filings.toolsQuanta Services (PWR) 10-K risk factor changes: FY2017 vs FY2016
The 2017-12-31 10-K against the 2016-12-31 one, compared heading by heading and sentence by sentence. One of these filings carries no fiscal year tag, so its year is the calendar year of the period end.
Item 1A241 rewritten178 added55 removed268 unchanged
All filing items1,851 rewritten1,292 added839 removed1,268 unchanged
Summary
counted, not written
- Item 1A headings could not be compared: only 0 carried over between the two years, which usually means one filing was read wrongly, so none is reported as new or removed.
- Sentence by sentence, 1,292 added, 839 removed, 1,851 rewritten and 1,268 unchanged across 22 items that differ.
Sentences by item
22 items, with every count and a link to each item that changed
Underlined words on a shaded ground are new in FY2017; struck-through words were in FY2016. Sentences that are wholly new or wholly gone are labelled rather than marked.
Item 1A. Risk Factors
241 rewritten, 178 added, 55 removed, 268 unchanged
This Annual Report on Form 10-K also includes statements reflecting assumptions, expectations, projections, intentions or beliefs about future events that are intended as “forward-looking statements” under the Private Securities Litigation Reform Act of 1995 and should be read in conjunction with the section entitled [removed: _Uncertainty] [added: Uncertainty] of Forward-Looking Statements and [removed: Information_] [added: Information] included in Item 7.
[removed: _Management’s] [added: Management’s] Discussion and Analysis of Financial Condition and Results of [removed: Operations._][added: Operations.]
[removed: _Our] [added: Our] operating results may vary significantly from quarter to [removed: quarter._][added: quarter.]
[added: For example, we typically experience lower gross and] operating margins during winter months due to lower demand for our services and more difficult operating conditions in the Northern hemisphere.
| [removed: |] • | [removed: |] the timing and volume of work we [removed: perform;] [added: perform and our performance with respect to ongoing projects;] |
| [removed: |] • | [removed: |] adverse weather [removed: conditions;] [added: conditions or events;] |
| [removed: |] • | [removed: |] variations in the size, scope and margins of projects we perform and the mix of our customers, contracts and business during any particular quarter; |
| [removed: |] • | [removed: |] increases in [removed: construction and design] [added: construction, design, engineering or procurement] costs; |
| [removed: |] • | [removed: |] fluctuations in regional, national or global [removed: economic] [added: economic, political] and market conditions and demand for our services; |
| [removed: |] • | [removed: |] pricing pressures resulting from competition; |
| [removed: |] • | [removed: |] the budgetary spending patterns of customers and federal, state and local governments; |
| [removed: |] • | [removed: |] disruptions in our customers’ strategic plans which could occur as a result of emerging technologies; |
| [removed: |] • | [removed: |] the magnitude of work performed under change orders and the timing of their recognition; |
| [removed: |] • | [removed: |] disputes with customers [added: or delays] relating to [added: billing and] payment terms under our contracts and change orders, and our ability to successfully negotiate and obtain payment or reimbursement under our contracts and change orders; |
| [removed: |] • | [removed: |] liabilities associated with multiemployer pension plans in which our employees [removed: participate or withdrawals] [added: participate, including with respect to any withdrawal] therefrom; |
| [removed: |] • | [removed: |] significant fluctuations in foreign currency exchange rates; |
| [removed: |] • | [removed: |] changes in accounting pronouncements that require us to account for items [removed: differently than historical] [added: differently;] |
| [removed: |] • | [removed: | losses] [added: liabilities and costs] experienced in our operations [added: that are] not [removed: otherwise] covered by [added: third-party] insurance; |
| [removed: |] • | [removed: |] payment risk associated with the financial condition of our customers, including those customers affected by the volatility of natural gas and oil prices; |
| [removed: |] • | [removed: |] the termination or expiration of existing [added: customer] agreements; |
| [removed: |] • | [removed: |] changes in bonding and lien requirements applicable to existing and new [added: customer] agreements; |
| [removed: |] • | [removed: |] implementation of various information [added: technology] systems, which could temporarily disrupt day-to-day operations; |
| [removed: |] • | [removed: |] the recognition of tax [removed: benefits] [added: impacts] related to [added: changes in tax laws or] uncertain tax positions; |
| [removed: |] • | [removed: |] the timing and magnitude of costs we incur to support growth internally or through acquisitions or otherwise; |
| [removed: |] • | [removed: |] the timing and integration of acquisitions and the magnitude of the related acquisition and integration costs; and |
| [removed: |] • | [removed: |] [added: estimates and assumptions in determining our financial results and backlog, including] the timing and significance of [removed: potential additional] impairments of long-lived assets, equity or other investments, [added: receivables,] goodwill or other intangible assets. |
[removed: _Negative] [added: Negative] economic and market conditions, including continued low oil and natural gas prices, may adversely impact our customers’ future spending as well as payment for our services and, as a result, our operations and [removed: growth._][added: growth.]
Stagnant or declining economic conditions [removed: have] [added: can] adversely [removed: impacted] [added: impact] the demand for our services [removed: in the past] and [removed: resulted] [added: result] in the delay, reduction or cancellation of certain [removed: projects and may adversely affect us in the future.][added: projects.]
In addition, economic and market conditions specifically affecting [removed: any of] the industries we serve could adversely affect our business, financial condition, results of operations and cash flows.
Consolidation, competition, capital constraints or negative economic conditions in the electric [removed: power and] [added: power,] oil and gas [added: or communications] industries may also result in reduced spending by, or the loss of, one or more of our customers.
Specifically, lower natural gas and oil prices [removed: have resulted, and could continue to result,] [added: can result] in decreased spending by [removed: some of] our customers in our Oil and Gas Infrastructure Services segment.
[removed: Despite some recovery and stability in natural gas and oil prices since early 2016,] [added: In particular,] capital spending by exploration and production companies and midstream companies has generally declined in the last few years.
[removed: As a result,] [added: Any future decline in prices, or perceived risk thereof, may result in] our customers [removed: may reduce] [added: reducing] or [removed: delay] [added: delaying] capital spending on larger pipeline projects, gas gathering and compressor systems and related infrastructure, resulting in less demand for our services.
Additionally, declines in natural gas and oil prices, and [removed: the] [added: a] resulting decline in the development of resource plays and oil and natural gas production, [removed: can] [added: could] negatively impact our Electric Power Infrastructure Services segment.
[removed: _A] [added: A] variety of issues outside of our [removed: control, can] [added: control could] affect the timing of and our performance on projects, which may result in additional costs to us, reductions or delays in revenues or the payment of liquidated [removed: damages._][added: damages.]
The timing of or failure to obtain contracts, delays in awards of, start dates for or completion of projects and the cancellations of projects [removed: can] [added: could] result in significant periodic fluctuations in our [removed: business and] [added: business, financial condition,] results of [removed: operations.][added: operations and cash flows.]
Many projects involve challenging engineering, permitting, procurement and construction phases that may occur over extended time periods, sometimes [removed: over] several years.
We may [added: also] encounter difficulties as a result of delays in design, engineering information or materials [removed: provided] [added: to be completed or procured] by [added: us,] the customer or a third [removed: party,] [added: party;] delays or difficulties in equipment and material [removed: delivery,] [added: delivery;] schedule [removed: changes,] [added: changes;] delays due to our or our customers’ failure to [added: timely obtain permits or rights of way or meet other regulatory requirements or permitting conditions; weather-related delays; protests, legal challenges or other political activity; and other factors.]
[removed: Larger projects, in particular,] [added: Projects where we provide engineering, procurement and construction services] present additional performance risks due to the [removed: larger and more complex] [added: amount of] work [added: and complexity] involved.
[removed: Furthermore, the] [added: The] bidding processes for [removed: larger] [added: these] projects can also be [removed: longer and more complex,] [added: longer,] often taking six to nine [removed: months.][added: months, and regulatory and permitting delays on these projects tend to be more challenging and cause more timing uncertainty.]
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| • | project delays, reductions in scope or cancellations, including as a result of permitting, regulatory or environmental processes, project performance, customer capital constraints, claimed force majeure events or protests or other political activity; |
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| • | the resolution of, or unexpected or increased costs associated with, pending or threatened litigation, indemnity obligations or other claims asserted against us; |
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For example, we typically experience lower gross and
##### [Table of Contents](#toc)
##### [Index to Financial Statements](#INDEX)
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| | • | | permitting, regulatory or customer-caused delays on projects; |
| | • | | the outcome or resolution of pending or threatened litigation, claims or other legal proceedings; |
pronouncements have;
Any future decline in prices, or perceived risk thereof, may place downward pressure on capital programs.
timely obtain permits or rights of way or meet other regulatory requirements or permitting conditions, weather-related delays and other factors, many of which are beyond our control, that can negatively impact our ability to complete the project and in accordance with the original delivery schedule.
Regulatory and permitting delays on larger projects tend to be more challenging and cause more uncertainty as to project timing.
We may not be able to recover all of such costs.
Our customers may change or delay various elements of a project before or after its commencement, or the design, engineering information, equipment or materials that are to be provided by the customer or other parties may be preliminarily deficient or delivered later than required by the project schedule, resulting in additional direct or indirect costs.
In some instances, these claims can be the subject of lengthy legal proceedings, and it is difficult to accurately predict when they will be fully resolved.
We currently generate some of our revenues under fixed price contracts.
We assume risks related to revenue, cost and profitability on fixed-priced contracts.
| | • | | unanticipated costs or claims due to customer-caused delays, customer failure to provide required materials or equipment, errors in engineering, specifications or designs, project modifications, or contract termination or suspension and our inability to obtain reimbursement for such costs or recover on such claims; |
| | • | | weather conditions; |
| | • | | failure to perform and delays in performance by our project owners or their contractors or our suppliers or subcontractors; |
| | • | | general economic conditions and the economic conditions affecting the industries we serve. |
It may be difficult to collect amounts owed to us by these customers.
claims occur due to, among other things, customer-caused delays or changes in project scope, both of which may result in additional cost, which may or may not be recovered until the claim is resolved.
_We may be unsuccessful at generating internal growth._
therefore may be able to provide the required services at lower rates than us.
Our offshore operations are subject to
We are generally self-insured for all claims that do not exceed the amount of the applicable deductible.
If any of these events occur, our overall risk exposure would increase and our operations could be disrupted.
The majority of our contracts have a warranty period of 18 to 24 months, although some are longer.
impacted thereby, at our sole expense, and we could also be responsible for other damages if we are not able to adequately satisfy our warranty obligations.
_Business_.
the periods presented and to determine the contingent assets and liabilities known to exist as of the date of the financial statements.
The accounting literature provides specific guidance for testing goodwill and other non-amortized intangible assets for impairment.
Refer to Item 7.
Management is required to make certain estimates and assumptions when allocating goodwill to reporting units and determining the fair value of a reporting unit’s net assets and liabilities, including, among other things, an assessment of market conditions, projected cash flows, investment rates, cost of capital and growth rates, which could significantly impact the reported value of goodwill and other intangible assets.
Fair value is determined using a combination of the discounted cash flow, market multiple and market capitalization valuation approaches.
Absent any impairment indicators, we perform our impairment tests annually during the fourth quarter.
If market capitalization declines below book value, this may be considered an impairment indicator.
As part of our 2015 annual test for goodwill impairment, we recorded a non-cash impairment charge of $39.8 million related to goodwill and $12.1 million related to customer relationships, trade names and non-compete agreement intangible assets.
The extended low commodity price environment significantly impacted certain reporting units within our Oil and Gas Infrastructure Services Division.
Specifically, lower levels of expected activity in the U.S. Gulf of Mexico and, to a lesser extent, with respect to certain directional drilling operations in Australia resulted in impairments of goodwill and intangible assets.
We also recorded asset impairments primarily related to certain international renewable energy services operations of $8.0 million in 2016 and $6.6 million in 2015.
An excerpt. Shown here: 40 of 241 rewritten, 40 of 178 added and 40 of 55 removed. The counts are complete. For every sentence, read Item 1A. Risk Factors in the FY2017 filing and the FY2016 filing.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
474 rewritten, 413 added, 367 removed, 292 unchanged
[removed: _The] [added: The] following discussion and analysis of our financial condition and results of operations should be read in conjunction with our historical consolidated financial statements and related notes [removed: thereto] [added: included elsewhere] in Item 8.
Actual results may differ materially from these expectations due to inaccurate assumptions and known or unknown risks and uncertainties, including those identified in Uncertainty of Forward-Looking Statements and Information below and [removed: in] Item 1A.
Risk [removed: Factors._][added: Factors.]
[removed: Introduction][added: Introduction]
We are a leading provider of specialty contracting services, offering infrastructure solutions primarily to the electric [removed: power and] [added: power,] oil and gas [added: and communications] industries in the United States, [removed: Canada and Australia] [added: Canada, Australia, Latin America] and select other international markets.
Our consolidated revenues for the year ended December 31, [removed: 2016] [added: 2017] were [removed: approximately $7.65] [added: $9.47] billion, of which [removed: 63%] [added: 59%] was attributable to the Electric Power Infrastructure Services segment and [removed: 37%] [added: 41% was attributable] to the Oil and Gas Infrastructure Services segment.
We have developed strong strategic alliances with numerous customers and strive to develop and maintain our status as a preferred [removed: vendor] [added: service provider] to our customers.
We enter into various types of contracts, including [removed: competitive] unit price, hourly rate, cost-plus (or time and materials basis), and fixed price (or lump sum basis), the final terms and prices of which are frequently negotiated with the customer.
Although the terms of our contracts vary considerably, most are made on either a unit price or fixed price basis in which we agree to [removed: do the work for] a price per unit of work performed (unit price) or [removed: for] a fixed amount for the entire project (fixed price).
We recognize [removed: revenue] [added: revenues] on our unit price and cost-plus contracts as units are completed or services are performed.
Under this method, [removed: revenue is] [added: revenues are] recognized based on the percentage of total costs incurred to date in proportion to total estimated costs to complete the contract.
For internal management purposes, we are [added: also] organized into two internal divisions, namely, the Electric Power Infrastructure Services Division and the Oil and Gas Infrastructure Services Division.
These internal divisions are closely aligned with the reportable segments [removed: described above] [added: and are] based on the predominant type of work provided by the operating units within each division.
[added: Our operating units may perform joint] projects for customers in multiple industries, deliver multiple types of [removed: infrastructure] services under a single customer contract or provide services across industries.
Our integrated operations and common administrative support at each of our operating units requires that certain [removed: allocations,] [added: allocations be made to determine segment profitability,] including allocations of shared and indirect costs, such as facility costs, indirect operating expenses including depreciation, and general and administrative [removed: costs, be made to determine operating segment profitability.][added: costs.]
To a lesser extent, [removed: this] [added: the] segment [added: also] provides [added: comprehensive communications infrastructure] services [removed: such as] [added: to wireline, fiber and wireless carrier customers within] the [added: communications industry; services in connection with the] construction of electric power generation [removed: facilities,] [added: facilities;] the design, installation, maintenance and repair of commercial and industrial [removed: wiring,] [added: wiring; and] the installation of traffic networks and cable and control systems for light rail [removed: lines and ancillary telecommunication infrastructure services.][added: lines.]
The Oil and Gas Infrastructure Services segment provides comprehensive network solutions to customers involved in the [removed: development] [added: development, transportation, storage] and [removed: transportation] [added: processing] of natural gas, oil and other pipeline products.
We also serve the offshore and inland water energy markets, primarily providing services to oil and gas exploration platforms, including mechanical installation (or “hook-ups”), electrical and instrumentation, pre-commissioning and commissioning, coatings, [added: shallow water pipeline installation,] fabrication and marine asset repair.
[removed: Recent] [added: Recent] Investments, Acquisitions and [removed: Divestitures][added: Divestitures]
The results of four of the acquired [removed: companies] [added: businesses] are generally included in our Electric Power Infrastructure Services segment.
These [removed: companies] [added: businesses] included an electrical infrastructure services [removed: company] [added: business] located in Australia, a utility contracting [removed: company] [added: business] located in Canada, a full service medium- and high-voltage powerline contracting [removed: company] [added: business] located in the United States and a [removed: telecommunications company] [added: communications services business] located in Canada.
We also acquired a pipeline [removed: service] [added: services] contractor located in the United States, the results of which are generally included in our Oil and Gas Infrastructure Services segment.
The aggregate consideration for these acquisitions consisted of [removed: approximately] $75.9 million paid or payable in cash, subject to certain adjustments, 70,840 shares of Quanta common stock valued at [removed: approximately] $1.5 million as of the settlement date of the applicable [removed: acquisition, and contingent consideration payments of up to $39.5 million, which will be paid if certain financial targets are achieved.]
Based on the estimated fair value of this contingent consideration, we [removed: have] recorded [removed: an] [added: a total of] $18.7 million [removed: liability.][added: in liabilities as of the applicable acquisition dates.]
The results of eight of the acquired [removed: companies] [added: businesses] are generally included in our Electric Power Infrastructure Services segment.
