XML 35 R21.htm IDEA: XBRL DOCUMENT
v3.22.4

Income Taxes | 12 Months Ended
--- | ---
Dec. 31, 2022
Income Tax Disclosure [Abstract] |
Income Taxes | INCOME TAXES: The components of income before income taxes were as follows (in thousands):
| Year Ended December 31,
| 2022 |  | 2021 |  | 2020
Income before income taxes: |  |  |  |  |
Domestic | $ | 532,051 |  |  | $ | 534,302 |  |  | $ | 632,791 |
Foreign | 171,835 |  |  | 88,599 |  |  | (61,445) |
Total | $ | 703,886 |  |  | $ | 622,901 |  |  | $ | 571,346 |
The components of the provision for income taxes were as follows (in thousands):
| Year Ended December 31,
| 2022 |  | 2021 |  | 2020
Current: |  |  |  |  |
Federal | $ | 97,673 |  |  | $ | 65,273 |  |  | $ | 134,538 |
State | 29,439 |  |  | 32,930 |  |  | 45,610 |
Foreign | 23,078 |  |  | 6,644 |  |  | (745) |
Total current tax provision | 150,190 |  |  | 104,847 |  |  | 179,403 |
Deferred: |  |  |  |  |
Federal | 29,657 |  |  | 27,762 |  |  | (46,251) |
State | 4,225 |  |  | (2,418) |  |  | (3,850) |
Foreign | 8,171 |  |  | 727 |  |  | (9,915) |
Total deferred tax provision (benefit) | 42,053 |  |  | 26,071 |  |  | (60,016) |
Total provision for income taxes | $ | 192,243 |  |  | $ | 130,918 |  |  | $ | 119,387 |
Income taxes related to other (loss) income within other comprehensive income (loss) was a benefit of $0.2 million, an expense of $0.4 million and a benefit of $0.9 million for the years ended December 31, 2022, 2021 and 2020. There was no tax on foreign currency translation adjustment within other comprehensive income (loss) for the years ended December 31, 2022, 2021 and 2020. The actual income tax provision differed from the income tax provision computed by applying the U.S. federal statutory corporate rate to income before provision for income taxes as follows (in thousands):
| Year Ended December 31,
| 2022 |  | 2021 |  | 2020
Provision at the statutory rate | $ | 147,816 |  |  | $ | 130,809 |  |  | $ | 119,983 |
Increases (decreases) resulting from: |  |  |  |  |
State taxes | 28,320 |  |  | 27,204 |  |  | 31,791 |
Valuation allowance on deferred tax assets | 23,366 |  |  | 6,107 |  |  | (31,138) |
Tax contingency reserves, net | 7,939 |  |  | 844 |  |  | (2,125) |
Employee per diems, meals and entertainment | 6,086 |  |  | 3,569 |  |  | 10,680 |
Company-owned life insurance | 2,917 |  |  | (6,969) |  |  | — |
Foreign taxes | (638) |  |  | (9,359) |  |  | (7,268) |
Taxes on certain equity method investments and non-controlling interests | (12,886) |  |  | (8,825) |  |  | (3,466) |
Stock-based compensation | (24,066) |  |  | (21,271) |  |  | (3,109) |
Other | 13,389 |  |  | 8,809 |  |  | 4,039 |
Total provision for income taxes | $ | 192,243 |  |  | $ | 130,918 |  |  | $ | 119,387 |
Deferred income taxes result from temporary differences in the recognition of income and expenses for financial reporting purposes and tax purposes. The tax effects of these temporary differences, representing deferred tax assets and liabilities, result principally from the following (in thousands):
| December 31,
| 2022 |  | 2021
Deferred income tax liabilities: |  |  |
Property and equipment | $ | (286,950) |  |  | $ | (278,303) |
Goodwill | (129,491) |  |  | (93,632) |
Leased assets | (84,870) |  |  | (76,728) |
Retainage | (28,773) |  |  | (32,661) |
Total deferred income tax liabilities | (530,084) |  |  | (481,324) |
Deferred income tax assets: |  |  |
Lease liabilities | 84,189 |  |  | 76,608 |
Other intangible assets | 73,654 |  |  | 19,110 |
Net operating loss carryforwards | 56,556 |  |  | 78,947 |
Stock and incentive compensation | 55,413 |  |  | 50,772 |
Accruals and reserves | 48,168 |  |  | 66,000 |
Tax credits | 34,413 |  |  | 39,826 |
Deferred tax benefits on unrecognized tax positions | 8,899 |  |  | 10,090 |
Equity method investments and non-controlling interests | 5,878 |  |  | 273 |
Other | 5,849 |  |  | 7,114 |
Subtotal | 373,019 |  |  | 348,740 |
Valuation allowance | (58,461) |  |  | (41,308) |
Total deferred income tax assets | 314,558 |  |  | 307,432 |
Total net deferred income tax liabilities | $(215,526) |  | $(173,892)
The net deferred income tax assets and liabilities comprised the following in the accompanying consolidated balance sheets (in thousands):
| December 31,
| 2022 |  | 2021
Deferred income taxes: |  |  |
Assets | $ | 12,335 |  |  | $ | 17,206 |
Liabilities | (227,861) |  |  | (191,098) |
Total net deferred income tax liabilities | $ | (215,526) |  |  | $ | (173,892) |
The valuation allowances for deferred income tax assets at December 31, 2022, 2021 and 2020 were $58.5 million, $41.3 million and $43.3 million. These valuation allowances relate to state and foreign net operating loss carryforwards and foreign tax credits. The net changes in the total valuation allowance for each of the years ended December 31, 2022, 2021 and 2020 were an increase of $17.2 million, a decrease of $1.9 million and a decrease of $60.9 million. The change in valuation allowance during the year ended December 31, 2022 resulted in a $23.3 million increase in tax expense due primarily to $22.7 million in new valuation allowances recorded on unrealized losses on Quanta’s investment in Starry as further described in Note 8. The total valuation allowance increased by $17.2 million from December 31, 2021 to December 31, 2022 primarily as a result of the $22.7 million valuation allowance related to Starry mentioned above, partially offset by a reduction of $4.8 million due to the removal of deferred tax assets that were no longer available to be carried forward to future years for which a valuation allowance had been provided in prior years, as well as currency translation adjustments on previously provided valuation allowances. The change in valuation allowance during the year ended December 31, 2021 resulted in a $6.1 million increase in tax expense due to approximately $8.5 million of new valuation allowances primarily recorded on foreign