QUANTA SERVICES, INC. (PWR)

ITEM 7.Management’s Discussion and Analysis of Financial Condition and Results of Operations

General

The following discussion and analysis of the financial condition and results of operations of Quanta Services, Inc. (together with its subsidiaries, Quanta, we, us or our) should be read in conjunction with our consolidated financial statements and related notes in Item 8. Financial Statements and Supplementary Data in Part II of this Annual Report. The discussion below contains forward-looking statements that are based upon our current expectations and are subject to uncertainty and changes in circumstances. Actual results may differ materially from these expectations due to inaccurate assumptions and known or unknown risks and uncertainties, including those identified in Cautionary Statement About Forward-Looking Statements and Information above and in Item 1A. Risk Factors in Part I of this Annual Report.

The discussion summarizing the significant factors which affected the results of operations and financial condition for the year ended December 31, 2023, including the changes in results of operations between the years ended December 31, 2023 and 2022, can be found in Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations of our Annual Report on Form 10-K for the year ended December 31, 2023, which was filed with the SEC on February 22, 2024.

Overview

Our 2024 results reflect increased demand for our services, as consolidated revenues and operating income increased as compared to 2023, primarily due to increased revenues and operating income for our Renewable Energy Infrastructure Solutions (Renewable Energy) and Electric Power Infrastructure Solutions (Electric Power) segments.

With respect to our Electric Power segment, utilities are continuing to invest significant capital in their electric power delivery systems through multi-year grid modernization and reliability programs, as well as system upgrades and hardening programs in response to recurring severe weather events. We have also experienced high demand for new and expanded transmission, substation and distribution infrastructure needed to reliably transport power. In particular, we continue to experience strong demand from our utility customers, which we believe is driven by increasing demand for electricity associated with, among other things, data centers and other technology-related dynamics, domestic manufacturing reshoring initiatives and overall electrification trends. Our acquisition of Cupertino Electric, Inc. (CEI) during 2024 also resulted in increased services for our critical path electrical design and installation solutions from the technology and data center industry.

With respect to our Renewable Energy segment, the cost-effectiveness of solar, wind energy and battery storage, combined with a meaningful increase in current and forecasted electricity demand, is continuing to drive demand for renewable generation and related infrastructure (e.g., high-voltage electric transmission, substation infrastructure and battery storage), as well as interconnection services necessary to connect and transmit renewable-generated electricity to existing electric power delivery systems. Despite these positive longer-term trends, in prior periods supply chain challenges, policy and regulatory uncertainty and other factors have resulted in project delays. For example, shortages of, and increased costs for, materials necessary for certain projects, particularly sourcing restrictions related to solar panels necessary for the utility-scale solar industry and delays in availability of power transformers impacting the electric power and renewable energy industries impacted certain prior periods.

With respect to our Underground Utility and Infrastructure Solutions (Underground and Infrastructure) segment, during 2024, operating income margin was negatively impacted by cost absorption pressures across our gas operations in the United States due to reduced demand and project delays for our industrial operations along the U.S. Gulf Coast due to Hurricanes Beryl and Francine. We continue to believe the market for our industrial solutions and gas utility and pipeline integrity services remains solid given the recurring critical-path maintenance requirements and regulated spend dedicated to modernizing systems, reducing methane emissions, ensuring environmental compliance and improving safety and reliability. However, revenues associated with large pipeline projects decreased in 2024 as compared to 2023 and 2022, and we anticipate that revenues associated with these projects will continue to fluctuate.

During 2024, increased revenues and operating income contributed to $2.08 billion of net cash provided by operating activities, a 32.1% increase compared to 2023, which allowed us to execute our business plan, including the strategic acquisition of certain businesses, for which we utilized $1.75 billion of cash, net of cash acquired, and the payment of $54.2 million in dividends associated with our common stock. Additionally, as of December 31, 2024, available commitments under our senior credit facility, combined with our cash and cash equivalents, totaled $3.35 billion.

Additionally, we entered into certain debt financing arrangements in connection with our acquisition of CEI, and on October 1, 2024, we repaid the $500.0 million aggregate principal amount of our 0.95% senior notes, which were issued in 2021. These debt financing arrangements are more fully described in Note 10 of the Notes to Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data in Part II of this Annual Report.

43

We expect the strong demand for our services will continue. Our remaining performance obligations and backlog were $16.76 billion and $34.54 billion as of December 31, 2024, representing increases of 20.6%, and 14.7% relative to December 31, 2023. For a reconciliation of backlog to remaining performance obligations, the most comparable financial measure prepared in conformity with generally accepted accounting principles in the United States (GAAP), see Non-GAAP Financial Measures below.

For additional information regarding our overall business environment, see Overview in Part I, Item 1. Business of this Annual Report.

Significant Factors Impacting Results

Our revenues, profit, margins and other results of operations can be influenced by a variety of factors in any given period, including those described in Item 1. Business and Item 1A. Risk Factors of Part I of this Annual Report, and those factors have caused fluctuations in our results in the past and are expected to cause fluctuations in our results in the future. Additional information with respect to certain of those factors is provided below.

Seasonality. Typically, our revenues are lowest in the first quarter of the year because cold, snowy or wet conditions can create challenging working environments that are more costly for our customers or cause delays on projects. In addition, infrastructure projects often do not begin in a meaningful way until our customers finalize their capital budgets, which typically occurs during the first quarter. Second quarter revenues are typically higher than those in the first quarter, as some projects begin, but continued cold and wet weather can often impact productivity. Third quarter and fourth quarter revenues are typically the highest of the year, as a greater number of projects are underway and operating conditions, including weather, are normally more accommodating. During the fourth quarter, projects are often completed and customers often seek to spend their capital budgets before year end. However, the holiday season and inclement weather can sometimes cause delays during the fourth quarter, reducing revenues and increasing costs. These seasonal impacts are typical for our U.S. operations, but seasonality for our international operations may differ. For example, revenues for certain projects in Canada are typically higher in the first quarter because projects are often accelerated in order to complete work while the ground is frozen and prior to the break up, or seasonal thaw, as productivity is adversely affected by wet ground conditions during warmer months.

Weather, natural disasters and emergencies. The results of our business in a given period can be impacted by adverse weather conditions, severe weather events, natural disasters or other emergencies, which include, among other things, heavy or prolonged snowfall or rainfall, hurricanes, tropical storms, tornadoes, floods, blizzards, extreme temperatures, wildfires, post-wildfire floods and debris flows, pandemics and earthquakes. Climate change has the potential to increase the frequency and extremity of severe weather events. These conditions and events can negatively impact our financial results due to, among other things, the termination, deferral or delay of projects, reduced productivity and exposure to significant liabilities due to failure of electrical power or other infrastructure on which we have performed services. However, severe weather events can also increase our emergency restoration services, which typically yield higher margins due in part to higher equipment utilization and absorption of fixed costs.

Demand for services. We perform the majority of our services under existing contracts, including MSAs and similar agreements pursuant to which our customers are not committed to specific volumes of our services. Therefore our volume of business can be positively or negatively affected by fluctuations in the amount of work our customers assign us in a given period, which may vary by geographic region. Examples of items that may cause demand for our services to fluctuate materially from quarter to quarter include: the financial condition of our customers, their capital spending and their access to and cost of capital; acceleration of any projects or programs by customers (e.g., modernization or hardening programs); economic and political conditions on a regional, national or global scale, including availability of renewable energy tax credits; interest rates; governmental regulations affecting the sourcing and costs of materials and equipment; other changes in U.S. and global trade relationships (e.g., tariffs, taxes); and project deferrals and cancellations.

Revenue mix and impact on margins. The mix of revenues based on the types of services we provide in a given period will impact margins, as certain industries and services provide higher-margin opportunities. Our larger or more complex projects typically include, among others, transmission projects with higher voltage capacities; pipeline projects with larger-diameter throughput capacities; large-scale renewable generation projects; complex data center projects; and projects with increased engineering, design or construction complexities, more difficult terrain or geographical requirements, or longer distance requirements. These projects typically yield opportunities for higher margins than our recurring services under MSAs described above, as we assume a greater degree of performance risk and there is greater utilization of our resources for longer construction timeframes. However, larger projects are subject to additional risk of regulatory delay and cyclicality. Project schedules also fluctuate, particularly in connection with larger, more complex or longer-term projects, which can affect the amount of work performed in a given period. Furthermore, smaller or less complex projects typically have a greater number of companies competing for them, and competitors at times may more aggressively pursue available work. A greater percentage of smaller scale or less complex work also could negatively impact margins due to the inefficiency of transitioning between a

44

greater number of smaller projects versus continuous production on fewer larger projects. As a result, at times we may choose to maintain a portion of our workforce and equipment in an underutilized capacity to ensure we are strategically positioned to deliver on larger projects when they move forward.

Project variability and performance. Margins for a single project may fluctuate period to period due to changes in the volume or type of work performed, the pricing structure under the project contract or job productivity. Additionally, our productivity and performance on a project can vary period to period based on a number of factors, including unexpected project difficulties or site conditions (including in connection with difficult geographic characteristics); project location, including locations with challenging operating conditions; whether the work is on an open or encumbered right of way; inclement weather or severe weather events; environmental restrictions or regulatory delays; protests, public activism, other political activity or legal challenges related to a project; and the performance of third parties. Moreover, we currently generate a significant portion of our revenues under fixed price contracts, and fixed price contracts are more common in connection with our larger and more complex projects that typically involve greater performance risk. Under these contracts, we assume risks related to project estimates and execution, and project revenues can vary, sometimes substantially, from our original projections due to a variety of factors, including the additional complexity, timing uncertainty or extended bidding, regulatory and permitting processes associated with these projects. These variations can result in a reduction in expected profit, the incurrence of losses on a project or the issuance of change orders and/or assertion of contract claims against customers. See Contract Estimates and Changes in Estimates in Note 4 of the Notes to Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data in Part II of this Annual Report.

Subcontract work and provision of materials. Work that is subcontracted to other service providers generally yields lower margins, and therefore an increase in subcontract work in a given period can decrease operating margins. In recent years, we have subcontracted approximately 20% of our work to other service providers. Additionally, under certain contracts, including contracts for engineering, procurement and construction services, we agree to procure all or part of the required materials. While we attempt to structure our agreements with customers and suppliers to account for the impact of increased materials procurement requirements or fluctuations in the cost of materials we procure, our margins may be lower on projects where we furnish a significant amount of materials, as our markup on materials is generally lower than our markup on labor costs, and in a given period an increase in the percentage of work with greater materials procurement requirements may decrease our overall margins, including in some cases our assuming price risk. Furthermore, fluctuations in the price or availability of materials, equipment and consumables that we or our customers utilize could impact costs to complete projects.

45

Results of Operations

Consolidated Results

The following table sets forth selected statements of operations data, such data as a percentage of revenues for the years indicated, as well as the dollar and percentage change from the prior year (dollars in thousands).

Revenues. Revenues increased due to a $1.68 billion increase in revenues from our Renewable Energy segment and a $1.47 billion increase in revenues from our Electric Power segment, partially offset by a $354.6 million decrease in revenues from our Underground and Infrastructure segment. See Segment Results below for additional information and discussion related to segment revenues.

Cost of services. Costs of services primarily includes wages, benefits, subcontractor costs, materials, equipment, and other direct and indirect costs, including related depreciation. The increase in cost of services generally correlates to the increase in revenues.

Selling, general and administrative expenses. The increase was primarily attributable to a $165.6 million increase related to recently acquired businesses; a $46.0 million increase in compensation expense, largely associated with increased salaries and non-cash stock compensation expense due primarily to an increase in the number of employees to support business growth; a $21.1 million increase in travel and related expenses to support business growth; and $18.5 million of foreign currency translation losses in connection with our substantial liquidation from Latin American operations.

Amortization of intangible assets. The increase was related to incremental amortization expense associated with recent acquisitions, including CEI.

Operating income. Operating income was positively impacted by a $278.2 million increase in operating income for our Electric Power segment and a $189.9 million increase in operating income for our Renewable Energy segment, partially offset by a $112.9 million decrease in operating income for our Underground and Infrastructure segment and a $136.7 million increase in corporate and non-allocated costs, which includes amortization expense. Results for each of our business segments and corporate and non-allocated costs are discussed in Segment Results below.

Interest and other financing expenses. Approximately half of the increase resulted from higher principal balances and lease financing transactions as compared to the year ended December 31, 2023.

Interest income. Approximately half of the increase resulted from higher interest-bearing cash and cash equivalent balances as compared to the year ended December 31, 2023.

46

Other income, net. The increase was primarily attributable to a gain of $12.6 million resulting from the sale of an investment in a non-integral unconsolidated affiliate, $5.0 million of which was attributable to a non-controlling interest, as further described in Note 8 of the Notes to Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data in Part II of this Annual Report.

Provision for income taxes. The effective income tax rates for the years ended December 31, 2024 and 2023 were 23.5% and 22.6%, respectively. The tax rate for the year ended December 31, 2024 benefited from a $55.1 million benefit due to equity incentive awards vesting at a higher fair market value than their grant date fair market value, compared to a $35.0 million benefit in the year ended December 31, 2023. Additionally, the 2024 tax rate was positively impacted by ongoing entity rationalization and restructuring efforts. These efforts resulted in a $10.2 million deferred tax benefit and the release of a $4.6 million valuation allowance during the year ended December 31, 2024. The tax rate for the year ended December 31, 2023 was favorably impacted by the realization of the loss on our investment in Starry Group Holdings, Inc. for tax purposes, and the corresponding release of the valuation allowance initially recorded during the year ended December 31, 2022. The components of our provision for income taxes including changes in our valuation allowance are quantified and described in more detail in Note 12 of the Notes to Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data in Part II of this Annual Report.

Net income attributable to non-controlling interests. The increase in net income attributable to non-controlling interests is primarily related to increased activity on certain joint ventures and the $5.0 million gain on the sale of the investment in a non-integral equity unconsolidated affiliate recorded during the year ended December 31, 2024 as described above.

Comprehensive income. See Statements of Comprehensive Income in Item 8. Financial Statements and Supplementary Data in Part II of this Annual Report. Comprehensive income increased by $42.6 million in 2024 as compared to 2023, primarily due to a $176.6 million increase in net income and $18.5 million of foreign currency translation losses recognized to net income in connection with our substantial liquidation from Latin American operations. These increases in comprehensive income were partially offset by a $134.7 million foreign currency translation adjustment loss and the $16.5 million increase in comprehensive income attributable to non-controlling interests described above. The predominant functional currencies for our operations outside the U.S. are Canadian and Australian dollars. Foreign currency translation adjustment loss in the year ended December 31, 2024 primarily resulted from the strengthening of the U.S. dollar against both the Canadian and Australian dollars as of December 31, 2024 when compared to December 31, 2023.

Segment Results

Through December 31, 2024, we reported our results under three reportable segments: Electric Power, Renewable Energy and Underground and Infrastructure. Reportable segment information, including revenues and operating income by type of work, is gathered from each of our operating companies. Classification of our operating company revenues by type of work for segment reporting purposes can at times require judgment on the part of management. Integrated operations and common administrative support for operating companies require that certain allocations be made to determine segment profitability, including allocations of corporate shared and indirect operating costs, as well as general and administrative costs. Certain corporate costs are not allocated, including 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 impairments related to goodwill and intangible assets; and change in fair value of contingent consideration liabilities.

47

The following table sets forth segment revenues, segment operating income (loss) and operating margins for the periods indicated, as well as the dollar and percentage change from the prior period (dollars in thousands):

Electric Power Segment Results

Revenues. The increase in revenues for the year ended December 31, 2024 was primarily due to approximately $1.22 billion in revenues attributable to acquired businesses in 2024 and the rising demand for our services.

Operating Income. The increase in operating income and operating margin for the year ended December 31, 2024 was primarily due to the increase in revenues and change in the overall mix of work, including an increase in higher margin emergency restoration services.

Renewable Energy Segment Results

Revenues. The increase in revenues for the year ended December 31, 2024 was primarily due to increased demand for generation and transmission services for renewable generation projects, as well as approximately $320 million in revenues attributable to acquired businesses.

Operating Income. The increase in operating income was primarily due to the increase in revenues during the year ended December 31, 2024. The increase in operating margin was primarily attributable to improved performance on transmission and generation projects, partially offset by increased costs on two solar projects in the United States.

Underground and Infrastructure Segment Results

Revenues. The decrease in revenues for the year ended December 31, 2024 was primarily due to lower revenues from large pipeline projects. This decrease was partially offset by approximately $215 million in revenues attributable to an acquired business.

Operating Income. The decrease in operating income and operating margin for the year ended December 31, 2024 was primarily due to decreased revenues and overall mix of work performed during the period, which contributed to lower levels of fixed cost absorption, and an $11.9 million loss recorded during the year ended related to the disposition of a non-core business.

Corporate and Non-Allocated Costs

The increase in corporate and non-allocated costs during the year ended December 31, 2024 was primarily due to a $93.9 million increase in intangible asset amortization expense associated with recent acquisitions, including CEI, and a $36.0 million increase in compensation expense, which was primarily attributable to increased non-cash stock compensation and salary expense in support of business growth and associated with acquisitions.

Change in Reportable Segments

Beginning in the three months ending March 31, 2025, our Chief Executive Officer reevaluated how he assesses performance and allocates resources, which resulted in a change in the reporting of management’s internal financial information. As a result, we will begin reporting the results of our two operating segments, which will also be our two reportable segments: (1) Electric Infrastructure Solutions and (2) Underground Utility and Infrastructure Solutions. The Electric Infrastructure Solutions segment will consist of the historical Electric Power and Renewable Energy segments.

48

Non-GAAP Financial Measures

EBITDA and Adjusted EBITDA

EBITDA and adjusted EBITDA, financial measures not recognized under GAAP, when used in connection with net income attributable to common stock, are intended to provide useful information to investors and analysts as they evaluate our performance. EBITDA is defined as earnings before interest and other financing expenses, taxes, depreciation and amortization, and adjusted EBITDA is defined as EBITDA adjusted for certain other items as described below. These measures should not be considered as an alternative to net income attributable to common stock or other financial measures of performance that are derived in accordance with GAAP. Management believes that the exclusion of these items from net income attributable to common stock enables us and our investors to more effectively evaluate our operations period over period and to identify operating trends that might not be apparent due to, among other reasons, the variable nature of these items period over period. In addition, management believes these measures may be useful for investors in comparing our operating results with other companies that may be viewed as our peers.

As to certain of the items below, (i) non-cash stock-based compensation expense varies from period to period due to acquisition activity, changes in the estimated fair value of performance-based awards, forfeiture rates, accelerated vesting and amounts granted; (ii) acquisition and integration costs vary from period to period depending on the level and complexity of our acquisition activity; (iii) equity in (earnings) losses of non-integral unconsolidated affiliates varies from period to period depending on the activity and financial performance of such affiliates, the operations of which are not operationally integral to us; (iv) gains and losses on the sale of investments and businesses, and foreign currency translation losses recognized from substantial liquidation of certain foreign operations vary from period to period depending on activity; and (v) change in fair value of contingent consideration liabilities varies from period to period depending on the performance in post-acquisition periods of certain acquired businesses and the effect of present value accretion on fair value calculations. Because EBITDA and adjusted EBITDA, as defined, exclude some, but not all, items that affect net income attributable to common stock, such measures may not be comparable to similarly titled measures of other companies. The most comparable GAAP financial measure, net income attributable to common stock, and information reconciling the GAAP and non-GAAP financial measures, are included below. The following table shows dollars in thousands.

(1)    The amount for the year ended December 31, 2024 is a loss of $11.9 million on the disposition of a non-core business, partially offset by a gain of $7.5 million as a result of the sale of a non-integral equity method investment.

(2)    The amount for the year ended December 31, 2024 is foreign currency translation losses in connection with our substantial liquidation from Latin American operations.

Remaining Performance Obligations and Backlog

A performance obligation is a promise in a contract with a customer to transfer a distinct good or service. Our remaining performance obligations represent management’s estimate of consolidated revenues that are expected to be realized from the

49

remaining portion of firm orders under fixed price contracts not yet completed or for which work has not yet begun, which includes estimated revenues attributable to consolidated joint ventures and variable interest entities, revenues from funded and unfunded portions of government contracts to the extent they are reasonably expected to be realized, and revenues from change orders and claims to the extent management believes they will be earned and are probable of collection.

We have also historically disclosed our backlog, a measure commonly used in our industry but not recognized under GAAP. We believe this measure enables management to more effectively forecast our future capital needs and results and better identify future operating trends that may not otherwise be apparent. We believe this measure is also useful for investors in forecasting our future results and comparing us to our competitors. Our remaining performance obligations are a component of backlog, which also includes estimated orders under MSAs, including estimated renewals, and certain non-fixed price contracts. Our methodology for determining backlog may not be comparable to the methodologies used by other companies.

