and maintenance services for electric power transmission and distribution infrastructure, both overhead and underground, and substation facilities, along with other engineering and technical services, including services that support the implementation of upgrades by utilities to modernize and harden the electric power grid in order to ensure its safety and enhance reliability and to accommodate increased residential and commercial use of electric vehicles (EVs); • emergency restoration services, including the repair of infrastructure damaged by fires and inclement weather; • energized installation, maintenance and upgrade of electric power infrastructure utilizing our bare hand and hot stick methods and our robotic arm techniques; 4 • installation of “smart grid” technologies on electric power networks; • design and construction services to wireline and wireless communications companies, cable multi-system operators and other customers within the communications industry (including services in connection with 5G wireless deployment); • design, installation, maintenance and repair services related to commercial and industrial wiring; and • aviation services primarily for the utility industry, including the transportation of line workers, the setting of poles and towers, and the stringing of wires.
Services performed generally include: • design, procurement, new construction, upgrade and repair and maintenance services for electric power transmission and distribution infrastructure, both overhead and underground, and substation facilities, along with other 4 engineering and technical services, including services that support the implementation of upgrades by utilities to modernize and harden the electric power grid in order to ensure its safety and enhance reliability and to accommodate increased residential and commercial use of electric vehicles (EVs); • emergency restoration services, including the repair of infrastructure damaged by fires and inclement weather; • energized installation, maintenance and upgrade of electric power infrastructure utilizing our bare hand and hot stick methods and our robotic arm techniques; • installation of “smart grid” technologies on electric power networks; • design and installation of electrical systems for data center, commercial and industrial facilities; • design and construction services to wireline and wireless communications companies, cable multi-system operators and other customers within the communications industry (including services in connection with 5G wireless deployment); • design, installation, maintenance and repair services related to commercial and industrial wiring; and • aviation services primarily for the utility industry, including transportation of line workers, pole and tower setting, and wire stringing, as well as certain emergency aerial firefighting services.
Business Environment With respect to our electric power service offerings, utilities are continuing to invest significant capital in their electric power delivery systems, particularly transmission, substation and distribution infrastructure, through multi-year, multi-billion dollar grid modernization and reliability programs.
Business Environment With respect to our electric power service offerings, utilities are continuing to invest significant capital in their gas- powered and renewable generation systems, as well as their electric power delivery systems, particularly transmission, substation and distribution infrastructure, through multi-year, multi-billion dollar grid modernization and reliability programs.
For the year ended December 31, 2023, our largest customer accounted for 6% of our 7 consolidated revenues and our ten largest customers accounted for 31% of our consolidated revenues.
For the year ended December 31, 2024, our largest customer accounted for 6% of our consolidated revenues and our ten largest customers accounted for 31% of our consolidated revenues.
Project Materials We and our customers depend on the availability of certain materials for construction, upgrade and repair and maintenance of their infrastructure, including, among other things, steel, copper, aluminum, and components for renewable 9 energy projects (e.g., solar panels, wind turbine blades).
Project Materials We and our customers depend on the availability of certain materials for construction, upgrade and repair and maintenance of their infrastructure, including, among other things, steel, copper, aluminum, and components for electrical projects (e.g., power transformers, circuit breakers, wire) and renewable energy projects (e.g., solar panels, wind turbine blades).
We believe the IRA includes, among other things, favorable provisions targeting increases in utility-scale wind, solar and energy storage capacity and increased domestic manufacturing capacity and availability of products and components for these projects, that could reduce supply chain risks in the future.
For example, the Inflation Reduction Act of 2022 (IRA) includes, among other things, favorable provisions targeting increases in utility-scale wind, solar and energy storage capacity and increased domestic manufacturing capacity and availability of products and components for these projects, that could reduce supply chain risks in the future.
Although revenues associated with large pipeline projects in Canada increased in 2022 and 2023, as compared to prior years, we anticipate that revenues associated with these projects will continue to fluctuate. Despite these fluctuations and cyclicality, we continue to selectively pursue larger pipeline project opportunities to the extent they satisfy our margin and risk profiles.
Revenues associated with large pipeline projects decreased in 2024, as compared to 2022 and 2023, and we anticipate that revenues associated with these projects will continue to fluctuate. Despite these fluctuations and cyclicality, we continue to selectively pursue larger pipeline project opportunities to the extent they satisfy our margin and risk profiles.
Employee Profile As of December 31, 2023, we had approximately 52,500 employees, consisting of approximately 10,100 salaried employees, including, among others, executive officers, professional and administrative staff, project managers and engineers, job superintendents and field personnel, and approximately 42,400 hourly employees, the number of which fluctuates depending upon the number and size of the projects that are ongoing and planned at any particular time.
Employee Profile As of December 31, 2024, we had approximately 58,400 employees, consisting of approximately 11,500 salaried employees, including, among others, executive officers, professional and administrative staff, project managers and engineers, job superintendents and field personnel, and approximately 46,900 hourly employees, the number of which fluctuates depending upon the number and size of the projects that are ongoing and planned at any particular time.
Risk Factors in Part I of this Annual Report. Conversely, we believe that there are also several existing, pending or proposed legislative or regulatory actions that may alleviate certain regulatory and permitting issues and positively impact long-term demand, particularly in connection with electric power infrastructure and renewable energy spending.
Conversely, we believe that there are also several existing, pending or proposed legislative or regulatory actions that may alleviate certain regulatory and permitting issues and positively impact long-term demand, particularly in connection with electric power infrastructure and renewable energy spending.
As of December 31, 2023, we had approximately 47,200 U.S. employees and approximately 5,300 non-U.S. employees, with the majority of our non-U.S. employees based in Canada. Employee Health and Safety Performance of our services requires the use of heavy equipment and exposure to inherently hazardous conditions.
As of December 31, 2024, we had approximately 53,400 U.S. employees and approximately 5,000 non-U.S. employees, with the majority of our non-U.S. employees based in Canada. Employee Health and Safety Performance of our services requires the use of heavy equipment and exposure to inherently hazardous conditions.
We believe utility, renewable energy, communications and industrial customers provide us with growth opportunities due to their programmatic and long-term capital programs and/or the longer term trends and transitions associated with these industries.
We believe utility, power developer, technology, communications, and energy delivery company customers provide us with growth opportunities due to their programmatic and long-term capital programs and/or the longer-term trends and transitions associated with these industries.
Additionally, recent legislative and regulatory initiatives, including the Rural Digital Opportunity Fund and the Infrastructure Investment and Jobs Act (IIJA), have dedicated billions of dollars of funding to support broadband service to underserved markets. Renewable Energy Services Our Renewable Energy segment provides comprehensive infrastructure solutions to customers that are involved in the renewable energy industry.
Additionally, legislative and regulatory initiatives, including the Broadband Equity Access and Deployment (BEAD) Program and the Infrastructure Investment and Jobs Act (IIJA), have dedicated billions of dollars of funding to support broadband service to underserved markets. Renewable Energy Services Our Renewable Energy segment provides comprehensive infrastructure solutions to customers that are involved in the renewable energy industry.
As of December 31, 2023, the total size of the fleet was approximately 71,000 units.
As of December 31, 2024, the total size of the fleet was approximately 77,000 units.
Utilities have increased the percentage of renewable electricity bought through power purchase agreements (PPAs) with renewable energy developers, and we believe are in the early stages of investing directly in renewable generation facilities, which could expand significantly over time as they pursue clean energy strategies and emissions-reduction initiatives.
Utilities have increased the percentage of renewable electricity bought through power purchase agreements (PPAs) with renewable energy developers, and by investing directly in renewable generation facilities, which could expand significantly over time as they increase supply to meet load growth expectations and pursue clean energy strategies and emissions-reduction initiatives.
In addition, enhanced climate disclosure requirements could accelerate the trend of certain stakeholders and lenders restricting or seeking more stringent conditions with respect to their investments in certain carbon intensive sectors, which could further impact our customers and demand for our services.
In addition, enhanced climate disclosure requirements could accelerate the trend of certain stakeholders and lenders restricting or seeking more stringent conditions with respect to their investments in certain carbon intensive sectors, which could further impact our customers and demand for our services. 14 For additional information regarding the risks and opportunities described above, see Risks Related to Operating Our Business in Item 1A.
For additional information regarding the risks and opportunities described above, see Risks Related to Operating Our Business in Item 1A. Risk Factors in Part I of this Annual Report.
For further information regarding the effects of regulation on our business, see Risks Related to Operating Our Business and Risks Related Regulation and Compliance in Item 1A. Risk Factors in Part I of this Annual Report.
We believe our ability to provide services that cover a broad spectrum of our customers’ needs and requirements is a significant differentiator. Our corporate-level business development and regional management groups support these activities by promoting and marketing our services for existing and prospective large accounts, as well as projects that are capable of utilizing services from multiple operating companies.
Our corporate-level business development and regional management groups support these activities by promoting and marketing our services for existing and prospective large accounts, as well as projects that are capable of utilizing services from multiple operating companies.
Also, a growing number of corporate enterprises, particularly technology companies, are entering into PPAs with renewable energy developers to source renewable electricity to power their facilities and achieve their own carbon-reduction initiatives.
Also, a growing number of corporate enterprises, particularly technology companies, are entering into PPAs with renewable energy developers to source renewable electricity to supply power directly to their facilities, as well as achieve their own carbon-reduction initiatives. Increased battery storage is also being constructed to enhance grid resiliency, balance load and integrate renewable energy.
Certain services within this segment have experienced challenges, and could continue to experience challenges, related to a transition toward a reduced-carbon economy.
Certain services within this segment have experienced challenges, and could continue to experience challenges.
Third quarter revenues are typically the highest of the year, as a greater number of projects are underway and operating conditions, including weather, are normally more accommodating.
Third quarter and fourth quarter revenues are typically the highest of the year, as a greater number of projects are underway and operating conditions, including weather, are normally more accommodating. During the fourth quarter, projects are often completed and customers often seek to spend their capital budgets before year end.
Gulf Coast region, which we believe should have certain long-term strategic advantages due to their proximity to competitively priced and abundant hydrocarbon resources. Through a recent acquisition, we also provide a variety of cleaning and other specialty environmental solutions to processing and petrochemical facilities throughout the United States. Our revenues related to larger pipeline services have fluctuated in recent years.
Gulf Coast region, which we believe should have certain long-term strategic advantages due to their proximity to competitively priced and abundant hydrocarbon resources. Our revenues related to larger pipeline services have fluctuated in recent years.
Representative customers include: l American Electric Power Company, Inc. l Invenergy LLC l ATCO Electric l Lower Colorado River Authority l Berkshire Hathaway, Inc. l National Grid plc l CenterPoint Energy, Inc. l NextEra Energy, Inc. l Comcast Corporation l Orsted US l Con Edison Development, Inc. l Pattern Energy l Duke Energy Corporation l PG&E Corporation l EDF Renewables l Puget Sound Energy, Inc. l Engie IR Holdings LLC l Sempra Energy l Entergy Corporation l The Southern Company l Enterprise Products Partners L.P. l TC Energy Corporation l Exelon Corporation l Trans Mountain Corporation l FirstEnergy Corp. l Valero Energy Corporation l Fortis Inc. l Xcel Energy Inc.
Representative customers include: l American Electric Power Company, Inc. l Lower Colorado River Authority l Avangrid, Inc. l National Grid plc l Berkshire Hathaway, Inc. l NextEra Energy, Inc. l CenterPoint Energy, Inc. l Pattern Energy l Clearway Renew LLC l PG&E Corporation l Comcast Corporation l Puget Sound Energy, Inc. l Duke Energy Corporation l RWE AG l EDF Renewables l Santos Limited l Engie IR Holdings LLC l Sempra Energy l Entergy Corporation l The Southern Company l Enterprise Products Partners L.P. l TC Energy Corporation l Exelon Corporation l Vesper Energy Development LLC l FirstEnergy Corp. l Xcel Energy Inc. l Invenergy LLC Our customers include utilities, power developer, technology, communications, and energy delivery companies, as well as governmental entities.
In order to reliably and efficiently deliver power, including in response to federal reliability standards and in preparation for emerging technologies, such as EVs, utilities are also integrating smart grid technologies into distribution systems to improve grid management and create efficiencies.
In order to reliably and efficiently deliver power and in preparation for emerging technologies, such as EVs, utilities are also integrating smart grid technologies into distribution systems to improve grid management and create efficiencies. A number of utilities also continue to implement system upgrades and hardening programs in response to recurring severe weather events.
Furthermore, many of our strategic relationships with customers take the form of strategic alliance or long-term maintenance agreements, which typically extend for an initial term and may include renewal options to extend the initial term.
We strive to maintain our preferred status as we believe it provides us an advantage in the award of future work for the applicable customer. Furthermore, many of our strategic relationships with customers take the form of strategic alliance or long-term maintenance agreements, which typically extend for an initial term and may include renewal options to extend the initial term.
To accommodate this growth, we expect continued demand for new or expanded transmission, substation and distribution infrastructure to reliably transport power to meet demand driven by electrification and the modification and reengineering of existing infrastructure as existing coal and nuclear generation facilities are retired or shut down.
To accommodate this growth, we expect continued demand for new or expanded transmission, substation and distribution infrastructure to reliably transport power to meet demand driven by electrification, data centers and manufacturing reshoring, and the modification and reengineering of existing infrastructure with increasing penetration of renewable generation and battery storage.
Furthermore, the favorable characteristics of natural gas could also position North America as a leading competitor in the global LNG export market, which could provide additional opportunities for our pipeline service offerings.
To the extent these technologies gain wider adoption, we believe our customer relationships and capabilities position us well to capitalize on future opportunities. Furthermore, the favorable characteristics of natural gas could also position North America as a leading competitor in the global LNG export market, which could provide additional opportunities for our pipeline service offerings.
Our operating company management teams build upon existing customer relationships to secure additional projects and increase revenues. Many of these customer relationships are long-standing and are maintained through a partnering approach with centralized account management, which includes project evaluation and consulting, quality performance, performance measurement and direct customer contact.
Many of these customer relationships are long-standing and are maintained through a partnering approach with centralized account management, which includes project evaluation and consulting, quality performance, performance measurement and direct customer contact. Additionally, operating company management focuses on pursuing growth opportunities with prospective customers.
Additionally, operating company management focuses on pursuing growth opportunities with prospective customers. We also encourage operating company management to cross-sell services of our other operating companies to their customers and coordinate with our other operating companies to pursue projects, especially those that are larger and more complex.
We also encourage operating company management to cross-sell services of our other operating companies to their customers and coordinate with our other operating companies to pursue projects, especially those that are larger and more complex. We believe our ability to provide services that cover a broad spectrum of our customers’ needs and requirements is a significant differentiator.
Underground and Infrastructure Services Our Underground and Infrastructure segment provides comprehensive infrastructure solutions to customers involved in the transportation, distribution, storage, development and processing of natural gas, oil and other products.
To the extent these legislative and policy objectives continue to be supported, we expect they will create incremental demand for our renewable energy solutions. Underground and Infrastructure Services Our Underground and Infrastructure segment provides comprehensive infrastructure solutions to customers involved in the transportation, distribution, storage, development and processing of natural gas, oil and other products.
Risk Factors in Part I of this Annual Report. Seasonality and Cyclicality Typically, our revenues and results of operations can be subject to seasonal and other variations. These variations are influenced by, among other things, weather, customer spending patterns, bidding seasons, receipt of required regulatory approvals, permits and rights of way, project timing and schedules, and holidays.
These variations are influenced by, among other things, weather, customer spending patterns, bidding seasons, receipt of required regulatory approvals, permits and rights of way, project timing and schedules, and holidays.
These seasonal impacts are typical for our U.S. operations, but seasonality for our international operations may differ. Regulation Compliance with numerous regulations has a material effect on our operations.
However, the holiday season and inclement weather can sometimes cause delays during the fourth quarter, reducing revenues and increasing costs. These seasonal impacts are typical for our U.S. operations, but seasonality for our international operations may differ. 10 Regulation Compliance with numerous regulations has a material effect on our operations.
For example, in support of the transition to a reduced-carbon economy, utility customers are transitioning toward more sustainable sources of power generation, such as renewables (e.g., wind and solar) coupled with battery storage technology, and are replacing aging, less efficient infrastructure.
For example, many utility customers are transitioning toward more sustainable sources of power generation, such as renewables (e.g., wind and solar) coupled with battery storage technology, and are replacing aging, less efficient infrastructure, and there has been an increased electrification of consumer goods (e.g., EVs), which is expected to provide continued additional demand for new and expanded electric power infrastructure and reengineering of existing electric power infrastructure.
We also believe the timeline for the transition to a reduced-carbon economy will be extended and will need to be supported by certain legacy energy resources, including natural gas as a transition fuel, and therefore have strategically focused on expanding our natural gas utility services in recent years.
We also believe that meeting the increased demand for electricity will require the continued operation and development of certain legacy energy resources, including natural gas as a transition fuel, and therefore have strategically focused on expanding our natural gas utility services in recent years. Lastly, new legislation or regulation related to climate change could increase our costs.
Additionally, the SEC and the State of California have proposed new rules relating to the disclosure of a range of climate-related risks. We are currently assessing these rules and regulations but at this time we cannot predict the costs of implementation or any potential adverse impacts resulting from the rules.
While these new rules are currently subject to litigation and the timing of implementation and finalization of such rules is uncertain, we are continuing to assess these rules and regulations and at this time we cannot predict the costs of implementation or any potential adverse impacts resulting from the rules.
Strategic alliance agreements also generally state an intention to work together over a period of time and/or on specific types of projects, and many provide us with preferential bidding procedures. Although we have an integrated marketing and business development strategy, management at each of our operating companies is primarily responsible for developing and maintaining successful long-term relationships with customers.
Although we have an integrated marketing and business development strategy, management at each of our operating companies is primarily responsible for developing and maintaining successful long-term relationships with customers. Our operating company management teams build upon existing customer relationships to secure additional projects and increase revenues.
Such estimates are based on management judgment and assumptions and are provided to show perceived trends in our customer types and should be considered directional in nature. 2023 2022 2021 Utility 58 % 67 % 74 % Renewable Energy Developers 16 7 2 Industrial 10 9 10 Energy Delivery 8 7 5 Communications 5 6 5 Other 3 4 4 Total revenues 100 % 100 % 100 % The customer types set forth in the table above are described in further detail as follows: • Utility - Customers that are electric and gas utility companies; • Industrial - Customers that own and/or operate downstream refinery, chemical and industrial facilities, as well as other commercial or manufacturing facilities; • Energy Delivery - Customers that own and/or operate pipelines for the delivery of hydrocarbons; • Renewable Energy Developers – Customers that develop, own and/or operate renewable energy solutions other than electric and gas utility companies; • Communications - Customers that own and/or operate assets supporting delivery of data, communications and digital services; and • Other - Customers that are not accurately described by the categories set forth above.
Year Ended December 31, 2024 2023 2022 Utility and Power 74 % 75 % 75 % Energy and Other 17 19 19 Technology, Manufacturing and Communications 9 6 6 Total revenues 100 % 100 % 100 % The customer types set forth in the table above are described in further detail as follows: • Utility and Power - Customers that are electric and gas utility companies, as well as power developers; • Energy and Other - Customers that own refineries or petrochemical plants and customers that own and/or operate pipelines for the delivery of hydrocarbons, and other non-utility and power customers and non-technology, manufacturing and communications customers to which we provide solutions; and • Technology, Manufacturing and Communications - Customers that own and/or operate assets supporting delivery of data, communications and digital services (such as hyperscaler, data center colocation) and customers who own or operate commercial or industrial manufacturing facilities, as well as telecommunication customers.
Our entrepreneurial business model allows multiple operating companies to serve the same or similar customers and to provide a range of services across end user markets and our reportable segments. Our operating companies may perform joint projects for customers in multiple industries, deliver multiple types of services under a single customer contract or provide service offerings to various industries.
Our entrepreneurial business model allows multiple operating companies to serve the same or similar customers and to provide a range of services across end user markets. Reportable segment information, including revenues and operating income by type of work, is gathered from each operating company.
As we continue to expand our EPC services, customers are increasingly requesting that we be responsible for procuring materials, and this trend is expected to continue to increase. For further information regarding certain risks associated with sources and availability of project materials and components, see Regulation below and Risks Related to Operating Our Business in Item 1A.
For further information regarding certain risks associated with sources and availability of project materials and components, see Regulation below and Risks Related to Operating Our Business in Item 1A. Risk Factors in Part I of this Annual Report. Seasonality and Cyclicality Typically, our revenues and results of operations can be subject to seasonal and other variations.
Risk Management and Insurance We maintain insurance coverage from third-party insurers as part of our overall risk management strategy and because some of our contracts require us to maintain specific insurance coverage limits. We are insured for, among other things, employer’s liability, workers’ compensation, auto liability, aviation and general liability claims.
Risk Factors in Part I of this Annual Report. Risk Management and Insurance We are insured for, among other things, employer’s liability, workers’ compensation, auto liability, aviation and general liability claims. We manage and maintain a portion of our risk through retentions and/or high deductibles and indirectly through our wholly-owned captive insurance company.
To that end, renewable energy developers are expected to continue to increase investments in wind and solar projects, as well as energy storage projects.
When coupled with consumer preferences for clean energy, demand for renewable generation and related infrastructure has increased and is expected to result in sizeable, long-term investments, including meaningful repowering and modernization of existing assets. To that end, renewable energy developers are expected to continue to make significant investments in wind and solar projects, as well as energy storage projects.
We manage and maintain a portion of our casualty risk indirectly through our wholly-owned captive insurance company, which reimburses claims up to the amount of the applicable deductible of our third-party insurance programs, as well as with respect to certain other amounts, and issue letters of credit to secure our obligations in connection with our casualty insurance programs.
The captive insurance company reimburses all claims up to the amount of the applicable deductible of our third-party insurance programs, as well as certain additional exposure related to the general and auto liability programs, which together, in certain circumstances, can be up to $50.0 million per occurrence.
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A number of utilities also continue to implement system upgrades and hardening programs in response to recurring severe weather events.
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Classification of operating company revenues by type of work for segment reporting purposes can require judgment on the part of management. Beginning in the three months ending March 31, 2025, our Chief Executive Officer reevaluated how he assesses performance and allocates resources, which resulted in a change in the reporting of management’s internal financial information.
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In particular, communications providers remain in the early stages of developing new fifth generation wireless services (5G), which are intended to facilitate bandwidth-intensive services at high speeds for consumers and commercial applications.
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As a result, we will begin reporting the results of our two operating segments, which will also be our two reportable segments: (1) Electric Infrastructure Solutions and (2) Underground Utility and Infrastructure Solutions. The Electric Infrastructure Solutions segment will consist of the historical Electric Power and Renewable Energy segments.
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Business Environment With respect to these services, we believe the transition to a reduced-carbon economy, which is being driven by regulatory requirements, consumer and investor preferences, state and federal policies, increasing electrification trends and 5 declining levelized costs of renewable energy, will require sizeable long-term investment in renewable generation and related infrastructure, including meaningful repowering and modernization of existing assets.
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We believe our collaborative, customer-focused, and solutions-based approach, combined with our significant capabilities and scale, differentiate us in the marketplace.
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Increased battery storage is also being developed to support increased renewable energy production by providing shorter-term storage of electricity from renewable energy generation, particularly from solar facilities, which helps to manage the amount and timing of intermittent power placed on the grid from renewable generation.
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Additionally, the technology industry is investing significant capital in the build out of data centers in order to expand cloud-based services and develop artificial intelligence (AI) training and inference. As mentioned above, these facilities consume significant electricity and are a meaningful driver of increasing load demand throughout our service geographies.
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For example, the Inflation Reduction Act of 2022 (IRA) includes policy and related financial incentives designed to support and accelerate, along with providing certainty for, the United States’ efforts to transition towards a reduced-carbon economy.
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Given this significant demand and resulting impact on the electric power grid, we believe we are well positioned to provide turnkey infrastructure solutions, such as critical path low-voltage electrical infrastructure solutions inside data centers, including advanced manufactured, modular solutions, as well as the high-voltage substation, transformers and transmission interconnection infrastructure connecting the facility to the power grid.
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While we believe demand for our renewable infrastructure services will grow as a result of the IRA, the requirements associated with this legislation are complex, and the timing of the expected growth depends in part on the speed at which we and our customers determine how to proceed.
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In particular, we believe there are opportunities to provide fiber and other services in and around data centers, and to interconnect data centers. Communications providers are utilizing fifth generation wireless (5G) infrastructure to support fixed wireless access, which is driving additional 5 fiber capacity requirements for consumer and commercial applications.
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The consideration for these transactions consisted of approximately $379.9 million paid or payable in cash and 221,700 shares of Quanta common stock issued in consideration for one of the acquired businesses, which had a fair value of $44.9 million as of the applicable acquisition date, plus the potential payment of certain contingent consideration.
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Like our Electric Power operations, as an industry leader in the renewable energy space, we believe our collaborative, customer-focused, solutions based approach coupled with our significant capabilities and scale differentiates us in the marketplace.
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The consideration for these transactions consisted of approximately $782.4 million paid or payable in cash (subject to certain adjustments) and 1,238,576 shares of Quanta common stock, which had a fair value of $158.9 million as of the applicable acquisition dates.
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Business Environment With respect to these services, we believe there is increasing demand for electricity due to, among other things, increased electrification trends and data center and other technology and manufacturing infrastructure construction, as well as certain regulatory requirements, consumer and investor preferences and state and federal policies.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeRisks Related to Operating Our Business • Our operating results may vary significantly from quarter to quarter. • A variety of issues could affect the timing or profitability of our projects, and could result in, among other things, project termination or payment of liquidated damages. • Our business is subject to operational hazards (e.g., wildfires, explosions) that can result in significant liabilities, and we may not be insured against all potential liabilities. • Unavailability or cancellation of third-party insurance would increase our risk exposure and disrupt our operations, and our estimates of losses under our insurance programs could prove inaccurate. • Our business and operating results are subject to physical risks associated with climate change. • Our business is labor-intensive, and we may be unable to attract and retain qualified employees or we may incur significant costs if we are unable to efficiently manage our workforce. • A loss of business from certain significant customers could have a material effect on our business. • Changes in estimates related to revenues and costs under customer contracts could result in a reduction or elimination of revenues or profits and the recognition of losses. • We may fail to adequately recover on contract change orders or claims against customers. • We are subject to lawsuits, claims and other legal proceedings, as well as project surety claims. • We may be unsuccessful in generating internal growth. • Many of our contracts may be canceled or suspended on short notice or may not be renewed or replaced. • The nature of our business exposes us to warranty, engineering and other related claims. • We can incur liabilities or suffer negative financial or reputational impacts due to health and safety matters. • Disruptions or failure to adequately protect our information technology systems could materially affect our business or result in harm to our reputation. • A deterioration of our reputation or brands could have an adverse impact on our business. • Our financial results are based on estimates and assumptions that may differ from actual results. • Our inability to successfully execute our acquisition strategy may adversely impact our growth. • Our management structure could be inadequate to support our business as it expands and becomes more complex. • The loss of, or our inability to attract, key personnel could disrupt our business. • Our investments, including our joint ventures, expose us to risks and may result in conflicts of interest. • We are subject to credit and investment risk with respect to our customers and projects. • Risks associated with operating in international markets and U.S. territories could harm our business and prospects. • Our business is subject to the availability of suppliers, subcontractors and equipment manufacturers. • A lack of availability or an increase in the price of fuel, materials or equipment could adversely affect our business or our customers. • Increasing scrutiny and expectations with respect to corporate sustainability practices may impose additional costs on us or expose us to reputational or other risks. 15 Risks Related to Our Industries • Negative macroeconomic conditions and industry-specific economic and market conditions can adversely impact our business. • Our revenues and profitability can be negatively impacted if customers encounter financial difficulties or disputes arise with our customers. • Our business is highly competitive and competitive pressures could negatively impact our business. • Technological advancements and other market conditions could negatively affect our business.
Biggest changeRisks Related to Operating Our Business • Our operating results may vary significantly from quarter to quarter. • A variety of issues could affect the timing or profitability of our projects, and could result in, among other things, project termination or payment of liquidated damages. • Our business is subject to operational hazards (e.g., wildfires, explosions) that can result in significant liabilities, and we may not be insured against all potential liabilities. 15 • Insurance and claims expenses, as well as the unavailability or cancellation of third-party insurance coverage, could have a material adverse effect on us. • Our business and operating results are subject to physical risks associated with climate change. • Our business is labor-intensive, and we may be unable to attract and retain qualified employees or we may incur significant costs if we are unable to efficiently manage our workforce. • A loss of business from certain significant customers could have a material effect on our business. • Changes in estimates related to revenues and costs under customer contracts could result in a reduction or elimination of revenues or profits and the recognition of losses. • We may fail to adequately recover on contract change orders or claims against customers. • We are subject to lawsuits, claims and other legal proceedings, as well as project surety claims. • We may be unsuccessful in generating internal growth. • Many of our contracts may be canceled or suspended on short notice or may not be renewed or replaced. • The nature of our business exposes us to warranty, engineering and other related claims. • We can incur liabilities or suffer negative financial or reputational impacts due to health and safety matters. • Disruptions or failure to adequately protect our information technology systems could materially affect our business and reputation. • A deterioration of our reputation or brands could have an adverse impact on our business. • Our financial results are based on estimates and assumptions that may differ from actual results. • Our inability to successfully execute our acquisition strategy may adversely impact our growth. • Our management structure could be inadequate to support our business as it expands and becomes more complex. • The loss of, or our inability to attract or keep, key personnel could disrupt our business. • Our investments, including our joint ventures, expose us to risks and may result in conflicts of interest. • We are subject to credit and investment risk with respect to our customers and projects. • Risks associated with operating in international markets and U.S. territories could harm our business and prospects. • Our business is subject to the availability of suppliers, subcontractors and equipment manufacturers. • A lack of availability or an increase in the price of fuel, materials or equipment could adversely affect our business or our customers. • Increasing scrutiny and expectations with respect to corporate sustainability practices may impose additional costs on us or expose us to reputational or other risks.
The following provisions of our charter documents, as currently in effect, and Delaware law could discourage potential proposals to acquire us, delay or prevent a change in control of us or limit the price that investors may be willing to pay in the future for shares of our common stock: • our certificate of incorporation permits our Board to issue “blank check” preferred stock and to adopt amendments to our bylaws; • our bylaws contain restrictions regarding the right of stockholders to nominate directors and to submit proposals to be considered at stockholder meetings; • our certificate of incorporation and bylaws restrict the right of stockholders to call a special meeting of stockholders and to act by written consent; and • we are subject to provisions of Delaware law which restrict us from engaging in any of a broad range of business transactions with an “interested stockholder” for a period of three years following the date such stockholder became classified as an interested stockholder.
The following provisions of our charter documents, as currently in effect, and Delaware law could discourage potential proposals to acquire us, delay or prevent a change in control of us or limit the price that investors may be willing to pay in the future for shares of our common stock: • our certificate of incorporation permits our Board to issue “blank check” preferred stock and to adopt amendments to our bylaws; • our bylaws contain restrictions regarding the right of stockholders to nominate directors and to submit proposals to be considered at stockholder meetings; • our certificate of incorporation and bylaws restrict the right of stockholders to call a special meeting of stockholders and to act by written consent; and 37 • we are subject to provisions of Delaware law which restrict us from engaging in any of a broad range of business transactions with an “interested stockholder” for a period of three years following the date such stockholder became classified as an interested stockholder.
Our ability to integrate and realize benefits can be negatively impacted by, among other things: • failure of an acquired business to achieve the results we expect; • diversion of our management’s attention from operational and other matters or other potential disruptions to our existing business; • difficulties incorporating the operations and personnel, or inability to retain key personnel, of an acquired business; • the complexities and difficulties associated with managing our business as it grows; • additional financial reporting and accounting challenges associated with an acquired business; • unanticipated events or liabilities associated with the operations of an acquired business; • loss of business due to customer overlap or other factors; and • risks and liabilities arising from the prior operations of an acquired business, such as performance, operational, safety, cybersecurity, environmental, workforce or other compliance or tax issues, some of which we may not have discovered or accurately estimated during our due diligence and may not be covered by indemnification obligations or insurance.
Our ability to integrate and realize benefits can be negatively impacted by, among other things: • failure of an acquired business to achieve the results we expect; • diversion of our management’s attention from operational and other matters or other potential disruptions to our existing business; • difficulties incorporating the operations and personnel, or inability to retain key personnel, of an acquired business; • the complexities and difficulties associated with managing our business as it grows and evolves; • additional financial reporting and accounting challenges associated with an acquired business; • unanticipated events or liabilities associated with the operations of an acquired business; • loss of business due to customer overlap or other factors; and • risks and liabilities arising from the prior operations of an acquired business, such as performance, operational, safety, cybersecurity, environmental, workforce or other compliance or tax issues, some of which we may not have discovered or accurately estimated during our due diligence and may not be covered by indemnification obligations or insurance.
Many of our projects involve challenging design, engineering, financing, permitting, right of way acquisition, procurement and construction phases that occur over extended time periods, sometimes several years, and we have encountered and may in the future encounter project delays, additional costs or project performance issues as a result of, among other things: • inability to meet project schedule requirements or achieve guaranteed performance or quality standards for a project, which can result in increased costs, through rework, replacement or otherwise, or the payment of liquidated damages to the customer or contract termination; • failure to accurately estimate project costs or accurately establish the scope of our services; • failure to make judgments in accordance with applicable professional standards (e.g., engineering standards); • unforeseen circumstances or project modifications not included in our cost estimates or covered by our contract for which we cannot obtain adequate compensation, including concealed or unknown environmental, geological or geographical site conditions or technical problems such as design or engineering issues; • changes in laws or permitting and regulatory requirements during the course of our work; • delays in the delivery or management of design or engineering information, equipment or materials; • our or a customer’s failure to manage a project, including the inability to timely obtain land, permits or rights of way or meet other permitting, regulatory or environmental requirements or conditions; • changes to project or customer schedules; • natural disasters or emergencies, including wildfires and earthquakes, as well as significant weather events (e.g., hurricanes, tropical storms, tornadoes, floods, droughts, blizzards and extreme temperatures) and adverse or unseasonable weather conditions (e.g., prolonged rainfall or snowfall, early thaw in Canada and the northern United States); 17 • difficult terrain and site conditions where delivery of materials and availability of labor are impacted or where there is exposure to harsh and hazardous conditions; • protests and other public activism, legal challenges or other political activity or opposition to a project; • other factors such as terrorism, geopolitical conflicts, public health crises (e.g. pandemics) and delays attributable to U.S. government shutdowns or any related under-staffing of government departments or agencies; • changes in the cost, availability or quality of equipment, commodities, materials, consumables or labor; and • delay or failure to perform by suppliers, subcontractors or other third parties, or our failure to coordinate performance of such parties, as approximately 20% of our work is subcontracted to other service providers.
Many of our projects involve challenging design, engineering, financing, permitting, right of way acquisition, procurement and construction phases that occur over extended time periods, sometimes several years, and we have encountered and may in the future encounter project delays, additional costs or project performance issues as a result of, among other things: • inability to meet project schedule requirements or achieve guaranteed performance or quality standards for a project, which can result in increased costs, through rework, replacement or otherwise, or the payment of liquidated damages to the customer or contract termination; • failure to accurately estimate project costs or accurately establish the scope of our services; • failure to make judgments in accordance with applicable professional standards (e.g., engineering standards); • unforeseen circumstances or project modifications not included in our cost estimates or covered by our contract for which we cannot obtain adequate compensation, including concealed or unknown environmental, geological or geographical site conditions or technical problems such as design or engineering issues; • changes in laws or permitting and regulatory requirements during the course of our work; • delays in the delivery or management of design or engineering information, equipment or materials; • our or a customer’s failure to manage a project, including the inability to timely obtain land, permits or rights of way or meet other permitting, regulatory or environmental requirements or conditions; • changes to project or customer schedules; • natural disasters or emergencies, including wildfires and earthquakes, as well as significant weather events (e.g., hurricanes, tropical storms, tornadoes, floods, droughts, blizzards and extreme temperatures) and adverse or unseasonable weather conditions (e.g., prolonged rainfall or snowfall, early thaw in Canada and the northern United States); • difficult terrain and site conditions where delivery of materials and availability of labor are impacted or where there is exposure to harsh and hazardous conditions; • protests and other public activism, legal challenges or other political activity or opposition to a project; • other factors such as terrorism, geopolitical conflicts, public health crises (e.g. pandemics) and delays attributable to U.S. government shutdowns or any related under-staffing of government departments or agencies; • changes in the cost, availability, lead times or quality of equipment, commodities, materials, consumables or labor; and • delay or failure to perform by suppliers, subcontractors or other third parties, or our failure to coordinate performance of such parties, as approximately 20% of our work is subcontracted to other service providers.
As a result, we may have, and from time to time have had, to replace certain components and/or provide remediation in response to the discovery of defects in our products, and the occurrence of any defect, error, failure or quality 22 issue could result in cancellation of orders, product returns, damage to our reputation, diversion of our resources, lawsuits or claims by our customers or other third parties and other losses to us or to any of our customers or third parties, which could have a material adverse impact on our business, financial condition, results of operations and cash flows.
As a result, we may have, and from time to time have had, to replace certain components and/or provide remediation in response to the discovery of defects in our products, and the occurrence of any defect, error, failure or quality issue could result in cancellation of orders, product returns, damage to our reputation, diversion of our resources, lawsuits or claims by our customers or other third parties and other losses to us or to any of our customers or third parties, which could have a material adverse impact on our business, financial condition, results of operations and cash flows.
Expectations and requirements of our investors, customers and other third parties evolve rapidly and are largely out of our control, and our initiatives and disclosures in response to such expectations and requirements may result in increased costs (including but not limited to increased costs related to compliance, stakeholder engagement, contracting and insurance), changes in demand for certain services, enhanced compliance or disclosure obligations, or other adverse impacts to our business, financial condition, or results of operations.
Expectations and requirements of our investors, customers and other third parties evolve rapidly and are largely out of our control, and our initiatives and disclosures in response to such expectations and requirements may result in increased costs (including but not limited to increased costs related to compliance, stakeholder engagement, contracting and insurance), 29 changes in demand for certain services, enhanced compliance or disclosure obligations, or other adverse impacts to our business, financial condition, or results of operations.
For example, customers in certain U.S. states and Canada, in order to receive certain funding or for other reasons, may expect or compel us to engage a specified percentage of services from suppliers or subcontractors that meet diversity-ownership requirements, which can further limit our pool of available suppliers 27 and subcontractors and limit our ability to secure contracts, maintain our services or grow in those areas.
For example, customers in certain U.S. states and Canada, in order to receive certain funding or for other reasons, may expect or compel us to engage a specified percentage of services from suppliers or subcontractors that meet diversity-ownership requirements, which can further limit our pool of available suppliers and subcontractors and limit our ability to secure contracts, maintain our services or grow in those areas.
Additionally, changing competitive pressures present difficulties in matching 30 workforce size with available contract awards. As a result of the factors described above, the competitive environment we operate in can have a material adverse effect on our business, financial condition, results of operations and cash flows. Technological advancements and other market developments could negatively affect our business.
Additionally, changing competitive pressures present difficulties in matching workforce size with available contract awards. As a result of the factors described above, the competitive environment we operate in can have a material adverse effect on our business, financial condition, results of operations and cash flows. Technological advancements and other market developments could negatively affect our business.
Additionally, we own and lease numerous properties and facilities, including certain of which that contain above-and below-ground fuel storage tanks, which could leak and cause us to be responsible for remediation costs and fines, and certain of which that are or have been used for industrial purposes and may contain known or unknown environmental conditions that we are or may be responsible for maintaining, monitoring and/or remediating.
Additionally, we own and lease numerous properties and facilities, including certain of which that contain above-and below-ground fuel storage tanks, which could leak and cause us to be responsible for remediation costs and fines, and certain of which that are or have been used for industrial purposes and may contain known or unknown environmental conditions that we 33 are or may be responsible for maintaining, monitoring and/or remediating.
Furthermore, the increased antitrust scrutiny of and compliance requirements for potential acquisitions, including by the Federal Trade Commission (FTC) and Department of Justice under the Hart-Scott Rodino Act, the Sherman Act, the Clayton Act (each 24 as amended) or other applicable laws, could negatively impact the cost and timing of or our ability to complete certain potential acquisitions.
Furthermore, the increased antitrust scrutiny of and compliance requirements for potential acquisitions, including by the Federal Trade Commission (FTC) and Department of Justice under the Hart-Scott Rodino Act, the Sherman Act, the Clayton Act (each as amended) or other applicable laws, could negatively impact the cost and timing of or our ability to complete certain potential acquisitions.
Additionally, to the extent we are required to 28 transition our fleet to alternative sources of power, including EVs, and the availability of such vehicles is limited or fluctuates, we may be unable to efficiently plan for such transition, which could result in, among other things, the retirement of certain vehicles prior to the end of their useful life.
Additionally, to the extent we are required to transition our fleet to alternative sources of power, including EVs, and the availability of such vehicles is limited or fluctuates, we may be unable to efficiently plan for such transition, which could result in, among other things, the retirement of certain vehicles prior to the end of their useful life.
A reduction in cash flow or the lack of availability of debt or equity financing for our customers on favorable terms could result in a reduction in our customers’ spending for our services 29 and also impact the ability of our customers to pay amounts owed to us, which could have a material adverse effect on our business, financial condition, results of operations and cash flows.
A reduction in cash flow or the lack of availability of debt or equity financing for our customers on favorable terms could result in a reduction in our customers’ spending for our services and also impact the ability of our customers to pay amounts owed to us, which could have a material adverse effect on our business, financial condition, results of operations and cash flows.
Furthermore, our wholly-owned captive insurance company is a registered insurance company with the Texas Department of Insurance, and therefore is subject to various rules and regulations and required to meet certain capital requirements, which can result in additional use of our resources. 33 We also collect and retain information about our customers, stockholders, vendors and employees.
Furthermore, our wholly-owned captive insurance company is a registered insurance company with the Texas Department of Insurance, and therefore is subject to various rules and regulations and required to meet certain capital requirements, which can result in additional use of our resources. We also collect and retain information about our customers, stockholders, vendors and employees.
Prices and availability could be materially impacted by, among other things, supply chain and other logistical challenges (including inability of manufacturers to meet demand), global trade relationships (e.g., tariffs, duties, taxes, assessments, sourcing restrictions) and other general market and geopolitical conditions (e.g., inflation, market volatility, increased interest rates and geopolitical conflicts).
Prices and availability could be materially impacted by, among other things, supply chain and other logistical challenges (including inability of manufacturers to timely meet demand), global trade relationships (e.g., tariffs, duties, taxes, assessments, sourcing restrictions) and other general market and geopolitical conditions (e.g., inflation, market volatility, increased interest rates and geopolitical conflicts).
For a variety of reasons, our unionized workforce could adversely impact relationships with our customers and adversely affect our business, financial condition, results of operations and cash flows. Certain of our customers also require or prefer a non-union workforce, and they may reduce the amount of work assigned to us if our non-union labor crews become unionized.
For a variety of reasons, our unionized workforce could adversely impact relationships with our customers and adversely affect our business, financial condition, results of 32 operations and cash flows. Certain of our customers also require or prefer a non-union workforce, and they may reduce the amount of work assigned to us if our non-union labor crews become unionized.
Government agencies routinely audit and investigate government contractors and may review a contractor’s performance under its contracts, cost structure and compliance with applicable laws, regulations and standards. If a government agency determines that costs were improperly allocated to specific contracts, such costs will not be reimbursed or a refund of previously reimbursed costs may be required.
Government agencies routinely audit and investigate government contractors and may review a contractor’s performance under its contracts, cost structure and 34 compliance with applicable laws, regulations and standards. If a government agency determines that costs were improperly allocated to specific contracts, such costs will not be reimbursed or a refund of previously reimbursed costs may be required.
Changes in climate have caused, and are expected to continue to cause, among other things, increasing mean annual temperatures, rising sea levels and changes to meteorological and hydrological patterns, as well as impacts to the frequency and 19 intensity of wildfires, hurricanes, floods, droughts, other storms and severe weather-related events and natural disasters.
Changes in climate have caused, and are expected to continue to cause, among other things, increasing mean annual temperatures, rising sea levels and changes to meteorological and hydrological patterns, as well as impacts to the frequency and intensity of wildfires, hurricanes, floods, droughts, other storms and severe weather-related events and natural disasters.
If our surety providers or lenders were to limit or eliminate our access to bonding, letters of credit or guarantees, our alternatives would include seeking capacity from other sureties and lenders or finding more business that does not require bonds or that allows for other forms of collateral for project performance, such as cash.
If our surety providers or lenders were to limit or eliminate our access to bonding, letters of credit or guarantees, our alternatives would 36 include seeking capacity from other sureties and lenders or finding more business that does not require bonds or that allows for other forms of collateral for project performance, such as cash.
Furthermore, many of our customers may cancel or suspend our contracts on short notice even if we are not in default under the contract. Certain of our customers assign work to us on a project-by-project basis under MSAs. Under these agreements, our customers generally have no obligation to assign a specific amount of work to us.
Furthermore, many of our customers may cancel or suspend our contracts on short notice even if we are not in default under the contract. Certain of our 22 customers assign work to us on a project-by-project basis under MSAs. Under these agreements, our customers generally have no obligation to assign a specific amount of work to us.
Any such breach or disruption could subject us to significant liabilities, cause damage to our reputation or customer relationships, or result in regulatory investigations or other actions by governmental authorities, which could have a material adverse impact on our business, financial condition, results of operations and cash flows.
Any such breach or disruption could subject us to material liabilities, cause damage to our reputation or customer relationships, or result in regulatory investigations or other actions by governmental authorities, which could have a material adverse impact on our business, financial condition, results of operations and cash flows.
As a result, additional costs or penalties, a reduction in our productivity or efficiency or a project termination in any given period can have a material adverse effect on our business, financial condition, results of operations and cash flows and can also adversely affect our ability to secure new contracts.
As a result, additional costs or penalties, a reduction in our productivity or efficiency or a project termination in any given period can have a 18 material adverse effect on our business, financial condition, results of operations and cash flows and can also adversely affect our ability to secure new contracts.
The loss of business from a significant customer could have a material adverse effect on our business, financial condition, results of operations and cash flows. 20 Changes in estimates related to revenues and costs associated with our contracts with customers could result in a reduction or elimination of revenues, a reduction of profits or the recognition of losses.
The loss of business from a significant customer could have a material adverse effect on our business, financial condition, results of operations and cash flows. Changes in estimates related to revenues and costs associated with our contracts with customers could result in a reduction or elimination of revenues, a reduction of profits or the recognition of losses.
For example, certain jurisdictions in which we operate have adopted new requirements that would require companies to provide expanded emissions-related disclosures on an annual basis. Additionally, the SEC and the State of California have published proposed rules that would require companies to provide significantly expanded climate-related disclosures in their periodic reporting.
For example, certain jurisdictions in which we operate have adopted new requirements that would require companies to provide expanded emissions-related disclosures on an annual basis. Additionally, the SEC and the State of California have published new rules that would require companies to provide significantly expanded climate-related disclosures in their periodic reporting.
Any of the above-listed factors could have an adverse effect on our business, financial condition and results of operations and our ability to meet our payment obligations on our existing indebtedness. 35 Servicing our debt requires a significant amount of cash, and we may not have sufficient cash flow from our operations to pay our indebtedness.
Any of the above-listed factors could have an adverse effect on our business, financial condition and results of operations and our ability to meet our payment obligations on our existing indebtedness. Servicing our debt requires a significant amount of cash, and we may not have sufficient cash flow from our operations to pay our indebtedness.
These bonds provide a guarantee that we will perform under the terms of a contract and pay our subcontractors and vendors. If we fail to perform, the customer may demand that the surety make payments or provide services under the bond, 21 and we must reimburse the surety for any expenses or outlays it incurs.
These bonds provide a guarantee that we will perform under the terms of a contract and pay our subcontractors and vendors. If we fail to perform, the customer may demand that the surety make payments or provide services under the bond, and we must reimburse the surety for any expenses or outlays it incurs.
Additionally, certain of our operating companies manufacture products sold to customers and other third parties, and we can be exposed to product liability and warranty claims if our products result in, or are alleged to result in, bodily injury and/or property damage or our products actually or allegedly fail to perform as expected.
Additionally, certain of our operating companies manufacture products sold to customers and other third parties, and we can be exposed to product liability and warranty claims if such products result in, or are alleged to result in, bodily injury and/or property damage or our products actually or allegedly fail to perform as expected.
Further, if our partners experience cost overruns or project performance issues that we are unable to adequately 26 address, the customer may terminate the project, which could result in legal liability to us, harm our reputation and reduce our profit or increase our loss on a project.
Further, if our partners experience cost overruns or project performance issues that we are unable to adequately address, the customer may terminate the project, which could result in legal liability to us, harm our reputation and reduce our profit or increase our loss on a project.
Additionally, we operate a significant number of helicopters in the performance of our services, including the transportation of line workers, the setting of poles, the stringing of wires and wildfire control and prevention, among other activities, including in 18 locations that have a higher risk of wildfires and in densely populated areas.
Additionally, we operate a significant number of helicopters in the performance of our services, including the transportation of line workers, the setting of poles, the stringing of wires and wildfire control and prevention, among other activities, including in locations that have a higher risk of wildfires and in densely populated areas.
We also rely on equipment manufacturers to provide us with the equipment required to conduct our operations, including a significant number of specialty vehicles. Limitations on the availability of suppliers, subcontractors or equipment manufacturers could negatively impact our or our customers’ operations, particularly in the event we rely on a single or small number of providers.
We also rely on equipment manufacturers to timely provide us with the equipment required to conduct our operations, including a significant number of specialty vehicles. Limitations on the availability of suppliers, subcontractors or equipment manufacturers could negatively impact our or our customers’ operations, particularly in the event we rely on a single or small number of providers.
As a result, regulatory or other requirements that require us to outsource a percentage of services to subcontractors, whether they are businesses meeting diversity-ownership requirements or otherwise, also limit our ability to self-perform our services, thereby potentially increasing performance risk associated with our services.
As a result, regulatory or other requirements that require us to outsource a percentage of services to subcontractors, whether they are businesses meeting 28 diversity-ownership requirements or otherwise, also limit our ability to self-perform our services, thereby potentially increasing performance risk associated with our services.
A shortage of these employees for various reasons, including intense competition for skilled employees, labor shortages, increased labor costs and the preference of some candidates to work remotely, could jeopardize our ability to successfully manage our decentralized operations or our ability to grow and expand our business.
A shortage of these employees for various reasons, including intense competition for skilled employees, labor shortages, increased labor costs and the preference of some 26 candidates to work remotely, could jeopardize our ability to successfully manage our decentralized operations or our ability to grow and expand our business.
Changes in immigration or work authorization laws may increase our obligations for compliance and oversight, which could subject us to additional costs and 34 potential liability and make our hiring and employee transfer processes more cumbersome, or reduce the availability of potential employees.
Changes in immigration or work authorization laws may increase our obligations for compliance and oversight, which could subject us to additional costs and potential liability and make our hiring and employee transfer processes more cumbersome, or reduce the availability of potential employees.
Known liabilities may also change over time and become more severe than previously anticipated. As a result, past or future acquisitions may ultimately have a negative impact on our business, financial condition, results of operations and cash flows.
Known liabilities may also change over 25 time and become more severe than previously anticipated. As a result, past or future acquisitions may ultimately have a negative impact on our business, financial condition, results of operations and cash flows.
While we have security measures and technology in place to protect our and our clients’ confidential or proprietary company information, there can be no assurance that our efforts will prevent all threats to our computer systems.
