Document and Company Informatio
Document and Company Information (USD $) | ||
In Billions, except Share data | 6 Months Ended
Jun. 30, 2009 | Jul. 31, 2009
|
Document and Company Information [Abstract] | ||
Entity Registrant Name | Quanta Services, Inc. | |
Entity Central Index Key | 0001050915 | |
Document Type | 10-Q | |
Document Period End Date | 2009-06-30 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Well-known Seasoned Issuer | Yes | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Public Float | 4.5 | |
Entity Common Stock, Shares Outstanding | 197,664,132 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) (USD $) | ||
In Thousands | Jun. 30, 2009
| Dec. 31, 2008
|
Current Assets: | ||
Cash and cash equivalents | $524,356 | $437,901 |
Accounts receivable, net of allowances of $8,802 and $9,817 | 723,711 | 795,251 |
Costs and estimated earnings in excess of billings on uncompleted contracts | 49,007 | 54,379 |
Inventories | 27,967 | 25,813 |
Prepaid expenses and other current assets | 60,851 | 68,147 |
Total current assets | 1,385,892 | 1,381,491 |
Property and equipment, net of accumulated depreciation of $330,070 and $359,565 | 677,346 | 635,456 |
Other assets, net | 42,159 | 33,479 |
Other intangible assets, net of accumulated amortization of $57,215 and $67,027 | 130,905 | 140,717 |
Goodwill | 1,363,200 | 1,363,100 |
Total assets | 3,599,502 | 3,554,243 |
Current Liabilities: | ||
Notes payable | 2 | 1,155 |
Accounts payable and accrued expenses | 364,514 | 400,253 |
Billings in excess of costs and estimated earnings on uncompleted contracts | 66,206 | 50,390 |
Total current liabilities | 430,722 | 451,798 |
Convertible subordinated notes, net of discount of $21,475 and $19,350 | 124,400 | 122,275 |
Deferred income taxes | 92,001 | 91,104 |
Insurance and other non-current liabilities | 218,901 | 217,851 |
Total liabilities | 866,024 | 883,028 |
Equity: | ||
Common stock, $.00001 par value, 300,000,000 shares authorized, 199,317,237 and 200,246,239 shares issued and 196,928,203 and 197,654,372 shares outstanding, respectively | 2 | 2 |
Limited Vote Common Stock, $.00001 par value, 3,345,333 shares authorized, 662,293 and 662,293 shares issued and outstanding, respectively | 0 | 0 |
Additional paid-in capital | 2,811,846 | 2,803,836 |
Accumulated deficit | (42,704) | (97,485) |
Accumulated other comprehensive income (loss) | (450) | (2,956) |
Treasury stock, 2,389,034 and 2,591,867 common shares, at cost | (35,569) | (32,182) |
Total stockholders' equity | 2,733,125 | 2,671,215 |
Noncontrolling interest | 353 | 0 |
Total equity | 2,733,478 | 2,671,215 |
Total liabilities and equity | $3,599,502 | $3,554,243 |
1_Condensed Consolidated Balanc
Condensed Consolidated Balance Sheets (Parenthetical) (Unaudited) (USD $) | ||
In Thousands, except Share data | Jun. 30, 2009
| Dec. 31, 2008
|
Allowance on Accounts Receivable | $9,817 | $8,802 |
Accumulated depreciation on property and equipment | 359,565 | 330,070 |
Accumulated amortization on other intangible assets | 67,027 | 57,215 |
Discount on convertible subordinated notes | $19,350 | $21,475 |
Common stock, par value | 0.00001 | 0.00001 |
Common stock, shares authorized | 300,000,000 | 300,000,000 |
Common stock, shares issued | 200,246,239 | 199,317,237 |
Common stock, shares outstanding | 197,654,372 | 196,928,203 |
Limited vote common stock, par value | 0.00001 | 0.00001 |
Limited vote common stock, shares authorized | 3,345,333 | 3,345,333 |
Limited vote common stock, shares issued | 662,293 | 662,293 |
Limited vote common stock, shares outstanding | 662,293 | 662,293 |
Treasury stock, common shares | 2,591,867 | 2,389,034 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) (USD $) | ||||
In Thousands, except Per Share data | 3 Months Ended
Jun. 30, 2009 | 3 Months Ended
Jun. 30, 2008 | 6 Months Ended
Jun. 30, 2009 | 6 Months Ended
Jun. 30, 2008 |
Revenues | $813,379 | $960,882 | $1,551,909 | $1,805,324 |
Cost of services (including depreciation) | 675,597 | 802,192 | 1,296,996 | 1,522,757 |
Gross profit | 137,782 | 158,690 | 254,913 | 282,567 |
Selling, general and administrative expenses | 72,970 | 76,292 | 146,573 | 147,008 |
Amortization of intangible assets | 4,906 | 9,876 | 9,812 | 20,466 |
Operating income | 59,906 | 72,522 | 98,528 | 115,093 |
Interest expense | (2,803) | (9,722) | (5,621) | (19,316) |
Interest income | 628 | 2,088 | 1,709 | 6,083 |
Other income (expense),net | 158 | 278 | 234 | 482 |
Income before income taxes | 57,889 | 65,166 | 94,850 | 102,342 |
Provision for income taxes | 24,245 | 27,498 | 39,716 | 43,203 |
Net income | 33,644 | 37,668 | 55,134 | 59,139 |
Less: Net income attributable to noncontrolling interest | 217 | 0 | 353 | 0 |
Net income attributable to common stock | $33,427 | $37,668 | $54,781 | $59,139 |
Earnings per share attributable to common stock: | ||||