As of December 31, 2024 and 2023, MSAs accounted for 38% and 45% of our estimated 12-month backlog and 48% and 55% of our total backlog. Generally, our customers are not contractually committed to specific volumes of services under our MSAs, and most of our contracts can be terminated on short notice even if we are not in default. We determine the estimated backlog for these MSAs using recurring historical trends, factoring in seasonal demand and projected customer needs based upon ongoing communications. In addition, many of our MSAs are subject to renewal, and these potential renewals are considered in determining estimated backlog. As a result, estimates for remaining performance obligations and backlog are subject to change based on, among other things, project accelerations; project cancellations or delays, including but not limited to those caused by commercial issues, regulatory requirements, natural disasters, emergencies and adverse weather conditions; and final acceptance of change orders by customers. These factors can cause revenues to be realized in periods and at levels that are different than originally projected.

The following table reconciles total remaining performance obligations to our backlog (a non-GAAP financial measure) by reportable segment, along with estimates of amounts expected to be realized within 12 months (in thousands):

The increases in both remaining performance obligations and backlog from December 31, 2023 to December 31, 2024 were partially due to the impact of acquisitions that occurred in the year ended December 31, 2024, as well as increased new project awards with existing customers.

50

Liquidity and Capital Resources

Overview

We plan to fund our working capital, capital expenditures, debt service, dividends and other cash requirements with our current available liquidity and cash from operations, which could be affected by general economic, financial, competitive, legislative, regulatory, business and other factors, many of which are beyond our control. Management monitors financial markets and national and global economic conditions for factors that may affect our liquidity and capital resources.

As set forth below, we have various short-term and long-term cash requirements and capital allocation priorities, and we intend to fund these requirements primarily with cash flow from operating activities, as well as debt financing as needed.

Cash Requirements and Capital Allocation

Cash Requirements. The following table summarizes, as of December 31, 2024, our cash requirements from contractual obligations that are due within the twelve months subsequent to December 31, 2024 and thereafter, excluding certain amounts discussed below (in thousands):

(1)    Amounts represent cash interest and other financing expenses associated primarily with our senior notes. Interest payments related to our senior credit facility and commercial paper program are not included due to their variable interest rates. With respect to this variable rate debt, assuming the principal amount outstanding and interest rate in effect as of December 31, 2024 remained the same, the annual cash interest expense would be approximately $42.1 million related to the term loan payable until October 8, 2026, the maturity date of the term loan, and $1.1 million related to the revolving loans payable until July 31, 2029, the maturity date of our senior credit facility.

(2)    Amounts represent undiscounted operating and finance lease obligations as of December 31, 2024. The corresponding amounts recorded on our December 31, 2024 consolidated balance sheet represent the present value of these amounts.

(3)    Amounts represent capital committed for the purchase of equipment. We expect that some of these orders will be assigned to third-party leasing companies and made available to us under certain of our master equipment lease agreements.

(4)    Amounts represent other purchase commitments not reflected in our consolidated balance sheet, primarily for inventory and general and administrative services, including information technology services.

(5)    Amounts represent estimates of capital commitments for investments in unconsolidated affiliates, including $45.0 million related to a limited partnership interest in a fund that targets investments in certain portfolio companies that operate businesses related to the transition to a reduced-carbon economy.

Excluded from the table above are firm purchase commitments for materials and certain subcontractor costs in the normal course of business that primarily support direct project costs on existing contractual arrangements with our customers. These firm purchase commitments are not reflected in our consolidated balance sheet and are not expected to impact future liquidity as amounts are anticipated to be included in customer billings. As of December 31, 2024, these commitments are estimated to represent approximately 10% of our annual cost of services, with the substantial majority of the commitments payable in the year ending December 31, 2025. Also excluded from the table above and not reflected in our consolidated balance sheet are our commitments to purchase certain production tax credits as described in more detail in Note 16 of the Notes to Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data in Part II of this Annual Report.

Contingent Obligations. We have various contingent obligations that could require the use of cash or impact the collection of cash in future periods; however, we are unable to accurately predict the timing and estimate the amount of such contingent obligations as of December 31, 2024. These contingent obligations generally include, among other things:

•contingent consideration liabilities, which are described further in Note 6 of the Notes to Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data in Part II of this Annual Report;

51

•undistributed earnings of foreign subsidiaries and unrecognized tax benefits, which are described further in Note 12 of the Notes to Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data in Part II of this Annual Report;

•collective bargaining agreements and multiemployer pension plan liabilities, as well as liabilities related to our deferred compensation and other employee benefit plans, which are described further in Notes 15 and 16 of the Notes to Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data in Part II of this Annual Report; and

•obligations relating to our joint ventures, lawsuits and other legal proceedings, uncollectible accounts receivable, insurance liabilities, obligations relating to letters of credit, bonds and parent guarantees, obligations relating to employment agreements, indemnities and assumed liabilities, and residual value guarantees, which are described further in Notes 4, 10, 11 and 16 of the Notes to Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data in Part II of this Annual Report.

Capital Allocation. Our capital deployment priorities that require the use of cash include: (i) working capital to fund ongoing operating needs, (ii) capital expenditures to meet anticipated demand for our services, (iii) acquisitions and investments to facilitate the long-term growth and sustainability of our business, and (iv) return of capital to stockholders, including through the payment of dividends and repurchases of our outstanding common stock. Our industry is capital intensive, and we expect substantial capital expenditures and commitments for equipment purchases and equipment lease and rental arrangements to be needed into the foreseeable future in order to meet anticipated demand for our services. We expect capital expenditures for property and equipment purchases for the year ended December 31, 2025 to be approximately $500 million to $550 million. We also expect to continue to allocate significant capital to strategic acquisitions and investments, as well as to pay dividends and to repurchase our outstanding common stock and/or debt securities.

During 2024, we completed the acquisition of eight businesses in which a portion of the consideration, net of cash acquired, consisted of $1.75 billion in cash funded partially with a combination of cash and cash equivalents, borrowings from our commercial paper program and certain other financing transactions as described in Financing Activities below.

Subsequent to December 31, 2024, we completed the acquisitions of two businesses in which a portion of the consideration consisted of $374.9 million in cash paid on each respective acquisition date funded with a combination of cash and cash equivalents and borrowings from our commercial paper program. For additional information regarding our recent acquisitions, refer to Note 6 of the Notes to Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data in Part II of this Annual Report.

We anticipate that our future cash flows from operating activities, cash and cash equivalents on hand, existing borrowing capacity under our senior credit facility and commercial paper program and ability to access capital markets for additional capital will provide sufficient funds to enable us to meet our cash requirements for the next twelve months and over the longer term.

Significant Sources of Cash

Cash flow from operating activities is primarily influenced by demand for our services and operating margins but is also influenced by the timing of working capital needs associated with the various types of services that we provide. Our working capital needs may increase when we commence large volumes of work under circumstances where project costs are required to be paid before the associated receivables are billed and collected. Working capital needs are generally higher during the summer and fall due to increased demand for our services when favorable weather conditions exist in many of our operating regions. Conversely, working capital assets are typically converted to cash during the winter. These seasonal trends can be offset by changes in project timing due to delays or accelerations and other economic factors that may affect customer spending, including market conditions or the impact of certain unforeseen events (e.g., regulatory and other actions that impact the supply chain for certain materials). Additionally, operating cash flows may be negatively impacted as a result of unpaid and delayed change orders and claims. Changes in project timing due to delays or accelerations and other economic, regulatory, market and political factors that may affect customer spending could also impact cash flow from operating activities. Further information with respect to our cash flow from operating activities is set forth below and in Note 18 of the Notes to Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data in Part II of this Annual Report.

52

Our available commitments under our senior credit facility and cash and cash equivalents as of December 31, 2024 were as follows (in thousands):

(1)    Further information with respect to our cash and cash equivalents is set forth below and in Note 17 of the Notes to Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data in Part II of this Annual Report. This amount includes $259.8 million in jurisdictions outside of the U.S., principally in Australia. There are currently no legal or economic restrictions that would materially impede our ability to repatriate such cash.

On July 31, 2024, we amended our senior credit facility to, among other things, (i) increase the aggregate commitments for revolving loans from $2.64 billion to $2.80 billion and (ii) extend the maturity date for revolving loans under the senior credit facility from October 8, 2026 to July 31, 2029. In August 2024, we issued $1.25 billion aggregate principal amount of senior notes and received net proceeds of $1.24 billion and used the proceeds to repay certain borrowings that were utilized to acquire CEI. For additional information regarding the amendment to our senior credit facility and the issuance of the senior notes, see Note 10 of the Notes to Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data in Part II of this Annual Report.

We consider our investment policies related to cash and cash equivalents to be conservative, as we maintain a diverse portfolio of what we believe to be high-quality cash and cash equivalent investments with short-term maturities. Additionally, subject to the conditions specified in the credit agreement for our senior credit facility, we have the option to increase the capacity of our senior credit facility, in the form of an increase in the revolving commitments, term loans or a combination thereof, from time to time, upon receipt of additional commitments from new or existing lenders by up to an additional (i) $400.0 million plus (ii) additional amounts so long as the Incremental Leverage Ratio Requirement (as defined in the credit agreement) is satisfied at the time of such increase. The Incremental Leverage Ratio Requirement requires, among other things, after giving pro forma effect to such increase and the use of proceeds therefrom, compliance with the credit agreement’s financial covenants as of the most recent fiscal quarter end for which financial statements were required to be delivered. Further information with respect to our debt obligations is set forth in Note 10 of the Notes to Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data in Part II of this Annual Report.

We may seek to access the capital markets from time to time to raise additional capital, increase liquidity as we deem necessary, refinance or extend the term of our existing indebtedness, fund acquisitions or otherwise fund our capital needs. While our financial strategy and consistent performance have allowed us to maintain investment grade ratings, our ability to access capital markets in the future depends on a number of factors, including our financial performance and financial position, our credit ratings, industry conditions, general economic conditions, our backlog, capital expenditure commitments, market conditions and market perceptions of us and our industry.

Sources and Uses of Cash, Cash Equivalents and Restricted Cash During the Years Ended December 31, 2024 and 2023

In summary, our cash flows for each period were as follows (in thousands):

53

Operating Activities

Net cash provided by operating activities of $2.08 billion and $1.58 billion in 2024 and 2023 primarily reflected earnings adjusted for non-cash items and cash provided and used by the main components of working capital: “Accounts and notes receivable,” “Contract assets,” “Accounts payable and accrued expenses,” and “Contract liabilities.” Net cash provided by operating activities during the year ended December 31, 2023 was negatively impacted by incremental working capital requirements and the timing of the associated billings related to the large renewable transmission project in Canada as discussed further in Note 4 of the Notes to Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data in Part II of this Annual Report.

Days sales outstanding (DSO) represents the average number of days it takes revenues to be converted into cash, which management believes is an important metric for assessing liquidity. A decrease in DSO has a favorable impact on cash flow from operating activities, while an increase in DSO has a negative impact on cash flow from operating activities. DSO is calculated by using the sum of current accounts receivable, net of allowance (which includes retainage and unbilled balances), plus contract assets less contract liabilities, and divided by average revenues per day during the quarter. DSO at December 31, 2024 was 59 days, which was lower than DSO of 68 days at December 31, 2023 and lower than our five-year historical average DSO of 79 days. This decrease in DSO as compared to December 31, 2023 was partially due to increased revenues, an increase in contract liabilities and a decrease in contract assets related to favorable billing terms on certain large projects. Negatively impacting DSO and cash flow from operating activities for both the years ended December 31, 2024 and 2023 were unapproved change orders and claims included in contract assets from the aforementioned large renewable transmission project in Canada. Also negatively impacting cash flow from operating activities for 2023 was our prepayment of amounts to suppliers for certain project materials that require a long lead time.

Investing Activities

Net cash used in investing activities in the year ended 2024 included $1.75 billion related to acquisitions, $604.1 million of capital expenditures and $81.9 million cash paid primarily for non-integral equity method investments. Partially offsetting these items were $77.6 million of proceeds from the sale of, and insurance settlements related to, property and equipment; $31.4 million of proceeds from the disposition of a non-core business; and $29.2 million of proceeds from the sale of a non-integral equity investment.

Net cash used in investing activities in 2023 included $651.6 million related to acquisitions and $434.8 million of capital expenditures. Partially offsetting these items were $69.3 million of proceeds from the sale of, and insurance settlements related to, property and equipment and $42.3 million of proceeds from the sale of certain non-integral equity investments.

Our industry is capital intensive, and we expect substantial capital expenditures and commitments for equipment purchases and equipment lease and rental arrangements to be needed for the foreseeable future in order to meet anticipated demand for our services. In addition, we expect to continue to pursue strategic acquisitions and investments, although we cannot predict the timing or amount of the cash needed for these initiatives. We also have various other capital commitments that are detailed in Cash Requirements and Capital Allocation above.

Financing Activities

In July 2024, we entered into, and borrowed the full amount available under, a $400.0 million 90-day term loan facility outside of our senior credit facility and utilized these borrowings, together with $1.20 billion of borrowings under our commercial paper program and cash on hand, to finance the acquisition of CEI, as well as pay certain related costs and expenses and fund certain working capital requirements. On August 9, 2024, we received net proceeds from the issuance of senior notes of $1.24 billion, net of the original issue discount and underwriting discounts, and used the proceeds to repay certain borrowings utilized to acquire CEI, including the full amount of the short-term term loan. Net cash provided by financing activities in the year ended December 31, 2024 included $830.8 million of net repayments under our senior credit facility and commercial paper program. Additionally, on October 1, 2024, we repaid the $500.0 million aggregate principal amount of 0.95% senior notes due October 2024. Financing costs paid directly by us during the year ended December 31, 2024 were $7.6 million, which related to the August 2024 issuance of senior notes, the short-term term loan and the amendment of our senior credit facility. Net cash used in financing activities in the year ended December 31, 2024 also included $155.6 million of payments to satisfy tax withholding obligations associated with stock-based compensation and the payment of $54.2 million of dividends.

Net cash provided by financing activities in the year ended December 31, 2023 included $408.7 million of net borrowings under our senior credit facility and commercial paper program, partially offset by $119.8 million of payments to satisfy tax withholding obligations associated with stock-based compensation and $47.8 million of dividends.

We expect to continue to utilize cash for similar financing activities in the future, including repayments of our outstanding debt, payment of cash dividends and repurchases of our common stock and/or debt securities.

54

Critical Accounting Estimates

The discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities known to exist as of the date the consolidated financial statements are published and the reported amounts of revenues and expenses recognized during the periods presented. We review all significant estimates affecting our consolidated financial statements on a recurring basis and record the effect of any necessary adjustments prior to their publication. Judgments and estimates are based on our beliefs and assumptions derived from information available at the time such judgments and estimates are made. Uncertainties with respect to such estimates and assumptions are inherent in the preparation of financial statements. There can be no assurance that actual results will not differ from those estimates. Management has reviewed its development and selection of critical accounting estimates with the Audit Committee of our Board of Directors. Our accounting policies are primarily described in Notes 2 and 4 of the Notes to Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data in Part II of this Annual Report and should be read in conjunction with the accounting policies identified below that we believe affect our more significant estimates used in the preparation of our consolidated financial statements.

Revenue Recognition - Contract Estimates and Changes in Estimates

Refer to Contract Estimates and Changes in Estimates in Note 4 of the Notes to Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data in Part II of this Annual Report for a description of a variety of factors that can cause changes in estimates and how changes in estimates on certain contracts may result in the issuance of change orders or claims under contracts for our projects. The quantitative impacts of changes in change orders and claims are also included therein.

Due to the significant judgments utilized in the revenue and cost estimation process, if subsequent actual results and/or updated assumptions or estimates were to change from those utilized as of December 31, 2024, it could result in a material impact to our results of operations. As described in Note 4 of the Notes to Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data in Part II of this Annual Report, 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 60.0% of our revenues recognized during the year ended December 31, 2024 were associated with this revenue recognition method. Refer to Contract Estimates and Changes in Estimates in Note 4 of the Notes to Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data in Part II of this Annual Report for a description of the impacts in changes in estimates on revenue and gross profit during the years ended December 31, 2024, 2023 and 2022.

Collectability of Accounts Receivable and Contract Assets

Refer to Accounts Receivable, Allowance for Credit Losses and Concentrations of Credit Risk in Note 4 of the Notes to Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data in Part II of this Annual Report for a description of how we determine our allowance for credit losses, which is based on an estimate of expected credit losses for financial instruments, primarily accounts receivable (including unbilled receivables) and contract assets, as well as activity in the allowance for credit losses.

Should anticipated collections fail to materialize, or if future economic conditions deteriorate, we could experience an increase in our allowance for credit losses. If our historical loss ratio had been 5 basis points higher or lower as of December 31, 2024, our provision for credit loss would have increased or decreased $2.9 million during the year ended December 31, 2024.

Acquisitions

Contingent Consideration. Refer to Contingent Consideration in Note 6 of the Notes to Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data in Part II of this Annual Report for a description of how contingent consideration liabilities are determined and the related assumptions and uncertainties utilized for our estimates, as well as the balances and account activity. The maximum amount payable related to these liabilities is also included therein.

Valuation of Long-Lived Assets. Refer to Notes 2 and 6 of the Notes to Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data in Part II of this Annual Report for a description of valuation of long-lived assets related to acquisitions (other intangible assets and property, plant and equipment), including assumptions and uncertainties related to our estimates, as well as amounts related to recent acquisitions. If we determine there is a change in the

55

valuation of long-lived assets during the measurement period, the change in estimate would result in a change in the amount of goodwill.

Goodwill, Other Intangible Assets and Property, Plant and Equipment

In connection with our annual goodwill assessments in 2024 and 2023, management performed a qualitative impairment assessment of our reporting units, which indicated that the fair value of our reporting units was greater than their carrying value including goodwill. Accordingly, a quantitative goodwill impairment test was not required, and no goodwill impairment was recognized in 2024 or 2023. Additionally, there were no material impairments related to other intangible assets or property, plant equipment in 2024 or 2023. Changes in facts and circumstances, judgments and assumptions used to determine these fair values, including with respect to market conditions and the economy, could result in impairment charges in the future that could be material to our financial statements.

Insurance

Refer to Notes 2 and 16 of the Notes to Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data in Part II of this Annual Report for a description of our insurance coverage, accounting policies related to insurance, accruals and related recoveries, as well as uncertainties of the related estimates. Our estimates of insurance liabilities related to employer’s liability, workers’ compensation, auto liability and general liability require us to make assumptions related to potential losses regarding our determination of amounts considered probable and estimable. We, along with our third-party actuary and third-party administrator, consider a number of factors when estimating our retained liability, including claims experience, demographic factors, severity factors and other actuarial assumptions. We periodically review our estimates and assumptions with our third-party actuary to assist us in determining the adequacy of our retained liability. As of December 31, 2024, the amount accrued for employer’s liability, workers’ compensation, auto liability and general liability totaled $373.6 million.

Although we believe that we have reasonably estimated our insurance liability, it is possible that actual results could differ from recorded retained liabilities. Our insurance liability is based on a reasonable estimate provided by our third-party actuaries based on a statistical model that considers the cumulative probability distribution of all possible loss estimates.

Income Taxes

Refer to Notes 2 and 12 of the Notes to Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data in Part II of this Annual Report for a description of our accounting policies related to income taxes, the identification and measurement of deferred tax assets and liabilities, the measurement of valuation allowances on deferred tax assets, benefits from uncertain tax positions and the amount of unrecognized tax benefits that are reasonably possible of being adjusted within 12 months due to the expiration of a statute of limitations and/or resolution of examinations with taxing authorities.

The evaluation of the recoverability of the deferred tax asset requires us to weigh all positive and negative evidence, including projected future taxable income and whether we will be able to utilize state and foreign net operating loss carryforwards, to determine whether it is more likely than not that all or some portion of the deferred tax assets will not be realized. Revisions to our forecasts, declining macroeconomic conditions or other factors could result in changes to our assessment of the realization of these deferred income tax assets.

The evaluation of uncertain tax positions involves significant estimates and judgments. Although we believe that our estimates and judgments are reasonable, we are occasionally challenged by various taxing authorities regarding the amount of taxes due. To the extent we prevail in matters for which a liability has been established, are required to pay amounts in excess of the established liability or experience a change in judgment, the change in the liability could increase or decrease income tax expense in the period of such determination.

ITEM 7.Management’s Discussion and Analysis of Financial Condition and Results of Operations

General

The following discussion and analysis of the financial condition and results of operations of Quanta Services, Inc. (together with its subsidiaries, Quanta, we, us or our) should be read in conjunction with our consolidated financial statements and related notes in Item 8. Financial Statements and Supplementary Data in Part II of this Annual Report. The discussion below contains forward-looking statements that are based upon our current expectations and are subject to uncertainty and changes in circumstances. Actual results may differ materially from these expectations due to inaccurate assumptions and known or unknown risks and uncertainties, including those identified in Cautionary Statement About Forward-Looking Statements and Information above and in Item 1A. Risk Factors in Part I of this Annual Report.

