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Segment Information
 9 Months Ended
Sep. 30, 2015
Segment Reporting [Abstract]  
Segment Information
12.

SEGMENT INFORMATION:

Quanta presents its operations under two reportable segments: (1) Electric Power Infrastructure Services and (2) Oil and Gas Infrastructure Services. This structure is generally based on the 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 two internal divisions, namely, the Electric Power Division and the Oil and Gas Infrastructure Division. These internal divisions are closely aligned with the reportable segments described above based on their operating units’ predominant type of work.

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 service across industries, for example, joint trenching projects to install distribution lines for electric power and natural gas customers. In addition, Quanta’s integrated operations and common administrative support at each of its operating units require that certain allocations of shared and indirect costs, such as facility costs and indirect operating expenses, including depreciation and general and administrative costs, be made 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 table (in thousands):

 

     Three Months Ended
September 30,		     Nine Months Ended
September 30,		  
     2015     2014     2015     2014  

Revenues:

         

Electric Power Infrastructure

    $ 1,183,151      $ 1,396,157      $ 3,645,767      $ 3,938,590   

Oil and Gas Infrastructure

      756,287        749,801        2,027,397        1,781,025   
  

 

 

    

 

 

    

 

 

    

 

 

  

Consolidated

    $ 1,939,438      $ 2,145,958      $ 5,673,164      $ 5,719,615   
  

 

 

    

 

 

    

 

 

    

 

 

  

Operating income (loss):

         

Electric Power Infrastructure

    $ 76,948      $ 104,365      $ 273,967      $ 361,689   

Oil and Gas Infrastructure

      58,874        74,824        119,002        109,235   

Corporate and non-allocated costs

      (54,944 )      (47,905 )      (159,090 )      (139,511 ) 
  

 

 

    

 

 

    

 

 

    

 

 

  

Consolidated

    $ 80,878      $ 131,284      $ 233,879      $ 331,413   
  

 

 

    

 

 

    

 

 

    

 

 

  

Depreciation:

         

Electric Power Infrastructure

    $ 22,801      $ 19,406      $ 65,790      $ 55,896   

Oil and Gas Infrastructure

      16,347        15,146        49,599        41,826   

Corporate and non-allocated costs

      1,806        1,933        5,993        5,517   
  

 

 

    

 

 

    

 

 

    

 

 

  

Consolidated

    $ 40,954      $ 36,485      $ 121,382      $ 103,239   
  

 

 

    

 

 

    

 

 

    

 

 

  

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, include operating machinery, equipment and vehicles, as well as office equipment, buildings and leasehold improvements, and 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, 2015 and 2014, Quanta derived $342.6 million and $523.7 million of its revenues from foreign operations. During the nine months ended September 30, 2015 and 2014, Quanta derived $1.24 billion and $1.37 billion of its revenues from foreign operations. The decreases in foreign revenues for the three and nine months ended September 30, 2015 were primarily attributable to reduced customer spending arising from regulatory and permitting delays on certain projects, normal fluctuations in project timing, and the decline in oil prices. Also contributing to the decreases were less favorable currency exchange rates. Of Quanta’s foreign revenues, approximately 83% was earned in Canada during both the three months ended September 30, 2015 and 2014, and approximately 85% and 81% was earned in Canada in the nine months ended September 30, 2015 and 2014. In addition, Quanta held property and equipment of $337.2 million and $372.9 million in foreign countries, primarily Canada, as of September 30, 2015 and December 31, 2014.