Quanta Services PWR · USD

SEGMENT INFORMATION: Quanta’s operations are managed by senior executives who report to its Chief Executive Officer, the chief operating decision maker. The Chief Executive Officer uses operating income for each of Quanta’s reportable segments and considers forecast to actual variances to assess performance and when making decisions about allocating capital, craft skill labor and other resources. During the three months ended March 31, 2025, Quanta’s Chief Executive Officer reevaluated how performance of the business is assessed and how resources are allocated, which resulted in a change in the reporting of management’s internal financial information. As a result, beginning with the three months ended March 31, 2025, Quanta began reporting the results of its two operating segments, which are also its two reportable segments: (1) Electric Infrastructure Solutions (Electric) and (2) Underground Utility and Infrastructure Solutions (Underground and Infrastructure). The Electric segment consists of the historical Electric Power Infrastructure Solutions and the Renewable Energy Infrastructure Solutions segments. In conjunction with this change, certain prior period amounts have been recast to conform to this new segment reporting structure.Electric. Quanta’s Electric segment provides comprehensive services for the electric power, power generation, large load center and communications markets. Services include, but are not limited to, the design, procurement, new construction, upgrade and repair and maintenance services for electric power transmission and distribution infrastructure, both overhead and underground, and substation facilities, along with other engineering and technical services, including services that support the implementation of upgrades by utilities to modernize and harden the electric power grid in order to ensure its safety and enhance reliability, to interconnect and transmit electricity from power generation and battery storage facilities and to accommodate increased residential and commercial use of electric vehicles.

REVENUE RECOGNITION AND RELATED BALANCE SHEET ACCOUNTS:ContractsQuanta’s services include the design, new construction, upgrade and repair and maintenance of infrastructure primarily in the electric and gas utility, renewable energy, technology, communications, pipeline and energy industries. These services are generally provided pursuant to master service agreements (MSAs), repair and maintenance contracts, and fixed price and non-fixed price construction contracts. Contracts are combined if they are entered into at or near the same time as one another and negotiated as a group, in contemplation of one another, for a related commercial purpose. When applicable, the transaction price is allocated to performance obligations on the basis of relative standalone selling prices that is generally determined using an expected profit margin on anticipated costs related to the performance obligation. Quanta’s contracts are classified into three categories based on the methods by which transaction prices are determined and revenue is recognized: unit-price contracts, cost-plus contracts and fixed price contracts. Transaction prices for unit-price contracts are determined on a per unit basis, transaction prices for cost-plus contracts are determined by applying a profit margin to costs incurred on the contracts and transaction prices for fixed price contracts are determined on a lump-sum basis. All of Quanta’s revenues are recognized from contracts with its customers. In addition to the considerations described below, revenue is not recognized unless collectability under the contract is considered probable, the contract has commercial substance and the contract has been approved. Additionally, the contract must contain payment terms, as well as the rights and commitments of both parties.Performance Obligations A performance obligation is a promise in a contract with a customer to transfer a distinct good or service. Most of Quanta’s contracts are considered to have a single performance obligation whereby Quanta is required to integrate complex activities and equipment into a deliverable for a customer. For contracts with multiple performance obligations, Quanta allocates a portion of the total transaction price to each performance obligation using its best estimate of the standalone selling price of the distinct good or service associated with each performance obligation. Standalone selling price is estimated using the expected costs plus a margin.

COMMITMENTS AND CONTINGENCIES:Legal ProceedingsQuanta is 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, property damage, breach of contract, negligence or gross negligence, environmental liabilities, wage and hour and other employment-related damages, punitive damages, consequential damages, civil penalties or other losses, or injunctive or declaratory relief, as well as interest and attorneys’ fees associated with such claims. With respect to all such lawsuits, claims and proceedings, Quanta records a reserve when it is probable that a liability has been incurred and the amount of loss can be reasonably estimated. In addition, Quanta discloses matters for which management believes a material loss is at least reasonably possible. The assessment of whether a loss is probable or reasonably possible, and whether the loss or a range of loss is estimable, often involves a series of complex judgments about future events. In all instances, management has assessed the matter based on current information and made a judgment concerning its potential outcome, giving due consideration to the nature of the claim, the amount and nature of damages sought and the probability of success and taking into account, among other things, negotiations with claimants, discovery, settlements and payments, judicial rulings, arbitration and mediation decisions, advice of internal and external legal counsel, and other information and events pertaining to a particular matter. Costs incurred for litigation are expensed as incurred. Except as otherwise stated below, none of these proceedings are expected to have a material adverse effect on Quanta’s consolidated financial position, results of operations or cash flows. However, management’s judgment may prove materially inaccurate, and such judgment is made subject to the known uncertainties of litigation.Silverado Wildfire Matter From 2022 to present, two of Quanta’s subsidiaries have received tenders of defense and demands for preservation of evidence from Southern California Edison Company (SCE) related to lawsuits filed against SCE and T-Mobile USA, Inc. (T-Mobile) in the Superior Court of California, County of Orange.

