XML 34 R20.htm IDEA: XBRL DOCUMENT v3.22.4
Leases
 12 Months Ended
Dec. 31, 2022
Leases [Abstract]  
Leases LEASES:Quanta primarily leases land, buildings, vehicles, construction equipment and office equipment. As of December 31, 2022, the majority of Quanta’s leases had remaining lease terms of less than eleven years. Certain leases include options to
extend their terms in increments of up to five years and/or options to terminate. The components of lease costs in the accompanying consolidated statements of operations are as follows (in thousands):
 Year Ended December 31,
Lease costClassification202220212020
Finance lease cost:
Amortization of lease assets
Depreciation (1)
$1,540 $1,097 $1,234 
Interest on lease liabilitiesInterest and other financing expenses108 90 107 
Operating lease costCost of services and Selling, general and administrative expenses93,539 104,668 116,672 
Short-term and variable lease cost (2)
Cost of services and Selling, general and administrative expenses953,721 716,722 656,649 
Total lease cost $1,048,908 $822,577 $774,662 
(1)     Depreciation is included within “Cost of services” and “Selling, general and administrative expenses” in the accompanying consolidated statements of operations.
(2) Short-term lease cost includes both leases and rentals with initial terms of one year or less. Variable lease cost is insignificant.
Quanta has entered into arrangements with certain related parties to lease real property and facilities. Typically, the parties are employees of Quanta who are also the former owners of businesses acquired by Quanta, and the real property and facilities continue to be utilized by Quanta subsequent to the acquisitions. Quanta utilizes third-party market valuations to evaluate rental rates for these properties and facilities, and the lease agreements generally have remaining lease terms of up to ten years, subject to renewal options. Related party lease expense was $14.7 million, $13.9 million and $14.3 million for the years ended December 31, 2022, 2021 and 2020.
The components of leases in the accompanying consolidated balance sheets were as follows (in thousands):
December 31,
Lease typeClassification20222021
Assets:
Operating lease right-of-use assetsOperating lease right-of-use assets$229,691 $240,605 
Finance lease assetsProperty and equipment, net of accumulated depreciation3,238 2,415 
Lease financing transaction assets (1)
Property and equipment, net of accumulated depreciation83,591 53,950 
Total lease assets $316,520 $296,970 
Liabilities:
Current:
OperatingCurrent portion of operating lease liabilities$74,052 $78,251 
FinanceCurrent maturities of long-term debt and short-term debt1,433 1,156 
Lease financing transaction liabilities (1)
Current maturities of long-term debt and short-term debt15,034 9,782 
Non-current:
OperatingOperating lease liabilities, net of current portion171,512 170,427 
FinanceLong-term debt, net of current maturities2,109 1,390 
Lease financing transaction liabilities (1)
Long-term debt, net of current maturities68,557 44,168 
Total lease liabilities $332,697 $305,174 
(1) Certain of Quanta’s equipment rental agreements contain purchase options pursuant to which the purchase price is offset by a portion of the rental payments. When these purchase options are exercised by a third-party lessor on behalf of Quanta, the transaction is deemed to be a financing transaction for accounting purposes, which results in the recognition of an asset equal to the purchase price and a corresponding liability.
Future minimum lease payments for operating, finance leases and lease financing transactions were as follows (in thousands):
As of December 31, 2022
 Operating LeasesFinance LeasesLease Financing TransactionsTotal
2023$80,899 $1,517 $15,034 $97,450 
202461,186 1,002 19,058 81,246 
202545,363 638 15,331 61,332 
202633,227 431 13,998 47,656 
202719,835 40 10,460 30,335 
Thereafter24,631 — 9,710 34,341 
Total future minimum payments related to operating leases, finance leases and lease financing transactions265,141 3,628 83,591 352,360 
Less imputed interest(19,577)(86)— (19,663)
Total operating lease, finance lease and lease financing transaction liabilities$245,564 $3,542 $83,591 $332,697 
Future minimum lease payments for short-term leases were $22.3 million as of December 31, 2022.
The weighted average remaining lease terms and discount rates were as follows:
 As of December 31,
20222021
Weighted average remaining lease term (in years):
Operating leases4.394.25
Finance leases2.932.57
Weighted average discount rate:
Operating leases3.5 %3.7 %
Finance leases3.1 %3.3 %
Quanta has also guaranteed the residual value under certain of its equipment operating leases, agreeing to pay any difference between the residual value and the fair market value of the underlying asset at the date of lease termination. Residual value guarantees approximate fair value and, therefore, generally do not result in significant payments.