Basic earnings per share | 0.17 | 0.22 | 0.28 | 0.34 |
Diluted earnings per share | 0.17 | 0.21 | 0.28 | 0.34 |
Shares used in computing earnings per share: | ||||
Weighted average basic shares outstanding | 198,300 | 172,393 | 198,365 | 171,681 |
Weighted average diluted shares outstanding | 198,379 | 197,021 | 198,431 | 172,112 |
2_Condensed Consolidated Statem
Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $) | ||||
In Thousands | 3 Months Ended
Jun. 30, 2009 | 3 Months Ended
Jun. 30, 2008 | 6 Months Ended
Jun. 30, 2009 | 6 Months Ended
Jun. 30, 2008 |
Cash Flows from Operating Activities: | ||||
Net income | $33,644 | $37,668 | $55,134 | $59,139 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities - | ||||
Depreciation | 20,195 | 19,188 | 39,963 | 38,180 |
Amortization of intangibles | 4,906 | 9,876 | 9,812 | 20,466 |
Non-cash interest expense | 1,073 | 4,620 | 2,125 | 9,131 |
Amortization of debt issuance costs | 231 | 538 | 461 | 1,075 |
Amortization of deferred revenues | (4,283) | (2,123) | (6,919) | (4,251) |
(Gain) loss on sale of property and equipment | 206 | (458) | 635 | (306) |
Provision for doubtful accounts | 1,477 | 1,550 | 1,932 | 2,902 |
Provision for insurance receivable | 0 | 3,375 | 0 | 3,375 |
Deferred income tax provision (benefit) | (176) | (4,180) | 4,582 | (5,489) |
Non-cash stock-based compensation | 4,964 | 4,583 | 9,666 | 8,359 |
Tax impact of stock-based equity awards | 76 | (1,073) | 1,708 | (2,307) |
(Increase) decrease in - | ||||
Accounts and notes receivable | (47,087) | (61,830) | 60,953 | (94,657) |
Costs and estimated earnings in excess of billings on uncompleted contracts | 11,328 | (951) | 5,464 | (3,506) |
Inventories | (2,180) | (5,851) | (2,154) | (4,911) |
Prepaid expenses and other current assets | 2,159 | (1,333) | 2,264 | (422) |
Increase (decrease) in - | ||||
Accounts payable and accrued expenses and other non-current liabilities | 25,168 | 23,758 | (30,094) | 22,717 |
Billings in excess of costs and estimated earnings on uncompleted contracts | 6,638 | (9,967) | 15,824 | (17,097) |
Other, net | 1,089 | 726 | (726) | 904 |
Net cash provided by operating activities | 59,428 | 18,116 | 170,630 | 33,302 |
Cash Flows from Investing Activities: | ||||
Proceeds from sale of property and equipment | 878 | 6,919 | 2,704 | 9,064 |
Additions of property and equipment | (43,575) | (59,983) | (84,840) | (113,149) |
Cash paid for acquisition, net of cash acquired | 0 | (22,722) | 0 | (22,909) |
Cash paid for developed technology | 0 | (14,573) | 0 | (14,573) |
Net cash used in investing activities | (42,697) | (90,359) | (82,136) | (141,567) |
Cash Flows from Financing Activities: | ||||
Proceeds from other long-term debt | 157 | 0 | 2,095 | 635 |
Payments on other long-term debt | (2,110) | (654) | (3,247) | (1,598) |
Tax impact of stock-based equity awards | (76) | 1,073 | (1,708) | 2,307 |
Exercise of stock options | 23 | 4,236 | 142 | 5,648 |
Net cash provided by (used in) financing activities | (2,006) | 4,655 | (2,718) | 6,992 |
Net increase (decrease) in cash and cash equivalents | 14,725 | (67,588) | 85,776 | (101,273) |
Effect of foreign exchange rate changes on cash and cash equivalents | 822 | 185 | 679 | (1,017) |
Cash and cash equivalents, beginning of period | 508,809 | 372,194 | 437,901 | 407,081 |
Cash and cash equivalents, end of period | 524,356 | 304,791 | 524,356 | 304,791 |
Cash (paid) received during the period for - | ||||
Interest paid | (2,734) | (8,951) | (2,894) | (9,137) |
Income taxes paid | (24,223) | (31,119) | (32,141) | (35,455) |
Income tax refunds | $421 | $92 | $1,369 | $485 |
Business and Organization
Business and Organization (Unaudited) | |
6 Months Ended
Jun. 30, 2009 USD / shares | |
Business and Organization [Abstract] | |
BUSINESS AND ORGANIZATION | 1. BUSINESS AND ORGANIZATION: Quanta Services, Inc. (Quanta) is a leading national provider of specialized contracting services, offering end-to-end network solutions to the electric power, gas, telecommunications and cable television industries. Effective during the quarter ended June30, 2009, Quanta began reporting its results under three reportable segments: (1)Electric Gas Infrastructure Services, (2)Telecom Ancillary Infrastructure Services and (3)Dark Fiber. Prior to the quarter ended June30, 2009, we reported our results under two business segments, with all of our operating segments, other than Dark Fiber, having been aggregated into the Infrastructure Services segment. Electric Gas Infrastructure Services Segment The Electric Gas Infrastructure Services segment predominantly provides comprehensive network solutions to customers in the electric power and gas industries, including designing, installing, repairing and maintaining network infrastructure. In addition and to a lesser extent, the segment provides services to customers in the telecommunications