net operating losses, which was partially offset by a $2.4 million valuation allowance release recorded due to the completion of certain internal restructuring efforts that increased management’s visibility into future utilization of certain state net operation losses. The total valuation allowance was reduced by $1.9 million from December 31, 2020 to December 31, 2021 as a result of a reduction of $8.0 million due to the expiration of certain net operating losses, for which a valuation allowance had previously been recorded, as well as currency translation adjustments on previously recorded valuation allowances, offset by an increase to the valuation allowance as a result of the $6.1 million of new valuation allowances as noted above. The change in valuation allowance during the year ended December 31, 2020 resulted in a $31.1 million reduction in tax expense, primarily due to a release of $45.1 million of valuation allowance on foreign tax credits due to the completion of an internal financial reorganization, which was partially offset by the establishment of $14.0 million of new valuation allowances on deferred tax assets generated during the year ended December 31, 2020. The total change in valuation allowance for the year ended December 31, 2020 was a $60.9 million reduction, primarily due to the removal of approximately $29.4 million of foreign net operating losses that were no longer eligible to be carried forward as well as the $31.1 million reduction noted above. The valuation allowances were established primarily as a result of uncertainty in Quanta’s outlook as to the amount and character of future taxable income in particular tax jurisdictions. Quanta believes it is more likely than not that it will realize the benefit of its deferred tax assets net of existing valuation allowances. At December 31, 2022, Quanta had state and foreign net operating loss carryforwards, the tax effect of which was $57.7 million. These carryforwards will expire as follows: 2023, $0.3 million; 2024, $0.1 million; 2025, $5.5 million; 2026, $1.6 million; 2027, $0.2 million; and $50.0 million thereafter. A valuation allowance of $27.6 million has been recorded against certain foreign and state net operating loss carryforwards. Quanta generally does not provide for taxes related to undistributed earnings of its foreign subsidiaries because such earnings either would not be taxable when remitted or they are considered to be indefinitely reinvested. Quanta could also be subject to additional foreign withholding taxes if it were to repatriate cash that is indefinitely reinvested outside the United States, but it does not expect such amount to be material. A reconciliation of unrecognized tax benefit balances is as follows (in thousands):
| December 31,
| 2022 |  | 2021 |  | 2020
Balance at beginning of year | $ | 37,737 |  |  | $ | 33,219 |  |  | $ | 40,878 |
Additions based on tax positions related to the current year | 11,699 |  |  | 6,881 |  |  | 4,398 |
Additions for tax positions of prior years | 230 |  |  | 2,339 |  |  | — |
Reductions for tax positions of prior years | (407) |  |  | — |  |  | (2,410) |
Reductions for audit settlements | (2,207) |  |  | — |  |  | (930) |
Reductions resulting from a lapse of the applicable statute of limitations periods | (5,413) |  |  | (4,702) |  |  | (8,717) |
Balance at end of year | $ | 41,639 |  |  | $ | 37,737 |  |  | $ | 33,219 |
As of December 31, 2022, the total amount of unrecognized tax benefits relating to uncertain tax positions was $41.6 million, a net increase of $3.9 million from December 31, 2021, which primarily resulted from a $11.7 million increase related to positions expected to be taken in 2022, partially offset by a $2.2 million reduction related to the settlement of audits and a $5.4 million reduction related to the expiration of U.S. federal and state statutes of limitations. For the year ended December 31, 2021, the aggregate increase results primarily from reserves for uncertain tax positions taken in 2021. For the year ended December 31, 2020, the $12.1 million of aggregate reductions were primarily due to the favorable settlement of U.S. and Canadian tax audits and the expiration of U.S. federal and state statutes of limitations. The balances of unrecognized tax benefits, the amount of related interest and penalties and what Quanta believes to be the range of reasonably possible changes in the next 12 months are as follows (in thousands):
| December 31, 2022
Unrecognized tax benefits | $ | 41,639 |
Portion that, if recognized, would reduce tax expense and effective tax rate | 39,247 |
Accrued interest on unrecognized tax benefits | 4,334 |
Accrued penalties on unrecognized tax benefits | 1,085 |
Reasonably possible reduction to the balance of unrecognized tax benefits in succeeding 12 months | $0 to $12,122
Portion that, if recognized, would reduce tax expense and effective tax rate | $0 to $11,699
Quanta classifies interest and penalties within the provision for income taxes. Quanta recognized interest expense of $0.5 million, interest income of $0.8 million and interest income of $0.7 million in the provision for income taxes for the years ended December 31, 2022, 2021 and 2020. Quanta’s consolidated federal income tax returns for tax years 2017, 2018, 2019, 2020 and 2021 remain open to examination by the IRS, as the applicable statute of limitations periods have not yet expired. Additionally, various state and foreign tax returns filed by Quanta and certain subsidiaries for multiple periods remain under examination by various U.S. state and foreign tax authorities. Quanta does not consider any state in which it does business to be a major tax jurisdiction.

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

X
- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI https://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI https://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration