10-Q 1 pwr-20240331.htm 10-Q pwr-20240331
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
(Mark One)  
 QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2024.
or
 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
  For the transition period from          to          .
Commission File Number:001-13831
quantalogohor.jpg
Quanta Services, Inc.
(Exact name of registrant as specified in its charter)
Delaware74-2851603
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
2727 North Loop West
Houston, Texas 77008
(Address of principal executive offices, including zip code)
(713629-7600
(Registrant’s telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.00001 par valuePWRNew York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes     No 
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes      No 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
Accelerated filer
Non-accelerated filer
Smaller reporting company 
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes      No 
As of April 29, 2024, the number of outstanding shares of Common Stock of the registrant was 146,388,455.



QUANTA SERVICES, INC. AND SUBSIDIARIES
TABLE OF CONTENTS

Page

1


Cautionary Statement About Forward-Looking Statements and Information
This Quarterly Report on Form 10-Q (Quarterly Report) of Quanta Services, Inc. (together with its subsidiaries, Quanta, we, us or our) includes forward-looking statements reflecting assumptions, expectations, projections, intentions or beliefs about future events that are intended to qualify for the “safe harbor” from liability established by the Private Securities Litigation Reform Act of 1995. You can identify these statements by the fact that they do not relate strictly to historical or current facts. They use words such as “anticipate,” “estimate,” “project,” “forecast,” “may,” “will,” “should,” “could,” “expect,” “believe,” “plan,” “intend” and other words of similar meaning. In particular, these include, but are not limited to, statements relating to the following:
Projected revenues, net income, earnings per share, margins, cash flows, liquidity, weighted average shares outstanding, capital expenditures, interest rates and tax rates, as well as other projections of operating results and GAAP (as defined herein) and non-GAAP financial results, including EBITDA (as defined herein), adjusted EBITDA (as defined herein) and backlog;
Expectations regarding our business or financial outlook;
Expectations regarding opportunities, technological developments, competitive positioning, future economic and regulatory conditions and other trends in particular markets or industries;
Expectations regarding our plans and strategies, including with respect to our supply chain solutions and expanded or new services offerings;
The business plans or financial condition of our customers, including with respect to the transition to a reduced-carbon economy;
The potential benefits from, and future financial and operational performance of, acquired businesses and our investments;
The expected value of contracts or intended contracts with customers, as well as the expected timing, scope, services, term or results of any awarded or expected projects;
Possible recovery of pending or contemplated insurance claims, change orders and claims asserted against customers or third parties, as well as the collectability of receivables;
The development of and opportunities with respect to future projects, including renewable energy projects and other projects designed to support the transition to a reduced-carbon economy, electrical grid modernization projects, upgrade and hardening projects and larger transmission and pipeline projects;
Expectations regarding the future availability and price of materials and equipment necessary for the performance of our business;
The expected impact of global and domestic economic or political conditions on our business, financial condition, results of operations, cash flows, liquidity and demand for our services, including inflation, interest rates, recessionary economic conditions and commodity prices and production volumes;
The expected impact of changes and potential changes in climate and the physical and transition risks associated with climate change and the transition to a reduced-carbon economy;
Future capital allocation initiatives, including the amount and timing of, and strategies with respect to, any future acquisitions, investments, cash dividends, repurchases of our equity or debt securities or repayments of other outstanding debt;
The expected impact of existing or potential legislation or regulation;
Potential opportunities that may be indicated by bidding activity or similar discussions with customers;
The future demand for, availability of and costs related to labor resources in the industries we serve;
The expected recognition and realization of our remaining performance obligations or backlog;
Expectations regarding the outcome of pending or threatened legal proceedings, as well as the collection of amounts awarded in legal proceedings; and
Expectations with respect to our ability to reduce our debt and maintain our current credit ratings.
These forward-looking statements are not guarantees of future performance; rather they involve or rely on a number of risks, uncertainties, and assumptions that are difficult to predict or are beyond our control and reflect management’s beliefs and assumptions based on information available at the time the statements are made. We caution you that actual outcomes and results may differ materially from what is expressed, implied or forecasted by our forward-looking statements and that any or all of our forward-looking statements may turn out to be inaccurate or incorrect. These statements can be affected by inaccurate assumptions and by known or unknown risks and uncertainties, including the following:
Market, industry, economic, financial or political conditions that are outside of our control, including economic, energy, infrastructure and environmental policies and plans that are adopted or proposed by the U.S. federal and state governments or other governments in territories or countries in which we operate, inflation, interest rates,
2


recessionary economic conditions, deterioration of global or specific trade relationships, and geopolitical conflicts and political unrest;
Quarterly variations in our operating and financial results, liquidity, financial condition, cash flows, capital requirements, and reinvestment opportunities;
Trends and growth opportunities in relevant markets, including our ability to obtain future project awards;
Delays, deferrals, reductions in scope or cancellations of anticipated, pending or existing projects as a result of, among other things, supply chain or production disruptions and other logistical challenges, weather, regulatory or permitting issues, right of way acquisition, environmental processes, project performance issues, claimed force majeure events, protests or other political activity, legal challenges, inflationary pressure, reductions or eliminations in governmental funding or customer capital constraints;
The effect of commodity prices and commodity production volumes, which have been and may continue to be affected by inflationary pressure, on our operations and growth opportunities and on our customers’ capital programs and demand for our services;
The successful negotiation, execution, performance and completion of anticipated, pending and existing contracts;
Events arising from operational hazards, including, among others, wildfires and explosions, that can arise due to the nature of the services we provide and certain of our product solutions, as well as the conditions in which we operate, and can be due to failure of infrastructure on which we have performed services and result in significant liabilities that may be exacerbated in certain geographies and locations;
Unexpected costs, liabilities, fines or penalties that may arise from legal proceedings, indemnity obligations, reimbursement obligations associated with letters of credit or bonds, multiemployer pension plans or other claims or actions asserted against us, including amounts that are not covered by, or are in excess of the coverage under, our third-party insurance;
Potential unavailability or cancellation of third-party insurance coverage, as well as the exclusion of coverage for certain losses, potential increases in premiums for coverage deemed beneficial to us, or the unavailability of coverage deemed beneficial to us at reasonable and competitive rates (e.g., coverage for wildfire events);
Damage to our brands or reputation, as well as potential costs, liabilities, fines or penalties, arising as a result of cybersecurity breaches, environmental and occupational health and safety matters, corporate scandal, failure to successfully perform or negative publicity regarding a high-profile project, involvement in a catastrophic event (e.g., fire, explosion) or other negative incidents;
Disruptions in, or failure to adequately protect, our information technology systems;
Our dependence on suppliers, subcontractors, equipment manufacturers and other third parties and the impact of, among other things, inflationary pressure and regulatory, supply chain and logistical challenges on these third parties;
Estimates and assumptions related to our financial results, remaining performance obligations and backlog;
Our inability to attract, the potential shortage of, and increased costs with respect to skilled employees, as well as our ability to retain and attract key personnel and qualified employees;
Our dependence on fixed price contracts and the potential that we incur losses with respect to these contracts;
Cancellation provisions within our contracts and the risk that contracts expire and are not renewed or are replaced on less favorable terms;
Our inability or failure to comply with the terms of our contracts, which may result in additional costs, unexcused delays, warranty claims, failure to meet performance guarantees, damages or contract terminations;
Adverse weather conditions, natural disasters and other emergencies, including wildfires, pandemics, hurricanes, tropical storms, floods, debris flows, earthquakes and other geological- and weather-related hazards, as well as the impact of climate change;
Our ability to generate internal growth;
Competition in our business, including our ability to effectively compete for new projects and market share, as well as technological advancements and market developments that could reduce demand for our services;
The failure of existing or potential legislative actions and initiatives to result in increased demand for our services or budgetary or other constraints that may reduce or eliminate tax incentives or government funding for projects, including renewable energy projects, which may result in project delays or cancellations;
The unavailability of, or increased prices for, materials, equipment and consumables (such as fuel) used in our and our customers’ businesses, including as a result of inflation; supply chain or production disruptions; governmental regulations on sourcing; the imposition of tariffs, duties, taxes or other assessments; and other changes in U.S. trade relationships with foreign countries;
Loss of or deterioration of relationships with customers that we have long-standing or significant relationships with;
3


The potential that our participation in joint ventures or similar structures exposes us to liability or harm to our reputation as a result of acts or omissions by our partners;
The inability or refusal of our customers or third-party contractors to pay for services, which could result in our inability to collect our outstanding receivables, failure to recover amounts billed to, or avoidance of certain payments received from, customers in bankruptcy or failure to recover on change orders or contract claims;
Risks associated with operating in international markets and U.S. territories, including instability of governments, significant currency exchange fluctuations, and compliance with unfamiliar legal and labor systems and cultural practices, the U.S. Foreign Corrupt Practices Act and other applicable anti-bribery and anti-corruption laws, and complex U.S. and foreign tax regulations and international treaties;
Our inability to successfully identify, complete, integrate and realize synergies from acquisitions, including the inability to retain key personnel from acquired businesses;
The potential adverse impact of acquisitions and investments, including the potential increase in risks already existing in our operations, poor performance or decline in value of acquired businesses or investments and unexpected costs or liabilities that may arise from acquisitions or investments;
The adverse impact of impairments of goodwill, other intangible assets, receivables, long-lived assets or investments;
Difficulties managing our business as it expands and becomes more complex;
The impact of the unionized portion of our workforce on our operations;
An inability to access sufficient funding to finance desired growth and operations, including our ability to access capital markets on favorable terms, as well as fluctuations in the price and trading volume of our common stock, debt covenant compliance, interest rate fluctuations, a downgrade in our credit ratings and other factors affecting our financing and investing activities;
Our ability to obtain bonds, letters of credit and other project security;
Risks related to the implementation of new information technology systems;
New or changed tax laws, treaties or regulations or the inability to realize deferred tax assets; and
The other risks and uncertainties described elsewhere herein, including in Item 1A. Risk Factors in Part I of our Annual Report on Form 10-K for the year ended December 31, 2023 (2023 Annual Report), and as may be detailed from time to time in our other public filings with the U.S. Securities and Exchange Commission (SEC).
All of our forward-looking statements, whether written or oral, are expressly qualified by these cautionary statements and any other cautionary statements that may accompany such forward-looking statements or that are otherwise included in this report. Although forward-looking statements reflect our good faith beliefs at the time they are made, reliance should not be placed on forward-looking statements because they involve known and unknown risks, uncertainties and other factors, which may cause our actual results, performance or achievements to differ materially from anticipated future results, performance or achievements expressed or implied by such forward-looking statements. In addition, we do not undertake and expressly disclaim any obligation to update or revise any forward-looking statements to reflect events or circumstances after the date of this report or otherwise.
4


PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

QUANTA SERVICES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share information)
(Unaudited)
March 31, 2024December 31, 2023
ASSETS
Current Assets:  
Cash and cash equivalents$531,056 $1,290,248 
Accounts receivable, net 4,094,914 4,410,829 
Contract assets1,274,686 1,413,057 
Inventories224,341 175,658 
Prepaid expenses and other current assets458,472 387,105 
Total current assets6,583,469 7,676,897 
Property and equipment, net2,427,131 2,336,943 
Operating lease right-of-use assets269,925 249,443 
Other assets, net569,708 565,625 
Other intangible assets, net 1,408,315 1,362,412 
Goodwill4,283,804 4,045,905 
Total assets$15,542,352 $16,237,225 
LIABILITIES AND EQUITY
Current Liabilities:  
Current maturities of long-term debt$546,543 $535,202 
Current portion of operating lease liabilities83,968 77,995 
Accounts payable and accrued expenses2,757,546 3,061,242 
Contract liabilities1,443,125 1,538,677 
Total current liabilities4,831,182 5,213,116 
Long-term debt, net of current maturities3,174,181 3,663,504 
Operating lease liabilities, net of current portion201,771 186,996 
Deferred income taxes298,137 254,004 
Insurance and other non-current liabilities669,812 636,250 
Total liabilities9,175,083 9,953,870 
Commitments and Contingencies
Equity:  
Common stock, $0.00001 par value, 600,000,000 shares authorized, 175,144,784 and 173,949,011 shares issued, and 146,384,210 and 145,508,549 shares outstanding
2 2 
Additional paid-in capital3,090,242 3,002,652 
Retained earnings4,962,949 4,858,066 
Accumulated other comprehensive loss(313,685)(282,945)
Treasury stock, 28,760,574 and 28,440,462 common shares
(1,382,885)(1,305,534)
Total stockholders’ equity6,356,623 6,272,241 
Non-controlling interests10,646 11,114 
Total equity6,367,269 6,283,355 
Total liabilities and equity$15,542,352 $16,237,225 

The accompanying notes are an integral part of these condensed consolidated financial statements.
5


QUANTA SERVICES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share information)
(Unaudited)

Three Months Ended
March 31,
 20242023
Revenues$5,031,819 $4,428,826 
Cost of services 4,408,325 3,855,631 
Gross profit623,494 573,195 
Equity in earnings of integral unconsolidated affiliates12,334 9,620 
Selling, general and administrative expenses(402,340)(384,552)
Amortization of intangible assets(77,511)(72,403)
Change in fair value of contingent consideration liabilities(623) 
Operating income155,354 125,860 
Interest and other financing expenses(41,072)(41,693)
Interest income8,023 1,516 
Other income, net24,882 7,866 
Income before income taxes147,187 93,549 
Provision for (benefit from) income taxes21,096 (3,421)
Net income126,091 96,970 
Less: Net income attributable to non-controlling interests7,731 1,924 
Net income attributable to common stock$118,360 $95,046 
Earnings per share attributable to common stock:
Basic$0.81 $0.66 
Diluted$0.79 $0.64 
Shares used in computing earnings per share:
Weighted average basic shares outstanding145,936 144,467 
Weighted average diluted shares outstanding149,350 148,661 

The accompanying notes are an integral part of these condensed consolidated financial statements.
6



QUANTA SERVICES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(In thousands)
(Unaudited)
Three Months Ended
March 31,
20242023
Net income$126,091 $96,970 
Other comprehensive (loss) income, net of taxes:
Foreign currency translation adjustment (loss) income(30,740)309 
Other income 791 
Other comprehensive (loss) income, net of taxes(30,740)1,100 
Comprehensive income95,351 98,070 
Less: Comprehensive income attributable to non-controlling interests7,731 1,924 
Comprehensive income attributable to common stock$87,620 $96,146 

The accompanying notes are an integral part of these condensed consolidated financial statements.
7


QUANTA SERVICES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Three Months Ended
March 31,
 20242023
Cash Flows from Operating Activities:
Net income$126,091 $96,970 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation88,895 78,382 
Amortization of intangible assets77,511 72,403 
Distributions, net of equity in earnings of unconsolidated affiliates4,264 18,452 
Deferred income tax benefit(4,765)(11,997)
Non-cash stock-based compensation35,331 27,451 
Other non-cash adjustments, net(7,970)4,076 
Changes in assets and liabilities, net of non-cash transactions:
Accounts and notes receivable321,914 27,874 
Contract assets119,324 (206,812)
Prepaid expenses and other current assets(46,977)(29,227)
Accounts payable and accrued expenses and other non-current liabilities(349,872)(33,618)
Contract liabilities(89,702)320 
Other assets and liabilities, net(36,089)(5,865)
Net cash provided by operating activities237,955 38,409 
Cash Flows from Investing Activities:
Capital expenditures(83,139)(80,319)
Proceeds from sale of and insurance settlements related to property and equipment26,418 10,751 
Cash paid for acquisitions, net of cash, cash equivalents and restricted cash acquired(384,071)(452,252)
Proceeds from the sale or settlement of certain investments26,571 39,069 
Other, net27,613 (5,873)
Net cash used in investing activities(386,608)(488,624)
Cash Flows from Financing Activities:
Borrowings under credit facility and commercial paper program2,763,700 4,431,075 
Payments under credit facility and commercial paper program(3,268,156)(4,050,437)
Payments related to tax withholding for share-based compensation (75,710)(108,689)
Payments of dividends(13,745)(12,817)
Other, net(9,133)(16,445)
Net cash (used in) provided by financing activities(603,044)242,687 
Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash(9,963)(1,562)
Net decrease in cash, cash equivalents and restricted cash(761,660)(209,090)
Cash, cash equivalents and restricted cash, beginning of period1,295,041 433,214 
Cash, cash equivalents and restricted cash, end of period$533,381 $224,124 

The accompanying notes are an integral part of these condensed consolidated financial statements.
8


QUANTA SERVICES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY
(In thousands, except share data)
(Unaudited)
Accumulated
AdditionalOtherTotalNon-
Common StockPaid-InRetainedComprehensiveTreasuryStockholders’ControllingTotal
SharesAmountCapitalEarningsIncome (Loss)StockEquityInterestsEquity
Balance, December 31, 2023145,508,549 $2 $3,002,652 $4,858,066 $(282,945)$(1,305,534)$6,272,241 $11,114 $6,283,355 
Other comprehensive loss— — — — (30,740)— (30,740)— (30,740)
Acquisitions250,539 — 51,768 — — — 51,768 — 51,768 
Stock-based compensation activity625,122 — 35,822 — — (77,351)(41,529)— (41,529)
Dividends declared ($0.09 per share)
— — — (13,477)— — (13,477)— (13,477)
Distributions to non-controlling interests— — — — — — — (8,199)(8,199)
Net income— — — 118,360 — — 118,360 7,731 126,091 
Balance, March 31, 2024146,384,210 $2 $3,090,242 $4,962,949 $(313,685)$(1,382,885)$6,356,623 $10,646 $6,367,269 

Accumulated
AdditionalOtherTotalNon-
Common StockPaid-InRetainedComprehensiveTreasuryStockholders’ControllingTotal
SharesAmountCapitalEarningsIncome (Loss)StockEquityInterestsEquity
Balance, December 31, 2022142,930,598 $2 $2,718,988 $4,163,212 $(310,677)$(1,188,061)$5,383,464 $15,355 $5,398,819 
Other comprehensive income— — — — 1,100 — 1,100 — 1,100 
Acquisitions1,018,946 — 123,503 — — — 123,503 — 123,503 
Stock-based compensation activity1,210,615 — 26,650 — — (104,247)(77,597)— (77,597)
Dividends declared ($0.08 per share)
— — — (12,100)— — (12,100)— (12,100)
Distributions to non-controlling interests— — — — — — — (8,741)(8,741)
Net income— — — 95,046 — — 95,046 1,924 96,970 
Balance, March 31, 2023145,160,159 $2 $2,869,141 $4,246,158 $(309,577)$(1,292,308)$5,513,416 $8,538 $5,521,954 

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


9



QUANTA SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

TABLE OF CONTENTS


10

QUANTA SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(Unaudited)

1. BUSINESS AND ORGANIZATION, BASIS OF PRESENTATION AND ACCOUNTING POLICIES:
Quanta Services, Inc. (together with its subsidiaries, Quanta) 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. 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.
These unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X for interim financial information. Certain information and footnote disclosures, normally included in annual financial statements prepared in accordance with generally accepted accounting principles in the United States (GAAP), have been condensed or omitted pursuant to those rules and regulations. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto of Quanta’s Annual Report on Form 10-K for the year ended December 31, 2023. Quanta believes that the disclosures made are adequate to make the information presented not misleading. In the opinion of management, all adjustments, consisting only of normal recurring adjustments, necessary to fairly state the financial position, results of operations, comprehensive income and cash flows with respect to the interim condensed consolidated financial statements have been included.
The results of Quanta have historically been subject to seasonal fluctuations. The results of operations, comprehensive income and operating cash flows for the interim periods are not necessarily indicative of the results for the entire fiscal year.

2. NEW ACCOUNTING PRONOUNCEMENTS:
Recently Adopted Guidance
In June 2022, the FASB issued an update that clarifies the guidance in FASB ASC 820 (Fair Value Measurement) for equity securities subject to contractual sale restrictions. The update prohibits entities from taking into account contractual restrictions on the sale of equity securities when estimating fair value and introduces required disclosures for such transactions. This update is effective for interim and annual periods beginning after December 15, 2023. This guidance will increase the fair market value of the consideration paid in equity securities in a business combination, and therefore it may increase the amount allocated to goodwill. Quanta adopted this update effective January 1, 2024, and it did not have a material impact on Quanta’s consolidated financial statements.
New Accounting Pronouncements and Disclosure Rules Not Yet Adopted
In March 2024, the U.S. Securities and Exchange Commission (SEC) issued its final climate disclosure rule (the Final Rule) that requires public entities to disclose certain material climate-related information in annual reports and registration statements, including disclosure of material impacts as a result of severe weather events and other natural conditions and material Scope 1 and Scope 2 greenhouse gas emissions. Disclosures will be required prospectively, with information for prior periods required only to the extent the information was disclosed in a prior SEC filing. Certain requirements of the Final Rule are effective for fiscal years beginning on or after January 1, 2025, with phase-in periods for additional requirements. However, on April 4, 2024, the SEC issued a stay pending judicial review of the Final Rule in U.S. federal court. Quanta is currently assessing the effect of the Final Rule.
In December 2023, the FASB issued an update that expands disclosures for tax rate reconciliation tables, primarily by requiring disaggregation of income taxes paid by jurisdiction, as well as greater disaggregation within the rate reconciliation. This update is effective for fiscal years beginning after December 15, 2024 and interim periods within fiscal years beginning after December 15, 2025. Early adoption and retrospective application are permitted. Quanta is currently assessing the effect of this update.
In November 2023, the FASB issued an update that, among other things, requires public entities to disclose significant segment expenses that are regularly provided to the chief operating decision maker (CODM) and included within each reported measure of segment profit or loss, provide an amount for other segment items by reportable segment and provide all segment disclosures required on an annual basis in interim periods. Additionally, the update requires entities to disclose the title and position of the CODM and an explanation of how the CODM uses the reported measures(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources. This update is effective for fiscal years beginning after
11

QUANTA SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(Unaudited)

December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted, and retrospective application is required. Quanta is currently assessing the effect of this update.

3. REVENUE RECOGNITION AND RELATED BALANCE SHEET ACCOUNTS:
Contracts
Quanta’s services are generally provided pursuant to master service agreements (MSAs), repair and maintenance contracts and fixed price and non-fixed price construction contracts. These contracts are classified into three categories: unit-price contracts, cost-plus contracts and fixed price contracts.
The following tables present Quanta’s revenue disaggregated by contract type and by geographic location, as determined by the job location (in thousands):
Three Months Ended March 31,
20242023
By contract type:
Fixed price contracts$2,672,315 53.1 %$1,934,888 43.7 %
Unit-price contracts1,427,507 28.4 1,497,394 33.8 
Cost-plus contracts931,997 18.5 996,544 22.5 
Total revenues$5,031,819 100.0 %$4,428,826 100.0 %
Three Months Ended March 31,
20242023
By primary geographic location:
United States$4,569,716 90.8 %$3,666,365 82.8 %
Canada229,427 4.6 542,360 12.2 
Australia146,029 2.9 154,677 3.5 
Others86,647 1.7 65,424 1.5 
Total revenues$5,031,819 100.0 %$4,428,826 100.0 %

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. Approximately 57.5% and 50.1% of Quanta’s revenues recognized during the three months ended March 31, 2024 and 2023 were associated with this revenue recognition method.
Performance Obligations
As of March 31, 2024 and December 31, 2023, the aggregate transaction price allocated to unsatisfied or partially satisfied performance obligations was approximately $14.88 billion and $13.89 billion, with 64.6% and 66.9% expected to be recognized in the subsequent twelve months. These amounts represent management’s estimates of the 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 had not yet begun as of such dates. For purposes of calculating remaining performance obligations, Quanta includes all estimated revenues attributable to consolidated joint ventures and variable interest entities, revenues from funded and unfunded portions of government contracts to the extent they are reasonably expected to be realized, and revenues from change orders and claims to the extent management believes additional contract revenues will be earned and are deemed probable of collection. Excluded from remaining performance obligations are potential orders under MSAs and expected revenues under certain non-fixed price contracts.
Contract Estimates and Changes in Estimates
Actual revenues and project costs can vary, sometimes substantially, from previous estimates due to changes in a variety of factors, including unforeseen or changed circumstances not included in Quanta’s cost estimates or covered by its contracts. Some of the factors that can result in positive changes in estimates on projects include successful execution through project
12

QUANTA SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(Unaudited)

risks, reduction of estimated project costs or increases of estimated revenues. Some of the factors that can result in negative changes in estimates include concealed or unknown site conditions; changes to or disputes with customers regarding the scope of services; changes in estimates related to the length of time to complete a performance obligation; changes or delays with respect to permitting and regulatory requirements and materials; changes in the cost of equipment, commodities, materials or skilled labor; unanticipated costs or claims due to delays or failure to perform by customers or third parties; customer failure to provide, or supply chain and logistical challenges related to, required materials or equipment; errors in engineering, specifications or designs; project modifications; adverse weather conditions, natural disasters, and other emergencies; and performance and quality issues causing delay (including payment of liquidated damages) or requiring rework or replacement. Any changes in estimates could result in changes to profitability or losses associated with the related performance obligations.
Additionally, changes in cost estimates on certain contracts may result in the issuance of change orders, which can be approved or unapproved by the customer, or the assertion of contract claims. Quanta recognizes amounts associated with change orders and claims as revenue if it is probable that the contract price will be adjusted and the amount of any such adjustment can be reasonably estimated.
As of March 31, 2024 and December 31, 2023, Quanta had recognized revenues of $774.8 million and $778.9 million related to unapproved change orders and claims included as contract price adjustments primarily in “Contract assets” in the accompanying consolidated balance sheets. These change orders and claims were in the process of being negotiated in the normal course of business and represent management’s estimates of additional contract revenues that have been earned and are probable of collection.
The largest component of the revenues recognized related to unapproved change orders and claims as of March 31, 2024 and December 31, 2023 is associated with a large renewable transmission project in Canada. During 2021 and 2022, decreased productivity and additional costs arose from delays, administrative requirements and labor issues due to the COVID-19 pandemic, including incremental governmental requirements and worksite restrictions. During 2023, additional costs arose from residual impacts associated with the aforementioned items, as well as work resequencing and acceleration, access delays, and logistical challenges and other issues outside of Quanta’s control. As of March 31, 2024, the project was substantially completed.
Changes in estimates can result in the recognition of revenue in a current period for performance obligations that were satisfied or partially satisfied in prior periods or the reversal of previously recognized revenue if the currently estimated revenue is less than the previous estimate. The impact of a change in contract estimate is measured as the difference between the revenue or gross profit recognized in the prior period as compared to the revenue or gross profit which would have been recognized had the revised estimate been used as the basis of recognition in the prior period. Changes in estimates can also result in contract losses, which are recognized in full when they are determined to be probable and can be reasonably estimated.
Revenues were positively impacted by 0.1% during each of the three months ended March 31, 2024 and 2023 as a result of changes in estimates associated with performance obligations on fixed price contracts partially satisfied prior to December 31, 2023 and 2022.
Operating results for the three months ended March 31, 2024 were impacted by less than 5% of gross profit as a result of aggregate changes in contract estimates related to projects that were in progress as of December 31, 2023. However, gross profit was negatively impacted by $21.9 million as a result of decreased productivity associated with a large solar facility project in the United States.
Operating results for the three months ended March 31, 2023 were impacted by less than 5% of gross profit as a result of aggregate changes in contract estimates related to projects that were in progress as of December 31, 2022. There were no material changes in estimates on any individual project.
Contract Assets and Liabilities
Contract assets and liabilities consisted of the following (in thousands):
March 31, 2024December 31, 2023
Contract assets$1,274,686 $1,413,057 
Contract liabilities$1,443,125 $1,538,677 
Contract assets and liabilities fluctuate period to period based on various factors, including, among others, changes in the number and size of projects in progress at period end; variability in billing and payment terms, such as up-front or advance billings, interim or milestone billings, or deferred billings; and recognized unapproved change orders and contract claims. The decrease in contract assets from December 31, 2023 to March 31, 2024 was primarily due to the completion of certain large
13