While we have security measures and technology in place to protect our and our clients’ confidential or proprietary company information, there can be no assurance that our efforts will prevent all threats to our systems and information.
Our future success will depend, in part, on our ability to anticipate and adapt to these and other potential changes in a cost-effective manner and to offer services that meet customer demands and evolving industry standards.
Our future success will depend, in part, on our ability to anticipate and adapt to these and other potential changes in a cost-effective manner and to offer services that meet customer demands and 31 evolving industry standards.
We also generate a significant portion of our revenues under fixed price contracts, including contracts for large projects and/or projects where we provide EPC services (e.g., large transmission, substation and renewable generation projects).
We also generate a significant portion of our revenues under fixed price contracts, including contracts for large projects and/or projects where we provide EPC services (e.g., large electric transmission and substation projects and renewable generation projects).
An attack could also cause service disruptions to our internal systems or, in extreme circumstances, infiltration into, damage to or loss of control of our customers’ energy infrastructure systems.
An attack could also cause material service disruptions to our internal systems or, in extreme circumstances, infiltration into, damage to or loss of control of our customers’ energy infrastructure systems.
Additionally, the FTC has proposed new rules to, among other things, prohibit and make unenforceable any post-employment non-compete arrangement that restricts an employee or individual independent contractor, unless such arrangement was entered into in connection with an acquisition and meets certain conditions.
Additionally, the FTC has adopted new rules to, among other things, prohibit and make unenforceable any post-employment non-compete arrangement that restricts an employee or individual independent contractor, unless such arrangement was entered into in connection with an acquisition and meets certain conditions.
As of December 31, 2023, approximately 32% of our employees were covered by collective bargaining agreements and the number of our employees covered by collective bargaining agreements could increase in the future for a variety of reasons, including acquisitions, unionization of a non-union operating company, project requirements (e.g. project labor agreements) and changes in law.
As of December 31, 2024, approximately 32% of our employees were covered by collective bargaining agreements and the number of our employees covered by collective bargaining agreements could increase in the future for a variety of reasons, including acquisitions, unionization of a non-union operating company, project requirements (e.g., project labor agreements) and changes in law.
Our quarterly results have been and may in the future be materially and/or adversely affected by, among other things: • the timing and volume of work we perform and our performance with respect to ongoing projects and services, including as a result of fluctuations in the amount of work customers assign to us under our agreements (e.g., MSAs), delays and reductions in scope of projects, and project and agreement terminations, expirations or cancellations; • increases in project costs that result from, among other things, natural disasters and emergencies, adverse weather conditions or events, legal challenges, permitting, regulatory or environmental processes, or inaccurate project cost estimates; • variations in the size, scope, costs and operating income margins of ongoing projects, as well as the mix of our customers, contracts and business; • fluctuations in economic, political, financial, industry and market conditions on a regional, national or global basis, including as a result of, among other things, inflationary pressure that impacts our costs associated with labor, equipment and materials; increased interest rates; default or threat of default by the U.S. federal government with respect to its debt obligations; U.S. government shutdowns; natural disasters and other emergencies (e.g., wildfires, weather-related events, pandemics); deterioration of global or specific trade relationships; or geopolitical conflicts and political unrest; 16 • pricing pressures as a result of competition; • changes in the budgetary spending patterns or strategic plans of customers or governmental entities; • supply chain and other logistical difficulties, as well as sourcing restrictions on materials necessary for the services we provide; • liabilities and costs incurred in our operations that are not covered by, or that are in excess of, our third-party insurance or indemnification rights, including significant liabilities that arise from the inherently hazardous conditions of our operations (e.g., explosions, fires) and the operations of our subcontractors, and which could be exacerbated by the geographies in which we operate; • disputes with customers or delays and payment risk relating to billing and payment under our contracts and change orders, including as a result of customers that encounter financial difficulties, are insolvent or have filed for bankruptcy protection; • the resolution of, or unexpected or increased costs associated with, pending or threatened legal proceedings, indemnity obligations, multiemployer pension plan obligations (e.g., withdrawal liability) or other claims; • restructuring, severance and other costs associated with, among other things, winding down certain operations and exiting markets; • estimates and assumptions in determining our financial results, remaining performance obligations and backlog, including the timing and significance of impairments of long-lived assets, equity or other investments, receivables, goodwill or other intangible assets; • significant fluctuations in foreign currency rates; • the recognition of tax impacts related to changes in tax laws or uncertain tax positions; and • the timing and magnitude of costs we incur to support our operations or growth internally or through acquisitions.
Our quarterly results have been and may in the future be materially and/or adversely affected by, among other things: • the timing and volume of work we perform and our performance with respect to ongoing projects and services, including as a result of fluctuations in the amount of work customers assign to us under our agreements (e.g., MSAs), delays and reductions in scope of projects, and project and agreement terminations, expirations or cancellations; • increases in project costs that result from, among other things, natural disasters and emergencies, adverse weather conditions or events, legal challenges, permitting, regulatory or environmental processes, tariffs, or inaccurate project cost estimates; • variations in the size, scope, costs and operating income margins of ongoing projects, as well as the mix of our customers, contracts and business; • fluctuations in economic, political, financial, industry and market conditions on a regional, national or global basis, including as a result of, among other things, inflationary pressure that impacts our costs associated with labor, equipment and materials; increased interest rates; default or threat of default by the U.S. federal government with respect to its debt obligations; U.S. government shutdowns; natural disasters and other emergencies (e.g., wildfires, weather-related events, pandemics); deterioration of global or specific trade relationships; or geopolitical conflicts and political unrest; • pricing pressures as a result of competition; • changes in the budgetary spending patterns or strategic plans of customers or governmental entities; • supply chain and other logistical difficulties, as well as sourcing restrictions on materials necessary for the services we provide; • liabilities and costs incurred in our operations that are not covered by, or that are in excess of, our third-party insurance or indemnification rights, including significant liabilities that arise from the inherently hazardous conditions of our operations (e.g., explosions, fires) and the operations of our subcontractors, and which could be exacerbated by the geographies in which we operate; • disputes with customers or delays and payment risk relating to billing and payment under our contracts and change orders, including as a result of customers that encounter financial difficulties, are insolvent or have filed for bankruptcy protection; • the resolution of, or unexpected or increased costs associated with, pending or threatened legal proceedings, indemnity obligations, multiemployer pension plan obligations (e.g., withdrawal liability) or other claims; • restructuring, severance and other costs associated with, among other things, winding down certain operations and exiting markets; • estimates and assumptions in determining our financial results, remaining performance obligations and backlog, including the timing and significance of impairments of long-lived assets, equity or other investments, receivables, goodwill or other intangible assets; • significant fluctuations in foreign currency rates; • the recognition of tax impacts related to changes in tax laws or uncertain tax positions; and • the timing and magnitude of costs we incur to support our operations or growth internally or through acquisitions. 17 A variety of issues could affect the timing or profitability of our projects, which may result in additional costs to us, reductions or delays in revenues, the payment of liquidated damages or project termination.
The loss of, or reduction in business from, certain significant customers could have a material adverse effect on our business. A few customers have in the past and may in the future account for a significant portion of our revenues. For example, our ten largest customers accounted for 31% of our consolidated revenues for the year ended December 31, 2023.
The loss of, or reduction in business from, certain significant customers could have a material adverse effect on our business. A few customers have in the past and may in the future account for a significant portion of our revenues. For example, our ten largest customers accounted for 31% of our consolidated revenues for the year ended December 31, 2024.
To the extent that we are unable to manage our growth effectively or are unable to attract and retain additional qualified management, we may not be able to continue to expand our operations or execute our business plan. 25 The loss of, or our inability to attract, key personnel could disrupt our business.
To the extent that we are unable to manage our growth effectively or are unable to attract and retain additional qualified management, we may not be able to continue to expand our operations or execute our business plan. The loss of, or our inability to attract or keep, key personnel could disrupt our business.
We employ a significant number of employees, and while we utilize processes to assist in verifying the employment eligibility of potential new employees so that we maintain compliance with applicable laws, it is possible some of our employees may be unauthorized workers.
We employ a significant number of employees, and while we utilize processes to assist in verifying the employment eligibility of our employees so that we maintain compliance with applicable laws, it is possible some of our employees may be unauthorized workers.
Many of these difficulties and delays are beyond our control and can negatively impact our ability to complete the project in accordance with the required delivery schedule or achieve our anticipated margin on the project.
Many of these difficulties and delays are beyond our control and can negatively impact our ability to complete the project in accordance with the required delivery schedule or achieve our anticipated operating income margin on the project.
We grant credit, generally without collateral, to our customers, which primarily include utilities, renewable energy developers, communications providers, industrial companies and energy delivery companies located primarily in the United States, Canada and Australia.
We grant credit, generally without collateral, to our customers, which primarily include utilities, renewable energy developers, technology companies, communications providers, industrial companies and energy delivery companies located 27 primarily in the United States, Canada and Australia.
With respect to certain services within our Renewable Energy segment, current and potential legislative or regulatory initiatives may not be implemented or extended or result in incremental increased demand for our services, including legislation or regulation that mandates percentages of power to be generated from renewable sources, requires utilities to meet reliability 31 standards, provides for existing or new production tax credits for renewable energy developers, or encourages installation of new electric power transmission and renewable energy generation facilities.
With respect to certain services within our Renewable Energy segment, current and potential legislative or regulatory initiatives may not be implemented or extended or result in incremental increased demand for our services, including the IRA, the IIJA, legislation or regulation that mandates percentages of power to be generated from renewable sources, requires utilities to meet reliability standards, provides for existing or new production tax credits for renewable energy developers, or encourages installation of new electric power transmission and renewable energy generation facilities.
Our internal control over financial reporting was effective as of December 31, 2023; however, there can be no assurance that our internal control over financial reporting will be determined to be effective in future years.
Our internal control over financial reporting was effective as of December 31, 2024; however, there can be no assurance that our internal control over financial reporting will be determined to be effective in future years.
The current political and labor environment has also generally been more conducive to unionization attempts, and we have experienced an increase in unionization attempts at certain of our operating companies, some of which have been successful, and we expect such attempts to continue in the future.
The political and labor environment in recent years has also generally been more conducive to unionization attempts, and we have experienced an increase in unionization attempts at certain of our operating companies, some of which have been successful, and we expect such attempts to continue in the future.
We also renew our insurance policies on an annual basis, and therefore deductibles and levels of coverage offered by third parties may change in future periods, and there is no assurance that any of our coverages will be renewed at their current levels or at all or that any future coverage will be available at reasonable and competitive rates.
We renew our third-party insurance policies on an annual basis, and therefore deductibles and levels of coverage offered may change in future periods, and there is no assurance that any of our coverages will be renewed at their current levels or at all or that any future coverage will be available at reasonable and competitive rates.
Macroeconomic conditions, including inflation, slow growth or recession, changes to fiscal and monetary policy, and tighter credit and higher interest rates could materially adversely affect demand for our services and the availability and cost of the materials and equipment that we need to deliver our services or our customers need for their projects.
Macroeconomic conditions, including inflation, slow growth or recession, changes to fiscal and monetary policy, changes in global trade relationships, and tighter credit and higher interest rates could materially adversely affect demand for our services and the availability and cost of the materials and equipment that we need to deliver our services or our customers need for their projects.
A variety of events could result in damage to our reputation or brands, some of which are outside of our control, including: • acts or omissions that adversely affect our business such as a crime, scandal, cyber-related incident, litigation or other negative publicity; • failure to successfully perform, or negative publicity related to, a high-profile project, including, among others, our joint venture in LUMA and large-scale infrastructure projects designed to support the energy transition (i.e., large electric transmission and renewable generation projects); • actual or potential involvement in a catastrophic fire, explosion or similar event; or • actual or perceived responsibility for a serious accident or injury.
A variety of events could result in damage to our reputation or brands, some of which are outside of our control, including: 24 • acts or omissions that adversely affect our business such as a crime, scandal, cyber-related incident, litigation or other negative publicity; • failure to successfully perform, or negative publicity related to, a high-profile project, including, among others, our joint venture in LUMA and large-scale infrastructure projects designed to support the energy transition (i.e., large electric transmission and renewable generation projects) and technological advancements (e.g., data center facilities); • actual or potential involvement in a catastrophic fire, explosion, mechanical failure of infrastructure or similar event; or • actual or perceived responsibility for a serious accident or injury.
Additionally, we may not be able to attract and retain the necessary skilled personnel for our expanded product and service offerings.
Additionally, we may not be able to attract and retain the necessary skilled personnel for our expanding product and service offerings.
As of December 31, 2023, the total amount of our outstanding performance bonds was estimated to be approximately $7.7 billion. To the extent reimbursements are required, the amounts could be material and could adversely affect our consolidated business, financial condition, results of operations or cash flows. We may be unsuccessful at generating internal growth, which could adversely affect our business.
As of December 31, 2024, the total amount of our outstanding performance bonds was estimated to be approximately $9.5 billion. To the extent reimbursements are required, the amounts could be material and could adversely affect our consolidated business, financial condition, results of operations or cash flows. We may be unsuccessful at generating internal growth, which could adversely affect our business.
The laws and regulations associated with such cross-border procurement activities are complex and our failure to comply with such laws or regulations may result in criminal or civil fines, penalties, sanctions or other liabilities, which could negatively impact our business, financial condition, results of operations, and cash flows. 32 Our failure to comply with environmental laws and regulations could result in significant liabilities and increased costs.
The laws and regulations associated with such cross-border procurement activities are complex and our failure to comply with such laws or regulations may result in criminal or civil fines, penalties, sanctions or other liabilities, which could negatively impact our business, financial condition, results of operations, and cash flows.
We have addressed breaches and disruptions of our information systems, or systems of key third parties and information technology vendors that we rely upon, in the past, and we expect such events to continue to arise in the future.
We have experienced and addressed cyber-attacks, breaches and disruptions of our information systems, and systems of key third parties and information technology vendors that we rely upon, in the past, and we expect such events to continue to arise in the future.
While to date we have not experienced any material impact as a result of cyber-attacks, the ultimate impact of future and similar events remains unknown, and we expect additional vulnerabilities may arise.
While to date we have not experienced any material impact as a result of these events, the ultimate impact of future and similar events remains unknown, and we expect additional vulnerabilities to arise.
Additionally, if the proposed FTC rulemaking regarding non-compete covenants discussed above is finalized, Quanta could be required to individually rescind any post-termination non-compete clauses in its employment and other service agreements with key management, other employees and individual independent contractors, which would increase the risk that key individuals, upon departure from Quanta, would compete with us despite any severance or other consideration paid or owed to any such individual.
Additionally, if the FTC rules regarding non-compete covenants discussed above are upheld and ultimately implemented, Quanta could be required to individually rescind any post-termination non-compete clauses in its employment and other service agreements with key management, other employees and individual independent contractors, which would increase the risk that key individuals, upon departure from Quanta, would compete with us despite any severance or other consideration paid or owed to any such individual.
For example, as of December 31, 2023, the amount recognized related to unapproved change orders and claims was $778.9 million, which is discussed further in Note 4 of the Notes to Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data in Part II of this Annual Report.
For example, as of December 31, 2024, the amount recognized related to unapproved change orders and claims was $733.6 million, which is discussed further in 21 Note 4 of the Notes to Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data in Part II of this Annual Report.
Additionally, our insurance coverages may not be sufficient or effective under all circumstances or against all claims and liabilities asserted against us, and if we are not fully insured against such claims and liabilities, it could expose us to significant liabilities and materially and adversely affect our business, financial condition, results of operations and cash flows.
Our insurance coverages may not be sufficient or effective under all circumstances or against all claims and liabilities asserted against us, and if we are not fully insured against such claims and liabilities, our business, financial condition. results of operations and cash flows could be materially and adversely affected.
These new and proposed regulatory requirements may require us to incur significant additional costs to comply, including the implementation of significant additional internal controls processes and procedures regarding matters that have not been subject to such controls in the past, and impose increased oversight obligations on our management and Board.
While certain of these rules are subject to ongoing legal challenges, if implemented these new and proposed regulatory requirements may require us to incur significant additional costs to comply, including the implementation of significant additional internal controls processes and procedures regarding matters that have not been subject to such controls in the past, and impose increased oversight obligations on our management and Board.
We expect to issue additional equity securities in the future in connection with these and other practices. Our Restated Certificate of Incorporation provides that we may issue up to 600,000,000 shares of common stock, of which 145,508,549 shares were outstanding as of December 31, 2023.
We expect to issue additional equity securities in the future in connection with these and other practices. Our Restated Certificate of Incorporation provides that we may issue up to 600,000,000 shares of common stock, of which 147,678,512 shares were outstanding as of December 31, 2024.
We are also exposed to increases in energy prices, particularly fuel prices for our large fleet of vehicles, which have fluctuated significantly since 2020 and could increase over the longer term due to market conditions or future regulatory, legislative and policy changes that result from, among other things, climate change initiatives.
We are also exposed to increases in energy prices, particularly fuel prices for our large fleet of vehicles, which have fluctuated significantly since 2020 and could increase over the longer term due to market conditions or future regulatory, legislative and policy changes.
Additionally, the availability of power transformers utilized in electric power projects has been negatively impacted by the inability of manufacturers to meet current market demand, which has increased, and is expected to continue to increase, as a result of the transition to a reduced-carbon economy.
Additionally, the availability of power transformers utilized in electric power projects has been negatively impacted by the inability of manufacturers to meet current market demand, which has increased, and is expected to continue to increase.
