Slide 1: Third Quarter 2022 Earnings Call Presentation
Third Quarter 2022 Earnings Call Presentation November 3, 2022
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 • 3Q22 Results, Operational and Strategic Jayshree Desai Commentary Chief Financial Officer • Financial Review and Discussion Kip Rupp • Outlook Vice President, Inv
Slide 4: Third Quarter 2022 Overview
Third Quarter 2022 Overview • Another solid quarter, which included multiple record financial metrics *Adj. EBITDA(1) • Continued solid execution and profitable growth *Operating *Adj. Income EPS(1) • Record total backlog(1) of $20.9 billion $467.4MM ◦ Opportunity for new levels of record total back
Slide 5: Electric Power Infrastructure Solutions
Electric Power Infrastructure Solutions • Another solid quarter of profitable growth. Reflects solid and safe execution and robust demand for our services • Successfully managing through supply chain challenges causing resource utilization inefficiencies and limited work delays ◦ Continue to collabo
Slide 6: Renewable Energy Infrastructure Solutions
Renewable Energy Infrastructure Solutions • Closed on Blattner acquisition ~1 year ago and are even more excited today about our solutions offering to customers and growth opportunities ◦ We're just getting started! • Segment performed well overall during the third quarter, despite external challeng
Slide 7: Inflation Reduction Act of 2022
Inflation Reduction Act of 2022 Estimated US Federal Tax Incentives for Energy Investment Estimated Annual U.S. Wind, Solar and Storage Capacity Additions Source: US Department of Treasury, Congressional Budget Office, Goldman Sachs Global Investment Source: BloombergNEF Research IRA EXPECTED TO DRI
Slide 8: Underground Utility & Infrastructure Solutions
Underground Utility & Infrastructure Solutions • Continued strong segment revenue and margin Projected North America Green Hydrogen Demand(1) performance in the third quarter • Strength from industrial services operations vs 3Q21 ◦ Solid execution ◦ Strong demand as end markets recover and two years
Slide 9: 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 9
Slide 10: Planning and Investing For A Bright Future
Planning and Investing For A Bright Future Quanta is investing in the resources necessary to meet our customers' future needs and capitalize on the large and visible opportunities ahead of us Sources: Utility company materials Multi-Year, Transmission, Distribution and Renewable Energy Programs Will
Slide 11: Solid Year-to-Date 2022 Performance and Positive Multi-Year Outlook
Solid Year-to-Date 2022 Performance and Positive Multi-Year Outlook • Year-to-date 2022 performance and full-year expectations demonstrate our confidence in the strength and sustainability of our business and long-term strategy, favorable end-market trends, our ability to safely execute and our stro
Slide 12: 3Q22 Segment Results versus 3Q21
3Q22 Segment Results versus 3Q21 ($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 hardening, resulting in increased demand for our electric power services, as well as approximately
Slide 13: Backlog
Backlog ($B) Backlog • Total backlog as of 3Q22 was a record $20.9B, primarily attributable to additional awards and an increase in expected volumes under MSAs +7.4% over • Twelve-month backlog of $12.4B was 2Q22 also a record, driven by steady, growing demand for our base business solutions. (1) (1
Slide 14: Free Cash Flow & DSO
Free Cash Flow & DSO 3rd Quarter Recap Free Cash Flow (1) ($M) Days Sales Outstanding (2) (DSO) Free Cash Flow increase mainly driven by: 3Q21 3Q22 • The collection of a significant portion of the receivables associated with the large Canadian electric transmission project discussed in prior quarter
Slide 15: Balance Sheet & Liquidity
Balance Sheet & Liquidity December 31, September 30, ($M) 2019 2020 2021 2022 Liquidity Highlights Cash and Cash Equivalents 165 185 229 215 Debt • During the quarter we commenced Credit Facility 105 149 450 202 a commercial paper program, which Commercial Paper — — — 400 is backstopped by our credi