Leases LEASES:Quanta primarily leases land, buildings, vehicles, construction equipment and office equipment. As of December 31, 2022, the majority of Quanta’s leases had remaining lease terms of less than eleven years. Certain leases include options to
extend their terms in increments of up to five years and/or options to terminate. The components of lease costs in the accompanying consolidated statements of operations are as follows (in thousands):
 Year Ended December 31,
Lease costClassification202220212020
Finance lease cost:
Amortization of lease assets
Depreciation (1)
$1,540 $1,097 $1,234 
Interest on lease liabilitiesInterest and other financing expenses108 90 107 
Operating lease costCost of services and Selling, general and administrative expenses93,539 104,668 116,672 
Short-term and variable lease cost (2)
Cost of services and Selling, general and administrative expenses953,721 716,722 656,649 
Total lease cost $1,048,908 $822,577 $774,662 
(1)     Depreciation is included within “Cost of services” and “Selling, general and administrative expenses” in the accompanying consolidated statements of operations.
(2) Short-term lease cost includes both leases and rentals with initial terms of one year or less. Variable lease cost is insignificant.
Quanta has entered into arrangements with certain related parties to lease real property and facilities. Typically, the parties are employees of Quanta who are also the former owners of businesses acquired by Quanta, and the real property and facilities continue to be utilized by Quanta subsequent to the acquisitions. Quanta utilizes third-party market valuations to evaluate rental rates for these properties and facilities, and the lease agreements generally have remaining lease terms of up to ten years, subject to renewal options. Related party lease expense was $14.7 million, $13.9 million and $14.3 million for the years ended December 31, 2022, 2021 and 2020.
The components of leases in the accompanying consolidated balance sheets were as follows (in thousands):
December 31,
Lease typeClassification20222021
Assets:
Operating lease right-of-use assetsOperating lease right-of-use assets$229,691 $240,605 
Finance lease assetsProperty and equipment, net of accumulated depreciation3,238 2,415 
Lease financing transaction assets (1)
Property and equipment, net of accumulated depreciation83,591 53,950 
Total lease assets $316,520 $296,970 
Liabilities:
Current:
OperatingCurrent portion of operating lease liabilities$74,052 $78,251 
FinanceCurrent maturities of long-term debt and short-term debt1,433 1,156 
Lease financing transaction liabilities (1)
Current maturities of long-term debt and short-term debt15,034 9,782 
Non-current:
OperatingOperating lease liabilities, net of current portion171,512 170,427 
FinanceLong-term debt, net of current maturities2,109 1,390 
Lease financing transaction liabilities (1)
Long-term debt, net of current maturities68,557 44,168 
Total lease liabilities $332,697 $305,174 
(1) Certain of Quanta’s equipment rental agreements contain purchase options pursuant to which the purchase price is offset by a portion of the rental payments. When these purchase options are exercised by a third-party lessor on behalf of Quanta, the transaction is deemed to be a financing transaction for accounting purposes, which results in the recognition of an asset equal to the purchase price and a corresponding liability.
Future minimum lease payments for operating, finance leases and lease financing transactions were as follows (in thousands):
As of December 31, 2022
 Operating LeasesFinance LeasesLease Financing TransactionsTotal
2023$80,899 $1,517 $15,034 $97,450 
202461,186 1,002 19,058 81,246 
202545,363 638 15,331 61,332 
202633,227 431 13,998 47,656 
202719,835 40 10,460 30,335 
Thereafter24,631 — 9,710 34,341 
Total future minimum payments related to operating leases, finance leases and lease financing transactions265,141 3,628 83,591 352,360 
Less imputed interest(19,577)(86)— (19,663)
Total operating lease, finance lease and lease financing transaction liabilities$245,564 $3,542 $83,591 $332,697 
Future minimum lease payments for short-term leases were $22.3 million as of December 31, 2022.
The weighted average remaining lease terms and discount rates were as follows:
 As of December 31,
20222021
Weighted average remaining lease term (in years):
Operating leases4.394.25
Finance leases2.932.57
Weighted average discount rate:
Operating leases3.5 %3.7 %
Finance leases3.1 %3.3 %
Quanta has also guaranteed the residual value under certain of its equipment operating leases, agreeing to pay any difference between the residual value and the fair market value of the underlying asset at the date of lease termination. Residual value guarantees approximate fair value and, therefore, generally do not result in significant payments.