These [removed: companies include] [added: businesses included] a foundation services [removed: company] [added: business] located in the United States, an electrical contracting [removed: company] [added: business] located in the United States, an electrical engineering [removed: company] [added: business] located in Australia, a powerline construction [removed: company] [added: business] located in the United States, an engineering [removed: company] [added: business] located in Canada, an engineering, procurement and construction services [removed: company] [added: business] based in the United States, an underground construction contracting [removed: company] [added: business] located in Canada and a supplier and material procurement specialist for the power and utility industry in Canada.
The results of the remaining three acquired [removed: companies] [added: businesses] are generally included in our Oil and Gas Infrastructure Services segment.
These [removed: companies] [added: businesses] include a [removed: company] [added: business] that services above-ground storage tanks in the United States, an underground utility distribution contractor that provides services to gas and electric utilities in Canada, and a [removed: company] [added: business] that specializes in the engineering, procurement, construction, and commissioning of compression and surface facilities for the high pressure gas industry in Australia.
The aggregate consideration for these acquisitions consisted of [removed: approximately] $110.6 million paid or payable in cash, subject to [removed: net working capital] [added: certain] adjustments, 461,037 shares of Quanta common stock valued at [removed: approximately] $10.1 million as of the settlement dates of the applicable acquisitions, and [added: contingent consideration payments with an estimated fair value of] $1.0 million [removed: in contingent consideration.][added: as of the applicable acquisition date.]
On August 4, 2015, we completed the sale for a purchase price of [removed: approximately $1] [added: $1.00] billion in cash, resulting in after-tax net proceeds of [removed: approximately $848] [added: $848.2] million.
In the third quarter of 2015, we recognized a net of tax gain of [removed: approximately $171] [added: $171.0] million.
[removed: Seasonality;] [added: Seasonality;] Fluctuations of Results; Economic [removed: Conditions][added: Conditions]
These variations are influenced by weather, customer spending patterns, bidding seasons, receipt of required regulatory approvals, [added: permits and rights of way, project timing and schedules, and holidays.]
In addition, many of our customers develop their [added: annual] capital budgets [removed: for the coming year] during the first [removed: quarter] [added: quarter,] and [added: therefore] do not begin infrastructure projects in a meaningful way until their capital budgets are finalized.
Third quarter revenues are typically the highest of the year, as a greater number of projects are underway, and weather is [added: normally] more accommodating.
Many projects are completed in the fourth quarter, and revenues are often impacted positively by customers seeking to spend their capital budgets before the end of the [removed: year; however, the holiday season and inclement weather can sometimes cause delays, reducing revenues and increasing costs.][added: year.]
[removed: Any] [added: Productivity and operating activity in any] quarter may be positively or negatively affected by atypical weather patterns in [removed: any of] the areas we serve, such as severe weather, excessive rainfall or unusual winter [removed: weather, making it difficult to predict these variations and their effect on particular projects quarter to quarter.][added: weather.]
These seasonal impacts are typical for our U.S. operations, but as our foreign operations [removed: continue to] grow, [removed: we may see a lessening of] this pattern [removed: impacting] [added: may have a lesser impact on] our quarterly revenues.
For example, revenues in Canada are often higher in the first quarter [removed: as] [added: because] projects are [added: often] accelerated [removed: so that] [added: in order to complete] work [removed: can be completed] prior to the break up, or seasonal thaw, as productivity is adversely affected by wet ground conditions during the warmer spring and summer months.
Our volume of business may be adversely affected by declines or delays in new projects due to cyclicality, which may vary by geographic [removed: region, including the United States, Canada and Australia.][added: region.]
Through a recent acquisition discussed below, we expanded our service offerings in this segment to include high-pressure and critical-path turnaround services to the downstream and midstream energy markets and enhanced our capabilities with respect to instrumentation and electrical services, piping, fabrication and storage tank services.
We also enter into strategic partnerships and investment arrangements with customers and infrastructure investors to provide fully integrated infrastructure services on certain projects, including planning and feasibility analysis, engineering, design, procurement, construction and operation and maintenance, as well as project financing and investment.
These projects include public-private partnerships, private infrastructure projects and concessions, along with build, own, operate and transfer and build to suit arrangements.
As part of this strategy, during the year ended December 31, 2017, we formed a partnership with select infrastructure investors that provides up to $1.0 billion of capital, including approximately $80.0 million from us, available to invest in certain of these infrastructure projects through August 2024.
Acquisitions
In January 2018, we acquired an electrical infrastructure services business specializing in substation construction and relay services and a postsecondary educational institution that provides pre-apprenticeship training and programs for experienced lineman, both of which are located in the United States.
The aggregate consideration for these acquisitions was $47.9 million in cash, subject to certain adjustments, and 379,817 shares of Quanta common stock, which had a fair value of approximately $13.6 million at the acquisition dates.
Additionally, the acquisition of the postsecondary educational institution includes the potential payment of up to approximately $15.0 million of contingent consideration, payable if the acquired business achieves certain financial and operational objectives over a five-year period.
The results of the acquired businesses will generally be included in our Electric Power Infrastructure Services segment and consolidated financial statements beginning on the acquisition dates.
On July 20, 2017, we acquired Stronghold, Ltd. and Stronghold Specialty, Ltd. (collectively Stronghold), a specialized services business located in the United States that provides high-pressure and critical-path solutions to the downstream and midstream energy markets.
The aggregate consideration included $351.0 million in cash, subject to certain adjustments, and 2,693,680 shares of Quanta common stock, which had a value of $81.3 million at the acquisition date.
Additionally, the acquisition includes the potential payment of up to $100.0 million of contingent consideration, payable if the acquired business achieves certain financial targets over a three-year period.
Based on the estimated fair value of this contingent consideration, we recorded a $51.1 million liability as of the acquisition date.
The results of the acquired business have generally been included in our Oil and Gas Infrastructure Services segment and consolidated financial statements since the acquisition date.
During the year ended December 31, 2017, we also acquired a communications infrastructure services contractor and an electrical and communications contractor, both of which are located in the United States.
The aggregate consideration for these acquisitions consisted of $11.9 million paid or payable in cash, subject to certain adjustments, and 288,666 shares of Quanta common stock, with a value of $8.3 million as of the respective acquisition dates.
The results of the acquired businesses have generally been included in our Electric Power Infrastructure Services segment and consolidated financial statements since the acquisition dates.
acquisition, and contingent consideration payments of up to $39.5 million, payable if financial targets are achieved by certain of the acquired businesses.
The results of the acquired businesses have been included in our consolidated financial statements since the acquisition dates.
During 2015, we completed 11 acquisitions.
The results of the acquired businesses have been included in our consolidated financial statements since the acquisition dates.
Disposition
However, the holiday season and inclement weather can sometimes cause delays during the fourth quarter, reducing revenues and increasing costs.
Examples of other items that may cause our results or demand for our services
Seasonal and geographical.
For example, margins may be negatively impacted by operations in an urban setting as opposed to a less populated rural setting or over mountainous or other difficult terrain as opposed to open terrain.
Weather.
Revenue mix.
Service and maintenance versus installation.
Subcontract work.
Materials versus labor.
Size, scope and complexity of projects.
fixed costs.
Our margins may be further impacted by delays in the timing of larger projects, extended bidding procedures for more complex EPC projects or temporary decreases in capital spending by our customers.
Depreciation.
We include depreciation in cost of services, which is common practice in our industry.
Project Variability and Performance.
Margins for a single project may fluctuate quarter to quarter due to changes in the volume or type of work performed, the pricing structure under the project contract or job productivity.
Foreign currency risk.
Change in fair value of contingent consideration liabilities.
Our operating units may perform joint infrastructure service
##### [Table of Contents](#toc)
##### [Index to Financial Statements](#INDEX)
As these transactions were effective during 2016, the results have been included in our consolidated financial statements beginning on the respective dates of acquisition.
These acquisitions should enable us to further enhance our service offerings in the United States, Canada and Australia.
During 2015, we acquired 11 companies.
As these transactions were effective during 2015, the results have been included in our consolidated financial statements beginning on the respective dates of acquisition.
These acquisitions should enable us to further enhance our electric power and oil and gas infrastructure service offerings in the United States, Canada and Australia.
During 2014, we completed nine acquisitions, which enabled us to further enhance our electric power and oil and gas infrastructure service offerings in the United States and Canada and expand our capabilities in Australia to include electric power infrastructure service offerings.
These acquisitions included four electric power infrastructure services companies located in Canada; two oil and gas infrastructure services businesses located in Canada; an electric power infrastructure services company located in Australia; a U.S.-based general engineering and construction company specializing in hydrant fueling, waterfront and utility construction for the U.S. Department of Defense the results of which are generally included in our Oil and Gas Infrastructure Services segment; and a geotechnical and geological engineering services company based in the United States the results of which are generally included in our Electric Power Infrastructure Services segment.
The aggregate consideration for these acquisitions was approximately $279.5 million in cash, 686,382 shares of Quanta common stock and 3,825,971 exchangeable shares of Canadian subsidiaries of Quanta that are exchangeable on a one-for-one basis for Quanta common stock.
The exchangeable shares provide holders with rights equivalent to Quanta common stockholders with respect to dividends and other economic rights.
In addition, we issued one share of Series G preferred stock associated with 899,858 of the exchangeable shares, which generally votes on the same matters as Quanta common stock and is entitled to a number of votes equal to the number of such exchangeable shares outstanding at that time.
Exchangeable shares not associated with preferred stock do not have voting rights.
The aggregate value of the securities issued on the settlement dates of the acquisitions totaled approximately $134.5 million.
As these transactions were effective during 2014, the results of each acquired company have been included in our consolidated financial statements beginning on the respective dates of acquisition.
permits and rights of way, project timing and schedules, and holidays.
Such characteristics include whether the project is performed in an urban versus a rural setting or in a mountainous area or in open terrain.
_Depreciation._ We include depreciation in cost of services.
This is common practice in our industry, but it can make comparability of our margins to those of other companies difficult.
_Performance risk._ Margins may fluctuate because of the volume of work and the impacts of pricing and job productivity, which can be affected both favorably and negatively by, among other things, weather, geography, customer decisions and crew productivity.
For example, when comparing a service contract between a current quarter and the comparable prior year’s quarter, factors affecting the gross margins associated with the revenues generated by the contract may include pricing under the contract, the volume of work performed under the contract, the mix of the type of work specifically being performed and the productivity of the crews performing the work.
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| Equity in losses of unconsolidated affiliates | | | (979 | ) | | | — | | | | (466 | ) | | | — | | | | (332 | ) | | | — | |
| Other income (expense), net | | | 316 | | | | — | | | | (1,831 | ) | | | — | | | | (1,100 | ) | | | — | |
Consolidated revenues were also favorably
_Revenues._ Revenues decreased $174.8 million, or 2.3%, to $7.57 billion for the year ended December 31, 2015.
This decrease was primarily attributable to a decrease in electric power infrastructure services revenues of $365.4 million, or 6.9%, partially offset by an increase in oil and gas infrastructure services revenues of $190.6 million, or 7.8%.
Revenues from electric power infrastructure services were adversely impacted primarily by reduced customer spending and delays in project timing due to regulatory and permitting issues associated with larger electric transmission projects during the year ended December 31, 2015.
In addition, revenues contributed by our international operations were negatively impacted by approximately $227 million due to less favorable average foreign currency exchange rates as the U.S. dollar strengthened against the Canadian and Australian dollars throughout 2015.
Partially offsetting these decreases for the year ended December 31, 2015 was the favorable impact of approximately $375 million in revenues generated by acquired companies, primarily in the Oil and Gas Infrastructure Services segment.
These decreases were primarily due to the decrease in revenues from larger electric transmission and larger pipeline transmission projects, which typically yield higher margins, and an increase in revenues from services that typically yield lower margins.
Gross profit was also negatively impacted by approximately $73 million in aggregate losses recorded during the year ended December 31, 2015 on three projects due to increased costs associated with performance and site related factors that adversely impacted production.
The projects included the previously mentioned power plant project in Alaska, an electric transmission project in Canada substantially completed in the third quarter of 2015, and a directional drilling project in Canada that was completed during the fourth quarter of 2015.
The decrease was primarily attributable to an aggregate $102.5 million charge to provision for long-term contract receivable recorded in the third and fourth quarters of 2014 associated with an electric power infrastructure services project completed in 2012 and an aggregate $38.8 million expense recorded in the year ended December 31, 2014 associated with an adverse arbitration decision regarding a contract dispute on a 2010 directional drilling project.
Partially offsetting these decreases was $16.5 million in incremental general and administrative costs associated with acquired companies and $11.0 million in higher costs associated with ongoing technology, business development initiatives and facilities expenses.
Specifically, lower levels of expected activity in the U.S. Gulf of Mexico and, to a lesser extent, with respect to certain directional drilling operations in Australia resulted in impairments of goodwill and intangible assets.
_Interest expense._ Interest expense increased $3.3 million to $8.0 million for the year ended December 31, 2015 as compared to the year ended December 31, 2014 due to increased borrowing activity.
The effective tax rate was higher in 2015 due to a lower proportion of income before taxes from international jurisdictions, which are generally taxed at lower statutory rates.
An excerpt. Shown here: 40 of 474 rewritten, 40 of 413 added and 40 of 367 removed. The counts are complete. For every sentence, read Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations in the FY2017 filing and the FY2016 filing.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk
16 rewritten, 5 added, 2 removed, 11 unchanged
[removed: _Credit Risk._] We are subject to concentrations of credit risk related to our cash and cash equivalents and our net receivable position with customers, which includes amounts related to billed and unbilled accounts receivable and costs and estimated earnings in excess of billings on uncompleted contracts net of advanced billings with the same customer.
Although we do not currently believe the principal amounts of these [removed: investments] [added: cash and cash equivalents] are subject to any material risk of loss, changes in economic conditions could impact the interest income we receive from these investments.
This risk may be heightened as a result of [removed: the] depressed economic and financial market [removed: conditions that have existed in recent years.][added: conditions.]
[removed: _Interest Rate Risk._] As of December 31, [removed: 2016,] [added: 2017,] we had no derivative financial instruments to manage interest rate risk.
As of December 31, [removed: 2016,] [added: 2017,] the fair value of our variable rate debt of [removed: $352.8] [added: $668.4] million approximated book value.
Our weighted average interest rate on our variable rate debt for the year ended December 31, [removed: 2016] [added: 2017] was [removed: 2.1%.][added: 2.7%.]
The annual effect on our pretax earnings of a hypothetical 50 basis point increase or decrease in variable interest rates would be approximately [removed: $1.8] [added: $3.3] million based on our December 31, [removed: 2016] [added: 2017] balance of variable rate debt.
[removed: _Foreign Currency Risk._] The U.S. dollar is the functional currency for the majority of our operations, which are primarily located within the United States.
The functional currency for our foreign operations, which are primarily located in [removed: Canada] [added: Canada, Australia] and [removed: Australia,] [added: Latin America,] is typically the currency of the country in which the foreign operating unit is located.
During [removed: 2016,] [added: 2017,] revenues from our foreign operations accounted for [removed: 20.8%] [added: 26.2%] of our consolidated revenues.
Fluctuations in foreign exchange rates during the year ended December 31, 2016 caused [removed: an approximate] [added: a] decrease of [added: approximately] $41 million in foreign revenues compared to the year ended December 31, 2015.
[removed: Additionally, fluctuations] [added: Fluctuations] in foreign exchange rates during the year ended December 31, [removed: 2015] [added: 2017] caused an [removed: approximate decrease] [added: increase] of [removed: $227] [added: approximately $53] million in foreign revenues compared to the year ended December 31, [removed: 2014.][added: 2016.]
[removed: To minimize the risk from changes in foreign] currency exchange rates, we may enter into foreign currency derivative contracts to hedge our foreign currency risk on a cash flow basis.
There were no outstanding foreign currency derivative contracts at December 31, [removed: 2016.][added: 2017.]
Based on the balance of cash and cash equivalents in foreign banks of [removed: $92.7] [added: $55.2] million as of December 31, [removed: 2016,] [added: 2017,] an assumed 5% adverse change to foreign exchange rates would result in a fair value decline of [removed: $4.6] [added: $2.8] million.
Fluctuations in fair value are recorded in “Accumulated other comprehensive income [removed: (loss),”] [added: (loss)”,] a separate component of stockholders’ equity.
Credit Risk.
Interest Rate Risk.
Foreign Currency Risk.
To minimize the risk from changes in foreign
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##### [Table of Contents](#toc)
##### [Index to Financial Statements](#INDEX)
Item 1. Business
91 rewritten, 41 added, 26 removed, 89 unchanged
[removed: General][added: General]
Quanta Services, Inc. (Quanta) is a leading provider of specialty contracting services, offering infrastructure solutions primarily to the electric [removed: power and] [added: power,] oil and gas [added: and communication] industries in the United States, [removed: Canada and Australia] [added: Canada, Australia, Latin America] and select other international markets.