The discussion summarizing the significant factors which affected the results of operations and financial condition for the year ended December 31, 2022, including the changes in results of operations between the years ended December 31, 2022 and 2021, can be found in Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations of our Annual Report on Form 10-K for the year ended December 31, 2022, which was filed with the SEC on February 23, 2023.

Overview

Our 2023 results reflect increased demand for our services, as revenue and operating income increased in all of our segments as compared to 2022.

With respect to our Electric Power Infrastructure Solutions (Electric Power) segment, utilities are continuing to invest significant capital in their electric power delivery systems through multi-year grid modernization and reliability programs, as well as system upgrades and hardening programs in response to recurring severe weather events. We have also experienced high demand for new and expanded transmission, substation and distribution infrastructure needed to reliably transport power.

With respect to our Renewable Energy Infrastructure Solutions (Renewable Energy) segment, the transition to a reduced-carbon economy is continuing to drive demand for renewable generation and related infrastructure (e.g., high-voltage electric transmission and substation infrastructure), as well as interconnection services necessary to connect and transmit renewable-generated electricity to existing electric power delivery systems. Despite these positive longer-term trends, during 2022 and into 2023, the timing of certain projects within this segment were negatively impacted by supply chain challenges that resulted in delays and shortages of, and increased costs for, materials necessary for certain projects, particularly sourcing restrictions related to solar panels necessary for the utility-scale solar industry and delays in availability of power transformers impacting the electric power and renewable energy industries. While certain challenges associated with solar panel sourcing improved during 2023, there could be other potential supply chain challenges for renewable infrastructure project components.

With respect to our Underground Utility and Infrastructure Solutions (Underground and Infrastructure) segment, during 2022 and 2023 we experienced strong demand for our services focused on utility spending, in particular our gas distribution services to natural gas utilities that are implementing modernization programs, and our downstream industrial services, as these customers continued to move forward with certain maintenance and capital spending that was deferred during the course of the COVID-19 pandemic. Additionally, although revenues associated with large pipeline projects in Canada increased in 2022 and 2023, as compared to prior years, we anticipate that revenues associated with these projects will continue to fluctuate.

During 2023, increased revenues and operating income across all our segments contributed to $1.58 billion of net cash provided by operating activities, a 39.4% increase relative to 2022, which allowed us to execute our business plan, including the strategic acquisition of several businesses, for which we utilized $651.6 million of cash, net of cash acquired, and the payment of $47.8 million in dividends associated with our common stock. Additionally, as of December 31, 2023, available commitments under our senior credit facility, combined with our cash and cash equivalents, totaled $2.81 billion.

We expect the strong demand for our services will continue. Our remaining performance obligations and backlog were $13.89 billion and $30.11 billion as of December 31, 2023, representing increases of 57.9%, and 25.0% relative to December 31, 2022. For a reconciliation of backlog to remaining performance obligations, the most comparable financial measure prepared in conformity with generally accepted accounting principles in the United States (GAAP), see Non-GAAP Financial Measures below.

For additional information regarding our overall business environment, see Overview in Part I, Item 1. Business of this Annual Report.

Significant Factors Impacting Results

Our revenues, profit, margins and other results of operations can be influenced by a variety of factors in any given period, including those described in Item 1. Business and Item 1A. Risk Factors in Part I of this Annual Report, and those factors have

43

caused fluctuations in our results in the past and are expected to cause fluctuations in our results in the future. Additional information with respect to certain of those factors is provided below.

Seasonality. Typically, our revenues are lowest in the first quarter of the year because cold, snowy or wet conditions can create challenging working environments that are more costly for our customers or cause delays on projects. In addition, infrastructure projects often do not begin in a meaningful way until our customers finalize their capital budgets, which typically occurs during the first quarter. Second quarter revenues are typically higher than those in the first quarter, as some projects begin, but continued cold and wet weather can often impact productivity. Third quarter revenues are typically the highest of the year, as a greater number of projects are underway and operating conditions, including weather, are normally more accommodating. Generally, revenues during the fourth quarter are lower than the third quarter but higher than the second quarter, as many projects are completed and customers often seek to spend their capital budgets before year end. However, the holiday season and inclement weather can sometimes cause delays during the fourth quarter, reducing revenues and increasing costs. These seasonal impacts are typical for our U.S. operations, but seasonality for our international operations may differ. For example, revenues for certain projects in Canada are typically higher in the first quarter because projects are often accelerated in order to complete work while the ground is frozen and prior to the break up, or seasonal thaw, as productivity is adversely affected by wet ground conditions during warmer months.

Weather, natural disasters and emergencies. The results of our business in a given period can be impacted by adverse weather conditions, severe weather events, natural disasters or other emergencies, which include, among other things, heavy or prolonged snowfall or rainfall, hurricanes, tropical storms, tornadoes, floods, blizzards, extreme temperatures, wildfires, post-wildfire floods and debris flows, pandemics and earthquakes. Climate change has the potential to increase the frequency and extremity of severe weather events.These conditions and events can negatively impact our financial results due to, among other things, the termination, deferral or delay of projects, reduced productivity and exposure to significant liabilities due to failure of electrical power or other infrastructure on which we have performed services. However, severe weather events can also increase our emergency restoration services, which typically yield higher margins due in part to higher equipment utilization and absorption of fixed costs.

Demand for services. We perform the majority of our services under existing contracts, including MSAs and similar agreements pursuant to which our customers are not committed to specific volumes of our services. Therefore our volume of business can be positively or negatively affected by fluctuations in the amount of work our customers assign us in a given period, which may vary by geographic region. Examples of items that may cause demand for our services to fluctuate materially from quarter to quarter include: the financial condition of our customers, their capital spending and their access to and cost of capital; acceleration of any projects or programs by customers (e.g., modernization or hardening programs); economic and political conditions on a regional, national or global scale, including availability of renewable energy tax credits; interest rates; governmental regulations affecting the sourcing and costs of materials and equipment; other changes in U.S. and global trade relationships; and project deferrals and cancellations.

Revenue mix and impact on margins. The mix of revenues based on the types of services we provide in a given period will impact margins, as certain industries and services provide higher-margin opportunities. Our larger or more complex projects typically include, among others, transmission projects with higher voltage capacities; pipeline projects with larger-diameter throughput capacities; large-scale renewable generation projects; and projects with increased engineering, design or construction complexities, more difficult terrain or geographical requirements, or longer distance requirements. These projects typically yield opportunities for higher margins than our recurring services under MSAs described above, as we assume a greater degree of performance risk and there is greater utilization of our resources for longer construction timeframes. However, larger projects are subject to additional risk of regulatory delay and cyclicality. Project schedules also fluctuate, particularly in connection with larger, more complex or longer-term projects, which can affect the amount of work performed in a given period. Furthermore, smaller or less complex projects typically have a greater number of companies competing for them, and competitors at times may more aggressively pursue available work. A greater percentage of smaller scale or less complex work also could negatively impact margins due to the inefficiency of transitioning between a greater number of smaller projects versus continuous production on fewer larger projects. As a result, at times we may choose to maintain a portion of our workforce and equipment in an underutilized capacity to ensure we are strategically positioned to deliver on larger projects when they move forward.

Project variability and performance. Margins for a single project may fluctuate period to period due to changes in the volume or type of work performed, the pricing structure under the project contract or job productivity. Additionally, our productivity and performance on a project can vary period to period based on a number of factors, including unexpected project difficulties or site conditions (including in connection with difficult geographic characteristics); project location, including locations with challenging operating conditions; whether the work is on an open or encumbered right of way; inclement weather or severe weather events; environmental restrictions or regulatory delays; protests, public activism, other political activity or legal challenges related to a project; and the performance of third parties. Moreover, we currently generate a significant portion of our revenues under fixed price contracts, and fixed price contracts are more common in connection with our larger and more

44

complex projects that typically involve greater performance risk. Under these contracts, we assume risks related to project estimates and execution, and project revenues can vary, sometimes substantially, from our original projections due to a variety of factors, including the additional complexity, timing uncertainty or extended bidding, regulatory and permitting processes associated with these projects. These variations can result in a reduction in expected profit, the incurrence of losses on a project or the issuance of change orders and/or assertion of contract claims against customers. See Contract Estimates and Changes in Estimates in Note 4 of the Notes to Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data in Part II of this Annual Report.

Subcontract work and provision of materials. Work that is subcontracted to other service providers generally yields lower margins, and therefore an increase in subcontract work in a given period can decrease operating margins. In recent years, we have subcontracted approximately 20% of our work to other service providers. Our customers are usually responsible for supplying the materials for their projects. However, under some contracts, we agree to procure all or part of the required materials. While we attempt to structure our agreements with customers and suppliers to account for the impact of increased materials procurement requirements or fluctuations in the cost of materials we procure, our margins may be lower on projects where we furnish a significant amount of materials, as our markup on materials is generally lower than our markup on labor costs, and in a given period an increase in the percentage of work with greater materials procurement requirements may decrease our overall margins, including in some cases our assuming price risk. Furthermore, fluctuations in the price or availability of materials, equipment and consumables that we or our customers utilize could impact costs to complete projects.

Results of Operations

Consolidated Results

The following table sets forth selected statements of operations data, such data as a percentage of revenues for the years indicated, as well as the dollar and percentage change from the prior year (dollars in thousands).

* The percentage change is not meaningful.

Revenues. Revenues increased due to a $2.39 billion increase in revenues from our Renewable Energy segment, a $756.6 million increase in revenues from our Electric Power segment, and a $659.9 million increase in revenues from our Underground and Infrastructure segment. See Segment Results below for additional information and discussion related to segment revenues.

45

Cost of services. Costs of services primarily includes wages, benefits, subcontractor costs, materials, equipment, and other direct and indirect costs, including related depreciation. The increase in cost of services generally correlates to the increase in revenues.

Equity in earnings of integral unconsolidated affiliates. The decrease in equity in earnings was primarily driven by lower emergency restoration services in one of our integral affiliates.

Selling, general and administrative expenses. The increase was partially attributable to an aggregate $113.1 million increase in the following items to support business growth: compensation expense, largely associated with increased salaries and stock compensation expense due primarily to an increase in employees; bonus expense due to increased profitability; and travel and related expenses. Also contributing to the increase was a $30.7 million increase related to recently acquired businesses, including acquisition and integration costs, and a $26.5 million increase in expense related to deferred compensation liabilities. The fair market value changes in deferred compensation liabilities were largely offset by changes in the fair value of corporate-owned life insurance (COLI) assets associated with the deferred compensation plan, which are included in “Other income (expense), net” as discussed below. This increase was also attributable to an aggregate $40.7 million increase in legal and other consulting services expense, depreciation expense primarily related to our new corporate headquarters and information technology expenses.

Amortization of intangible assets. The decrease was primarily related to a $88.8 million reduction of amortization of intangible assets associated with backlog for Blattner Holding Company (Blattner), which was fully amortized by the third quarter of 2022.

Asset impairment charges. The asset impairment charges during the year ended December 31, 2022 were primarily associated with an $11.7 million charge related to a software implementation project at an acquired company, which commenced prior to our acquisition and was discontinued in the fourth quarter of 2022.

Operating income. Operating income was positively impacted by a $172.9 million increase in operating income for our Renewable Energy segment, a $54.6 million increase in operating income for our Electric Power segment and a $60.4 million increase in operating income for our Underground and Infrastructure segment, partially offset by a $32.0 million increase in corporate and non-allocated costs, which includes amortization expense. Results for each of our business segments and corporate and non-allocated costs are discussed in Segment Results below.

Interest and other financing expenses. The increase primarily resulted from the impact of higher interest rates on our outstanding variable rate debt during the year ended December 31, 2023 as compared to the year ended December 31, 2022.

Other income (expense), net. The net other expense for the year ended December 31, 2022 includes a loss of $91.5 million that resulted from the remeasurement of the fair value of our investment in Starry Group Holdings, Inc. (Starry) and a $13.8 million decrease in the mark-to-market valuation adjustment of the COLI assets associated with our deferred compensation plan, partially offset by a $25.9 million gain on the sale of an investment in a non-integral unconsolidated affiliate and $18.5 million of equity in earnings related to this non-integral unconsolidated affiliate. Other income for the year ended December 31, 2023 was favorably impacted by a $11.6 million increase in the mark-to-market valuation adjustment of the COLI assets associated with our deferred compensation plan.

Provision for income taxes. The effective income tax rates were 22.6% and 27.3% for the years ending December 31, 2023 and 2022. The decrease in our effective income tax rate in 2023 was primarily due to changes in the valuation allowance on deferred tax assets, predominantly from the realization of the loss on our investment in Starry, as well as changes in the fair market value of our company-owned life insurance investments and a tax benefit related to the vesting of equity incentive awards at a higher fair market value than their grant date fair market value. These decreases in the effective tax rate were partly offset by higher non-deductible per diem expenses related to the expiration, as of December 31, 2022, of a temporary provision that allowed for the full deduction of certain meal and entertainment costs. The components of our provision for income taxes including changes in our valuation allowance are quantified and described in more detail in Note 12 of the Notes to Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data in Part II of this Annual Report.

Net income attributable to non-controlling interests. The decrease in net income attributable to non-controlling interests is primarily related to the $10.4 million gain on sale of the investment in a non-integral equity unconsolidated affiliate recorded during the year ended December 31, 2022 as further described in Note 8 of the Notes to Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data in Part II of this Annual Report.

Comprehensive income. See Statements of Comprehensive Income in Item 8. Financial Statements and Supplementary Data in Part II of this Annual Report. Comprehensive income increased by $354.2 million in 2023 as compared to 2022, primarily due to a $239.0 million increase in net income and a $99.3 million increase related to foreign currency translation adjustments. The predominant functional currencies for our operations outside the U.S. are Canadian and Australian dollars. Foreign currency translation adjustment income in the year ended December 31, 2023 primarily resulted from the strengthening

46

of the Canadian dollar against the U.S. dollar as of December 31, 2023 when compared to December 31, 2022. Foreign currency translation loss in the year ended December 31, 2022 primarily resulted from the strengthening of the U.S. dollar against both the Australian and Canadian dollars as of December 31, 2022 when compared to December 31, 2021.

EBITDA and adjusted EBITDA. See Non-GAAP Financial Measures below for a reconciliation of EBITDA and adjusted EBITDA to net income attributable to common stock, the most comparable GAAP financial measure. EBITDA increased 21.2%, or $309.7 million, to $1.77 billion as compared to $1.46 billion for the year ended December 31, 2022, and adjusted EBITDA increased 15.6%, or $262.2 million, to $1.95 billion as compared to $1.68 billion for the year ended December 31, 2022.

Segment Results

We report our results under three reportable segments: Electric Power, Renewable Energy and Underground and Infrastructure. Reportable segment information, including revenues and operating income by type of work, is gathered from each of our operating companies. Classification of our operating company revenues by type of work for segment reporting purposes can at times require judgment on the part of management. Our operating companies may perform joint projects for customers in multiple industries, deliver multiple types of services under a single customer contract or provide service offerings to various industries. For example, we perform joint trenching projects to install distribution lines for electric power and natural gas customers. Integrated operations and common administrative support for operating companies require that certain allocations be made to determine segment profitability, including allocations of corporate shared and indirect operating costs, as well as general and administrative costs. Certain corporate costs are not allocated, including 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 impairments related to goodwill and intangible assets; and change in fair value of contingent consideration liabilities.

The following table sets forth segment revenues, segment operating income (loss) and operating margins for the periods indicated, as well as the dollar and percentage change from the prior period (dollars in thousands):

Electric Power Segment Results

Revenues. The increase in revenues for the year ended December 31, 2023 was primarily due to increased spending by our utility customers and approximately $270 million in revenues attributable to acquired businesses. These increases were partially offset by approximately $60 million in lower emergency restoration services revenues.

Operating Income. The increase in operating income for the year ended December 31, 2023 was primarily due to the increase in revenues. The decrease in operating margin compared to the year ended December 31, 2022 was due to $10.9 million of lower equity in earnings from our integral unconsolidated affiliates as discussed above, as well as lower utilization of resources in Canada. The decrease in emergency restoration services revenues, which generally deliver higher operating margin, also contributed to the decrease in operating margin. These items were partially offset by the favorable impact of margins related to telecommunication projects.

47

Renewable Energy Segment Results

Revenues. The increase in revenues for the year ended December 31, 2023 was primarily due to increased demand and improved supply chain dynamics associated with certain components for renewable generation projects, as well as approximately $225 million in revenues attributable to acquired businesses. These increases were partially offset by approximately $35 million as a result of unfavorable foreign currency exchange rates.

Operating Income. The increase in operating income was primarily due to the increase in revenues during the year ended December 31, 2023. Operating margin during the year ended December 31, 2023 was negatively impacted by variability in overall project timing and increased unabsorbed costs related to the ramping up of resources in the first half of 2023 to support the increase in project activity experienced in the second half of 2023 and into 2024. Operating income and margin for the year ended December 31, 2022 benefited from the favorable acceleration of a transmission project and was negatively impacted by $11.7 million of asset impairment charges related to a software implementation project at an acquired company, which commenced prior to our acquisition and was discontinued in the fourth quarter of 2022.

Underground and Infrastructure Segment Results

Revenues. The increase in revenues for the year ended December 31, 2023 was primarily due to higher demand from our gas utility services customers, and to a lesser extent, increased revenues associated with large pipeline projects in Canada. These increases were partially offset by approximately $55 million as a result of unfavorable foreign currency exchange rates.

Operating Income. Operating income and operating margin increased for the year ended December 31, 2023 primarily due to the increase in revenues, which contributed to higher levels of fixed cost absorption.

Corporate and Non-Allocated Costs

The increase in corporate and non-allocated costs during the year ended December 31, 2023 was primarily due to an aggregate increase of $75.0 million in costs primarily related to compensation expense, which was primarily attributable to non-cash stock compensation expense and salaries in support of business growth, and consulting fees. Also contributing to the increase was a $26.5 million increase in expense related to deferred compensation liabilities. Partially offsetting these increases was a $65.0 million decrease in intangible asset amortization primarily associated with backlog for Blattner, which was fully amortized by the third quarter of 2022.

Non-GAAP Financial Measures

EBITDA and Adjusted EBITDA

EBITDA and adjusted EBITDA, financial measures not recognized under GAAP, when used in connection with net income attributable to common stock, are intended to provide useful information to investors and analysts as they evaluate our performance. EBITDA is defined as earnings before interest and other financing expenses, taxes, depreciation and amortization, and adjusted EBITDA is defined as EBITDA adjusted for certain other items as described below. These measures should not be considered as an alternative to net income attributable to common stock or other financial measures of performance that are derived in accordance with GAAP. Management believes that the exclusion of these items from net income attributable to common stock enables us and our investors to more effectively evaluate our operations period over period and to identify operating trends that might not be apparent due to, among other reasons, the variable nature of these items period over period. In addition, management believes these measures may be useful for investors in comparing our operating results with other companies that may be viewed as our peers.

As to certain of the items below, (i) non-cash stock-based compensation expense varies from period to period due to acquisition activity, changes in the estimated fair value of performance-based awards, forfeiture rates, accelerated vesting and amounts granted; (ii) acquisition and integration costs vary from period to period depending on the level and complexity of our acquisition activity; (iii) equity in (earnings) losses of non-integral unconsolidated affiliates varies from period to period depending on the activity and financial performance of such affiliates, the operations of which are not operationally integral to us; (iv) mark-to-market adjustments on investments vary from period to period based on fluctuations in the market price of such company’s common stock; (v) gains and losses on the sale of investments vary from period to period depending on activity; (vi) asset impairment charges vary from period to period depending on economic and other factors; and (vii) change in fair value of contingent consideration liabilities varies from period to period depending on the performance in post-acquisition periods of certain acquired businesses and the effect of present value accretion on fair value calculations. Because EBITDA and adjusted EBITDA, as defined, exclude some, but not all, items that affect net income attributable to common stock, such measures may not be comparable to similarly titled measures of other companies. The most comparable GAAP financial measure, net income

48

attributable to common stock, and information reconciling the GAAP and non-GAAP financial measures, are included below. The following table shows dollars in thousands.

(1) The amount for the year ended December 31, 2022 includes $35.9 million of expenses that are associated with change of control payments as a result of the acquisition of Blattner.

(2) The amount for the year ended December 31, 2022 is a loss from a decrease in fair value of our investment in Starry.

(3) The amount for the year ended December 31, 2022 is a gain as a result of the sale of a non-integral equity method investment further described in Note 8 of the Notes to Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data in Part II of this Annual Report, and a non-marketable equity security interest in a technology company.

(4) The amount for the year ended December 31, 2022 primarily related to a software implementation project at an acquired company, which commenced prior to our acquisition and was discontinued in the fourth quarter of 2022.

Remaining Performance Obligations and Backlog

A performance obligation is a promise in a contract with a customer to transfer a distinct good or service. Our remaining performance obligations represent management’s estimate of consolidated revenues that are expected to be realized from the remaining portion of firm orders under fixed price contracts not yet completed or for which work has not yet begun, which includes estimated revenues attributable to consolidated joint ventures and variable interest entities, revenues from funded and unfunded portions of government contracts to the extent they are reasonably expected to be realized, and revenues from change orders and claims to the extent management believes they will be earned and are probable of collection.

