XML 27 R16.htm IDEA: XBRL DOCUMENT
v3.20.2

Debt Obligations | 9 Months Ended
--- | ---
Sep. 30, 2020
Debt Disclosure [Abstract] |
Debt Obligations | DEBT OBLIGATIONS: Quanta’s long-term debt obligations consisted of the following (in thousands):
|  | September 30, 2020 |  | December 31, 2019
2.900% Senior Notes due 2030 |  | $ | 1,000,000 |  |  | $ | — |
Borrowings under senior credit facility |  | 195,350 |  |  | 1,346,290 |
Other long-term debt |  | 25,254 |  |  | 13,275 |
Finance leases |  | 1,428 |  |  | 957 |
Unamortized discount and debt issuance costs related to senior notes |  | (13,273) |  |  | — |
Total long-term debt obligations |  | 1,208,759 |  |  | 1,360,522 |
Less — Current maturities of long-term debt |  | 6,334 |  |  | 68,327 |
Total long-term debt obligations, net of current maturities |  | $ | 1,202,425 |  |  | $ | 1,292,195 |
Quanta’s current maturities of long-term debt and short-term debt consisted of the following (in thousands):
|  | September 30, 2020 |  | December 31, 2019
Short-term debt |  | $ | 2,887 |  |  | $ | 6,542 |
Current maturities of long-term debt |  | 6,334 |  |  | 68,327 |
Current maturities of long-term debt and short-term debt |  | $ | 9,221 |  |  | $ | 74,869 |
2.900% Senior Notes Due 2030 During the three months ended September 30, 2020, Quanta issued $1.00 billion aggregate principal amount of 2.900% Senior Notes due October 1, 2030 (the senior notes). Quanta received proceeds of $986.7 million from the offering, net of the original issue discount, underwriting discounts and debt issuance costs, and used such proceeds, together with cash on hand, to voluntarily prepay the $1.21 billion of term loans then-outstanding under Quanta’s credit agreement for its senior credit facility (the credit agreement). Interest on the senior notes is payable semi-annually in arrears on April 1 and October 1 of each year, commencing April 1, 2021. The maturity date for the senior notes is October 1, 2030. The senior notes are Quanta’s senior unsecured obligations and rank equally in right of payment with Quanta’s existing and future senior indebtedness and senior in right of payment to all future subordinated indebtedness of Quanta (subject to applicable law). The senior notes are effectively subordinated to all secured indebtedness of Quanta to the extent of the value of the assets securing such indebtedness and are structurally subordinated to all liabilities, including trade payables, of Quanta’s subsidiaries. Quanta may redeem all or a portion of the senior notes at any time prior to July 1, 2030 at a price equal to 100% of the principal amount plus a make-whole premium and accrued and unpaid interest, and at any time on or after July 1, 2030 at a price equal to 100% of the principal amount plus accrued and unpaid interest, in each case as further specified by terms of the senior notes and the indenture and supplemental indenture governing the senior notes (together, the indenture). Additionally, upon the occurrence of a Change of Control Triggering Event (as defined in the indenture), unless Quanta has exercised its right to redeem the senior notes in full by giving irrevocable notice to the trustee, each noteholder will have the right to require Quanta to purchase all or a portion of such holder’s senior notes at a purchase price equal to 101% of the principal amount thereof plus any accrued and unpaid interest. The indenture also contains customary events of default and covenants that, among other things, limit Quanta’s ability to incur liens securing indebtedness, to engage in certain sale and leaseback transactions with respect to certain properties and to sell all or substantially all of its assets or merge or consolidate with or into other companies. Senior Credit Facility On September 22, 2020, Quanta entered into an amendment to the credit agreement that, among other things, increased the aggregate revolving commitments from $2.14 billion to $2.51 billion and extended the maturity date for the revolving commitments from October 31, 2022 to September 22, 2025. Pursuant to the amendment, the pledge of capital stock of certain Quanta subsidiaries and the liens on the collateral that secured the obligations under the credit agreement were released, and all of Quanta’s subsidiaries that were guarantors of the obligations under the credit agreement were released from their guarantees of such obligations. In addition, the amendment removed the collateral reinstatement provision that would have applied in the event Quanta’s corporate credit rating