The services we provide include the design, installation, upgrade, repair and maintenance of infrastructure within each of the industries we serve, such as electric power transmission and distribution networks, substation facilities, renewable energy facilities, pipeline transmission and distribution systems and [removed: facilities, and related infrastructure.][added: facilities.]
Our consolidated revenues for the year ended December 31, [removed: 2016] [added: 2017] were [removed: approximately $7.65] [added: $9.47] billion, of which [removed: 63%] [added: 59%] was attributable to the Electric Power Infrastructure Services segment and [removed: 37%] [added: 41% was attributable] to the Oil and Gas Infrastructure Services segment.
We have established a presence throughout the United States, [removed: Canada and] [added: Canada,] Australia [added: and Latin America] with a workforce of approximately [removed: 28,100] [added: 32,800] employees as of December 31, [removed: 2016,] [added: 2017,] which enables us to quickly and reliably serve a diversified customer base.
Our ability to deploy services to customers throughout the United States, [removed: Canada and] [added: Canada,] Australia [added: and Latin America] as a result of our broad geographic presence and significant scope and scale of services is particularly important to our customers who operate networks that span multiple states or regions.
| [removed: •] [added: l |] Ameren Corporation | [added: l] | [removed: •] ITC Holdings Corp. |
| [removed: •] [added: l |] American Electric Power Company, Inc. | [added: l] | [removed: • Maurepas Pipeline, LLC] [added: Nalcor Energy] |
| [removed: •] [added: l |] ATCO Electric | [added: l] | [removed: • Nalcor Energy] [added: NextEra Energy, Inc.] |
| [removed: •] [added: l |] CenterPoint Energy, Inc. | [added: l] | [removed: • NextEra Energy,] [added: NiSource] Inc. |
| [removed: • Duke Energy Corporation] [added: l] | [added: Enbridge Inc.] | [removed: •] [added: l |] Puget Sound Energy, Inc. |
| [removed: • Enbridge, Inc.] [added: l] | [added: Entergy Corporation] | [removed: •] [added: l |] San Diego Gas & Electric Company |
| [removed: • Exelon Corporation] [added: l] | [added: Enterprise Products Partners L.P.] | [removed: •] [added: l |] Southern California Edison Company |
| [removed: • FirstEnergy] [added: l | Exelon] Corporation | [added: l] | [removed: •] TransCanada Corporation |
This growth has [removed: expanded] [added: allowed us to expand] our geographic presence and scope of services and [removed: developed] [added: develop] new capabilities to meet our customers’ evolving needs.
We believe that our business strategies, along with our competitive and financial strengths, are key elements in differentiating us from our competition and position us to capitalize on future capital spending by our [added: customers.]
Our strategies of expanding [removed: the] [added: our] portfolio of [removed: services we provide to our] [added: service offerings for] existing and potential [removed: customer base,] [added: customers,] increasing our geographic and technological capabilities, promoting best practices and cross-selling [removed: our] services to our [added: existing] customers, as well as continuing to maintain our financial strength, place us in the position to capitalize on opportunities and trends in the industries we serve and [removed: to] expand our operations [removed: globally] to select international markets.
We [added: also] continue to evaluate potential acquisitions of companies with strong management teams and good reputations and believe [removed: that] our financial strength and experienced management [removed: team] are attractive to potential acquisition targets.
[removed: Reportable Segments][added: Reportable Segments]
[removed: _Electric] [added: Electric] Power Infrastructure Services [removed: Segment_][added: Segment]
To a lesser extent, [removed: this] [added: the] segment [added: also] provides [added: comprehensive communications infrastructure] services [removed: such as] [added: to wireline, fiber and wireless carrier customers within] the [added: communications industry; services in connection with the] construction of electric power generation [removed: facilities,] [added: facilities;] the design, [removed: the] installation, maintenance and repair of commercial and industrial [removed: wiring,] [added: wiring; and the] installation of traffic networks and cable and control systems for light rail [removed: lines and ancillary telecommunication infrastructure services.][added: lines.]
[removed: _Oil] [added: Oil] and Gas Infrastructure Services [removed: Segment_][added: Segment]
The Oil and Gas Infrastructure Services segment provides comprehensive network solutions to customers involved in the [removed: development] [added: development, transportation, storage] and [removed: transportation] [added: processing] of natural gas, oil and other pipeline products.
We also serve the offshore and inland water energy markets, primarily providing services to oil and gas exploration platforms, including mechanical installation (or “hook-ups”), electrical and instrumentation, pre-commissioning and commissioning, coatings, [added: shallow water pipeline installation,] fabrication and marine asset repair.
[removed: Financial] [added: Financial] Information about Geographic [removed: Areas][added: Areas]
We operate primarily in the United States; however, we derived [removed: $1.59] [added: $2.48] billion, [removed: $1.54] [added: $1.59] billion and [removed: $1.89] [added: $1.54] billion of our revenues from foreign operations during the years ended December 31, [removed: 2016, 2015] [added: 2017, 2016] and [removed: 2014,] [added: 2015,] respectively.
Of our foreign revenues, [removed: approximately 75%, 85%] [added: 79%, 75%] and [removed: 82%] [added: 85%] were earned in Canada during the years ended December 31, [removed: 2016, 2015] [added: 2017, 2016] and [removed: 2014,] [added: 2015,] respectively.
In addition, we held property and equipment [removed: in the amount] of [removed: $320.7] [added: $330.4] million and [removed: $317.6] [added: $320.7] million in foreign countries, primarily Canada, as of December 31, [removed: 2016] [added: 2017] and [removed: 2015.][added: 2016.]
[removed: _Risk Factors,_] [added: Risk Factors,] Item 7.
[removed: _Management’s] [added: Management’s] Discussion and Analysis of Financial Condition and Results of [removed: Operations_] [added: Operations] and Item 7A.
[removed: _Quantitative] [added: Quantitative] and Qualitative Disclosures about Market [removed: Risk_] [added: Risk] for additional information and discussion regarding the potential impact of currency rate fluctuations.
[removed: Customers,] [added: Customers,] Strategic Alliances and Preferred Provider [removed: Relationships][added: Relationships]
Our customers include electric [removed: power and] [added: power,] oil and gas [added: and communications] companies, as well as commercial, industrial and governmental entities.
Our 10 largest customers accounted for [removed: approximately 32%] [added: 36%] of our consolidated revenues during the year ended December 31, [removed: 2016.][added: 2017.]
Our largest customer accounted for [removed: approximately 4%] [added: 9%] of our consolidated revenues for the year ended December 31, [removed: 2016.][added: 2017.]
Our operating unit management teams build upon existing customer relationships to secure additional projects and increase [removed: revenues from our current customer base.][added: revenues.]
Many of these customer relationships [removed: originated decades ago] [added: are long-standing] and are maintained through a partnering approach with [added: centralized] account [removed: management that] [added: management, which] includes project evaluation and consulting, quality performance, performance measurement and direct customer contact.
Additionally, operating unit management focuses on pursuing growth opportunities with prospective [removed: new] customers.
We [added: also] encourage operating unit management to cross-sell services of our other operating units to their customers and [removed: to] coordinate with our other operating units to pursue projects, especially those that are larger and more [removed: complicated.][added: complex.]
Our [added: corporate-level] business development group supports [removed: the operating units’] [added: these] activities by promoting and marketing our services for existing and prospective large national accounts, as well as projects that would require services from multiple operating units.
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| l | Duke Energy Corporation | l | PG&E Corporation |
| l | Eversource Energy | l | Valero Energy Corporation |
| l | FirstEnergy Corp. | l | The Williams Companies, Inc. |
Through a recent acquisition, we expanded our service offerings in this segment to include high-pressure and critical-path turnaround services to the downstream and midstream energy markets and enhanced our capabilities with respect to instrumentation and electrical services, piping, fabrication and storage tank services.
Financial Information Regarding Reportable Segments
For financial information about our reportable segments, refer to Note 16 of the Notes to Consolidated Financial Statements in Item 8.
Financial Statements and Supplementary Data, which note is incorporated herein by reference.
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| | | | | | | | | | | | | | | | |
| | Backlog as of | | | | | | | | Backlog as of | | | | | | |
| Total | $ | 6,446,196 | | | $ | 11,177,707 | | | $ | 5,853,336 | | | $ | 9,749,772 | |
For example, during the year ended December 31, 2017, we reduced our 12-month backlog for the Oil and Gas Infrastructure Services segment by approximately $100 million as a result of a cancellation of a natural gas pipeline project, for which we received a termination fee.
As discussed in Note 3 of the Notes to Consolidated Financial Statements in Item 8.
Financial Statements and Supplementary Data, effective for the quarter ending March 31, 2018, we will adopt new revenue recognition guidance issued by the Financial Accounting Standards Board (FASB).
Pursuant to the new guidance, we will also disclose the amount of remaining performance obligations at each period end as a separate component of backlog.
We expect to continue to report total backlog on a basis consistent with our current definition.
In response to the shortage and to attract qualified employees, we support and utilize various training and educational programs and have developed additional company-wide and project-specific employee training and educational programs, as described in further detail below.
programs specifically designed for developing and improving the skills of their members who work in the pipeline construction industry.
We have also continued to invest in our internal education and training capabilities.
Additionally, we recently acquired Northwest Lineman College, which has four campuses across the United States and specializes in pre-apprenticeship training, apprenticeship training and specialized utility task training.
We expect these capabilities to support future demand for qualified labor in the industries we serve and provide a platform for the development of additional educational and training programs.
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Further, while an increase in severe weather events, such as hurricanes, tropical storms, blizzards and ice storms, can create a greater amount of emergency restoration service work, it often also can result in delays or other negative consequences for our existing projects, which could negatively impact our financial results.
We manage and maintain a portion of our casualty risk through our wholly-owned captive insurance company, which insures all claims up to the amount of the applicable deductible of our third-party insurance programs.
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| • Con Edison Development, Inc. | | • PG&E Corporation |
| • Entergy Corporation | | • Spectra Energy Corp. |
| • Eversource Energy | | • Tallgrass Energy Partners, LP |
##### [Table of Contents](#toc)
##### [Index to Financial Statements](#INDEX)
customers.
On August 4, 2015, we completed the sale of our fiber optic licensing operations to Crown Castle International Corp. for a purchase price of approximately $1 billion in cash, resulting in after-tax net proceeds of approximately $848 million.
In the third quarter of 2015, we recognized a net of tax gain of approximately $171 million.
We have presented the results of operations, financial position, cash flows and disclosures of the fiber optic licensing operations as discontinued operations for all periods in our consolidated financial statements.
We are a preferred vendor for many of our customers.
Strategic alliances and long-term maintenance agreements are typically agreements for an initial term of approximately two to four years and may include renewal options to extend the initial term.
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| Total | | $ | 5,853,336 | | | $ | 9,749,772 | | | $ | 5,208,682 | | | $ | 9,386,897 | |
These collective bargaining agreements have varying terms and expiration dates.
In response to the shortage and to attract qualified employees, we utilize various International Brotherhood of Electrical Workers (IBEW) and National Electrical Contractors Association (NECA) training programs and support the joint IBEW/NECA Apprenticeship Program which trains qualified electrical workers.
Certain of our Canadian operations also support the Canadian Union Skilled Workers (CUSW)’s apprenticeship programs for training construction and maintenance electricians and powerline technicians.
We have also established apprenticeship training programs approved by the U.S. Department of Labor for employees not subject to the IBEW/NECA Apprenticeship Program, as well as additional company-wide and project-specific employee training and educational programs.
We believe our relationships with our employees and union representatives are good.
Our operating units performing more sophisticated and technical jobs utilize, when applicable, training programs
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operator, regardless of whether we directly caused the contamination or violated any law at the time of discharge or disposal.
Further, if climate change results in an increase in severe weather, such as hurricanes and ice storms, we could experience a greater amount of higher-margin emergency restoration service work, which generally has a positive impact on our gross margins.
We are generally self-insured for all claims that do not exceed the amount of the applicable deductible.
An excerpt. Shown here: 40 of 91 rewritten, 40 of 41 added and all 26 removed. The counts are complete. For every sentence, read Item 1. Business in the FY2017 filing and the FY2016 filing.
Item 3. Legal Proceedings
2 rewritten, 1 added, 0 removed, 5 unchanged
See [removed: _Legal Proceedings_] [added: Legal Proceedings] and [removed: _Collective] [added: Collective] Bargaining [removed: Agreements_] [added: Agreements] in Note 15 of the Notes to Consolidated Financial Statements in Item 8.
[removed: _Financial] [added: Financial] Statements and Supplementary [removed: Data,_] [added: Data,] which are incorporated by reference in this Item 3, for additional information regarding litigation, claims and other legal proceedings.
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Cover and table of contents
64 rewritten, 26 added, 7 removed, 12 unchanged
[removed: 10-K 1 d295903d10k.htm FORM] [added: Form] 10-K
[removed: SECURITIES] [added: UNITED STATES SECURITIES] AND EXCHANGE [removed: COMMISSION][added: COMMISSION]
[removed: Washington,] [added: Washington,] D.C. [removed: 20549][added: 20549]
[removed: (Mark One)][added: | (Mark One) | | |]
| [removed: ☒] [added: þ] | [removed: ANNUAL] [added: | ANNUAL] REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF [removed: 1934] [added: 1934] |
[removed: For] [added: | | | For] the fiscal year ended December 31, [removed: 2016][added: 2017 |]
| [removed: ☐] [added: ¨] | [removed: TRANSITION] [added: | TRANSITION] REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF [removed: 1934] [added: 1934] |
[removed: Commission] [added: Commission] file number [removed: 001-13831][added: 001-13831]
[removed: Quanta] [added: Quanta] Services, [removed: Inc.][added: Inc.]
[removed: (Exact] [added: (Exact] name of registrant as specified in its [removed: charter)][added: charter)]
| [removed: Delaware] [added: Delaware] | | [removed: 74-2851603] [added: 74-2851603] |
| [removed: (State] [added: (State] or other jurisdiction [removed: of incorporation] [added: of incorporation] or [removed: organization)] [added: organization)] | | [removed: (I.R.S. Employer Identification No.)] [added: (I.R.S. Employer Identification No.)] |
[removed: 2800] [added: 2800] Post Oak Boulevard, Suite [removed: 2600][added: 2600]
[removed: Houston,] [added: Houston,] Texas [removed: 77056][added: 77056]
[removed: (Address] [added: (Address] of principal executive offices, including zip [removed: code)][added: code)]
[removed: (713) 629-7600][added: (713) 629-7600]
[removed: (Registrant’s] [added: (Registrant’s] telephone number, including area [removed: code)][added: code)]
[removed: Securities] [added: Securities] registered pursuant to Section 12(b) of the [removed: Act:][added: Act:]
| [removed: Title] [added: Title] of Each [removed: Class] [added: Class] | | [removed: Name] [added: Name] of Exchange on Which [removed: Registered] [added: Registered] |
| [removed: Common] [added: Common] Stock, $0.00001 par [removed: value] [added: value] | | [removed: New] [added: New] York Stock [removed: Exchange] [added: Exchange] |
[removed: Securities] [added: Securities] registered pursuant to Section 12(g) of the [removed: Act:][added: Act:]
[removed: Title] [added: Title] of Each [removed: Class][added: Class]
[removed: None][added: None]
Yes [removed: ☒] [added: þ] No [removed: ☐][added: o]
Yes [removed: ☐] [added: o] No [removed: ☒][added: þ]
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, [removed: or] a smaller reporting [added: company, or an emerging growth] company.
See the definitions of “large accelerated filer,” “accelerated [removed: filer” and] [added: filer,”] “smaller reporting [added: company,” and “emerging growth] company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer [added: þ] | | [removed: ☒] | | Accelerated filer [removed: | | ☐] [added: o] |
| Non-accelerated filer [added: o] | | [removed: ☐] (Do not check if smaller reporting company) | | Smaller reporting company [removed: | | ☐] [added: o] |
As of June 30, [removed: 2016] [added: 2017] (the last business day of the Registrant’s most recently completed second fiscal quarter), the aggregate market value of the Common Stock of the Registrant held by non-affiliates of the Registrant, based on the last sale price of the Common Stock reported by the New York Stock Exchange on such date, was [removed: approximately $3.3] [added: $4.9] billion.
As of February 21, [removed: 2017,] [added: 2018,] the number of outstanding shares of Common Stock of the Registrant was [removed: 145,133,163.][added: 153,744,728.]
As of the same date, [removed: 3,500,000 exchangeable shares of a Canadian subsidiary of the Registrant associated with one share of Series F Preferred Stock of the Registrant were outstanding,] 449,929 exchangeable shares of a Canadian subsidiary of the Registrant associated with one share of Series G Preferred Stock of the Registrant were outstanding and an additional [removed: 2,144,620] [added: 36,183] exchangeable shares of certain other Canadian subsidiaries of the Registrant were outstanding.