and cable television industries, as well as various ancillary services which are similar to the services provided by the Telecom Ancillary Infrastructure Services segment. Telecom Ancillary Infrastructure Services Segment The Telecom Ancillary Infrastructure Services segment predominantly provides comprehensive network solutions to customers in the telecommunications and cable television industries, including designing, installing, repairing and maintaining network infrastructure, as well as various ancillary services, such as inside electrical wiring, intelligent traffic networks, cable and control systems for light rail lines, airports and highways, and specialty rock trenching, directional boring and road milling for industrial and commercial customers. In addition and to a lesser extent, the segment provides services to customers in the electric power and gas industries which are similar to the services provided by the Electric Gas Infrastructure Services segment. Dark Fiber Segment The Dark Fiber segment designs, procures, constructs and maintains fiber-optic telecommunications infrastructure in select markets and licenses the right to use these point-to-point fiber-optic telecommunications facilities to its customers. The Dark Fiber segment services educational and healthcare institutions, large industrial and financial services customers and other entities with high bandwidth telecommunication needs. The telecommunication services provided through this business are generally subject to regulation by the Federal Communications Commission and certain state public utility commissions. Acquisitions During 2008, Quanta made three acquisitions of businesses, which have been reflected in Quantas consolidated financial statements as of their respective acquisition dates. These acquisitions further expanded Quantas capabilities and scope of services in various locations around the United States. Quanta has not made any acquisitions during the first half of 2009. Changes in Accounting Principles The condensed c |
Summary of Significant Accounti
Summary of Significant Accounting Policies (Unaudited) | |
6 Months Ended
Jun. 30, 2009 USD / shares | |
Summary of Significant Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Interim Condensed Consolidated Financial Information These unaudited condensed consolidated financial statements have been prepared pursuant to the rules of the Securities and Exchange Commission (SEC). Certain information and footnote disclosures, normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the UnitedStates, have been condensed or omitted pursuant to those rules and regulations. Quanta believes that the disclosures made are adequate to make the information presented not misleading. In the opinion of management, all adjustments, consisting only of normal recurring adjustments, necessary to fairly state the financial position, results of operations and cash flows with respect to the interim consolidated financial statements have been included. The results of operations for the interim periods are not necessarily indicative of the results for the entire fiscal year. The results of Quanta have historically been subject to significant seasonal fluctuations. Quanta recommends that these unaudited condensed consolidated financial statements be read in conjunction with the audited consolidated financial statements and notes thereto of Quanta and its subsidiaries included in Quantas Annual Report on Form10-K for the year ended December31, 2008, which was filed with the SEC on March2, 2009. Use of Estimates and Assumptions The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires the use of estimates and assumptions by management in determining the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities known to exist as of the date the financial statements are published and the reported amount of revenues and expenses recognized during the periods presented. Quanta reviews all significant estimates affecting its consolidated financial statements on a recurring basis and records the effect of any necessary adjustments prior to their publication. Judgments and estimates are based on Quantas 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. Estimates are primarily used in Quantas assessment of the allowance for doubtful accounts, valuation of inventory, useful lives of assets, fair value assumptions in analyzing goodwill, other intangibles and long-lived asset impairments, purchase price allocations, liabilities for self-insured claims, convertible debt, revenue recognition for construction contracts and dark fiber licensing, share-based compensation, provision for income taxes and calculation of uncertain tax positions. Reclassifications Certain reclassifications have been made in prior years financial statements to conform to classifications used in the current year. Cash and Cash Equivalents Quanta had cash and cash equivalents of $437.9million and $524.4million as of December31, 2008 an |
