Slide 1: Second Quarter 2021 Earnings Call Presentation
Second Quarter 2021 Earnings Call Presentation August 5, 2021
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 • 2Q21 Results, Operational and Strategic Derrick Jensen Commentary Chief Financial Officer • Financial Review and Discussion Kip Rupp • Outlook Vice President, Inv
Slide 4: Second Quarter 2021 Overview
Second Quarter 2021 Overview *Adj. • Solid start to 2021 EBITDA(1) *Operating *Adj. EPS(1) • Record backlog(1) of $17 billion Income $281.3MM ◦ Reflects collaboration with customers and advancement of long-term strategies $161.7MM $1.06 • Multi-year growth opportunities driven by solutions- Cash fro
Slide 5: Electric Power Infrastructure Solutions
Electric Power Infrastructure Solutions • Another strong quarter of profitable growth • Reflects solid and safe execution and demand for our services driven by grid modernization, system hardening and renewable interconnections • Backlog driven by multi-year master services agreements (MSAs) • Seein
Slide 6: Communications Infrastructure Solutions
Communications Infrastructure Solutions • Operations performed well in 2Q21 as we continue to profitably scale and grow the business • As previously discussed, a subcontractor challenge experienced in 1Q21 was an isolated issue that did not continue in 2Q21 • On track to achieve high single-digit or
Slide 7: Underground Utility & Infrastructure Solutions
Underground Utility & Infrastructure Solutions • Performed well, with the exception of a provision for Focus on Base Business Focus Services credit loss related to receivables owed by a Pipeline Gas Utility customer, that recently declared bankruptcy, and its Base Business Revenues Integrity affilia
Slide 8: Encouraged By Bipartisan Infrastructure Proposal Progress
Encouraged By Bipartisan Infrastructure Proposal Progress • Infrastructure modernization is necessary to support economic growth, to improve safety and reliability and for a cleaner environment • The bipartisan infrastructure proposal could incrementally benefit several of our core markets, includin
Slide 9: Increasing 2021 Outlook; Positive Multi-Year Outlook
Increasing 2021 Outlook; Positive Multi-Year Outlook • Increasing Quanta's full-year 2021 outlook given increased confidence in core utility-based operations • Expectations demonstrate the strength and sustainability of our business and long-term strategy, favorable end-market trends, our ability to
Slide 10: 2Q21 Segment Results versus 2Q20
2Q21 Segment Results versus 2Q20 ($MMs) Revenues Op Inc % Commentary Change (bps) + Revenue increase was driven by continued growth in base business activities as well as contributions from larger transmission Electric projects and revenues from acquired businesses of approximately $70 million. Reve
Slide 11: Backlog
Backlog (1) ($B) Total Backlog +12% • Record total backlog of $17.0B at the end of the second quarter, which is 12% higher than backlog at year-end and 22% higher than $17.0 backlog at the end of the second quarter of 2020, driven by several multi-year MSA $15.1 programs with utility customers signe
Slide 12: Free Cash Flow & DSO
Free Cash Flow & DSO Free Cash Flow (1) ($MMs) Days Sales Outstanding (2) (DSO) 2nd Quarter Recap 2Q20 2Q21 Free Cash Flow decrease driven by: • 2Q20 free cash flow was elevated due to substantial revenue reduction and $457 corresponding reduction of working capital, plus the benefit associated with
Slide 13: Balance Sheet & Liquidity
Balance Sheet & Liquidity December 31, June 30, ($MMs) 2018 2019 2020 2021 Cash and Cash Equivalents 79 165 185 212 Liquidity Highlights Debt Credit Facility 479 105 149 323 • Ample liquidity and investment grade Term Loans 593 1,241 — — credit rating allow management to Senior Notes — — 1,000 1,000
Slide 14: Capital Allocation Priorities
Capital Allocation Priorities Capital Deployment – 2016 thru 2Q21 ($MMs) Capital Allocation • Working capital and capex required to support organic growth of the business remain our first priorities and have been Working Capital & CapEx, net of sales Working Capital $732 Capex $1,261 the largest use
Slide 15: Electric Power Solutions Segment Guidance
Electric Power Solutions Segment Guidance 2021 ESTIMATED RANGE Initial 2020 1Q Guidance 2Q Guidance Guidance + Strong first quarter + Strong results from the first half Revenues + Continued base results electric growth + Continued of the year + Continued U.S. confidence in + Continued $7.8B te
