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

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our historical consolidated financial statements and related notes in Item 8. Financial Statements and Supplementary Data. The discussion below contains forward-looking statements that are based upon our current expectations and are subject to uncertainty and changes in circumstances. Actual results may differ materially from these expectations due to inaccurate assumptions and known or unknown risks and uncertainties, including those identified in Uncertainty of Forward-Looking Statements and Information below and Item 1A. Risk Factors.

Overview

We are a leading provider of specialty contracting services, delivering comprehensive infrastructure solutions for the electric power, energy and communications industries in the United States, Canada, Australia and select other international markets. The performance of our business generally depends on our ability to obtain contracts with customers and to effectively deliver the services provided under those contracts. The services we provide include 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; pipeline transmission and distribution systems and facilities; refinery, petrochemical and industrial facilities; and telecommunications and cable multi-system operator networks. Our customers include many of the leading companies in the industries we serve, and we endeavor to develop and maintain strategic alliances and preferred service provider status with our customers. Our services are typically provided pursuant to master service agreements, repair and maintenance contracts and fixed price and non-fixed price installation contracts.

We report our results under two reportable segments: (1) Electric Power Infrastructure Services and (2) Pipeline and Industrial Infrastructure Services, as further described in Item 1. Business – Reportable Segments. This structure is generally focused on broad end-user markets for our services. Included within the Electric Power Infrastructure Services segment are the results related to our telecommunications infrastructure services.

Current Year Financial Results and Significant Operational Trends and Events

Key financial results for the year ended December 31, 2019 included:

•	Consolidated revenues increased 8.4% to $12.11 billion as compared to $11.17 billion for the year ended December 31, 2018, of which 59% was attributable to the Electric Power Infrastructure Services segment and 41% was attributable to the Pipeline and Industrial Infrastructure Services segment;

•	Operating income increased 2.7%, or $14.6 million, to $554.9 million as compared to $540.3 million for the year ended December 31, 2018;

•	Net income attributable to common stock increased 37.1%, or $108.7 million, to $402.0 million as compared to $293.3 million for the year ended December 31, 2018;

•	Diluted earnings per share increased 43.7%, or $0.83, to $2.73 as compared to $1.90 for the year ended December 31, 2018;

•	Net cash provided by operating activities increased 46.8%, or $167.8 million, to $526.6 million as compared to $358.8 million for the year ended December 31, 2018;

•	Remaining performance obligations increased 13.3%, or $621.0 million, to $5.30 billion as of December 31, 2019 as compared to $4.68 billion as of December 31, 2018; and

•	Total backlog (a non-GAAP measure) increased 21.6%, or $2.66 billion, to $15.00 billion as of December 31, 2019 as compared to $12.34 billion as of December 31, 2018. For a reconciliation of backlog to remaining performance obligations, its most comparable GAAP measure, see Remaining Performance Obligations and Backlog below.

During 2019, our Electric Power Infrastructure Services segment was impacted by the following significant operational trends and events:

•	Increased customer spending on smaller electric transmission and distribution services projects, including increased revenues in the western United States associated with grid modernization and accelerated fire hardening programs, which are services we generally consider to be base business operations;

•	Decreased revenues on larger transmission projects primarily due to the completion of a larger transmission project in Canada in the first quarter of 2019 as compared to full construction on the project throughout 2018;

•	Delays on other larger transmission projects in Canada, which shifted expected revenues from 2019 to 2020 and beyond; and

•	Recognition of a $79.2 million charge related to the termination of a large telecommunications project in Peru.

During 2019, our Pipeline and Industrial Infrastructure Services segment was impacted by the following significant operational trends and events:

•	Increased customer spending on gas utility infrastructure replacement and modernization initiatives, pipeline integrity work, industrial services and other services that we generally consider to be base business operations;

•	Improved operating income margins across our transmission, distribution and industrial services operations resulting from improved execution and utilization;

•	Decreased revenues from larger pipeline projects as compared to 2018, the timing of which is highly variable due to potential permitting delays, worksite access limitations related to environmental regulations and seasonal weather patterns; and

•	Recognition of a $28.3 million project loss associated with engineering and production delays on a substantially complete processing facility project, which negatively impacted operating income and was partially offset by favorable change orders and insurance settlements on other projects during 2019.

During 2019, our results were also impacted by the following significant events, the gross amounts related to which are recorded as equity in earnings of unconsolidated affiliates included in “Other income (expense), net” in our consolidated statements of operations:

•	Recognition of $60.3 million ($43.9 million net of tax) of previously deferred earnings as a result of the completion of the larger transmission project in Canada referenced above; and

•	Recognition of a $13.0 million gain ($20.7 million with favorable tax benefits) related to the sale of our interest in the same large electric transmission project in Canada.

We also continue to selectively evaluate acquisitions as part of our overall business strategy and acquired seven businesses in 2019, including The Hallen Construction Co., Inc. (Hallen), a business that specializes in above-ground and underground gas distribution and transmission services in the northeastern United States. During 2019, revenues were positively impacted by approximately $305 million from acquired businesses.

Business Environment

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

Electric Power Infrastructure Services Segment. Utilities are investing significant capital in their electric power delivery systems, particularly transmission, substation and distribution infrastructure, through multi-year, multi-billion dollar grid modernization and reliability programs, which have provided, and are expected to continue to provide, demand for our services. Utilities are accommodating a changing fuel generation mix that is moving toward more sustainable sources such as natural gas and renewables and replacing aging infrastructure to support long-term economic growth. In order to reliably and efficiently deliver power, and in response to federal reliability standards, utilities are also integrating smart grid technologies into distribution systems in order to improve grid management and create efficiencies, and in preparation for emerging technologies such as electric vehicles. A number of utilities are also implementing system upgrades or hardening programs in response to recurring severe weather events, such as hurricanes and wildfires. In particular, current system resiliency initiatives in California and other regions in the western U.S. are designed to prevent and manage the impact of wildfires. However, while these resiliency initiatives also provide opportunities for our services, they also increase our potential exposure to significant liabilities attributable to those events.

We expect demand for electricity in North America to grow over the long term and believe that certain segments of the North American electric power grid are not adequate to efficiently serve the power needs of the future. As demand for power increases, we also expect an increase in new power generation facilities powered by certain traditional energy sources (e.g., natural gas) and renewable energy sources (e.g., solar and wind). To the extent this dynamic continues, we expect continued demand for new or expanded transmission and substation infrastructure to transport power and interconnect new generation facilities and the modification and reengineering of existing infrastructure as existing coal and nuclear generation facilities are retired or shut down.

With respect to our communications service offerings, consumer and commercial demand for communication and data-intensive, high-bandwidth wireline and wireless services and applications is driving significant investment in infrastructure and the deployment of new technologies. In particular, communications providers in North America are in the early stages of developing new fifth generation wireless services (5G), which are intended to facilitate bandwidth-intensive services at high speeds for

consumers and a wide range of commercial applications. As a result of these industry trends, we believe there will be meaningful demand for our services in that market. While we continue to perform certain electric power and communications services in Latin America, we have completed a strategic review of those operations, and due to circumstances experienced in connection with the termination of the large telecommunications project in Peru during 2019 and political volatility in other areas of the region, have concluded to pursue an orderly exit of our Latin American operations. While we expect additional costs in the near-term related to exiting these operations, we anticipate this decision will result in improved profitability of our overall services offerings.

Pipeline and Industrial Infrastructure Services Segment. We have experienced an increase in demand for our gas utility distribution services as a result of improved economic conditions, lower natural gas prices, regulatory requirements and customer desire to upgrade and replace aging infrastructure. We believe there are also growth opportunities for our pipeline integrity, rehabilitation and replacement services, as regulatory measures have increased the frequency or stringency of pipeline integrity testing requirements.

We provide critical path solutions and related specialty services to refinery and chemical processing facilities, primarily along the Gulf Coast of the United States and in other select markets in North America. Trends and estimates for process facility utilization rates and overall refining capacity show North America as the largest downstream maintenance market in the world over the next several years, and we believe processing facilities located along the U.S. Gulf Coast region should have certain strategic advantages due to their proximity to affordable hydrocarbon resources. While our high-pressure and critical-path turnaround services can be negatively impacted in the short term by severe weather events, such as hurricanes, tropical storms and floods, we expect these favorable industry dynamics to provide near-term and longer-term opportunities for these services, as well as our capabilities with respect to instrumentation, high-voltage and other electrical services, piping, fabrication and storage, and other industrial services.

Additionally, a number of larger pipeline projects from the North American shale formations and Canadian oil sands to power plants, refineries, liquefied natural gas (LNG) export facilities and other demand centers are in various stages of development. While there is risk the projects will not move forward or be delayed, we believe many of our customers remain committed to them given the cost and time required to move from conception to construction. The larger pipeline market is cyclical and the contribution of these projects to our revenues has declined over the last few years. We currently expect a further reduction in revenues from larger pipeline projects in 2020; however, we are pursuing various opportunities that, if successful, could cause our current expectations to increase. Due to its abundant supply and current low price, we also believe natural gas will remain a fuel of choice for both primary power generation and backup power generation for renewable-driven power plants in North America. The favorable characteristics of natural gas also position the United States as a leading competitor in the global LNG export market, which has the potential to continue to grow over the coming years as approved and proposed LNG export facilities are developed. In certain areas, the existing pipeline system infrastructure is insufficient to support these expected future developments, which could provide additional opportunities for our services.