For the year ended December 31, 2023, we derived $2.97 billion, or 14.2%, of our consolidated revenues from foreign operations, the substantial majority of which was related to Canada and Australia.
For the year ended December 31, 2024, we derived $2.07 billion, or 8.7%, of our consolidated revenues from foreign operations, the substantial majority of which was related to Canada and Australia.
Financial Statements and Supplementary Data in Part II of this Annual Report, two Quanta operating companies have received tenders of defense and demands for preservation of documents. Additionally, certain of these wildfire events remain under investigation and additional claims or legal proceedings involving Quanta and its operating companies related to these events may be brought in the future.
Financial Statements and Supplementary Data in Part II of this Annual Report, two Quanta operating companies have received tenders of defense and demands for preservation of documents and indemnity in connection with a wildfire event, and additional claims or legal proceedings involving Quanta and its operating companies related to wildfire events may be brought in the future.
While these actions and initiatives have positively impacted demand for our services in the past, it is not certain whether they will continue to do so in the future.
While these actions and initiatives have positively impacted demand for our services in the past, it is not certain whether they will continue to do so in the future. Our unionized workforce and related obligations may adversely affect our operations.
Our operations are subject to various environmental laws and regulations, including those dealing with the handling and disposal of waste products, PCBs, PFAS, fuel storage, water quality and air quality.
Our failure to comply with environmental laws and regulations could result in significant liabilities and increased costs. Our operations are subject to various environmental laws and regulations, including those dealing with the handling and disposal of waste products, PCBs, PFAS, fuel storage, water quality and air quality.
Borrowings under our senior credit facility and commercial paper facility are at variable rates of interest and expose us to interest rate risk. Interest rates have increased significantly during 2022 and 2023, and further increases may occur.
Borrowings under our senior credit facility and commercial paper facility are at variable rates of interest and expose us to interest rate risk. Interest rates increased significantly during 2022 and 2023, and remained elevated in 2024.
Our operation of helicopters is subject to various risks, such as crashes, collisions, fires, adverse weather conditions or mechanical failures. Additionally, we manufacture certain products, including power transformers and mobile energy storage systems, and a failure of one of our products could also lead to similar operational hazards (e.g., explosions or mechanical failures).
Additionally, we manufacture certain products, including power transformers and mobile energy storage systems, and a failure of one of our products could also lead to similar operational hazards (e.g., explosions or mechanical failures).
An increase in the level of our indebtedness and related interest costs may increase our vulnerability to adverse general economic and industry conditions and may affect our ability to obtain additional financing, as well as have a material adverse effect on our business, financial condition, results of operations and cash flows. 36 Risks Related to Our Common Stock Our sale or issuance of additional common stock or other equity-related securities could dilute each stockholder’s ownership interest or adversely affect the market price of our common stock.
An increase in the level of our indebtedness and related interest costs may increase our vulnerability to adverse general economic and industry conditions and may affect our ability to obtain additional financing, as well as have a material adverse effect on our business, financial condition, results of operations and cash flows.
Certain of our operations within our Underground and Infrastructure segment could also experience reputational risks, such as how our values and practices regarding a low carbon transition are viewed by external and internal stakeholders, which could have a material adverse impact on our business, results of operations, financial condition and cash flows.
For example, future restrictions imposed on oil and gas production activities, including as a result of concerns about the impact of climate change, could have a material adverse effect on the oil and gas industry as a whole. 30 Certain of our operations within our Underground and Infrastructure segment could also experience reputational risks, such as how our values and practices regarding a low carbon transition are viewed by external and internal stakeholders, which could have a material adverse impact on our business, results of operations, financial condition and cash flows.
Furthermore, we may incur additional costs related to the investigation and reporting of any such breach or disruption as a result of the SEC’s increased reporting requirements for cyber incidents.
Furthermore, we may incur additional costs related to the investigation and reporting of any such breach or disruption.
In preparing our consolidated financial statements and financial and operational disclosures, estimates and assumptions are used by management to report, among other things, assets, liabilities, revenues and expenses.
Our financial results, financial condition and other financial and operational disclosures are based upon estimates and assumptions that may differ from actual results or future outcomes. In preparing our consolidated financial statements and financial and operational disclosures, estimates and assumptions are used by management to report, among other things, assets, liabilities, revenues and expenses.
We cannot be certain that our management structure will be adequate to support our business as it expands and becomes more complex.Due to our continued growth, as well as the increasing complexity of our projects, operations and industries, we may encounter difficulties managing our business, including with respect to our ability to coordinate and execute business strategies, plans and tactics.
Due to our continued growth, as well as the increasing complexity of our projects, operations and industries, we may encounter difficulties managing our business, including with respect to our and our operating companies’ ability to coordinate and execute business strategies, plans and tactics.
As of December 31, 2023, we had approximately $3.66 billion of outstanding long-term debt, net of current maturities. We also had $1.52 billion of aggregate undrawn borrowing capacity under our senior credit facility and commercial paper program as of December 31, 2023.
We have a significant amount of debt and debt service requirements. As of December 31, 2024, we had approximately $4.10 billion of outstanding long-term debt, net of current maturities. We also had $2.61 billion of aggregate undrawn borrowing capacity under our senior credit facility and commercial paper program as of December 31, 2024.
Our management structure could be inadequate to support our business as it expands and becomes more complex.
Our management structure could be inadequate to support our business as it expands and becomes more complex. We cannot be certain that our management structure will be adequate to support our business as it continues to expand and become more complex.
For example, due to the increased occurrence and future risk of wildfires, as described above, insurers have reduced coverage availability and increased the cost of insurance coverage for such events in recent years.
For example, due to the increased occurrence and future risk of wildfires, as described above, insurers have reduced coverage availability and increased the cost of insurance coverage for such events in recent years. As a result, Quanta’s current level of insurance coverage for wildfire events may not be sufficient to cover potential losses in connection with these events.
Increasing scrutiny and changing expectations from various stakeholders with respect to corporate sustainability practices may impose additional costs on us or expose us to reputational or other risks. Investors, customers and other stakeholders have focused increasingly on sustainability practices of companies, including, among other things, practices with respect to human capital resources, emissions and environmental impact and political spending.
Investors, customers and other stakeholders have focused increasingly on sustainability practices of companies, including, among other things, practices with respect to human capital resources, emissions and environmental impact and political spending.
If a member of the key management of the businesses we acquire leaves voluntarily or is terminated, we might be subject to increased competition if the restrictive covenants entered into by such person are not enforceable or have expired, which could materially and adversely affect our business, financial condition, results of operations and cash flows.
While these rules have been challenged judicially and their implementation has been stayed, if the rules are ultimately upheld, we might be subject to increased competition if the restrictive covenants entered into by key management personnel of acquired businesses are not enforceable or have expired, which could materially and adversely affect our business, financial condition, results of operations and cash flows.
A variety of events may cause the market price of our common stock to fluctuate significantly, including overall market conditions or volatility, actual or perceived negative financial results or other unfavorable information relating to us or our market peers.
A variety of events may cause the market price of our common stock to fluctuate significantly, including overall market conditions or volatility, actual or perceived negative financial results or other unfavorable information relating to us or our market peers. 35 We have a significant amount of debt, and our significant indebtedness could adversely affect our business, financial condition and results of operations and our ability to meet our payment obligations under our other debt.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeSee “ Risk Factors – Disruptions to our information technology systems or our failure to adequately protect critical data, sensitive information and technology systems could materially affect our business or result in harm to our reputation .” Cybersecurity Governance Our Board considers cybersecurity risk as part of its risk oversight function and considers cybersecurity and IT risks as key strategic risks of Quanta.
Biggest changeSee Disruptions to our information technology systems or our failure to adequately protect critical data, sensitive information and technology systems could materially affect our business or result in harm to our reputation in Item 1A.
Our cybersecurity function is responsible for assessing and managing our material risks from cybersecurity threats, as well as informing management about and monitoring the prevention, detection, mitigation, and remediation of cybersecurity risks and incidents through various means, which include briefings with internal security personnel, threat intelligence and other information obtained from governmental, public or private sources, including external cybersecurity service providers and alerts and reports produced by security tools deployed in the IT environment.
Our cybersecurity function is responsible for assessing and managing our material risks from cybersecurity threats, as well as informing management about and monitoring the prevention, detection, mitigation, and remediation of cybersecurity risks and incidents through various means, which include briefings with internal security personnel, threat intelligence and other information obtained from governmental, public or private sources, including external cybersecurity service providers and alerts and reports produced by security tools deployed 38 in the IT environment.
During the year ended December 31, 2023, we have not identified risks from known cybersecurity threats, including as a result of any prior cybersecurity incidents, that have materially affected our operations, business strategy, results of operations or financial condition.
During the year ended December 31, 2024, we have not identified risks from known cybersecurity threats, including as a result of any prior cybersecurity incidents, that have materially affected our operations, business strategy, results of operations or financial condition.
Our Vice President of IT reports to the Chief Financial Officer and leads our IT and cybersecurity functions and has primary responsibility for leading our overall cybersecurity risk management program, supervising both our internal cybersecurity personnel and our external cybersecurity service providers.
Our Senior Vice President of Technology reports to the Chief Financial Officer and leads our IT and cybersecurity functions and has primary responsibility for leading our overall cybersecurity risk management program, supervising both our internal cybersecurity personnel and our external cybersecurity service providers.
However, we expect to continue to face certain risks from ongoing cybersecurity threats that, if realized, are reasonably likely to materially affect us, including our operations, business strategy, results of operations or financial condition.
However, we will continue to face certain risks from ongoing cybersecurity threats that, if realized, are reasonably likely to materially affect us, including our operations, business strategy, results of operations or financial condition.
The Board oversees management’s implementation of our cybersecurity risk management program, receiving regular reports from management (including our Vice President of IT) on our cybersecurity risks, including briefings on our cyber risk management program and cybersecurity incidents, and reviewing cybersecurity topics impacting companies with management and external experts.
The Board oversees management’s implementation of our cybersecurity risk management program, receiving regular reports from management (including our Senior Vice President of Technology) on our cybersecurity risks, including briefings on our cyber risk management program and cybersecurity incidents, and reviewing cybersecurity topics impacting companies with management and external experts.
Our Vice President of IT has significant global experience in managing and leading information systems and deploying cybersecurity technologies and holds a cybersecurity certification from a leading cybersecurity training and research institute.
Our Senior Vice President of Technology has significant global experience in managing and leading information systems and deploying cybersecurity technologies and holds a cybersecurity certification from a leading cybersecurity training and research institute.
Our cybersecurity risk management program includes, among other things: • risk assessments designed to help identify material cybersecurity risks to our critical systems and information services; 37 • a team comprising information technology (IT) security, IT infrastructure, and IT compliance personnel principally responsible for directing (i) our cybersecurity risk assessment processes, (ii) our security processes and (iii) our response to cybersecurity incidents; • the use of external cybersecurity service providers, where appropriate, to assess, test or otherwise assist with aspects of our security processes; • cybersecurity awareness training of employees with access to our IT systems; • a cybersecurity incident response plan and Security Operations Center to respond to cybersecurity incidents; and • a third-party risk management process for service providers.
Our cybersecurity risk management program includes, among other things: • risk assessments designed to help identify material cybersecurity risks to our critical systems and information services; • a team comprising information technology (IT) security, IT infrastructure, and IT compliance personnel principally responsible for directing (i) our cybersecurity risk assessment processes, (ii) our security processes and (iii) our response to cybersecurity incidents; • the use of external cybersecurity service providers, where appropriate, to assist with development, testing and compliance in regards to our security controls and processes; • cybersecurity awareness training of employees with access to our IT systems; • a cybersecurity incident response plan and Security Operations Center to respond to cybersecurity incidents; • a third-party risk management process for service providers; and • procurement of insurance coverage that is intended to address certain aspects of cybersecurity risks.
While we may not meet any particular standard, specification or requirement of the Center for Internet Security Critical Security Controls, we utilize such controls as a guide to help us identify, assess and manage cybersecurity risks relevant to our business.
While we may not meet any particular standard, specification or requirement of the Center for Internet Security Critical Security Controls, we utilize such controls as a guide to help us identify, assess and manage cybersecurity risks relevant to our business. Additionally, we are required by certain customers to maintain controls and processes pursuant to applicable cybersecurity regulations and frameworks.
Added
Risk Factors in Part I of this Annual Report.” Cybersecurity Governance Our Board considers cybersecurity risk as part of its risk oversight function and considers cybersecurity and IT risks as key strategic risks of Quanta.

Item 2. Properties

Properties — owned and leased real estate

3 edited+0 added−0 removed4 unchanged
Biggest changeIncluded in the owned facilities is real property and associated office buildings and facilities located in Houston, Texas that we utilize as our corporate headquarters and real property and associated manufacturing facilities located in Canonsburg, Pennsylvania, and Raeford, North Carolina, associated with our business that specializes in manufacturing power transformers and related electrical components.
Biggest changeIncluded in the owned facilities is real property and associated office buildings and facilities located in Houston, Texas that we utilize as our corporate headquarters and real property and associated manufacturing facilities located in Canonsburg, Pennsylvania; Raeford, North Carolina; and Erie County, New York, associated with our businesses that specialize in manufacturing power transformers and related electrical components.
As of December 31, 2023, the total size of our owned and leased fleet was approximately 71,000 units. Most of our fleet is serviced by our own mechanics who work at various maintenance sites and facilities. We believe that our equipment is generally well maintained and is suitable and adequate for our present operations. 38
As of December 31, 2024, the total size of our owned and leased fleet was approximately 77,000 units. Most of our fleet is serviced by our own mechanics who work at various maintenance sites and facilities. We believe that our equipment is generally well maintained and is suitable and adequate for our present operations.
As of December 31, 2023, we owned 88 of our facilities and certain real property and leased the remainder.
As of December 31, 2024, we owned 101 of our facilities and certain real property and leased the remainder.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

9 edited+1 added−3 removed8 unchanged
Biggest changeIn January 2024, we completed two acquisitions, and a portion of the consideration of one of these acquisitions consisted of the unregistered issuance of shares of our common stock. The aggregate consideration for this acquisition included 221,700 shares of our common stock, valued at $44.9 million as of the acquisition date.
Biggest changeUnregistered Sales of Securities Subsequent to December 31, 2024, we completed two acquisitions, and a portion of the consideration consisted of the unregistered issuance of shares of our common stock. The aggregate consideration for these acquisitions included 515,822 shares of our common stock, valued at $161.6 million as of the respective acquisition dates.
(2) Includes shares withheld from employees to satisfy tax withholding obligations in connection with the vesting of restricted stock unit and performance stock unit awards or the settlement of previously vested but deferred restricted stock unit and performance stock unit awards. 40 Dividends We have declared a quarterly dividend during each quarter beginning in the fourth quarter of 2018, and we currently expect that comparable cash dividends will continue to be paid for the foreseeable future.
(2) Includes shares withheld from employees to satisfy tax withholding obligations in connection with the vesting of restricted stock unit or performance stock unit awards or the settlement of previously vested but deferred restricted stock unit or performance stock unit awards. 40 Dividends We have declared a quarterly dividend during each quarter beginning in the fourth quarter of 2018, and we currently expect that comparable cash dividends will continue to be paid for the foreseeable future.
The program does not obligate us to acquire any specific amount of common stock and may be modified or terminated by our Board at any time at its sole discretion and without notice.
The program does not obligate us to acquire any specific amount of common stock and may be modified or terminated by our Board of Directors at any time at its sole discretion and without notice.
Issuer Purchases of Equity Securities During the Fourth Quarter of 2023 The following table contains information about our purchases of equity securities during the three months ended December 31, 2023.
Issuer Purchases of Equity Securities During the Fourth Quarter of 2024 The following table contains information about our purchases of equity securities during the three months ended December 31, 2024.
For additional information about these acquisitions, see Note 6 of the Notes to Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data in Part II of this Annual Report .
For additional information about this acquisition, see Note 6 of the Notes to Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data in Part II of this Annual Report .
The graph below assumes an investment of $100 (with reinvestment of all dividends) in our common stock, the S&P 500, the S&P 500 Industrials and the peer group on December 31, 2018 and tracks their relative performance through December 31, 2023.
The graph below assumes an investment of $100 (with reinvestment of all dividends) in our common stock, the S&P 500, the S&P 500 Industrials and the peer group on December 31, 2019 and tracks their relative performance through December 31, 2024.
The following graph compares, for the period from December 31, 2018 to December 31, 2023, the cumulative stockholder return on our common stock with the cumulative total return of the S&P 500 Index (the S&P 500), the S&P 500 Industrials Index (the S&P 500 Industrials), the S&P MidCap 400 Index (the S&P MidCap 400) and a peer group selected by our management that includes public companies within our industries.
The following graph compares, for the period from December 31, 2019 to December 31, 2024, the cumulative stockholder return on our common stock with the cumulative total return of the S&P 500 Index (the S&P 500), the S&P 500 Industrials Index (the S&P 500 Industrials) and a peer group selected by our management that includes public companies within our industries.
ITEM 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our common stock is listed on the New York Stock Exchange under the symbol “PWR.” On February 19, 2024, there were approximately 408 holders of record of our common stock.
ITEM 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our common stock is listed on the New York Stock Exchange under the symbol “PWR.” On February 17, 2025, there were approximately 417 holders of record of our common stock.