QUANTA SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(Unaudited)

projects and the corresponding billing of amounts previously recorded as contract assets, while the decrease in contract liabilities was primarily due to higher production on a large renewable transmission project and the associated recognition of revenue on amounts that were previously recorded as contract liabilities.
During the three months ended March 31, 2024 and 2023, Quanta recognized revenue of approximately $952.6 million and $641.1 million related to contract liabilities outstanding as of the end of each respective prior year.
Accounts Receivable, Allowance for Credit Losses and Concentrations of Credit Risk
Quanta determines its allowance for credit losses based on an estimate of expected credit losses for financial instruments, primarily accounts receivable and contract assets. The assessment of the allowance for credit losses involves certain judgments and estimates. Management estimates the allowance balance using relevant available information from internal and external sources relating to past events, current conditions and reasonable and supportable forecasts. Expected credit losses are estimated by evaluating trends with respect to Quanta’s historical write-off experience and applying historical loss ratios to pools of financial assets with similar risk characteristics. Quanta has determined that it has two risk pools for the purpose of calculating its historical credit loss experience.
Quanta’s historical loss ratio and its determination of risk pools, which are used to calculate expected credit losses, may be adjusted for changes in customer credit concentrations within its portfolio of financial assets, changes in customers’ ability to pay, and other considerations, such as economic and market changes, changes to regulatory or technological environments affecting customers and the consistency between current and forecasted economic conditions and the historical economic conditions used to derive historical loss ratios. At the end of each quarter, management reassesses these and other relevant factors, including the impact of uncertainty and challenges in the overall economy and in Quanta’s industries and markets, (e.g., inflationary pressure, supply chain and other logistical challenges and increased interest rates).
Additional allowance for credit losses is established for financial asset balances with specific customers where collectability has been determined to be improbable based on customer specific facts and circumstances. Quanta considers accounts receivable delinquent after 30 days but, absent certain specific considerations, generally does not consider such amounts delinquent in its credit loss analysis unless the accounts receivable are at least 120 days outstanding. In addition, management monitors the credit quality of its receivables by, among other things, obtaining credit ratings for significant customers, assessing economic and market conditions and evaluating material changes to a customer’s business, cash flows and financial condition. Should anticipated recoveries relating to receivables fail to materialize, including anticipated recoveries relating to bankruptcies or other workout situations, Quanta could experience reduced cash flows and losses in excess of current allowances provided.
Accounts receivable are written-off against the allowance for credit losses if they are deemed uncollectible.
Activity in Quanta’s allowance for credit losses consisted of the following (in thousands):
 Three Months Ended
March 31,
 20242023
Balance at beginning of period$13,962 $15,644 
Increase in provision for credit losses271 2,358 
Write-offs charged against the allowance net of recoveries of amounts previously written off(278)(1,472)
Balance at end of period$13,955 $16,530 
The above activity relates to the largest risk pool Quanta utilizes for assessing credit loss. The second risk pool represents approximately 12% of Quanta’s consolidated financial instruments as of March 31, 2024 and did not have any allowance for credit loss or experience any credit loss during the periods presented. Quanta’s customers generally have high credit ratings. In addition, the customers in the second risk pool typically pre-approve invoices and often receive project financing.
Provision for credit losses is included in “Selling, general and administrative expenses” in the consolidated statements of operations.
Quanta is subject to concentrations of credit risk related primarily to its receivable position for services Quanta has performed for customers. Quanta grants credit under normal payment terms, generally without collateral. As of March 31, 2024 and December 31, 2023, one customer within the Renewable Energy Infrastructure Solutions segment associated with the large renewable transmission project in Canada described above represented 10% of Quanta’s consolidated receivable position,
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which includes amounts related to contracts assets. No customer represented 10% or more of Quanta’s consolidated revenues for the three months ended March 31, 2024 or 2023.
Certain contracts allow customers to withhold a small percentage of billings pursuant to retainage provisions, and such amounts are generally due upon completion of the contract and acceptance of the project by the customer. Based on Quanta’s experience in recent years, the majority of these retainage balances are expected to be collected within one year. Retainage balances with expected settlement dates within one year of March 31, 2024 and December 31, 2023 were $624.2 million and $610.0 million, which are included in “Accounts receivable.” Retainage balances with expected settlement dates beyond one year were $88.4 million and $78.7 million as of March 31, 2024 and December 31, 2023 and are included in “Other assets, net.”
Quanta recognizes unbilled receivables for non-fixed price contracts within “Accounts receivable” in certain circumstances, such as when revenues have been earned and recorded but the amount cannot be billed under the terms of the contract until a later date or when amounts arise from routine lags in billing. These balances do not include revenues recognized for work performed under fixed-price contracts and unit-price contracts with more than an insignificant amount of partially completed units, as these amounts are recorded as “Contract assets.” As of March 31, 2024 and December 31, 2023, unbilled receivables included in “Accounts receivable” were $794.3 million and $743.6 million. Quanta also recognizes unearned revenues for non-fixed price contracts when cash is received prior to recognizing revenues for the related performance obligation. Unearned revenues, which are included in “Accounts payable and accrued expenses,” were $66.7 million and $58.6 million as of March 31, 2024 and December 31, 2023.

4. SEGMENT INFORMATION:
Quanta reports its results under three reportable segments described below:
Electric Power Infrastructure Solutions (Electric Power). Quanta’s Electric Power segment provides comprehensive infrastructure solutions to customers in the electric power and communications markets.
Renewable Energy Infrastructure Solutions (Renewable Energy). Quanta’s Renewable Energy segment provides comprehensive infrastructure solutions to customers that are involved in the renewable energy industry.
Underground Utility and Infrastructure Solutions (Underground and Infrastructure). Quanta’s 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.
Corporate and Non-allocated Costs include corporate facility costs; non-allocated corporate salaries, benefits and incentive compensation; acquisition and integration costs; non-cash stock-based compensation; amortization related to intangible assets; asset impairment related to goodwill and intangible assets; and change in fair value of contingent consideration liabilities.
Quanta’s segment results are derived from the types of services provided across its operating companies in each of its end user markets. Quanta’s 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. Classification of operating company revenues by type of work for segment reporting purposes can require judgment on the part of management.
In addition, integrated operations and common administrative support for Quanta’s operating companies require that allocations be made to determine segment profitability, including allocations of certain corporate shared and indirect operating costs as well as general and administrative costs.
The following table sets forth segment revenues and segment operating income (loss) for the three months ended March 31, 2024 and 2023. Operating margin is calculated by dividing operating income (loss) by revenues. The following table
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shows dollars in thousands:
Three Months Ended March 31,
 20242023
Revenues:  
Electric Power
$2,326,960 46.2 %$2,336,037 52.7 %
Renewable Energy
1,584,164 31.5 1,008,300 22.8 
Underground and Infrastructure
1,120,695 22.3 1,084,489 24.5 
Consolidated revenues$5,031,819 100.0 %$4,428,826 100.0 %
Operating income (loss):
  
Electric Power (1)
$228,025 9.8 %$215,149 9.2 %
Renewable Energy
74,846 4.7 %35,656 3.5 %
Underground and Infrastructure
46,888 4.2 %61,573 5.7 %
Corporate and Non-Allocated Costs (2)
(194,405)(3.9)%(186,518)(4.2)%
Consolidated operating income$155,354 3.1 %$125,860 2.8 %
(1)    Includes equity in earnings of integral unconsolidated affiliates of $12.3 million and $9.6 million for the three months ended March 31, 2024 and 2023, primarily related to Quanta’s equity interest in LUMA Energy, LLC (LUMA).
(2)    Includes amortization expense of $77.5 million and $72.4 million and non-cash stock-based compensation of $35.3 million and $27.5 million for the three months ended March 31, 2024 and 2023.
Depreciation Expense
Separate measures of Quanta’s assets and cash flows by reportable segment, including capital expenditures, are not produced or utilized by management to evaluate segment performance. Certain of Quanta’s fixed assets are used on an interchangeable basis across its reportable segments. The following table sets forth depreciation expense by segment for the three months ended March 31, 2024 and 2023. The table shows dollars in thousands:
Three Months Ended
March 31,
20242023
Depreciation:
Electric Power
$40,447 $42,085 
Renewable Energy
17,795 10,858 
Underground and Infrastructure
24,986 20,500 
Corporate and Non-Allocated Costs5,667 4,939 
Consolidated depreciation$88,895 $78,382 