Changes in Accounting Principle
Changes in Accounting Principles and New Accounting Pronouncements (Unaudited) | |
6 Months Ended
Jun. 30, 2009 USD / shares | |
Changes in Accounting Principles and New Accounting Pronouncements [Abstract] | |
CHANGES IN ACCOUNTING PRINCIPLES AND NEW ACCOUNTING PRONOUNCEMENTS | 3. CHANGES IN ACCOUNTING PRINCIPLES AND NEW ACCOUNTING PRONOUNCEMENTS: New Accounting Pronouncements Adoption of New Accounting Pronouncements.On January1, 2009, Quanta adopted FSP APB 14-1, which requires issuers of such instruments to separately account for the liability and equity components of qualifying convertible debt instruments in a manner that adjusts the recorded value of the convertible debt to reflect the entitys non-convertible debt borrowing rate and interest cost at the time of issuance. The value of the debt instrument is adjusted through a discount to the face value of the debt, which is amortized as non-cash interest expense over the expected life of the debt, with an offsetting adjustment to equity to separately recognize the value of the debt instruments conversion feature. This FSP has been applied retrospectively to all periods presented. Accordingly, Quanta recorded a cumulative effect of the change in accounting principle to accumulated deficit as of January 1, 2007 of approximately $29.6million. Also included in accumulated deficit is the impact from non-cash interest expense recorded in the amounts of approximately $18.3million ($11.8million after tax effect) and $14.9million ($9.6million after tax effect) for the years ended December31, 2007 and 2008. In addition, Quanta recorded non-cash interest expense during the first and second quarters of 2009 and will continue doing so until Quantas 3.75% convertible subordinated notes are redeemable at the holders option in April 2013. Approximately $4.3million ($2.8million after tax effect) non-cash interest expense will be recorded in 2009, with approximately $1.1million ($0.7million after tax effect) recorded in each the first and second quarters of 2009. See the tables below for the impact of the adoption of FSP APB 14-1 as of December31, 2008 and for the three and six months ended June30, 2008. Also on January1, 2009, Quanta adopted FSP EITF03-6-1. FSP EITF03-6-1states that unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and should be included in the computation of both basic and diluted earnings per share. All prior period earnings per share data presented have been adjusted retrospectively to conform to the provisions of FSP EITF03-6-1. All of Quantas restricted stock grants have non-forfeitable rights to dividends and are considered participating securities under FSP EITF03-6-1. Prior to the retrospective application of FSP EITF03-6-1 on January1, 2009, unvested restricted stock grants were included in the calculation of weighted average dilutive shares outstanding using the treasury stock method. Under this previous method, unvested restricted common shares were not included in the calculation of weighted average basic shares outstanding and were included in the calculation of weighted average diluted shares outstanding to the extent the grant price was less than the average share price for the respective period. The impact of the retrospective application of FSP EITF03-6-1 on earnings per share for prior periods is immat |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets (Unaudited) | |
6 Months Ended
Jun. 30, 2009 USD / shares | |
Goodwill and Other Intangible Assets [Abstract] | |
GOODWILL AND OTHER INTANGIBLE ASSETS | 4. GOODWILL AND OTHER INTANGIBLE ASSETS: A summary of changes in Quantas goodwill between December31, 2008 and June30, 2009 is as follows (in thousands): Electric Telecom Gas Ancillary Dark Fiber Segment Segment Segment Total Balance at December31, 2008 $ 912,649 $ 113,660 $ 336,791 $ 1,363,100 Purchase price adjustments related to acquisitions closed in previous quarters (14 ) 114 100 Balance at June30, 2009 $ 912,635 $ 113,774 $ 336,791 $ 1,363,200 Other intangible assets are comprised of (in thousands): December31, June30, 2008 2009 Other intangible assets: Customer relationships $ 111,379 $ 111,379 Backlog 54,139 54,139 Non-compete agreements 16,336 16,336 Patented rights and developed technology 16,078 16,078 Total intangible assets 197,932 197,932 Accumulated amortization: Customer relationships (11,381 ) (15,154 ) Backlog (38,109 ) (41,974 ) Non-compete agreements (6,000 ) (7,540 ) Patented rights and developed technology (1,725 ) (2,359 ) Total accumulated amortization (57,215 ) (67,027 ) Intangible assets, net $ 140,717 $ 130,905 Expenses for the amortization of intangible assets were $9.9million and $4.9million for the three months ended June30, 2008 and 2009 and $20.5million and $9.8million for the six months ended June30, 2008 and 2009. The remaining weighted average amortization period for all intangible assets as of June30, 2009 is 11.2years, while the remaining weighted average amortization periods for customer relationships, backlog, non-compete agreements and the patented rights and developed technology are 13.2years, 1.9years, 2.5years and 11.2years, respectively. The estimated future aggregate amortization expense of intangible assets as of June30, 2009 is set forth below (in thousands): For the Fiscal Year Ended December 31, Remainder of 2009 $ 9,809 2010 14,147 2011 13,003 2012 13,802 2013 8,770 Thereafter 71,374 Total $ 130,905 |