Period Total Number of Shares Purchased (1) (2) Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) Maximum Number (or Approximate Dollar Value) of Shares that may yet be Purchased Under the Plans or Programs (1) October 1 - 31, 2023 Open Market Stock Repurchases (1) — $ — — $ 500,000,000 Tax Withholding (2) 9,478 $ 186.41 — November 1 - 30, 2023 Open Market Stock Repurchases (1) 2,229 $ 156.98 2,229 $ 499,650,097 Tax Withholding (2) 19,906 $ 166.73 — December 1 - 31, 2023 Open Market Stock Repurchases (1) — $ — — $ 499,650,097 Tax Withholding (2) 6,537 $ 199.49 — As of December 31, 2023 38,150 2,229 $ 499,650,097 _______________ (1) On May 24, 2023, we issued a press release announcing that our Board approved a stock repurchase program, effective July 1, 2023, that authorizes us to purchase, from time to time through June 30, 2026, up to $500 million of our outstanding common stock.
Period Total Number of Shares Purchased (1) (2) Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) Maximum Number (or Approximate Dollar Value) of Shares that may yet be Purchased Under the Plans or Programs (1) October 1 - 31, 2024 Open Market Stock Repurchases (1) — $ — — $ 499,650,097 Tax Withholding (2) 5,568 $ 304.60 — November 1 - 30, 2024 Open Market Stock Repurchases (1) — $ — — $ 499,650,097 Tax Withholding (2) 18,994 $ 301.98 — December 1 - 31, 2024 Open Market Stock Repurchases (1) — $ — — $ 499,650,097 Tax Withholding (2) 23,074 $ 324.74 — As of December 31, 2024 47,636 — $ 499,650,097 _______________ (1) On May 24, 2023, we issued a press release announcing that our Board approved a stock repurchase program effective July 1, 2023 that authorizes us to purchase, from time to time through June 30, 2026, up to $500 million of our outstanding common stock.
Removed
Unregistered Sales of Securities In October 2023, we completed an acquisition in which a portion of the consideration consisted of the unregistered issuance of shares of our common stock. The aggregate consideration for this acquisition included 176,168 shares of our common stock, valued at $27.4 million as of the acquisition date.
Added
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN Among Quanta Services, Inc., the S&P 500, the S&P 500 Industrials and the Peer Group December 31, 2019 2020 2021 2022 2023 2024 Quanta Services, Inc. $ 100.00 $ 177.74 $ 283.50 $ 353.32 $ 536.01 $ 785.80 S&P 500 $ 100.00 $ 118.40 $ 152.39 $ 124.79 $ 157.59 $ 197.02 S&P 500 Industrials $ 100.00 $ 111.06 $ 134.52 $ 127.15 $ 150.20 $ 176.44 Peer Group $ 100.00 $ 114.51 $ 160.27 $ 164.96 $ 188.62 $ 270.31 ITEM 6.
Removed
Additionally we determined that the S&P 500 Industrials should be included as it is better aligned with our market capitalization and reflects more of our industry peers than the S&P MidCap 400, and the S&P MidCap 400 will be excluded from the graph in future years.
Removed
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN Among Quanta Services, Inc., the S&P 500, the S&P MidCap 400, the S&P 500 Industrials and the Peer Group December 31, 2018 2019 2020 2021 2022 2023 Quanta Services, Inc. $ 100.00 $ 135.84 $ 241.44 $ 385.10 $ 479.95 $ 728.11 S&P 500 $ 100.00 $ 131.49 $ 155.68 $ 200.37 $ 164.08 $ 207.21 S&P MidCap 400 $ 100.00 $ 126.20 $ 143.44 $ 178.95 $ 155.58 $ 181.15 S&P 500 Industrials $ 100.00 $ 129.37 $ 143.68 $ 174.02 $ 164.49 $ 194.31 Peer Group $ 100.00 $ 138.21 $ 158.75 $ 221.13 $ 225.74 $ 257.51 ITEM 6.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

1 edited+0 added−0 removed0 unchanged
Biggest changeITEM 6. Selected Financial Data 42 ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 43 ITEM 7A. Quantitative and Qualitative Disclosures About Market Risk 56 ITEM 8. Financial Statements and Supplementary Data 58 ITEM 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 112 ITEM 9A. Controls and Procedures 112 ITEM 9B.
Biggest changeITEM 6. Reserved 42 ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 43 ITEM 7A. Quantitative and Qualitative Disclosures About Market Risk 56 ITEM 8. Financial Statements and Supplementary Data 58 ITEM 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 112 ITEM 9A. Controls and Procedures 112 ITEM 9B.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

102 edited+27 added−41 removed58 unchanged
Biggest changeThe following table reconciles total remaining performance obligations to our backlog (a non-GAAP financial measure) by reportable segment, along with estimates of amounts expected to be realized within 12 months (in thousands): December 31, 2023 December 31, 2022 12 Month Total 12 Month Total Electric Power Remaining performance obligations $ 2,762,608 $ 4,505,830 $ 2,124,820 $ 3,033,472 Estimated orders under MSAs and short-term, non-fixed price contracts 5,597,732 10,995,198 5,415,427 10,049,435 Backlog $ 8,360,340 $ 15,501,028 $ 7,540,247 $ 13,082,907 Renewable Energy Remaining performance obligations $ 5,512,159 $ 8,005,368 $ 3,183,568 $ 4,638,115 Estimated orders under MSAs and short-term, non-fixed price contracts 118,770 119,634 57,555 84,094 Backlog $ 5,630,929 $ 8,125,002 $ 3,241,123 $ 4,722,209 Underground and Infrastructure Remaining performance obligations $ 1,017,227 $ 1,383,057 $ 1,038,543 $ 1,129,837 Estimated orders under MSAs and short-term, non-fixed price contracts 2,222,451 5,099,332 1,973,982 5,158,814 Backlog $ 3,239,678 $ 6,482,389 $ 3,012,525 $ 6,288,651 Total Remaining performance obligations $ 9,291,994 $ 13,894,255 $ 6,346,931 $ 8,801,424 Estimated orders under MSAs and short-term, non-fixed price contracts 7,938,953 16,214,164 7,446,964 15,292,343 Backlog $ 17,230,947 $ 30,108,419 $ 13,793,895 $ 24,093,767 The increases in remaining performance obligations and backlog from December 31, 2022 to December 31, 2023 were primarily attributable to multiple new project awards.
Biggest changeThe following table reconciles total remaining performance obligations to our backlog (a non-GAAP financial measure) by reportable segment, along with estimates of amounts expected to be realized within 12 months (in thousands): December 31, 2024 December 31, 2023 12 Month Total 12 Month Total Electric Power Remaining performance obligations $ 4,250,978 $ 7,320,481 $ 2,762,608 $ 4,505,830 Estimated orders under MSAs and short-term, non-fixed price contracts 5,907,359 12,583,574 5,597,732 10,995,198 Backlog $ 10,158,337 $ 19,904,055 $ 8,360,340 $ 15,501,028 Renewable Energy Remaining performance obligations $ 6,046,432 $ 8,333,547 $ 5,512,159 $ 8,005,368 Estimated orders under MSAs and short-term, non-fixed price contracts 291,244 390,205 118,770 119,634 Backlog $ 6,337,676 $ 8,723,752 $ 5,630,929 $ 8,125,002 Underground and Infrastructure Remaining performance obligations $ 953,983 $ 1,104,609 $ 1,017,227 $ 1,383,057 Estimated orders under MSAs and short-term, non-fixed price contracts 2,321,941 4,806,408 2,222,451 5,099,332 Backlog $ 3,275,924 $ 5,911,017 $ 3,239,678 $ 6,482,389 Total Remaining performance obligations $ 11,251,393 $ 16,758,637 $ 9,291,994 $ 13,894,255 Estimated orders under MSAs and short-term, non-fixed price contracts 8,520,544 17,780,187 7,938,953 16,214,164 Backlog $ 19,771,937 $ 34,538,824 $ 17,230,947 $ 30,108,419 The increases in both remaining performance obligations and backlog from December 31, 2023 to December 31, 2024 were partially due to the impact of acquisitions that occurred in the year ended December 31, 2024, as well as increased new project awards with existing customers. 50 Liquidity and Capital Resources Overview We plan to fund our working capital, capital expenditures, debt service, dividends and other cash requirements with our current available liquidity and cash from operations, which could be affected by general economic, financial, competitive, legislative, regulatory, business and other factors, many of which are beyond our control.
Financing Activities Net cash provided by financing activities in the year ended December 31, 2023 included $408.7 million of net borrowings under our senior credit facility and commercial paper program, partially offset by $119.8 million of payments to satisfy tax withholding obligations associated with stock-based compensation and $47.8 million of dividends.
Net cash provided by financing activities in the year ended December 31, 2023 included $408.7 million of net borrowings under our senior credit facility and commercial paper program, partially offset by $119.8 million of payments to satisfy tax withholding obligations associated with stock-based compensation and $47.8 million of dividends.
Our remaining performance obligations represent management’s estimate of consolidated revenues that are expected to be realized from the remaining portion of firm orders under fixed price contracts not yet completed or for which work has not yet begun, which includes 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 be realized, and revenues from change orders and claims to the extent management believes they will be earned and are probable of collection.
Our remaining performance obligations represent management’s estimate of consolidated revenues that are expected to be realized from the 49 remaining portion of firm orders under fixed price contracts not yet completed or for which work has not yet begun, which includes 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 be realized, and revenues from change orders and claims to the extent management believes they will be earned and are probable of collection.
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 48 attributable to common stock, and information reconciling the GAAP and non-GAAP financial measures, are included below.
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.
Financial Statements and Supplementary Data in Part II of this Annual Report for a description of how we determine our allowance for credit losses, which is based on an estimate of expected credit losses for financial instruments, primarily accounts receivable (including unbilled receivables) and contract assets, as well as activity in allowance for credit losses.
Financial Statements and Supplementary Data in Part II of this Annual Report for a description of how we determine our allowance for credit losses, which is based on an estimate of expected credit losses for financial instruments, primarily accounts receivable (including unbilled receivables) and contract assets, as well as activity in the allowance for credit losses.
Changes in facts and circumstances, judgments and assumptions used to determine these fair values, including with respect to market conditions and the economy, could result in impairment charges in the future that could be material to our financial statements. 55 Insurance Refer to Notes 2 and 16 of the Notes to Consolidated Financial Statements in Item 8.
Changes in facts and circumstances, judgments and assumptions used to determine these fair values, including with respect to market conditions and the economy, could result in impairment charges in the future that could be material to our financial statements. Insurance Refer to Notes 2 and 16 of the Notes to Consolidated Financial Statements in Item 8.
Examples of items that may cause demand for our services to fluctuate materially from quarter to quarter include: the financial condition of our customers, their capital spending and their access to and cost of capital; acceleration of any projects or programs by customers (e.g., modernization or hardening programs); economic and political conditions on a regional, national or global scale, including availability of renewable energy tax credits; interest rates; governmental regulations affecting the sourcing and costs of materials and equipment; other changes in U.S. and global trade relationships; and project deferrals and cancellations.
Examples of items that may cause demand for our services to fluctuate materially from quarter to quarter include: the financial condition of our customers, their capital spending and their access to and cost of capital; acceleration of any projects or programs by customers (e.g., modernization or hardening programs); economic and political conditions on a regional, national or global scale, including availability of renewable energy tax credits; interest rates; governmental regulations affecting the sourcing and costs of materials and equipment; other changes in U.S. and global trade relationships (e.g., tariffs, taxes); and project deferrals and cancellations.
Risk Factors in Part I of this Annual Report, and those factors have 43 caused fluctuations in our results in the past and are expected to cause fluctuations in our results in the future. Additional information with respect to certain of those factors is provided below. Seasonality.
Risk Factors of Part I of this Annual Report, and those factors have caused fluctuations in our results in the past and are expected to cause fluctuations in our results in the future. Additional information with respect to certain of those factors is provided below. Seasonality.
Financial Statements and Supplementary Data in Part II of this Annual Report; • undistributed earnings of foreign subsidiaries and unrecognized tax benefits, which are described further in Note 12 of the Notes to Consolidated Financial Statements in Item 8.
Financial Statements and Supplementary Data in Part II of this Annual Report; 51 • undistributed earnings of foreign subsidiaries and unrecognized tax benefits, which are described further in Note 12 of the Notes to Consolidated Financial Statements in Item 8.
Moreover, we currently generate a significant portion of our revenues under fixed price contracts, and fixed price contracts are more common in connection with our larger and more 44 complex projects that typically involve greater performance risk.
Moreover, we currently generate a significant portion of our revenues under fixed price contracts, and fixed price contracts are more common in connection with our larger and more complex projects that typically involve greater performance risk.
A greater percentage of smaller scale or less complex work also could negatively impact margins due to the inefficiency of transitioning between a greater number of smaller projects versus continuous production on fewer larger projects.
A greater percentage of smaller scale or less complex work also could negatively impact margins due to the inefficiency of transitioning between a 44 greater number of smaller projects versus continuous production on fewer larger projects.
If we determine there is a change in the valuation of long-lived assets during the measurement period, the change in estimate would result in a change in the amount of goodwill.
If we determine there is a change in the 55 valuation of long-lived assets during the measurement period, the change in estimate would result in a change in the amount of goodwill.
Our accounting policies are primarily described in Notes 2 and 4 of the Notes to Consolidated Financial 54 Statements in Item 8.
Our accounting policies are primarily described in Notes 2 and 4 of the Notes to Consolidated Financial Statements in Item 8.
Goodwill, Other Intangible Assets and Property, Plant and Equipment In connection with our annual goodwill assessments in 2023 and 2022, management performed a qualitative impairment assessment of our reporting units, which indicated that the fair value of our reporting units was greater than their carrying value including goodwill.
Goodwill, Other Intangible Assets and Property, Plant and Equipment In connection with our annual goodwill assessments in 2024 and 2023, management performed a qualitative impairment assessment of our reporting units, which indicated that the fair value of our reporting units was greater than their carrying value including goodwill.
With respect to our Electric Power Infrastructure Solutions (Electric Power) segment, utilities are continuing to invest significant capital in their electric power delivery systems through multi-year grid modernization and reliability programs, as well as system upgrades and hardening programs in response to recurring severe weather events.
With respect to our Electric Power segment, utilities are continuing to invest significant capital in their electric power delivery systems through multi-year grid modernization and reliability programs, as well as system upgrades and hardening programs in response to recurring severe weather events.
Our larger or more complex projects typically include, among others, transmission projects with higher voltage capacities; pipeline projects with larger-diameter throughput capacities; large-scale renewable generation projects; and projects with increased engineering, design or construction complexities, more difficult terrain or geographical requirements, or longer distance requirements.
Our larger or more complex projects typically include, among others, transmission projects with higher voltage capacities; pipeline projects with larger-diameter throughput capacities; large-scale renewable generation projects; complex data center projects; and projects with increased engineering, design or construction complexities, more difficult terrain or geographical requirements, or longer distance requirements.
We have various contingent obligations that could require the use of cash or impact the collection of cash in future periods; however, we are unable to accurately predict the timing and estimate the amount of such contingent obligations as of December 31, 2023.
We have various contingent obligations that could require the use of cash or impact the collection of cash in future periods; however, we are unable to accurately predict the timing and estimate the amount of such contingent obligations as of December 31, 2024.
The discussion summarizing the significant factors which affected the results of operations and financial condition for the year ended December 31, 2022, including the changes in results of operations between the years ended December 31, 2022 and 2021, can be found in Part II, Item 7.
The discussion summarizing the significant factors which affected the results of operations and financial condition for the year ended December 31, 2023, including the changes in results of operations between the years ended December 31, 2023 and 2022, can be found in Part II, Item 7.
Cash flow from operating activities is primarily influenced by demand for our services and operating margins but is also influenced by the timing of working capital needs associated with the various types of services that we provide.
Significant Sources of Cash Cash flow from operating activities is primarily influenced by demand for our services and operating margins but is also influenced by the timing of working capital needs associated with the various types of services that we provide.
Financial Statements and Supplementary Data in Part II of this Annual Report . 51 Capital Allocation .
Financial Statements and Supplementary Data in Part II of this Annual Report . Capital Allocation .
We may also seek to access the capital markets from time to time to raise additional capital, increase liquidity as necessary, refinance or extend the term of our existing indebtedness, fund acquisitions or otherwise fund our capital needs.
We may seek to access the capital markets from time to time to raise additional capital, increase liquidity as we deem necessary, refinance or extend the term of our existing indebtedness, fund acquisitions or otherwise fund our capital needs.
Accordingly, a quantitative goodwill impairment test was not required, and no goodwill impairment was recognized in 2023 or 2022. Additionally, there were no material impairments related to other intangible assets or property, plant equipment in 2023 or 2022.
Accordingly, a quantitative goodwill impairment test was not required, and no goodwill impairment was recognized in 2024 or 2023. Additionally, there were no material impairments related to other intangible assets or property, plant equipment in 2024 or 2023.
Collectibility of Accounts Receivable and Contract Assets Refer to Accounts Receivable, Allowance for Credit Losses and Concentrations of Credit Risk in Note 4 of the Notes to Consolidated Financial Statements in Item 8.
Collectability of Accounts Receivable and Contract Assets Refer to Accounts Receivable, Allowance for Credit Losses and Concentrations of Credit Risk in Note 4 of the Notes to Consolidated Financial Statements in Item 8.
Should anticipated collections fail to materialize, or if future economic conditions deteriorate, we could experience an increase in our allowance for credit losses. If our historical loss ratio had been 5 basis points higher or lower as of December 31, 2023, our provision for credit loss would have increased or decreased $2.6 million during the year ended December 31, 2023.