Slide 16: Electric Power Solutions Segment Guidance
Electric Power Solutions Segment Guidance Full-Year 2022 Estimated Range 2021 △ 2Q Guidance △ 3Q Guidance + Base business growth + Robust demand for Revenues + Communications growth electric and communications $7.6B - Reduced emergency $8.5B - $8.6B services $8.8B - $8.9B restoration services + Cont
Slide 17: Renewable Energy Solutions Segment Guidance
Renewable Energy Solutions Segment Guidance Full-Year 2022 Estimated Range 2021 △ 2Q Guidance △ 3Q Guidance Revenues + Full year revenue contribution from - Near term delays $1.8B Blattner with continued $4.0B - $4.2B shifting project start ~$3.8B demand for renewable dates into 2023 infrastructure
Slide 18: Underground Utility & Infrastructure Solutions Segment Guidance
Underground Utility & Infrastructure Solutions Segment Guidance Full-Year 2022 Estimated Range 2021(2) △ 2Q Guidance △ 3Q Guidance + Industrial services Revenues recovery + Strengthening full year expectation based on + Increased Canadian performance through $3.5B operations revenues $4.1B - $4.2B 3
Slide 19: 2022 Guidance Summary
2022 Guidance Summary GUIDANCE ($M except per share data) Low Mid High Revenues $16,800 $16,900 $17,000 Adj. EBITDA (1) $1,645 $1,670 $1,696 Free Cash Flow (2) $600 $650 $700 Net Income (Loss) $473 $490 $507 Diluted EPS (GAAP) $3.19 $3.31 $3.43 Adjusted Diluted EPS (3) $6.15 $6.27 $6.39 REITERATING
Slide 20: Closing Remarks
Closing Remarks • With solid execution through the first nine months of 2022 and the strength of our portfolio of solutions, we remain confident in our ability to execute within a tightened range of our previous expectations • End markets continue to strengthen, bolstered by continued utility invest
Slide 21: Appendix
Appendix • Definitions • Reconciliation Tables • Cautionary Statement About Forward-Looking Statements and Information 21
Slide 22: 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 23: 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 to period due to acquisition activity, changes in the estimated fair value of pe
Slide 24: 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) 2022 FY 2022 GUIDANCE RANGE 3Q Low Mid High Reconciliation of adjusted net income attributable to common stock: Net income attributable to common stock (GAAP as reported) $ 155,956 $ 4
Slide 25: Reconciliation of EBITDA and Adjusted EBITDA
Reconciliation of EBITDA and Adjusted EBITDA ($000s) 2022 FY 2022 GUIDANCE RANGE 3Q Low Mid High Net income attributable to common stock (GAAP as reported) $ 155,956 $ 472,700 $ 490,000 $ 507,300 Interest expense, net 33,130 121,000 121,500 122,000 Provision for income taxes 72,890 183,600 191,200 1
Slide 26: Reconciliation of Free Cash Flow
Reconciliation of Free Cash Flow ($000s) 2021 2022 FY 2022 GUIDANCE RANGE 3Q 3Q Low Mid High Net cash provided by operating activities (GAAP as reported) $ 17,876 $ 343,362 $ 1,000,000 $ 1,050,000 $ 1,100,000 Less: Net capital expenditures: (57,926) (87,741) (400,000) (400,000) (400,000) Free Cash F
Slide 27: Reconciliation of Backlog
Reconciliation of Backlog (In thousands) September 30, 2021 June 30, 2022 September 30, 2022 12 Month Total 12 Month Total 12 Month Total Electric Power Infrastructure Solutions Remaining performance obligations $ 1,884,602 $ 2,537,921 $ 2,149,469 $ 2,779,227 $ 2,207,737 $ 2,854,847 Estimated orders
Slide 28: 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 29: 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, among other things, inflation, interest rates, recessionary economic conditions, and geopolitical conflicts, pol
Slide 30: 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; • The future development of natural resources; • Unavailability of, or increased prices for, materials, equ
Slide 31: 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 31