Slide 1: First Quarter 2023 Earnings Call Presentation
First Quarter 2023 Earnings Call Presentation May 4, 2023
Slide 2: Notice to Investors
Notice to Investors This presentation (and oral statements regarding the subject matter of this presentation) includes forward-looking statements intended to qualify under the “safe harbor” from liability established by the Private Securities Litigation Reform Act of 1995. These forward-looking stat
Slide 3: Call Participants and Agenda
Call Participants and Agenda Duke Austin • Introduction and Forward-Looking President and Chief Executive Officer Statements Disclaimer • 1Q23 Results, Operational and Strategic Jayshree Desai Commentary Chief Financial Officer • Financial Review and Discussion Kip Rupp • Outlook Vice President, Inv
Slide 4: First Quarter 2023 Overview
First Quarter 2023 Overview • Quanta selected by Engineering News Record for its highest honor, the Award of Excellence Adj. EBITDA(1) • Good start to the year - on pace to achieve our 2023 Operating Adj. Income EPS(1) expectations $332.4MM • Continued solid execution and profitable growth $125.9MM
Slide 5: Electric Power Infrastructure Solutions
Electric Power Infrastructure Solutions • Another quarter of profitable growth. Reflects solid and safe exec ution and robust demand for our services • Demand for our services driven by grid modernization, grid security, system U.S. EV Penetration and Sales Forecast hardening initiatives, reputation
Slide 6: Renewable Energy Infrastructure Solutions
Renewable Energy Infrastructure Solutions • Utilities and renewable developers continue to lead the energy transition through carbon- reduction and electrification initiatives • Achieving these goals will require substantial incremental investment in transmission, substation and renewable generation
Slide 7: Underground Utility & Infrastructure Solutions
Underground Utility & Infrastructure Solutions • Pleased with 1Q23 performance ◦ Double-digit revenue growth ◦ Record first quarter operating income • Strength from industrial services operations ◦ Solid execution ◦ Strong demand due to end market recovery and pent-up demand from deferred maintenanc
Slide 8: Across Our Portfolio, Megatrends Provide Multiple Paths for Growth
Across Our Portfolio, Megatrends Provide Multiple Paths for Growth SOUND STRATEGY * STRENGTH AND SUSTAINABILITY * FAVORABLE LONG-TERM TRENDS * STRONG FINANCIAL PROFILE 8
Slide 9: 1Q23 Segment Results versus 1Q22
1Q23 Segment Results versus 1Q22 ($M) Revenues Op Inc %(1) Commentary Change (bps) + The increase in revenues was primarily due to growth in spending by our utility customers on grid modernization and Electric hardening, resulting in increased demand for our electric power services, as well as appro
Slide 10: Backlog
Backlog ($B) Backlog • Total backlog as of 1Q23 was a record $25.3B, primarily attributable to additional awards and increases in expected volumes under MSAs. +6.0% over • Twelve-month backlog of $14.6B was 4Q22 also a record, driven by steady, growing demand for our base business solutions. • Backl
Slide 11: Free Cash Flow & DSO
Free Cash Flow & DSO 1st Quarter Recap Free Cash Flow (1) ($M) Days Sales Outstanding (2) (DSO) Free Cash Flow decrease mainly driven by: 1Q22 1Q23 • Elevated levels of working capital related to a large renewable transmission project in Canada and normal season working capital increases required to
Slide 12: Balance Sheet & Liquidity
Balance Sheet & Liquidity December 31, March 31, ($M) 2020 2021 2022 2023 Liquidity Highlights Cash and Cash Equivalents 185 229 429 217 Debt • We expect earnings growth and Credit Facility 149 450 37 197 cash generation to support our Commercial Paper — — 373 599 ability to efficiently de-lever Ter
Slide 13: 2023 Guidance Summary
2023 Guidance Summary GUIDANCE ($M except per share data) Low Mid High Revenues $18,600 $18,850 $19,100 Adj. EBITDA (1) $1,838 $1,895 $1,951 Free Cash Flow (2) $750 $875 $1,000 Net Income (Loss) $688 $725 $762 Diluted EPS (GAAP) $4.62 $4.87 $5.11 Adjusted Diluted EPS (3) $6.75 $7.00 $7.25 INCREASING
Slide 14: Electric Power Solutions Segment Guidance
Electric Power Solutions Segment Guidance Full-Year 2023 Estimated Range 2022 △ Initial Guidance △ 1Q Guidance Revenues + Base business growth led by continued investments supporting = Continued confidence $8.9B grid modernization, $10.0B - $10.1B in robust performance $10.0B - $10.1B hardening and
Slide 15: Renewable Energy Solutions Segment Guidance