Although much of our pipeline and industrial infrastructure services are influenced by hydrocarbon production volume rather than shorter-term changes in commodity prices, the broader oil and gas industry is highly cyclical and subject to price volatility, which can impact demand for our services. For example, certain of our end markets where the price of oil is influential, such as Australia, the Canadian Oil Sands and certain oil-driven U.S. shale formations, have been materially impacted and remain challenged, as the broader energy market has not fully recovered from the significant decline in oil prices that occurred in 2014 and 2015.

Regulatory Challenges and Opportunities. The regulatory environment creates both challenges and opportunities for our business. Certain regulatory and environmental permitting processes continue to create uncertainty for projects and negatively impact customer spending. In recent years, electric power and pipeline infrastructure services margins have been impacted by regulatory and permitting delays, particularly with respect to larger electric transmission and larger pipeline projects. We believe that several existing, pending or proposed legislative or regulatory actions may alleviate certain of these issues and positively impact long-term demand, particularly in connection with electric power infrastructure and renewable energy spending. For example, regulatory changes affecting siting and right-of-way processes could potentially accelerate construction for transmission projects, and state and federal reliability standards are creating incentives for system investment and maintenance. We also consider renewable energy, including solar and wind generation facilities, to be an ongoing opportunity for our engineering, project management and installation services; however, the economic feasibility of some of these projects remains subject to the continued availability of tax incentive programs.

Labor Resource Availability. Our customers are seeking additional specialized labor resources to address an aging utility workforce and labor availability issues, increasing pressure to reduce costs and improve reliability, and increasing duration and complexity of their capital programs. We believe these trends will continue, possibly to the point where demand for labor resources will outpace supply. Furthermore, the cyclical nature of the natural gas and oil industry can create shortages of qualified labor in those markets during periods of high demand. Our ability to capitalize on available opportunities is limited by our ability to employ, train and retain the necessary skilled personnel, and we are taking proactive steps to develop our workforce, including through

strategic relationships with universities, the military and unions and the expansion and development of our training facility and postsecondary educational institution. Although we believe these initiatives will help address workforce needs, meeting our customers’ demand for labor resources could remain challenging.

Acquisitions and Investments. We believe potential acquisition and investment opportunities exist in our industries and adjacent industries, primarily due to the highly fragmented and evolving nature of those industries and inability of many companies to expand and modernize due to capital or liquidity constraints. We continue to evaluate opportunities that are expected to, among other things, broaden our customer base, expand our geographic area of operations, and grow and diversify our portfolio of services.

Significant Factors Impacting Results

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

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

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

Cyclicality and demand for services. Our volume of business may be adversely affected by declines or delays in new projects due to cyclicality, which may vary by geographic region. Project schedules also fluctuate, particularly in connection with larger, more complex or longer-term projects, which can affect the amount of work performed in a given period. For example, the timing of obtaining permits and other approvals on a larger project may be delayed, and we may need to maintain a portion of our workforce and equipment in an underutilized capacity to ensure we are strategically positioned to deliver on the project when it moves forward. Examples of other items that may cause demand for our services to fluctuate materially from quarter to quarter include: the financial condition of our customers and their access to capital; economic and political conditions on a regional, national or global scale, including changes in U.S. and global trade relationships and interest rates; our customers’ capital spending, including on larger pipeline and electrical infrastructure projects; commodity and material prices; and project cancellations.

Revenue mix. The mix of revenues based on the types of services we provide in a given period will impact margins, as certain industries and services provide higher-margin opportunities. For example, installation work is often performed on a fixed price basis, while maintenance work is often performed under pre-established or negotiated prices or cost-plus pricing arrangements. Margins for installation work varies by project but can be higher than maintenance work due to higher risk. We have historically derived approximately 30% to 35% of our annual revenues from maintenance work, but a higher portion of maintenance work in any given period may affect our gross margins for that period. Additionally, the areas in which we operate during a given period can impact margins. Some areas offer the opportunity for higher margins due to their more difficult geographic characteristics, such as urban settings or mountainous and other difficult terrain. However, margins may also be negatively impacted by unexpected difficulties that can arise due to those same characteristics, as well as unexpected site conditions.

Size, scope and complexity of projects. Larger or more complex projects with higher voltage capacities; larger diameter throughput capacities; increased engineering, design or construction complexities; more difficult terrain requirements; or longer distance requirements typically yield opportunities for higher margins as we assume a greater degree of performance risk and there is greater utilization of our resources for longer construction timeframes. Furthermore, smaller or less complex projects typically have a greater number of companies competing for them, and competitors at times may more aggressively pursue available work. A greater percentage of smaller scale or less complex work also could negatively impact margins due to the inefficiency of

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

Project variability and performance. Margins for a single project may fluctuate period to period due to changes in the volume or type of work performed, the pricing structure under the project contract or job productivity. Additionally, our productivity and performance on a project can vary period to period based on a number of factors, including unexpected project difficulties or site conditions; project location, including locations with challenging operating conditions; whether the work is on an open or encumbered right of way; inclement weather or severe weather events; environmental restrictions or regulatory delays; protests, other political activity or legal challenges related to a project; and the performance of third parties.

Subcontract work and provision of materials. Work that is subcontracted to other service providers generally yields lower margins, and therefore an increase in subcontract work in a given period can decrease margins. In recent years, we have subcontracted approximately 15% to 20% of our work to other service providers. Our customers are usually responsible for supplying the materials for their projects; however, under some contracts we agree to procure all or part of the required materials. Margins may be lower on projects where we furnish a significant amount of materials, including projects where we provide engineering, procurement and construction (EPC) services, as our markup on materials is generally lower than our markup on labor costs. Furthermore, fluctuations in the price of materials we procure, including as a result of changes in U.S. or global trade relationships or other economic or political conditions, may impact our margins. In a given period, an increase in the percentage of work with higher materials procurement requirements may decrease our overall margins.

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

Results of Operations

The results of acquired businesses have been included in the following results of operations beginning on their respective acquisition dates. A discussion of results of operations changes between the years ended December 31, 2018 and 2017 is included in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations of our Annual Report on Form 10-K for the year ended December 31, 2018, which was filed with the SEC on February 28, 2019. The following table sets forth selected statements of operations data, such data as a percentage of revenues for the years indicated as well as the dollar and percentage change from the prior year (dollars in thousands):

Consolidated Results

		Year Ended December 31,														Change
		2019							2018							$				%
Revenues		$	12,112,153			100.0	%		$	11,171,423			100.0	%		$	940,730			8.4	%
Cost of services (including depreciation)		10,511,901				86.8			9,691,459				86.8			820,442				8.5	%
Gross profit		1,600,252				13.2			1,479,964				13.2			120,288				8.1	%
Selling, general and administrative expenses		955,991				7.9			857,574				7.7			98,417				11.5	%
Amortization of intangible assets		62,091				0.5			43,994				0.4			18,097				41.1	%
Asset impairment charges		13,892				0.1			49,375				0.4			(35,483		)		(71.9	)%
Change in fair value of contingent consideration liabilities		13,404				0.1			(11,248		)		(0.1	)		24,652				*
Operating income		554,874				4.6			540,269				4.8			14,605				2.7	%
Interest expense		(66,890		)		(0.6	)		(36,945		)		(0.3	)		(29,945		)		81.1	%
Interest income		927				—			1,555				—			(628		)		(40.4	)%
Other income (expense), net		83,376				0.7			(47,213		)		(0.4	)		130,589				*
Income before income taxes		572,287				4.7			457,666				4.1			114,621				25.0	%
Provision for income taxes		165,472				1.3			161,659				1.5			3,813				2.4	%
Net income		406,815				3.4			296,007				2.6			110,808				37.4	%
Less: Net income attributable to non-controlling interests		4,771				0.1			2,661				—			2,110				79.3	%
Net income attributable to common stock		$	402,044			3.3	%		$	293,346			2.6	%		$	108,698			37.1	%

• The percentage change is not meaningful.

Revenues. Contributing to the increase were incremental revenues of $706.3 million from electric power infrastructure services and $234.5 million from pipeline and industrial infrastructure services. See Segment Results below for additional information and discussion related to segment revenues.

Gross profit. The increase in gross profit was primarily due to the overall increase in revenues described above and margin improvement in pipeline and industrial infrastructure services, partially offset by a decline in margins for electric power infrastructure services. See Segment Results below for additional information and discussion related to segment operating income (loss).

Selling, general and administrative expenses. The increase was primarily attributable to a $29.9 million increase in compensation expenses, largely associated with higher salaries due to increased personnel to support business growth and annual compensation increases; a $23.4 million increase in expenses associated with acquired businesses, including incremental acquisition and integration costs of $7.5 million; and a $15.6 million increase in professional fees. Also contributing to the increase were a $9.6 million increase in information systems-related expenses to support business growth; a $9.3 million increase in deferred compensation expense, which was primarily associated with market value changes; a $7.7 million increase in travel expenses and a $4.1 million increase in bad debt expense. These increases were partially offset by a $9.1 million increase in net gains on the sale of property and equipment.