Stock Based Compensation
Stock Based Compensation (Unaudited) | |
6 Months Ended
Jun. 30, 2009 USD / shares | |
Stock Based Compensation [Abstract] | |
STOCK-BASED COMPENSATION | 5. STOCK-BASED COMPENSATION: Stock Incentive Plans Pursuant to the Quanta Services, Inc. 2007 Stock Incentive Plan (the 2007 Plan), which was adopted on May24, 2007, Quanta may award restricted common stock, incentive stock options and non-qualified stock options. The purpose of the 2007 Plan is to provide directors, key employees, officers and certain consultants and advisors with additional performance incentives by increasing their proprietary interest in Quanta. Prior to the adoption of the 2007 Plan, Quanta had issued awards of restricted common stock and stock options under its 2001 Stock Incentive Plan (as amended and restated March13, 2003) (the 2001 Plan), which was terminated effective May24, 2007, except that outstanding awards will continue to be governed by the terms of the 2001 Plan. In connection with the acquisition of InfraSource Services, Inc. (InfraSource) on August30, 2007, Quanta assumed InfraSources 2003 Omnibus Stock Incentive Plan and 2004 Omnibus Stock Incentive Plan, in each case as amended (the InfraSource Plans). The InfraSource Plans were terminated in connection with the acquisition, and no further awards will be made under these plans, although the terms of these plans will govern outstanding awards. The 2007 Plan, the 2001 Plan and the InfraSource Plans are referred to as the Plans. Restricted Stock Restricted common stock has been issued under the Plans at the fair market value of the common stock as of the date of issuance. The shares of restricted common stock issued are subject to forfeiture, restrictions on transfer and certain other conditions until they vest, which generally occurs over three or four years in equal annual installments. During the restriction period, the restricted stockholders are entitled to vote and receive dividends on such shares. During the three months ended June30, 2008 and 2009, Quanta granted 78,591 and 38,791shares of restricted stock under the 2007 Plan with a weighted average grant price of $29.07 and $21.27. During the six months ended June30, 2008 and 2009, Quanta granted 0.8million and 0.9million shares of restricted stock under the 2007 Plan with a weighted average grant price of $23.62 and $22.13. Additionally, during the three months ended June30, 2008 and 2009, 61,943 and 63,112shares vested with an approximate fair value at the time of vesting of $1.9million and $1.4million. During the six months ended June30, 2008 and 2009, 0.6million and 0.6million shares vested with an approximate fair value at the time of vesting of $14.5million and $10.8million. As of June30, 2009, there was approximately $26.2million of total unrecognized compensation cost related to unvested restricted stock granted to both employees and non-employees. This cost is expected to be recognized over a weighted average period of 2.2years. Stock Options The stock options granted under the InfraSource Plans, which were converted to options to acquire Quanta common stock upon the acquisition of InfraSource, generally vest over four years and have a maximum term of ten years; however, some options vested on August30, 2007 due to change of control p |
Per Share Information
Per Share Information (Unaudited) | |
6 Months Ended
Jun. 30, 2009 USD / shares | |
Per Share Information [Abstract] | |
