Item 1. Business

Overview

Quanta Services, Inc. (together with its subsidiaries, “Quanta,” “we,” “us” or “our”) is a leading provider of specialty contracting services, delivering comprehensive infrastructure solutions for the electric and gas utility, communications, pipeline and energy industries in the United States, Canada, Australia and select other international markets.

Within each of the industries we serve, the services we provide include the engineering, construction, and repair and maintenance of infrastructure, such as electric power transmission and distribution networks; substation facilities; communications and cable multi-system operator networks; gas utility systems; pipeline transmission systems and facilities; and downstream industrial facilities. Our operations are decentralized and labor-intensive, and we rely on craft skilled labor personnel and experienced operators to successfully manage our day-to-day business. We also have an experienced management team, both at the executive level and within our subsidiaries, which we refer to as operating units. We operate a fleet of owned and leased trucks and trailers, support vehicles and specialty construction equipment, as well as various proprietary technologies that enhance our service offerings. We have a large and diverse customer base, including many of the leading companies in the utility, industrial, communications and energy 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. Our services are typically provided pursuant to master service agreements, repair and maintenance contracts and fixed price and non-fixed price construction contracts. We offer comprehensive and diverse solutions on a broad geographic scale and have a solid base of long-standing customer relationships in each of the industries we serve. We believe our reputation for safety leadership, responsiveness and performance, geographic reach, comprehensive service offerings and financial strength have resulted in strong relationships with numerous customers, and we endeavor to develop and maintain strategic alliances and preferred service provider status with our customers.

We believe that our business strategies, along with our safety culture and financial resources, differentiate us from our competition and position us to benefit from future capital spending by our customers. Our strategies of expanding our portfolio of service offerings for existing and potential customers, increasing and enhancing our presence in core geographic markets, technological and training capabilities, promoting best practices and cross-selling services to our existing customers place us in the position to capitalize on opportunities and trends in the industries we serve and expand our operations to select new markets.

Services

We report our results under two reportable segments: (1) Electric Power Infrastructure Solutions and (2) Underground Utility and Infrastructure Solutions. This structure is generally focused on broad end-user markets for our services. We operate primarily in the United States; however, we derived approximately 14.1%, 15.9% and 23.2% of our revenues from foreign operations, primarily in Canada and Australia, during the years ended December 31, 2020, 2019 and 2018.

Electric Power Infrastructure Solutions. Our Electric Power Infrastructure Solutions segment provides, among other things, comprehensive network solutions to customers in the electric power, communications and other industries. Services performed by the Electric Power Infrastructure Solutions segment generally include:

*•*the design, engineering, new construction, upgrade and repair and maintenance of electric power transmission and distribution infrastructure and substation facilities to support, among other things, utility customers’ efforts to ensure the safety and reliability of the power grid and integrate renewable generation and the growing trend towards the electrification of transportation and other industries;

• emergency restoration services, including the repair of infrastructure damaged by, among other things, inclement weather and wildfires;

• the energized installation, maintenance and upgrade of electric power infrastructure utilizing unique bare hand and hot stick methods and our proprietary robotic arm techniques;

• the installation of “smart grid” technologies on electric power networks;

• engineering and construction of substations, switchyards and transmission infrastructure to interconnect renewable energy generation, including solar, wind, hydro power and backup natural gas generation facilities;

• engineering and construction of micro-grids, battery storage and solar generation facilities;

• comprehensive design and construction services to wireline and wireless communications companies, cable multi-system operators and other customers within the communications industry (including services in connection with 5G wireless deployment);

• the design, installation, maintenance and repair of commercial and industrial wiring; and

*•*aviation services primarily for the utility industry, including the transportation of line workers, the setting of poles, and the stringing of wires.

This segment also includes a majority of the financial results of our training facility and our postsecondary educational institution, which specializes in pre-apprenticeship training, apprenticeship training and utility task training for electric workers, as well as training for the gas utility and communications industries. For additional information on this institution, see Human Capital Resources - Employee Recruiting, Development and Training.