DEBT OBLIGATIONS:Quanta’s long-term debt obligations consisted of the following (in thousands): December 31, 202520244.75% Senior Notes due August 2027$600,000 $600,000 4.30% Senior Notes due August 2028500,000 — 2.90% Senior Notes due October 20301,000,000 1,000,000 4.50% Senior Notes due January 2031500,000 — 2.35% Senior Notes due January 2032500,000 500,000 5.25% Senior Notes due August 2034650,000 650,000 5.10% Senior Notes due August 2035500,000 — 3.05% Senior Notes due October 2041500,000 500,000 Borrowings under senior credit facility (including Term Loan)675,000 735,445 Borrowings under commercial paper program316,000 — Lease financing transactions198,847 155,549 Other long-term debt2,761 4,939 Finance leases93,055 47,993 Unamortized discount and financing costs(40,757)(31,490)Total long-term debt obligations5,994,906 4,162,436 Less — Current maturities of long-term debt763,898 62,680 Total long-term debt obligations, net of current maturities$5,231,008 $4,099,756 As of December 31, 2025, principal payments required to be made during the next five years are set forth in the table below (in thousands). The payments required under finance leases are provided in Note 11.2026$689,829 2027$615,086 2028$511,556 2029$9,026 2030$1,321,920 Senior Notes In August 2025, Quanta issued $1.50 billion aggregate principal amount of senior notes consisting of $500.0 million aggregate principal amount of 4.30% senior notes due August 2028 (the 2028 notes), $500.0 million aggregate principal amount of 4.50% senior notes due January 2031 (the 2031 notes) and $500.0 million aggregate principal amount of 5.10% senior notes due August 2035 (the 2035 notes). The cumulative proceeds from the public offering of the 2028 notes, 2031 notes and 2035 notes were $1.48 billion, net of the original issue discount, underwriting discounts and deferred financing costs, and were used to repay indebtedness, including certain commercial paper borrowings and revolving loans under Quanta’s senior credit facility that were utilized primarily to acquire Dynamic Systems.In August 2024, Quanta issued $1.25 billion aggregate principal amount of senior notes consisting of $600.0 million aggregate principal amount of 4.75% senior notes due August 2027 (the 2027 notes) and $650.0 million aggregate principal amount of 5.25% senior notes due August 2034 (the 2034 notes). The cumulative proceeds from the public offering of the 2027 notes and 2034 notes were $1.

INCOME TAXES:The components of income before income taxes were as follows (in thousands): Year Ended December 31, 202520242023Income before income taxes: Domestic$1,238,190 $1,052,185 $823,691 Foreign151,315 159,845 146,265 Total$1,389,505 $1,212,030 $969,956 The components of the provision for income taxes were as follows (in thousands): Year Ended December 31, 202520242023Current: Federal$184,159 $185,357 $132,727 State58,955 55,691 42,783 Foreign66,871 52,024 39,941 Total current tax provision309,985 293,072 215,451 Deferred:Federal62,992 34,498 16,055 State6,201 14,556 (556)Foreign(31,590)(57,379)(11,683)Total deferred tax provision (benefit)37,603 (8,325)3,816 Total provision for income taxes$347,588 $284,747 $219,267 There was no tax on foreign currency translation adjustment within other comprehensive income (loss) for the years ended December 31, 2025, 2024 and 2023.The actual income tax provision differed from the income tax provision computed by applying the U.S. federal statutory corporate rate to income before provision for income taxes as follows (in thousands, except percentages):Year Ended December 31, 2025AmountPercentage of Pre-Tax IncomeU.S. federal statutory tax rate$291,796 21.0 %State and local income tax, net of federal (national) income tax effect (1)53,215 3.8 Foreign tax effects(2,973)(0.2)Effect of cross-border tax laws14,163 1.0 Tax credits(11,408)(0.8)Changes in valuation allowances51 — Nontaxable or nondeductible items: Employee per diems, meals and entertainment35,710 2.6 Share-based payment awards(23,662)(1.7) Other(10,977)(0.8)Changes in unrecognized tax benefits3,030 0.2 Other adjustments(1,357)(0.1)Total provision for income taxes and effective tax rate$347,588 25.0 %(1) State taxes in California, Florida, Illinois, Indiana, Iowa, New Mexico, New York, Texas and Wisconsin made up the majority (greater than 50 percent) of the tax effect in this category.