PER SHARE INFORMATION | 6. PER SHARE INFORMATION: Basic earnings per share is computed using the weighted average number of common shares outstanding during the period, and diluted earnings per share is computed using the weighted average number of common shares outstanding during the period adjusted for all potentially dilutive common stock equivalents, except in cases where the effect of the common stock equivalent would be antidilutive. The amounts used to compute the basic and diluted earnings per share for the three and six months ended June30, 2008 and 2009 are illustrated below (in thousands): Three Months Ended Six Months Ended June30, June30, 2008 2009 2008 2009 NET INCOME: Net income attributable to common stock $ 37,668 $ 33,427 $ 59,139 $ 54,781 Effect of convertible subordinated notes under the if-converted method interest expense addback, net of taxes 4,532 Net income attributable to common stock for diluted earnings per share $ 42,200 $ 33,427 $ 59,139 $ 54,781 WEIGHTED AVERAGE SHARES: Weighted average shares outstanding for basic earnings per share 172,393 198,300 171,681 198,365 Effect of dilutive stock options 393 79 431 66 Effect of convertible subordinated notes under the if-converted method weighted convertible shares issuable 24,235 Weighted average shares outstanding for diluted earnings per share 197,021 198,379 172,112 198,431 For the three and six months ended June30, 2008, stock options of approximately 0.1million shares were excluded from the computation of diluted earnings per share because the options exercise prices were greater than the average market price of Quantas common stock. For the three months ended June30, 2008, the effect of assuming conversion of the 3.75% convertible subordinated notes would have been antidilutive, and they were therefore excluded from the calculation of diluted earnings per share. For the six months ended June30, 2008, the effect of assuming conversion of the 4.5% and 3.75% convertible subordinated notes would have been antidilutive and they were therefore excluded from the calculation of diluted earnings per share. For the three and six months ended June30, 2009, the effect of assuming conversion of the 3.75% convertible subordinated notes would have been antidilutive and they were therefore excluded from the calculation of diluted earnings per share. The 4.5% convertible subordinated notes were not outstanding during the three and six months ended June30, 2009. |
Debt
Debt (Unaudited) | |
6 Months Ended
Jun. 30, 2009 USD / shares | |
Debt [Abstract] | |
DEBT | 7. DEBT: Credit Facility Quanta has a credit facility with various lenders that provides for a $475.0million senior secured revolving credit facility maturing on September19, 2012. Subject to the conditions specified in the credit facility, borrowings under the credit facility are to be used for working capital, capital expenditures and other general corporate purposes. The entire unused portion of the credit facility is available for the issuance of letters of credit. As of June30, 2009, Quanta had approximately $158.0million of letters of credit issued under the credit facility and no outstanding revolving loans. The remaining $317.0million was available for revolving loans or issuing new letters of credit. Amounts borrowed under the credit facility bear interest, at Quantas option, at a rate equal to either (a)the Eurodollar Rate (as defined in the credit facility) plus 0.875% to 1.75%, as determined by the ratio of Quantas total funded debt to consolidated EBITDA (as defined in the credit facility), or (b)the base rate (as described below) plus 0.00% to 0.75%, as determined by the ratio of Quantas total funded debt to consolidated EBITDA. Letters of credit issued under the credit facility are subject to a letter of credit fee of 0.875% to 1.75%, based on the ratio of Quantas total funded debt to consolidated EBITDA. Quanta is also subject to a commitment fee of 0.15% to 0.35%, based on the ratio of its total funded debt to consolidated EBITDA, on any unused availability under the credit facility. The base rate equals the higher of (i)the Federal Funds Rate (as defined in the credit facility) plus 1/2 of 1% or (ii)the banks prime rate. The credit facility contains certain covenants, including covenants with respect to maximum funded debt to consolidated EBITDA, maximum senior debt to consolidated EBITDA and minimum interest coverage, in each case as specified in the credit facility. For purposes of calculating the maximum funded debt to consolidated EBITDA ratio and the maximum senior debt to consolidated EBITDA ratio, Quantas maximum funded debt and maximum senior debt are reduced by all cash and cash equivalents (as defined in the credit facility) held by Quanta in excess of $25.0million. As of June30, 2009, Quanta was in compliance with all of its covenants. The credit facility limits certain acquisitions, mergers and consolidations, capital expenditures, asset sales and prepayments of indebtedness and, subject to certain exceptions, prohibits liens on material assets. The credit facility also limits the payment of dividends and stock repurchase programs in any fiscal year except those payments or other distributions payable solely in capital stock. The credit facility provides for customary events of default and carries cross-default provisions with all of Quantas existing subordinated notes, its continuing indemnity and security agreement with its sureties and all of its other debt instruments exceeding $15.0million in borrowings. If an event of default (as defined in the credit facility) occurs and is continuing, on the terms and subject to the conditions set forth in the credit facility, amounts o |