Underground Utility and Infrastructure Solutions. Our Underground Utility and Infrastructure Solutions segment provides comprehensive infrastructure solutions to customers involved in the development, transportation, distribution, storage and processing of natural gas, oil and other products. Services performed by the Underground Utility and Infrastructure Solutions segment generally include:

• the design, engineering, new construction, upgrade and repair and maintenance of natural gas systems for gas utility customers;

• pipeline protection, integrity testing, rehabilitation and replacement;

• catalyst replacement services, high-pressure and critical-path turnaround services, instrumentation and electrical services, piping, fabrication and storage tank services to the midstream and downstream industrial energy complex;

• engineering and construction services for pipeline systems, storage systems and compressor and pump stations; and

• trenching, directional boring and mechanized welding services related to the above services and in connection with our electric power infrastructure services.

To a lesser extent, this segment also designs, installs and maintains fueling systems and water and sewer infrastructure, fabricates pipeline support systems and related structures and facilities for the pipeline industry and provides services to the offshore energy market.

Recent Acquisitions

We continue to evaluate, strategic acquisitions to broaden our customer base, expand our geographic area of operations, grow our portfolio of services and increase opportunities across our operations. During the year ended December 31, 2020, we acquired seven businesses that we believe support our strategic goals and enhance our ability to innovate and expand our services offerings to serve our customers. These acquisitions involved aggregate consideration of approximately $351.7 million paid or payable in cash, subject to certain adjustments, 1,334,469 shares of Quanta common stock, which had a fair value of $57.1 million as of the respective acquisition dates, and certain contingent consideration obligations. For additional information on our investments and acquisitions, see Notes 2, 4 and 14 of the Notes to Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data.

Puerto Rico Joint Venture

During the first half of 2020, a joint venture in which we own a 50% interest, LUMA Energy, LLC (LUMA), was selected for a 15-year operation and maintenance agreement to operate, maintain and modernize the approximately 18,000-mile electric transmission and distribution system in Puerto Rico. The operation and maintenance period is scheduled to begin following a transition period, which is expected to end in mid-2021 and during which we receive a fixed transition services fee. During the operation and maintenance period, LUMA will receive a fixed annual management fee, with the opportunity to receive additional annual performance-based incentive fees.

Customer Relationships

We have a large and diverse customer base, including many of the leading companies in the industries we serve, and we have developed strong strategic alliances with numerous customers and strive to develop and maintain our status as a preferred service provider to our customers. For the year ended December 31, 2020, our largest customer accounted for 5% of our consolidated revenues and our ten largest customers accounted for 32% of our consolidated revenues. Representative customers include:

l			American Electric Power Company, Inc.			l			FirstEnergy Corp.
l			ATCO Electric			l			Fortis Inc.
l			Berkshire Hathaway, Inc.			l			National Grid plc
l			CenterPoint Energy, Inc.			l			NextBridge Infrastructure, LP
l			Comcast Corporation			l			NextEra Energy, Inc.
l			Dominion Energy, Inc.			l			NiSource Inc.
l			Duke Energy Corporation			l			PG&E Corporation
l			Edison International			l			Puget Sound Energy, Inc.
l			Enbridge Inc.			l			Sempra Energy
l			Entergy Corporation			l			The Southern Company
l			Enterprise Products Partners L.P.			l			TC Energy Corporation
l			Eversource Energy			l			Valero Energy Corporation
l			Exelon Corporation			l			Verizon Communications Inc.

Our customers include utilities, communications, industrial and energy delivery companies, as well as governmental entities. We have estimated revenues by customer type as a percentage of total revenues below. Such estimates are based on management judgment and assumptions and are provided to show perceived trends in our customer types and should be considered directional in nature.

						2020						2019						2018
Utility						72		%				64		%				60		%
Communications						4		%				3		%				2		%
Industrial						13		%				15		%				14		%
Energy Delivery						6		%				14		%				17		%
Other						5		%				4		%				7		%
Total revenues						100		%				100		%				100		%

Customer types in the table above are defined as follows:

• Utility - Customers that are electric and gas utilities;

• Communications - Customers that own and/or operate assets supporting delivery of data, communications and digital services;

• Industrial - Customers that own and/or operate refinery, chemical and industrial plants and other commercial or manufacturing facilities;

• Energy Delivery - Customers that own and/or operate pipelines for the delivery of hydrocarbons; and

• Other - Customers that are not accurately described by the categories set forth above.