5. ACQUISITIONS:
The results of operations of acquired businesses have been included in Quanta’s consolidated financial statements since their respective acquisition dates.
In April 2024, Quanta acquired a business located in the United States that manufactures transmission and distribution equipment for the electric utility industry. The aggregate consideration paid or payable for this transaction was approximately $72 million, consisting of a combination of cash and shares of Quanta common stock. The final amount of consideration also remains subject to certain post-closing adjustments, including with respect to net working capital.
During the three months ended March 31, 2024, Quanta acquired three businesses located in the United States, including: a business that provides specialty environmental solutions to 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); and a business that specializes in electrical infrastructure services for substations, data centers and governmental entities (primarily included in the Electric Power segment). The consideration for the businesses acquired during the three months ended March 31, 2024
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consisted of approximately $382.9 million paid or payable in cash on the acquisition dates and 250,539 shares of Quanta common stock, which had a fair value of $51.8 million as of the acquisition dates. The final amount of consideration for these acquisitions remains subject to certain post-closing adjustments, including with respect to net working capital.
During the year ended December 31, 2023, Quanta acquired five businesses located in the United States, including: a business that provides services related to high-voltage transmission lines, overhead and underground distribution, emergency restoration and industrial and commercial wiring and lighting (primarily included in the Electric Power segment); a business that procures parts, assembles kits for sale, manages logistics and installs solar tracking equipment for utility and development customers (primarily included in the Renewable Energy segment); a business that provides concrete construction services (primarily included in the Electric Power and Renewable Energy segments); a business specializing in power studies, maintenance testing and commissioning primarily for utility and commercial customers (included in the Electric Power segment) and a business that manufactures power transformers for the electric utility, renewable energy, municipal power and industrial markets (included in the Electric Power and Renewable Energy segments). The consideration for these transactions consisted of approximately $785.7 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 dates of the acquisitions.
Additionally, the former owners of certain acquired businesses are eligible to receive potential payments of contingent consideration to the extent the acquired businesses achieve certain financial performance targets over specified post-acquisition periods.
Purchase Price Allocation
Quanta is finalizing its purchase price allocations related to certain businesses acquired subsequent to March 31, 2023, and further adjustments to the purchase price allocations may occur, with possible updates primarily related to intangible asset values, property and equipment values, certain contingent liabilities, tax estimates, and the finalization of closing working capital adjustments. The aggregate consideration paid or payable for businesses acquired between March 31, 2023 and March 31, 2024 was allocated to acquired assets and assumed liabilities, which resulted in an allocation of $194.2 million to net tangible assets, $207.8 million to identifiable intangible assets and $403.4 million to goodwill.
The following table summarizes the estimated fair value of total consideration transferred or estimated to be transferred and the fair value of assets acquired and liabilities assumed as of their respective acquisition dates as of March 31, 2024 for
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acquisitions completed in the three months ended March 31, 2024 (in thousands):
Three Months Ended
March 31, 2024
Consideration:
Cash paid or payable$382,929 
Value of Quanta common stock issued51,768 
Contingent consideration14,463 
Fair value of total consideration transferred or estimated to be transferred$449,160 
Cash and cash equivalents$8,453 
Accounts receivable50,845 
Contract assets162 
Inventories14,127 
Prepaid expenses and other current assets12,176 
Property and equipment92,676 
Operating lease right-of-use assets15,532 
Other assets456 
Identifiable intangible assets122,301 
Current maturities of long-term debt(4,431)
Current portion of operating lease liabilities(4,134)
Accounts payable and accrued liabilities(51,325)
Contract liabilities(390)
Long-term debt, net of current maturities(4,436)
Operating lease liabilities, net of current portion(11,398)
Deferred income taxes(42,363)
Total identifiable net assets198,251 
Goodwill 250,909 
Fair value of net assets acquired$449,160 
As of March 31, 2024, approximately $10.6 million of goodwill is expected to be deductible for income tax purposes related to acquisitions completed in the three months ended March 31, 2024.
The following table summarizes the estimated fair values of identifiable intangible assets for the acquisitions completed in the three months ended March 31, 2024 as of the acquisition dates and the related weighted average amortization periods by type (in thousands, except for weighted average amortization periods, which are in years).    
Three Months Ended
March 31, 2024
Estimated Fair ValueWeighted Average Amortization Period in Years
Customer relationships$102,106 6.7
Backlog4,495 1.7
Trade names14,456 15.0
Non-compete agreements1,244 5.0
Total intangible assets subject to amortization$122,301 7.5
The significant estimates used by management in determining the fair values of customer relationship intangible assets include future revenues, discount rates and customer attrition rates. The following table includes the discount rates and
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customer attrition rates used to determine the fair value of customer relationship intangible assets for businesses acquired during the three months ended March 31, 2024 as of the respective acquisition dates:
Three Months Ended
 March 31, 2024
RangeWeighted Average
Discount rates
15% to 22%
15%
Customer attrition rates
10% to 23%
12%
Contingent Consideration
As described above, certain business acquisitions have contingent consideration liabilities associated with the transactions. The aggregate fair value of these outstanding contingent consideration liabilities was $172.0 million and $157.1 million as of March 31, 2024 and December 31, 2023, and such amounts are included in “Insurance and other non-current liabilities.”
Quanta’s aggregate contingent consideration liabilities can change due to additional business acquisitions, settlement of outstanding liabilities, accretion in present value, changes in estimated fair value, the performance of acquired businesses in post-acquisition periods, and in certain cases, management discretion. These changes are reflected in “Change in fair value of contingent consideration liabilities” in the accompanying consolidated statements of operations.
The fair value determinations for contingent consideration liabilities incorporate significant inputs not observable in the market, including revenue forecasts, operating margins, discount rates and the probability of acquired businesses achieving certain performance targets during designated post-acquisition periods. Accordingly, the level of inputs used for these fair value measurements is Level 3.
All of Quanta’s outstanding contingent consideration liabilities are subject to a maximum payment amount, and the aggregate maximum payment amount of these liabilities totaled $352.6 million as of March 31, 2024. During the three months ended March 31, 2023, Quanta settled certain contingent consideration liabilities with cash payments of $5.0 million.
Pro Forma Results of Operations
The following unaudited supplemental pro forma results of operations for Quanta, which incorporate the acquisitions completed in the three months ended March 31, 2024 and the year ended December 31, 2023, have been provided for illustrative purposes only and may not be indicative of the actual results that would have been achieved by the combined companies for the periods presented or that may be achieved by the combined companies in the future (in thousands).
Three Months Ended
March 31,
20242023
Revenues$5,033,522 $4,535,366 
Net income attributable to common stock$118,213 $86,670 
The pro forma combined results of operations for the three months ended March 31, 2024 and 2023 were prepared by adjusting the historical results of Quanta to include the historical results of the businesses acquired in 2024 as if such acquisitions had occurred January 1, 2023. The pro forma combined results of operations for the three months ended March 31, 2023 were prepared by further adjusting the historical results of Quanta to include the historical results of the business acquired in 2023 as if such acquisition had occurred January 1, 2022. These pro forma combined historical results were adjusted for the following: a reduction of interest and other financing expenses as a result of the repayment of outstanding indebtedness of the acquired businesses; an increase in interest and other financing expenses as a result of the cash consideration paid; an increase in amortization expense due to the intangible assets recorded; elimination of inter-company sales; and changes in depreciation expense to adjust acquired property and equipment to the acquisition date fair value and to conform with Quanta’s accounting policies. The pro forma combined results of operations do not include any adjustments to eliminate the impact of acquisition-related costs incurred by Quanta or any cost savings or other synergies that resulted or may result from the acquisitions.
Impact on Consolidated Results of Operations Related to Acquisitions
Included in Quanta’s condensed consolidated results of operations for the three months ended March 31, 2024 were revenues of $67.7 million and a loss before income taxes of $9.1 million, which included $4.8 million of amortization expense
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and $5.9 million of acquisition-related costs, related to the acquisitions completed in 2024. Included in Quanta’s condensed consolidated results of operations for the three months ended March 31, 2023 were revenues of $93.5 million and a loss before income taxes of $16.1 million, which included $8.6 million of amortization expense and $17.8 million of acquisition-related costs, related to the acquisitions completed in 2023.

6. INVESTMENTS IN AFFILIATES AND OTHER ENTITIES:
Equity Investments
The following table presents Quanta’s equity investments by type (in thousands):
March 31, 2024December 31, 2023
Equity method investments - integral unconsolidated affiliates
$96,948 $96,124 
Equity method investments - non-integral unconsolidated affiliates9,480 28,105 
Non-marketable equity securities53,388 53,868 
Total equity investments$159,816 $178,097 
Equity Method Investments
During the three months ended March 31, 2024, Quanta sold a non-integral equity method investment and recognized a $12.2 million gain, $4.9 million of which was attributable to non-controlling interests. Also during the three months ended March 31, 2024, Quanta received $34.9 million in cash related to the sale of this investment, $4.9 million of which was distributed to non-controlling interests.
During the three months ended December 31, 2022, Quanta entered into an agreement to sell a non-integral equity method investment. The transaction was subject to certain customary closing conditions that were satisfied in early 2023. As a result, a $25.9 million gain was recognized in the fourth quarter of 2022, $10.4 million of which was attributable to non-controlling interests. During the year ended December 31, 2023, Quanta received $58.5 million in cash related to the sale of this investment, $9.8 million of which was distributed to non-controlling interests.
As of March 31, 2024 and December 31, 2023, Quanta had receivables of $81.4 million and $96.4 million from its integral unconsolidated affiliates and payables of $22.4 million and $24.5 million to its integral unconsolidated affiliates. Quanta recognized revenues of $59.0 million and $48.3 million during the three months ended March 31, 2024 and 2023 from services provided to its integral unconsolidated affiliates, primarily related to services provided to LUMA at cost. In addition, during the three months ended March 31, 2024 and 2023, Quanta recognized costs of sales of $88.9 million and $12.0 million for services provided to Quanta by other integral unconsolidated affiliates.
Total equity in earnings from integral unconsolidated affiliates was $12.3 million and $9.6 million for the three months ended March 31, 2024 and 2023. Total equity in earnings from non-integral unconsolidated affiliates was earnings of $3.6 million and $1.6 million for the three months ended March 31, 2024 and 2023. As of March 31, 2024, Quanta had $45.2 million of undistributed earnings related to unconsolidated affiliates.
The difference between Quanta’s carrying value and the underlying equity in the net assets of its equity investments is assigned to the assets and liabilities of the investment, giving rise to a basis difference, which was $29.9 million and $31.4 million as of March 31, 2024 and December 31, 2023. The amortization of the basis difference included in “Equity in earnings of integral unconsolidated affiliates” in the accompanying condensed consolidated statements of operations was $1.5 million and $1.8 million for the three months ended March 31, 2024 and 2023.