Equity
Equity (Unaudited) | |
6 Months Ended
Jun. 30, 2009 USD / shares | |
Equity Disclosure [Abstract] | |
EQUITY | 8. EQUITY: Treasury Stock Pursuant to the stock incentive plans described in Note5, employees may elect to satisfy their tax withholding obligations upon vesting of restricted stock by having Quanta make such tax payments and withhold a number of vested shares having a value on the date of vesting equal to their tax withholding obligation. As a result of such employee elections, during the six months ended June30, 2008 and 2009, Quanta withheld 179,376 and 189,620shares of Quanta common stock with a total market value of $4.3million and $3.4million for settlement of employee tax liabilities. These shares were accounted for as treasury stock. Also, participants may elect a net settlement upon the exercise of vested stock options. When such election is made, Quanta withholds from the total number of shares of Quanta common stock purchased through the exercise that number of shares of Quanta common stock having a value on the date of exercise equal to the aggregate exercise price. During the six months ended June30, 2009, Quanta withheld and placed into treasury stock 13,213shares of Quanta common stock as a result of the net settlement of stock options. Under Delaware corporate law, treasury stock is not entitled to vote or be counted for quorum purposes. Noncontrolling Interest During the first quarter of 2009, Quanta acquired a 50% interest in a joint venture that qualifies as a variable interest entity under FIN46(R) and has been included on a consolidated basis in the accompanying financial statements as described in Note2. As a result, income attributable to the other joint venture member has been accounted for as a reduction of reported net income to derive net income attributable to the common stockholders of Quanta. Equity in the consolidated assets and liabilities of the joint venture attributable to the other joint venture member has been accounted for as a noncontrolling interest component of total equity in the accompanying balance sheet. Income before income taxes in the condensed consolidated statements of operations includes $0.2million and $0.4million related to the noncontrolling interest for the three and six months ended June30, 2009. The carrying value of the investments held by Quanta and the noncontrolling interest in the variable interest entity were both approximately $0.4million at June30, 2009. There were no changes in equity as a result of transfers (to) from the noncontrolling interest during the period. Comprehensive Income Quantas foreign operations are translated into U.S.dollars, and a translation adjustment is recorded in other comprehensive income (loss) as a result. The following table presents the components of comprehensive income for the periods presented (in thousands): Three Months Ended Six Months Ended June30, June30, 2008 2009 2008 2009 Net income $ 37,668 $ 33,644 $ 59,139 $ 55,134 Foreign currency translation adjustment 185 3,173 (1,017 ) 2,506 |
Segment Information
Segment Information (Unaudited) | |
6 Months Ended
Jun. 30, 2009 USD / shares | |
Segment Information [Abstract] | |
SEGMENT INFORMATION | 9. SEGMENT INFORMATION: Quanta reports its results under three reportable segments: (1)Electric Gas Infrastructure Services, (2)Telecom Ancillary Infrastructure Services and (3)Dark Fiber. These reportable segments represent the aggregation of Quantas operating units based on the divisional structure by which Quantas operations are internally organized. Prior to the second quarter of 2009, Quanta reported its results under two business segments, with all of its operating units, other than the operating unit comprising Dark Fiber, having been aggregated into the Infrastructure Services segment. This change to Quantas segment reporting disclosures provides additional information that is aligned with the divisional responsibilities that management uses to oversee the business. As a result, the former Infrastructure Services segment has been divided into the Electric Gas Infrastructure Services and Telecom Ancillary Infrastructure Services segments. The prior periods presented have been restated to reflect the changed segments. Operating units are organized into divisions based on similarities in the predominant type of work performed (i.e., greater than 50%) by an operating unit at the point in time when the divisional designation is made. These types of work are either electric, gas, telecommunications, ancillary services, or dark fiber licensing and the operating units within each division share similar processes for delivering these services to the same