We believe utility, communications and industrial customers provide us with growth opportunities due to the long-term capital programs associated with these industries. Our opportunities and capital programs associated with energy delivery customers are dependent on the cyclicality of larger pipeline projects, and energy delivery and industrial customers have been negatively impacted by the currently challenged energy market and recent oil price volatility, as well as the exacerbating effect of the pandemic associated with the novel coronavirus disease (COVID-19).

We are a preferred service provider for many of our customers, which generally means we have met minimum standards for a specific category of service, maintained a high level of performance and agreed to certain payment terms and negotiated rates. We strive to maintain preferred status as we believe it provides us an advantage in the award of future work for the applicable customer. Furthermore, many of our strategic relationships with customers take the form of strategic alliance or long-

term maintenance agreements, which typically extend for an initial term and may include renewal options to extend the initial term. Strategic alliance agreements also generally state an intention to work together over a period of time and/or on specific types of projects, and many provide us with preferential bidding procedures.

Although we have an integrated marketing and business development strategy, management at each of our operating units is responsible for developing and maintaining successful long-term relationships with customers. Our operating unit management teams build upon existing customer relationships to secure additional projects and increase revenues. Many of these customer relationships are long-standing and are maintained through a partnering approach with centralized account management, which includes project evaluation and consulting, quality performance, performance measurement and direct customer contact. Additionally, operating unit management focuses on pursuing growth opportunities with prospective customers. We also encourage operating unit management to cross-sell services of our other operating units to their customers and coordinate with our other operating units to pursue projects, especially those that are larger and more complex. We believe our ability to provide services that cover a broad spectrum of our customers’ needs and requirements is a significant differentiator. Our corporate-level business development and regional management groups support these activities by promoting and marketing our services for existing and prospective large national accounts, as well as projects that are capable of utilizing services from multiple operating units.

Competition and Market Demand

The markets in which we operate are highly competitive. We compete with other contractors in the geographic markets in which we operate, and several of our competitors are large companies that have significant financial, technical and marketing resources. In addition, there are relatively few barriers to entry into some of the industries in which we operate and, as a result, any organization that has adequate financial resources and access to technical expertise may become a competitor. A significant portion of our revenues is currently derived from unit price or fixed price agreements, and price is often an important factor in the award of such agreements. Accordingly, we could be underbid by our competitors. However, customers often consider other factors in choosing a service provider, including technical expertise and experience, safety ratings, financial and operational resources, geographic presence, industry reputation and dependability, which we expect to benefit larger contractors such as us. In addition, competition may lessen as industry resources, such as labor supplies, approach capacity. There can be no assurance, however, that our competitors will not develop the expertise, experience and resources to provide services that are superior in both price and quality to our services, or that we will be able to maintain or enhance our competitive position. We also face competition from the in-house service organizations of our existing or prospective customers, which employ personnel who perform some of the same types of services we provide. Although these companies currently outsource a significant portion of these services, there can be no assurance that they will continue to do so in the future or that they will not acquire additional in-house capabilities.

For further information regarding the effects of competition on our business and trends in market demand affecting our business, see Risks Related to Operating Our Business and Risks Related to Our Industries in Item 1A. Risk Factors of this Annual Report and Overview - Business Environment and Results of Operations in Item 7. Management’s Discussion and Analysis of Financial Condition of this Annual Report.

Material Resources

We depend on the availability of certain equipment, including specialty vehicles, to perform our services. We operate a fleet of owned and leased bucket trucks, digger derricks, trucks and trailers, support vehicles and specialty construction equipment, such as sidebooms, dozers, backhoes, excavators, trenchers, generators, boring machines, cranes, robotic arms, wire pullers, tensioners and helicopters. As of December 31, 2020, the total size of the rolling stock fleet was approximately 51,000 units. Additionally, our customers typically supply most or all of the raw materials required for each project. However, pursuant to certain of our contracts, we may procure all or part of the raw materials required. To the extent we continue to expand our comprehensive engineering, procurement and construction offerings, the cost of materials may become a proportionately larger component of our consolidated cost of services.