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7. PER SHARE INFORMATION:
The amounts used to compute basic and diluted earnings per share attributable to common stock consisted of the following (in thousands):
Three Months Ended
March 31,
20242023
Amounts attributable to common stock:
Net income attributable to common stock$118,360 $95,046 
Weighted average shares:
Weighted average shares outstanding for basic earnings per share attributable to common stock145,936 144,467 
Effect of dilutive unvested non-participating stock-based awards3,414 4,194 
Weighted average shares outstanding for diluted earnings per share attributable to common stock149,350 148,661 

8. DEBT OBLIGATIONS:
Quanta’s long-term debt obligations consisted of the following (in thousands):
March 31, 2024December 31, 2023
0.950% Senior Notes due October 2024
$500,000 $500,000 
2.900% Senior Notes due October 2030
1,000,000 1,000,000 
2.350% Senior Notes due January 2032
500,000 500,000 
3.050% Senior Notes due October 2041
500,000 500,000 
Borrowings under senior credit facility (including Term Loan)854,364 867,137 
Borrowings under commercial paper program208,350 705,900 
Lease financing transactions126,409 102,955 
Other long-term debt6,219 6,279 
Finance leases46,373 39,577 
Unamortized discount and financing costs(20,991)(23,142)
Total long-term debt obligations3,720,724 4,198,706 
Less — Current maturities of long-term debt546,543 535,202 
Total long-term debt obligations, net of current maturities$3,174,181 $3,663,504 
Senior Notes
The interest amounts due on Quanta’s senior notes on each payment date are set forth below (dollars in thousands):
Title of the NotesInterest AmountPayment DatesCommencement Date
0.950% Senior Notes due October 2024
$2,375 April 1 and October 1April 1, 2022
2.900% Senior Notes due October 2030
$14,500 April 1 and October 1April 1, 2021
2.350% Senior Notes due January 2032
$5,875 January 15 and July 15July 15, 2022
3.050% Senior Notes due October 2041
$7,625 April 1 and October 1April 1, 2022
The fair value of Quanta’s senior notes was $2.13 billion as of March 31, 2024, compared to a carrying value of $2.48 billion net of unamortized bond discount, underwriting discounts and deferred financing costs of $19.7 million. The fair value of the senior notes is based on the quoted market prices for the same issue, and the senior notes are categorized as Level 1 liabilities.
Senior Credit Facility
The credit agreement for Quanta’s senior credit facility (as amended, the credit agreement) provides for a $750.0 million
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term loan facility and aggregate revolving commitments of $2.64 billion, with a maturity date of October 8, 2026. Borrowings under the senior credit facility and the applicable interest rates were as follows (dollars in thousands):
Three Months Ended
March 31,
20242023
Maximum amount outstanding$867,204 $956,308 
Average daily amount outstanding$841,295 $859,270 
Weighted-average interest rate6.80 %5.99 %
As of March 31, 2024, Quanta was in compliance with all of the financial covenants under the credit agreement.
Term Loan. As of March 31, 2024, Quanta had $726.6 million outstanding under its term loan facility. The carrying amount of the term loan under Quanta’s senior credit facility approximates fair value due to its variable interest rate.
Revolving Loans. As of March 31, 2024, Quanta had $127.8 million of outstanding revolving loans under the senior credit facility, all of which were denominated in Canadian dollars. The carrying amounts of the revolving borrowings under Quanta’s senior credit facility approximate fair value, as all revolving borrowings have a variable interest rate.
As of March 31, 2024, Quanta also had $251.2 million of letters of credit issued under the senior credit facility, of which $94.6 million were denominated in U.S. dollars and $156.6 million were denominated in currencies other than the U.S. dollar, primarily Australian and Canadian dollars. Additionally, available commitments for revolving loans under the senior credit facility must be maintained in order to provide credit support for notes issued under Quanta’s commercial paper program, and therefore such notes effectively reduce the available borrowing capacity under the senior credit facility.
As of March 31, 2024, $2.05 billion remained available under the senior credit facility for new revolving loans, letters of credit and support of the commercial paper program.
Commercial Paper Program
As of March 31, 2024, Quanta had $208.4 million of outstanding unsecured notes under its commercial paper program, with a weighted average interest rate of 5.75%. The carrying amounts of the notes issued under Quanta’s commercial paper program approximate fair value, and all notes currently have a short maturity.
Borrowings under the commercial paper program and the applicable interest rates were as follows (dollars in thousands):
Three Months Ended
March 31,
20242023
Maximum amount outstanding$705,900 $747,700 
Average daily amount outstanding $216,075 $494,600 
Weighted-average interest rate5.80 %5.38 %
Additional Letters of Credit
As of March 31, 2024, Quanta had $488.7 million of letters of credit issued outside of its senior credit facility, which were denominated in U.S. dollars.


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9. LEASES:
Quanta primarily leases land, buildings, vehicles, construction equipment and office equipment. The components of lease costs in the accompanying condensed consolidated statements of operations are as follows (in thousands):
Three Months Ended
 March 31,
Lease costClassification20242023
Finance lease cost:
Amortization of lease assets
Depreciation (1)
$2,969 $911 
Interest on lease liabilitiesInterest and other financing expenses722 208 
Lease financing transactions: (2)
Depreciation
Depreciation (1)
2,092 2,252 
InterestInterest and other financing expenses3,498 4,299 
Operating lease costCost of services and Selling, general and administrative expenses25,534 23,223 
Short-term and variable lease cost (3)
Cost of services and Selling, general and administrative expenses287,335 238,078 
Total lease cost $322,150 $268,971 
(1)    Depreciation is included within “Cost of services” and “Selling, general and administrative expenses” in the accompanying condensed consolidated statements of operations.
(2)    Certain of Quanta’s equipment rental agreements contain purchase options pursuant to which the purchase price is offset by a portion of the rental payments. When these purchase options are exercised by a third-party lessor on behalf of Quanta, the transaction is deemed to be a financing transaction for accounting purposes, which results in the recognition of an asset equal to the purchase price and a corresponding liability.
(3)    Short-term lease cost includes both leases and rentals with initial terms of one year or less. Variable lease cost is insignificant.
Related party lease expense was $4.7 million and $3.9 million for the three months ended March 31, 2024 and 2023.
Future minimum lease payments for operating leases and finance leases were as follows (in thousands):
 As of March 31, 2024
 Operating LeasesFinance LeasesTotal
Remainder of 2024$73,023 $9,655 $82,678 
202581,366 10,436 91,802 
202663,052 9,428 72,480 
202744,661 8,078 52,739 
202826,108 7,203 33,311 
Thereafter27,077 6,029 33,106 
Total future minimum payments related to operating leases and finance leases
315,287 50,829 366,116 
Less imputed interest(29,548)(4,456)(34,004)
Total
$285,739 $46,373 $332,112 
Future minimum lease payments for short-term leases were $26.5 million as of March 31, 2024. As of March 31, 2024, Quanta also had minimum lease payments related to operating lease obligations of $17.5 million for leases that had not yet commenced as of such date, are expected to commence in 2024 and have lease terms of one to ten years. Additionally, as described above, certain of Quanta’s equipment rental agreements contain purchase options pursuant to which the purchase price is offset by a portion of the rental payments. The future payments related to these lease financing transactions totaled $95.2 million and comprise principal and interest payments.
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The weighted average remaining lease terms (other than for short-term leases) and discount rates were as follows:
 As of March 31, 2024
Weighted average remaining lease term (in years):
Operating leases4.27
Finance leases4.96
Weighted average discount rate:
Operating leases4.5 %
Finance leases6.3 %
Quanta has also guaranteed the residual value under certain of its equipment operating leases and real estate finance leases, agreeing to pay any difference between the residual value and the fair market value of the underlying asset at the date of lease termination. Historically, the fair value of the assets at the time of lease termination generally has approximated or exceeded the residual value guarantees, and therefore such guarantees are not expected to result in significant payments.

10. INCOME TAXES:
Quanta’s effective tax rates for the three months ended March 31, 2024 and 2023 were a provision of 14.3% and a benefit of 3.7%. The tax rates for the three months ended March 31, 2024 and 2023 were favorably impacted by the recognition of $21.6 million and $32.0 million of benefits that resulted from equity incentive awards vesting at a higher fair market value than their grant date fair value.
Quanta regularly evaluates valuation allowances established for deferred tax assets for which future realization is uncertain, including in connection with changes in tax laws. The estimation of required valuation allowances includes estimates of future taxable income. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Quanta considers projected future taxable income and tax planning strategies in making this assessment. If actual future taxable income differs from these estimates, Quanta may not realize deferred tax assets to the extent estimated.
As of March 31, 2024, the total amount of unrecognized tax benefits relating to uncertain tax positions was $47.4 million, a net increase of $2.3 million from December 31, 2023, which resulted from positions expected to be taken in 2024. Quanta’s consolidated federal income tax returns for tax years 2017, 2018, and 2020 through 2022 remain open to examination by the IRS, as the applicable statute of limitations periods have not yet expired. Additionally, various state and foreign tax returns filed by Quanta and certain subsidiaries for multiple periods remain under examination by various U.S. state and foreign tax authorities. Quanta does not consider any U.S. state in which it does business to be a major tax jurisdiction. Quanta believes it is reasonably possible that within the next 12 months unrecognized tax benefits may decrease by up to $8.9 million as a result of settlement of these examinations or as a result of the expiration of certain statute of limitations periods.

11. EQUITY:
Stock Repurchases
On May 23, 2023, Quanta’s Board of Directors approved a stock repurchase program that authorizes Quanta to purchase, from time to time through June 30, 2026, up to $500 million of its outstanding common stock. As of March 31, 2024, $499.7 million remained available under this repurchase program.
Repurchases may be implemented through open market repurchases or privately negotiated transactions, at management’s discretion, based on market and business conditions, applicable contractual and legal requirements, including restrictions under Quanta’s senior credit facility, and other factors. Quanta is not obligated to acquire any specific amount of common stock, and the repurchase program may be modified or terminated by Quanta’s Board of Directors at any time at its sole discretion and without notice.
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Dividends
Quanta declared and paid the following cash dividends and cash dividend equivalents during 2023 and the first three months of 2024 (in thousands, except per share amounts):
DeclarationRecordPaymentDividendDividends
DateDateDatePer ShareDeclared
March 28, 2024April 9, 2024April 17, 2024$0.09 $13,477 
December 5, 2023January 2, 2024January 12, 2024$0.09 $13,412 
August 30, 2023October 2, 2023October 13, 2023$0.08 $12,430 
May 23, 2023July 3, 2023July 14, 2023$0.08 $11,893 
March 29, 2023April 10, 2023April 18, 2023$0.08 $12,100 