Should anticipated collections fail to materialize, or if future economic conditions deteriorate, we could experience an increase in our allowance for credit losses. If our historical loss ratio had been 5 basis points higher or lower as of December 31, 2024, our provision for credit loss would have increased or decreased $2.9 million during the year ended December 31, 2024.
For additional information regarding these acquisitions, refer to Note 6 of the Notes to Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data in Part II of this Annual Report.
For additional information regarding our recent acquisitions, refer to Note 6 of the Notes to Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data in Part II of this Annual Report.
As of December 31, 2023, the amount accrued for employer’s liability, workers’ compensation, auto liability and general liability totaled $327.3 million. Although we believe that we have reasonably estimated our insurance liability, it is possible that actual results could differ from recorded retained liabilities.
As of December 31, 2024, the amount accrued for employer’s liability, workers’ compensation, auto liability and general liability totaled $373.6 million. Although we believe that we have reasonably estimated our insurance liability, it is possible that actual results could differ from recorded retained liabilities.
Significant Sources of Cash We anticipate that our future cash flows from operating activities, cash and cash equivalents on hand, existing borrowing capacity under our senior credit facility and ability to access capital markets for additional capital will provide sufficient funds to enable us to meet our cash requirements described above for the next twelve months and over the longer term.
We anticipate that our future cash flows from operating activities, cash and cash equivalents on hand, existing borrowing capacity under our senior credit facility and commercial paper program and ability to access capital markets for additional capital will provide sufficient funds to enable us to meet our cash requirements for the next twelve months and over the longer term.
Segment Results We report our results under three reportable segments: Electric Power, Renewable Energy and Underground and Infrastructure. Reportable segment information, including revenues and operating income by type of work, is gathered from each of our operating companies.
Segment Results Through December 31, 2024, we reported our results under three reportable segments: Electric Power, Renewable Energy and Underground and Infrastructure. Reportable segment information, including revenues and operating income by type of work, is gathered from each of our operating companies.
These seasonal trends can be offset by changes in project timing due to delays or accelerations and other economic factors that may affect customer spending, including market conditions or the impact of certain unforeseen events (e.g., regulatory and other actions that impact the supply chain for certain materials).
Conversely, working capital assets are typically converted to cash during the winter. These seasonal trends can be offset by changes in project timing due to delays or accelerations and other economic factors that may affect customer spending, including market conditions or the impact of certain unforeseen events (e.g., regulatory and other actions that impact the supply chain for certain materials).
Sources and Uses of Cash, Cash Equivalents and Restricted Cash During the Years Ended December 31, 2023 and 2022 In summary, our cash flows for each period were as follows (in thousands): Year Ended December 31, 2023 2022 Net cash provided by operating activities $ 1,575,952 $ 1,130,312 Net cash used in investing activities $ (989,650) $ (617,191) Net cash provided by (used in) financing activities $ 268,500 $ (311,071) Operating Activities Net cash provided by operating activities of $1.58 billion and $1.13 billion in 2023 and 2022 primarily reflected earnings adjusted for non-cash items and cash used by the main components of working capital: “Accounts and notes receivable,” “Contract assets,” “Prepaid expenses and other current assets,” “Accounts payable and accrued expenses,” and “Contract liabilities.” Net cash provided by operating activities during the years ended December 31, 2023 and 2022 was negatively impacted by incremental working capital requirements and the timing of the associated billings related to the large renewable transmission project in Canada as discussed further in Note 4 of the Notes to Consolidated Financial Statements in Item 8.
Sources and Uses of Cash, Cash Equivalents and Restricted Cash During the Years Ended December 31, 2024 and 2023 In summary, our cash flows for each period were as follows (in thousands): Year Ended December 31, 2024 2023 Net cash provided by operating activities $ 2,081,196 $ 1,575,952 Net cash used in investing activities $ (2,294,319) $ (989,650) Net cash (used in) provided by financing activities $ (305,636) $ 268,500 53 Operating Activities Net cash provided by operating activities of $2.08 billion and $1.58 billion in 2024 and 2023 primarily reflected earnings adjusted for non-cash items and cash provided and used by the main components of working capital: “Accounts and notes receivable,” “Contract assets,” “Accounts payable and accrued expenses,” and “Contract liabilities.” Net cash provided by operating activities during the year ended December 31, 2023 was negatively impacted by incremental working capital requirements and the timing of the associated billings related to the large renewable transmission project in Canada as discussed further in Note 4 of the Notes to Consolidated Financial Statements in Item 8.
Foreign currency translation loss in the year ended December 31, 2022 primarily resulted from the strengthening of the U.S. dollar against both the Australian and Canadian dollars as of December 31, 2022 when compared to December 31, 2021. EBITDA and adjusted EBITDA .
Foreign currency translation adjustment loss in the year ended December 31, 2024 primarily resulted from the strengthening of the U.S. dollar against both the Canadian and Australian dollars as of December 31, 2024 when compared to December 31, 2023.
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 and complexity of our 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 such affiliates, the operations of which are not operationally integral to us; (iv) mark-to-market adjustments on investments vary from period to period based on fluctuations in the market price of such company’s common stock; (v) gains and losses on the sale of investments vary from period to period depending on activity; (vi) asset impairment charges vary from period to period depending on economic and other factors; and (vii) 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 the effect of present value accretion on fair value calculations.
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 and complexity of our 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 such affiliates, the operations of which are not operationally integral to us; (iv) gains and losses on the sale of investments and businesses, and foreign currency translation losses recognized from substantial liquidation of certain foreign operations vary from period to period depending on activity; 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 and the effect of present value accretion on fair value calculations.
(5) Amounts represent capital committed for investments in unconsolidated affiliates, including $50.0 million related to a limited partnership interest in a fund that targets investments in certain portfolio companies that operate businesses related to the transition to a reduced-carbon economy.
(5) Amounts represen t estimates of capital commitments for investments in unconsolidated affiliates, including $45.0 million related to a limited partnership interest in a fund that targets investments in certain portfolio companies that operate businesses related to the transition to a reduced-carbon economy.
Our industry is capital intensive, and we expect substantial capital expenditures and commitments for equipment purchases and equipment lease and rental arrangements to be needed into the foreseeable future in order to meet anticipated demand for our services. We expect capital expenditures for property and equipment purchases for the year ended December 31, 2024 to be approximately $450 million.
Our industry is capital intensive, and we expect substantial capital expenditures and commitments for equipment purchases and equipment lease and rental arrangements to be needed into the foreseeable future in order to meet anticipated demand for our services.
With respect to this variable rate debt, assuming the principal amount outstanding and interest rate in effect as of December 31, 2023 remained the same, the annual cash interest expense would be approximately $100.2 million, payable until October 8, 2026, the maturity date of our senior credit facility.
With respect to this variable rate debt, assuming the principal amount outstanding and interest rate in effect as of December 31, 2024 remained the same, the annual cash interest expense would be approximately $42.1 million related to the term loan payable until October 8, 2026, the maturity date of the term loan, and $1.1 million related to the revolving loans payable until July 31, 2029, the maturity date of our senior credit facility.
DSO at December 31, 2023 was 68 days, which was lower than DSO of 75 days at December 31, 2022 and our five-year historical average DSO of 84 days.
DSO at December 31, 2024 was 59 days, which was lower than DSO of 68 days at December 31, 2023 and lower than our five-year historical average DSO of 79 days.
Financial Statements and Supplementary Data in Part II of this Annual Report, under fixed price contracts, as well as unit-price contracts with more than an insignificant amount of partially completed units, revenue is recognized as performance obligations are satisfied over time.
Financial Statements and Supplementary Data in Part II of this Annual Report, under fixed price contracts, as well as unit-price contracts with more than an insignificant amount of partially completed units, revenue is recognized as performance obligations are satisfied over time, with the percentage of completion generally measured as the percentage of costs incurred to total estimated costs for such performance obligation.
This decrease in DSO as compared to December 31, 2022 was partially due to an increase in contract liabilities related to favorable billing terms on certain large projects, increased revenues and improved collection of receivables in the fourth quarter of 2023.
This decrease in DSO as compared to December 31, 2023 was partially due to increased revenues, an increase in contract liabilities and a decrease in contract assets related to favorable billing terms on certain large projects.
Costs of services primarily includes wages, benefits, subcontractor costs, materials, equipment, and other direct and indirect costs, including related depreciation. The increase in cost of services generally correlates to the increase in revenues. Equity in earnings of integral unconsolidated affiliat es.
Costs of services primarily includes wages, benefits, subcontractor costs, materials, equipment, and other direct and indirect costs, including related depreciation. The increase in cost of services generally correlates to the increase in revenues. Selling, general and administrative expenses.
Non-GAAP Financial Measures EBITDA and Adjusted EBITDA EBITDA and adjusted EBITDA, financial measures not recognized under GAAP, when used in connection with net income attributable to common stock, are intended to provide useful information to investors and analysts as they evaluate our performance.
The Electric Infrastructure Solutions segment will consist of the historical Electric Power and Renewable Energy segments. 48 Non-GAAP Financial Measures EBITDA and Adjusted EBITDA EBITDA and adjusted EBITDA, financial measures not recognized under GAAP, when used in connection with net income attributable to common stock, are intended to provide useful information to investors and analysts as they evaluate our performance.
We believe this measure is also useful for investors in forecasting our future results and comparing us to our competitors. Our remaining performance obligations are a component of backlog, which also includes estimated orders under MSAs, including estimated renewals, and non-fixed price contracts expected to be completed within one year.
We believe this measure is also useful for investors in forecasting our future results and comparing us to our competitors. Our remaining performance obligations are a component of backlog, which also includes estimated orders under MSAs, including estimated renewals, and certain non-fixed price contracts. Our methodology for determining backlog may not be comparable to the methodologies used by other companies.
(2) Amounts represent undiscounted operating and finance lease obligations as of December 31, 2023. The corresponding amounts recorded on our December 31, 2023 consolidated balance sheet represent the present value of these amounts. (3) Amounts represent undiscounted operating lease obligations that had not commenced as of December 31, 2023.
(2) Amounts represent undiscounted operating and finance lease obligations as of December 31, 2024. The corresponding amounts recorded on our December 31, 2024 consolidated balance sheet represent the present value of these amounts. (3) Amounts represent capital committed for the purchase of equipment.
For additional information regarding our overall business environment, see Overview in Part I, Item 1. Business of this Annual Report. Significant Factors Impacting Results Our revenues, profit, margins and other results of operations can be influenced by a variety of factors in any given period, including those described in Item 1. Business and Item 1A.
Significant Factors Impacting Results Our revenues, profit, margins and other results of operations can be influenced by a variety of factors in any given period, including those described in Item 1. Business and Item 1A.
Additionally, although revenues associated with large pipeline projects in Canada increased in 2022 and 2023, as compared to prior years, we anticipate that revenues associated with these projects will continue to fluctuate.
However, revenues associated with large pipeline projects decreased in 2024 as compared to 2023 and 2022, and we anticipate that revenues associated with these projects will continue to fluctuate.
Revenues. Revenues increased due to a $2.39 billion increase in revenues from our Renewable Energy segment, a $756.6 million increase in revenues from our Electric Power segment, and a $659.9 million increase in revenues from our Underground and Infrastructure segment. See Segment Results below for additional information and discussion related to segment revenues. 45 Cost of services.
Revenues increased due to a $1.68 billion increase in revenues from our Renewable Energy segment and a $1.47 billion increase in revenues from our Electric Power segment, partially offset by a $354.6 million decrease in revenues from our Underground and Infrastructure segment. See Segment Results below for additional information and discussion related to segment revenues. Cost of services.
Operating income was positively impacted by a $172.9 million increase in operating income for our Renewable Energy segment, a $54.6 million increase in operating income for our Electric Power segment and a $60.4 million increase in operating income for our Underground and Infrastructure segment, partially offset by a $32.0 million increase in corporate and non-allocated costs, which includes amortization expense.
Operating income was positively impacted by a $278.2 million increase in operating income for our Electric Power segment and a $189.9 million increase in operating income for our Renewable Energy segment, partially offset by a $112.9 million decrease in operating income for our Underground and Infrastructure segment and a $136.7 million increase in corporate and non-allocated costs, which includes amortization expense.
With respect to our Renewable Energy Infrastructure Solutions (Renewable Energy) segment, the transition to a reduced-carbon economy is continuing to drive demand for renewable generation and related infrastructure (e.g., high-voltage electric transmission and substation infrastructure), as well as interconnection services necessary to connect and transmit renewable-generated electricity to existing electric power delivery systems.
With respect to our Renewable Energy segment, the cost-effectiveness of solar, wind energy and battery storage, combined with a meaningful increase in current and forecasted electricity demand, is continuing to drive demand for renewable generation and related infrastructure (e.g., high-voltage electric transmission, substation infrastructure and battery storage), as well as interconnection services necessary to connect and transmit renewable-generated electricity to existing electric power delivery systems.
In January of 2024, we completed the acquisition of two businesses in which a portion of the consideration consisted of $378.7 million in cash paid on the acquisition dates funded with a combination of cash and cash equivalents and borrowings from our commercial paper program.
Subsequent to December 31, 2024, we completed the acquisitions of two businesses in which a portion of the consideration consisted of $374.9 million in cash paid on each respective acquisition date funded with a combination of cash and cash equivalents and borrowings from our commercial paper program.
During 2023, increased revenues and operating income across all our segments contributed to $1.58 billion of net cash provided by operating activities, a 39.4% increase relative to 2022, which allowed us to execute our business plan, including the strategic acquisition of several businesses, for which we utilized $651.6 million of cash, net of cash acquired, and the payment of $47.8 million in dividends associated with our common stock.
During 2024, increased revenues and operating income contributed to $2.08 billion of net cash provided by operating activities, a 32.1% increase compared to 2023, which allowed us to execute our business plan, including the strategic acquisition of certain businesses, for which we utilized $1.75 billion of cash, net of cash acquired, and the payment of $54.2 million in dividends associated with our common stock.
Results for each of our business segments and corporate and non-allocated costs are discussed in Segment Results below. Interest and other financing expenses. The increase primarily resulted from the impact of higher interest rates on our outstanding variable rate debt during the year ended December 31, 2023 as compared to the year ended December 31, 2022.
Results for each of our business segments and corporate and non-allocated costs are discussed in Segment Results below. Interest and other financing expenses. Approximately half of the increase resulted from higher principal balances and lease financing transactions as compared to the year ended December 31, 2023. Interest income .
Due to the significant judgments utilized in the revenue and cost estimation process, if subsequent actual results and/or updated assumptions or estimates were to change from those utilized as of December 31, 2023, it could result in a material impact to our results of operations. As described in Note 4 of the Notes to Consolidated Financial Statements in Item 8.
The quantitative impacts of changes in change orders and claims are also included therein. Due to the significant judgments utilized in the revenue and cost estimation process, if subsequent actual results and/or updated assumptions or estimates were to change from those utilized as of December 31, 2024, it could result in a material impact to our results of operations.
Third quarter revenues are typically the highest of the year, as a greater number of projects are underway and operating conditions, including weather, are normally more accommodating.
Third quarter and fourth quarter revenues are typically the highest of the year, as a greater number of projects are underway and operating conditions, including weather, are normally more accommodating. During the fourth quarter, projects are often completed and customers often seek to spend their capital budgets before year end.
As set forth below, we have various short-term and long-term cash requirements and capital allocation priorities, and we intend to fund these requirements primarily with cash flow from operating activities, as well as debt financing as needed. 50 Cash Requirements and Capital Allocation Cash Requirements.
Management monitors financial markets and national and global economic conditions for factors that may affect our liquidity and capital resources. As set forth below, we have various short-term and long-term cash requirements and capital allocation priorities, and we intend to fund these requirements primarily with cash flow from operating activities, as well as debt financing as needed.
There are currently no legal or economic restrictions that would materially impede our ability to repatriate such cash. We consider our investment policies related to cash and cash equivalents to be conservative, as we maintain a diverse 52 portfolio of what we believe to be high-quality cash and cash equivalent investments with short-term maturities.
We consider our investment policies related to cash and cash equivalents to be conservative, as we maintain a diverse portfolio of what we believe to be high-quality cash and cash equivalent investments with short-term maturities.
Management’s Discussion and Analysis of Financial Condition and Results of Operations of our Annual Report on Form 10-K for the year ended December 31, 2022, which was filed with the SEC on February 23, 2023. Overview Our 2023 results reflect increased demand for our services, as revenue and operating income increased in all of our segments as compared to 2022.
Management’s Discussion and Analysis of Financial Condition and Results of Operations of our Annual Report on Form 10-K for the year ended December 31, 2023, which was filed with the SEC on February 22, 2024.
Interest payments related to our senior credit facility and notes issued under our commercial paper program are not included due to their variable interest rates, and as it relates to the commercial paper program, the short-term nature of the borrowings.
Interest payments related to our senior credit facility and commercial paper program are not included due to their variable interest rates.
The decrease in net income attributable to non-controlling interests is primarily related to the $10.4 million gain on sale of the investment in a non-integral equity unconsolidated affiliate recorded during the year ended December 31, 2022 as further described in Note 8 of the Notes to Consolidated Financial Statements in Item 8.