[removed: DOCUMENTS] [added: DOCUMENTS] INCORPORATED BY [removed: REFERENCE][added: REFERENCE]
Portions of the Registrant’s Definitive Proxy Statement for the [removed: 2017] [added: 2018] Annual Meeting of Stockholders are incorporated by reference into Part III of this Form 10-K.
[removed: ANNUAL] [added: ANNUAL] REPORT ON FORM [removed: 10-K][added: 10-K]
[removed: For] [added: For] the Year Ended December 31, [removed: 2016][added: 2017]
[removed: INDEX][added: INDEX]
| | | [removed: | | Page Number | |] [added: Page] |
| [removed: PART I | | | |] [added: PART I] | | |
| ITEM 1. | [removed: | [Business](#tx295903_1) | | | 2] [added: [Business](#s8F7FA5AE00C051E1868BE9E43CA97EF8)] | [added: [2](#s8F7FA5AE00C051E1868BE9E43CA97EF8)] |
10-K 1 pwr-123117x10k.htm 10-K
_____________________________________________
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Yes þ No o
Yes þ No o
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| | | | | Emerging growth company o |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Yes o No þ
QUANTA SERVICES, INC.
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| [SIGNATURES](#sBC5DE54DAB155957AA9B1D89BAEDA249) | | [128](#sBC5DE54DAB155957AA9B1D89BAEDA249) |
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##### [Table of Contents](#toc)
##### [Index to Financial Statements](#INDEX)
UNITED STATES
Form 10-K
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An excerpt. Shown here: 40 of 64 rewritten, all 26 added and all 7 removed. The counts are complete. For every sentence, read Cover and table of contents in the FY2017 filing and the FY2016 filing.
Item 1B. Unresolved Staff Comments
0 rewritten, 1 added, 0 removed, 2 unchanged
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Item 2. Properties
5 rewritten, 1 added, 0 removed, 7 unchanged
[removed: Facilities][added: Facilities]
We lease our corporate headquarters in Houston, Texas and [removed: maintain] [added: own and lease] other facilities throughout North America and in various foreign locations where we conduct business.
As of December 31, [removed: 2016,] [added: 2017,] we owned [removed: 54] [added: 55] of our facilities and leased the remainder.
[removed: Equipment][added: Equipment]
As of December 31, [removed: 2016,] [added: 2017,] the total size of the rolling-stock fleet was approximately [removed: forty thousand] [added: 40,000] units.
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Item 4. Mine Safety Disclosures
1 rewritten, 1 added, 2 removed, 2 unchanged
[removed: PART II][added: PART II]
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##### [Table of Contents](#toc)
##### [Index to Financial Statements](#INDEX)
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
28 rewritten, 31 added, 25 removed, 14 unchanged
Our common stock is listed on the New York Stock Exchange (NYSE) under the symbol “PWR.” The following table sets forth the high and low [removed: sales] [added: closing] prices of our common stock per quarter, as reported by the NYSE, for the two most recent fiscal years.
| | | [removed: High] [added: High] | | | | [removed: Low] [added: Low] | | |
| [removed: Year] [added: Year] Ended December 31, [removed: 2016] [added: 2016] | | | | | | | | |
| [removed: Year] [added: Year] Ended December 31, [removed: 2015] [added: 2017] | | | | | | | | |
On February 21, [removed: 2017,] [added: 2018,] there were [removed: 724] [added: 670] holders of record of our common stock, [removed: eight] [added: four] holders of record of exchangeable shares of Canadian subsidiaries of Quanta, [removed: one holder of record of our Series F preferred stock] and one holder of record of our Series G preferred stock.
There is no established trading market for the exchangeable shares or the Series [removed: F and Series] G preferred stock; however, the exchangeable shares may be exchanged at the option of the holder for Quanta common stock on a [removed: one-for-one] [added: one\-for-one] basis.
[removed: _Financial] [added: Financial] Statements and Supplementary [removed: Data_] [added: Data] for additional discussion of our equity securities.
[removed: Unregistered] [added: Unregistered] Sales of Securities During the Fourth Quarter of [removed: 2016][added: 2017]
The shares of common stock issued in [removed: the above transactions] [added: these acquisitions] were issued in reliance upon the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended, as the shares were issued to the owners of businesses acquired in [removed: a] privately negotiated transactions not involving any public offering or solicitation.
[removed: Issuer] [added: Issuer] Purchases of Equity Securities During the Fourth Quarter of [removed: 2016][added: 2017]
The following table contains information about our purchases of equity securities during the three months ended December 31, [removed: 2016.][added: 2017.]
| [removed: Period] [added: Period] | | [removed: Total] [added: Total] Number of Shares [removed: Purchased |] [added: Purchased] | | | [removed: Average] [added: Average] Price Paid per [removed: Share |] [added: Share] | | | [removed: Total] [added: Total] Number of Shares Purchased as Part of Publicly Announced Plans or [removed: Programs |] [added: Programs] | | | [removed: Maximum Number] [added: Maximum Number] (or Approximate Dollar Value) of Shares That May Yet be Purchased Under the Plans or [removed: Programs(1)] [added: Programs(2)] | | |
| [removed: (1)] [added: (2)] | [added: |] On [removed: August 5, 2015,] [added: May 25, 2017,] we issued a press release announcing that our board of directors approved a stock repurchase program [removed: authorizing] [added: that authorizes] us to purchase, from time to time through [removed: February 28, 2017,] [added: June 30, 2020,] up to [removed: $1.25 billion] [added: $300.0 million] of our outstanding common stock. Repurchases under [removed: the] [added: this] program can be made in open market [removed: or] [added: and] privately negotiated transactions, [removed: including pursuant to an accelerated share repurchase arrangement, issuer repurchase plan or otherwise,] at our discretion, based on market and business conditions, applicable contractual and legal requirements and other factors. This program does not obligate us to acquire any specific amount of common stock and may be modified or terminated by our board of directors at any time at its sole discretion and without notice. As of December 31, [removed: 2016,] [added: 2017,] we had repurchased [removed: an aggregate $1.20 billion in Quanta] [added: 1.4 million shares of our] common stock under this [removed: program. As discussed in _Liquidity and Capital Resources_ _—_ _Debt Instruments_ _—_ _Credit Facility_ in Item 7. _Management’s Discussion and Analysis of Financial Condition and Results of Operations_ of Part II] [added: program at a cost] of [removed: this Annual Report on Form 10-K, our credit agreement includes certain limitations on] [added: $50.0 million. Accordingly, $250.0 million remained available under] the [removed: repurchase of common stock.] [added: program.] |
| [removed: (2)] [added: (1)] | [added: |] Includes shares purchased from employees to satisfy tax withholding obligations in connection with the vesting of restricted stock unit [added: awards and performance unit awards or the settlement of previously vested but deferred restricted stock unit] awards. |
[removed: Dividends][added: Dividends]
We did not declare any cash dividends on our common stock during the years ended December 31, [removed: 2016] [added: 2017] or [removed: 2015,] [added: 2016,] or in any previous periods.
The declaration, payment and amount of future cash dividends, if any, will be at the discretion of our board of directors after taking into account various [removed: factors.][added: factors, including our financial condition, results of operations, cash flows from operations, current and anticipated capital requirements and expansion plans, the income tax laws then in effect and the requirements of Delaware law.]
In addition, as discussed in [removed: _Liquidity] [added: Liquidity] and Capital [removed: Resources_] [added: Resources - Debt Instruments] — [removed: _Debt Instruments_ _—_ _Credit Facility_] [added: Credit Facility] in Item 7.
[removed: _Management’s] [added: Management’s] Discussion and Analysis of Financial Condition and Results of [removed: Operations,_] [added: Operations,] our credit agreement restricts the payment of cash dividends unless certain conditions are met.
[removed: Performance Graph][added: Performance Graph]
[removed: _The] [added: The] following Performance Graph and related information shall not be deemed “soliciting material” or to be “filed” with the Securities and Exchange Commission, nor shall such information be incorporated by reference into any future filing under the Securities Act of 1933 or Securities Exchange Act of 1934, each as amended, except to the extent that we specifically incorporate it by reference into such [removed: filing._][added: filing.]
The following graph compares, for the period from December 31, [removed: 2011] [added: 2012] to December 31, [removed: 2016,] [added: 2017,] the cumulative stockholder return on our common stock with the cumulative total return of the Standard & Poor’s [added: 500 Index (the S&P 500 Index) and a peer group selected by our management that includes public companies within our industries.]
The companies in [removed: each] [added: the] peer group were selected to represent a broad group of publicly held corporations with operations similar to ours.
The [removed: current] peer group (the [removed: 2016] Peer Group) includes [removed: AECOM Technology Corporation,] [added: AECOM,] Chicago Bridge & Iron Company N.V., EMCOR Group Inc., Fluor Corporation, Jacobs Engineering Group Inc., KBR, Inc., MasTec, Inc., MYR Group Inc. and Primoris Services Corporation.
The graph below assumes an investment of $100 (with reinvestment of all dividends) in our common stock, the [removed: S&P 500 Index, the 2016] Peer Group and the [removed: 2015 Peer Group] [added: S&P 500 Index] on December 31, [removed: 2011] [added: 2012] and tracks their relative performance through December 31, [removed: 2016.][added: 2017.]
[removed: COMPARISON] [added: COMPARISON] OF 5 YEAR CUMULATIVE TOTAL [removed: RETURN][added: RETURN]
Among Quanta Services, Inc., the [removed: 2016 Peer Group, the 2015 Peer Group and the] S&P 500 Index [added: and the Peer Group]
[removed: ][added: ]
| | | | | | | | | |
| 4th Quarter | | $ | 39.50 | | | $ | 35.35 | |
| 3rd Quarter | | $ | 37.59 | | | $ | 32.67 | |
| 2nd Quarter | | $ | 36.48 | | | $ | 30.66 | |
| 1st Quarter | | $ | 38.47 | | | $ | 34.14 | |
| | | | | | | | | |
None.
However, subsequent to the end of the fourth quarter of 2017, on January 19, 2018 and January 22, 2018, we completed acquisitions in which a portion of the consideration for each acquisition consisted of the unregistered issuance of shares of our common stock.
The aggregate consideration paid at closing in these acquisitions included 379,817 shares of our common stock valued at approximately $13.6 million as of the acquisition dates.
For additional information about these acquisitions, including additional consideration, see Note 19 of the Notes to Consolidated Financial Statements in Item 8.
Financial Statements and Supplementary Data.
| | | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | | | |
| October 1 - 31, 2017 | | | | | | | | | | | | | |
| Tax Withholdings (1) | | 9,252 | | | $37.42 | | | — | | | | | |
| November 1 - 30, 2017 | | | | | | | | | | | | | |
| Open Market Stock Repurchases (2017 Repurchase Program) (2) | | 1,382,292 | | | $36.17 | | | 1,382,292 | | | $ | 250,000,000 | |
| Tax Withholdings (1) | | 1,692 | | | $36.16 | | | — | | | | | |
| December 1 - 31, 2017 | | — | | | — | | | — | | | | | |
| Total | | 1,393,236 | | | | | | 1,382,292 | | | $ | 250,000,000 | |
_______________
| | | |
| --- | --- | --- |
| | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | 12/12 | | | | 12/13 | | | | 12/14 | | | | 12/15 | | | | 12/16 | | | | 12/17 | | |
| Quanta Services, Inc. | | $ | 100.00 | | | $ | 115.65 | | | $ | 104.03 | | | $ | 74.20 | | | $ | 127.70 | | | $ | 143.31 | |
| Peer Group | | $ | 100.00 | | | $ | 140.12 | | | $ | 100.17 | | | $ | 91.17 | | | $ | 111.67 | | | $ | 118.25 | |
| S&P 500 | | $ | 100.00 | | | $ | 132.39 | | | $ | 150.51 | | | $ | 152.59 | | | $ | 170.84 | | | $ | 208.14 | |
| | |
| --- | --- |
| 4th Quarter | | $ | 27.05 | | | $ | 18.46 | |
| 3rd Quarter | | $ | 29.10 | | | $ | 21.35 | |
| 2nd Quarter | | $ | 30.61 | | | $ | 27.68 | |
| 1st Quarter | | $ | 29.94 | | | $ | 25.67 | |
During the three months ended December 31, 2016, we issued 104,942 shares of our common stock to certain former owners of an acquired company in exchange, on a one-for-one basis, for exchangeable shares in a Canadian subsidiary of Quanta that were held by certain former owners.
Additionally, subsequent to December 31, 2016, we issued 420,904 shares of our common stock to certain former owners of an acquired company in exchange, on a one-for-one basis, for exchangeable shares in a Canadian subsidiary of Quanta that were held by certain former owners.
Each of the former owners originally received the exchangeable shares as partial consideration for the sale of the acquired company.
##### [Table of Contents](#toc)
##### [Index to Financial Statements](#INDEX)
| | | | | | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| October 1 – 31, 2016 (2) | | | 19,145 | | | $ | 27.88 | | | | — | | | | | |
| November 1 – 30, 2016 (2) | | | 9,606 | | | $ | 32.88 | | | | — | | | | | |
| December 1 – 31, 2016 | | | — | | | $ | — | | | | — | | | | | |
| Total | | | 28,751 | | | | | | | | — | | | $ | 50,120,407 | |
These factors include our financial condition, results of operations, cash flows from operations, current and anticipated capital requirements and expansion plans, the income tax laws then in effect and the requirements of Delaware law.
500 Index (the S&P 500 Index) and two peer groups selected by our management that include public companies within our industries.
The peer group used in the prior year (the 2015 Peer Group) included each of the foregoing companies as well as Willbros Group, Inc. We determined not to include Willbros Group, Inc. in the 2016 Peer Group due to dissimilarities with respect to its trading liquidity and operational performance history.
| (1) | The 2016 Peer Group and the 2015 Peer Group performed similarly during the five-year performance period, therefore their cumulative total returns overlap in the graph. |
| | | 12/11 | | | | 12/12 | | | | 12/13 | | | | 12/14 | | | | 12/15 | | | | 12/16 | | |
| Quanta Services, Inc. | | $ | 100.00 | | | $ | 126.69 | | | $ | 146.52 | | | $ | 131.80 | | | $ | 94.01 | | | $ | 161.79 | |
| 2016 Peer Group | | | 100.00 | | | | 116.43 | | | | 163.14 | | | | 116.63 | | | | 106.15 | | | | 130.02 | |
| 2015 Peer Group | | | 100.00 | | | | 116.61 | | | | 163.73 | | | | 116.97 | | | | 105.94 | | | | 129.74 | |
| S&P 500 | | | 100.00 | | | | 116.00 | | | | 153.58 | | | | 174.60 | | | | 177.01 | | | | 198.18 | |
Item 6. Selected Financial Data
38 rewritten, 16 added, 10 removed, 12 unchanged
The following historical selected financial data has been derived from [removed: the] [added: our] consolidated financial [removed: statements of Quanta.][added: statements.]
[removed: _Financial] [added: Financial] Statements and Supplementary [removed: Data_] [added: Data] for information regarding certain acquisitions and the related impact on our results of operations as these acquisitions may affect the comparability of such results.
We have presented the results of operations, financial position and cash flows of such fiber optic licensing [removed: and telecommunications] subsidiaries as discontinued operations for all applicable periods presented in this Annual Report on Form 10-K.
[removed: _Financial] [added: Financial] Statements and Supplementary [removed: Data_] [added: Data] and [removed: _Item] [added: Item] 7.
Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations._][added: Operations.]
| | | [removed: Year] [added: Year] Ended December [removed: 31,] [added: 31,] | | | | | | | | | | | | | | | | | | | [added: |]
| | | [removed: 2016] [added: 2017] | | | | [removed: 2015] [added: 2016] | | | | [removed: 2014] [added: 2015] | | | | [removed: 2013] [added: 2014] | | | | [removed: 2012] [added: 2013] | | | [added: |]
| | | [removed: (In] [added: (In] thousands, except per share [removed: information)] [added: information)] | | | | | | | | | | | | | | | | | | | [added: |]
| [removed: Consolidated] [added: Consolidated] Statements of Operations [removed: Data:] [added: Data:] | | | | | | | | | | | | | | | | | | | | | [added: |]
| Revenues | | $ | [removed: 7,651,319] [added: 9,466,478] | | | $ | [removed: 7,572,436] [added: 7,651,319] | | | $ | [removed: 7,747,229] [added: 7,572,436] | | | $ | [removed: 6,411,577] [added: 7,747,229] | | | $ | [removed: 5,825,085] [added: 6,411,577] | | [added: |]
| Cost of services (including depreciation) | | [added: 8,224,618] | [added: | | |] 6,637,519 | | | | 6,648,771 | | | | 6,578,435 | | | | 5,424,644 | | | | [removed: 4,953,176 | |]
| Gross profit | | [added: 1,241,860] | [added: | | |] 1,013,800 | | | | 923,665 | | | | 1,168,794 | | | | 986,933 | | | | [removed: 871,909 | |]
| Selling, general and administrative expenses | | [added: 777,920] | [added: | | |] 653,338 | | | | 592,863 | | | | 705,477 | [removed: (c)] | | [added: (c)] | 485,069 | | | | [removed: 421,726 | |]
| Amortization of intangible assets | | [added: 32,205] | [added: | | |] 31,685 | | | | 34,848 | | | | 34,257 | | | | 25,865 | | | | [removed: 34,049 | |]
| Asset impairment charges (a) | | [added: 58,057] | [added: | | |] 7,964 | | | | 58,451 | | | | — | | | | — | | | | [removed: — | |]
| Operating income | | [added: 378,849] | [added: | | |] 320,813 | | | | 237,503 | | | | 429,060 | | | | 475,999 | | | | [removed: 416,134 | |]
| Interest expense | | [added: (20,946] | [removed: (14,887] | ) | | [added: (14,887] | [removed: (8,024] | ) | | [added: (8,024] | [removed: (4,765] | ) | | [added: (4,765] | [removed: (2,668] | ) | | [added: (2,668] | [removed: (3,746] | ) | [added: |]
| Interest income | | [added: 832] | [added: | | |] 2,423 | | | | 1,493 | | | | 3,736 | | | | 3,378 | | | | [removed: 1,471 | |]
| Income from continuing operations before income taxes | | [added: 353,757] | [added: | | |] 307,686 | | | | 228,675 | | | | 426,599 | | | | 588,320 | | | | [removed: 415,594 | |]
| Provision for income taxes (b) | | [added: 35,532] | [added: | | |] 107,246 | | | | 97,472 | | | | 139,007 | | | | 196,875 | | | | [removed: 139,988 | |]
| Net income from continuing operations | | [added: 318,225] | [added: | | |] 200,440 | | | | 131,203 | | | | 287,592 | | | | 391,445 | | | | [removed: 275,606 | |]
| Net income (loss) from discontinued operations | | [added: —] | [added: | | |] (342 | [removed: )] | [added: )] | | 190,621 | | | | 27,490 | | | | 29,864 | | | | [removed: 47,050 | |]
| Net income | | [added: 318,225] | [added: | | |] 200,098 | | | | 321,824 | | | | 315,082 | | | | 421,309 | | | | [removed: 322,656 | |]
| Less: Net income attributable to non-controlling interests | | [added: 3,247] | [added: | | |] 1,715 | | | | 10,917 | | | | 18,368 | | | | 19,388 | | | | [removed: 16,027 | |]
| Net income attributable to common stock | | $ | [removed: 198,383] [added: 314,978] | | | $ | [removed: 310,907] [added: 198,383] | | | $ | [removed: 296,714] [added: 310,907] | | | $ | [removed: 401,921] [added: 296,714] | | | $ | [removed: 306,629] [added: 401,921] | | [added: |]
| Amounts attributable to common stock: | | | | | | | | | | | | | | | | | | | | | [added: |]
| Net income from continuing operations | | $ | [removed: 198,725] [added: 314,978] | | | $ | [removed: 120,286] [added: 198,725] | | | $ | [removed: 269,224] [added: 120,286] | | | $ | [removed: 372,057] [added: 269,224] | | | $ | [removed: 259,579] [added: 372,057] | | [added: |]
| Basic earnings per share attributable to common stock from continuing operations | | $ | [removed: 1.26] [added: 2.02] | | | $ | [removed: 0.62] [added: 1.26] | | | $ | [removed: 1.22] [added: 0.62] | | | $ | [removed: 1.73] [added: 1.22] | | | $ | [removed: 1.22] [added: 1.73] | | [added: |]
| Diluted earnings per share attributable to common stock from continuing operations | | $ | [removed: 1.26] [added: 2.00] | | | $ | [removed: 0.62] [added: 1.26] | | | $ | [removed: 1.22] [added: 0.62] | | | $ | [removed: 1.73] [added: 1.22] | | | $ | [removed: 1.22] [added: 1.73] | | [added: |]
| (a) | In [added: 2017,] 2016 and 2015, we recorded [removed: total] asset impairment charges of [added: $58.1 million ($36.6 million net of tax),] $8.0 million ($7.1 million net of tax) and $58.5 million ($44.6 million net of tax). The charges recorded in [added: 2017 related to goodwill and intangible assets, including a $57.0 million goodwill impairment and a $1.1 million impairment of a customer relationship intangible asset. The goodwill impairment is associated with two reporting units within our Oil and Gas Infrastructure Services Division. The charges recorded in] 2016 primarily [removed: relate] [added: related] to a pending disposition of certain international renewable energy services [removed: operations.] [added: operations, which was completed in 2017.] The charges recorded in 2015 related to goodwill, intangible assets and property and equipment, including a $39.8 million goodwill impairment and a $12.1 million [added: impairment to customer relationship, trade name and non-compete agreement intangible assets. For a discussion of these charges, refer to Results of Operations - Consolidated Results - Asset impairment charges included in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.] |
| | | [removed: December 31,] [added: December 31,] | | | | | | | | | | | | | | | | | | |
| | | [removed: (In thousands)] [added: (In thousands)] | | | | | | | | | | | | | | | | | | |
| [removed: Balance] [added: Balance] Sheet [removed: Data:] [added: Data:] | | | | | | | | | | | | | | | | | | | | |
| Working capital | | $ | [removed: 1,083,517] [added: 1,377,840] | | | $ | [removed: 1,073,775] [added: 1,083,517] | | | $ | [removed: 1,389,393] [added: 1,073,775] | | | $ | [removed: 1,226,012] [added: 1,389,393] | | | $ | [removed: 1,310,405] [added: 1,226,012] | |
| Goodwill | | [added: $] | [removed: 1,603,169] [added: 1,868,600] | | | [added: $] | [removed: 1,552,658] [added: 1,603,169] | | | [added: $] | [removed: 1,596,695] [added: 1,552,658] | | | [added: $] | [removed: 1,445,927] [added: 1,596,695] | | | [added: $] | [removed: 1,202,854] [added: 1,445,927] | |
| Total assets | | [added: $] | [removed: 5,354,059] [added: 6,480,154] | | | [added: $] | [removed: 5,213,543] [added: 5,354,059] | | | [added: $] | [removed: 6,253,583] [added: 5,213,543] | | | [added: $] | [removed: 5,731,982] [added: 6,253,583] | | | [added: $] | [removed: 5,111,408] [added: 5,731,982] | |
| Long-term debt, net of current maturities | | [added: $] | [removed: 353,562] [added: 670,721] | | | [added: $] | [removed: 475,364] [added: 353,562] | | | [added: $] | [removed: 72,489] [added: 475,364] | | | [added: $] | [removed: 1,053] [added: 72,489] | | | [added: $] | [removed: —] [added: 1,053] | |
| Total stockholders’ equity | | [added: $] | [removed: 3,339,427] [added: 3,791,571] | | | [added: $] | [removed: 3,085,494] [added: 3,339,427] | | | [added: $] | [removed: 4,514,473] [added: 3,085,494] | | | [added: $] | [removed: 4,234,188] [added: 4,514,473] | | | [added: $] | [removed: 3,766,548] [added: 4,234,188] | |
Additionally, on August 4, 2015, we sold our fiber optic licensing operations.
| | | | | | | | | | | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | | | | | | | | | | | |
| Change in fair value of contingent consideration liabilities | | (5,171 | | ) | | — | | | | — | | | | — | | | | — | | | |
| Other income (expense), net | | (4,978 | | ) | | (663 | | ) | | (2,297 | | ) | | (1,432 | | ) | | 111,611 | | | (d) |
| Net income (loss) from discontinued operations | | — | | | | (342 | | ) | | 190,621 | | | | 27,490 | | | | 29,864 | | | |
| Net income attributable to common stock | | $ | 314,978 | | | $ | 198,383 | | | $ | 310,907 | | | $ | 296,714 | | | $ | 401,921 | | |
_______________________________________
| | |
| | |
| (b) | The low effective tax rate in 2017 was primarily due to $70.1 million of tax benefits related to the enactment of the Tax Cuts and Jobs Act (Tax Act) on December 22, 2017. For more information and the status of our provisional analysis of the Tax Act, refer to Note 10 of the Notes to Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data. For more information on other items that impacted the effective tax rates in 2017, 2016 and 2015, refer to Results of Operations - Consolidated Results - Provision for income taxes included in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. The effective tax rates in 2014 and 2013 were impacted by $8.1 million and $9.9 million in tax benefits primarily due to decreases in reserves for uncertain tax positions resulting from the expiration of federal and state statute of limitations periods. |
| | |
| | |
| | | 2017 | | | | 2016 | | | | 2015 | | | | 2014 | | | | 2013 | | |
| | |
| --- | --- |
Additionally, on August 4, 2015, we sold our fiber optic licensing operations, and on December 3, 2012, we sold substantially all of our domestic telecommunications infrastructure services operations and related subsidiaries.
| | | | | | | | | | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Equity in earnings (losses) of unconsolidated affiliates, including gain on sale of investment | | | (979 | ) | | | (466 | ) | | | (332 | ) | | | 112,744 | (d) | | | 2,084 | |
| Other income (expense), net | | | 316 | | | | (1,831 | ) | | | (1,100 | ) | | | (1,133 | ) | | | (349 | ) |
##### [Table of Contents](#toc)
##### [Index to Financial Statements](#INDEX)
| | impairment to customer relationships, trade names and non-compete agreement intangible assets. These charges were primarily attributable to lower levels of expected activity in the U.S. Gulf of Mexico and, to a lesser extent, due to the extended low commodity price environment with respect to certain directional drilling operations in Australia. In 2015, we also recorded a $6.6 million impairment to property and equipment associated with the same international renewable energy services operations. |
| (b) | The effective tax rate was lower in 2016 primarily due to $20.5 million in tax benefits from decreases in reserves for uncertain tax positions, which resulted from the expiration of federal and state statute of limitations periods. The effective tax rate in 2015 was higher primarily due to a lower proportion of income before taxes from international jurisdictions. Additionally, certain asset impairments recorded in 2015 were not tax deductible, and a change in the Alberta provincial statutory income tax resulted in additional taxes of $5.0 million. In addition, the effective tax rates in 2014, 2013 and 2012 were impacted by $8.1 million, $9.9 million and $7.8 million in tax benefits primarily due to decreases in reserves for uncertain tax positions resulting from the expiration of federal and state statute of limitations periods. |
Item 8. Financial Statements and Supplementary Data
809 rewritten, 537 added, 254 removed, 483 unchanged
[removed: INDEX] [added: INDEX] TO QUANTA SERVICES, INC.’S CONSOLIDATED FINANCIAL [removed: STATEMENTS][added: STATEMENTS]
| | [removed: | Page | |] [added: Page] |
[removed: | [Report of Management](#tx295903_22) | | | 86 | |][added: REPORT OF MANAGEMENT]
[removed: | [Report of Independent Registered Public Accounting Firm](#tx295903_23) | | | 88 | |][added: REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM]
[removed: | [Consolidated Balance Sheets](#tx295903_24) | | | 90 | |][added: CONSOLIDATED BALANCE SHEETS]
[removed: | [Consolidated Statements of Operations](#tx295903_25) | | | 91 | |][added: CONSOLIDATED STATEMENTS OF OPERATIONS]
[removed: | [Consolidated Statements of Comprehensive Income](#tx295903_26) | | | 92 | |][added: CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME]
[removed: | [Consolidated Statements of Cash Flows](#tx295903_27) | | | 93 | |][added: CONSOLIDATED STATEMENTS OF CASH FLOWS]
[removed: | [Consolidated Statements of Equity](#tx295903_28) | | | 94 | |][added: CONSOLIDATED STATEMENTS OF EQUITY]
[removed: | [Notes to Consolidated Financial Statements](#tx295903_29) | | | 95 | |][added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS]
[removed: REPORT OF MANAGEMENT][added: | [Report of Management](#s8920FCA06DDF54AA857DC52C8821B3A4) | [68](#s8920FCA06DDF54AA857DC52C8821B3A4) |]
[removed: Management’s] [added: Management’s] Report on Financial Information and [removed: Procedures][added: Procedures]
[removed: Management’s] [added: Management’s] Report on Internal Control Over Financial [removed: Reporting][added: Reporting]
Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we have conducted an evaluation of the effectiveness of our internal control over financial reporting based upon the criteria established in [removed: _Internal Control_ _—_ _Integrated] [added: Internal Control — Integrated] Framework [removed: (2013)_] [added: (2013)] issued by the Committee of Sponsoring Organizations of the Treadway Commission.
Based on this evaluation, our management has concluded that our internal control over financial reporting was effective as of December 31, [removed: 2016] [added: 2017] to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external reporting purposes in accordance with U.S. generally accepted accounting principles.
The effectiveness of Quanta Services, Inc.’s internal control over financial reporting as of December 31, [removed: 2016] [added: 2017] has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in its report which appears herein.
Management’s assessment of the effectiveness of our internal control over financial reporting as of December 31, [removed: 2016] [added: 2017] excluded the [removed: five] [added: three] acquisitions we completed in [removed: 2016.][added: 2017.]
These acquisitions comprised approximately [removed: 1.3%] [added: 2.5%] and [removed: 0.9%] [added: 2.2%] of our consolidated assets and revenues as of and for the year ended December 31, [removed: 2016.][added: 2017.]
[removed: REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM][added: | [Report of Independent Registered Public Accounting Firm](#s55AC2D6EF91D5D998006B5F63C4E7AB0) | [69](#s55AC2D6EF91D5D998006B5F63C4E7AB0) |]
In our opinion, the [removed: accompanying] consolidated [removed: balance sheets and the related consolidated] [added: financial] statements [removed: of operations, comprehensive income, cash flows and equity,] [added: referred to above] present fairly, in all material respects, the financial position of [removed: Quanta Services, Inc. and its subsidiaries at] [added: the Company as of] December 31, [removed: 2016] [added: 2017] and [removed: 2015,] [added: 2016,] and the results of [removed: their] [added: its] operations and [removed: their] [added: its] cash flows for each of the three years in the period ended December 31, [removed: 2016] [added: 2017] in conformity with accounting principles generally accepted in the United States of America.
Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, [removed: 2016,] [added: 2017,] based on criteria established in [removed: _Internal Control_ _—_ _Integrated] [added: Internal Control - Integrated] Framework [removed: (2013)_] [added: (2013)] issued by the [removed: Committee of Sponsoring Organizations of the Treadway Commission (COSO).][added: COSO.]
The Company’s management is responsible for these [added: consolidated] financial statements, for maintaining effective internal control over financial [removed: reporting] [added: reporting,] and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control [removed: Over] [added: over] Financial Reporting.
Our responsibility is to express opinions on [removed: these] [added: the Company’s consolidated] financial statements and on the Company’s internal control over financial reporting based on our [removed: integrated] audits.
We conducted our audits in accordance with the standards of the [removed: Public Company Accounting Oversight Board (United States).][added: PCAOB.]
Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the [added: consolidated] financial statements are free of material [removed: misstatement] [added: misstatement, whether due to error or fraud,] and whether effective internal control over financial reporting was maintained in all material respects.
Our audits [removed: of the financial statements] [added: also] included [removed: examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing] [added: evaluating] the accounting principles used and significant estimates made by management, [removed: and] [added: as well as] evaluating the overall [added: presentation of the consolidated] financial [removed: statement presentation.][added: statements.]
A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are [removed: being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.]
As described in Management’s Report on Internal Control [removed: Over] [added: over] Financial Reporting, management has excluded its [removed: 2016] [added: 2017] acquisitions from its assessment of internal control over financial reporting as of December 31, [removed: 2016] [added: 2017] because [removed: these acquisitions] [added: they] were [removed: made] [added: acquired] by the Company [removed: through] [added: in] purchase business combinations during [removed: 2016.][added: 2017.]
We have also excluded the [removed: Company’s 2016] [added: 2017] acquisitions from our audit of internal control over financial reporting.
[removed: QUANTA] [added: QUANTA] SERVICES, INC. AND [removed: SUBSIDIARIES][added: SUBSIDIARIES]
[removed: CONSOLIDATED BALANCE SHEETS][added: | [Consolidated Balance Sheets](#s171939B2987D55E4A0AD084D27E8A601) | [71](#s171939B2987D55E4A0AD084D27E8A601) |]
| | | [removed: December 31,] [added: December 31,] | | | | | | |
| | | [removed: 2016] [added: 2016] | | | | [removed: 2015] [added: 2015] | | |
| | | [removed: (In] [added: (In] thousands, except share [removed: information)] [added: information)] | | | | | | |
| [removed: ASSETS] [added: ASSETS] | | | | | | | | |
| Cash and cash [removed: equivalents |] [added: equivalents, beginning of year] | [removed: $] | 112,183 | | | [removed: $] | 128,771 | | [added: | | 190,515 | | |]
| Accounts receivable, net of allowances of [removed: $2,752] [added: $4,465] and [removed: $5,226] [added: $2,752] | | [added: 1,985,077] | [removed: 1,500,115] | | | [added: 1,500,115] | [removed: 1,621,133] | |
| Costs and estimated earnings in excess of billings on uncompleted contracts | | [added: 497,292] | [removed: 473,308] | | | [added: 473,308] | [removed: 317,745] | |
| Inventories | | [added: 80,890] | [removed: 88,548] | | | [added: 88,548] | [removed: 75,285] | |
| Prepaid expenses and other current assets | | [added: 168,363] | [removed: 114,591] | | | [added: 114,591] | [removed: 134,585] | |
| | |
| | |
Opinions on the Financial Statements and Internal Control over Financial Reporting
We have audited the accompanying consolidated balance sheets of Quanta Services, Inc. and its subsidiaries as of December 31, 2017 and 2016, and the related consolidated statements of operations, comprehensive income, cash flows and equity for each of the three years in the period ended December 31, 2017, including the related notes (collectively referred to as the “consolidated financial statements”).