Amortization of intangible assets. The increase was primarily due to increased amortization of intangible assets associated with recently acquired businesses, partially offset by reduced amortization expense from previously acquired intangible assets, as certain of those assets became fully amortized.

Asset impairment charges. During the fourth quarters of 2019 and 2018, we recognized $13.9 million and $49.4 million of asset impairment charges. The 2019 charges primarily related to the winding down and exit of certain oil-influenced operations

and assets, the replacement of an internally-developed software application and the planned sale of certain foreign operations and assets, while the 2018 charges primarily related to the winding down of certain oil-influenced operations and assets.

Change in fair value of contingent consideration liabilities. The overall change was primarily due to changes in performance in post-acquisition periods for certain acquired businesses and the effect of present value accretion on fair value calculations. Further changes in fair value are expected to be recorded periodically until contingent consideration liabilities are settled. See Contractual Obligations — Contingent Consideration Liabilities for more information.

Interest expense. Interest expense increased primarily due to increased borrowing activity and a higher weighted average interest rate.

Other income (expense), net. The change was primarily related to our equity investment in a limited partnership that built, owned and operated the large electric transmission project in Canada that was substantially completed and placed into commercial operation during the three months ended March 31, 2019. As a result of the project completion, we recognized $60.3 million of earnings that were previously deferred as a component of “Other income (expense), net” in prior periods, the majority of which were deferred in the years ended December 31, 2018 and 2017. Additionally, during the three months ended December 31, 2019, we recognized a gain of $13.0 million related to the sale of our interest in this limited partnership. The net expense recognized in the year ended December 31, 2018 was primarily related to the deferral of earnings on the same project.

Provision for income taxes. The effective tax rates for the years ended December 31, 2019 and 2018 were 28.9% and 35.3%. The higher effective tax rate for the year ended December 31, 2018 was primarily due to the impact of tax reform regulations issued during 2018, which resulted in a $37.2 million valuation allowance against certain tax benefits recognized during 2017 associated with the Tax Act and other entity restructuring and recapitalization efforts. The effective tax rate for the year ended December 31, 2019 includes the impact of a $79.2 million charge associated with the termination of a large telecommunications project in Peru, for which no income tax benefit was recognized, partially offset by $7.8 million of favorable tax benefits associated with the sale of our interest in the limited partnership referenced above. We expect our effective tax rate to be approximately 29.8% to 30.3% for 2020. For additional information regarding the Tax Act, refer to Note 10 of the Notes to Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data.

Other comprehensive income (loss), net of taxes. The gain in the year ended December 31, 2019 resulted from the translation of the balance sheet positions of our international operations, primarily in Canada and Australia, as of December 31, 2019 as compared to December 31, 2018, and the impact of the strengthening of those foreign currencies against the U.S. dollar as of December 31, 2019. The loss in the year ended December 31, 2018 resulted from the translation of the balance sheet positions of our international operations, primarily in Canada and Australia, as of December 31, 2018 as compared to December 31, 2017, and the impact of the strengthening of the U.S. dollar against those foreign currencies as of December 31, 2018.

Segment Results

Reportable segment information, including revenues and operating income by type of work, is gathered from each operating unit for the purpose of evaluating segment performance. Classification of our operating unit revenues by type of work for segment reporting purposes can at times require judgment on the part of management. Our operating units may perform joint projects for customers in multiple industries, deliver multiple types of services under a single customer contract or provide service offerings to various industries. For example, we perform joint trenching projects to install distribution lines for electric power and natural gas customers. Our integrated operations and common administrative support for operating units require that certain allocations be made to determine segment profitability, including allocations of shared and indirect costs (e.g., facility costs), indirect operating expenses (e.g., depreciation), and general and administrative costs. Certain corporate costs are not allocated, including payroll and benefits, employee travel expenses, facility costs, professional fees, acquisition costs, non-cash stock-based compensation, amortization related to intangible assets, asset impairment related to goodwill and intangible assets and change in fair value of contingent consideration liabilities.

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

		Year Ended December 31,														Change
		2019							2018							$				%
Revenues:
Electric Power Infrastructure Services excluding Latin America		$	7,058,611			58.3	%		$	6,319,436			56.5	%		$	739,175			11.7	%
Latin America		63,226				0.5			96,126				0.9			(32,900		)		(34.2	)%
Electric Power Infrastructure Services		7,121,837				58.8			6,415,562				57.4			706,275				11.0	%
Pipeline and Industrial Infrastructure Services		4,990,316				41.2			4,755,861				42.6			234,455				4.9	%
Consolidated revenues from external customers		$	12,112,153			100.0	%		$	11,171,423			100.0	%		$	940,730			8.4	%
Operating income (loss):
Electric Power Infrastructure Services excluding Latin America		$	676,926			9.6	%		$	636,403			10.1	%		$	40,523			6.4	%
Latin America		(85,749		)		(135.6	)%		(8,117		)		(8.4	)%		(77,632		)		956.4	%
Electric Power Infrastructure Services		591,177				8.3	%		628,286				9.8	%		(37,109		)		(5.9	)%
Pipeline and Industrial Infrastructure Services		332,011				6.7	%		204,178				4.3	%		127,833				62.6	%
Corporate and non-allocated costs		(368,314		)		N/A			(292,195		)		N/A			(76,119		)		26.1	%
Consolidated operating income		$	554,874			4.6	%		$	540,269			4.8	%		$	14,605			2.7	%

Electric Power Infrastructure Services Segment Results

The increase in revenues was primarily due to increased customer spending on smaller transmission and distribution services, including increased revenues in the western United States associated with grid modernization and accelerated fire hardening programs. Revenues also increased due to growth in our communications operations and $140 million was attributable to acquired businesses. These increases were partially offset by lower revenues on the larger transmission project in Canada that was substantially completed during the three months ended March 31, 2019 but was in full construction throughout 2018; a $51 million decrease in emergency restoration services revenues; and less favorable foreign currency exchange rates, which negatively impacted revenues by approximately $32 million and were primarily attributable to the relationship between the U.S. dollar and the Canadian and Australian dollars.

As referenced in Current Year Financial Results and Significant Operational Trends and Events, during the year ended December 31, 2019, we recognized a $79.2 million charge associated with the termination of a telecommunications project in Peru, which included a $48.8 million reversal of revenues and a $30.4 million increase in cost of services. The charge included a reduction of previously recognized earnings on the project, a reserve against a portion of alleged liquidated damages and recognition of estimated costs to complete the project turnover and close out the project. As a result of the contract termination and other factors, we have concluded to pursue an orderly exit of our operations in Latin America and have modified our segment disclosures in the above table to separately identify the Latin American results. We believe that providing visibility into these results is beneficial to understanding the performance of our ongoing operations. See Legal Proceedings in Note 14 below for additional information involving the termination of the telecommunications project in Peru.

The increase in segment operating income excluding Latin America was primarily attributable to the increase in revenues from smaller transmission and distribution services described above, including increased customer spending on fire hardening programs, as well as growth in our communications operations. The decrease in operating income as a percentage of revenues excluding Latin America was primarily attributable to higher operating income for the year ended December 31, 2018 related to successful execution of the larger transmission project in Canada described above and increased revenues from emergency restorations services, which typically yield higher margins due in part to higher equipment utilization and absorption of fixed costs. Additionally, operating income for the year ended December 31, 2019 was negatively impacted due to an increase in unabsorbed costs in Canada related to permitting and other delays to the commencement of construction for certain larger transmission projects.

Pipeline and Industrial Infrastructure Services Segment Results

The increase in revenues was primarily due to approximately $165 million in revenues from acquired businesses. Also contributing to the increase were increased revenues from smaller pipeline transmission, gas distribution and industrial services,

which resulted from increased capital spending by our customers. Partially offsetting these increases was a decrease in revenues from larger pipeline transmission projects, the timing of which is highly variable due to potential permitting delays, worksite access limitations related to environmental regulations and seasonal weather patterns. Also partially offsetting these increases were less favorable foreign currency exchange rates during the year ended December 31, 2019, which negatively impacted revenues by approximately $25 million and were primarily attributable to the relationship between the U.S. dollar and the Canadian and Australian dollars.

The increases in operating income and operating income as a percentage of revenues were primarily due to improved margins across our transmission, distribution and industrial services operations resulting from improved execution and utilization, including successful execution on a larger gas transmission project that resulted in lower project costs and higher earnings. Additionally, operating income and operating income as a percentage of segment revenues in 2018 were negatively impacted by the recognition of $52.7 million of asset impairment and other charges primarily related to the winding down of certain oil-influenced operations and assets, as compared to $10.2 million of asset impairment charges in 2019 primarily related to the winding down and exit of certain additional oil-influenced operations and assets. The year ended December 31, 2018 was also negatively impacted by $17.3 million of project losses associated with production issues and severe weather conditions on a gas transmission project. Additionally, the years ended December 31, 2019 and 2018 were negatively impacted by $28.3 million and $32.5 million of project losses associated with engineering and production delays on a processing facility project, which was substantially complete as of December 31, 2019.