The increase in net income attributable to non-controlling interests is primarily related to increased activity on certain joint ventures and the $5.0 million gain on the sale of the investment in a non-integral equity unconsolidated affiliate recorded during the year ended December 31, 2024 as described above. Comprehensive income. See Statements of Comprehensive Income in Item 8.
Results of Operations Consolidated Results The following table sets forth selected statements of operations data, such data as a percentage of revenues for the years indicated, as well as the dollar and percentage change from the prior year (dollars in thousands).
Furthermore, fluctuations in the price or availability of materials, equipment and consumables that we or our customers utilize could impact costs to complete projects. 45 Results of Operations Consolidated Results The following table sets forth selected statements of operations data, such data as a percentage of revenues for the years indicated, as well as the dollar and percentage change from the prior year (dollars in thousands).
We also expect to continue to allocate significant capital to strategic acquisitions and investments, as well as to pay dividends and to repurchase our outstanding common stock and/or debt securities.
We expect capital expenditures for property and equipment purchases for the year ended December 31, 2025 to be approximately $500 million to $550 million. We also expect to continue to allocate significant capital to strategic acquisitions and investments, as well as to pay dividends and to repurchase our outstanding common stock and/or debt securities.
During 2023, we completed the acquisition of five businesses in which a portion of the consideration, net of cash acquired, consisted of $651.6 million in cash funded with a combination of cash and cash equivalents and borrowings from our commercial paper program.
During 2024, we completed the acquisition of eight businesses in which a portion of the consideration, net of cash acquired, consisted of $1.75 billion in cash funded partially with a combination of cash and cash equivalents, borrowings from our commercial paper program and certain other financing transactions as described in Financing Activities below.
Changes in project timing due to delays or accelerations and other economic, regulatory, market and political factors that may affect customer spending could also impact cash flow from operating activities. Further information with respect to our cash flow from operating activities is set forth below and in Note 18 of the Notes to Consolidated Financial Statements in Item 8.
Further information with respect to our cash flow from operating activities is set forth below and in Note 18 of the Notes to Consolidated Financial Statements in Item 8.
Despite these positive longer-term trends, during 2022 and into 2023, the timing of certain projects within this segment were negatively impacted by supply chain challenges that resulted in delays and shortages of, and increased costs for, materials necessary for certain projects, particularly sourcing restrictions related to solar panels necessary for the utility-scale solar industry and delays in availability of power transformers impacting the electric power and renewable energy industries.
For example, shortages of, and increased costs for, materials necessary for certain projects, particularly sourcing restrictions related to solar panels necessary for the utility-scale solar industry and delays in availability of power transformers impacting the electric power and renewable energy industries impacted certain prior periods.
Additionally, as of December 31, 2023, available commitments under our senior credit facility, combined with our cash and cash equivalents, totaled $2.81 billion. We expect the strong demand for our services will continue.
Additionally, as of December 31, 2024, available commitments under our senior credit facility, combined with our cash and cash equivalents, totaled $3.35 billion.
We expect to continue to utilize cash for similar financing activities in the future, including repayments of our outstanding debt, payment of cash dividends and repurchases of our common stock and/or debt securities.
We expect to continue to utilize cash for similar financing activities in the future, including repayments of our outstanding debt, payment of cash dividends and repurchases of our common stock and/or debt securities. 54 Critical Accounting Estimates The discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements, which have been prepared in accordance with GAAP.
Partially offsetting these items were $69.3 million of proceeds from the sale of, and insurance settlements related to, property and equipment and $42.3 million of cash received from the sale of investments.
Net cash used in investing activities in 2023 included $651.6 million related to acquisitions and $434.8 million of capital expenditures. Partially offsetting these items were $69.3 million of proceeds from the sale of, and insurance settlements related to, property and equipment and $42.3 million of proceeds from the sale of certain non-integral equity investments.
Corporate and Non-Allocated Costs The increase in corporate and non-allocated costs during the year ended December 31, 2023 was primarily due to an aggregate increase of $75.0 million in costs primarily related to compensation expense, which was primarily attributable to non-cash stock compensation expense and salaries in support of business growth, and consulting fees.
Corporate and Non-Allocated Costs The increase in corporate and non-allocated costs during the year ended December 31, 2024 was primarily due to a $93.9 million increase in intangible asset amortization expense associated with recent acquisitions, including CEI, and a $36.0 million increase in compensation expense, which was primarily attributable to increased non-cash stock compensation and salary expense in support of business growth and associated with acquisitions.
Also negatively impacting cash flow from operating activities for 2023 was our prepayment of amounts to suppliers for certain project materials that require a long lead time. Days payables outstanding (DPO) represents the average number of days it takes to repay accounts payable, which management believes is an important metric for assessing liquidity.
Also negatively impacting cash flow from operating activities for 2023 was our prepayment of amounts to suppliers for certain project materials that require a long lead time.
Days sales outstanding (DSO) represents the average number of days it takes revenues to be converted into cash, which management believes is an important metric for assessing liquidity. A decrease in DSO has a favorable impact on cash flow 53 from operating activities, while an increase in DSO has a negative impact on cash flow from operating activities.
Financial Statements and Supplementary Data in Part II of this Annual Report. Days sales outstanding (DSO) represents the average number of days it takes revenues to be converted into cash, which management believes is an important metric for assessing liquidity.
Net cash used in financing activities in the year ended December 31, 2022 included $127.8 million of common stock repurchases, $82.6 million of payments to satisfy tax withholding obligations associated with stock-based compensation; $41.1 million of dividends; and $23.4 million of net payments under our senior credit facility and commercial paper program.
Net cash used in financing activities in the year ended December 31, 2024 also included $155.6 million of payments to satisfy tax withholding obligations associated with stock-based compensation and the payment of $54.2 million of dividends.
Our working capital needs may increase when we commence large volumes of work under circumstances where project costs, primarily labor, equipment and subcontractors, are required to be paid before the associated receivables are billed and collected and when we incur costs for work that is the subject of unpaid change orders and claims.
Our working capital needs may increase when we commence large volumes of work under circumstances where project costs are required to be paid before the associated receivables are billed and collected. Working capital needs are generally higher during the summer and fall due to increased demand for our services when favorable weather conditions exist in many of our operating regions.
Generally, our customers are not contractually committed to specific volumes of services under our MSAs, and most of our contracts can be terminated on short notice even if we are not in default. We determine the estimated backlog for these MSAs using recurring historical trends, factoring in seasonal demand and projected customer needs based upon ongoing communications.
As of December 31, 2024 and 2023, MSAs accounted for 38% and 45% of our estimated 12-month backlog and 48% and 55% of our total backlog. Generally, our customers are not contractually committed to specific volumes of services under our MSAs, and most of our contracts can be terminated on short notice even if we are not in default.
Year Ended December 31, 2023 2022 Net income attributable to common stock (GAAP as reported) $ 744,689 $ 491,189 Interest and other financing expenses 186,913 124,363 Interest income (10,830) (2,606) Provision for income taxes 219,267 192,243 Depreciation expense 324,786 290,647 Amortization of intangible assets 289,014 353,973 Interest, income taxes, depreciation and amortization included in equity in earnings of integral unconsolidated affiliates 19,936 14,274 EBITDA 1,773,775 1,464,083 Non-cash stock-based compensation 126,762 105,600 Acquisition and integration costs (1) 42,837 47,431 Equity in earnings of non-integral unconsolidated affiliates (1,263) (20,333) Loss from mark-to-market adjustment on investment (2) — 91,500 Gains on sales of investments (3) (1,496) (22,222) Asset impairment charges (4) — 14,457 Change in fair value of contingent consideration liabilities 6,568 4,422 Adjusted EBITDA $ 1,947,183 $ 1,684,938 (1) The amount for the year ended December 31, 2022 includes $35.9 million of expenses that are associated with change of control payments as a result of the acquisition of Blattner.
Year Ended December 31, 2024 2023 Net income attributable to common stock (GAAP as reported) $ 904,824 $ 744,689 Interest and other financing expenses 202,687 186,913 Interest income (32,404) (10,830) Provision for income taxes 284,747 219,267 Depreciation expense 359,363 324,786 Amortization of intangible assets 382,959 289,014 Interest, income taxes, depreciation and amortization included in equity in earnings of integral unconsolidated affiliates 21,114 19,936 EBITDA 2,123,290 1,773,775 Non-cash stock-based compensation 150,526 126,762 Acquisition and integration costs 29,994 42,837 Equity in earnings of non-integral unconsolidated affiliates (2,649) (1,263) Loss on disposition of business (gain on sale of investment), net (1) 4,370 (1,496) Foreign currency translation losses (2) 18,531 — Change in fair value of contingent consideration liabilities 7,064 6,568 Adjusted EBITDA $ 2,331,126 $ 1,947,183 (1) The amount for the year ended December 31, 2024 is a loss of $11.9 million on the disposition of a non-core business, partially offset by a gain of $7.5 million as a result of the sale of a non-integral equity method investment.
Partially offsetting these items were $64.1 million of proceeds from the sale of, and insurance settlements related to, property and equipment and $20.6 million of cash received from the sale of investments.
Partially offsetting these items were $77.6 million of proceeds from the sale of, and insurance settlements related to, property and equipment; $31.4 million of proceeds from the disposition of a non-core business; and $29.2 million of proceeds from the sale of a non-integral equity investment.
The increase in revenues for the year ended December 31, 2023 was primarily due to increased spending by our utility customers and approximately $270 million in revenues attributable to acquired businesses. These increases were partially offset by approximately $60 million in lower emergency restoration services revenues. Operating Income.
The increase in revenues for the year ended December 31, 2024 was primarily due to approximately $1.22 billion in revenues attributable to acquired businesses in 2024 and the rising demand for our services. Operating Income.
In addition, many of our MSAs are subject to renewal, and these potential renewals are 49 considered in determining estimated backlog.
We determine the estimated backlog for these MSAs using recurring historical trends, factoring in seasonal demand and projected customer needs based upon ongoing communications. In addition, many of our MSAs are subject to renewal, and these potential renewals are considered in determining estimated backlog.
Our remaining performance obligations and backlog were $13.89 billion and $30.11 billion as of December 31, 2023, representing increases of 57.9%, and 25.0% relative to December 31, 2022. For a reconciliation of backlog to remaining performance obligations, the most comparable financial measure prepared in conformity with generally accepted accounting principles in the United States (GAAP), see Non-GAAP Financial Measures below.
For a reconciliation of backlog to remaining performance obligations, the most comparable financial measure prepared in conformity with generally accepted accounting principles in the United States (GAAP), see Non-GAAP Financial Measures below. For additional information regarding our overall business environment, see Overview in Part I, Item 1. Business of this Annual Report.
Remaining Performance Obligations and Backlog A performance obligation is a promise in a contract with a customer to transfer a distinct good or service.
(2) The amount for the year ended December 31, 2024 is foreign currency translation losses in connection with our substantial liquidation from Latin American operations. Remaining Performance Obligations and Backlog A performance obligation is a promise in a contract with a customer to transfer a distinct good or service.
For example, we perform joint trenching projects to install distribution lines for electric power and natural gas customers. Integrated operations and common administrative support for operating companies require that certain allocations be made to determine segment profitability, including allocations of corporate shared and indirect operating costs, as well as general and administrative costs.
Classification of our operating company revenues by type of work for segment reporting purposes can at times require judgment on the part of management. Integrated operations and common administrative support for operating companies require that certain allocations be made to determine segment profitability, including allocations of corporate shared and indirect operating costs, as well as general and administrative costs.
A decrease in DPO has a negative impact on cash flow from operating activities, while an increase in DPO has a favorable impact on cash flow from operating activities. DPO is calculated by using accounts payable divided by average cost of services per day during the quarter.
A decrease in DSO has a favorable impact on cash flow from operating activities, while an increase in DSO has a negative impact on cash flow from operating activities.
Although the decrease in DSO had a positive impact on cash flow from operating activities, increased unapproved change orders included in contract assets from the aforementioned large renewable transmission project in Canada continue to have a negative impact on DSO and cash flow from operating activities.
Negatively impacting DSO and cash flow from operating activities for both the years ended December 31, 2024 and 2023 were unapproved change orders and claims included in contract assets from the aforementioned large renewable transmission project in Canada.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeThe fair value of Quanta’s senior notes was $2.15 billion at December 31, 2023. A 10% change in the market price would cause a change in fair value of $214.5 million. As of December 31, 2023, our variable-rate debt consisted of $867.1 million outstanding under our senior credit facility and $705.9 million outstanding under our commercial paper program.
Biggest changeThe fair value of our senior notes was $2.90 billion as of December 31, 2024, compared to a carrying value of $3.22 billion net of unamortized bond discount, underwriting discounts and deferred financing costs of $30.6 million. A 10% change in the market price would cause a change in fair value of $289.6 million.
Financial Statements and Supplementary Data in Part II of this Annual Report reflects net foreign currency losses of $2.6 million in the year ended December 31, 2023 and net foreign currency gains of $0.7 million in the year ended December 31, 2022. Other Risks.
Financial Statements and Supplementary Data in Part II of this Annual Report reflects net foreign currency gains of $5.6 million in the year ended December 31, 2024 and net foreign currency losses of $2.6 million in the year ended December 31, 2023. Other Risks.
At December 31, 2023, 63% of our debt portfolio, on a gross basis, incurred interest at a fixed-rate and the remaining 37% of the portfolio incurred interest at a variable-rate. As of December 31, 2023, our fixed-rate debt was $2.63 billion , which consisted primarily of our s enior notes outstanding.
At December 31, 2024, 82% of our debt portfolio, on a gross basis, incurred interest at a fixed-rate and the remaining 18% of the portfolio incurred interest at a variable-rate. 56 As of December 31, 2024, our fixed-rate debt primarily consisted of our s enior notes outstanding.
Financial Statements and Supplementary Data in Part II of this Annual Report. 56 Foreign Currency Risk. We perform our services in some foreign countries, primarily Canada and Australia, and as a result, are exposed to changes in foreign currency exchange rates. Our reporting currency is the U.S. dollar. Our foreign entities typically use the local currency as their functional currency.
We perform our services in some foreign countries, primarily Canada and Australia, and as a result, are exposed to changes in foreign currency exchange rates. Our reporting currency is the U.S. dollar. Our foreign entities typically use the local currency as their functional currency. Translation adjustments are deferred in accumulated other comprehensive income.
The weighted average interest rate on our borrowings under our senior credit facility for the year ended December 31, 2023 was 6.6%, and the weighted average interest rate on borrowings under our commercial paper program was 5.8%.
The average daily amount outstanding and weighted average interest rate on our borrowings under our commercial paper program for the year ended December 31, 2024 were $362.2 million and 5.37%.
Based on these borrowings outstanding as of December 31, 2023, we estimate that a 50 basis point increase or decrease in interest rates would impact annual interest expense by approximately $7.9 million. For additional information about our debt obligations, refer to Note 10 of the Notes to Consolidated Financial Statements in Item 8.
Based on these borrowings outstanding as of December 31, 2024, we estimate that a 50 basis point increase or decrease in interest rates would impact annual interest expense by approximately $3.7 million. As of December 31, 2024, we had no outstanding unsecured notes under our commercial paper program.
Our policy is to maintain a balanced position in foreign currencies to minimize exchange gains and losses arising from changes in exchange rates. We maintain risk management control practices to monitor the foreign currency risk attributable to our intercompany and third-party outstanding foreign currency balances.
This results in exposure to foreign currency risk for financial instruments, including, but not limited to, third-party and intercompany receivables and payables and intercompany loans. Our policy is to maintain a balanced position in foreign currencies to minimize exchange gains and losses arising from changes in exchange rates.
These practices involve the centralization of our exposure to underlying currencies that are not subject to central bank and/or country specific restrictions. By centralizing most of our foreign currency exposure into one subsidiary, we are able to take advantage of natural offsets thereby reducing the overall impact of changes in foreign currency rates on our earnings.
By centralizing most of our foreign currency exposure into one subsidiary, we are able to take advantage of natural offsets thereby reducing the overall impact of changes in foreign currency rates on our earnings. Historically, we have not had significant exposure to foreign currency risk. Other income (expense), net, in the consolidated statements of income in Item 8.
Removed
Translation adjustments are deferred in accumulated other comprehensive income. Some of our consolidated entities enter into transactions that are not denominated in their functional currency. This results in exposure to foreign currency risk for financial instruments, including, but not limited to, third-party and intercompany receivables and payables and intercompany loans.
Added
As of December 31, 2024, our variable-rate debt consisted of $735.4 million outstanding under our senior credit facility. The weighted average interest rate on our borrowings under our senior credit facility for the year ended December 31, 2024 was 6.6%.
Removed
Historically, we have not had significant exposure to foreign currency risk. Other income (expense), net, in the consolidated statements of income in Item 8.
Added
Based on the weighted average interest rate and average borrowings outstanding during the year ended December 31, 2024, we estimate that a 50 basis point increase or decrease in interest rates would impact annual interest expense by approximately $1.8 million .
Added
For additional information about our debt obligations, refer to Note 10 of the Notes to Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data in Part II of this Annual Report. Foreign Currency Risk.
Added
In the year ended December 31, 2024 we recognized $18.5 million of foreign currency translation losses to net income in connection with our substantial liquidation from Latin American operations. Some of our consolidated entities enter into transactions that are not denominated in their functional currency.
Added
We maintain risk management control practices to monitor the foreign currency risk attributable to our intercompany and third-party outstanding foreign currency balances. These practices involve the centralization of our exposure to underlying currencies that are not subject to central bank and/or country specific restrictions.

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