While the ongoing COVID-19 pandemic has resulted in significant supply chain disruptions globally and within the United States, we have not experienced, and do not anticipate experiencing, any significant procurement difficulties, as we purchase our required materials and equipment from a variety of sources. However, a number of factors that we may not be able to predict or control could result in increased costs for these materials, including the continued impact of the ongoing COVID-19 pandemic, as well as global trade relationships and other general market and political conditions. For further information regarding the risks associated with availability of materials, see Risks Related to Operating Our Business in Item 1A. Risk Factors of this Annual Report.

Seasonality and Cyclicality

Our revenues and results of operations can be subject to seasonal and other variations. These variations are influenced by, among other things, weather, customer spending patterns, bidding seasons, receipt of required regulatory approvals, permits and rights of way, project timing and schedules, and holidays. 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 additional information on seasonality and cyclicality, please see Significant Factors Impacting Results within Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Regulation

Compliance with numerous regulations has a material effect on our operations. Our operations are subject to various federal, state, local and international laws and regulations including:

• licensing, permitting and inspection requirements applicable to contractors and engineers;

• regulations relating to worker safety and environmental protection;

• permitting and inspection requirements applicable to construction projects;

• wage and hour regulations and regulations associated with our collective bargaining agreements and unionized workforce;

• regulations relating to transportation of equipment and materials, including licensing and permitting requirements, as well as aviation activities;

• building and electrical codes;

• applicable U.S. and non-U.S. anti-corruption regulations;

• immigration regulations applicable to U.S. and cross-border employment; and

• special bidding, procurement and other requirements on government projects.

We believe that we are in compliance with all material licensing and regulatory requirements that are necessary to conduct our operations. Our failure to comply with applicable regulations could result in substantial fines or revocation of our operating licenses, as well as give rise to termination or cancellation rights under our contracts or disqualify us from future bidding opportunities. Additionally, the overall regulatory environment can impact our customers’ projects and demand for our services, and in connection with the current heightened regulatory environment and increased regulatory enforcement and challenges, our customers have experienced delays, reductions in scope and cancellations of projects. We are also subject to numerous federal, state, local and international environmental laws and regulations governing our operations, including the handling, transportation and disposal of non-hazardous and hazardous substances and wastes, as well as emissions and discharges into the environment, including discharges to air, surface water, groundwater and soil. We also are subject to laws and regulations that impose liability and cleanup responsibility for releases of hazardous substances into the environment. Under certain of these laws and regulations, liability can be imposed for cleanup of previously owned or operated properties or currently owned properties at which hazardous substances or wastes were discharged or disposed of by a former owner or operator, regardless of whether we directly caused the contamination or violated any law at the time of discharge or disposal. The presence of contamination from such substances or wastes could also interfere with ongoing operations or adversely affect our ability to sell or lease the property or use it as collateral for financing. In addition, we could be held liable for significant penalties and damages under certain environmental laws and regulations or be subject to revocation of certain licenses or permits, which could materially and adversely affect our business, results of operations and cash flows. Our contracts with customers may also impose liability on us for environmental issues that arise through the performance of our services. As a

result, from time to time, we may incur costs and obligations for correcting environmental noncompliance matters and for remediation at or relating to certain of our properties. We believe that we are in substantial compliance with our environmental obligations and that any such obligations will not have a material adverse effect on our business or financial performance.

For further information regarding the effects of regulation on our business, see Risks Related to Operating Our Business and Risks Related Regulation and Compliance in Item 1A. Risk Factors of this Annual Report and Overview - Business Environment in Item 7. Management’s Discussion and Analysis of Financial Condition of this Annual Report.

Human Capital Resources

We believe our employees are our most important assets, and we focus significant attention and resources on attracting, developing and retaining talented and experienced individuals. We believe our industry-leading training and safety programs are a strength and competitive differentiator with not only our current and potential employees, but with our customers, which have high safety standards and are increasing the amount of their outsourced infrastructure services. Our operations are decentralized and labor-intensive, and we rely on craft skilled labor personnel and experienced operators to successfully manage our day-to-day business, as well as corporate management and professional personnel to coordinate and execute our business strategies, allocate capital and coordinate equipment usage, and facilitate certain centralized administrative services.

