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SEGMENT INFORMATION:
 9 Months Ended
Sep. 30, 2012
SEGMENT INFORMATION:

11.    SEGMENT INFORMATION:

Quanta presents its operations under four reportable segments: (1) Electric Power Infrastructure Services, (2) Natural Gas and Pipeline Infrastructure Services, (3) Telecommunications Infrastructure Services and (4) Fiber Optic Licensing. This structure is generally focused on broad end-user markets for Quanta’s services. See Note 1 for additional information regarding Quanta’s reportable segments.

Quanta’s segment results are derived from the types of services provided across its operating units in each of the end user markets described above. Quanta’s entrepreneurial business model allows each of its operating units to serve the same or similar customers and to provide a range of services across end user markets. Quanta’s operating units are organized into one of three internal divisions, namely, the electric power division, natural gas and pipeline division and telecommunications division. These internal divisions are closely aligned with the reportable segments described above based on their operating units’ predominant type of work, with the operating units providing predominantly telecommunications and fiber optic licensing services being managed within the same internal division.

Reportable segment information, including revenues and operating income by type of work, is gathered from each operating unit for the purpose of evaluating segment performance in support of Quanta’s market strategies. These classifications of Quanta’s operating unit revenues by type of work for segment reporting purposes can at times require judgment on the part of management. Quanta’s operating units may perform joint infrastructure service projects for customers in multiple industries, deliver multiple types of network services under a single customer contract or provide services across industries, for example, joint trenching projects to install distribution lines for electric power, natural gas and telecommunications customers.

In addition, Quanta’s integrated operations and common administrative support at each of its operating units requires certain allocations, including allocations of shared and indirect costs, such as facility costs, indirect operating expenses, including depreciation, and general and administrative costs, to determine operating segment profitability. Corporate costs, such as payroll and benefits, employee travel expenses, facility costs, professional fees, acquisition costs and amortization related to certain intangible assets are not allocated.

 

Summarized financial information for Quanta’s reportable segments is presented in the following tables (in thousands):

 

     Three Months Ended
September 30,		     Nine Months Ended
September 30,		  
     2012     2011     2012     2011  

Revenues:

         

Electric Power

    $ 1,089,256      $ 822,689      $ 3,037,000      $ 2,056,232   

Natural Gas and Pipeline

      397,459        259,014        1,096,247        645,495   

Telecommunications

      169,858        140,679        409,436        326,494   

Fiber Optic Licensing

      28,628        28,437        84,391        82,471   
  

 

 

    

 

 

    

 

 

    

 

 

  

Consolidated

    $ 1,685,201      $ 1,250,819      $ 4,627,074      $ 3,110,692   
  

 

 

    

 

 

    

 

 

    

 

 

  

Operating income (loss):

         

Electric Power

    $ 136,378      $ 100,199      $ 356,863      $ 198,661   

Natural Gas and Pipeline

      23,207        (4,035 )      27,498        (42,263 ) 

Telecommunications

      22,224        15,832        44,420        21,238   

Fiber Optic Licensing

      14,092        14,231        42,919        39,448   

Corporate and non-allocated costs

      (50,247 )      (32,246 )      (135,424 )      (92,289 ) 
  

 

 

    

 

 

    

 

 

    

 

 

  

Consolidated

    $ 145,654      $ 93,981      $ 336,276      $ 124,795   
  

 

 

    

 

 

    

 

 

    

 

 

  

Depreciation:

         

Electric Power

    $ 14,075      $ 12,474      $ 40,907      $ 37,080   

Natural Gas and Pipeline

      11,137        10,332        32,187        31,020   

Telecommunications

      1,971        1,526        5,556        4,412   

Fiber Optic Licensing

      3,568        3,468        10,446        10,321   

Corporate and non-allocated costs

      1,692        1,335        4,990        3,666   
  

 

 

    

 

 

    

 

 

    

 

 

  

Consolidated

    $ 32,443      $ 29,135      $ 94,086      $ 86,499   
  

 

 

    

 

 

    

 

 

    

 

 

  

Separate measures of Quanta’s assets and cash flows by reportable segment, including capital expenditures, are not produced or utilized by management to evaluate segment performance. Quanta’s fixed assets which are held at the operating unit level, including operating machinery, equipment and vehicles, as well as office equipment, buildings and leasehold improvements, are used on an interchangeable basis across its reportable segments. As such, for reporting purposes, total depreciation expense is allocated each quarter among Quanta’s reportable segments based on the ratio of each reportable segment’s revenue contribution to consolidated revenues.

Foreign Operations

During the three months ended September 30, 2012 and 2011, Quanta derived $198.3 million and $121.6 million of its revenues from foreign operations. During the nine months ended September 30, 2012 and 2011, Quanta derived $604.0 million and $367.2 million of its revenues from foreign operations. Of Quanta’s foreign revenues, approximately 96.8% and 93.6% was earned in Canada during the three months ended September 30, 2012 and 2011 and approximately 96.3% and 96.5% was earned in Canada during the nine months ended September 30, 2012 and 2011. In addition, Quanta held property and equipment of $132.8 million and $114.8 million in foreign countries, primarily Canada, as of September 30, 2012 and December 31, 2011.