Corporate and Non-allocated Costs

The increase in corporate and non-allocated costs was partially due to a $13.4 million increase in the fair value of contingent consideration liabilities in the year ended December 31, 2019, as compared to an $11.2 million decrease in the fair value of contingent consideration liabilities recognized during the year ended December 31, 2018 based on performance of certain acquired businesses. Also contributing to the increase was an $18.1 million increase in intangible amortization due to an increase in intangible assets associated primarily with 2019 acquisitions, an $11.1 million increase in deferred compensation expense primarily associated with increases in the market value of participants’ investment elections, a $7.2 million increase in professional fees and a $7.5 million increase in acquisition-related costs. Partially offsetting these increases was a $6.8 million decrease in incentive and stock-based compensation, primarily attributable to lower performance against incentive compensation metrics in 2019 as compared to 2018.

Remaining Performance Obligations and Backlog

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

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

As of December 31, 2019 and 2018, MSAs accounted for 53% and 53% of our estimated 12-month backlog and 61% and 60% of total backlog. Generally, our customers are not contractually committed to specific volumes of services under our MSAs, and most of our contracts can be terminated on short notice even if we are not in default. We determine the estimated backlog for these MSAs using recurring historical trends, factoring in seasonal demand and projected customer needs based upon ongoing communications. In addition, many of our MSAs are subject to renewal, and these potential renewals are considered in determining estimated backlog. As a result, estimates for remaining performance obligations and backlog are subject to change based on, among other things, project accelerations; project cancellations or delays, including but not limited to those caused by commercial issues, regulatory requirements, natural disasters and adverse weather conditions; and final acceptance of change orders by customers. These factors can cause revenues to be realized in periods and at levels that are different than originally projected.

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

		December 31, 2019								December 31, 2018
		12 Month				Total				12 Month				Total
Electric Power Infrastructure Services
Remaining performance obligations		$	2,483,109			$	3,957,710			$	2,093,461			$	3,045,553
Estimated orders under MSAs and short-term, non-fixed price contracts		2,873,446				5,864,527				2,467,654				5,499,887
Backlog		5,356,555				9,822,237				4,561,115				8,545,440
Pipeline and Industrial Infrastructure Services
Remaining performance obligations		670,707				1,344,741				1,003,543				1,635,918
Estimated orders under MSAs and short-term, non-fixed price contracts		1,919,791				3,837,923				1,411,329				2,161,275
Backlog		2,590,498				5,182,664				2,414,872				3,797,193
Total
Remaining performance obligations		3,153,816				5,302,451				3,097,004				4,681,471
Estimated orders under MSAs and short-term, non-fixed price contracts		4,793,237				9,702,450				3,878,983				7,661,162
Backlog		$	7,947,053			$	15,004,901			$	6,975,987			$	12,342,633

Liquidity and Capital Resources

Management monitors financial markets and national and global economic conditions for factors that may affect our liquidity and capital resources. We consider our investment policies related to cash and cash equivalents to be conservative in that we maintain a diverse portfolio of what we believe to be high-quality cash and cash equivalent investments with short-term maturities. We anticipate that our cash and cash equivalents on hand, existing borrowing capacity under our senior secured credit facility, our ability to access capital markets and future cash flows from operations will provide sufficient funds to enable us to meet our debt repayment obligations, fund future operating needs, facilitate our ability to pay any future dividends we declare, grow through acquisitions or strategic investments, and fund planned capital expenditures during 2020. However, our liquidity and capital resources, as well as our access to these sources of funds, can be influenced by adverse conditions in financial markets and economic trends and conditions that impact our results of operations.

Cash Requirements

Our available commitments and cash and cash equivalents at December 31, 2019 were as follows (in thousands):

		December 31, 2019
Total capacity available for revolving loans and letters of credit		$	2,135,000
Less:
Borrowings of revolving loans under our senior secured credit facility		104,885
Letters of credit outstanding under our senior secured credit facility		383,800
Available commitments under senior secured credit facility for issuing revolving loans or new letters of credit		1,646,315
Plus:
Cash and cash equivalents		164,798
Total available commitments under senior secured credit facility and cash and cash equivalents		$	1,811,113

We also had borrowings of term loans under our senior secured credit facility of $1.24 billion as of December 31, 2019, and we are required to make quarterly principal payments of $16.1 million on these loans.

Our industry is capital intensive, and we expect substantial capital expenditures and commitments under equipment lease and rental arrangements to be needed into the foreseeable future in order to meet anticipated demand for our services. Total capital

expenditures are expected to be approximately $300 million for the year ended December 31, 2020. We also continue to evaluate opportunities for stock repurchases under our authorized stock repurchase programs.

Refer to Contractual Obligations below for a summary of our future contractual obligations as of December 31, 2019 and Off-Balance Sheet Transactions and Contingencies below for a description of certain contingent obligations. Although some of these contingent obligations could require the use of cash in future periods, they are excluded from the Contractual Obligations table because we are unable to accurately predict the timing and amount of any such obligations as of December 31, 2019.

Sources and Uses of Cash

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

		Year Ended December 31,
		2019				2018
Net cash provided by operating activities		$	526,551			$	358,789
Net cash used in investing activities		(617,596		)		(402,670		)
Net cash provided by (used in) financing activities		177,687				(16,570		)

Operating Activities

Cash flow from operating activities is primarily influenced by demand for our services and operating margins but is also influenced by working capital needs associated with the various types of services that we provide. Our working capital needs may increase when we commence large volumes of work under circumstances where project costs, primarily labor, equipment and subcontractors, are required to be paid before the associated receivables are billed and collected. Accordingly, changes within working capital in accounts receivable, contract assets and contract liabilities are normally related and are typically affected on a collective basis by changes in revenue due to the timing and volume of work performed and variability in the timing of customer billings and payments. Additionally, working capital needs are generally higher during the summer and fall months due to increased demand for our services when favorable weather conditions exist in many of our operating regions. Conversely, working capital assets are typically converted to cash during the winter months. These seasonal trends can be offset by changes in project timing due to delays or accelerations and other economic factors that may affect customer spending.

Net cash provided by operating activities during 2019 was favorably impacted by a decrease in cash used for operating assets and liabilities as compared to 2018, including as a result of the timing and number of contracts that include advance billing terms and/or retention balances. Net cash used in operating activities during 2019 included our payment of $112 million as a result of the exercise of on-demand advance payment and performance bonds in connection with the termination of the large telecommunications project in Peru, which is described in further detail in Note 14 of the Notes to Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data.

Days sales outstanding (DSO) represents the average number of days it takes revenues to be converted into cash, which management believes is an important metric for assessing liquidity. A decrease in DSO has a favorable impact on cash flow from operating activities, while an increase in DSO has a negative impact on cash flow from operating activities. DSO is calculated by using the sum of current accounts receivable, net of allowance (which includes retainage and unbilled balances), plus contract assets less contract liabilities, divided by average revenues per day during the quarter. DSO as of December 31, 2019 was 81 days, as compared to 74 days as of December 31, 2018. The increase in DSO was primarily due to the timing of work on larger pipeline transmission projects and the related billing and collection cycles. During the fourth quarter of 2018, we had higher revenues on larger pipeline transmission projects with relatively lower receivable balances as compared to lower revenues and relatively higher receivable balances on larger pipeline transmission projects during the fourth quarter of 2019.

Investing Activities

Net cash used in investing activities during 2019 included $388.0 million used for acquisitions, $261.8 million used for capital expenditures and $47.1 million of cash paid for investments in unconsolidated affiliates and other entities. These items were partially offset by $46.6 million of cash received from investments in unconsolidated affiliates and other entities related to the sale of our equity interest in the limited partnership that built, owned and operated the large electric transmission project in Canada and $31.1 million of proceeds from the sale of property and equipment.

Net cash used in investing activities during 2018 included $293.6 million used for capital expenditures; $94.9 million used for acquisitions; $36.9 million of cash paid for investments in unconsolidated affiliates and other entities, including $18.5 million for our acquisition of a 30% interest in a water and gas pipeline infrastructure contractor located in Australia and $14.9 million related to the limited partnership for the large electric transmission project in Canada; and $14.4 million of cash paid for intangible assets. These items were partially offset by $31.8 million of proceeds from the sale of property and equipment.

Our industry is capital intensive, and we expect substantial capital expenditures and commitments under equipment lease and rental arrangements to be needed into the foreseeable future. We also have various contractual obligations related to investments in unconsolidated affiliates and other capital commitments that are detailed in Contractual Obligations below. In addition, we expect to continue to pursue strategic acquisitions and investments, although we cannot predict the timing or amount of the cash needed for these initiatives.

Financing Activities

Net cash provided by financing activities during 2019 included $272.5 million of net borrowings under our senior secured credit facility. These borrowings were primarily utilized to fund operating and investing activities, including capital expenditures, the cash portion of acquisitions, payments in connection with the exercise of on-demand advance payment and performance bonds described above and working capital requirements. Additional financing activities during 2019 included $28.3 million of net short-term debt repayments, $20.1 million of common stock repurchases under our stock repurchase program, $23.2 million of cash payments of dividends and cash dividend equivalents and $16.1 million of payments to satisfy tax withholding obligations associated with stock-based compensation.

Net cash used in financing activities during 2018 included $443.2 million of common stock repurchases under our stock repurchase programs and $15.2 million of payments to satisfy tax withholding obligations associated with stock-based compensation. These items were mostly offset by $415.3 million of net borrowings under our senior secured credit facility and $33.8 million of net short-term debt borrowings.