Employee Profile

As of December 31, 2020, we had approximately 35,800 employees, consisting of approximately 7,600 salaried employees, including executive officers, professional and administrative staff, project managers and engineers, job superintendents and field personnel, and approximately 28,200 hourly employees, the number of which fluctuates depending upon the number and size of the projects that are ongoing and planned at any particular time. As of December 31, 2020, we had approximately 29,700 U.S. employees and approximately 6,100 non-U.S. employees, with the majority of our non-U.S. employees based in Canada. Additionally, approximately 34% of our employees at December 31, 2020 were covered by collective bargaining agreements, which require the payment of specified wages, the observance of certain workplace rules and the payment of certain amounts to multiemployer pension plans and employee benefit trusts. These collective bargaining agreements have varying terms and expiration dates, and the majority contain provisions that prohibit work stoppages or strikes, even during specified negotiation periods relating to agreement renewals, and provide for binding arbitration dispute resolution in the event of prolonged disagreement.

Employee Safety

Performance of our services requires the use of heavy equipment and exposure to inherently hazardous conditions. In response to these inherent hazards and as part of our commitment to the safety of our employees, customers and third parties, our corporate and operating unit management personnel have established safety programs, policies and procedures and ongoing training requirements for our employees and have also developed and implemented critical safety equipment and innovations. For example, on our project sites we have implemented emergency response plans, first aid training and automated external defibrillators, which have helped save the lives our employees and bystanders. We have also continued to invest significant resources in our safety training facilities, including the Quanta Advanced Training Center located in Texas, and our safety monitoring tools, including fleet management software. Our operating units also develop and share best practices for safety policies and practices, and we have an established program for onboarding newly acquired companies and working with them to augment their existing safety practices as necessary.

Furthermore, during the COVID-19 pandemic, the majority of our operations have continued, as they have been deemed essential to critical infrastructure. In response to this new operating environment, we have implemented additional safety protocols and procedures to protect the health and safety of our employees, such as the adoption of specialized training initiatives and the utilization of additional protective equipment for our employees operating in the field and additional sanitation measures for our offices, vehicles and equipment. We also reduced non-essential business travel, applied work-from-home policies where appropriate and developed other human resource guidance to help employees. We have not experienced any meaningful impact on the availability of our workforce or key personnel as a result of the COVID-19 pandemic.

Employee Recruiting, Development and Training

Our success depends on our ability to attract, develop and retain highly qualified employees, including craft skilled labor, engineers, architects, designers, management and professional and administrative employees.

Craft Skilled Labor. Our industry is experiencing a shortage of journeyman linemen and specialty craft labor in certain geographic areas. Furthermore, the cyclical nature of the energy industry can create shortages of qualified labor in those markets during periods of high demand. In order to take advantage of available opportunities and successfully implement our long-term strategy, we must be able to employ, train and retain the necessary skilled personnel. As a result, we support and

utilize various training and educational programs and have developed additional company-wide and project-specific employee training and educational programs.

We own and operate Northwest Lineman College, which provides training programs for the electric power infrastructure, communications and underground utility and infrastructure industries and specializes in pre-apprenticeship training, apprenticeship training and specialized utility task training for electric workers. At our Quanta Advanced Training Center, we have also continued to invest in our internal education and training capabilities for beginning linemen and have added lead and cable splicing and directional drilling and gas distribution to our existing energized electric power and pipeline integrity training. These programs provide classroom and on-the-job training programs and allow us to train employees in a controlled environment without the challenges of limited structure access and utility constraints.