We have also historically disclosed our backlog, a measure commonly used in our industry but not recognized under GAAP. We believe this measure enables management to more effectively forecast our future capital needs and results and better identify future operating trends that may not otherwise be apparent. We believe this measure is also useful for investors in forecasting our future results and comparing us to our competitors. Our remaining performance obligations are a component of backlog, which also includes estimated orders under MSAs, including estimated renewals, and non-fixed price contracts expected to be completed within one year. Our methodology for determining backlog may not be comparable to the methodologies used by other companies.

As of December 31, 2023 and 2022, MSAs accounted for 45% and 52% of our estimated 12-month backlog and 55% and 65% of our total backlog. Generally, our customers are not contractually committed to specific volumes of services under our MSAs, and most of our contracts can be terminated on short notice even if we are not in default. We determine the estimated backlog for these MSAs using recurring historical trends, factoring in seasonal demand and projected customer needs based upon ongoing communications. In addition, many of our MSAs are subject to renewal, and these potential renewals are

49

considered in determining estimated backlog. As a result, estimates for remaining performance obligations and backlog are subject to change based on, among other things, project accelerations; project cancellations or delays, including but not limited to those caused by commercial issues, regulatory requirements, natural disasters, emergencies and adverse weather conditions; and final acceptance of change orders by customers. These factors can cause revenues to be realized in periods and at levels that are different than originally projected.

The following table reconciles total remaining performance obligations to our backlog (a non-GAAP financial measure) by reportable segment, along with estimates of amounts expected to be realized within 12 months (in thousands):

The increases in remaining performance obligations and backlog from December 31, 2022 to December 31, 2023 were primarily attributable to multiple new project awards.

Liquidity and Capital Resources

Overview

We plan to fund our working capital, capital expenditures, debt service, dividends and other cash requirements with our current available liquidity and cash from operations, which could be affected by general economic, financial, competitive, legislative, regulatory, business and other factors, many of which are beyond our control. Management monitors financial markets and national and global economic conditions for factors that may affect our liquidity and capital resources.

As set forth below, we have various short-term and long-term cash requirements and capital allocation priorities, and we intend to fund these requirements primarily with cash flow from operating activities, as well as debt financing as needed.

50

Cash Requirements and Capital Allocation

Cash Requirements. The following table summarizes, as of December 31, 2023, our cash requirements from contractual obligations that are due within the twelve months subsequent to December 31, 2023 and thereafter, excluding certain amounts discussed below (in thousands):

(1)    Amounts represent cash interest and other financing expenses associated primarily with our senior notes. Interest payments related to our senior credit facility and notes issued under our commercial paper program are not included due to their variable interest rates, and as it relates to the commercial paper program, the short-term nature of the borrowings. With respect to this variable rate debt, assuming the principal amount outstanding and interest rate in effect as of December 31, 2023 remained the same, the annual cash interest expense would be approximately $100.2 million, payable until October 8, 2026, the maturity date of our senior credit facility.

(2)    Amounts represent undiscounted operating and finance lease obligations as of December 31, 2023. The corresponding amounts recorded on our December 31, 2023 consolidated balance sheet represent the present value of these amounts.

(3)    Amounts represent undiscounted operating lease obligations that had not commenced as of December 31, 2023. The operating lease obligations will be recorded on our consolidated balance sheet beginning on the commencement date of each lease.

(4) Amount primarily represents capital committed for the expansion of our vehicle fleet. Although we have committed to the purchase of these vehicles/equipment, at the time of their delivery, we expect that the majority of these orders will be assigned to third-party leasing companies and made available to us under certain of our master equipment lease agreements.

(5) Amounts represent capital committed for investments in unconsolidated affiliates, including $50.0 million related to a limited partnership interest in a fund that targets investments in certain portfolio companies that operate businesses related to the transition to a reduced-carbon economy. Because we are unable to determine the timing of any such investments, we have included the entire amount of our capital commitment in the “Due Thereafter” column in the above cash requirements table.

Contingent Obligations. We have various contingent obligations that could require the use of cash or impact the collection of cash in future periods; however, we are unable to accurately predict the timing and estimate the amount of such contingent obligations as of December 31, 2023. These contingent obligations generally include, among other things:

•contingent consideration liabilities, which are described further in Note 6 of the Notes to Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data in Part II of this Annual Report;

•undistributed earnings of foreign subsidiaries and unrecognized tax benefits, which are described further in Note 12 of the Notes to Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data in Part II of this Annual Report;

•collective bargaining agreements and multiemployer pension plan liabilities, as well as liabilities related to our deferred compensation and other employee benefit plans, which are described further in Notes 15 and 16 of the Notes to Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data in Part II of this Annual Report; and

•obligations relating to our joint ventures, lawsuits and other legal proceedings, uncollectible accounts receivable, insurance liabilities, obligations relating to letters of credit, bonds and parent guarantees, obligations relating to employment agreements, indemnities and assumed liabilities, and residual value guarantees, which are described further in Notes 4, 10, 11 and 16 of the Notes to Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data in Part II of this Annual Report.

51

Capital Allocation. Our capital deployment priorities that require the use of cash include: (i) working capital to fund ongoing operating needs, (ii) capital expenditures to meet anticipated demand for our services, (iii) acquisitions and investments to facilitate the long-term growth and sustainability of our business, and (iv) return of capital to stockholders, including through the payment of dividends and repurchases of our outstanding common stock. Our industry is capital intensive, and we expect substantial capital expenditures and commitments for equipment purchases and equipment lease and rental arrangements to be needed into the foreseeable future in order to meet anticipated demand for our services. We expect capital expenditures for property and equipment purchases for the year ended December 31, 2024 to be approximately $450 million. We also expect to continue to allocate significant capital to strategic acquisitions and investments, as well as to pay dividends and to repurchase our outstanding common stock and/or debt securities. During 2023, we completed the acquisition of five businesses in which a portion of the consideration, net of cash acquired, consisted of $651.6 million in cash funded with a combination of cash and cash equivalents and borrowings from our commercial paper program. In January of 2024, we completed the acquisition of two businesses in which a portion of the consideration consisted of $378.7 million in cash paid on the acquisition dates funded with a combination of cash and cash equivalents and borrowings from our commercial paper program. For additional information regarding these acquisitions, refer to Note 6 of the Notes to Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data in Part II of this Annual Report.

Significant Sources of Cash

We anticipate that our future cash flows from operating activities, cash and cash equivalents on hand, existing borrowing capacity under our senior credit facility and ability to access capital markets for additional capital will provide sufficient funds to enable us to meet our cash requirements described above for the next twelve months and over the longer term.

Cash flow from operating activities is primarily influenced by demand for our services and operating margins but is also influenced by the timing of working capital needs associated with the various types of services that we provide. Our working capital needs may increase when we commence large volumes of work under circumstances where project costs are required to be paid before the associated receivables are billed and collected. Additionally, operating cash flows may be negatively impacted as a result of unpaid and delayed change orders and claims. Changes in project timing due to delays or accelerations and other economic, regulatory, market and political factors that may affect customer spending could also impact cash flow from operating activities. Further information with respect to our cash flow from operating activities is set forth below and in Note 18 of the Notes to Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data in Part II of this Annual Report.

Our available commitments under our senior credit facility and cash and cash equivalents as of December 31, 2023 were as follows (in thousands):

(1) Amount represents unsecured notes issued under our commercial paper program, which has a maximum aggregate amount of $1.50 billion of notes outstanding at any time. Available commitments for revolving loans under our senior credit facility must be maintained to provide credit support for notes issued under our commercial paper program, and therefore such notes effectively reduce the available borrowing capacity under our senior credit facility.

(2) Further information with respect to our cash and cash equivalents is set forth below and in Note 17 of the Notes to Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data in Part II of this Annual Report. This amount includes $256.5 million in jurisdictions outside of the U.S., principally in Canada and Australia. There are currently no legal or economic restrictions that would materially impede our ability to repatriate such cash.

We consider our investment policies related to cash and cash equivalents to be conservative, as we maintain a diverse

52

portfolio of what we believe to be high-quality cash and cash equivalent investments with short-term maturities. Additionally, subject to the conditions specified in the credit agreement for our senior credit facility, we have the option to increase the capacity of our senior credit facility, in the form of an increase in the revolving commitments, term loans or a combination thereof, from time to time, upon receipt of additional commitments from new or existing lenders by up to an additional (i) $400.0 million plus (ii) additional amounts so long as the Incremental Leverage Ratio Requirement (as defined in the credit agreement) is satisfied at the time of such increase. The Incremental Leverage Ratio Requirement requires, among other things, after giving pro forma effect to such increase and the use of proceeds therefrom, compliance with the credit agreement’s financial covenants as of the most recent fiscal quarter end for which financial statements were required to be delivered. Further information with respect to our debt obligations is set forth in Note 10 of the Notes to Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data in Part II of this Annual Report.

We may also seek to access the capital markets from time to time to raise additional capital, increase liquidity as necessary, refinance or extend the term of our existing indebtedness, fund acquisitions or otherwise fund our capital needs. While our financial strategy and consistent performance have allowed us to maintain investment grade ratings, our ability to access capital markets in the future depends on a number of factors, including our financial performance and financial position, our credit ratings, industry conditions, general economic conditions, our backlog, capital expenditure commitments, market conditions and market perceptions of us and our industry.

Sources and Uses of Cash, Cash Equivalents and Restricted Cash During the Years Ended December 31, 2023 and 2022

In summary, our cash flows for each period were as follows (in thousands):

Operating Activities

Net cash provided by operating activities of $1.58 billion and $1.13 billion in 2023 and 2022 primarily reflected earnings adjusted for non-cash items and cash used by the main components of working capital: “Accounts and notes receivable,” “Contract assets,” “Prepaid expenses and other current assets,” “Accounts payable and accrued expenses,” and “Contract liabilities.” Net cash provided by operating activities during the years ended December 31, 2023 and 2022 was negatively impacted by incremental working capital requirements and the timing of the associated billings related to the large renewable transmission project in Canada as discussed further in Note 4 of the Notes to Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data in Part II of this Annual Report.

Certain payments negatively impacted net cash provided by operating activities in the year ended 2022, including $45.4 million related to change of control liabilities owed to employees of Blattner and payable in connection with our acquisition of Blattner; and $54.4 million for payments associated with deferred employer payroll taxes, which were due during the year ended December 31, 2020 but deferred pursuant to the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). Partially offsetting these items was the receipt of $100.5 million pursuant to coverage under an insurance policy related to an outcome in a legal proceeding, as further described in Legal Proceedings - Peru Project Dispute in Note 16 of the Notes to Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data in Part II of this Annual Report.

As discussed above, cash flow provided by operating activities is primarily influenced by demand for our services and operating margins but is also influenced by working capital needs. Our working capital needs may increase when we commence large volumes of work under circumstances where project costs, primarily labor, equipment and subcontractors, are required to be paid before the associated receivables are billed and collected and when we incur costs for work that is the subject of unpaid change orders and claims. Accordingly, changes within working capital in accounts receivable, contract assets and contract liabilities are normally related and are typically affected on a collective basis by changes in revenue due to the timing and volume of work performed and variability in the timing of customer billings and payments, as well as change orders and claims. Additionally, working capital needs are generally higher during the summer and fall due to increased demand for our services when favorable weather conditions exist in many of our operating regions. Conversely, working capital assets are typically converted to cash during the winter. These seasonal trends can be offset by changes in project timing due to delays or accelerations and other economic factors that may affect customer spending, including market conditions or the impact of certain unforeseen events (e.g., regulatory and other actions that impact the supply chain for certain materials).

Days sales outstanding (DSO) represents the average number of days it takes revenues to be converted into cash, which management believes is an important metric for assessing liquidity. A decrease in DSO has a favorable impact on cash flow

53

from operating activities, while an increase in DSO has a negative impact on cash flow from operating activities. DSO is calculated by using the sum of current accounts receivable, net of allowance (which includes retainage and unbilled balances), plus contract assets less contract liabilities, and divided by average revenues per day during the quarter. DSO at December 31, 2023 was 68 days, which was lower than DSO of 75 days at December 31, 2022 and our five-year historical average DSO of 84 days. This decrease in DSO as compared to December 31, 2022 was partially due to an increase in contract liabilities related to favorable billing terms on certain large projects, increased revenues and improved collection of receivables in the fourth quarter of 2023. Although the decrease in DSO had a positive impact on cash flow from operating activities, increased unapproved change orders included in contract assets from the aforementioned large renewable transmission project in Canada continue to have a negative impact on DSO and cash flow from operating activities. Also negatively impacting cash flow from operating activities for 2023 was our prepayment of amounts to suppliers for certain project materials that require a long lead time.

Days payables outstanding (DPO) represents the average number of days it takes to repay accounts payable, which management believes is an important metric for assessing liquidity. A decrease in DPO has a negative impact on cash flow from operating activities, while an increase in DPO has a favorable impact on cash flow from operating activities. DPO is calculated by using accounts payable divided by average cost of services per day during the quarter. Net cash provided by operating activities during the year ended December 31, 2023 was positively impacted by increased DPO, which was primarily the result of increased accounts payable activity on certain large renewable projects.

Investing Activities

Net cash used in investing activities in the year ended 2023 included $651.6 million related to acquisitions and $434.8 million of capital expenditures. Partially offsetting these items were $69.3 million of proceeds from the sale of, and insurance settlements related to, property and equipment and $42.3 million of cash received from the sale of investments.

Net cash used in investing activities in 2022 included $427.6 million of capital expenditures; $195.1 million related to acquisitions, primarily associated with a net working capital adjustment in connection with our acquisition of Blattner; and $78.1 million of cash paid primarily for equity method and non-marketable securities. Partially offsetting these items were $64.1 million of proceeds from the sale of, and insurance settlements related to, property and equipment and $20.6 million of cash received from the sale of investments.

Our industry is capital intensive, and we expect substantial capital expenditures and commitments for equipment purchases and equipment lease and rental arrangements to be needed for the foreseeable future in order to meet anticipated demand for our services. In addition, we expect to continue to pursue strategic acquisitions and investments, although we cannot predict the timing or amount of the cash needed for these initiatives. We also have various other capital commitments that are detailed in Cash Requirements and Capital Allocation above.

Financing Activities

Net cash provided by financing activities in the year ended December 31, 2023 included $408.7 million of net borrowings under our senior credit facility and commercial paper program, partially offset by $119.8 million of payments to satisfy tax withholding obligations associated with stock-based compensation and $47.8 million of dividends.

Net cash used in financing activities in the year ended December 31, 2022 included $127.8 million of common stock repurchases, $82.6 million of payments to satisfy tax withholding obligations associated with stock-based compensation; $41.1 million of dividends; and $23.4 million of net payments under our senior credit facility and commercial paper program.

We expect to continue to utilize cash for similar financing activities in the future, including repayments of our outstanding debt, payment of cash dividends and repurchases of our common stock and/or debt securities.

Critical Accounting Estimates

The discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities known to exist as of the date the consolidated financial statements are published and the reported amounts of revenues and expenses recognized during the periods presented. We review all significant estimates affecting our consolidated financial statements on a recurring basis and record the effect of any necessary adjustments prior to their publication. Judgments and estimates are based on our beliefs and assumptions derived from information available at the time such judgments and estimates are made. Uncertainties with respect to such estimates and assumptions are inherent in the preparation of financial statements. There can be no assurance that actual results will not differ from those estimates. Management has reviewed its development and selection of critical accounting estimates with the audit committee of our Board of Directors. Our accounting policies are primarily described in Notes 2 and 4 of the Notes to Consolidated Financial

54

Statements in Item 8. Financial Statements and Supplementary Data in Part II of this Annual Report and should be read in conjunction with the accounting policies identified below that we believe affect our more significant estimates used in the preparation of our consolidated financial statements.

Revenue Recognition - Contract Estimates and Changes in Estimates

Refer to Contract Estimates and Changes in Estimates in Note 4 of the Notes to Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data in Part II of this Annual Report for a description of a variety of factors that can cause changes in estimates and how changes in estimates on certain contracts may result in the issuance of change orders or claims under contracts for our projects. The quantitative impacts of changes in estimates and change orders and claims are also included therein.

Due to the significant judgments utilized in the revenue and cost estimation process, if subsequent actual results and/or updated assumptions or estimates were to change from those utilized as of December 31, 2023, it could result in a material impact to our results of operations. As described in Note 4 of the Notes to Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data in Part II of this Annual Report, under fixed price contracts, as well as unit-price contracts with more than an insignificant amount of partially completed units, revenue is recognized as performance obligations are satisfied over time. Approximately 56.5% of our revenues recognized during the year ended December 31, 2023 were associated with this revenue recognition method. There were no material changes in estimates impacting revenues or gross profit during the years ended December 31, 2023, 2022 and 2021 other than a 5.7% favorable impact to gross profit that resulted from net positive changes in estimates across a large number of projects in the year ended December 31, 2021, primarily as a result of favorable performance and successful mitigation of risks and contingencies as the projects progressed to completion.

Collectibility of Accounts Receivable and Contract Assets

Refer to Accounts Receivable, Allowance for Credit Losses and Concentrations of Credit Risk in Note 4 of the Notes to Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data in Part II of this Annual Report for a description of how we determine our allowance for credit losses, which is based on an estimate of expected credit losses for financial instruments, primarily accounts receivable (including unbilled receivables) and contract assets, as well as activity in allowance for credit losses.

Should anticipated collections fail to materialize, or if future economic conditions deteriorate, we could experience an increase in our allowance for credit losses. If our historical loss ratio had been 5 basis points higher or lower as of December 31, 2023, our provision for credit loss would have increased or decreased $2.6 million during the year ended December 31, 2023.

Acquisitions

Contingent Consideration. Refer to Contingent Consideration in Note 6 of the Notes to Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data in Part II of this Annual Report for a description of how contingent consideration liabilities are determined and the related assumptions and uncertainties utilized for our estimates, as well as the balances and account activity. The maximum amount payable related to these liabilities is also included therein.

Valuation of Long-Lived Assets. Refer to Notes 2 and 6 of the Notes to Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data in Part II of this Annual Report for a description of valuation of long-lived assets related to acquisitions (other intangible assets and property, plant and equipment), including assumptions and uncertainties related to our estimates, as well as amounts related to recent acquisitions. If we determine there is a change in the valuation of long-lived assets during the measurement period, the change in estimate would result in a change in the amount of goodwill.

Goodwill, Other Intangible Assets and Property, Plant and Equipment

In connection with our annual goodwill assessments in 2023 and 2022, management performed a qualitative impairment assessment of our reporting units, which indicated that the fair value of our reporting units was greater than their carrying value including goodwill. Accordingly, a quantitative goodwill impairment test was not required, and no goodwill impairment was recognized in 2023 or 2022. Additionally, there were no material impairments related to other intangible assets or property, plant equipment in 2023 or 2022. Changes in facts and circumstances, judgments and assumptions used to determine these fair values, including with respect to market conditions and the economy, could result in impairment charges in the future that could be material to our financial statements.

55

Insurance

Refer to Notes 2 and 16 of the Notes to Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data in Part II of this Annual Report for a description of our insurance coverage, accounting policies related to insurance, accruals and related recoveries, as well as uncertainties of the related estimates. Our estimates of insurance liabilities related to employer’s liability, workers’ compensation, auto liability and general liability require us to make assumptions related to potential losses regarding our determination of amounts considered probable and estimable. We, along with our third-party actuary and third-party administrator, consider a number of factors when estimating our retained liability, including claims experience, demographic factors, severity factors and other actuarial assumptions. We periodically review our estimates and assumptions with our third-party actuary to assist us in determining the adequacy of our retained liability. As of December 31, 2023, the amount accrued for employer’s liability, workers’ compensation, auto liability and general liability totaled $327.3 million.

Although we believe that we have reasonably estimated our insurance liability, it is possible that actual results could differ from recorded retained liabilities. Our insurance liability is based on a reasonable estimate provided by our third-party actuaries based on a statistical model that considers the cumulative probability distribution of all possible loss estimates.

Income Taxes

Refer to Notes 2 and 12 of the Notes to Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data in Part II of this Annual Report for a description of our accounting policies related to income taxes, the identification and measurement of deferred tax assets and liabilities, the measurement of valuation allowances on deferred tax assets, benefits from uncertain tax positions and the amount of unrecognized tax benefits that are reasonably possible of being adjusted within 12 months due to the expiration of a statute of limitations and/or resolution of examinations with taxing authorities.

The evaluation of the recoverability of the deferred tax asset requires us to weigh all positive and negative evidence, including projected future taxable income and whether we will be able to utilize state and foreign net operating loss carryforwards, to determine whether it is more likely than not that all or some portion of the deferred tax assets will not be realized. Revisions to our forecasts, declining macroeconomic conditions or other factors could result in changes to our assessment of the realization of these deferred income tax assets.