Contingent Consideration Liabilities

Certain of our acquisitions include the potential payment of contingent consideration, payable in the event certain performance objectives are achieved by the acquired businesses during designated post-acquisition periods. The majority of these contingent consideration liabilities are subject to a maximum payment amount, which totaled $157.2 million as of December 31, 2019. Included within this maximum amount is approximately $18.0 million related to certain acquisitions completed in 2018, payable based on performance over five-year and three-year post-acquisition periods, and approximately $100.0 million related to the 2017 acquisition of Stronghold, Ltd. and Stronghold Specialty, Ltd., payable based on performance over a three-year post-acquisition period. The aggregate fair value of all of our contingent consideration liabilities was $84.2 million as of December 31, 2019, of which $77.6 million is included in “Accounts payable and accrued expenses” and $6.5 million is included in “Insurance and other non-current liabilities.” The significant majority of these liabilities would be paid at least 70% to 85% in cash. Cash payments for these liabilities up to the amount recognized at the respective acquisition dates, including measurement-period adjustments, will be classified as financing activities in our consolidated statements of cash flows. Any cash payments in excess of the amount of contingent consideration liabilities recognized at the respective acquisition dates will be classified as operating activities in our consolidated statements of cash flows.

Stock Repurchases

We repurchased the following shares of common stock in the open market under our stock repurchase programs (in thousands):

Year ended:		Shares			Amount
December 31, 2019		376			$	11,953
December 31, 2018		13,917			$	451,290
December 31, 2017		1,382			$	50,000

Our policy is to record a stock repurchase as of the trade date; however, the payment of cash related to a repurchase is made on the settlement date of the trade. During the years ended December 31, 2019, 2018 and 2017, cash payments related to stock repurchases were $20.1 million, $443.2 million and $50.0 million.

As of December 31, 2019, $286.8 million remained authorized under our existing repurchase program, which authorizes us to repurchase outstanding common stock from time to time through June 30, 2021 (the 2018 Repurchase Program). Repurchases under the 2018 Repurchase Program may be implemented through open market or privately negotiated transactions, at management’s discretion, based on market and business conditions, applicable contractual and legal requirements, including restrictions under our senior secured credit facility, and other factors. We are not obligated to acquire any specific amount of common stock and the 2018 Repurchase Program may be modified or terminated by our Board of Directors at any time at its sole discretion and without notice. For additional detail about our stock repurchases, refer to Note 11 of the Notes to Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data.

Dividends

We declared and paid the following cash dividends and cash dividend equivalents during 2019 and 2018 (in thousands, except per share amounts):

Declaration		Record		Payment		Dividend				Dividends
Date		Date		Date		Per Share				Declared
December 11, 2019		January 2, 2020		January 16, 2020		$	0.05			$	7,371
August 28, 2019		October 1, 2019		October 15, 2019		$	0.04			$	5,564
May 24, 2019		July 1, 2019		July 15, 2019		$	0.04			$	6,233
March 21, 2019		April 5, 2019		April 19, 2019		$	0.04			$	5,896
December 6, 2018		January 2, 2019		January 16, 2019		$	0.04			$	5,838

A significant majority of dividends declared were paid on the corresponding payment dates. Holders of restricted stock units (RSUs) awarded under the Quanta Services, Inc. 2011 Omnibus Equity Incentive Plan (the 2011 Plan) generally received cash dividend equivalent payments equal to the cash dividend payable on account of the underlying Quanta common stock. Holders of exchangeable shares of certain Canadian subsidiaries of Quanta were paid a cash dividend per exchangeable share equal to the cash dividend per share paid to Quanta common shareholders on the payment dates. Holders of RSUs awarded under the Quanta Services, Inc. 2019 Omnibus Equity Incentive Plan (the 2019 Plan) and holders of unearned and unvested performance stock units (PSUs) awarded under the 2011 Plan and the 2019 Plan receive cash dividend equivalent payments only to the extent such RSUs and PSUs become earned and/or vest. Additionally, cash dividend equivalents related to certain stock-based awards that have been deferred pursuant to the terms of a deferred compensation plan maintained by us are recorded as liabilities in such plans until the deferred awards are settled.

Debt Instruments

Senior Secured Credit Facility

We have a credit agreement with various lenders that provides for (i) a $2.14 billion revolving credit facility and (ii) a term loan facility with term loans in the aggregate initial principal amount of $1.29 billion. In addition, subject to the conditions specified in the credit agreement, we have the option to increase the capacity of the credit facility, in the form of an increase in the revolving credit facility, incremental term loans or a combination thereof, from time to time, upon receipt of additional commitments from new or existing lenders by up to an additional (i) $400.0 million plus (ii) an additional amount that is unlimited so long as the Incremental Leverage Ratio Requirement (as defined in the credit agreement) is satisfied at the time of such increase. The Incremental Leverage Ratio Requirement requires, among other things, after giving pro forma effect to such increase and the use of proceeds therefrom, compliance with the credit agreement’s financial covenants as of the most recent fiscal quarter end for which financial statements were required to be delivered and that our Consolidated Leverage Ratio (as defined below) does not exceed 2.5 to 1.0, subject to the conditions specified in the credit agreement.

Borrowings under the credit agreement are to be used to refinance existing indebtedness and for working capital, capital expenditures, acquisitions and other general corporate purposes. The maturity date for both the revolving credit facility and the term loan facility is October 31, 2022; however, we may voluntarily prepay the term loans from time to time in whole or in part, without premium or penalty. We are required to make quarterly principal payments of $16.1 million on the term loan facility. During the years ended December 31, 2019 and 2018, our weighted average interest rates associated with our senior secured credit facility were 3.8% and 3.6%.

We borrowed $600.0 million under the term loan facility in October 2018 and borrowed an additional $687.5 million under the term loan facility in September 2019 and used the majority of such proceeds to repay outstanding revolving loans under the credit agreement. As of December 31, 2019, we had $1.35 billion of borrowings outstanding under the credit agreement, which included $1.24 billion borrowed under the term loan facility and $104.9 million of outstanding revolving loans. We also had $383.8 million of letters of credit issued under our revolving credit facility. The remaining $1.65 billion of available commitments under the revolving credit facility was available for additional revolving loans or letters of credit in U.S. dollars and certain alternative currencies.

The credit agreement contains certain covenants, including (i) a maximum Consolidated Leverage Ratio of 3.0 to 1.0 (except that in connection with certain permitted acquisitions in excess of $200.0 million, such ratio is 3.5 to 1.0 for the fiscal quarter in which the acquisition is completed and the two subsequent fiscal quarters) and (ii) a minimum Consolidated Interest Coverage Ratio of 3.0 to 1.0. As of December 31, 2019, we were in compliance with all of the financial covenants under the credit agreement. Consolidated Leverage Ratio is the ratio of our Consolidated Funded Indebtedness to Consolidated EBITDA (as those terms are defined in the credit agreement). For purposes of calculating our Consolidated Leverage Ratio, Consolidated Funded Indebtedness

is reduced by available cash and Cash Equivalents (as defined in the credit agreement) in excess of $25.0 million. Consolidated Interest Coverage Ratio is the ratio of (i) Consolidated EBIT (as defined in the credit agreement) for the four fiscal quarters most recently ended to (ii) Consolidated Interest Expense (as defined in the credit agreement) for such period (excluding all interest expense attributable to capitalized loan costs and the amount of fees paid in connection with the issuance of letters of credit on our behalf during such period).

The credit agreement provides for customary events of default and generally contains cross-default provisions with other debt instruments exceeding $150.0 million in borrowings or availability. Additionally, subject to certain exceptions, (i) all borrowings are secured by substantially all the assets of Quanta and its wholly-owned U.S. subsidiaries and by a pledge of all of the capital stock of Quanta’s wholly-owned U.S. subsidiaries and 65% of the capital stock of direct foreign subsidiaries of Quanta’s wholly-owned U.S. subsidiaries and (ii) Quanta’s wholly-owned U.S. subsidiaries guarantee the repayment of all amounts due under the credit agreement. The credit agreement also limits certain acquisitions, mergers and consolidations, indebtedness, asset sales and prepayments of indebtedness and, subject to certain exceptions, prohibits liens on our assets. The credit agreement allows cash payments for dividends and stock repurchases subject to compliance with the following requirements (including after giving effect to the dividend or stock repurchase): (i) no default or event of default under the credit agreement; (ii) continued compliance with the financial covenants in the credit agreement; and (iii) at least $100.0 million of availability under the revolving credit facility and/or cash and cash equivalents on hand.

Contractual Obligations and Contingencies

The following table summarizes our future contractual obligations as of December 31, 2019, excluding certain amounts discussed below (in thousands):

		Total				2020				2021				2022				2023				2024				Thereafter
Long-term debt - principal (1)		$	1,359,565			$	67,887			$	66,345			$	1,219,512			$	1,971			$	1,971			$	1,879
Long-term debt - cash interest (2)		545				545				—				—				—				—				—
Short-term debt (3)		6,542				6,542				—				—				—				—				—
Operating lease obligations (4)		317,249				102,848				75,982				51,295				34,153				17,952				35,019
Operating lease obligations that have not yet commenced (5)		12,893				1,805				2,451				2,352				2,140				2,145				2,000
Finance lease obligations (6)		1,010				469				325				127				60				21				8
Short-term lease obligations (7)		19,930				19,930				—				—				—				—				—
Equipment purchase commitments (8)		30,459				30,459				—				—				—				—				—
Capital commitment related to investments in unconsolidated affiliates (9)		1,686				1,686				—				—				—				—				—
Total contractual obligations		$	1,749,879			$	232,171			$	145,103			$	1,273,286			$	38,324			$	22,089			$	38,906

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(1)

We had $1.35 billion of outstanding borrowings under our senior secured credit facility, which included $1.24 billion borrowed under the term loan facility and $104.9 million of outstanding revolving loans, both of which bear interest at variable market rates. Assuming the principal amount outstanding at December 31, 2019 remained outstanding and the interest rate in effect at December 31, 2019 remained the same, the annual cash interest expense would be approximately $43.9 million, payable until October 31, 2022, the maturity date of the facility. Additionally, in connection with the term loan facility, we are required to make quarterly principal payments of $16.1 million and pay the remaining balance on the maturity date for the facility.