or similar customers within each division. The types of information and internal reports used by management to evaluate results of operations at each operating unit, allocate resources and otherwise manage operating unit performance are similar and support the aggregation of Quantas operating segments along divisional lines. Quanta generally manages its business based on the consolidated results of its operations achieved through the collective performance of its stand-alone operating units. Although Quantas operating units have been aggregated along divisional lines based on their predominant type of work, the range of infrastructure services provided by Quantas operating units is not limited to the predominant type of work within their given segment. While certain of Quantas operating units specialize in providing services to customers within the predominant type of work for their segment, the majority of Quantas operating units provide infrastructure services that encompass types of work provided by both the Electric Gas Infrastructure Services and Telecom Ancillary Infrastructure Services segments or types of work that are considered common to both segments. Regardless of the internal reporting division in which Quantas operating units are included, the predominance of the type of work performed by an individual operating unit can change as the operating unit may expand its service capabilities or develop market opportunities for different types of work. Electric Gas Infrastructure Services Segment The Electric Gas Infrastructure Services segment predominantly provides comprehensive network solutions to customers in the electric power and gas industri |
Commitments and Contingencies
Commitments and Contingencies (Unaudited) | |
6 Months Ended
Jun. 30, 2009 USD / shares | |
Commitments and Contingencies [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 10. COMMITMENTS AND CONTINGENCIES: Joint Venture Contingencies As described in Note2, one of Quantas subsidiaries entered into a joint venture with a third party engineering company during the first quarter of 2009 for the purpose of providing infrastructure services under a contract with a large utility customer. Losses incurred by the joint venture are typically shared equally by the joint venture members. However, under the terms of the joint venture agreement, each member of the joint venture has guaranteed all of the obligations of the joint venture under the contract with the customer and therefore can be liable for full performance of the contract to the customer. Quanta is not aware of circumstances that would lead to future claims against it for material amounts in connection with this performance guarantee. In addition, as described in Note2, another of Quantas subsidiaries began operations during the first quarter of 2009 in a joint venture with a third party for the purpose of providing joint engineering and construction services for the design and installation of fuel storage facilities under a contract with a specific customer. Under the joint venture agreement, the losses incurred by the joint venture are typically shared equally by the joint venture partners. However, the joint venture is a general partnership, and as such, the joint venture partners are jointly and severally liable for all of the obligations of the joint venture, including obligations owed to the customer or any other person or entity. Quanta is not aware of circumstances that would lead to future claims against it for material amounts in connection with its joint and several liability. In each of the above joint venture arrangements, each joint venturer has indemnified the other for any liabilities incurred in excess of the liabilities for which the joint venturer is obligated to bear under the respective joint venture agreement. It is possible, however, that Quanta could be required to pay or perform obligations in excess of its share if the other joint venturer failed or refused to pay or perform its share of the obligations. Quanta is not aware of circumstances that would lead to future claims against it for material amounts that would not be indemnified. Leases Quanta leases certain land, buildings and equipment under non-cancelable lease agreements, including related party leases. The terms of these agreements vary from lease to lease, including some with renewal options and escalation clauses. The following schedule shows the future minimum lease payments under these leases as of June30, 2009 (in thousands): Operating Leases Year Ending December 31 Remainder of 2009 $ 29,195 2010 41,615 2011 31,757 2012 21,317 2013 15,959 Thereafter 16,964 Total minimum lease payments $ 156,807 Rent expense related to operating leases was approximately $26.5million and $54.4million for the three and six months ended June 30, 2009 and approximately $26.3m |