Additionally, we have entered into strategic relationships with universities, the military and unions in order to attract potential employees and develop our workforce. For example, our operating units performing more sophisticated and technical jobs utilize, when applicable, training programs provided by the International Brotherhood of Electrical Workers/National Electrical Contractors Associations (IBEW/NECA) Apprenticeship Program, training programs sponsored by the four trade unions administered by the Pipe Line Contractors Association (PLCA), apprenticeship training programs sponsored by the Canadian Union of Skilled Workers (CUSW) or our equivalent programs. Certain of our operating units have also established apprenticeship training programs approved by the U.S. Department of Labor that prescribe equivalent training requirements for employees who are not otherwise subject to the requirements of the IBEW/NECA Apprenticeship Program. In addition, the Laborers International Union of North America, the International Brotherhood of Teamsters, the United Association of Plumbers and Pipefitters and the International Union of Operating Engineers have training programs specifically designed for developing and improving the skills of their members who work in the pipeline construction industry. Our operating units also share best practices for training and educational programs.

For additional information on the risks associated with labor resources in our industries, see Risks Related to Operating Our Business in Item 1A. Risk Factors of this Annual Report and Overview - Business Environment in Item 7. Management’s Discussion and Analysis of Financial Condition of this Annual Report.

Management and Professional Personnel. Due to our decentralized operating structure, significant decision-making authority resides with our operating unit management, and our corporate management and administrative personnel are relied upon to allocate capital and communicate, coordinate and help execute our business strategies. We have also implemented enterprise-wide talent development and succession planning programs designed to identify and develop future and/or replacement candidates for key positions. For example, we have developed and administer a succession program with respect to our executive officers and senior operating unit personnel, which is reviewed and/or overseen by our Board of Directors.

Compensation and Benefits

Our compensation programs are generally designed to align employee compensation with market practices and our performance, as well as provide the proper incentives to attract, retain and motivate employees. With respect to our executive officers, operating unit management, other senior leadership and corporate employees, compensation programs consist of both fixed and variable components. The fixed portion is generally set at market levels, with variable compensation designed to reward employees based on company performance. In connection with these compensation programs, we also grant stock-based compensation to management and key operations personnel at the majority of our operating units, which we believe helps to align incentives throughout our decentralized organization. We also enter into employment agreements with our executive officers and certain other key personnel. For additional information regarding our executive compensation, please see the information required in Item 11. Executive Compensation, which will be incorporated by reference to our definitive proxy statement related to our 2021 Annual Meeting of Stockholders.

We also provide additional benefits to our employees. For example, we provide health, welfare and benefit plans for employees who are not covered by collective bargaining agreements, and we maintain a 401(k) plan pursuant to which eligible U.S. employees who are not provided retirement benefits through a collective bargaining agreement may make contributions through a payroll deduction and to which we make certain matching contributions.

Ethics and Compliance

All of our employees are subject to Quanta’s Code of Ethics and Business Conduct, which includes guidance and requirements concerning, among other things, general business ethics, including policies concerning the environment, conflicts of interest, anti-corruption, harassment and discrimination, data security and privacy, and insider trading, and Quanta’s Anti-Bribery & Corruption Policy, which includes guidance and requirements concerning, among other things, interactions with government officials; provision of gifts, entertainment and hospitality; due diligence on certain high-risk service providers; and charitable and political contributions. Training with respect to these policies is conducted as part of our comprehensive ethics and compliance training program.

Climate-Related Impacts

While the potential impact of climate-related changes on our operations is uncertain, management considers climate-related risks and opportunities in connection with its long-term strategic planning and short-term deployment of resources. Concerns about the impact of climate change have resulted, and are expected to continue to result, in technological advancements and market developments that impact our business. For example, utility customers are transitioning toward more sustainable sources of power generation, such as renewables, which can provide additional opportunities for our electric power services. Additionally, increased electrification of new technologies may lead to continued and additional demand for new and expanded electric power infrastructure and reengineering of existing electric power infrastructure. However, concerns about climate change could also result in potential new regulations, regulatory actions or requirements to fund energy efficiency activities, as well as decreased demand for refined products, which in turn could negatively impact our customers and demand for certain of our underground utility and infrastructure services. We also maintain a large fleet of vehicles and a significant amount of construction machinery, all of which could be negatively impacted by new regulations related to greenhouse gas emissions from such sources or increases in fuel prices.