The evaluation of uncertain tax positions involves significant estimates and judgments. Although we believe that our estimates and judgments are reasonable, we are occasionally challenged by various taxing authorities regarding the amount of taxes due. To the extent we prevail in matters for which a liability has been established, are required to pay amounts in excess of the established liability or experience a change in judgment, the change in the liability could increase or decrease income tax expense in the period of such determination.

ITEM 7.Management’s Discussion and Analysis of Financial Condition and Results of Operations

General

The following discussion and analysis of the financial condition and results of operations of Quanta Services, Inc. (together with its subsidiaries, Quanta, we, us or our) should be read in conjunction with our consolidated financial statements and related notes in Item 8. Financial Statements and Supplementary Data of this Annual Report. The discussion below contains forward-looking statements that are based upon our current expectations and are subject to uncertainty and changes in circumstances. Actual results may differ materially from these expectations due to inaccurate assumptions and known or unknown risks and uncertainties, including those identified in Cautionary Statement About Forward-Looking Statements and Information above and in Item 1A. Risk Factors of this Annual Report.

The discussion summarizing the significant factors which affected the results of operations and financial condition for the year ended December 31, 2021, including the changes in results of operations between the years ended December 31, 2021 and 2020, can be found in Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations of our Annual Report on Form 10-K for the year ended December 31, 2021, which was filed with the SEC on February 25, 2022.

Overview

Overall, our 2022 results reflect increased demand for our services, as revenue and operating income increased in all our segments as compared to 2021.

With respect to our Electric Power Infrastructure Services segment, utilities are continuing to invest significant capital in their electric power delivery systems through multi-year grid modernization and reliability programs, as well as with respect to system upgrades and hardening programs in response to recurring severe weather events. We have also experienced high demand for new and expanded transmission, substation and distribution infrastructure needed to reliably transport power.

With respect to our Renewable Energy Infrastructure Solutions segment, the transition to a reduced-carbon economy is continuing to drive demand for renewable generation and related infrastructure (e.g., high-voltage electric transmission and substation infrastructure), as well as interconnection services necessary to connect and transmit renewable-generated electricity to existing electric power delivery systems. Our acquisition of Blattner in the fourth quarter of 2021 had a significant incremental impact on our ability to perform these services during 2022. Despite these positive longer-term trends, certain of our customers experienced supply chain challenges during 2022 that resulted in delays and shortages of, and increased costs for, materials necessary for certain projects, particularly sourcing restrictions related to solar panels necessary for the utility scale solar industry.

With respect to our Underground Utility and Infrastructure Solutions segment, in 2022 we continued to experience strong demand for our services focused on utility spending, in particular our gas distribution services to natural gas utilities that are implementing modernization programs, and our downstream industrial services, as these customers continued to move forward with certain maintenance and capital spending that was deferred during the course of the COVID-19 pandemic. Our revenues with respect to larger pipeline services have also fluctuated in recent years, and we had a significant increase in larger pipeline projects in Canada in 2022 as compared to 2021.

Increased revenues and operating income across all our segments during 2022 generated $1.1 billion of cash provided by operating activities, a 94.1% increase relative to 2021, which allowed us to execute our business plan, repurchase $128 million of common stock and pay $41 million of dividends. Available commitments under our senior credit facility and cash and cash equivalents as of December 31, 2022 was $2.4 billion.

We expect the strong demand for our services will continue. Our remaining performance obligations and backlog as of December 31, 2022 of $8.8 billion and $24.1 billion increased 49.3%, and 25.0%, respectively, relative to 2021. For a reconciliation of backlog to remaining performance obligations, the most comparable financial measure prepared in conformity with generally accepted accounting principles in the United States (GAAP), see Non-GAAP Financial Measures below.

For additional information regarding our overall business environment, see Overview in Part I, Item 1. Business of this Annual Report.

Significant Factors Impacting Results

Our revenues, profit, margins and other results of operations can be influenced by a variety of factors in any given period, including those described in Item 1. Business and Item 1A. Risk Factors of this Annual Report, and those factors have caused fluctuations in our results in the past and are expected to cause fluctuations in our results in the future. Additional information with respect to certain of those factors is provided below.

42

Seasonality. Typically, our revenues are lowest in the first quarter of the year because cold, snowy or wet conditions can create challenging working environments that are more costly for our customers or cause delays on projects. In addition, infrastructure projects often do not begin in a meaningful way until our customers finalize their capital budgets, which typically occurs during the first quarter. Second quarter revenues are typically higher than those in the first quarter, as some projects begin, but continued cold and wet weather can often impact productivity. Third quarter revenues are typically the highest of the year, as a greater number of projects are underway and operating conditions, including weather, are normally more accommodating. Generally, revenues during the fourth quarter are lower than the third quarter but higher than the second quarter, as many projects are completed and customers often seek to spend their capital budgets before year end. However, the holiday season and inclement weather can sometimes cause delays during the fourth quarter, reducing revenues and increasing costs. These seasonal impacts are typical for our U.S. operations, but seasonality for our international operations may differ. For example, revenues for certain projects in Canada are typically higher in the first quarter because projects are often accelerated in order to complete work while the ground is frozen and prior to the break up, or seasonal thaw, as productivity is adversely affected by wet ground conditions during warmer months.

Weather, natural disasters and emergencies. The results of our business in a given period can be impacted by adverse weather conditions, severe weather events, natural disasters or other emergencies, which include, among other things, heavy or prolonged snowfall or rainfall, hurricanes, tropical storms, tornadoes, floods, blizzards, extreme temperatures, wildfires, post-wildfire floods and debris flows, pandemics and earthquakes. These conditions and events can negatively impact our financial results due to, among other things, the termination, deferral or delay of projects, reduced productivity and exposure to significant liabilities. However, severe weather events can also increase our emergency restoration services, which typically yield higher margins due in part to higher equipment utilization and absorption of fixed costs.

Demand for services. We perform the majority of our services under existing contracts, including MSAs and similar agreements pursuant to which our customers are not committed to specific volumes of our services. Therefore our volume of business can be positively or negatively affected by fluctuations in the amount of work our customers assign us in a given period, which may vary by geographic region. Examples of items that may cause demand for our services to fluctuate materially from quarter to quarter include: the financial condition of our customers, their capital spending and their access to capital; acceleration of any projects or programs by customers (e.g., modernization or hardening programs); economic and political conditions on a regional, national or global scale, including availability of renewable energy tax credits; interest rates; governmental regulations affecting the sourcing and costs of materials and equipment; other changes in U.S. and global trade relationships; and project deferrals and cancellations.

Revenue mix and impact on margins. The mix of revenues based on the types of services we provide in a given period will impact margins, as certain industries and services provide higher-margin opportunities. Our larger or more complex projects typically include, among others, transmission projects with higher voltage capacities; pipeline projects with larger-diameter throughput capacities; large-scale renewable generation projects; and projects with increased engineering, design or construction complexities, more difficult terrain or geographical requirements, or longer distance requirements. These projects typically yield opportunities for higher margins than our recurring services under MSAs described above, as we assume a greater degree of performance risk and there is greater utilization of our resources for longer construction timeframes. However, larger projects are subject to additional risk of regulatory delay and cyclicality. Project schedules also fluctuate, particularly in connection with larger, more complex or longer-term projects, which can affect the amount of work performed in a given period. Furthermore, smaller or less complex projects typically have a greater number of companies competing for them, and competitors at times may more aggressively pursue available work. A greater percentage of smaller scale or less complex work also could negatively impact margins due to the inefficiency of transitioning between a greater number of smaller projects versus continuous production on fewer larger projects. As a result, at times we may choose to maintain a portion of our workforce and equipment in an underutilized capacity to ensure we are strategically positioned to deliver on larger projects when they move forward.

Project variability and performance. Margins for a single project may fluctuate period to period due to changes in the volume or type of work performed, the pricing structure under the project contract or job productivity. Additionally, our productivity and performance on a project can vary period to period based on a number of factors, including unexpected project difficulties or site conditions (including in connection with difficult geographic characteristics); project location, including locations with challenging operating conditions; whether the work is on an open or encumbered right of way; inclement weather or severe weather events; environmental restrictions or regulatory delays; protests, other political activity or legal challenges related to a project; the performance of third parties; and the impact of the COVID-19 pandemic. Moreover, we currently generate a significant portion of our revenues under fixed price contracts, and fixed price contracts are more common in connection with our larger and more complex projects that typically involve greater performance risk. Under these contracts, we assume risks related to project estimates and execution, and project revenues can vary, sometimes substantially, from our original projections due to a variety of factors, including the additional complexity, timing uncertainty or extended bidding, regulatory and permitting processes associated with these projects. These variations can result in a reduction in expected profit,

43

the incurrence of losses on a project or the issuance of change orders and/or assertion of contract claims against customers. See Revenue Recognition - Contract Estimates and Changes in Estimates in Note 4 of the Notes to Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data in Part II of the 2022 Annual Report.

Subcontract work and provision of materials. Work that is subcontracted to other service providers generally yields lower margins, and therefore an increase in subcontract work in a given period can decrease operating margins. In recent years, we have subcontracted approximately 20% of our work to other service providers. Our customers are usually responsible for supplying the materials for their projects. However, under some contracts, including contracts for projects where we provide EPC services, we agree to procure all or part of the required materials. Margins may be lower on projects where we furnish a significant amount of materials, as our markup on materials is generally lower than our markup on labor costs, and in a given period an increase in the percentage of work with greater materials procurement requirements may decrease our overall margins, including in some cases our assuming price risk. Furthermore, as described further in Item 1. Business, fluctuations in the price or availability of materials, equipment and consumables that we or our customers utilize could impact costs to complete projects.

Results of Operations

Consolidated Results

The following table sets forth selected statements of operations data, such data as a percentage of revenues for the years indicated, as well as the dollar and percentage change from the prior year (dollars in thousands). The results of acquired businesses have been included in the following results of operations since their respective acquisition dates.

* The percentage change is not meaningful.

44

Revenues. Revenues increased due to a $1.95 billion increase in revenues from our Renewable Energy Infrastructure Solutions segment, a $1.32 billion increase in revenues from our Electric Power Infrastructure Solutions segment, and a $824.4 million increase in revenues from our Underground Utility and Infrastructure Solutions segment. See Segment Results below for additional information and discussion related to segment revenues.

Cost of services. Costs of services primarily includes wages, benefits, subcontractor costs, materials, equipment, and other direct and indirect costs, including related depreciation. The increase in cost of services generally correlates to the increase in revenues.

Equity in earnings of integral unconsolidated affiliates. The increase was primarily driven by our LUMA joint venture. For additional information, see Note 8 of the Notes to Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data of this Annual Report.

Selling, general and administrative expenses. The increase was primarily attributable to a $149.7 million increase in expenses associated with acquired businesses. Also contributing to the increase were the following items to support business growth: a $32.8 million increase in compensation expense, primarily associated with increased salaries and non-cash stock compensation expense; a $25.2 million increase in travel and related expenses; and a $7.7 million increase in rent and information technology expenses. Partially offsetting these increases was a $23.6 million decrease in expense related to deferred compensation liabilities. The fair market value changes in deferred compensation liabilities were largely offset by changes in the fair value of corporate-owned life insurance (COLI) assets associated with the deferred compensation plan, which are included in “Other (expense) income, net” as discussed below. Also partially offsetting these increases was a specific provision for credit loss of $31.7 million recorded in 2021.

Amortization of intangible assets. The increase was primarily related to $196.3 million of incremental amortization of intangible assets associated with recently acquired businesses, driven by the acquisition of Blattner, partially offset by reduced amortization expense associated with older acquired intangible assets, as certain of these assets became fully amortized.

Asset impairment charges. The increase was primarily due to $11.7 million of asset impairment charges related to a software implementation project at an acquired company, which commenced prior to our acquisition and was discontinued in the fourth quarter of 2022.

Change in fair value of contingent consideration liabilities. Contingent consideration liabilities are payable in the event prescribed performance objectives are achieved by certain acquired businesses during designated post-acquisition periods. Future changes in fair value are expected to be recorded periodically until the contingent consideration liabilities are settled. For additional information regarding these liabilities, see Note 6 of the Notes to Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data of this Annual Report.

Operating income. Operating income for the Electric Power Infrastructure Solutions, Renewable Energy Infrastructure Solutions and Underground Utility and Infrastructure Solutions segments increased $93.4 million, $122.4 million and $167.4 million, respectively. These increases were partially offset by an increase in Corporate and Non-Allocated Costs of $174.6 million, which includes amortization expense. Results for each of our business segments and Corporate and Non-Allocated Costs are discussed in the Segment Results section below.

EBITDA and adjusted EBITDA. EBITDA increased 31.5%, or $350.9 million, to $1.46 billion as compared to $1.11 billion for the year ended December 31, 2021, and adjusted EBITDA increased 33.8%, or $425.8 million, to $1.68 billion as compared to $1.26 billion for the year ended December 31, 2021. For a reconciliation of EBITDA and adjusted EBITDA to net income attributable to common stock, the most comparable GAAP financial measure, see Non-GAAP Financial Measures below.

Interest and other financing expenses. Approximately two-thirds of the increase resulted from higher debt outstanding during 2022 as compared to 2021. Our long-term debt increased significantly at the end of 2021 in connection with our acquisition of Blattner. The remaining increase was primarily driven by higher interest rates impacting our variable rate debt.

Interest income. Interest income decreased during the year ended December 31, 2022 primarily due to interest received during the year ended December 31, 2021 related to a settlement with a customer.

Other (expense) income, net. The net other expense for the year ended December 31, 2022 was primarily the result of an unrealized loss of $91.5 million resulting from the remeasurement of the fair value of our investment in a publicly traded broadband technology provider, Starry Group Holdings, Inc. (Starry), based on the market price of Starry’s common stock as of December 31, 2022. Also included in other (expense) income, net was a $13.8 million mark-to-market loss in 2022 compared to a $8.6 million mark-to-market gain in 2021 associated with our deferred compensation plan. This amount was largely offset by corresponding changes in the fair market value of the liabilities associated with our deferred compensation plan, which are recorded in selling, general, and administrative expenses, as discussed above. Partially offsetting these increases in expenses

45

were a $25.9 million gain on the sale of an investment in a non-integral unconsolidated affiliate recognized in the fourth quarter of 2022, of which $10.4 million was attributable to a non-controlling interest as noted below, and an $18.2 million increase in equity in earnings of non-integral affiliates.

Provision for income taxes. The effective tax rates for the years ended December 31, 2022 and 2021 were 27.3% and 21.0%. The higher effective tax rate is primarily attributable to the recognition of a $22.7 million valuation allowance resulting from the unrealized loss on our investment in Starry described above, and a year over year increase in tax expense of $9.9 million driven by mark-to-market accounting on corporate-owned life insurance products associated with our deferred compensation plan. If the Starry losses become realized for tax purposes, we could release a portion of the valuation allowance by the amount Starry losses offset certain capital gains. For additional information regarding our provision for income taxes, see Note 12 of the Notes to Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data of this Annual Report.

Net income attributable to non-controlling interests. The increase in net income attributable to non-controlling interests is primarily related to the $10.4 million gain on sale of the investment in a non-integral equity unconsolidated affiliate. See Note 8 of the Notes to Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data of this Annual Report.

Comprehensive income. See Statements of Comprehensive Income in Item 8. Financial Statements and Supplementary Data of this Annual Report. Comprehensive income decreased by $63.1 million in 2022 as compared to 2021, primarily due to higher foreign currency translation adjustments losses and the aforementioned increase in net income attributable to non-controlling interests, partly offset by higher net income. The predominant functional currencies for our operations outside the U.S. are Canadian and Australian dollars. The $66.8 million increase in foreign currency translation loss in the year ended December 31, 2022 primarily resulted from the strengthening of the U.S. dollar against both the Canadian and Australian dollars as of December 31, 2022 when compared to December 31, 2021.

46

Segment Results

We report our results under three reportable segments: Electric Power Infrastructure Solutions, Renewable Energy Infrastructure Solutions and Underground Utility and Infrastructure Solutions. Reportable segment information, including revenues and operating income by type of work, is gathered from each of our operating companies. Classification of our operating company revenues by type of work for segment reporting purposes can at times require judgment on the part of management. Our operating companies may perform joint projects for customers in multiple industries, deliver multiple types of services under a single customer contract or provide service offerings to various industries. For example, we perform joint trenching projects to install distribution lines for electric power and natural gas customers. Integrated operations and common administrative support for operating companies require that certain allocations be made to determine segment profitability, including allocations of corporate shared and indirect operating costs, as well as general and administrative costs. Certain corporate costs are not allocated, including 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 impairments related to goodwill and intangible assets; and change in fair value of contingent consideration liabilities.

The following table sets forth segment revenues, segment operating income (loss) and operating margins for the periods indicated, as well as the dollar and percentage change from the prior period (dollars in thousands):

Electric Power Infrastructure Solutions Segment Results

Revenues. The increase in revenues for the year ended December 31, 2022 was primarily due to increased spending by our utility customers on grid modernization and hardening, resulting in increased demand for our electric power services, as well as approximately $280 million in revenues attributable to acquired businesses. This increase was partially offset by approximately $145 million in lower emergency restoration services revenues and foreign exchange impacts of approximately $23 million.

Operating Income. Operating income increased for the year ended December 31, 2022 primarily due to the increase in revenues explained above. Operating margin decreased during the year ended December 31, 2022 from lower equipment utilization and fixed cost absorption and less favorable results associated with inefficiencies attributable to supply chain disruptions impacting certain operations, and elevated consumable costs. Lower emergency restoration services revenues, which generally deliver higher margin, also contributed to the decrease in operating margin, as well as less favorable results associated with variability across our portfolio of projects. The decrease in operating margin was partially offset by improved performance on various communication projects in 2022, and the absence of losses associated with certain communication projects in 2021 from various production issues, poor subcontractor performance, challenging site conditions, permitting delays, increased completion costs and adverse weather impacts. Equity in earnings from LUMA and other integral unconsolidated affiliates increased $8.4 million in 2022 as compared to the year ended December 31, 2021.

Renewable Energy Infrastructure Solutions Segment Results

Revenues. The increase in revenues for the year ended December 31, 2022 was primarily due to approximately $1.51 billion in revenues attributable to acquired businesses, primarily Blattner, which was acquired in October 2021. The remaining

47

increase in revenues was primarily due to increased customer demand for renewable transmission and interconnection construction services. These increases were partially offset by foreign exchange impacts of approximately $25 million.

Operating Income. The increase in operating income was primarily due to the increase in revenues associated with the acquisition of Blattner. The decrease in operating margin was attributable to lower margins on a large renewable transmission project in Canada, a change in the mix of work due to acquisitions, primarily Blattner, project delays and operating inefficiencies due to regulatory and supply chain challenges in the utility scale solar industry and less favorable results associated with normal variability in overall project timing. Partially offsetting these decreases, operating margin improved relative to 2021 as a result of a large renewable transmission project in the United States. Operating income for the renewable segment also included $11.7 million of asset impairment charges related to a software implementation project at an acquired company, which commenced prior to our acquisition and was discontinued in the fourth quarter of 2022. Additionally, there were favorable close-outs of certain projects during the year ended December 31, 2021 as compared to the year ended December 31, 2022.

Underground Utility and Infrastructure Solutions Segment Results

Revenues. The increase in revenues for the year ended December 31, 2022 was primarily due to increased revenues associated with higher demand from our gas utility and industrial customers, which began to move forward with certain deferred maintenance and capital spending during the year ended December 31, 2022, as well as an increase in revenues associated with large pipeline projects in Canada and Australia and approximately $40 million in revenues attributable to acquired businesses. These increases were partially offset by foreign exchange impacts of approximately $62 million.

Operating Income. The increase in operating income and operating margin for the year ended December 31, 2022 was primarily due to the increase in revenues, which contributed to higher levels of fixed cost absorption. Also contributing to the increase were improved performance across the segment from better project execution and resource utilization, particularly with respect to our industrial services operations and large pipeline services in Canada, and more favorable results associated with normal variability in overall project timing and project mix. Additionally, our performance in this segment was impacted less by the COVID-19 pandemic and challenges in the overall energy market during the year ended December 31, 2022 as compared to the year ended December 31, 2021. Also contributing to the increase in 2022 compared to 2021 was the recognition of a specific provision for credit loss of $31.7 million recorded in 2021.

Corporate and Non-Allocated Costs

The increase in corporate and non-allocated costs during the year ended December 31, 2022 was primarily due to a $188.6 million increase in intangible asset amortization, largely associated with the acquisition of Blattner, and an increase in compensation expense along with general and administrative expenses resulting from the growth of the business. These increases were partially offset by a $23.0 million decrease in expense related to deferred compensation liabilities due to market fluctuations.