Slide 16: Underground Utility & Infrastructure Solutions Segment Guidance
Underground Utility & Infrastructure Solutions Segment Guidance 2021 ESTIMATED RANGE Initial 2020 1Q Guidance 2Q Guidance Guidance + Gas distribution and maintenance Revenues and integrity - Lack of visibility growth opportunity $3.65B - = In line with original $3.65B - into second-half $3.50B
Slide 17: 2021 Guidance Summary
2021 Guidance Summary ($MMs except per share data) LOW MIDPOINT HIGH Revenues $12,200 $12,325 $12,450 Adj. EBITDA (1) $1,133 $1,169 $1,206 Free Cash Flow (2) $400 $500 $600 Net Income $491 $517 $543 Diluted EPS (GAAP) $3.40 $3.58 $3.76 Adjusted Diluted EPS (3) $4.32 $4.50 $4.68 INCREASING MIDPOINT E
Slide 18: Closing Remarks
Closing Remarks • Utility-based operations continue to execute at a high level and are well positioned to deliver solutions to meet the expanding capital and maintenance programs of our North American utility partners • Continued backlog growth and increasing visibility into the duration of this inf
Slide 19: Appendix
Appendix • Definitions • Reconciliation Tables • Forward Looking Statement Disclaimers 19
Slide 20: 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 21: Definitions
Definitions • Adjusted Earnings per Share is defined as diluted earnings per share adjusted for the after-tax impact of certain other items as described below: ◦ Non-cash stock-based compensation expense may vary period do period due to acquisition activity, changes in the estimated fair value of pe
Slide 22: Reconciliation of EBITDA and Adjusted EBITDA
Reconciliation of EBITDA and Adjusted EBITDA ESTIMATED GUIDANCE RANGE ($000s) 2021 FY 2021 2Q Low Mid High Net income attributable to common stock (GAAP as reported) $ 117,033 $ 491,000 $ 516,900 $ 542,800 Interest expense, net 10,200 47,000 47,000 47,000 Provision for income taxes 40,951 158,200 16
Slide 23: Reconciliation of Adjusted Net Income and Adjusted Diluted Earnings per Share
Reconciliation of Adjusted Net Income and Adjusted Diluted Earnings per Share ESTIMATED GUIDANCE RANGE ($000s, except per share information) 2021 FY 2021 2Q Low Mid High Reconciliation of adjusted net income attributable to common stock: Net income attributable to common stock (GAAP as reported) $ 1
Slide 24: Reconciliation of Backlog
Reconciliation of Backlog ($MMs) June 30, 2020 December 31, 2020 June 30, 2021 12 Month Total 12 Month Total 12 Month Total Electric Power Infrastructure Solutions Remaining performance obligations $ 2,490.8 $ 3,812.8 $ 2,511.2 $ 3,547.8 $ 2,670.9 $ 3,606.6 Estimated orders under MSAs and short-term
Slide 25: Reconciliation of Free Cash Flow
Reconciliation of Free Cash Flow ESTIMATED GUIDANCE RANGE ($000s) 2020 2021 FY 2021 2Q 2Q Low Mid High Net cash provided by operating activities (GAAP as reported) $ 497,479 $ 188,948 $ 725,000 $ 825,000 $ 925,000 Less: Net capital expenditures: Capital expenditures (48,148) (74,898) (325,000) (325,
Slide 26: Cautionary Statement About Forward-Looking Statements
Cautionary Statement About Forward-Looking Statements 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 Litigation Reform Act of
Slide 27: Cautionary Statement About Forward-Looking Statements
Cautionary Statement About Forward-Looking Statements • Quarterly variations in operating results, liquidity, financial condition, cash flows, capital requirements and reinvestment opportunities, including the ongoing and potential impact to Quanta's business, operations and supply chains of the COV
Slide 28: Cautionary Statement About Forward-Looking Statements
Cautionary Statement About Forward-Looking Statements • Fluctuations of prices of certain materials used in Quanta’s or its customers' businesses, including as a result of the imposition of tariffs, governmental regulations affecting the sourcing of certain materials and equipment and other changes
Slide 29: Connect With Quanta Services Investor Relations
Connect With Quanta Services Investor Relations @QuantaIR QuantaServicesIR Investor Contact Corporate Office Kip Rupp, CFA 2800 Post Oak Blvd., Suite 2600 Vice President – Investor Relations Houston, TX 77056 713-341-7260 713-629-7600 investors@quantaservices.com www.quantaservices.com 29