Additionally, climate change may result in, among other things, increasing temperatures, rising sea levels and changes to patterns and intensity of wildfires, hurricanes, other storms and severe weather-related events and natural disasters. Our operating results are significantly influenced by weather, and these changes could significantly impact our future operating results. A greater amount of rainfall, snow, ice or other less accommodating weather conditions, as well as an increase in severe weather events and natural disasters, could reduce our productivity or result in project delays or cancellations. However, an increase in certain of these events, such as hurricanes, tropical storms, wildfires, blizzards and ice storms, can create a greater amount of emergency restoration service work and increase customer spending on modernization, grid hardening and other infrastructure improvements (e.g., fire hardening programs in California and the western United States and storm hardening in coastal regions). Additionally, changes in climate could result in more accommodating weather patterns for greater periods of time in certain areas, which may enable us to increase our productivity. Climate change may also affect the conditions in which we operate, and in some cases, expose us to potentially increased liabilities associated with those environmental conditions. For example, severe drought and high wind speeds in the western United States have increased the risk of wildfires during certain portions of the year, which in turn has exposed us and other contractors to increased risk of liability in connection with our operations in those locations. These conditions have also resulted in increased costs for wildfire-related third-party insurance and reduced the amount insurance carriers are willing to make available under such policies.

For additional information regarding the risks and opportunities described above, see Item 1A. Risk Factors, Overview - Business Environment and Overview - Significant Factors Impacting Results in Item 7. Management’s Discussion and Analysis of Financial Condition of this Annual Report.

Risk Management and Insurance

We maintain insurance coverage from third-party insurers as part of our overall risk management strategy and because some of our contracts require us to maintain specific insurance coverage limits. We are insured for, among other things, employer’s liability, workers’ compensation, auto liability, aviation and general liability claims. Deductibles for the employer’s liability and workers’ compensation programs are $5.0 million per occurrence, and deductibles for the auto liability and general liability programs are $15.0 million per occurrence. We manage and maintain a portion of our casualty risk through our wholly-owned captive insurance company, which insures all claims up to the amount of the applicable deductible of our third-party insurance programs. In connection with our casualty insurance programs, we are required to issue letters of credit to secure our obligations. We also have employee health care benefit plans for most employees not subject to collective bargaining agreements, of which the primary plan is subject to a deductible of $0.8 million per claimant per year.

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.

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 and future risk of wildfires in California and other areas in the western United States, Australia and other locations, insurers have reduced coverage availability and increased the cost of insurance coverage for such events in recent years. As a result, our level of insurance coverage for wildfire events decreased, including in connection with our annual insurance renewals in the spring of 2020 and 2019, and our levels of coverage may not be sufficient to cover

potential losses. Our third-party insurers could also decide to further reduce or exclude coverage for wildfires or other events in connection with our insurance renewal in the spring of 2021 and/or in the future. In any such event, our overall risk exposure would increase, which could negatively affect our results of operations, financial condition and cash flows.

Website Access and Other Information

Our website address is www.quantaservices.com. Interested parties may obtain free electronic copies of our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and any amendments to these reports through our website under the heading Investor Relations / SEC Filings or through the website of the Securities and Exchange Commission (the SEC) at www.sec.gov. These reports are available on our website as soon as reasonably practicable after we electronically file them with, or furnish them to, the SEC. We will also make available to any stockholder, without charge, copies of our Annual Report on Form 10-K as filed with the SEC. For copies of this or any other Quanta publication, stockholders may submit a request in writing to Quanta Services, Inc., Attn: Corporate Secretary, 2800 Post Oak Blvd., Suite 2600, Houston, Texas 77056, or by phone at (713) 629-7600.

Investors and others should note that we announce material financial information and make other public disclosures of information regarding Quanta through SEC filings, press releases, public conference calls, and our website. We also utilize social media to communicate this information, and it is possible that the information we post on social media could be deemed material. Accordingly, we encourage investors, the media and others interested in our company to follow Quanta, and review the information we post, on the social media channels listed on our website in the Investors Relations / Social Media section.

This Annual Report, our website and our social media channels contain information provided by other sources that we believe is reliable. We cannot provide assurance that the information obtained from other sources is accurate or complete. No information on our website or our social media channels is incorporated by reference herein.