STOCK-BASED COMPENSATION:Stock Incentive PlansThe Omnibus Plan was approved by Quanta’s stockholders in May 2019 and provides for the award of non-qualified stock options, incentive (qualified) stock options, stock appreciation rights, restricted stock awards, RSUs, stock bonus awards, performance compensation awards (including cash bonus awards) or any combination of the foregoing. Current and prospective employees, directors, officers, advisors or consultants of Quanta or its affiliates are eligible to participate in the Omnibus Plan. In May 2022 and May 2025, Quanta’s stockholders approved amendments to the Omnibus Plan to increase the shares available for issuance. Subject to certain adjustments, the maximum number of shares available for issuance under the Omnibus Plan is 14.1 million. As of December 31, 2025, there were approximately 5.1 million shares available for issuance under the Omnibus Plan. All awards subsequent to stockholder approval of the Omnibus Plan have been and will be made pursuant to the Omnibus Plan and applicable award agreements.RSUs to be Settled in Common StockA summary of the activity for RSUs to be settled in common stock for the years ended December 31, 2025, 2024 and 2023 is as follows (RSUs in thousands):202520242023RSUsWeighted AverageGrant Date Fair Value(Per Unit)RSUsWeighted AverageGrant Date Fair Value(Per Unit)RSUsWeighted AverageGrant Date Fair Value(Per Unit)Unvested at January 12,024 $173.322,548 $104.763,263 $78.74Granted638 $302.14857 $246.34684 $161.81Vested(759)$154.01(1,216)$82.86(1,268)$68.06Forfeited(149)$192.97(165)$165.14(131)$116.29Unvested at December 311,754 $226.392,024 $173.322,548 $104.76The approximate fair value of RSUs that vested during the years ended December 31, 2025, 2024 and 2023 was $228.1 million, $316.4 million and $208.0 million, respectively. During the years ended December 31, 2025, 2024 and 2023, Quanta recognized $141.4 million, $114.0 million and $94.5 million of non-cash stock compensation expense related to RSUs to be settled in common stock. As of December 31, 2025, there was $238.3 million of total unrecognized compensation expense related to unvested RSUs to be settled in common stock granted to both employees and non-employees. This cost is expected to be recognized over a weighted average period of 2.44 years.

LEASES:Quanta primarily leases land, buildings, vehicles, construction equipment and office equipment. As of December 31, 2025, the majority of Quanta’s leases had remaining lease terms of less than 11 years. Certain leases include options to extend their terms in increments of up to ten years and/or options to terminate. The components of lease costs in the accompanying consolidated statements of operations are as follows (in thousands): Year Ended December 31,Lease and lease financing costClassification202520242023Finance lease cost:Amortization of lease assetsDepreciation (1)$12,321 $11,462 $4,944 Interest on lease liabilitiesInterest and other financing expenses2,445 2,798 1,463 Lease financing transactions:(2)DepreciationDepreciation (1)13,092 10,396 7,698 InterestInterest and other financing expenses27,505 17,600 12,992 Operating lease costCost of services and Selling, general and administrative expenses129,611 108,879 93,133 Short-term and variable lease cost (3)Cost of services and Selling, general and administrative expenses1,483,281 1,245,011 1,106,454 Total lease and lease financing cost $1,668,255 $1,396,146 $1,226,684 (1) Depreciation is included within “Cost of services” and “Selling, general and administrative expenses” in the accompanying consolidated statements of operations.(2) Certain of Quanta’s equipment rental agreements contain purchase options pursuant to which the purchase price is offset by a portion of the rental payments. When these purchase options are exercised by a third-party lessor on behalf of Quanta, the transaction is deemed to be a financing transaction for accounting purposes, which results in the recognition of an asset equal to the purchase price and a corresponding liability.(3) Short-term lease cost includes both leases and rentals with initial terms of one year or less. Variable lease cost is insignificant.Quanta has entered into arrangements with certain related parties to lease real and personal property and facilities. Typically, the parties are employees of Quanta who are also the former owners of businesses acquired by Quanta, and the real property and facilities continue to be utilized by Quanta subsequent to the acquisitions. Quanta utilizes third-party market valuations to evaluate rental rates for these properties and facilities, and the lease agreements generally have remaining lease terms of up to 11 years, subject to renewal options. Related party lease expense was $27.2 million, $18.7 million and $16.

ACQUISITIONS:On July 25, 2025, Quanta completed the acquisition of Dynamic Systems (DSI), LLC (Dynamic Systems), which provides turnkey mechanical, plumbing and process infrastructure solutions to a diversified customer base that includes technology, semiconductor, healthcare and other load center markets. Dynamic Systems is located in the United States, and its results have been primarily included in the Underground and Infrastructure segment. The consideration for the acquisition included approximately $1.26 billion in cash (subject to certain adjustments and including payment for cash held by Dynamic Systems as of the acquisition date) and 518,772 shares of Quanta common stock, which had a fair value of $218.8 million as of the acquisition date. Additionally, the former owner of Dynamic Systems is eligible for a potential contingent consideration payment of up to $216.0 million to the extent the acquired business achieves certain financial and other operating performance targets during a two-year post-acquisition period beginning in January 2026. To the extent payable, Quanta, at its sole discretion, can pay 15% of any such contingent consideration amount in Quanta common stock. The final amount of consideration for the acquisition remains subject to certain post-closing adjustments, including with respect to net working capital (inclusive of cash) and certain assumed liabilities.