We also have audited the Company’s internal control over financial reporting as of December 31, 2017, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
Basis for Opinions
We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.
Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.
The 2017 acquisitions of the Company and its related subsidiaries are wholly-owned subsidiaries whose total assets and total revenues excluded from management’s assessment and our audit of internal control over financial reporting represent 2.5% and 2.2%, respectively, of the related consolidated financial statement amounts as of and for the year ended December 31, 2017.
Definition and Limitations of Internal Control over Financial Reporting
being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
We have served as the Company’s auditor since 2002.
[Index](#s1B9B8F907FC15F4A82CF426F0DD3380D)
| Cash and cash equivalents | | $ | 138,285 | | | $ | 112,183 | |
[Index](#s1B9B8F907FC15F4A82CF426F0DD3380D)
QUANTA SERVICES, INC. AND SUBSIDIARIES
| Change in fair value of contingent consideration liabilities | | (5,171 | | ) | | — | | | | — | | |
| Net income (loss) from discontinued operations | | — | | | | (342 | | ) | | 190,621 | | |
| Net income attributable to common stock | | $ | 314,978 | | | $ | 198,383 | | | $ | 310,907 | |
| Diluted earnings per share attributable to common stock: | | | | | | | | | | | | |
| Continuing operations | | $ | 2.00 | | | $ | 1.26 | | | $ | 0.62 | |
| Net income attributable to common stock | | $ | 2.00 | | | $ | 1.26 | | | $ | 1.59 | |
[Index](#s1B9B8F907FC15F4A82CF426F0DD3380D)
QUANTA SERVICES, INC. AND SUBSIDIARIES
| | | Year Ended December 31, | | | | | | | | | | |
[Index](#s1B9B8F907FC15F4A82CF426F0DD3380D)
QUANTA SERVICES, INC. AND SUBSIDIARIES
| | | Year Ended December 31, | | | | | | | | | | |
| | | | | | | (In thousands) | | | | | | |
| Net income | | $ | 318,225 | | | $ | 200,098 | | | $ | 321,824 | |
| Amortization of intangible assets | | 32,205 | | | | 31,685 | | | | 34,848 | | |
| Asset impairment charges | | 58,057 | | | | 7,964 | | | | 58,451 | | |
| Change in fair value of contingent consideration liabilities | | (5,171 | | ) | | — | | | | — | | |
| Net cash provided by operating activities of continuing operations | | 372,475 | | | | 390,187 | | | | 628,649 | | |
| Payments related to tax withholding for share-based compensation | | (18,543 | | ) | | (8,340 | | ) | | (9,797 | | ) |
| Net cash provided by (used in) financing activities of continuing operations | | 227,764 | | | | (133,836 | | ) | | (1,227,844 | | ) |
[Index](#s1B9B8F907FC15F4A82CF426F0DD3380D)
QUANTA SERVICES, INC. AND SUBSIDIARIES
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | |
| --- | --- | --- | --- | --- |
##### [Table of Contents](#toc)
##### [Index to Financial Statements](#INDEX)
The 2016 acquisitions of the Company and its related subsidiaries are wholly owned subsidiaries of the
Company and have total assets and revenues which represent approximately 1.3% and 0.9%, respectively, of the related consolidated financial statement amounts as of and for the year ended December 31, 2016.
March 1, 2017
| | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Equity in losses of unconsolidated affiliates | | | 979 | | | | 466 | | | | 332 | |
| Provision for contract receivable | | | — | | | | — | | | | 102,460 | |
| Non-cash portion of arbitration expense | | | — | | | | — | | | | 10,518 | |
| Tax impact of stock-based equity awards | | | (671 | ) | | | (669 | ) | | | (1,563 | ) |
| Net cash provided by operating activities of continuing operations | | | 381,176 | | | | 618,183 | | | | 247,742 | |
| Payments on other long-term debt | | | (6,959 | ) | | | (2,683 | ) | | | (30,448 | ) |
| Tax impact of stock-based equity awards | | | 671 | | | | 669 | | | | 1,563 | |
| Net cash used in financing activities of continuing operations | | | (124,825 | ) | | | (1,217,378 | ) | | | (58,347 | ) |
| Cash and cash equivalents, beginning of year | | | 128,771 | | | | 190,515 | | | | 488,777 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | Shares | | | | Amount | | | | Shares | | | | Amount | | | | Shares | | | | Amount | | | | Shares | | | | Amount | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Balance, December 31, 2013 | | | 212,942,767 | | | $ | 2 | | | | 3,500,000 | | | $ | — | | | | 1 | | | $ | — | | | | — | | | $ | — | | | $ | 3,416,585 | | | $ | 1,070,077 | | | $ | (37,236 | ) | | $ | (215,240 | ) | | $ | 4,234,188 | | | $ | 7,131 | | | $ | 4,241,319 | |
| Acquisitions | | | 686,382 | | | | — | | | | 3,825,971 | | | | — | | | | — | | | | — | | | | 1 | | | | — | | | | 134,538 | | | | — | | | | — | | | | — | | | | 134,538 | | | | — | | | | 134,538 | |
| Restricted stock and restricted stock unit activity | | | 95,475 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 39,030 | | | | — | | | | — | | | | (12,340 | ) | | | 26,690 | | | | — | | | | 26,690 | |
| Common stock repurchases | | | (2,996,278 | ) | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | (93,482 | ) | | | (93,482 | ) | | | — | | | | (93,482 | ) |
| Net income | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 296,714 | | | | — | | | | — | | | | 296,714 | | | | 18,368 | | | | 315,082 | |
| Other comprehensive loss | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | (171,399 | ) | | | — | | | | (171,399 | ) | | | — | | | | (171,399 | ) |
| Distributions to non-controlling interests | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | (21,228 | ) | | | (21,228 | ) |
| Income tax impact of long-term incentive plans | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | (3,904 | ) | | | — | | | | — | | | | — | | | | (3,904 | ) | | | — | | | | (3,904 | ) |
These acquisitions should enable Quanta to further enhance its service offerings in the United States, Australia and Canada.
During 2014, Quanta completed nine acquisitions, which enabled Quanta to further enhance its electric power and oil and gas infrastructure service offerings in the United States and Canada and expand its capabilities in Australia to include electric power infrastructure service offerings.
These acquisitions included four electric power infrastructure services companies located in Canada; two oil and gas infrastructure services businesses located in Canada; an electric power infrastructure services company located in Australia; a U.S. based general engineering and construction company specializing in hydrant fueling, waterfront and utility construction for the U.S. Department of Defense the results of which are generally included in Quanta’s Oil and Gas Infrastructure Services segment; and a geotechnical and geological engineering services company based in the United States the results of which are generally included in Quanta’s Electric Power Infrastructure Services segment.
Quanta’s ability to collect amounts due from them.
Current retainage balances as of December 31, 2016 and 2015 were approximately $231.0 million and $250.1 million and were included in accounts receivable.
At December 31, 2016 and 2015, the balances of unbilled receivables included in accounts receivable were approximately $206.8 million and $233.6 million.
quantitative impairment test is required.
Otherwise, no further testing is required.
If the carrying value of the reporting unit exceeds its fair value, the second step is performed.
An excerpt. Shown here: 40 of 809 rewritten, 40 of 537 added and 40 of 254 removed. The counts are complete. For every sentence, read Item 8. Financial Statements and Supplementary Data in the FY2017 filing and the FY2016 filing.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
0 rewritten, 1 added, 0 removed, 2 unchanged
| | |
Item 9A. Controls and Procedures
9 rewritten, 2 added, 3 removed, 16 unchanged
[removed: Evaluation] [added: Evaluation] of Disclosure Controls and [removed: Procedures][added: Procedures]
Based on this evaluation, these officers have concluded that, as of December 31, [removed: 2016,] [added: 2017,] our disclosure controls and procedures were effective to provide reasonable assurance of achieving their objectives.
[removed: Evaluation] [added: Evaluation] of Internal Control over Financial [removed: Reporting][added: Reporting]
[removed: _Financial] [added: Financial] Statements and Supplementary [removed: Data_] [added: Data] under the heading [removed: _Report] [added: Report] of [removed: Management_] [added: Management] and is incorporated herein by reference.
[removed: _Financial] [added: Financial] Statements and Supplementary [removed: Data_] [added: Data] under the heading [removed: _Report] [added: Report] of Independent Registered Public Accounting [removed: Firm_] [added: Firm] and is incorporated herein by reference.
There has been no change in our internal control over financial reporting that occurred during the quarter ended December 31, [removed: 2016] [added: 2017] that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
[removed: Design] [added: Design] and Operation of Control [removed: Systems][added: Systems]
Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances [added: of fraud, if any, within the company have been detected.]
[removed: These inherent limitations include the realities that judgments] in decision-making can be faulty and breakdowns can occur because of simple errors or mistakes.
These inherent limitations include the realities that judgments
| | |
##### [Table of Contents](#toc)
##### [Index to Financial Statements](#INDEX)
of fraud, if any, within the company have been detected.
Item 9B. Other Information
1 rewritten, 1 added, 2 removed, 2 unchanged
[removed: PART III][added: PART III]
| | |
##### [Table of Contents](#toc)
##### [Index to Financial Statements](#INDEX)
Item 10. Directors, Executive Officers and Corporate Governance
1 rewritten, 1 added, 0 removed, 1 unchanged
The information required by this Item 10 is incorporated by reference to our definitive proxy statement, which is to be filed with the SEC pursuant to the Exchange Act within 120 days following the end of our [removed: 2016] [added: 2017] fiscal year.
| | |
Item 11. Executive Compensation
1 rewritten, 1 added, 0 removed, 1 unchanged
The information required by this Item 11 is incorporated by reference to our definitive proxy statement, which is to be filed with the SEC pursuant to the Exchange Act within 120 days following the end of our [removed: 2016] [added: 2017] fiscal year.
| | |
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
1 rewritten, 1 added, 0 removed, 1 unchanged
The information required by this Item 12 is incorporated by reference to our definitive proxy statement, which is to be filed with the SEC pursuant to the Exchange Act within 120 days following the end of our [removed: 2016] [added: 2017] fiscal year.
| | |
Item 13. Certain Relationships and Related Transactions, and Director Independence
1 rewritten, 1 added, 0 removed, 1 unchanged
The information required by this Item 13 is incorporated by reference to our definitive proxy statement, which is to be filed with the SEC pursuant to the Exchange Act within 120 days following the end of our [removed: 2016] [added: 2017] fiscal year.
| | |
Item 14. Principal Accounting Fees and Services
2 rewritten, 1 added, 2 removed, 1 unchanged
The information required by this Item 14 is incorporated by reference to our definitive proxy statement, which is to be filed with the SEC pursuant to the Exchange Act within 120 days following the end of our [removed: 2016] [added: 2017] fiscal year.
[removed: PART IV][added: PART IV]
| | |
##### [Table of Contents](#toc)
##### [Index to Financial Statements](#INDEX)
Item 15. Exhibits and Financial Statement Schedules
49 rewritten, 19 added, 15 removed, 23 unchanged
[removed: (2)] All [added: financial statement] schedules are omitted because they are not applicable or the required information is shown in the consolidated financial statements or the notes to the consolidated financial statements in Item 8.
[removed: _Financial] [added: Financial] Statements and Supplementary [removed: Data_] [added: Data] of this Annual Report on Form 10-K.
(3) [removed: _Exhibits._][added: Exhibits.]