(2)	Amount represents cash interest expense on our fixed-rate long-term debt, which excludes our senior secured credit facility.

(3)	Amount represents short-term borrowings recorded on our December 31, 2019 consolidated balance sheet.

(4)	Amounts represent undiscounted operating lease obligations at December 31, 2019. The operating lease obligations recorded on our December 31, 2019 consolidated balance sheet represent the present value of these amounts.

(5)	Amounts represent undiscounted operating leases obligations that had not commenced as of December 31, 2019. The operating leases obligations will be recorded on our consolidated balance sheet beginning on the commencement date of each lease.

(6)	Amounts represent undiscounted finance lease obligations at December 31, 2019. The finance lease obligations recorded on our December 31, 2019 consolidated balance sheet represent the present value of these amounts.

(7)	Amounts represent short-term lease obligations that are not recorded on our December 31, 2019 consolidated balance sheet due to our accounting policy election. Month-to-month rental expense associated primarily with certain equipment rentals is excluded from these amounts because we are unable to accurately predict future rental amounts.

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

(9)	Amount represents outstanding capital commitments associated with investments in unconsolidated affiliates. As of December 31, 2019, we had outstanding capital commitments associated with investments in unconsolidated affiliates.

As discussed in Notes 2, 10, 13 and 14 of the Notes to Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data, we have various contingencies and commitments that may require the use of cash in future periods. The Contractual Obligations table excludes the contingencies described below, as we are unable to accurately predict the timing and amount of any of the following contingent obligations.

Concentrations of Credit Risk

We are subject to concentrations of credit risk related primarily to our cash and cash equivalents and our net receivable position with customers, which includes amounts related to billed and unbilled accounts receivable and contract assets net of advanced billings with the same customer. Substantially all of our cash and cash equivalents are managed by what we believe to be high credit quality financial institutions. In accordance with our investment policies, these institutions are authorized to invest cash and cash equivalents in a diversified portfolio of what we believe to be high quality cash and cash equivalent investments, which consist primarily of interest-bearing demand deposits, money market investments and money market mutual funds. Although we do not currently believe the principal amount of these cash and cash equivalents is subject to any material risk of loss, changes in economic conditions could impact the interest income we receive from these investments. In addition, we grant credit under

normal payment terms, generally without collateral, to our customers, which include electric power and energy companies, governmental entities, general contractors, and builders, owners and managers of commercial and industrial properties located primarily in the United States, Canada, Australia and Latin America. Consequently, we are subject to potential credit risk related to business, economic and financial market conditions that affect these locations. However, we generally have certain statutory lien rights with respect to services provided. Some of our customers have experienced significant financial difficulties (including bankruptcy), and customers may experience financial difficulties in the future. These difficulties expose us to increased risk related to collectability of billed and unbilled receivables and contract assets for services we have performed.

For example, on January 29, 2019, PG&E Corporation and its primary operating subsidiary, Pacific Gas and Electric Company (collectively PG&E), one of our largest customers, filed for bankruptcy protection under Chapter 11 of the U.S. Bankruptcy Code, as amended. We are monitoring the bankruptcy proceeding and evaluating the treatment of, and potential claims related to, our pre-petition receivables. As of the bankruptcy filing date, we had $165 million of billed and unbilled receivables. Subsequent to the bankruptcy filing, the bankruptcy court approved the assumption by PG&E of certain contracts with our subsidiaries, pursuant to which PG&E had paid $122 million of our pre-petition receivables as of December 31, 2019. We also sold $36 million of our pre-petition receivables to a third party during the three months ended December 31, 2019 in exchange for cash consideration of $34 million, subject to certain claim disallowance provisions, the occurrence of which could result in our obligation to repurchase some or all of the pre-petition receivables sold. We expect the remaining $7 million of pre-petition receivables to be sold or ultimately collected in the bankruptcy proceeding. However, the ultimate outcome of the bankruptcy proceeding is uncertain, and our belief regarding any future sale or collection of the remaining receivables is based on a number of assumptions that are potentially subject to change as the proceeding progresses. Should any of these assumptions change, the amount collected could be less than the amount of the remaining receivables. Additionally, we are continuing to perform services for PG&E while the bankruptcy case is ongoing and believe that amounts billed for post-petition services will continue to be collected in the ordinary course of business.

No customer represented 10% or more of our consolidated revenues for the years ended December 31, 2019, 2018 or 2017, and no customer represented 10% or more of our consolidated net receivable position at December 31, 2019 or 2018.

Legal Proceedings

We are from time to time party to various lawsuits, claims and other legal proceedings that arise in the ordinary course of business. These actions typically seek, among other things, compensation for alleged personal injury, breach of contract, negligence or gross negligence and/or property damages, wage and hour claims and other employment-related damages, punitive and consequential damages, civil penalties or other losses, or injunctive or declaratory relief. With respect to all such lawsuits, claims and proceedings, we record a reserve when it is probable that a loss has been incurred and the amount of loss can be reasonably estimated. In addition, we disclose matters for which management believes a material loss is at least reasonably possible. See Note 14 of the Notes to Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data for additional information regarding litigation, claims and other legal proceedings.

Multiemployer Pension Plans

Certain of our operating units are parties to collective bargaining agreements with unions that represent certain of their employees, which require the operating units to pay specified wages, provide certain benefits to union employees and contribute certain amounts to multiemployer pension plans and employee benefit trusts. Our multiemployer pension plan contribution rates generally are made to the plans on a “pay-as-you-go” basis based on our union employee payrolls. The location and number of union employees that we employ at any given time and the plans in which they may participate vary depending on our need for union resources in connection with our ongoing projects. Therefore, we are unable to accurately predict our union employee payroll and the resulting multiemployer pension plan contribution obligations for future periods.

We may also be required to make additional contributions to our multiemployer pension plans if they become underfunded, and these additional contributions will be determined based on our union employee payrolls. Special funding and operational rules are generally applicable to certain of these multiemployer plans that are classified as “endangered,” “seriously endangered” or “critical” status based on multiple factors. The amount, if any, that we may be obligated to contribute to these plans cannot be reasonably estimated and is not included in the above table due to uncertainty regarding the amount of future work involving covered union employees, future contribution levels and possible surcharges on plan contributions.

Furthermore, we may be subject to additional liabilities imposed by law as a result of our participation in multiemployer defined benefit pension plans, including in connection with a withdrawal or deemed withdrawal from a plan or a plan being terminated or experiencing a mass withdrawal. These liabilities include an allocable share of the unfunded vested benefits in the plan for all plan participants, not merely the benefits payable to a contributing employer’s own retirees. As a result, participating employers may bear a higher proportion of liability for unfunded vested benefits if other participating employers cease to contribute or withdraw, with the reallocation of liability being more acute in cases when a withdrawn employer is insolvent or otherwise fails to pay its withdrawal liability. We are not currently aware of any material withdrawal liabilities that have been incurred or asserted

and that remain outstanding. However, we have been subject to significant withdrawal liabilities in the past, including in connection with our withdrawal from the Central States, Southeast and Southwest Areas Pension Plan, and may be subject to material withdrawal liabilities in the future, which could adversely affect our business, financial condition, results of operations or cash flows.

Performance Bonds and Parent Guarantees

Many customers, particularly in connection with new construction, require us to post performance and payment bonds. These bonds provide a guarantee that we will perform under the terms of a contract and pay our subcontractors and vendors. If we fail to perform, the customer may demand that the surety make payments or provide services under the bond, and we must reimburse the surety for any expenses or outlays it incurs. Under our underwriting, continuing indemnity and security agreement with our sureties, we have granted security interests in certain of our assets as collateral for our obligations to the sureties. We may be required to post letters of credit or other collateral in favor of the sureties or our customers in the future, which would reduce the borrowing availability under our senior secured credit facility. We have not been required to make any material reimbursements to our sureties for bond-related costs except in connection with the exercise of approximately $112 million of advance payment and performance bonds related to the terminated telecommunications project in Peru, which is described further in Legal Proceedings in Note 14 of the Notes to Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data. To the extent further reimbursements are required, the amounts could be material and could adversely affect our consolidated business, financial condition, results of operations or cash flows. As of December 31, 2019, we are not aware of any outstanding material obligations for payments related to bond obligations.