12. STOCK-BASED COMPENSATION:
Restricted Stock Units (RSUs) to be Settled in Common Stock
A summary of the activity for RSUs to be settled in common stock for the three months ended March 31, 2024 and 2023 is as follows (RSUs in thousands):
20242023
RSUsWeighted Average
Grant Date Fair Value
(Per Unit)
RSUsWeighted Average
Grant Date Fair Value
(Per Unit)
Unvested at January 12,548 $104.763,263 $78.74
Granted561 $236.82626 $158.82
Vested(635)$111.81(1,120)$65.50
Forfeited(20)$144.76(75)$107.63
Unvested at March 31
2,454 $132.932,694 $102.59
The approximate fair value of RSUs that vested during the three months ended March 31, 2024 and 2023 was $152.5 million and $176.1 million.
During the three months ended March 31, 2024 and 2023, Quanta recognized $25.7 million and $22.6 million of non-cash stock compensation expense related to RSUs to be settled in common stock. As of March 31, 2024, there was $239.3 million of total unrecognized compensation expense related to unvested RSUs to be settled in common stock granted to both employees and non-employees. This cost is expected to be recognized over a weighted average period of 3.19 years.
Performance Stock Units (PSUs) to be Settled in Common Stock
A summary of the activity for PSUs to be settled in common stock for the three months ended March 31, 2024 and 2023 is as follows (PSUs in thousands):
20242023
PSUsWeighted Average
Grant Date Fair Value
(Per Unit)
PSUsWeighted Average
Grant Date Fair Value
(Per Unit)
Unvested at January 1491 $129.70733 $65.39
Granted109 $257.29177 $174.50
Vested(175)$96.45(413)$35.12
Unvested at March 31
425 $176.03497 $129.38
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The Monte Carlo simulation valuation methodology applied the following key inputs:
20242023
Valuation date price based on March 4, 2024 and March 9, 2023 closing stock prices of Quanta common stock$243.34$160.55
Expected volatility33 %35 %
Risk-free interest rate4.43 %4.62 %
Term in years2.832.81
During the three months ended March 31, 2024 and 2023, Quanta recognized $9.6 million and $4.9 million of non-cash stock compensation expense related to PSUs to be settled in common stock. As of March 31, 2024, there was an estimated $55.9 million of total unrecognized compensation expense related to unearned and unvested PSUs. This amount is based on forecasted attainment of performance metrics and estimated forfeitures of unearned and unvested PSUs. The compensation expense related to outstanding PSUs can vary from period to period based on changes in forecasted achievement of established performance goals and the total number of shares of common stock that Quanta anticipates will be issued upon vesting of such PSUs. This cost is expected to be recognized over a weighted average period of 2.16 years.
During the three months ended March 31, 2024 and 2023, 0.3 million and 0.7 million shares of common stock were issued in connection with earned and vested PSUs. The approximate fair values of PSUs earned and vested during the three months ended March 31, 2024 and 2023 were $75.4 million and $115.5 million, respectively.

13. EMPLOYEE BENEFIT PLANS:
Deferred Compensation Plans
Quanta maintains non-qualified deferred compensation plans under which eligible directors and key employees may defer their receipt of certain cash compensation and/or the settlement of certain stock-based awards. As of March 31, 2024 and December 31, 2023, the liability related to deferred cash compensation under these plans, including amounts contributed by Quanta, was $101.8 million and $88.9 million, the majority of which was included in “Insurance and other non-current liabilities” in the accompanying condensed consolidated balance sheets. Additionally, as of March 31, 2024 and December 31, 2023, the settlement and issuance of 176,305 and 174,079 shares of common stock underlying certain stock-based awards had been deferred under these plans, and such issuances are scheduled to occur in future periods.
To provide for future obligations related to deferred cash compensation under these plans, Quanta has invested in corporate-owned life insurance (COLI) policies covering certain participants in the deferred compensation plans, the underlying investments of which are intended to be aligned with the investment alternatives elected by plan participants. The COLI assets are recorded at their cash surrender value, which is considered their fair market value, and as of March 31, 2024 and December 31, 2023, the fair market values were $95.7 million and $83.4 million and were included in “Other assets, net” in the accompanying condensed consolidated balance sheets. The level of inputs for these fair value measurements is Level 2.
Changes in the fair market value of Quanta’s COLI assets and deferred compensation liabilities largely offset and are recorded in the accompanying statements of operations as follows (in thousands):
 Three Months Ended
March 31,
ClassificationChange in fair market value of20242023
Loss included in Selling, general and administrative expenses
Deferred compensation liabilities$(6,513)$(4,076)
Other income, net
COLI assets$6,049 $3,146 