[removed: EXHIBIT INDEX][added: EXHIBIT INDEX]
| [removed: Exhibit No.] [added: No.] | | | | [removed: Description] [added: Description] |
| 2.1 | | — | | [removed: Stock] [added: [Stock] Purchase Agreement dated as of [removed: November 19, 2012,] [added: April 29, 2015,] among Quanta Services, Inc., [removed: Infrasource FI] [added: CC SCN Fiber] LLC, [removed: Dycom Industries, Inc.] and [removed: PBG Acquisition III, LLC] [added: Crown Castle International Corp.] (previously filed as Exhibit 2.1 to the Company’s Form 8-K (No. 001-13831) filed [removed: November 21, 2012] [added: May 4, 2015] and incorporated herein by [removed: reference)] [added: reference)](http://www.sec.gov/Archives/edgar/data/1050915/000119312515169318/d919974dex21.htm)] |
| [removed: 2.2] [added: 10.14 *] | | — | | [removed: Stock Purchase] [added: [Employment] Agreement dated [added: March 29, 2012, effective] as of [removed: April 29, 2015, among] [added: May 17, 2012, by and between] Quanta Services, [removed: Inc., CC SCN Fiber LLC,] [added: Inc.] and [removed: Crown Castle International Corp.] [added: Derrick A. Jensen] (previously filed as Exhibit [removed: 2.1] [added: 10.2] to the Company’s Form 8-K (No. 001-13831) filed [removed: May 4, 2015] [added: April 2, 2012] and incorporated herein by [removed: reference)] [added: reference)](http://www.sec.gov/Archives/edgar/data/1050915/000119312512144780/d327880dex102.htm)] |
| 3.1 | | — | | [removed: Restated] [added: [Restated] Certificate of Incorporation of Quanta Services, Inc. (previously filed as Exhibit 3.3 to the Company’s Form 8-K (No. 001-13831) filed May 25, 2011 and incorporated herein by [removed: reference)] [added: reference)](http://www.sec.gov/Archives/edgar/data/1050915/000095012311053713/h82507exv3w3.htm)] |
| 3.2 | | — | | [removed: Certificate] [added: [Certificate] of Designation of Series G Preferred Stock (previously filed as Exhibit 3.1 to the Company’s Form 8-K (No. 001-13831) filed January 17, 2014 and incorporated herein by [removed: reference)] [added: reference)](http://www.sec.gov/Archives/edgar/data/1050915/000119312514014496/d661893dex31.htm)] |
| 3.3 | | — | | [removed: Bylaws] [added: [Bylaws] of Quanta Services, Inc., as amended and restated March 27, 2014 (previously filed as Exhibit 3.1 to the Company’s Form 8-K (No. 001-13831) filed March 31, 2014 and incorporated herein by [removed: reference)] [added: reference)](http://www.sec.gov/Archives/edgar/data/1050915/000119312514123853/d701164dex31.htm)] |
| 4.1 | | — | | [removed: Form] [added: [Form] of Common Stock Certificate (previously filed as Exhibit 4.1 to the Company’s Registration Statement on Form S-1/Amendment No. 2 (No. 333-42957) filed February 9, 1998 and incorporated herein by [removed: reference)] [added: reference)](http://www.sec.gov/Archives/edgar/data/1050915/0000930661-98-000272.txt)] |
| [removed: 10.1*] [added: 10.18*] | | — | | [added: [Quanta Services, Inc. 2017 Annual Incentive Plan – Corporate Employees,] Quanta Services, Inc. [removed: 2007 Stock] [added: 2017 Senior Leadership Long-Term] Incentive Plan [added: and Quanta Services, Inc. 2017 Discretionary Plan – All Employees] (previously filed as Exhibit [removed: 99.1] [added: 10.1] to the Company’s Form 8-K (No. 001-13831) filed May [removed: 29, 2007] [added: 26, 2017] and incorporated herein by reference) [added: ](http://www.sec.gov/Archives/edgar/data/1050915/000119312517185772/d395994dex101.htm)] |
| [removed: 10.2*] [added: 10.4*] | | — | | [removed: Amendment] [added: [Amendment] No. 1 to the Quanta Services, Inc. [removed: 2007 Stock] [added: 2011 Omnibus Equity] Incentive Plan (previously filed as Exhibit [removed: 99.2] [added: 10.4] to the Company’s Form [removed: 8-K] [added: 10-Q for the quarter ended June 30, 2013] (No. 001-13831) filed [removed: November 21, 2012] [added: August 9, 2013] and incorporated herein by [removed: reference)] [added: reference)](http://www.sec.gov/Archives/edgar/data/1050915/000119312513328613/d542165dex104.htm)] |
| [removed: 10.3*] [added: 10.8*] | | — | | [removed: Form] [added: [Form] of Restricted Stock [added: Unit] Agreement for awards to employees/consultants pursuant to the [removed: 2007 Stock] [added: 2011 Omnibus Equity] Incentive Plan (previously filed as Exhibit [removed: 99.2] [added: 10.2] to the Company’s Form 8-K (No. 001-13831) filed [removed: May 29, 2007] [added: March 8, 2013] and incorporated herein by [removed: reference)] [added: reference)](http://www.sec.gov/Archives/edgar/data/1050915/000119312513098713/d499192dex102.htm)] |
| [removed: 10.4*] [added: 10.9*] | | — | | [removed: Form] [added: [Form] of Restricted Stock [added: Unit] Agreement for awards to non-employee directors pursuant to the [removed: 2007 Stock] [added: 2011 Omnibus Equity] Incentive Plan (previously filed as Exhibit [removed: 99.3] [added: 10.3] to the Company’s Form [removed: 8-K] [added: 10-Q for the quarter ended March 31, 2013] (No. 001-13831) filed May [removed: 29, 2007] [added: 8, 2013] and incorporated herein by [removed: reference)] [added: reference)](http://www.sec.gov/Archives/edgar/data/1050915/000119312513206743/d512186dex103.htm)] |
| [removed: 10.5*] [added: 10.1*] | | — | | [removed: InfraSource] [added: [InfraSource] Services, Inc. 2003 Omnibus Stock Incentive Plan, as amended (previously filed as Exhibit 10.5 to InfraSource Services’ Registration Statement on Form S-1 (Registration No. 333-112375) filed January 30, 2004 and incorporated herein by [removed: reference)] [added: reference)](http://www.sec.gov/Archives/edgar/data/1276827/000104746904002702/a2126834zex-10_5.htm)] |
| [removed: 10.6*] [added: 10.2*] | | — | | [removed: InfraSource] [added: [InfraSource] Services, Inc. 2004 Omnibus Stock Incentive Plan, as amended (previously filed as Exhibit 10.1 to InfraSource Services’ Form 8-K (Registration No. 001-32164) filed November 14, 2006 and incorporated herein by [removed: reference)] [added: reference)](http://www.sec.gov/Archives/edgar/data/1276827/000089322006002453/w27026exv10w1.txt)] |
| [removed: 10.7*] [added: 10.3*] | | — | | [removed: Quanta] [added: [Quanta] Services, Inc. 2011 Omnibus Equity Incentive Plan (previously filed as Exhibit 4.5 to the Company’s Form S-8 (No. 333-174374) filed May 20, 2011 and incorporated herein by [removed: reference)] [added: reference)](http://www.sec.gov/Archives/edgar/data/1050915/000095012311052476/h82371exv4w5.htm)] |
| [removed: 10.8*] [added: 10.5*] | | — | | [removed: Amendment] [added: [Amendment] No. [removed: 1] [added: 2] to the Quanta Services, Inc. 2011 Omnibus Equity Incentive Plan (previously filed as Exhibit [removed: 10.4] [added: 10.1] to the Company’s Form 10-Q for the quarter ended June 30, [removed: 2013] [added: 2016] (No. 001-13831) filed August [removed: 9, 2013] [added: 8, 2016] and incorporated herein by [removed: reference)] [added: reference)](http://www.sec.gov/Archives/edgar/data/1050915/000119312516675265/d196610dex101.htm)] |
| [removed: 10.9*] [added: 10.21*] | | — | | [removed: Amendment No. 2] [added: [Restricted Stock Unit Deferral Election Form, pursuant] to the Quanta Services, Inc. 2011 Omnibus Equity Incentive Plan (previously filed as Exhibit [removed: 10.1] [added: 10.5] to the Company’s Form 10-Q for the quarter ended [removed: June 30, 2016] [added: March 31, 2013] (No. 001-13831) filed [removed: August] [added: May] 8, [removed: 2016] [added: 2013] and incorporated herein by [removed: reference)] [added: reference)](http://www.sec.gov/Archives/edgar/data/1050915/000119312513206743/d512186dex105.htm)] |
| [removed: 10.10*] [added: 10.6*] | | — | | [removed: Form] [added: [Form] of Restricted Stock Agreement for awards to employees/consultants pursuant to the 2011 Omnibus Equity Incentive Plan accommodating electronic acceptance (previously filed as Exhibit 10.12 to the Company’s Form 10-K (No. 001-13831) filed February 29, 2012 and incorporated herein by [removed: reference)] [added: reference)](http://www.sec.gov/Archives/edgar/data/1050915/000119312512088822/d264834dex1012.htm)] |
| [removed: 10.11*] [added: 10.7*] | | — | | [removed: Form] [added: [Form] of Restricted Stock Agreement for awards to non-employee directors pursuant to the 2011 Omnibus Equity Incentive Plan accommodating electronic acceptance (previously filed as Exhibit 10.13 to the Company’s Form 10-K (No. 001-13831) filed February 29, 2012 and incorporated herein by [removed: reference)] [added: reference)](http://www.sec.gov/Archives/edgar/data/1050915/000119312512088822/d264834dex1013.htm)] |
| [removed: 10.12*] [added: 10.11*] | | — | | [removed: Form] [added: [Form] of [removed: Restricted Stock] [added: Performance] Unit [added: Award] Agreement for awards to employees/consultants pursuant to the 2011 Omnibus Equity Incentive Plan (previously filed as Exhibit 10.2 to the Company’s Form 8-K (No. 001-13831) filed March [removed: 8, 2013] [added: 7, 2014] and incorporated herein by [removed: reference)] [added: reference)](http://www.sec.gov/Archives/edgar/data/1050915/000119312514089446/d689729dex102.htm)] |
| [removed: 10.13*] [added: 10.12*] | | — | | [removed: Form] [added: [Form] of Restricted Stock Unit [added: Award] Agreement for awards [added: with performance condition(s)] to [removed: non-employee directors] [added: employee/consultant] pursuant to the 2011 Omnibus Equity Incentive Plan (previously filed as Exhibit [removed: 10.3] [added: 10.2] to the Company’s Form 10-Q for the quarter ended March 31, [removed: 2013] [added: 2016] (No. 001-13831) filed May [removed: 8, 2013] [added: 10, 2016] and incorporated herein by [removed: reference)] [added: reference](http://www.sec.gov/Archives/edgar/data/1050915/000119312516585468/d135432dex102.htm)] |
| [removed: 10.14*] [added: 10.10*] | | — | | [removed: Form] [added: [Form] of Restricted Stock Unit Award Agreement for awards to non-employee directors pursuant to the 2011 Omnibus Equity Incentive Plan (Settled in Stock Unless Cash Settlement Elected) (previously filed as Exhibit 10.1 to the Company’s Form 10-Q for the quarter ended June 30, 2015 (No. 001-13831) filed August 10, 2015 and incorporated herein by [removed: reference)] [added: reference)](http://www.sec.gov/Archives/edgar/data/1050915/000119312515284664/d928298dex101.htm)] |
| [removed: 10.17*] [added: 10.13 *] | | — | | [removed: Employment] [added: [Employment] Agreement dated September 1, 2016, effective as of March 14, 2016, by and between Quanta Services, Inc. and Earl C. Austin, Jr. (previously filed as Exhibit 10.1 to the Company’s Form 8-K (No. 001-13831) filed September 8, 2016 and incorporated herein by [removed: reference)] [added: reference)](http://www.sec.gov/Archives/edgar/data/1050915/000119312516705198/d253011dex101.htm)] |
| [removed: 10.18*] [added: 10.15 *] | | — | | [removed: Employment] [added: [Employment] Agreement dated March [removed: 29, 2012,] [added: 4, 2014,] effective as of [removed: May 17, 2012,] [added: January 6, 2014,] by and between Quanta Services, Inc. and [removed: Derrick A. Jensen] [added: Jesse E. Morris] (previously filed as Exhibit [removed: 10.2] [added: 10.1] to the Company’s Form [removed: 8-K] [added: 10-Q for the quarter ended March 31, 2014] (No. 001-13831) filed [removed: April 2, 2012] [added: May 8, 2014] and incorporated herein by [removed: reference)] [added: reference)](http://www.sec.gov/Archives/edgar/data/1050915/000119312514190173/d692596dex101.htm)] |
| [removed: 10.19*] [added: 10.16*] | | [removed: —] | | [removed: Employment] [added: [Employment] Agreement dated [removed: March 4, 2014,] [added: September 12, 2017,] effective as of January [removed: 6, 2014,] [added: 1, 2017,] by and between Quanta Services, Inc. and [removed: Jesse E. Morris] [added: Paul C. Gregory] (previously filed as Exhibit 10.1 to the Company’s Form 10-Q for the quarter ended [removed: March 31, 2014] [added: September 30, 2017] (No. 001-13831) filed [removed: May 8, 2014] [added: November 9, 2017] and incorporated herein by [removed: reference)] [added: reference)](http://www.sec.gov/Archives/edgar/data/1050915/000105091517000057/pwr9-30x2017ex101.htm)] |
| [removed: 10.20*] [added: 10.17*] | | [removed: —] | | [removed: Employment] [added: [Employment] Agreement dated [removed: March 24, 2011,] [added: September 12, 2017,] effective as of May [removed: 19, 2011,] [added: 15, 2017,] by and between Quanta Services, Inc. and [removed: James F. O’Neil III] [added: Donald C. Wayne] (previously filed as Exhibit 10.2 to the Company’s Form [removed: 8-K] [added: 10-Q for the quarter ended September 30, 2017] (No. 001-13831) filed [removed: March 25, 2011] [added: November 9, 2017] and incorporated herein by [removed: reference)] [added: reference)](http://www.sec.gov/Archives/edgar/data/1050915/000105091517000057/pwr9-30x2017ex102.htm)] |
| 10.22* | | — | | [removed: Quanta Services, Inc. Senior Leadership Annual Incentive Plan 2016 and Quanta] [added: [Quanta] Services, Inc. [removed: Senior Leadership Long-Term Incentive] [added: Nonqualified Deferred Compensation Plan, as restated effective January 1, 2017, including the Nonqualified Deferred Compensation] Plan [removed: 2016] [added: Adoption Agreement] (previously filed as Exhibit [removed: 10.1] [added: 10.27] to the Company’s Form [removed: 8-K] [added: 10-K for the year ended December 31, 2016] (No. 001-13831) filed March [removed: 30, 2016] [added: 1, 2017] and incorporated herein by [removed: reference)] [added: reference)](http://www.sec.gov/Archives/edgar/data/1050915/000119312517064821/d295903dex1027.htm)] |
| [removed: 10.23*] [added: 10.19*] | | — | | [removed: Director] [added: [Director] Compensation Summary effective as of the [removed: 2015] [added: 2017] Annual Meeting of the Board of Directors (previously filed as Exhibit [removed: 10.3] [added: 10.24] to the Company’s Form [removed: 10-Q] [added: 10-K] for the [removed: quarter] [added: year] ended [removed: March] [added: December] 31, [removed: 2015] [added: 2016] (No. 001-13831) filed [removed: May 8, 2015] [added: March 1, 2017] and incorporated herein by [removed: reference)] [added: reference)](http://www.sec.gov/Archives/edgar/data/1050915/000119312517064821/d295903dex1024.htm)] |
| [removed: 10.28*] [added: 10.23*] | | — | | [removed: Form] [added: [Form] of Amended and Restated Indemnity Agreement (previously filed as Exhibit 10.1 to the Company’s Form 8-K (No. 001-13831) filed January 31, 2012 and incorporated herein by [removed: reference)] [added: reference)](http://www.sec.gov/Archives/edgar/data/1050915/000119312512029911/d291268dex101.htm)] |
| [removed: 10.29] [added: 10.24] | | — | | [removed: Fourth] [added: [Fourth] Amended and Restated Credit Agreement, dated as of December 18, 2015, among Quanta Services, Inc. and certain subsidiaries of Quanta Services, Inc., as Borrowers, certain subsidiaries of Quanta Services, Inc. identified therein as Guarantors, Bank of America, N.A., as Administrative Agent, Domestic Swing Line Lender and an L/C Issuer, and the other Lenders party thereto (previously filed as Exhibit 99.1 to the Company’s Form 8-K (No. 001-13831) filed December 23, 2015 and incorporated herein by [removed: reference)] [added: reference)](http://www.sec.gov/Archives/edgar/data/1050915/000119312515412933/d106967dex991.htm)] |
| [removed: 10.30] [added: 10.25] | | — | | [removed: First] [added: [First] Amendment to Fourth Amended and Restated Credit Agreement dated as of June 27, 2016, among Quanta Services, Inc. and certain subsidiaries of Quanta Services, Inc., as Borrowers, certain subsidiaries of Quanta Services, Inc. identified therein as Guarantors, Bank of America, N.A., as Administrative Agent, Domestic Swing Line Lender and an L/C Issuer, and the other Lenders party thereto (previously filed as Exhibit 10.2 to the Company’s Form 10-Q (No. 001-13831) filed August 8, 2016 and incorporated herein by [removed: reference)] [added: reference)](http://www.sec.gov/Archives/edgar/data/1050915/000119312516675265/d196610dex102.htm)] |
| [removed: 10.31] [added: 10.27] | | — | | [removed: Fourth] [added: [Fourth] Amended and Restated Security Agreement, dated as of December 18, 2015, among Quanta Services, Inc., the other Debtors identified therein, and Bank of America, N.A., as Administrative Agent for the ratable benefit of the Secured Parties (previously filed as Exhibit 99.2 to the Company’s Form 8-K (No. 001-13831) filed December 23, 2015 and incorporated herein by [removed: reference)] [added: reference)](http://www.sec.gov/Archives/edgar/data/1050915/000119312515412933/d106967dex992.htm)] |
| [removed: 10.32] [added: 10.28] | | — | | [removed: Fourth] [added: [Fourth] Amended and Restated Pledge Agreement, dated as of December 18, 2015, among Quanta Services, Inc., the other Pledgors identified therein, and Bank of America, N.A., as Administrative Agent for the ratable benefit of the Secured Parties (previously filed as Exhibit 99.3 to the Company’s Form 8-K (No. 001-13831) filed December 23, 2015 and incorporated herein by [removed: reference)] [added: reference)](http://www.sec.gov/Archives/edgar/data/1050915/000119312515412933/d106967dex993.htm)] |
| [removed: 10.33] [added: 10.29] | | — | | [removed: Assignment] [added: [Assignment] and Assumption Agreement dated as of August 30, 2007, by and between InfraSource Services, Inc. and Quanta Services, Inc. (previously filed as Exhibit 10.3 to Quanta’s Form 8-K (001-13831) filed September 6, 2007 and incorporated herein by [removed: reference)] [added: reference)](http://www.sec.gov/Archives/edgar/data/1050915/000095012907004509/h49711exv10w3.htm)] |
| [removed: 10.34] [added: 10.30] | | — | | [removed: Underwriting,] [added: [Underwriting,] Continuing Indemnity and Security Agreement dated as of March 14, 2005 by Quanta Services, Inc. and the subsidiaries and affiliates of Quanta Services, Inc. identified therein, in favor of Federal Insurance Company (previously filed as Exhibit 10.1 to the Company’s Form 8-K (No. 001-13831) filed March 16, 2005 and incorporated herein by [removed: reference)] [added: reference)](http://www.sec.gov/Archives/edgar/data/1050915/000095012905002465/h23479exv10w1.htm)] |
| [removed: 10.35] [added: 10.31] | | — | | [removed: Intercreditor] [added: [Intercreditor] Agreement dated March 14, 2005 by and between Federal Insurance Company and Bank of America, N.A., as Lender Agent on behalf of the other Lender Parties (under the Company’s Credit Agreement, as amended) and agreed to by Quanta Services, Inc. and the subsidiaries and affiliates of Quanta Services, Inc. identified therein (previously filed as Exhibit 10.2 to the Company’s Form 8-K (No. 001-13831) filed March 16, 2005 and incorporated herein by [removed: reference)] [added: reference)](http://www.sec.gov/Archives/edgar/data/1050915/000095012905002465/h23479exv10w2.htm)] |
| [removed: 10.36] [added: 10.32] | | — | | [removed: First] [added: [First] Amendment to Intercreditor Agreement dated December 3, 2012 by and between Federal Insurance Company and Bank of America, N.A., as Lender Agent on behalf of the other Lender Parties (under the Company’s Credit Agreement, as amended) and agreed to by Quanta Services, Inc. and the subsidiaries and affiliates of Quanta Services, Inc. identified therein (previously filed as Exhibit 10.7 to the Company’s Form 10-Q for the quarter ended June 30, 2013 (No. 001-13831) filed August 9, 2013 and incorporated herein by [removed: reference)] [added: reference)](http://www.sec.gov/Archives/edgar/data/1050915/000119312513328613/d542165dex107.htm)] |
(1) Consolidated financial statements.
The consolidated financial statements are included in Item 8.
(2) Financial statement schedules.
Financial Statements and Supplementary Data of this Annual Report on Form 10-K.
| Exhibit | | | | |
| 2.2 | | | | [Securities Purchase Agreement, dated as of July 20, 2017, by and among Quanta Services, Inc., certain subsidiaries of Quanta Services, Inc., as purchasers, and the General Partners and Limited Partners of Stronghold, Ltd. and Stronghold Specialty, Ltd. (previously filed as Exhibit 2.1 to the Company’s Form 10-Q for the quarter ended September 30, 2017 (No. 001-13831) filed November 9, 2017 and incorporated herein by reference)](http://www.sec.gov/Archives/edgar/data/1050915/000105091517000057/pwr9-30x2017ex21.htm) |
| Exhibit | | | | |
| No. | | | | Description |
| 10.20* | | — | | [Quanta Services, Inc. Non-Employee Director Deferred Compensation Plan dated effective January 1, 2017 (previously filed as Exhibit 10.25 to the Company’s Form 10-K for the year ended December 31, 2016 (No. 001-13831) filed March 1, 2017 and incorporated herein by reference)](http://www.sec.gov/Archives/edgar/data/1050915/000119312517064821/d295903dex1025.htm) |
| Exhibit | | | | |
| No. | | | | Description |
| 10.26 | | | | [Second Amendment to Fourth Amended and Restated Credit Agreement, dated as of October 31, 2017, among Quanta Services, Inc. and certain subsidiaries of Quanta Services, Inc., as Borrowers, certain subsidiaries of Quanta Services, Inc. identified therein as Guarantors, the lenders party thereto, Bank of America, N.A., as Administrative Agent, and the Swing Line Lenders and L/C Issuers party thereto (previously filed as Exhibit 10.1 to the Company’s Form 8-K filed November 6, 2017 and incorporated herein by reference)](http://www.sec.gov/Archives/edgar/data/1050915/000119312517334394/d471826dex101.htm) |
| Exhibit | | | | |
| No. | | | | Description |
| 21.1ˆ | | — | | [Subsidiaries](https://www.sec.gov/Archives/edgar/data/1050915/000105091518000003/pwr-ex211x12x31x2017.htm) |
| 23.1ˆ | | — | | [Consent of PricewaterhouseCoopers LLP](https://www.sec.gov/Archives/edgar/data/1050915/000105091518000003/pwr-ex231x12x31x2017.htm) |
_______________________________________
| | |
| | |
| --- | --- |
(1) _Financial Statements._ Reference is made to the Index to Consolidated Financial Statements on page 85 of this Annual Report on Form 10-K.
##### [Table of Contents](#toc)
##### [Index to Financial Statements](#INDEX)
| | | | | |
| --- | --- | --- | --- | --- |
| 10.15* | | — | | Form of Performance Unit Award Agreement for awards to employees/consultants pursuant to the 2011 Omnibus Equity Incentive Plan (previously filed as Exhibit 10.2 to the Company’s Form 8-K (No. 001-13831) filed March 7, 2014 and incorporated herein by reference) |
| 10.16* | | — | | Form of Restricted Stock Unit Award Agreement for awards with performance condition(s) to employee/consultant pursuant to the 2011 Omnibus Equity Incentive Plan (previously filed as Exhibit 10.2 to the Company’s Form 10-Q for the quarter ended March 31, 2016 (No. 001-13831) filed May 10, 2016 and incorporated herein by reference |
| 10.21* | | — | | Separation Agreement and General Release of All Claims dated March 14, 2016 between James F. O’Neil III and Quanta Services, Inc. (previously filed as Exhibit 10.1 to the Company’s Form 8-K (No. 001-13831) filed March 15, 2016 and incorporated herein by reference) |
| 10.24*^ | | — | | Director Compensation Summary effective as of the 2017 Annual Meeting of the Board of Directors |
| 10.25*^ | | — | | Quanta Services, Inc. Non-Employee Director Deferred Compensation Plan dated effective January 1, 2017 |
| 10.26* | | — | | Restricted Stock Unit Deferral Election Form, pursuant to the Quanta Services, Inc. 2011 Omnibus Equity Incentive Plan (previously filed as Exhibit 10.5 to the Company’s Form 10-Q for the quarter ended March 31, 2013 (No. 001-13831) filed May 8, 2013 and incorporated herein by reference) |
| 10.27*^ | | — | | Quanta Services, Inc. Nonqualified Deferred Compensation Plan, as restated effective January 1, 2017, including the Nonqualified Deferred Compensation Plan Adoption Agreement |
| 21.1ˆ | | — | | Subsidiaries |
| 23.1ˆ | | — | | Consent of PricewaterhouseCoopers LLP |
An excerpt. Shown here: 40 of 49 rewritten, all 19 added and all 15 removed. The counts are complete. For every sentence, read Item 15. Exhibits and Financial Statement Schedules in the FY2017 filing and the FY2016 filing.
Item 16. Form 10-K Summary.
17 rewritten, 13 added, 69 removed, 23 unchanged
[removed: SIGNATURES][added: SIGNATURES]
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, Quanta Services, Inc. has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Houston, State of Texas, on [removed: March 1, 2017.][added: February 28, 2018.]
| [added: |] QUANTA SERVICES, INC. | | [removed: |]
| [removed: By:] | [added: By:] | /s/ EARL C. AUSTIN, JR. |
Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed by the following persons in the capacities indicated on [removed: March 1, 2017.][added: February 28, 2018.]
| [removed: Signature] [added: Signature] | | [removed: Title] [added: Title] |
| /s/ EARL C. AUSTIN, JR. [removed: Earl C. Austin, Jr.] | | President, Chief Executive Officer, Chief Operating Officer and Director [removed: (Principal Executive Officer)] |
| /s/ DERRICK A. JENSEN [removed: Derrick A. Jensen] | | Chief Financial Officer [removed: (Principal Financial Officer and Principal Accounting Officer)] |
| /s/ DOYLE N. BENEBY [removed: Doyle N. Beneby] | | Director |
| /s/ J. MICHAL CONAWAY [removed: J. Michal Conaway] | | Director |
| /s/ VINCENT D. FOSTER [removed: Vincent D. Foster] | | Director |
| /s/ BERNARD FRIED [removed: Bernard Fried] | | Director |
| /s/ WORTHING F. JACKMAN [removed: Worthing F. Jackman] | | Director |
| [removed: /s/ DAVID M. McCLANAHAN] David M. McClanahan | | [removed: Director] |
| /s/ [removed: BRUCE RANCK Bruce Ranck] [added: DAVID M. McCLANAHAN] | | Chairman of the Board of Directors |
| /s/ MARGARET B. SHANNON [removed: Margaret B. Shannon] | | Director |
| /s/ PAT WOOD, III [removed: Pat Wood, III] | | Director |
| Earl C. Austin, Jr. | | (Principal Executive Officer) |
| Derrick A. Jensen | | (Principal Financial Officer) |
| /s/ JERRY K. LEMON | | Chief Accounting Officer |
| Jerry K. Lemon | | (Principal Accounting Officer) |
| Doyle N. Beneby | | |
| J. Michal Conaway | | |
| Vincent D. Foster | | |
| Bernard Fried | | |
| Worthing F. Jackman | | |
| | | |
| Margaret B. Shannon | | |
| | | |
| Pat Wood, III | | |
| --- | --- |
##### [Table of Contents](#toc)
##### [Index to Financial Statements](#INDEX)
EXHIBIT INDEX
| | | | | |
| --- | --- | --- | --- | --- |
| Exhibit No. | | | | Description |
| 2.1 | | — | | Stock Purchase Agreement dated as of November 19, 2012, among Quanta Services, Inc., Infrasource FI LLC, Dycom Industries, Inc. and PBG Acquisition III, LLC (previously filed as Exhibit 2.1 to the Company’s Form 8-K (No. 001-13831) filed November 21, 2012 and incorporated herein by reference) |
| 2.2 | | — | | Stock Purchase Agreement dated as of April 29, 2015, among Quanta Services, Inc., CC SCN Fiber LLC, and Crown Castle International Corp. (previously filed as Exhibit 2.1 to the Company’s Form 8-K (No. 001-13831) filed May 4, 2015 and incorporated herein by reference) |
| 3.1 | | — | | Restated Certificate of Incorporation of Quanta Services, Inc. (previously filed as Exhibit 3.3 to the Company’s Form 8-K (No. 001-13831) filed May 25, 2011 and incorporated herein by reference) |
| 3.2 | | — | | Certificate of Designation of Series G Preferred Stock (previously filed as Exhibit 3.1 to the Company’s Form 8-K (No. 001-13831) filed January 17, 2014 and incorporated herein by reference) |
| 3.3 | | — | | Bylaws of Quanta Services, Inc., as amended and restated March 27, 2014 (previously filed as Exhibit 3.1 to the Company’s Form 8-K (No. 001-13831) filed March 31, 2014 and incorporated herein by reference) |
| 4.1 | | — | | Form of Common Stock Certificate (previously filed as Exhibit 4.1 to the Company’s Registration Statement on Form S-1/Amendment No. 2 (No. 333-42957) filed February 9, 1998 and incorporated herein by reference) |
| 10.1* | | — | | Quanta Services, Inc. 2007 Stock Incentive Plan (previously filed as Exhibit 99.1 to the Company’s Form 8-K (No. 001-13831) filed May 29, 2007 and incorporated herein by reference) |
| 10.2* | | — | | Amendment No. 1 to the Quanta Services, Inc. 2007 Stock Incentive Plan (previously filed as Exhibit 99.2 to the Company’s Form 8-K (No. 001-13831) filed November 21, 2012 and incorporated herein by reference) |
| 10.3* | | — | | Form of Restricted Stock Agreement for awards to employees/consultants pursuant to the 2007 Stock Incentive Plan (previously filed as Exhibit 99.2 to the Company’s Form 8-K (No. 001-13831) filed May 29, 2007 and incorporated herein by reference) |
| 10.4* | | — | | Form of Restricted Stock Agreement for awards to non-employee directors pursuant to the 2007 Stock Incentive Plan (previously filed as Exhibit 99.3 to the Company’s Form 8-K (No. 001-13831) filed May 29, 2007 and incorporated herein by reference) |
| 10.5* | | — | | InfraSource Services, Inc. 2003 Omnibus Stock Incentive Plan, as amended (previously filed as Exhibit 10.5 to InfraSource Services’ Registration Statement on Form S-1 (Registration No. 333-112375) filed January 30, 2004 and incorporated herein by reference) |
| 10.6* | | — | | InfraSource Services, Inc. 2004 Omnibus Stock Incentive Plan, as amended (previously filed as Exhibit 10.1 to InfraSource Services’ Form 8-K (Registration No. 001-32164) filed November 14, 2006 and incorporated herein by reference) |
| 10.7* | | — | | Quanta Services, Inc. 2011 Omnibus Equity Incentive Plan (previously filed as Exhibit 4.5 to the Company’s Form S-8 (No. 333-174374) filed May 20, 2011 and incorporated herein by reference) |
| 10.8* | | — | | Amendment No. 1 to the Quanta Services, Inc. 2011 Omnibus Equity Incentive Plan (previously filed as Exhibit 10.4 to the Company’s Form 10-Q for the quarter ended June 30, 2013 (No. 001-13831) filed August 9, 2013 and incorporated herein by reference) |
| 10.9* | | — | | Amendment No. 2 to the Quanta Services, Inc. 2011 Omnibus Equity Incentive Plan (previously filed as Exhibit 10.1 to the Company’s Form 10-Q for the quarter ended June 30, 2016 (No. 001-13831) filed August 8, 2016 and incorporated herein by reference) |
| 10.10* | | — | | Form of Restricted Stock Agreement for awards to employees/consultants pursuant to the 2011 Omnibus Equity Incentive Plan accommodating electronic acceptance (previously filed as Exhibit 10.12 to the Company’s Form 10-K (No. 001-13831) filed February 29, 2012 and incorporated herein by reference) |
| 10.11* | | — | | Form of Restricted Stock Agreement for awards to non-employee directors pursuant to the 2011 Omnibus Equity Incentive Plan accommodating electronic acceptance (previously filed as Exhibit 10.13 to the Company’s Form 10-K (No. 001-13831) filed February 29, 2012 and incorporated herein by reference) |
| 10.12* | | — | | Form of Restricted Stock Unit Agreement for awards to employees/consultants pursuant to the 2011 Omnibus Equity Incentive Plan (previously filed as Exhibit 10.2 to the Company’s Form 8-K (No. 001-13831) filed March 8, 2013 and incorporated herein by reference) |
| 10.13* | | — | | Form of Restricted Stock Unit Agreement for awards to non-employee directors pursuant to the 2011 Omnibus Equity Incentive Plan (previously filed as Exhibit 10.3 to the Company’s Form 10-Q for the quarter ended March 31, 2013 (No. 001-13831) filed May 8, 2013 and incorporated herein by reference) |
| 10.14* | | — | | Form of Restricted Stock Unit Award Agreement for awards to non-employee directors pursuant to the 2011 Omnibus Equity Incentive Plan (Settled in Stock Unless Cash Settlement Elected) (previously filed as Exhibit 10.1 to the Company’s Form 10-Q for the quarter ended June 30, 2015 (No. 001-13831) filed August 10, 2015 and incorporated herein by reference) |
| 10.15* | | — | | Form of Performance Unit Award Agreement for awards to employees/consultants pursuant to the 2011 Omnibus Equity Incentive Plan (previously filed as Exhibit 10.2 to the Company’s Form 8-K (No. 001-13831) filed March 7, 2014 and incorporated herein by reference) |
| 10.16* | | — | | Form of Restricted Stock Unit Award Agreement for awards with performance condition(s) to employee/consultant pursuant to the 2011 Omnibus Equity Incentive Plan (previously filed as Exhibit 10.2 to the Company’s Form 10-Q for the quarter ended March 31, 2016 (No. 001-13831) filed May 10, 2016 and incorporated herein by reference |
| 10.17* | | — | | Employment Agreement dated September 1, 2016, effective as of March 14, 2016, by and between Quanta Services, Inc. and Earl C. Austin, Jr. (previously filed as Exhibit 10.1 to the Company’s Form 8-K (No. 001-13831) filed September 8, 2016 and incorporated herein by reference) |
| 10.18* | | — | | Employment Agreement dated March 29, 2012, effective as of May 17, 2012, by and between Quanta Services, Inc. and Derrick A. Jensen (previously filed as Exhibit 10.2 to the Company’s Form 8-K (No. 001-13831) filed April 2, 2012 and incorporated herein by reference) |
| 10.19* | | — | | Employment Agreement dated March 4, 2014, effective as of January 6, 2014, by and between Quanta Services, Inc. and Jesse E. Morris (previously filed as Exhibit 10.1 to the Company’s Form 10-Q for the quarter ended March 31, 2014 (No. 001-13831) filed May 8, 2014 and incorporated herein by reference) |
| 10.20* | | — | | Employment Agreement dated March 24, 2011, effective as of May 19, 2011, by and between Quanta Services, Inc. and James F. O’Neil III (previously filed as Exhibit 10.2 to the Company’s Form 8-K (No. 001-13831) filed March 25, 2011 and incorporated herein by reference) |
| 10.21* | | — | | Separation Agreement and General Release of All Claims dated March 14, 2016 between James F. O’Neil III and Quanta Services, Inc. (previously filed as Exhibit 10.1 to the Company’s Form 8-K (No. 001-13831) filed March 15, 2016 and incorporated herein by reference) |
| 10.22* | | — | | Quanta Services, Inc. Senior Leadership Annual Incentive Plan 2016 and Quanta Services, Inc. Senior Leadership Long-Term Incentive Plan 2016 (previously filed as Exhibit 10.1 to the Company’s Form 8-K (No. 001-13831) filed March 30, 2016 and incorporated herein by reference) |
| 10.23* | | — | | Director Compensation Summary effective as of the 2015 Annual Meeting of the Board of Directors (previously filed as Exhibit 10.3 to the Company’s Form 10-Q for the quarter ended March 31, 2015 (No. 001-13831) filed May 8, 2015 and incorporated herein by reference) |
| 10.24*^ | | — | | Director Compensation Summary effective as of the 2017 Annual Meeting of the Board of Directors |
| 10.25*^ | | — | | Quanta Services, Inc. Non-Employee Director Deferred Compensation Plan dated effective January 1, 2017 |
| 10.26* | | — | | Restricted Stock Unit Deferral Election Form, pursuant to the Quanta Services, Inc. 2011 Omnibus Equity Incentive Plan (previously filed as Exhibit 10.5 to the Company’s Form 10-Q for the quarter ended March 31, 2013 (No. 001-13831) filed May 8, 2013 and incorporated herein by reference) |
| 10.27*^ | | — | | Quanta Services, Inc. Nonqualified Deferred Compensation Plan, as restated effective January 1, 2017, including the Nonqualified Deferred Compensation Plan Adoption Agreement |
An excerpt. Shown here: all 17 rewritten, all 13 added and 40 of 69 removed. The counts are complete. For every sentence, read Item 16. Form 10-K Summary. in the FY2017 filing and the FY2016 filing.