Renewable Energy Solutions Segment Guidance Full-Year 2023 Estimated Range 2022 △ Initial Guidance △ 1Q Guidance Revenues + Solid growth compared + Continued growth due $3.8B to prior year with ramp $4.3B - $4.5B to strong 1Q23 and $4.5B - $4.7B in 2H23 new awards Op Inc % (1) + Improved margins wit
Slide 16: Underground Utility & Infrastructure Solutions Segment Guidance
Underground Utility & Infrastructure Solutions Segment Guidance Full-Year 2023 Estimated Range 2022 △ Initial Guidance △ 1Q Guidance Revenues - Lower volumes of larger pipeline projects = Remain confident in $4.4B $4.1B - $4.3B segment revenue $4.1B - $4.3B + Continued base levels business growth Op
Slide 17: Closing Remarks
Closing Remarks • Record revenues and strong performance through the first three months of 2023 give us confidence in our ability to execute at the midpoint of our consolidated range, and provides a path to achieve results at the high end of our range • End markets continue to strengthen, bolstered
Slide 18: Appendix
Appendix • Definitions • Reconciliation Tables • Cautionary Statement About Forward-Looking Statements and Information 18
Slide 19: Definitions
Definitions • Backlog is defined as performance obligations, plus estimated orders under master service agreements, including estimated renewals, and non-fixed price contracts expected to be completed within one year. Quanta’s methodology for determining backlog may not be comparable to the methodol
Slide 20: Definitions
Definitions • Adjusted Earnings Per Share is defined as diluted earnings per share adjusted for the after-tax impact of certain other items, in the current year, as described below: ◦ Non-cash stock-based compensation expense varies period to period due to acquisition activity, changes in the estima
Slide 21: Reconciliation of Adjusted Net Income and Adjusted Diluted Earnings Per Share
Reconciliation of Adjusted Net Income and Adjusted Diluted Earnings Per Share ($000s, except per share information) 2023 FY 2023 GUIDANCE RANGE 1Q Low Mid High Net income attributable to common stock (GAAP as reported) $ 95,046 $ 687,800 $ 724,700 $ 761,600 Adjustments: Acquisition and integration c
Slide 22: Reconciliation of EBITDA and Adjusted EBITDA
Reconciliation of EBITDA and Adjusted EBITDA ($000s) 2023 FY 2023 GUIDANCE RANGE 1Q Low Mid High Net income attributable to common stock (GAAP as reported) $ 95,046 $ 687,800 $ 724,700 $ 761,600 Interest and other financing expenses, net 40,177 147,000 150,000 153,000 (Benefit from) provision for in
Slide 23: Reconciliation of Free (Negative Free) Cash Flow
Reconciliation of Free (Negative Free) Cash Flow ($000s) 2022 2023 FY 2023 GUIDANCE RANGE 1Q 1Q Low Mid High Net cash provided by operating activities (GAAP as reported) $ 85,090 $ 38,409 $ 1,150,000 $ 1,275,000 $ 1,400,000 Less: Net capital expenditures: Capital expenditures (109,937) (80,319) (400
Slide 24: Reconciliation of Backlog
Reconciliation of Backlog (In thousands) March 31, 2022 December 31, 2022 March 31, 2023 12 Month Total 12 Month Total 12 Month Total Electric Power Infrastructure Solutions Remaining performance obligations $ 2,071,266 $ 2,731,572 $ 2,124,820 $ 3,033,472 $ 2,420,570 $ 3,986,724 Estimated orders und
Slide 25: Cautionary Statement About Forward-Looking Statements and Information
Cautionary Statement About Forward-Looking Statements and Information This presentation (and oral statements regarding the subject matter of this presentation) contains forward-looking statements intended to qualify for the “safe harbor” from liability established by the Private Securities Litigatio
Slide 26: Cautionary Statement About Forward-Looking Statements and Information
Cautionary Statement About Forward-Looking Statements and Information • Market, industry, economic, financial or political conditions that are outside of the control of Quanta, including economic, energy, infrastructure and environmental policies that are adopted or proposed by the U.S. federal and
Slide 27: Cautionary Statement About Forward-Looking Statements and Information
Cautionary Statement About Forward-Looking Statements and Information • The failure of existing or potential legislative actions and initiatives to result in increased demand for our services or budgetary or other constraints that may reduce or eliminate tax incentives or government funding for proj
Slide 28: Connect With Quanta Services Investor Relations
Connect With Quanta Services Investor Relations @QuantaIR QuantaServicesIR Investor Contact Corporate Office Kip Rupp, CFA, IRC 2727 North Loop West Vice President – Investor Relations Houston, TX 77008 713-341-7260 713-629-7600 investors@quantaservices.com www.quantaservices.com 28