Performance bonds expire at various times ranging from mechanical completion of a project to a period extending beyond contract completion in certain circumstances, and as such a determination of maximum potential amounts outstanding requires the use of certain estimates and assumptions. Such amounts can also fluctuate from period to period based upon the mix and level of our bonded operating activity. As of December 31, 2019, the total amount of the outstanding performance bonds was estimated to be approximately $2.9 billion. Our estimated maximum exposure as it relates to the value of the performance bonds outstanding is lowered on each bonded project as the cost to complete is reduced, and each commitment under a performance bond generally extinguishes concurrently with the expiration of our related contractual obligation. The estimated cost to complete these bonded projects was approximately $1.1 billion as of December 31, 2019.

Additionally, from time to time, we guarantee certain obligations and liabilities of our subsidiaries that may arise in connection with, among other things, contracts with customers, equipment lease obligations, joint venture arrangements and contractor licenses. These guarantees may cover all of the subsidiary’s unperformed, undischarged and unreleased obligations and liabilities under or in connection with the relevant agreement. For example, with respect to customer contracts, a guarantee may cover a variety of obligations and liabilities arising during the ordinary course of the subsidiary’s business or operations, including, among other things, warranty and breach of contract claims, third-party and environmental liabilities arising from the subsidiary’s work and for which it is responsible, liquidated damages, or indemnity claims. We are not aware of any claims under any of these guarantees that are material, except as set forth in Legal Proceedings within Note 14 of the Notes to Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data. To the extent a subsidiary incurs a material obligation or liability and we have guaranteed the performance or payment of such liability, the recovery by a customer or other counterparty or a third party will not be limited to the assets of the subsidiary. As a result, responsibility under a guarantee could adversely affect our consolidated business, financial condition, results of operations and cash flows.

Insurance

Insurance Coverage. Losses under our insurance programs are accrued based upon our estimate of the ultimate liability for claims reported and an estimate of claims incurred but not reported, with assistance from third-party actuaries. These insurance liabilities are difficult to assess and estimate due to unknown factors, including the severity of an injury, the extent of damage, the determination of our liability in proportion to other parties and the number of incidents not reported. The accruals are based upon known facts and historical trends, and management believes such accruals are adequate. As of December 31, 2019 and 2018, the gross amount accrued for insurance claims totaled $287.6 million and $272.9 million, with $212.9 million and $210.1 million considered to be long-term and included in “Insurance and other non-current liabilities.” Related insurance recoveries/receivables as of December 31, 2019 and 2018 were $35.1 million and $56.5 million, of which $0.3 million and $0.3 million are included in “Prepaid expenses and other current assets” and $34.8 million and $56.2 million are included in “Other assets, net.”

We renew our insurance policies on an annual basis, and therefore deductibles and levels of insurance coverage may change in future periods. In addition, insurers may cancel our coverage or determine to exclude certain items from coverage, or we may elect not to obtain certain types or incremental levels of insurance based on the potential benefits considered relative to the cost of such insurance, or coverage may not be available at reasonable and competitive rates. In any such event, our overall risk exposure would increase, which could negatively affect our results of operations, financial condition and cash flows. For example, due to the increased occurrence in recent years and future risk of wildfires in California and other areas in the western United States, Australia and other locations, insurers have reduced coverage limits and increased the cost of insurance coverage for those events.

As a result, we expect our level of insurance coverage for wildfire events will decrease at the time of our annual insurance renewal in the spring of 2020, and such level may not be sufficient to cover potential losses. Our third party insurers could also decide to further reduce or exclude coverage for wildfires in the future.

Project Insurance Claim. In June 2018, while performing a horizontal directional drill and installing an underground gas pipeline, one of our subsidiaries experienced a partial collapse of a borehole. Subsequent to the incident, we worked with our customer to mitigate the impact of the incident and to complete the project. As required by the contract, the customer procured certain insurance coverage for the project, with our subsidiaries as additional insureds, and we worked collaboratively with our customer to pursue insurance claims with the customer’s insurance carriers. In December 2019 and January 2020, we reached settlement and release agreements with the insurers and the customer, respectively, resulting in total insurance recoveries related to this matter of $95.5 million. We expect to receive the remaining insurance proceeds in the first quarter of 2020.

Hallen Acquisition Assumed Liability. As discussed in further detail in Legal Proceedings within Note 14 of the Notes to Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data, we assumed certain contingent liabilities in connection with the acquisition of Hallen. Hallen’s liabilities associated with this matter are expected to be covered under applicable insurance policies or contractual remedies negotiated by us with the former owners of Hallen. As of December 31, 2019, we had not recorded an accrual for any probable and estimable loss related to this matter. However, the ultimate amount of liability in connection with this matter remains subject to uncertainties associated with pending litigation, including, among other things, the apportionment of liability among the defendants and the likelihood and amount of potential damages claims. As a result, this matter could result in a loss that is in excess of, or not covered by, such insurance or contractual remedies, which could have a material adverse effect on our consolidated results of operations and cash flows.

Contingent Consideration Liabilities

The liabilities recorded represent the estimated fair values of future amounts payable to the former owners of the acquired businesses and are estimated by management based on entity-specific assumptions that are evaluated on an ongoing basis. Because acquisition-related contingent consideration liabilities are contingent upon future events, we include these liabilities in the contractual obligations table when the contingencies are resolved. We expect a significant portion of these liabilities to be settled by late 2020 or early 2021.

Aggregate fair values of these outstanding and unearned contingent consideration liabilities and their classification in the Consolidated Balance Sheets in Item 1. Financial Statements were as follows (in thousands):

		December 31, 2019				December 31, 2018
Accounts payable and accrued expenses		$	77,618			$	—
Insurance and other non-current liabilities		6,542				70,756
Total contingent consideration liabilities		$	84,160			$	70,756

The fair values of these liabilities were primarily determined using a Monte Carlo simulation valuation methodology based on probability-weighted performance projections and other inputs, including a discount rate and an expected volatility factor for each acquisition. The expected volatility factor ranged from 20.4% to 30.0% based on historical asset volatility of selected guideline public companies. Depending on contingent consideration payment terms, the present values of the estimated payments are discounted based on a risk-free rate and/or our cost of debt, ranging from 1.6% to 3.9%. The fair value determinations incorporate significant inputs not observable in the market. Accordingly, the level of inputs used for these fair value measurements is the lowest level (Level 3), as further described in Note 2 of the Notes to Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data. Significant changes in any of these assumptions could result in a significantly higher or lower potential liability.

The majority of our contingent consideration liabilities are subject to a maximum payment amount, which aggregated to $157.2 million as of December 31, 2019. One contingent consideration liability is not subject to a maximum payout amount, and that liability had a fair value of $1.0 million as of December 31, 2019.

Our aggregate contingent consideration liabilities can change due to additional business acquisitions, settlement of outstanding liabilities, changes in the fair value of amounts owed based on performance in post-acquisition periods and accretion in present value. During the year ended December 31, 2019, we recognized a net increase of the fair value of our aggregate contingent consideration liabilities of $13.4 million. During the years ended December 31, 2018 and 2017, we recognized net decreases in the fair value of our aggregate contingent consideration liabilities of $11.2 million and $5.2 million. These changes are reflected in “Change in fair value of contingent consideration liabilities” in our consolidated statements of operations.

Undistributed Earnings of Foreign Subsidiaries and Unrecognized Tax Benefits

We generally do not provide for taxes related to undistributed earnings of our foreign subsidiaries because such earnings either would not be taxable when remitted or they are considered to be indefinitely reinvested. We could also be subject to additional foreign withholding taxes if we were to repatriate cash that is indefinitely reinvested outside the United States, but we do not expect such amounts to be material.

Quanta and certain subsidiaries remain under examination by various U.S. state, Canadian and other foreign tax authorities for multiple periods. We believe it is reasonably possible that within the next 12 months unrecognized tax benefits may decrease by up to $6.3 million as a result of settlement of these examinations or the expiration of certain statute of limitations periods.

Letters of Credit Fees and Commitment Fees

The Contractual Obligations table excludes letters of credit and commitment fees under our senior secured credit facility because the amount of outstanding letters of credit, availability and applicable fees are all variable. Assuming that the amount of letters of credit outstanding and the fees as of December 31, 2019 remained the same, the annual cash expense for our letters of credit would be approximately $5.4 million. For additional information regarding our letters of credit and the associated fees and our borrowings under our senior secured credit facility, see Liquidity and Capital Resources — Debt Instruments above.

Off-Balance Sheet Transactions

As is common in our industry, we have entered into certain off-balance sheet arrangements in the ordinary course of business that result in risks not directly reflected in our balance sheets. Our significant off-balance sheet transactions include certain obligations relating to our investments and joint venture arrangements; short-term, non-cancelable leases; letters of credit obligations; surety guarantees related to performance bonds; committed expenditures for the purchase of equipment; and certain multiemployer pension plan liabilities. See Contractual Obligations above and Note 14 of the Notes to Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data for a description of these arrangements.

