Segment Information

12 Months Ended

Dec. 31, 2021

Segment Reporting [Abstract]

Segment Information

SEGMENT INFORMATION:

Beginning with the three months ended December 31, 2021, Quanta reports results under three reportable segments: (1) Electric Power Infrastructure Solutions, (2) Renewable Energy Infrastructure Solutions and (3) Underground Utility and Infrastructure Solutions. The Renewable Energy Infrastructure Solutions segment was added primarily due to the acquisition of Blattner. In conjunction with this change, certain prior period amounts have been recast to conform to this new segment reporting structure. This structure is generally based on the broad end-user markets for Quanta’s services. See Note 1 for additional information regarding Quanta’s reportable segments.

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. Quanta’s operating companies are organized into one of three reportable segments. Reportable segment information, including revenues and operating income by type of work, is gathered from each operating company for the purpose of evaluating segment performance in support of Quanta’s market strategies. Classification of operating company revenues by type of work for segment reporting purposes can require judgment on the part of management. Quanta’s operating companies may perform joint projects for customers in multiple industries, deliver multiple types of services under a single customer contract or provide service offerings to various industries. For example, Quanta performs joint trenching projects to install distribution lines for electric power and natural gas customers.

In addition, integrated operations and common administrative support for Quanta’s operating companies require that certain allocations be made to determine segment profitability, including allocations of corporate shared and indirect operating costs as well as general and administrative costs. Certain corporate costs are not allocated, including facility costs, 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.

Summarized financial information for Quanta’s reportable segments is presented in the following table (in thousands):

	Year Ended December 31,
	2021		2020		2019
Revenues:
Electric Power Infrastructure Solutions (1)	$	7,624,240	$	6,468,192	$	6,346,837
Renewable Energy Infrastructure Solutions	1,825,259		1,305,151		775,000
Underground Utility and Infrastructure Solutions	3,530,714		3,429,329		4,990,316
Consolidated revenues	$	12,980,213	$	11,202,672	$	12,112,153
Operating income (loss):
Electric Power Infrastructure Solutions (2)(3)	$	865,409	$	648,405	$	554,824
Renewable Energy Infrastructure Solutions	181,908		177,920		36,353
Underground Utility and Infrastructure Solutions	150,147		170,074		332,011
Corporate and non-allocated costs	(533,943)		(385,028)		(368,314)
Consolidated operating income	$	663,521	$	611,371	$	554,874
Depreciation:
Electric Power Infrastructure Solutions	$	141,093	$	112,663	$	101,299
Renewable Energy Infrastructure Solutions	14,020		9,185		6,996
Underground Utility and Infrastructure Solutions	83,720		85,981		90,953
Corporate and non-allocated costs	16,696		17,427		18,859
Consolidated depreciation	$	255,529	$	225,256	$	218,107

(1)    Includes $63.2 million related to Latin American operations for the year ended December 31, 2019, which included the reversal of $48.8 million of revenues in the year ended December 31, 2019 in connection with the terminated telecommunications project in Peru, a portion of which related to prior periods.

(2) Includes $74.0 million and $85.7 million of operating losses related to Latin American operations for the years ended December 31, 2020 and 2019. Included in the Latin American operating loss for the year ended December 31, 2019 was a $79.2 million charge associated with the termination of the large telecommunications project in Peru, which included the $48.8 million decrease in revenues described above and a $30.4 million increase in cost of services. See Legal Proceedings — Peru Project Dispute in Note 16 for additional information on this matter. As of December 31, 2020, Quanta had substantially completed the exit of its operations in Latin America.

(3)    Includes equity in earnings of integral unconsolidated affiliates of $44.1 million and $11.3 million for the years ended December 31, 2021 and 2020. These affiliates are considered to be operationally integral to the operations of Quanta and primarily consists of equity in earnings related to Quanta’s equity interest in LUMA.

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. Quanta’s fixed assets, which are held at the operating company level, include operating machinery, equipment and vehicles, office equipment, buildings and leasehold improvements, and certain fixed assets are used on an interchangeable basis across its reportable segments. As such, for reporting purposes, total depreciation expense is allocated each quarter among Quanta’s reportable segments based on the ratio of each reportable segment’s revenue contribution to consolidated revenues.

Foreign Operations

During 2021, 2020, and 2019, Quanta derived $1.91 billion, $1.58 billion and $1.92 billion of its revenues from foreign operations. Of Quanta’s foreign revenues, 81%, 79% and 75% were earned in Canada during the years ended December 31, 2021, 2020 and 2019. In addition, Quanta held property and equipment of $338.1 million and $336.4 million in foreign countries, primarily Canada, as of December 31, 2021 and 2020.