Non-GAAP Financial Measures

EBITDA and Adjusted EBITDA

EBITDA and adjusted EBITDA, financial measures not recognized under GAAP, when used in connection with net income attributable to common stock, are intended to provide useful information to investors and analysts as they evaluate our performance. EBITDA is defined as earnings before interest and other financing expenses, taxes, depreciation and amortization, and adjusted EBITDA is defined as EBITDA adjusted for certain other items as described below. These measures should not be considered as an alternative to net income attributable to common stock or other financial measures of performance that are derived in accordance with GAAP. Management believes that the exclusion of these items from net income attributable to common stock enables Quanta and its investors to more effectively evaluate our operations period over period and to identify operating trends that might not be apparent when including the excluded items.

As to certain of the items below, (i) non-cash stock-based compensation expense varies from period to period due to acquisition activity, changes in the estimated fair value of performance-based awards, forfeiture rates, accelerated vesting and amounts granted; (ii) acquisition and integration costs vary from period to period depending on the level of our acquisition activity; (iii) equity in (earnings) losses of non-integral unconsolidated affiliates varies from period to period depending on the activity and financial performance of such affiliates, the operations of which are not operationally integral to us; (iv) unrealized mark-to-market adjustments on our investment in a publicly traded company vary from period to period based on fluctuations in the market price of such company’s common stock; (v) gains and losses on the sale of investments vary from period to period depending on activity; (vi) asset impairment charges vary from period to period depending on economic and other factors; and (vii) change in fair value of contingent consideration liabilities varies from period to period depending on the performance in

48

post-acquisition periods of certain acquired businesses and the effect of present value accretion on fair value calculations. Because EBITDA and adjusted EBITDA, as defined, exclude some, but not all, items that affect net income attributable to common stock, such measures may not be comparable to similarly titled measures of other companies. The most comparable GAAP financial measure, net income attributable to common stock, and information reconciling the GAAP and non-GAAP financial measures, are included below. The following table shows dollars in thousands.

(1) The amounts for the years ended December 31, 2022 and 2021 include, among other things, $35.9 million and $10.0 million of expenses that are associated with change of control payments as a result of the acquisition of Blattner.

(2) The amount for the year ended December 31, 2022 is an unrealized loss from a decrease in fair value of our investment in Starry, as further described in Note 8 of the Notes to Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data of this Annual Report.

(3) The amount for the year ended December 31, 2022 is a gain as a result of the sale of a non-integral equity method investment further described in Note 8 of the Notes to Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data of this Annual Report, and a non-marketable equity security interest in a technology company.

(4) The amount for the year ended December 31, 2022 primarily relates to an impairment of a software implementation project, which was discontinued during the fourth quarter of 2022.

Remaining Performance Obligations and Backlog

A performance obligation is a promise in a contract with a customer to transfer a distinct good or service. Our remaining performance obligations represent management’s estimate of consolidated revenues that are expected to be realized from the remaining portion of firm orders under fixed price contracts not yet completed or for which work has not yet begun, which includes estimated revenues attributable to consolidated joint ventures and variable interest entities, revenues from funded and unfunded portions of government contracts to the extent they are reasonably expected to be realized, and revenues from change orders and claims to the extent management believes they will be earned and are probable of collection.

We have also historically disclosed our backlog, a measure commonly used in our industry but not recognized under GAAP. We believe this measure enables management to more effectively forecast our future capital needs and results and better identify future operating trends that may not otherwise be apparent. We believe this measure is also useful for investors in forecasting our future results and comparing us to our competitors. Our remaining performance obligations are a component of backlog, which also includes estimated orders under MSAs, including estimated renewals, and non-fixed price contracts expected to be completed within one year. Our methodology for determining backlog may not be comparable to the methodologies used by other companies.

49

As of December 31, 2022 and 2021, MSAs accounted for 52% and 55% of our estimated 12-month backlog and 65% and 67% of our total backlog. Generally, our customers are not contractually committed to specific volumes of services under our MSAs, and most of our contracts can be terminated on short notice even if we are not in default. We determine the estimated backlog for these MSAs using recurring historical trends, factoring in seasonal demand and projected customer needs based upon ongoing communications. In addition, many of our MSAs are subject to renewal, and these potential renewals are considered in determining estimated backlog. As a result, estimates for remaining performance obligations and backlog are subject to change based on, among other things, project accelerations; project cancellations or delays, including but not limited to those caused by commercial issues, regulatory requirements, natural disasters, emergencies (including the COVID-19 pandemic) and adverse weather conditions; and final acceptance of change orders by customers. These factors can cause revenues to be realized in periods and at levels that are different than originally projected.

The following table reconciles total remaining performance obligations to our backlog (a non-GAAP financial measure) by reportable segment, along with estimates of amounts expected to be realized within 12 months (in thousands):

The increase in remaining performance obligations from December 31, 2021 to December 31, 2022 was attributable to multiple new project awards, while the increase in backlog was attributable to these new awards and extensions and increases in expected volumes under MSAs.

Liquidity and Capital Resources

Management monitors financial markets and national and global economic conditions for factors that may affect our liquidity and capital resources. As set forth below, we have various short-term and long-term cash requirements and capital allocation priorities, and we intend to fund these requirements primarily with cash flow from operating activities, as well as debt financing as needed.

50

Cash Requirements and Capital Allocation

Cash Requirements. The following table summarizes, as of December 31, 2022, our cash requirements from contractual obligations that are due within the twelve months subsequent to December 31, 2022 and thereafter, excluding certain amounts discussed below (in thousands):

(1)    Amounts represent cash interest and other financing expenses associated primarily with our senior notes. Interest payments related to our senior credit facility and notes issued under our commercial paper program are not included due to their variable interest rates, and as it relates to the commercial paper program, the short-term nature of the borrowings. With respect to this variable rate debt, assuming the principal amount outstanding and interest rate in effect as of December 31, 2022 remained the same, the annual cash interest expense would be approximately $65.0 million, payable until October 8, 2026, the maturity date of our senior credit facility.

(2)    Amounts represent undiscounted operating and finance lease obligations as of December 31, 2022. The corresponding amounts recorded on our December 31, 2022 consolidated balance sheet represent the present value of these amounts.

(3)    Amounts represent undiscounted operating lease obligations that have not commenced as of December 31, 2022. The operating lease obligations will be recorded on our consolidated balance sheet beginning on the commencement date of each lease.

(4) Amounts represent lease financing transactions as further described in Note 11 of the Notes to Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data of this Annual Report.

(5) Amounts represent capital committed for the expansion of our vehicle fleet. Although we have committed to the purchase of these vehicles/equipment at the time of their delivery, we expect that these orders will be assigned to third-party leasing companies and made available to us under certain of our master equipment lease agreements.

Contingent Obligations. We have various contingent obligations that could require the use of cash or impact the collection of cash in future periods; however, we are unable to accurately predict the timing and estimate the amount of such contingent obligations as of December 31, 2022. These contingent obligations generally include, among other things:

•contingent consideration liabilities, which are described further in Note 6 of the Notes to Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data of this Annual Report;

•undistributed earnings of foreign subsidiaries and unrecognized tax benefits, which are described further in Note 12 of the Notes to Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data of this Annual Report;

•collective bargaining agreements and multiemployer pension plan liabilities, as well as liabilities related to our deferred compensation and other employee benefit plans, which are described further in Notes 15 and 16 of the Notes to Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data of this Annual Report; and

•obligations relating to our joint ventures, lawsuits and other legal proceedings, uncollectible accounts receivable, insurance liabilities, obligations relating to letters of credit, bonds and parent guarantees, obligations relating to employment agreements, indemnities and assumed liabilities, and residual value guarantees, which are described further in Notes 4, 10, 11 and 16 of the Notes to Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data of this Annual Report.

Capital Allocation. Our capital deployment priorities that require the use of cash include: (i) working capital to fund ongoing operating needs, (ii) capital expenditures to meet anticipated demand for our services, (iii) acquisitions and investments

51

to facilitate the long-term growth and sustainability of our business, and (iv) return of capital to stockholders, including through the payment of dividends and repurchases of our outstanding common stock. Our industry is capital intensive, and we expect substantial capital expenditures and commitments for equipment purchases and equipment lease and rental arrangements to be needed into the foreseeable future in order to meet anticipated demand for our services. We expect capital expenditures for property and equipment purchases for the year ended December 31, 2023 to be approximately $400 million. We also expect to continue to allocate significant capital to strategic acquisitions and investments, as well as to pay dividends and to repurchase our outstanding common stock and/or debt securities. In January of 2023, we completed the acquisition of three businesses in which a portion of the consideration consisted of $465.0 million in cash funded with a combination of cash and cash equivalents and borrowings from our commercial paper program. For additional information regarding these acquisitions, refer to Note 6 of the Notes to Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data of this Annual Report.

Significant Sources of Cash

We anticipate that our future cash flows from operating activities, cash and cash equivalents on hand, existing borrowing capacity under our senior credit facility and commercial paper program and ability to access capital markets for additional capital will provide sufficient funds to enable us to meet our cash requirements described above for the next twelve months and over the longer term.

Cash flow from operating activities is primarily influenced by demand for our services and operating margins but is also influenced by the timing of working capital needs associated with the various types of services that we provide. Our working capital needs may increase when we commence large volumes of work under circumstances where project costs are required to be paid before the associated receivables are billed and collected. Additionally, operating cash flows may be negatively impacted as a result of unpaid and delayed change orders and claims. Changes in project timing due to delays or accelerations and other economic, regulatory, market and political factors that may affect customer spending could also impact cash flow from operating activities. Further information with respect to our cash flow from operating activities is set forth below and in Note 18 of the Notes to Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data of this Annual Report.

Our available commitments under our senior credit facility and cash and cash equivalents as of December 31, 2022 were as follows (in thousands):

(1) Represents unsecured notes issued under our commercial paper program, which allows for the issuance of notes up to a maximum aggregate face amount of $1.0 billion outstanding at any time. Available commitments for revolving loans under our senior credit facility must be maintained to provide credit support for notes issued under our commercial paper program, and therefore such notes effectively reduce the available borrowing capacity under our senior credit facility.

(2) Further information with respect to our cash and cash equivalents is set forth in Note 17 of the Notes to Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data of this Annual Report.

We consider our investment policies related to cash and cash equivalents to be conservative, as we maintain a diverse portfolio of what we believe to be high-quality cash and cash equivalent investments with short-term maturities. Additionally, subject to the conditions specified in the credit agreement for our senior credit facility, we have the option to increase the capacity of our senior credit facility, in the form of an increase in the revolving commitments, term loans or a combination thereof, from time to time, upon receipt of additional commitments from new or existing lenders by up to an additional (i) $400.0 million plus (ii) additional amounts so long as the Incremental Leverage Ratio Requirement (as defined in the credit

52

agreement) is satisfied at the time of such increase. The Incremental Leverage Ratio Requirement requires, among other things, after giving pro forma effect to such increase and the use of proceeds therefrom, compliance with the credit agreement’s financial covenants as of the most recent fiscal quarter end for which financial statements were required to be delivered. Further information with respect to our debt obligations is set forth in Note 10 of the Notes to Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data of this Annual Report.

We may also seek to access the capital markets from time to time to raise additional capital, increase liquidity as necessary, refinance or extend the term of our existing indebtedness, fund acquisitions or otherwise fund our capital needs. While our financial strategy and consistent performance have allowed us to maintain investment grade ratings, our ability to access capital markets in the future depends on a number of factors, including our financial performance and financial position, our credit ratings, industry conditions, general economic conditions, our backlog, capital expenditure commitments, market conditions and market perceptions of us and our industry.

Sources and Uses of Cash, Cash Equivalents and Restricted Cash During the Years Ended December 31, 2022 and 2021

In summary, our cash flows for each period were as follows (in thousands):

Operating Activities

Net cash provided by operating activities of $1.13 billion and $582.4 million in 2022 and 2021 primarily reflected earnings adjusted for non-cash items and cash used by the main components of working capital: “Accounts and notes receivable,” “Contract assets,” “Accounts payable and accrued expenses,” and “Contract liabilities.”

Certain payments negatively impacted net cash provided by operating activities in both the years ended December 31, 2022 and 2021, including $45.4 million and $72.3 million related to certain change of control liabilities owed to employees of Blattner and payable in connection with our acquisition of Blattner; $11.0 million and $37.4 million of cash payments for other acquisition and integration costs; and $54.4 million in each period for payments associated with deferred employer payroll taxes, which were due during the year ended December 31, 2020 but deferred pursuant to the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). Partially offsetting these negative impacts in 2022 was the receipt of $100.5 million pursuant to coverage under an insurance policy following a legal proceeding, as further described in Legal Proceedings - Peru Project Dispute in Note 16 of the Notes to Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data of this Annual Report.

As discussed above, cash flow from operating activities is primarily influenced by demand for our services and operating margins but is also influenced by working capital needs. Our working capital needs may increase when we commence large volumes of work under circumstances where project costs, primarily labor, equipment and subcontractors, are required to be paid before the associated receivables are billed and collected and when we incur costs for work that is the subject of unpaid change orders and claims. Accordingly, changes within working capital in accounts receivable, contract assets and contract liabilities are normally related and are typically affected on a collective basis by changes in revenue due to the timing and volume of work performed and variability in the timing of customer billings and payments. Additionally, working capital needs are generally higher during the summer and fall due to increased demand for our services when favorable weather conditions exist in many of our operating regions. Conversely, working capital assets are typically converted to cash during the winter. These seasonal trends can be offset by changes in project timing due to delays or accelerations and other economic factors that may affect customer spending, including market conditions or the impact of certain unforeseen events (e.g., regulatory and other actions that impact the supply chain for certain materials).

Days sales outstanding (DSO) represents the average number of days it takes revenues to be converted into cash, which management believes is an important metric for assessing liquidity. A decrease in DSO has a favorable impact on cash flow from operating activities, while an increase in DSO has a negative impact on cash flow from operating activities. DSO is calculated by using the sum of current accounts receivable, net of allowance (which includes retainage and unbilled balances), plus contract assets less contract liabilities, divided by average revenues per day during the quarter. DSO at December 31, 2022 was 75 days, which was lower than DSO of 80 days at December 31, 2021 and our five-year historical average DSO of 82 days. This decrease in DSO as compared to December 31, 2021 was primarily due to favorable billing positions on certain projects.

53

This decrease was partially offset by high working capital requirements primarily related to a large renewable transmission project in Canada and the timing of the associated billings.

Investing Activities

Net cash used in investing activities in 2022 included $427.6 million of capital expenditures; $195.1 million related to acquisitions, primarily related to a net working capital adjustment in connection with our acquisition of Blattner; and $78.1 million of cash paid primarily for equity method investments and non-marketable securities. Partially offsetting these items were $62.1 million of proceeds from the sale of property and equipment and $20.6 million of cash received from sale of investments.

Net cash used in investing activities in 2021 included $2.45 billion used for acquisitions, most of which relates to our acquisition of Blattner; $385.9 million of capital expenditures; and $139.0 million of cash paid for equity and other investments, which was primarily related to the acquisition of our initial minority interest in Starry. These items were partially offset by $49.2 million of proceeds from the sale of property and equipment and $29.1 million of cash received primarily from sale of investments.

Our industry is capital intensive, and we expect substantial capital expenditures and commitments for equipment purchases and equipment lease and rental arrangements to be needed for the foreseeable future in order to meet anticipated demand for our services. In addition, we expect to continue to pursue strategic acquisitions and investments, although we cannot predict the timing or amount of the cash needed for these initiatives. We also have various other capital commitments that are detailed in Cash Requirements and Capital Allocation above.

Financing Activities

Net cash used in financing activities in the year ended December 31, 2022 included $127.8 million common stock repurchases; $82.6 million payments to satisfy tax withholding obligations associated with stock-based compensation; $41.1 million of dividends; $23.4 million of net repayments under our senior credit facility and commercial paper program; $15.7 million of net repayments of short-term debt; and $9.7 million of distributions to non-controlling interests.

Net cash provided by financing activities in 2021 included $1.49 billion of net proceeds from the issuance of the 0.950% senior notes due October 2024, the 2.350% senior notes due January 2032 and the 3.050% senior notes due October 2041, net of the original issue discount and underwriting discounts but not net of deferred financing costs paid or accrued by us. On October 13, 2021, we borrowed the full amount of a $750.0 million term loan facility under our senior credit facility and used such amount, together with the net proceeds from our September 2021 offering of the senior notes and approximately $50.9 million of revolving loans borrowed under our senior credit facility, to pay the cash consideration for the acquisition of Blattner. Total net borrowings under our senior credit facility during the year ended December 31, 2021 were $1.05 billion, which included the $750.0 million term loan facility. Deferred financing costs paid directly by us during the year ended December 31, 2021 were $12.6 million, $8.2 million of which related to the September 2021 issuance of such senior notes, the term loan and amendment of our senior credit facility and $4.4 million of which related to the bridge facility commitment entered into, but ultimately not utilized, in connection with our acquisition of Blattner. Net cash provided by financing activities in 2021 also included $11.4 million of net borrowings of short-term debt.

Net cash provided by financing activities in 2021 was partially offset by $66.7 million of cash payments for common stock repurchases, $65.0 million of cash payments to satisfy tax withholding obligations associated with stock-based compensation and $34.0 million of cash payments for dividends and cash dividend equivalents.

We expect to continue to utilize cash for similar financing activities in the future, including repayments under our senior credit facility and commercial paper program, payment of cash dividends and repurchases of our common stock and/or debt securities.

Critical Accounting Estimates

The discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities known to exist as of the date the consolidated financial statements are published and the reported amounts of revenues and expenses recognized during the periods presented. We review all significant estimates affecting our consolidated financial statements on a recurring basis and record the effect of any necessary adjustments prior to their publication. Judgments and estimates are based on our beliefs and assumptions derived from information available at the time such judgments and estimates are made. Uncertainties with respect to such estimates and assumptions are inherent in the preparation of financial statements. There can be no assurance that actual results will not differ from those estimates.

54

Management has reviewed its development and selection of critical accounting estimates with the audit committee of our Board of Directors. Our accounting policies are primarily described in Note 2 of the Notes to Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data of this Annual Report and should be read in conjunction with the accounting policies identified below that we believe affect our more significant judgments and estimates used in the preparation of our consolidated financial statements.

Revenue Recognition - The estimation of contract revenues and costs, including changes in estimates; progress on construction projects; variable consideration; and collectability of accounts receivable, long-term accounts receivable, unbilled receivables, retainage and contract assets, including amounts related to unapproved change orders and claims in the process of being negotiated (refer to Note 4 of the Notes to Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data of this Annual Report).

Property and Equipment - The valuation methods and assumptions used in assessing impairment, useful life determination and the related timing of depreciation and the determination of asset groupings (also refer to Note 17 of the Notes to Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data of this Annual Report).

Goodwill - The valuation methods and assumptions used in assessing impairment, including determination of whether to perform a qualitative assessment on some or all of the reporting units, weighting of various methods of determining the fair value of each reporting unit, number of years of cash flows utilized before applying a terminal value, the weighted average cost of capital, transaction multiples, guideline public company multiples and five-year compounded annual growth rates.

Other Intangible Assets - The valuation methods and assumptions used in assessing the fair value of intangible assets as of the date a business is acquired, as well as any impairment, including determining the future revenues, discount rates and customer attrition rates (also refer to Note 6 of the Notes to Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data of this Annual Report).

Income Taxes - The identification and measurement of deferred tax assets and liabilities; the measurement of valuation allowances on deferred tax assets including estimates of future taxable income; estimates associated with tax liabilities in that tax laws and regulations are voluminous and often ambiguous; and benefits from uncertain tax positions (also refer to Note 12 of the Notes to Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data of this Annual Report).

Insurance - The estimation of liabilities and related recoveries (also refer to Note 16 of the Notes to Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data of this Annual Report).

Litigation Costs and Reserves and Loss Contingencies - The estimation of when a loss is probable or reasonably possible and whether any such loss is reasonably estimable or any range of possible loss is estimable, as well as uncertainties related to the outcome of litigation or other legal proceedings (also refer to Note 16 of the Notes to Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data of this Annual Report).

Acquisitions - The assumptions used to determine the fair value of consideration transferred and to allocate this consideration to assets acquired and liabilities assumed in connection with our acquisitions, including the estimated useful lives of other intangible assets subject to amortization and the fair value of contingent consideration liabilities (also refer to Note 6 of the Notes to Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data of this Annual Report).

Stock-based Compensation - The assumptions used to determine the grant date fair value and attainment percentages related to performance stock units (also refer to Note 14 of the Notes to Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data of this Annual Report).

ITEM 7.Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations of Quanta Services, Inc. (together with its subsidiaries, Quanta, we, us or our) should be read in conjunction with our consolidated financial statements and related notes in Item 8. Financial Statements and Supplementary Data of this Annual Report. The discussion below contains forward-looking statements that are based upon our current expectations and are subject to uncertainty and changes in circumstances. Actual results may differ materially from these expectations due to inaccurate assumptions and known or unknown risks and uncertainties, including those identified in Cautionary Statement About Forward-Looking Statements and Information above and Item 1A. Risk Factors of this Annual Report.