from either Moody’s Investors Service, Inc or Standard & Poor’s Financial Services LLC were to fall below an investment grade rating. As referenced above, Quanta used the net proceeds from the offering of the senior notes, together with cash on hand, to voluntarily prepay all the term loans then-outstanding under the credit agreement in the aggregate principal amount of $1.21 billion. Borrowings under the credit agreement are to be used to refinance existing indebtedness and for working capital, capital expenditures, acquisitions and other general corporate purposes. Subject to the conditions specified in the credit agreement, Quanta has the option to increase the capacity of the credit facility, in the form of an increase in the revolving commitments, term loans or a combination thereof, from time to time, upon receipt of additional commitments from new or existing lenders by up to an additional (i) $400.0 million plus (ii) additional amounts so long as the Incremental Leverage Ratio Requirement (as defined in the credit agreement) is satisfied at the time of such increase. The Incremental Leverage Ratio Requirement requires, among other things, after giving pro forma effect to such increase and the use of proceeds therefrom, compliance with the credit agreement’s financial covenants as of the most recent fiscal quarter end for which financial statements were required to be delivered. Subject to compliance with the financial covenants described below, the entire amount available under the credit facility may be used by Quanta for revolving loans and letters of credit in U.S. dollars and certain alternative currencies, subject to a $900.0 million sublimit for Financial Letters of Credit (as defined in the credit agreement). Up to $800.0 million may be used by certain subsidiaries of Quanta for revolving loans and letters of credit, including in certain alternative currencies. Up to $100.0 million may be used for swing line loans in U.S. dollars, up to $50.0 million may be used for swing line loans in Canadian dollars and up to $50.0 million may be used for swing line loans in Australian dollars. As of September 30, 2020, Quanta had $195.4 million of outstanding revolving loans under the senior credit facility. Of the total outstanding borrowings, $151.7 million were denominated in Canadian dollars and $43.7 million were denominated in Australian dollars. As of September 30, 2020, Quanta also had $364.5 million of letters of credit issued under the senior credit facility, of which $265.1 million were denominated in U.S. dollars and $99.4 million were denominated in currencies other than the U.S. dollar, primarily Canadian dollars. As of September 30, 2020, Quanta also had $91.9 million of letters of credit issued by a financial institution that ceased to be a lender under the senior credit facility subsequent to the September 2020 amendment to the credit agreement, which are collateralized by a $93.0 million letter of credit issued by a lender under the senior credit facility. As of September 30, 2020, subject to the applicable sublimits, the remaining $1.95 billion of available commitments under the senior credit facility was available for additional revolving loans or letters of credit in U.S. dollars and certain alternative currencies. Borrowings under the senior credit facility and the applicable interest rates were as follows (dollars in thousands):
|  | Three Months Ended |  | Nine Months Ended
|  | September 30, |  | September 30,
|  | 2020 |  | 2019 |  | 2020 |  | 2019
Maximum amount outstanding under the credit facility during the period |  | $ | 1,462,069 |  |  | $ | 1,987,215 |  |  | $ | 2,023,326 |  |  | $ | 1,987,215 |
Average daily amount outstanding under the credit facility |  | $ | 1,255,171 |  |  | $ | 1,721,843 |  |  | $ | 1,395,207 |  |  | $ | 1,505,376 |
Weighted-average interest rate |  | 1.57 | % |  | 3.86 | % |  | 2.13 | % |  | 3.88 | %
