Segment Information

3 Months Ended

Mar. 31, 2024

Segment Reporting [Abstract]

Segment Information

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

shows dollars in thousands:

	Three Months Ended March 31,
	2024				2023
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,
	2024		2023
Depreciation:
Electric Power	$	40,447	$	42,085
Renewable Energy	17,795		10,858
Underground and Infrastructure	24,986		20,500
Corporate and Non-Allocated Costs	5,667		4,939
Consolidated depreciation	$	88,895	$	78,382