Critical Accounting Estimates

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

Revenue Recognition - the estimation of contract revenues and costs, progress on construction projects, variable consideration and collectability of accounts receivables, long-term accounts receivable, unbilled receivables, retainage and contract assets, including amounts related to unapproved change orders in the process of being negotiated;

Property and Equipment - the valuation methods and assumptions used in assessing impairment, useful life determination and the related timing of depreciation and the determination of asset groupings;

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

Other Intangible Assets - the valuation methods and assumptions used in assessing impairment;

Income Taxes - the identification and measurement of deferred tax assets and liabilities; the measurement of valuation allowances on deferred tax assets including estimates of future taxable income; estimates associated with tax liabilities in that tax laws and regulations are voluminous and often ambiguous; and benefits from uncertain tax positions (also refer to Note 10 of the Notes to Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data);

Insurance - the estimation of liabilities and related recoveries;

Litigation Costs and Reserves and Loss Contingencies - the estimation of when a loss is probable or reasonably possible and whether any such loss is reasonably estimable or any range of possible loss is estimable, as well as uncertainties related to the outcome of litigation or other legal proceedings (also refer to Notes 13 and 14 of the Notes to Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data);

Contingent Consideration Liabilities - the valuation methods and assumptions used in assessing the fair values of future amounts payable to the former owners of certain acquired businesses; and

Acquisitions - the assumptions used to determine the fair value of consideration transferred and to allocate this consideration to assets acquired and liabilities assumed in connection with our acquisitions, including the estimated useful lives of other intangible assets subject to amortization (also refer to Note 4 of the Notes to Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data).

Uncertainty of Forward-Looking Statements and Information

This Annual Report includes “forward-looking statements” reflecting assumptions, expectations, projections, intentions or beliefs about future events that are intended to qualify for the “safe harbor” from liability established by the Private Securities Litigation Reform Act of 1995. You can identify these statements by the fact that they do not relate strictly to historical or current facts. They use words such as “anticipate,” “estimate,” “project,” “forecast,” “may,” “will,” “should,” “could,” “expect,” “believe,” “plan,” “intend” and other words of similar meaning. In particular, these include, but are not limited to, statements relating to the following:

•	Projected revenues, net income, earnings per share, margins, weighted average shares outstanding, capital expenditures, tax rates and other projections of operating or financial results;

•	Expectations regarding our business or financial outlook and opportunities, trends or economic and regulatory conditions in particular markets or industries;

•	Expectations regarding our plans and strategies, including plans, effects and other matters relating to our exit from our Latin American operations;

•	The expected value of contracts or intended contracts with customers, as well as the scope, services, term or results of any awarded or expected projects;

•	The development of larger electric transmission and pipeline projects, as well as the level of oil, natural gas and natural gas liquids prices and their impact on our business or demand for our services;

•	Future capital allocation initiatives, including the amount, timing and strategies with respect to any future stock repurchases, and expectations regarding the declaration, amount and timing of any future cash dividends;

•	The impact of existing or potential legislation or regulation;

•	Potential opportunities that may be indicated by bidding activity or similar discussions with customers;

•	The future demand for and availability of labor resources in the industries we serve;

•	The expected realization of remaining performance obligations or backlog;

•	The potential benefits from investments or acquisitions;

•	The expected outcome of pending or threatened legal proceedings;

•	Beliefs and assumptions about the collectability of receivables;

•	The business plans or financial condition of our customers; and

•	Possible recovery of pending or contemplated insurance claims, change orders and claims asserted against customers or third parties.

These forward-looking statements are not guarantees of future performance, involve or rely on a number of risks, uncertainties, and assumptions that are difficult to predict or are beyond our control, and reflect management’s beliefs and assumptions based

on information available at the time the statements are made. We caution you that actual outcomes and results may differ materially from what is expressed, implied or forecasted by our forward-looking statements and that any or all of our forward-looking statements may turn out to be inaccurate or incorrect. Those statements can be affected by inaccurate assumptions and by known or unknown risks and uncertainties, including the following:

•	Market, industry, economic, financial or political conditions outside our control, including weakness in the capital markets or any actual or potential shutdown, sequester, default or similar event or occurrence involving the U.S. federal government;

•	Quarterly variations in our operating and financial results, liquidity, financial condition, capital requirements, and reinvestment opportunities;

•	Trends and growth opportunities in relevant markets, including our ability to obtain future project awards;

•	The time and costs required to exit our Latin American operations and our ability to effect related transactions on acceptable terms, as well as the business and political climate in Latin America;

•	Delays, reductions in scope or cancellations of anticipated, pending or existing projects, including as a result of weather, regulatory or permitting issues, environmental processes, project performance issues, claimed force majeure events, protests or other political activity, legal challenges or customer capital constraints;

•	The successful negotiation, execution, performance and completion of anticipated, pending and existing contracts;

•	Risks associated with operational hazards that arise due to the nature of the services we provide and the conditions in which we operate, including, among others, wildfires and explosions;

•

Unexpected costs, liabilities, fines or penalties that may arise from legal proceedings, indemnity obligations, reimbursement obligations associated with letters of credit or bonds, multiemployer pension plans (e.g., underfunding of liabilities, termination or withdrawal liability) or other claims or actions asserted against us, including amounts that are not covered by, or are in excess of, our third-party insurance;

•	Potential unavailability or cancellation of third-party insurance coverage, as well as the exclusion of coverage for certain losses, potential increases in premiums for coverage deemed beneficial to us, or the unavailability of coverage deemed beneficial to us at reasonable and competitive rates;

•	Damage to our brands or reputation arising as a result of cyber-security breaches, environmental and occupational health and safety matters, corporate scandal, failure to successfully perform a high-profile project, involvement in a catastrophic event (e.g., fire, explosion) or other negative incidents;

•	Our dependence on suppliers, subcontractors, equipment manufacturers and other third-party contractors;

•	Estimates and assumptions related to our financial results, remaining performance obligations and backlog;

•	Our ability to attract and the potential shortage of skilled employees and our ability to retain key personnel and qualified employees;

•	Our dependence on fixed price contracts and the potential to incur losses with respect to these contracts;

•	Adverse weather conditions or natural disasters, including wildfires, pandemics, hurricanes, tropical storms, floods, earthquakes and other geological- and weather-related hazards;

•	Our ability to generate internal growth;

•	Competition in our business, including our ability to effectively compete for new projects and market share;

•	The effect of natural gas, natural gas liquids and oil prices on our operations and growth opportunities and on our customers’ capital programs and demand for our services;

•	The future development of natural resources;

•	The failure of existing or potential legislative actions and initiatives to result in increased demand for our services;

•	Fluctuations of prices of certain materials used in our business, including as a result of the imposition of tariffs or changes in U.S. trade relationships with other countries;

•	Cancellation provisions within our contracts and the risk that contracts expire and are not renewed or are replaced on less favorable terms;

•	Loss of customers with whom we have long-standing or significant relationships;

•	The potential that participation in joint ventures or similar structures exposes us to liability and/or harm to our reputation for acts or omissions by our partners;

•	Our inability or failure to comply with the terms of our contracts, which may result in additional costs, unexcused delays, warranty claims, failure to meet performance guarantees, damages or contract terminations;

•	The inability or refusal of our customers or third-party contractors to pay for services, including failure to collect our outstanding receivables, failure to recover amounts billed to customers in bankruptcy, or failure to recover on change orders or contract claims;

•	Budgetary or other constraints that may reduce or eliminate tax incentives or government funding for projects, which may result in project delays or cancellations;

•	Our ability to successfully complete our remaining performance obligations or realize our backlog;

•	Risks associated with operating in international markets, including instability of foreign governments, currency exchange fluctuations, and compliance with unfamiliar foreign legal systems and cultural practices, the U.S. Foreign Corrupt Practices Act and other applicable anti-bribery and anti-corruption laws, and complex U.S. and foreign tax regulations and international treaties;

•	Our ability to successfully identify, complete, integrate and realize synergies from acquisitions, including the ability to retain key personnel from acquired businesses;

•	The potential adverse impact resulting from uncertainty surrounding acquisitions and investments, including the potential increase in risks already existing in our operations and poor performance or decline in value of our investments;

•	The adverse impact of impairments of goodwill, other intangible assets, receivables, long-lived assets or investments;

•	Our growth outpacing our decentralized management and infrastructure;

•	Inability to enforce our intellectual property rights or the obsolescence of such rights;

•	The impact of our unionized workforce on our operations, including labor stoppages or interruptions due to strikes or lockouts;

•	The ability to access sufficient funding to finance desired growth and operations, including our ability to access capital markets on favorable terms, as well as fluctuations in the price and volume of our common stock, debt covenant compliance, interest rate fluctuations and other factors affecting our financing and investing activities;

•	Our ability to obtain performance bonds and other project security;

•	Our ability to meet the regulatory requirements applicable to us and our subsidiaries, including the Sarbanes-Oxley Act of 2002 and the U.S. Investment Advisers Act of 1940;

•	Rapid technological and other structural changes that could reduce the demand for our services;

•	Risks related to the implementation of new information technology systems;

•	New or changed tax laws, treaties or regulations;

•	Our ability to realize deferred tax assets;

•	Legislative or regulatory changes that result in increased costs, including with respect of labor and healthcare costs;

•	Significant fluctuations in foreign currency exchange rates; and

•	The other risks and uncertainties described elsewhere herein and in Item 1A. Risk Factors in this Annual Report and as may be detailed from time to time in our other public filings with the SEC.

All of our forward-looking statements, whether written or oral, are expressly qualified by these cautionary statements and any other cautionary statements that may accompany such forward-looking statements or that are otherwise included in this report. In addition, we do not undertake and expressly disclaim any obligation to update or revise any forward-looking statements to reflect events or circumstances after the date of this report or otherwise.