14. COMMITMENTS AND CONTINGENCIES:
Legal Proceedings
Quanta is from time to time party to various lawsuits, claims and other legal proceedings that arise in the ordinary course of business. These actions typically seek, among other things, compensation for alleged personal injury, property damage, breach of contract, negligence or gross negligence, environmental liabilities, wage and hour and other employment-related
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damages, punitive damages, consequential damages, civil penalties or other losses, or injunctive or declaratory relief. With respect to all such lawsuits, claims and proceedings, Quanta records a reserve when it is probable that a liability has been incurred and the amount of loss can be reasonably estimated. In addition, Quanta discloses matters for which management believes a material loss is at least reasonably possible.
The assessment of whether a loss is probable or reasonably possible, and whether the loss or a range of loss is estimable, often involves a series of complex judgments about future events. In all instances, management has assessed the matter based on current information and made a judgment concerning its potential outcome, giving due consideration to the nature of the claim, the amount and nature of damages sought and the probability of success and taking into account, among other things, negotiations with claimants, discovery, settlements and payments, judicial rulings, arbitration and mediation decisions, advice of internal and external legal counsel, and other information and events pertaining to a particular matter. Costs incurred for litigation are expensed as incurred. Except as otherwise stated below, none of these proceedings are expected to have a material adverse effect on Quanta’s consolidated financial position, results of operations or cash flows. However, management’s judgment may prove materially inaccurate, and such judgment is made subject to the known uncertainties of litigation.
Peru Project Dispute
In 2015, Redes Andinas de Comunicaciones S.R.L. (Redes), a majority-owned subsidiary of Quanta, entered into two separate contracts with an agency of the Peruvian Ministry of Transportation and Communications (MTC), currently Programa Nacional de Telecomunicaciones (PRONATEL), as successor to Fondo de Inversion en Telecomunicaciones (FITEL), pursuant to which Redes would design, construct and operate certain telecommunication networks in rural regions of Peru. The aggregate consideration provided for in the contracts was approximately $248 million, consisting of approximately $151 million to be paid during the construction period and approximately $97 million to be paid during a 10-year post-construction operation and maintenance period. At the beginning of the project, FITEL made advance payments totaling approximately $87 million to Redes, which were secured by two on-demand advance payment bonds posted by Redes to guarantee proper use of the payments in the execution of the project. Redes also provided two on-demand performance bonds in the aggregate amount of $25 million to secure performance of its obligations under the contracts.
During the construction phase, the project experienced numerous challenges and delays, primarily related to issues which Quanta believes were outside of the control of and not attributable to Redes, including, among others, weather-related issues, local opposition to the project, permitting delays, the inability to acquire clear title to certain required parcels of land and other delays which Quanta believes were attributable to FITEL/PRONATEL. In response to various of these challenges and delays, Redes requested and received multiple extensions to certain contractual deadlines and relief from related liquidated damages. However, in April 2019, PRONATEL provided notice to Redes claiming that Redes was in default under the contracts due to the delays and that PRONATEL would terminate the contracts if the alleged defaults were not cured. Redes responded by claiming that it was not in default, as the delays were due to events not attributable to Redes, and therefore PRONATEL was not entitled to terminate the contracts. PRONATEL subsequently terminated the contracts for alleged cause prior to completion of Redes’ scope of work, exercised the on-demand performance bonds and advance payment bonds against Redes, and indicated its intention to claim damages, including liquidated damages under the contracts. As of the date of the contract terminations, Redes had incurred costs of approximately $157 million related to the design and construction of the project and had received approximately $100 million of payments (inclusive of the approximately $87 million advance payments).
In May 2019, Redes filed for arbitration before the Court of International Arbitration of the International Chamber of Commerce (ICC) against PRONATEL and the MTC. In the arbitration, Redes claimed that PRONATEL: breached and wrongfully terminated the contracts; wrongfully executed the advance payment bonds and the performance bonds; and was not entitled to the alleged amount of liquidated damages, and sought compensation for various damages arising from PRONATEL’s actions in the initially claimed amount of approximately $190 million. In August 2022, Redes received the decision of the arbitration tribunal, which unanimously found in favor of Redes in connection with its claims and ordered, among other things, (i) repayment of the amounts collected by PRONATEL under the advance payment bonds and the performance bonds; (ii) payment of amounts owed for work completed by Redes under the contracts; (iii) payment of lost income in connection with Redes’ future operation and maintenance of the networks; and (iv) payment of other related costs and damages to Redes as a result of the breach and improper termination of the contracts (including costs related to the execution of the bonds, costs related to the transfer of the networks and legal and expert fees). Accordingly, the arbitration tribunal awarded Redes approximately $177 million. In addition, per the terms of the arbitration decision, interest will accrue on the amount owed up to the date of payment.
The decision of the arbitration tribunal is final, with limited grounds on which PRONATEL and the MTC may seek to annul the decision in Peruvian courts. In December 2022, Redes filed an enforcement proceeding with respect to each project contract to secure recovery of the arbitration award, and PRONATEL and the MTC filed an annulment proceeding with respect
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to each project contract. The enforcement and annulment proceedings were filed with different commercial courts in Lima, Peru. In April 2023 and August 2023, Redes received favorable rulings in each of the annulment proceedings rejecting the grounds for annulment; however, PRONATEL and the MTC are pursuing, and are expected to continue to pursue, certain remaining legal challenges to such rulings. Final decisions with respect to the enforcement proceedings are expected later in 2024. Additionally, in December 2022, following the favorable arbitration ruling, Quanta received $100.5 million pursuant to coverage under an insurance policy for the improper collection by PRONATEL and the MTC of the advance payment and performance bonds, and in January 2023 Quanta received $6.7 million pursuant to coverage under an insurance policy for nonpayment by PRONATEL and the MTC of amounts owed for work completed by Redes. Quanta is continuing to pursue collection of the ICC arbitration award and any amount collected would result in repayment of an equal amount to the insurers up to the amount received from the insurers.
Quanta also reserves the right to seek full compensation for the loss of its investment under applicable legal regimes, including investment treaties and customary international law, as well as to seek resolution through direct discussions with PRONATEL or the MTC. In connection with these rights, in May 2020 Quanta’s Dutch subsidiary delivered to the Peruvian government an official notice of dispute arising from the termination of the contracts and related acts by PRONATEL (which are attributable to Peru) under the Agreement on the Encouragement and Reciprocal Protection of Investments between the Kingdom of the Netherlands and the Republic of Peru (Investment Treaty). The Investment Treaty protects Quanta’s subsidiary’s indirect ownership stake in Redes and the project, and provides for rights and remedies distinct from the ICC arbitration. In December 2020, Quanta’s Dutch subsidiary filed a request for the institution of an arbitration proceeding against Peru with the International Centre for Settlement of Investment Disputes (ICSID) related to Peru’s breach of the Investment Treaty, which was registered by ICSID in January 2021. In the ICSID arbitration, Quanta’s Dutch subsidiary claims, without limitation, that Peru: (i) treated the subsidiary’s investment in Redes and the project unfairly and inequitably; and (ii) effectively expropriated the subsidiary’s investment in Redes and the project. In addition, Quanta’s Dutch subsidiary is seeking full compensation for all damages arising from Peru’s actions, including but not limited to (i) the fair market value of the investment and/or lost profits; (ii) attorneys’ fees and arbitration costs; (iii) other related costs and damages and (iv) pre- and post-award interest. The ICSID arbitration hearing on the merits occurred in the second quarter of 2023 and a decision is currently expected in the second half of 2024.
Quanta believes Redes is entitled to all amounts awarded by the ICC arbitration tribunal, and that its Dutch subsidiary is entitled to other amounts associated with the pending ICSID arbitration proceeding. Quanta and Redes intend to vigorously pursue recovery of the amounts awarded by the ICC arbitration tribunal and take additional legal actions deemed necessary to enforce the ICC arbitration decision. However, due to the inherent uncertainty involved with, among other things, the challenges to the annulment decisions, enforcement and related proceedings, the ultimate timing and conclusion with respect to collection of the amounts of the ICC arbitration award remains unknown.
As a result of the contract terminations and the inherent uncertainty involved in arbitration proceedings and recovery of amounts owed, during the three months ended June 30, 2019, Quanta recorded a charge to earnings of $79.2 million, which included a reduction of previously recognized earnings on the project, a reserve against a portion of the project costs incurred through the project termination date, an accrual for a portion of the alleged liquidated damages, and the estimated costs to complete the project turnover and close out the project. Quanta also initially recorded a contract receivable of approximately $120 million related to the project during the three months ended June 30, 2019, which includes the amounts collected by PRONATEL through exercise of the advance payment bonds and performance bonds. As of March 31, 2024, the total amount of the receivable was not changed and is included in “Other assets, net” in the accompanying consolidated balance sheet. Additionally, with respect to the amounts received pursuant to coverage under the insurance policies described above, $107.2 million is included in “Insurance and other non-current liabilities” in the accompanying condensed consolidated balance sheet as of March 31, 2024.
After considering, as discussed above, that the ultimate timing and conclusion with respect to collection of the full amounts associated with the ICC arbitration award remains unknown, Quanta has not recognized a gain in the current period. To the extent amounts in excess of the current receivable are determined to be realizable, a gain would be recorded in the period such determination is made. However, if Quanta is ultimately not successful with respect to collection of the ICC arbitration award or with respect to its claims in the pending ICSID arbitration proceeding, this matter could result in an additional significant loss that could have a material adverse effect on Quanta’s consolidated results of operations and cash flows.
Silverado Wildfire Matter
During 2022 and 2023, two of Quanta’s subsidiaries received tenders of defense and demands for preservation of evidence from Southern California Edison Company (SCE) related to lawsuits filed from April 2021 through March 2024 against SCE and T-Mobile USA, Inc. (T-Mobile) in the Superior Court of California, County of Orange. The lawsuits generally
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assert property damage and related claims on behalf of certain individuals and subrogation claims on behalf of insurers relating to damages caused by a wildfire that began in October 2020 in Orange County, California (the Silverado Fire) and that is purported to have damaged approximately 13,000 acres. The lawsuits allege the Silverado Fire originated from utility poles in the area, generally claiming that each defendant failed to adequately maintain, inspect, repair or replace its overhead facilities, equipment and utility poles and remove vegetation in the vicinity; that the utility poles were overloaded with equipment from shared usage; and that SCE failed to de-energize its facilities during red flag warnings for a Santa Ana wind event. The lawsuits allege the Silverado Fire started when SCE and T-Mobile equipment contacted each other and note the Orange County Fire Department is investigating whether a T-Mobile lashing wire contacted an SCE overhead primary conductor in high winds. T-Mobile has filed cross-complaints against SCE alleging, among other things, that the ignition site of the Silverado Fire encompassed two utility poles replaced by SCE or a third party engaged by SCE, and that certain equipment, including T-Mobile’s lashing wire, was not sufficiently re-secured after the utility pole replacements. One of Quanta’s subsidiaries performed planning and other services related to the two utility poles, and another Quanta subsidiary replaced the utility poles and reattached the electrical and telecommunication equipment to the new utility poles in March 2019, approximately 19 months before the Silverado Fire. Pursuant to the general terms of a master services agreement and a master consulting services agreement between the Quanta subsidiaries and SCE, the subsidiaries agreed to defend and indemnify SCE against certain claims arising with respect to performance or nonperformance under the agreements. The SCE tender letters seek contractual indemnification and defense from Quanta’s subsidiaries for the claims asserted against SCE in the lawsuits and the T-Mobile cross-complaints.
Quanta’s subsidiaries intend to vigorously defend against the lawsuits, the T-Mobile cross-complaints and any other claims asserted in connection with the Silverado Fire. Quanta will continue to review additional information in connection with this matter as litigation and resolution efforts progress, and any such information may potentially allow Quanta to determine an estimate of potential loss, if any. As of March 31, 2024, Quanta had not recorded an accrual with respect to this matter, and Quanta is currently unable to reasonably estimate a range of reasonably possible loss, if any, because there are a number of unknown facts and legal considerations that may impact the amount of any potential liability. Quanta also believes that to the extent its subsidiaries are determined to be liable for any damages resulting from this matter, its insurance would be applied to any such liabilities over its deductible amount and its insurance coverage would be adequate to cover such potential liabilities. However, the ultimate amount of any potential liability and insurance coverage in connection with this matter remains subject to uncertainties associated with pending and potential future litigation.
Insurance
Quanta is insured for, among other things, employer’s liability, workers’ compensation, auto liability, aviation and general liability claims. Quanta manages and maintains a portion of its casualty risk indirectly through its wholly-owned captive insurance company, which insures all claims up to the amount of the applicable deductible of its third-party insurance programs, as well as with respect to certain other amounts.
As of March 31, 2024 and December 31, 2023, the gross amount accrued for employer’s liability, workers’ compensation, auto liability, general liability, and group health claims totaled $371.0 million and $351.7 million, of which $237.0 million and $229.2 million are included in “Insurance and other non-current liabilities,” and the remainder is included in “Accounts payables and accrued expenses.” Related insurance recoveries/receivables as of March 31, 2024 and December 31, 2023 were $5.5 million and $4.9 million, of which $0.9 million and $0.3 million are included in “Prepaid expenses and other current assets” and $4.6 million and $4.6 million are included in “Other assets, net.”
Bonds
As of March 31, 2024, the total amount of the outstanding performance bonds was estimated to be approximately $8.1 billion. Quanta’s estimated maximum exposure related to the value of the performance bonds outstanding is lowered on each bonded project as the cost to complete is reduced, and each commitment under a performance bond generally extinguishes concurrently with the expiration of its related contractual obligation.
Capital Commitments and Other Committed Expenditures
As of March 31, 2024, Quanta had $64.2 million of outstanding capital commitments associated with investments in unconsolidated affiliates, the majority of which relates 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.
As of March 31, 2024, Quanta had $133.7 million of unfilled production orders primarily related to its fleet of vehicles, which have expected delivery dates during the remainder of 2024, in order to accommodate manufacturer lead times on certain types of vehicles. Although Quanta has committed to purchase these vehicles at the time of their delivery, Quanta anticipates
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that the majority of these orders will be assigned to third party leasing companies and made available under certain master equipment lease agreements, thereby releasing Quanta from its capital commitments.

15. DETAIL OF CERTAIN ACCOUNTS:
Cash and Cash Equivalents
As of March 31, 2024 and December 31, 2023, cash equivalents were $161.1 million and $610.8 million and consisted primarily of money market investments, money market mutual funds and short-term deposits.
Cash and cash equivalents held by joint ventures, which are either consolidated or proportionately consolidated, are available to support joint venture operations, but Quanta cannot utilize those assets to support its other operations. Quanta generally has no right to cash and cash equivalents held by a joint venture other than participating in distributions, to the extent made, and in the event of dissolution. Cash and cash equivalents held by Quanta’s wholly-owned captive insurance company are generally not available for use in support of its other operations. Amounts related to cash and cash equivalents held by consolidated or proportionately consolidated joint ventures and the captive insurance company, which are included in Quanta’s total cash and cash equivalents balances, were as follows (in thousands):
 March 31, 2024December 31, 2023
Cash and cash equivalents held by domestic joint ventures$