Overview

We are a leading provider of specialty contracting services, delivering comprehensive infrastructure solutions for the utility, renewable energy, communications, pipeline and energy industries in the United States, Canada, Australia and select other international markets. The performance of our business generally depends on our ability to obtain contracts with customers and to effectively deliver the services provided under those contracts. The services we provide include design, engineering, procurement, new construction, upgrade and repair and maintenance services for infrastructure within each of the industries we serve, such as electric power transmission and distribution networks; substation facilities; wind and solar energy 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. Our customers include many of the leading companies in the industries we serve, and we endeavor to develop and maintain strategic alliances and preferred service provider status with our customers. Our services are typically provided pursuant to master service agreements, repair and maintenance contracts and fixed price and non-fixed price new construction contracts.

Beginning with the three months ended December 31, 2021, we report our results under three reportable segments: (1) Electric Power Infrastructure Solutions, (2) Renewable Energy Infrastructure Solutions and (3) Underground Utility and Infrastructure Solutions, as further described in Item 1. Business – Reportable Segments of this Annual Report. This structure is generally focused on broad end-user markets for our services. Included within the Electric Power Infrastructure Solutions segment are the results related to our communications infrastructure services.

Current Year Financial Results and Significant Operational Trends and Events

Key consolidated financial results for the year ended December 31, 2021 included:

•Revenues increased 15.9%, or $1.78 billion, to $12.98 billion as compared to revenues of $11.20 billion for the year ended December 31, 2020;

•Operating income increased 8.5%, or $52.2 million, to $663.5 million as compared to $611.4 million for the year ended December 31, 2020;

•Net income attributable to common stock increased 9.1%, or $40.4 million, to $486.0 million as compared to $445.6 million for the year ended December 31, 2020;

•Diluted earnings per share increased 8.8%, or $0.27, to $3.34 as compared to $3.07 for the year ended December 31, 2020;

•EBITDA (a non-GAAP financial measure) increased 22.0%, or $200.5 million, to $1.11 billion as compared to $912.7 million for the year ended December 31, 2020, and adjusted EBITDA (a non-GAAP financial measure) increased 19.9%, or $209.3 million, to $1.26 billion as compared to $1.05 billion for the year ended December 31, 2020;

•Net cash provided by operating activities decreased 47.8%, or $533.6 million, to $582.4 million as compared to net cash provided by operating activities of $1.12 billion for the year ended December 31, 2020;

•Remaining performance obligations increased 47.9%, or $1.91 billion, to $5.90 billion as of December 31, 2021 as compared to $3.99 billion as of December 31, 2020; and

•Total backlog (a non-GAAP financial measure) increased 27.4%, or $4.14 billion, to $19.27 billion as of December 31, 2021 as compared to $15.13 billion as of December 31, 2020.

For a reconciliation of EBITDA and adjusted EBITDA to net income attributable to common stock, the most comparable GAAP financial measure, and a reconciliation of backlog to remaining performance obligations, the most comparable GAAP financial measure, see Non-GAAP Financial Measures below.

41

As described below, during the year ended December 31, 2021, our results reflected certain significant operational trends and events as compared to the year ended December 31, 2020, with certain of our segment results of operations recast to conform to our current segment reporting structure.

Electric Power Infrastructure Solutions Segment

•Revenues increased by 17.9% to $7.62 billion, as compared to $6.47 billion.

•Operating income increased by 33.5% to $865.4 million, as compared to $648.4 million, and operating income as a percentage of revenues increased to 11.4%, as compared to 10.0%.

•Revenues increased primarily due to growth in spending by our utility customers on grid modernization, resulting in increased demand for our electric power services, as well as approximately $245 million of revenues attributable to acquired businesses and a $90 million positive impact related to more favorable foreign currency exchange rates, primarily the Canadian dollar and U.S. dollar exchange rate.

•Operating income increased primarily due to higher revenues. The increase in operating income as a percentage of revenues was primarily attributable to improved performance across the segment, higher levels of fixed cost absorption, and favorable contributions associated with the timing of projects and project mix. Also positively impacting operating income was $44.1 million of equity in earnings in LUMA and other integral affiliates, which represented a $32.8 million increase from the year ended December 31, 2020. Additionally, although we had substantially completed our exit from Latin America as of December 31, 2020, Electric Power Infrastructure Solutions operating income for the year ended December 31, 2020 included $74.0 million of operating losses related to Latin American operations. Partially offsetting the positive impact of these items were losses associated with certain communications projects during the year ended December 31, 2021 due to various production issues, poor subcontractor performance, challenging site conditions, permitting delays, increased completion costs and weather and seasonal impacts.

Renewable Energy Infrastructure Solutions Segment

•Revenues increased by 39.9% to $1.83 billion, as compared to $1.31 billion.

•Operating income increased by 2.2% to $181.9 million, as compared to $177.9 million, and operating income as a percentage of revenues decreased to 10.0%, as compared to 13.6%.

•Revenues increased primarily due to a $450 million increase in revenues attributable to acquired businesses, primarily Blattner, the results of operations of which are included since the acquisition date of October 13, 2021.

•The increase in operating income was primarily due to higher revenues associated with the acquisition of Blattner. Blattner’s results as a percentage of operating income were largely in line with results associated with the transmission and interconnection construction related to the renewable energy infrastructure. The decrease in operating income as a percentage of revenues for the year ended December 31, 2021 compared to the year ended December 31, 2020 was primarily due to the favorable close-out of certain projects in 2020.

Underground Utility and Infrastructure Solutions Segment

•Revenues increased by 3.0% to $3.53 billion, as compared to $3.43 billion.

•Operating income decreased by 11.7% to $150.1 million, as compared to $170.1 million, and operating income as a percentage of revenues decreased to 4.3%, as compared to 5.0%.

•Revenues increased primarily due to higher demand for our services from our gas utility and industrial customers; $25 million related to more favorable foreign currency exchange rates, primarily the Canadian dollar and U.S. dollar exchange rate; and approximately $20 million of revenues attributable to acquired businesses.

•Operating income and operating income as a percentage of revenues decreased primarily due to the recognition of $31.7 million of provision for credit losses related to receivables owed from a customer that declared bankruptcy in July 2021, and its affiliate, which is described further in Accounts Receivable and Allowance for Credit Losses

42

within Note 4 of the Notes to Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data of this Annual Report.

See Business Environment, Results of Operations and Liquidity and Capital Resources below for additional information and discussion related to consolidated and segment results.

Recent Significant Acquisition and Related Debt Financing

On October 13, 2021, we completed the acquisition of Blattner, a large and leading utility-scale renewable energy infrastructure solutions provider that is located in and primarily operates in North America. Consideration for this acquisition was $2.37 billion paid or payable in cash (subject to certain adjustments) and 3,326,955 shares of Quanta common stock, which had a fair value of $345.4 million as of the date of the acquisition. The final amount of consideration for the acquisition remains subject to certain post-closing adjustments, including with respect to net working capital (inclusive of cash) and certain assumed liabilities. Additionally, the former owners of Blattner are eligible to receive the potential payment of up to $300.0 million of contingent consideration, payable to the extent the acquired business achieves certain financial performance targets over a three-year period beginning in January 2022. Based on the estimated fair value of the contingent consideration, we recorded a $125.6 million liability as of the date of the acquisition. Blattner’s results of operations have been included in our consolidated financial statements since the acquisition date, with its results included in the Renewable Energy Infrastructure Solutions segment.

Additionally, we entered into certain debt financing arrangements in connection with our acquisition of Blattner. On September 23, 2021, we received net proceeds from the issuance of senior notes of $1.48 billion, net of the original issue discount and underwriting discounts and deferred financing costs, and on October 13, 2021, we borrowed $750.0 million from a term loan facility under our senior credit facility. We utilized these proceeds, together with approximately $50.9 million of revolving loans borrowed under our senior credit facility, to pay the cash consideration due at closing for the acquisition of Blattner.

Business Environment

We believe there are long-term growth opportunities across our industries, and we continue to have a positive long-term outlook. Although not without risks and challenges, including those discussed in Item 1A. Risk Factors of this Annual Report, we believe, with our full-service operations, broad geographic reach, financial position and technical expertise, we are well positioned to capitalize on opportunities and trends in our industries.

Electric Power Infrastructure Solutions. Utilities are continuing to invest significant capital in their electric power delivery systems, particularly transmission, substation and distribution infrastructure, through multi-year, multi-billion dollar grid modernization and reliability programs, which have provided, and are expected to continue to provide, demand for our services. While the COVID-19 pandemic resulted in a short-term overall decline in electricity usage in 2020, primarily related to commercial and industrial users, demand recovered and continued to increase in 2021, and we expect demand for electricity in North America to grow over the long term and believe that certain segments of the North American electric power grid are not adequate to efficiently serve the power needs of the future. Furthermore, to the extent that electrification trends increase, including through, among other things, electric vehicle (EV) adoption, demand for electricity could be greater than currently anticipated. To accommodate this growth, we expect continued demand for new or expanded transmission, substation and distribution infrastructure to reliably transport power to meet demand driven by electrification and the modification and reengineering of existing infrastructure as existing coal and nuclear generation facilities are retired or shut down. In order to reliably and efficiently deliver power, and in response to federal reliability standards, utilities are also integrating smart grid technologies into distribution systems to improve grid management and create efficiencies, and in preparation for emerging technologies, such as EVs.

A number of utilities also continue to implement system upgrades and hardening programs in response to recurring severe weather events, such as hurricanes and wildfires. For example, utilities along the Eastern and Gulf Coasts of the United States are executing storm hardening programs to make their systems more resilient to hurricanes and other severe weather events, which we expect to continue for the foreseeable future. Additionally, there are significant system resiliency initiatives underway in California and other regions in the western United States that are designed to prevent and manage the impact of wildfires. While these resiliency initiatives provide additional opportunities for our services, they also increase our potential exposure to significant liabilities, as these events can be started by the failure of electric power and other infrastructure on which we have performed services. Utilities are also executing significant initiatives to underground critical infrastructure, including additional underground transmission and distribution initiatives by utilities in California, underground transmission projects in the northeast United States, underground distribution circuits along U.S. coastlines and underground transmission lines for offshore wind generation projects.

43

With respect to our communications service offerings, consumer and commercial demand for communication and data-intensive, high-bandwidth wireline and wireless services and applications is driving significant investment in infrastructure and the deployment of new technologies. In particular, communications providers in North America are in the early stages of developing new fifth generation wireless services (5G), which are intended to facilitate bandwidth-intensive services at high speeds for consumers and commercial applications. Additionally, recent legislative and regulatory initiatives, including the Rural Digital Opportunity Fund enacted by the Federal Communications Commission and the Infrastructure Investment and Jobs Act, have dedicated billions of dollars of funding to support broadband service to underserved markets. As a result of these industry trends, we believe there will be meaningful demand for our engineering and construction services. We also reoriented our communications service offerings to strategically focus on the North American market, substantially completing the exit of our Latin American communications operations during 2020, which we anticipate will result in improved profitability within our communications services operations.

Renewable Energy Infrastructure Solutions. We believe the transition to a carbon-neutral economy, which is being driven by consumer and investor preferences, increasing electrification trends, supportive public policy actions and declining levelized costs of renewable energy, will require sizeable long-term investment in renewable generation and related infrastructure, including meaningful repowering and modernization of existing assets. To that end, renewable energy developers are expected to continue to increase investments in wind and solar projects, as well as energy storage projects. Utilities have increased the percentage of renewable electricity bought through power purchase agreements (PPAs) with renewable energy developers, and we believe are in the early stages of investing directly in renewable generation facilities, which could expand significantly over time as they pursue clean energy strategies and emissions-reduction initiatives. Also, a growing number of corporate enterprises, particularly technology companies, are entering into PPAs with renewable energy developers to source renewable electricity to power their facilities and achieve their own carbon reduction initiatives. We believe increased battery storage can support increased renewable energy development by providing shorter-term storage of electricity from renewable energy generation, particularly from solar facilities, which helps to manage the amount and timing of intermittent power placed on the grid from renewable generation. Though the current capacity of installed battery storage is much smaller than the amount of wind and solar capacity installed in North America, utility-scale battery storage capacity is expected to grow significantly and at higher rates over the longer term, which we believe will provide significant growth opportunities for us.

We believe these dynamics will generate significant demand in the near- and longer-term for our renewable energy infrastructure services, including our generation construction services and engineering expertise in utility-scale solar, wind and battery storage projects, as well as our services related to the development and construction of related infrastructure, including high-voltage electric transmission and substation infrastructure and battery storage facilities, which are necessary to interconnect and transmit electricity from new renewable energy generation facilities into the existing electric power grid and enhance grid reliability.

While the demand for certain renewable energy services could fluctuate in the short term due to, among other things, supply chain and other logistical difficulties that could delay projects, the availability of production tax credits, sourcing restrictions on materials and components necessary for certain projects (e.g., solar panels) or permitting delays, we believe we are well positioned, through our recent acquisition of Blattner and our existing renewable energy and transmission services offerings, to capitalize on the longer term growth trends with respect to the development of renewable energy generation and related infrastructure.

Underground Utility and Infrastructure Solutions. For several years we have focused on increasing our underground utility and infrastructure solutions related to specialty services and industries that we believe are driven by regulated utility spending, regulation, replacement and rehabilitation of aging infrastructure and safety and environmental initiatives, which we believe provide a greater level of business sustainability and predictability. These service offerings include gas utility services, pipeline integrity services and downstream industrial services. We believe focusing on these services helps to offset the seasonality and cyclicality of our larger pipeline project business, and although our strategic focus on larger pipeline projects has decreased, we continue to pursue project opportunities to the extent they satisfy our margin and risk profiles and support the needs of our customers.

Though we experienced short-term disruptions in 2020 and to a lesser extent in 2021 due to the COVID-19 pandemic, we believe demand for our gas utility distribution services will increase as a result of customer desire to upgrade and replace aging infrastructure and increasing regulatory requirements. In particular, natural gas utilities have implemented multi-decade modernization programs to replace aging cast iron, bare steel and plastic system infrastructure with modern materials for safety, reliability and environmental purposes. We believe there are also growth opportunities for our pipeline integrity, rehabilitation and replacement services, as regulatory measures have increased the frequency and stringency of pipeline integrity testing requirements that require our customers to test, inspect, repair, maintain and replace pipeline infrastructure to ensure that it operates in a safe, reliable and environmentally conscious manner. Further, permitting challenges associated with construction of new pipelines can make existing pipeline infrastructure more valuable, motivating owners to extend the useful life of existing pipeline assets through integrity initiatives.

44

Broader challenges and uncertainties in the energy market, which have been compounded by the COVID-19 pandemic, have materially impacted, and may continue to materially impact, our Underground Utility and Infrastructure Solutions segment. The extent to which these challenges continue depends on the pace of recovery of the global economy and our end market conditions. In particular, demand for our midstream and industrial services operations has declined as customers reduced and deferred regularly scheduled maintenance and capital projects due to lack of demand for refined products. Our services to downstream industrial energy customers, which are primarily located along the Gulf Coast of the United States and in other select markets in North America, have been negatively impacted by an overall decline in global demand for refined products during 2020 and 2021. While demand for our critical path catalyst services has remained solid, in the second half of 2020 customers began reducing onsite activity for our other services and have deferred maintenance and certain turnaround projects to 2022. However, to the extent commodity prices continue to strengthen and the global economy continues to recover, we believe the outlook for services with respect to these customers will continue to improve. We also believe there are significant long-term opportunities for these services, including our high-pressure and critical-path turnaround services, as well as our capabilities with respect to instrumentation and electrical services, piping, fabrication and storage tanks services, and other industrial services, and that processing facilities located along the U.S. Gulf Coast region should have certain long-term strategic advantages due to their proximity to affordable hydrocarbon resources. However, these processing facilities can also be negatively impacted for short-term periods due to severe weather events, such as hurricanes, tropical storms and floods.

Furthermore, the broader oil and gas industry is highly cyclical and subject to price and production volume volatility, which can impact demand for our services. For example, certain of our end markets where the price of oil is influential, such as Australia, the Canadian Oil Sands and certain oil-driven U.S. shale formations, have been materially impacted by uncertainties and challenges in the energy market and overall economy caused by the COVID-19 pandemic. As a result of these dynamics, our revenues related to larger pipeline projects have declined significantly over the last few years. This dynamic is supportive of our increased focus on specialty services and industries that are driven by regulated utility spending, regulation, replacement and rehabilitation of aging infrastructure and safety and environmental initiatives, which we believe provide a greater level of business sustainability and predictability.

Lastly, we believe there are also longer-term opportunities that may arise in this segment. For example, we believe natural gas, due to its expected abundant supply and attractive price over the long-term, will remain a fuel of choice for both primary power generation and backup power generation for renewable power plants in North America. We believe the favorable characteristics of natural gas could also position North America as a leading competitor in the global LNG export market. In certain areas, the existing pipeline system infrastructure is insufficient to support any future LNG export facilities, which could provide additional opportunities for our business. We also believe that customers in this segment are implementing strategies to reduce carbon emissions produced from their operations, which are providing incremental opportunities for our services, including developing infrastructure for blending hydrogen into natural gas flow to customers, carbon capture projects, which could include building or repurposing pipeline infrastructure. While certain customers are in various stages of evaluating or implementing these types of strategies, certain near-term opportunities exist and we believe more meaningful opportunities could occur over the longer term to the extent these strategies and opportunities progress and mature.

COVID-19 Pandemic Impact. The effects of the COVID-19 pandemic continue to significantly impact global economies due to, among other things, workforce and travel restrictions and supply chain, production and other logistical disruptions. While we have continued to operate substantially all of our activities as a provider of essential services, during the course of the pandemic our operations and financial results have been adversely impacted by reduced customer spending and demand for certain of our services (including as described above), as well as governmental responses to the COVID-19 pandemic, including shut-down orders and limitations on work site practices implemented by governments, which have negatively impacted (i) our Canadian operations and financial results during 2020 and 2021; (ii) our Australian operations and financial results during 2020 and 2021; (iii) our operations in certain major U.S. metropolitan markets that were meaningfully impacted by the pandemic during the first and second quarters of 2020; and (iv) our Latin American operations during 2020. Additionally, governmental vaccination and testing requirements related to COVID-19, as well as certain standards and guidance as to preventing the spread of COVID-19, have impacted and may continue to impact our business in the future. These include vaccination or testing standards and requirements issued by federal, state and local governmental entities that require employers to ensure their workforce is fully vaccinated or to require testing for unvaccinated workers. In addition, many of our customers have established vaccination requirements that could apply to our employees performing work on their premises, or in proximity of their employees. The implementation of vaccination and testing requirements could have a material adverse effect on our business in the event that, among other things, a significant portion of our workforce does not choose to become vaccinated, as such employees may not be able to perform work for certain customers that require vaccination. Moreover, the costs related to mandatory testing for unvaccinated employees are significant, and time away from work for testing is disruptive to our operations.

The broader and longer-term implications of the COVID-19 pandemic on our results of operations and overall financial performance and position remain highly uncertain and variable, and we expect continued operational challenges for portions of

45

our operations in the future. The future impact that the pandemic, or any resulting market disruption and volatility, will have on our business, cash flows, liquidity, financial condition and results of operations will depend on future developments, including, among others, the duration and severity of the pandemic; the actions taken by governmental authorities, customers, suppliers and other third parties in response to the pandemic and the consequences of those actions; our workforce availability; and the timing and extent to which normal economic and operating conditions resume and continue.

Regulatory Challenges and Opportunities. The regulatory environment creates both challenges and opportunities for our business, and in recent years our margins have been impacted by regulatory and permitting delays, as well as private legal challenges related to regulatory requirements, particularly with respect to large transmission and large pipeline projects. As a result, regulatory and environmental permitting processes continue to create uncertainty for projects and negatively impact customer spending. However, we believe that there are also several existing, pending or proposed legislative or regulatory actions that may alleviate certain regulatory and permitting issues and positively impact long-term demand, particularly in connection with electric power infrastructure and renewable energy spending. For example, regulatory changes affecting siting and right-of-way processes could potentially accelerate construction for transmission projects, and state and federal reliability standards are creating incentives for system investment and maintenance. Additionally, as described above, we consider renewable energy, including solar and wind generation facilities, to be an ongoing opportunity; however, policy and economic incentives designed to support and encourage such projects, as well as limitations on the availability or sourcing of materials or components for such projects, can create variability of project timing.

Labor Resource Availability and Cost. We continue to address the longer-term need for additional labor resources in our markets, as our customers continue to seek additional specialized labor resources to address an aging utility workforce and longer-term labor availability issues, increasing pressure to reduce costs and improve reliability, and increasing duration and complexity of their capital programs. We believe these trends will continue, possibly to such a degree that demand for labor resources will outpace supply. Furthermore, the increased demand for our services based on the dynamics described above can create shortages of qualified labor in our markets. Our ability to capitalize on available opportunities is limited by our ability to employ, train and retain the necessary skilled personnel, and therefore we are taking proactive steps to develop our workforce, including through strategic relationships with universities, the military and unions and the expansion and development of our training facility and postsecondary educational institution. Although we believe these initiatives will help address workforce needs, meeting our customers’ demand for labor resources could prove challenging.

Additionally, we continue to monitor our labor markets and expect labor costs to increase based on increased demand for our services. Our labor costs are passed through in certain of our contracts, and the portion of our workforce that is represented by labor unions typically operate under multi-year collective bargaining agreements, which provide some visibility into future labor costs. While we do not currently believe this environment will materially impact our profitability and would expect to be able to adjust contract pricing with certain customers to the extent wages and other labor costs increase, whether due to renegotiation of collective bargaining agreements or market conditions, meaningful increases in our labor costs could have a material adverse effect on our business, financial condition, results of operations or cash flows to the extent we cannot do so.

Materials and Equipment Procurement. We continue to monitor supply chain and other logistical challenges, global trade relationships (e.g., tariffs, sourcing restrictions) and other general market and political conditions (e.g., inflation) with respect to availability and costs of certain materials and equipment necessary for the performance of our business and for materials necessary for our customers’ projects, including, among other things, steel, copper, aluminum, and components for renewable energy projects. For example, we believe some participants in the renewable energy market are experiencing supply chain challenges, resulting in delays and shortages of, and increased costs for, materials necessary for the construction of certain renewable energy projects in the near term, including as a result of sourcing restrictions related to solar panels manufactured in China. While we believe many of our renewable energy customers are generally better equipped to manage near-term supply chain disruptions than their smaller competitors, these challenges could delay our customers’ ongoing projects or impact their future project schedules, which in turn could impact the timing of or demand for our renewable energy services. While these delays are not anticipated to result in exposure to liquidated damages or commodity risks, such delays could cause customers to cancel projects as higher than expected costs impact project profitability projections.

Additionally, based on, among other things, the significant worldwide shortage of semiconductors, vehicle manufacturers are experiencing production delays with respect to new vehicles for our fleet (both on-road and specialty vehicles) and vehicle parts (e.g., tires), all of which we utilize in our operations, and certain of our vehicle delivery orders scheduled for delivery in 2022 have been delayed or cancelled. While we believe we have taken steps to secure delivery of a sufficient amount of vehicles in the near term and do not anticipate any significant disruptions with respect to our fleet, to the extent the production issues become worse than expected or become longer-term in nature, our operations could be negatively impacted. Delays impacting construction schedules resulting from supply chain disruption impacting project materials could result in risks. In addition, as a result of the recent inflationary pressure, our results of operations could be negatively impacted by price inflation related to costs of materials and equipment to the extent we are not able to pass such costs through to our contracts.

46

Acquisitions and Investments. We believe potential acquisition and investment opportunities exist in our industries and adjacent industries, primarily due to the highly fragmented and evolving nature of those industries and inability of many companies to expand due to capital or liquidity constraints. While the desirability of certain of these opportunities could be impacted by the recent inflationary pressure in the short term, we continue to evaluate opportunities that are expected to, among other things, broaden our customer base, expand our geographic area of operations and grow and diversify our portfolio of services.

Significant Factors Impacting Results

Our revenues, profit, margins and other results of operations can be influenced by a variety of factors in any given period, including those described in Business Environment above, Results of Operations below and Item 1A. Risk Factors of this Annual Report, and those factors have caused fluctuations in our results in the past and are expected to cause fluctuations in our results in the future. Additional information with respect to certain of those factors is provided below.

Seasonality. Typically, our revenues are lowest in the first quarter of the year because cold, snowy or wet conditions can create challenging working environments that are more costly for our customers or cause delays on projects. In addition, infrastructure projects often do not begin in a meaningful way until our customers finalize their capital budgets, which typically occurs during the first quarter. Second quarter revenues are typically higher than those in the first quarter, as some projects begin, but continued cold and wet weather can often impact productivity. Third quarter revenues are typically the highest of the year, as a greater number of projects are underway and operating conditions, including weather, are normally more accommodating. Generally, revenues during the fourth quarter are lower than the third quarter but higher than the second quarter, as many projects are completed and customers often seek to spend their capital budgets before year end. However, the holiday season and inclement weather can sometimes cause delays during the fourth quarter, reducing revenues and increasing costs. These seasonal impacts are typical for our U.S. operations, but seasonality for our international operations may differ. For example, revenues in Canada are typically higher in the first quarter because projects are often accelerated in order to complete work while the ground is frozen and prior to the break up, or seasonal thaw, as productivity is adversely affected by wet ground conditions during warmer months.

Weather, natural disasters and emergencies. The results of our business in a given period can be impacted by adverse weather conditions, severe weather events, natural disasters or other emergencies, which include, among other things, heavy or prolonged snowfall or rainfall, hurricanes, tropical storms, tornadoes, floods, blizzards, extreme temperatures, wildfires, post-wildfire floods and debris flows, pandemics (including the ongoing COVID-19 pandemic) and earthquakes. These conditions and events can negatively impact our financial results due to, among other things, the termination, deferral or delay of projects, reduced productivity and exposure to significant liabilities. See Business Environment above for further discussion regarding the impact of the COVID-19 pandemic. However, severe weather events can increase our emergency restoration services, which typically yield higher margins due in part to higher equipment utilization and absorption of fixed costs, and we had a significant amount of emergency restoration services revenues in 2020 and 2021.

Demand for services. We perform the majority of our services under existing contracts, including master service agreements (MSAs) and similar agreements pursuant to which our customers are not committed to specific volumes of our services. Therefore, our volume of business can be positively or negatively affected by fluctuations in the amount of work our customers assign us in a given period, which may vary by geographic region. For example, to the extent our customers accelerate grid modernization or hardening programs or face deadlines to meet regulatory requirements for rehabilitation, reliability or efficiency, our volume of work could increase under existing agreements. Also, as described above in Business Environment, we have experienced reductions in demand for certain services as a result of the uncertainties and challenges in the energy market and overall economy caused by the COVID-19 pandemic. Examples of other items that may cause demand for our services to fluctuate materially from quarter to quarter include: the financial condition of our customers, their capital spending and their access to capital; economic and political conditions on a regional, national or global scale, including availability of renewable energy tax credits; interest rates; governmental regulations affecting the sourcing of materials and equipment; other changes in U.S. and global trade relationships; and project deferrals and cancellations.

Revenue mix and impact on margins. The mix of revenues based on the types of services we provide in a given period will impact margins, as certain industries and services provide higher-margin opportunities. Our larger or more complex projects typically include, among others, transmission projects with higher voltage capacities; pipeline projects with larger-diameter throughput capacities; large-scale renewable generation projects, which we expect to increase subsequent to our acquisition of Blattner; and projects with increased engineering, design or construction complexities, more difficult terrain or geographical requirements, or longer distance requirements. These projects typically yield opportunities for higher margins than our recurring services under MSAs described above, as we assume a greater degree of performance risk and there is greater utilization of our resources for longer construction timeframes. However, larger projects are subject to additional risk of regulatory delay and cyclicality. For example, our revenues with respect to large pipeline projects have declined significantly in

47

recent years, and a significant number of larger projects have been delayed or cancelled during that same period. Project schedules also fluctuate, particularly in connection with larger, more complex or longer-term projects, which can affect the amount of work performed in a given period. Furthermore, smaller or less complex projects typically have a greater number of companies competing for them, and competitors at times may more aggressively pursue available work. A greater percentage of smaller scale or less complex work also could negatively impact margins due to the inefficiency of transitioning between a greater number of smaller projects versus continuous production on fewer larger projects. As a result, at times we may choose to maintain a portion of our workforce and equipment in an underutilized capacity to ensure we are strategically positioned to deliver on larger projects when they move forward.

Project variability and performance. Margins for a single project may fluctuate period to period due to changes in the volume or type of work performed, the pricing structure under the project contract or job productivity. Additionally, our productivity and performance on a project can vary period to period based on a number of factors, including unexpected project difficulties or site conditions (including in connection with difficult geographic characteristics); project location, including locations with challenging operating conditions; whether the work is on an open or encumbered right of way; inclement weather or severe weather events; environmental restrictions or regulatory delays; protests, other political activity or legal challenges related to a project; the performance of third parties; and the impact of the COVID-19 pandemic. Moreover, we currently generate a significant portion of our revenues under fixed price contracts, and fixed price contracts are more common in connection with our larger and more complex projects that typically involve greater performance risk. Furthermore, subsequent to our acquisition of Blattner, we expect the portion of our revenues generated under fixed price contracts to increase significantly. Under these contracts, we assume risks related to project estimates and execution, and project revenues can vary, sometimes substantially, from our original projections due to a variety of factors, including the additional complexity, timing uncertainty or extended bidding, regulatory and permitting processes associated with these projects. These variations can result in a reduction in expected profit or the incurrence of losses on a project or the issuance of change orders or assertion of contract claims against customers. See Revenue Recognition - Contract Estimates in Note 4 of the Notes to Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data of this Annual Report for further information regarding changes in estimated contract revenues and/or project costs, including any significant project gains or losses in connection with fixed price contracts that have impacted our results, and determinations with respect to the recognition of change orders and claims as contract price adjustments.

Subcontract work and provision of materials. Work that is subcontracted to other service providers generally yields lower margins, and therefore an increase in subcontract work in a given period can decrease margins. In recent years, we have subcontracted approximately 20% of our work to other service providers. Our customers are usually responsible for supplying the materials for their projects. However, under some contracts, including contracts for projects where we provide engineering, procurement and construction (EPC) services, we agree to procure all or part of the required materials. Margins may be lower on projects where we furnish a significant amount of materials, as our markup on materials is generally lower than our markup on labor costs, and in a given period an increase in the percentage of work with greater materials procurement requirements may decrease our overall margins. Furthermore, as discussed further in Overview - Business Environment, fluctuations in the price or availability of materials and equipment we or our customers utilize could impact demand for our services or costs to complete projects.

Foreign currency risk. Our financial performance is reported on a U.S. dollar-denominated basis but is partially subject to fluctuations in foreign currency exchange rates. Fluctuations in exchange rates relative to the U.S. dollar, primarily Canadian dollars and Australian dollars, can materially impact our results of operations and impact comparability between periods.

Results of Operations

A discussion of the changes in our consolidated results of operations between the years December 31, 2021 and December 31, 2020 and the changes in our segment results of operations between the years ended December 31, 2021, 2020 and 2019 is included below, with certain of our segment results of operations recast to conform to our current segment reporting structure. A discussion of the changes in our consolidated results of operations between the years ended December 31, 2020 and 2019 is included in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations of our Annual Report on Form 10-K for the year ended December 31, 2020, which was filed with the SEC on March 1, 2021. The results of acquired businesses have been included in the following results of operations since their respective acquisition dates.

48

The following table sets forth selected statements of operations data, such data as a percentage of revenues for the years indicated as well as the dollar and percentage change from the prior year (dollars in thousands):

Consolidated Results

`

Revenues. Revenues increased primarily due to a $1.16 billion increase in revenues from our Electric Power Infrastructure Solutions segment, largely due to growth in spending by our utility customers on grid modernization resulting in increased demand for our electric power services and approximately $245 million of revenues attributable to acquired businesses. Also contributing to the increase was a $520.1 million increase in revenues from our Renewable Energy Infrastructure Solutions segment, primarily due to our acquisition of Blattner in the fourth quarter of 2021, as well as a $101.4 million increase in revenues from our Underground Utility and Infrastructure Solutions segment, primarily due to increased demand from our gas utility and industrial customers. See Segment Results below for additional information and discussion related to segment revenues.

Gross profit. Gross profit increased primarily due to an increase in revenues across all segments. Gross profit as a percentage of revenues increased due to improved utilization and fixed cost absorption from our Electric Power Infrastructure Solutions and Renewable Energy Infrastructure Solutions segments. Gross profit was positively impacted in 2020 by the favorable close-out of certain projects in the Renewable Energy Infrastructure Solutions segment. Gross profit for the Underground Utility and Infrastructure Solutions segment in 2021 was adversely impacted by the recognition of a $31.7 million provision for credit loss related to receivables owed by a customer that declared bankruptcy in July 2021 and its affiliate, which is described further in Accounts Receivable and Allowance for Credit Losses within Note 4 of the Notes to Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data of this Annual Report. Additionally, gross profit for the Underground Utility and Infrastructure Solutions segment was adversely impacted during the years ended December 31, 2021 and 2020 by uncertainties and challenges in the energy market and overall economy caused by the COVID-19 pandemic, which negatively impacted our margins and ability to cover fixed and overhead costs. See Segment Results below for additional information and discussion related to segment operating income (loss).

Equity in earnings of integral unconsolidated affiliates. The amounts include our portion of amounts earned by integral unconsolidated affiliates and primarily relate to our portion of amounts earned by LUMA. The increase with respect to LUMA is mostly related to the completion of the steps necessary to transition operation and maintenance of the Puerto Rican electric transmission and distribution system from the owner to LUMA in mid-2021 and the entry into an interim services agreement that covers the interim services period for the project. See Note 9 of the Notes to Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data of this Annual Report for further information on LUMA. During the interim services period, LUMA receives a fixed annual management fee, payable in monthly installments, and is reimbursed for costs

49

and expenses. Additionally, we acquired a 44% interest in an entity that provides right-of-way solutions, including site preparation and clearing, materials delivery and installation and management of permitting requirements and traffic control at the beginning of the fourth quarter of 2021, and our portion of the amounts earned by this investment are included beginning as of that investment date.

Selling, general and administrative expenses. The increase in selling, general and administrative expenses was primarily attributable to a $95.6 million increase in expenses associated with acquired businesses and a $31.2 million increase in the provision for credit losses, the majority of which related to the recognition of the provision for credit loss related to a receivable from a customer that declared bankruptcy in July 2021, and its affiliate, which is described further in Accounts Receivable and Allowance for Credit Losses within Note 4 of the Notes to Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data of this Annual Report. Also contributing to the increase was a $31.2 million increase in compensation expense, largely associated with increased incentive compensation expense as a result of higher levels of operating performance and an increase in salaries and benefits due to increased personnel to support business growth. Compensation expense for the year ended December 31, 2020 included a $14.0 million correction of prior period amounts related to the valuation of and accounting for certain performance-based equity awards that were awarded during the years 2017 to 2019. Also contributing to the 2021 increase were a $11.4 million increase in travel and related expenses, which were below historical levels in 2020 as a result of reduced travel due to the COVID-19 pandemic, and a $2.9 million increase in expense related to deferred compensation liabilities. The fair market value changes in deferred compensation liabilities were largely offset by changes in the fair value of the company-owned life insurance (COLI) policies associated with the deferred compensation plan, which are included in other income, net as discussed below. Partially offsetting these increases were $6.3 million of incremental gains on sales of property and equipment.

Amortization of intangible assets. The increase was primarily due to amortization of intangible assets associated with recently acquired businesses, including the recent acquisition of Blattner, partially offset by reduced amortization expense associated with older acquired intangible assets, as certain of these assets became fully amortized.

Asset impairment charges. During the year ended December 31, 2021, we recognized a $5.7 million asset impairment charge related to certain equipment not utilized in our core operations, some of which was sold in October 2021 and the remainder of which was classified as assets held for sale as of December 31, 2021. Management reviews long-lived assets for potential impairment whenever events or changes in circumstances indicate the carrying amount may not be realizable, which may arise in connection with regular evaluations as to whether business operations have the ability to contribute long-term strategic value. As part of such evaluations during the fourth quarter of 2020, we recognized $8.3 million of asset impairment charges, $7.0 million of which related to our Latin American operations and $1.3 million of which related to the planned sale of certain equipment.

Change in fair value of contingent consideration liabilities. Contingent consideration liabilities are payable in the event certain performance objectives are achieved by an acquired business during designated post-acquisition periods. The change in fair value associated with these liabilities was primarily due to the effect of present value accretion on fair value calculations and, to a lesser extent, changes in performance in post-acquisition measurement periods by certain acquired businesses. Further changes in fair value are expected to be recorded periodically until the contingent consideration liabilities are settled, including potentially significant changes associated with the potential payment of up to $300.0 million of contingent consideration in connection with our acquisition of Blattner, the amount for which will be determined during a three-year post-acquisition period that began in January 2022. See Notes 6 and 17 of the Notes to Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data of this Annual Report for additional information related to these liabilities.

Interest and other financing expenses. Interest and other financing expenses increased primarily due to higher levels of debt and, to a lesser extent, a higher weighted average interest rate during the year ended December 31, 2021 compared to 2020. Our long-term debt increased significantly during the year ended December 31, 2021 in connection with our acquisition of Blattner, as described in further detail in Liquidity and Capital Resources below, and we expect that our interest expense will increase during the year ending December 31, 2022 as a result of this higher level of debt. Additionally, we paid $4.4 million of fees to the lenders related to a bridge facility commitment entered into but not utilized in connection with our acquisition of Blattner, all of which was amortized to interest and other financing expenses in the year ended December 31, 2021. For additional information on our debt instruments, including our senior notes, senior credit facility, the bridge facility commitment and interest requirements related to our debt instruments, see Note 10 of the Notes to Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data of this Annual Report.

Interest income. Interest income increased primarily due to interest received related to a settlement with a customer.

Other income, net. Other income, net increased primarily due to unfavorable results in the year ended December 31, 2020 primarily due to a $9.3 million impairment charge associated with an investment in a water and gas pipeline infrastructure contractor located in Australia that is accounted for using the cost method of accounting and $8.7 million of impairment charges associated with two non-integral equity investments that were negatively impacted by the decline in demand for refined

50

petroleum products. Higher income related to investments in unconsolidated affiliates and COLI policies associated with our deferred compensation plan positively impacted results for the year-ended December 31, 2021, while an $8.9 million legal settlement favorably impacted results for the year ended December 31, 2020.

Provision for income taxes. The effective tax rates for the years ended December 31, 2021 and 2020 were 21.0% and 20.9%. The rate for the year ended December 31, 2021 was favorably impacted by the recognition of a $21.3 million tax benefit that resulted from equity incentive awards vesting at a higher fair market value than their grant date fair market value, as compared to the recognition of $3.1 million associated with this tax benefit for the year ended December 31, 2020, which was due to a smaller difference between the vest date fair market value and grant date fair market value of vested equity incentive awards. The effective tax rate for the year ended December 31, 2021 was also favorably impacted by $6.7 million of tax benefits related to a decrease in reserves for uncertain tax positions as a result of the expiration of certain U.S. federal and state statutes of limitations periods, a $7.8 million benefit related to a favorable clarification by the Internal Revenue Service regarding deductions for certain per diem amounts, a $7.0 million benefit related to certain COLI policies, and a $2.4 million reduction in our deferred tax asset valuation allowance related to U.S. state net operating losses. The effective tax rate for the year ended December 31, 2020 was also favorably impacted by a $45.1 million reduction in our deferred tax asset valuation allowance related to foreign tax credits and $8.2 million of tax benefits related to a decrease in reserves for uncertain tax positions, which resulted from the expiration of certain federal and state statutes of limitations periods. The effective tax rates for the years ended December 31, 2021 and 2020 include the impact of taxable losses of $9.6 million and $60.8 million associated with our Latin American operations, for which no income tax benefit was recognized. Absent the items described above, the effective tax rates for December 31, 2021 and 2020 would have been 27.8% in each period. We expect our effective tax rate to be approximately 25.0% to 25.5% for 2022.

Other comprehensive income (loss), net of taxes. Other comprehensive income (loss) results from translation of the balance sheets of our foreign operating companies, which are primarily located in Canada and Australia and have functional currencies other than the U.S. dollar, and therefore are affected by the strengthening or weakening of the U.S. dollar against such currencies. The loss in the year ended December 31, 2021 was impacted primarily by the strengthening of the U.S. dollar against the Australian dollar as of December 31, 2021 when compared to December 31, 2020. The gain in the year ended December 31, 2020 was impacted primarily by the weakening of the U.S. dollar against both the Australian and Canadian dollars as of December 31, 2020.

Segment Results

Reportable segment information, including revenues and operating income by type of work, is gathered from each of our operating companies for the purpose of evaluating segment performance. Classification of our operating company revenues by type of work for segment reporting purposes can at times require judgment on the part of management. Our operating companies may perform joint projects for customers in multiple industries, deliver multiple types of services under a single customer contract or provide service offerings to various industries. For example, we perform joint trenching projects to install distribution lines for electric power and natural gas customers. Integrated operations and common administrative support for operating companies require that certain allocations be made to determine segment profitability, including allocations of corporate shared and indirect operating costs, as well as general and administrative costs. 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.

Year ended December 31, 2021 compared to the year ended December 31, 2020

The following tables set forth segment revenues, segment operating income (loss) and operating margins for the periods indicated, as well as the dollar and percentage change from the prior period. Operating margins are calculated by dividing operating income by revenues. Management utilizes operating margins as a measure of profitability, which can be helpful for

51

monitoring how effectively we are performing under our contracts. Management also believes operating margins are a useful metric for investors to utilize in evaluating our performance. The following table shows dollars in thousands.