Revolving loans borrowed in U.S. dollars bear interest, at Quanta’s option, at a rate equal to either (i) the Eurocurrency Rate (as defined in the credit agreement) plus 1.125% to 2.000%, as determined based on Quanta’s Consolidated Leverage Ratio, or (ii) the Base Rate (as described below) plus 0.125% to 1.000%, as determined based on Quanta’s Consolidated Leverage Ratio. Revolving loans borrowed in any currency other than U.S. dollars bear interest at a rate equal to the Eurocurrency Rate plus 1.125% to 2.000%, as determined based on Quanta’s Consolidated Leverage Ratio. Additionally, standby or commercial letters of credit issued under the credit agreement are subject to a letter of credit fee of 1.125% to 2.000%, based on Quanta’s Consolidated Leverage Ratio, and Performance Letters of Credit (as defined in the credit agreement) issued under the credit agreement in support of certain contractual obligations are subject to a letter of credit fee of 0.675% to 1.150%, based on Quanta’s Consolidated Leverage Ratio. The Base Rate equals the highest of (i) the Federal Funds Rate (as defined in the credit agreement) plus 0.5%, (ii) the prime rate publicly announced by Bank of America, N.A. and (iii) the Eurocurrency Rate plus 1.00%. Quanta is also subject to a commitment fee of 0.275% to 0.425%, based on its Consolidated Leverage Ratio, on any unused availability under the senior credit facility. Prior to the amendment on September 22, 2020, Quanta was subject to a commitment fee of 0.200% to 0.400%. Consolidated Leverage Ratio is the ratio of Quanta’s Consolidated Funded Indebtedness to Consolidated EBITDA (as those terms are defined in the credit agreement). For purposes of calculating Quanta’s Consolidated Leverage Ratio, Consolidated Funded Indebtedness is reduced by available cash and Cash Equivalents (as defined in the credit agreement) in excess of $25.0 million. Consolidated Interest Coverage Ratio is the ratio of (i) Consolidated EBIT (as defined in the credit agreement) for the four fiscal quarters most recently ended to (ii) Consolidated Interest Expense (as defined in the credit agreement) for such period (excluding all interest expense attributable to capitalized loan costs and the amount of fees paid in connection with the issuance of letters of credit on behalf of Quanta during such period). The credit agreement contains certain covenants, including (i) a maximum Consolidated Leverage Ratio of 3.5 to 1.0 (except that in connection with certain permitted acquisitions in excess of $200.0 million, such ratio is 4.0 to 1.0 for the fiscal quarter in which the acquisition is completed and the four subsequent fiscal quarters) and (ii) a minimum Consolidated Interest Coverage Ratio of 3.0 to 1.0. As of September 30, 2020, Quanta was in compliance with all of the financial covenants under the credit agreement. The credit agreement also limits certain acquisitions, mergers and consolidations, indebtedness, asset sales and prepayments of indebtedness and, subject to certain exceptions, prohibits liens on Quanta’s assets. The credit agreement allows cash payments for dividends and stock repurchases subject to compliance with the following requirements (including after giving effect to the dividend or stock repurchase): (i) no default or event of default under the credit agreement; (ii) continued compliance with the financial covenants in the credit agreement; and (iii) at least $100.0 million of availability under the senior credit facility and/or cash and cash equivalents on hand. The credit agreement provides for customary events of default and generally contains cross-default provisions with other debt instruments exceeding $150.0 million in borrowings or availability. If an Event of Default (as defined in the credit agreement) occurs and is continuing, on the terms and subject to the conditions set forth in the credit agreement, the lenders may declare all amounts outstanding and accrued and unpaid interest immediately due and payable, require that Quanta provide cash collateral for all outstanding letter of credit obligations and terminate the commitments under the credit agreement.As referenced above, Quanta voluntarily prepaid the aggregate term loans then-outstanding on September 22, 2020. Quanta had borrowed $600.0 million under the term loan facility in October 2018 and $675.0 million under the term loan facility in September 2019 and used the majority of such proceeds to repay then-outstanding revolving loans under the credit agreement. Term loans bore interest at rates generally consistent with the revolving loans borrowed in U.S. dollars, except that the additional amount over the Eurocurrency Rate was 1.125% to 1.875%, as determined based on Quanta’s Consolidated Leverage Ratio. Quanta made quarterly principal payments of $7.5 million on the term loan through September 2019 and $16.1 million on the term loans through June 2020.

X
- References No definition available. + Details
Name: | us-gaap_DebtDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -URI http://asc.fasb.org/topic&trid=2208564 + Details
Name: | us-gaap_DebtDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration