QUANTA SERVICES INC

Previous wording

Our second quarter 2024 results reflect increased demand for our services, as consolidated revenue and operating income increased as compared to the second quarter of 2023, primarily due to increased revenues and operating income for our Renewable Energy Infrastructure Solutions (Renewable Energy) segment.

Current wording

Our third quarter 2024 results reflect increased demand for our services, as consolidated revenue and operating income increased as compared to the third quarter of 2023, primarily due to increased revenues and operating income for our Renewable Energy Infrastructure Solutions (Renewable Energy) segment.

Previous wording

With respect to our Electric Power Infrastructure Solutions (Electric Power) segment, utilities are continuing to invest significant capital in their electric power delivery systems through multi-year grid modernization and reliability programs, as well as system upgrades and hardening programs in response to recurring severe weather events. We have also experienced high demand for new and expanded transmission, substation and distribution infrastructure needed to reliably transport power.

Current wording

With respect to our Electric Power Infrastructure Solutions (Electric Power) segment, utilities are continuing to invest significant capital in their electric power delivery systems through multi-year grid modernization and reliability programs, as well as system upgrades and hardening programs in response to recurring severe weather events. We have also experienced high demand for new and expanded transmission, substation and distribution infrastructure needed to reliably transport power. In particular, we continue to experience strong demand from our utility customers, which we believe is driven by increasing demand for electricity associated with, among other things, data centers and other technology-related dynamics, domestic manufacturing reshoring initiatives and overall electrification trends. Our acquisition of Cupertino Electric Inc. (CEI) has also created additional demand for our critical path electrical design and installation solutions from the technology and data center industry.

Previous wording

With respect to our Renewable Energy segment, the transition to a reduced-carbon economy is continuing to drive demand for renewable generation and related infrastructure (e.g., high-voltage electric transmission and substation infrastructure), as well as interconnection services necessary to connect and transmit renewable-generated electricity to existing electric power delivery systems. Despite these positive longer-term trends, during 2022 and into 2023, the timing of certain projects within this segment were negatively impacted by supply chain challenges that resulted in delays and shortages of, and increased costs for, materials necessary for certain projects, particularly sourcing restrictions related to solar panels necessary for the utility-scale solar industry and delays in availability of power transformers impacting the electric power and renewable energy industries. While certain challenges associated with solar panel sourcing improved during 2023, we could experience and continue to monitor other potential supply chain challenges that could impact the availability and/or cost of renewable infrastructure project components, including solar generation components, in future periods.

Current wording

With respect to our Renewable Energy segment, the transition to a reduced-carbon economy as well as a meaningful increase in current and forecasted electricity demand is continuing to drive demand for renewable generation and related infrastructure (e.g., high-voltage electric transmission and substation infrastructure), as well as interconnection services necessary to connect and transmit renewable-generated electricity to existing electric power delivery systems. Despite these positive longer-term trends, during 2022 and into 2023, the timing of certain projects within this segment were negatively impacted by supply chain challenges that resulted in delays and shortages of, and increased costs for, materials necessary for certain projects, particularly sourcing restrictions related to solar panels necessary for the utility-scale solar industry and delays in availability of power transformers impacting the electric power and renewable energy industries. While certain challenges associated with solar panel sourcing improved during 2023, we could experience and continue to monitor other potential supply chain challenges that could impact the availability and/or cost of renewable infrastructure project components, including solar generation components, in future periods.

Previous wording

During the six months ended June 30, 2024, increased revenues and operating income contributed to $629.3 million of net cash provided by operating activities, a 279% increase compared to the six months ended June 30, 2023, which allowed us to execute our business plan, including the strategic acquisition of certain businesses, for which we utilized $450.8 million of cash, net of cash acquired, and the payment of $27.0 million in dividends associated with our common stock. Additionally, as of June 30, 2024, available commitments under our senior credit facility, combined with our cash and cash equivalents, totaled $2.77 billion.

Current wording

During the nine months ended September 30, 2024, increased revenues and operating income contributed to $1.37 billion of net cash provided by operating activities, a 139% increase compared to the nine months ended September 30, 2023, which allowed us to execute our business plan, including the strategic acquisition of certain businesses, for which we utilized $1.72 billion of cash, net of cash acquired, and the payment of $40.8 million in dividends associated with our common stock. Additionally, as of September 30, 2024, available commitments under our senior credit facility, combined with our cash and cash equivalents, totaled $3.28 billion.

Previous wording

In July 2024, we acquired Cupertino Electric, Inc. (Cupertino). The consideration, excluding cash acquired and subject to certain adjustments, was approximately $1.5 billion, which included cash and shares of Quanta common stock (valued at approximately $216.3 million as of the acquisition date). Additionally, as further described in Note 5 of the Notes to Condensed Consolidated Financial Statements in Item 1. Financial Statements of Part I of this Quarterly Report, there is also a potential earnout payment of up to $200.0 million associated with this acquisition. Also in July 2024, we entered into, and borrowed the full amount available under a $400.0 million 90-day term loan facility outside of the senior credit facility and utilized these borrowings, together with $1.20 billion of borrowings under our commercial paper program and cash on hand, primarily to finance the cash portion of the acquisition of Cupertino and pay certain related costs and expenses and working capital requirements. Approximately $215.0 million of the commercial paper borrowings were repaid with cash held by Cupertino and acquired in the acquisition. See Note 8 of the Notes to Condensed Consolidated Financial Statements in Item 1. Financial Statements of Part I of this Quarterly Report.

Current wording

Additionally, we entered into certain debt financing arrangements in connection with our acquisition of CEI. In July 2024, we entered into, and borrowed the full amount available under a $400.0 million 90-day term loan facility outside of the senior credit facility and utilized these borrowings, together with $1.20 billion of borrowings under our commercial paper program and cash on hand, primarily to finance the cash portion of the acquisition of CEI and pay certain related costs and expenses and working capital requirements. In August 2024, we received net proceeds from the issuance of senior notes of $1.24 billion, net of the original issue discount, underwriting discounts and deferred financing costs, which were used to repay certain borrowings that were utilized to acquire CEI. Additionally, on October 1, 2024, we repaid the $500.0 million aggregate principal amount of our 0.950% senior notes. These debt financing arrangements are more fully described in Note 8 of the Notes to Condensed Consolidated Financial Statements in Item 1. Financial Statements of Part I of this Quarterly Report.

Previous wording

We expect the strong demand for our services will continue. Our remaining performance obligations and backlog were $14.37 billion and $31.31 billion as of June 30, 2024, representing increases of 3.4% and 4.0% relative to December 31, 2023. For a reconciliation of backlog to remaining performance obligations, the most comparable financial measure prepared in conformity with generally accepted accounting principles in the United States (GAAP), see Non-GAAP Financial Measures below.

Current wording

We expect the strong demand for our services will continue. Our remaining performance obligations and backlog were $15.61 billion and $33.96 billion as of September 30, 2024, representing increases of 12.3% and 12.8% relative to December 31, 2023. For a reconciliation of backlog to remaining performance obligations, the most comparable financial measure prepared in conformity with generally accepted accounting principles in the United States (GAAP), see Non-GAAP Financial Measures below.

Previous wording

The change is not meaningful.

Current wording

The percentage change is not meaningful.

Previous wording

Revenues. Revenues increased due to a $645.0 million increase in revenues from our Renewable Energy segment and a $37.2 million increase in revenues from our Electric Power segment, partially offset by a $136.5 million decrease in revenues from our Underground and Infrastructure segment. See Segment Results below for additional information and discussion related to segment revenues.

Current wording

Revenues. Revenues increased due to a $505.2 million increase in revenues from our Renewable Energy segment and a $492.5 million increase in revenues from our Electric Power segment, partially offset by a $125.4 million decrease in revenues from our Underground and Infrastructure segment. See Segment Results below for additional information and discussion related to segment revenues.

Previous wording

Amortization of intangible assets. The increase was related to incremental amortization expense associated with recent acquisitions.

Current wording

Amortization of intangible assets. The increase was related to incremental amortization expense associated with recent acquisitions, including CEI.

Previous wording

Operating income. Operating income was positively impacted by a $52.2 million increase in operating income for our Renewable Energy segment and a $19.8 million increase in operating income for our Electric Power segment, partially offset by a $25.6 million decrease in operating income for our Underground and Infrastructure segment and an $18.5 million increase in corporate and non-allocated costs, which includes amortization expense. Results for each of our business segments and our corporate and non-allocated costs are discussed in Segment Results below.

Current wording

Operating income. Operating income was positively impacted by a $70.1 million increase in operating income for our Renewable Energy segment and a $58.3 million increase in operating income for our Electric Power segment, partially offset by a $29.8 million decrease in operating income for our Underground and Infrastructure segment and a $67.8 million increase in corporate and non-allocated costs, which includes amortization expense. Results for each of our business segments and our corporate and non-allocated costs are discussed in Segment Results below.

Previous wording

Comprehensive income. See Statements of Comprehensive Income in Item 1. Financial Statementsof Part I of this Quarterly Report. Comprehensive income decreased by $7.7 million in the three months ended June 30, 2024 as compared to the three months ended June 30, 2023 due to a $33.0 million decrease related to foreign currency translation adjustments, which was partially offset by a $25.3 million increase in net income. The predominant functional currencies for our operations outside the U.S. are Canadian and Australian dollars. Foreign currency translation losses for the three months ended June 30, 2024 primarily resulted from the strengthening of the U.S. dollar against the Canadian dollar.

Current wording

Comprehensive income. See Statements of Comprehensive Income in Item 1. Financial Statementsof Part I of this Quarterly Report. Comprehensive income increased by $75.2 million in the three months ended September 30, 2024 as compared to the three months ended September 30, 2023 due to a $49.7 million increase related to foreign currency translation adjustments and a $25.5 million increase in net income. The predominant functional currencies for our operations outside the U.S. are Canadian and Australian dollars. Foreign currency translation gains for the three months ended September 30, 2024 primarily resulted from the weakening of the U.S. dollar against the Canadian and Australian dollars.

Previous wording

Revenues. Revenues increased due to a $1.22 billion increase in revenues from our Renewable Energy segment and a $28.2 million increase in revenues from our Electric Power segment, partially offset by a $100.3 million decrease in revenues from our Underground and Infrastructure segment. See Segment Results below for additional information and discussion related to segment revenues.

Current wording

Revenues. Revenues increased due to a $1.73 billion increase in revenues from our Renewable Energy segment and a $520.6 million increase in revenues from our Electric Power segment, partially offset by a $225.6 million decrease in revenues from our Underground and Infrastructure segment. See Segment Results below for additional information and discussion related to segment revenues.

Previous wording

Selling, general and administrative expenses. The increase was primarily attributable to a $19.2 million increase related to recently acquired businesses; a $9.7 million increase in compensation expense, largely associated with increased salaries due primarily to an increase in employees to support business growth; a $7.8 million increase in travel and related expenses to support business growth; and a $6.6 million increase in acquisition and integration costs.

Current wording

Selling, general and administrative expenses. The increase was primarily attributable to a $93.6 million increase related to recently acquired businesses; a $31.7 million increase in compensation expense, largely associated with increased salaries, incentive compensation and non-cash stock compensation expense due primarily to an increase in number of employees to support business growth and increased incentive compensation due primarily to increased levels of profitability; a $17.9 million increase in travel and related expenses to support business growth; and an $11.9 million loss on the disposal of a non-core business. Also contributing to the increase was an $8.4 million increase in expense related to deferred compensation liabilities. The fair market value changes in deferred compensation liabilities were largely offset by changes in the fair value of COLI assets associated with the deferred compensation plan, which are included in “Other income (expense), net” as discussed below.

Previous wording

Amortization of intangible assets. The increase was related to incremental amortization expense associated with recent acquisitions.

Current wording

Amortization of intangible assets. The increase was related to incremental amortization expense associated with recent acquisitions, including CEI.

Previous wording

Operating income. Operating income was positively impacted by a $91.4 million increase in operating income for our Renewable Energy segment and a $32.7 million increase in operating income for our Electric Power segment, partially offset by a $40.3 million decrease in operating income for our Underground and Infrastructure segment and a $26.4 million increase in corporate and non-allocated costs, which includes amortization expense. Results for each of our business segments and corporate and non-allocated costs are discussed in Segment Results below.

Current wording

Operating income. Operating income was positively impacted by a $161.5 million increase in operating income for our Renewable Energy segment and a $91.0 million increase in operating income for our Electric Power segment, partially offset by a $70.1 million decrease in operating income for our Underground and Infrastructure segment and a $94.2 million increase in corporate and non-allocated costs, which includes amortization expense. Results for each of our business segments and corporate and non-allocated costs are discussed in Segment Results below.

Previous wording

Other income (expense), net. The increase was primarily attributable to a gain of $12.6 million resulting from the sale of an investment in a non-integral unconsolidated affiliate, $5.0 million of which was attributable to a non-controlling interest, as further described in Note 6 of the Notes to Condensed Consolidated Financial Statements in Item 1. Financial Statements of Part I of this Quarterly Report.

Current wording

Other income (expense), net. The increase was primarily attributable to a gain of $12.6 million resulting from the sale of an investment in a non-integral unconsolidated affiliate, $5.0 million of which was attributable to a non-controlling interest, as further described in Note 6 of the Notes to Condensed Consolidated Financial Statements in Item 1. Financial Statements of Part I of this Quarterly Report. The increase was also attributable to a $9.3 million increase in the mark-to-market valuation adjustment of the COLI assets associated with our deferred compensation plan. The fair market value changes of the COLI assets were largely offset by changes in the fair value of the deferred compensation liabilities, which are included in “Selling, general and administrative expenses” as discussed above.

Previous wording

Provision for income taxes. The effective tax rates for the six months ended June 30, 2024 and 2023 were 23.2% and 20.0%. The tax rate for the six months ended June 30, 2024 was favorably impacted by the recognition of a $22.4 million benefit that resulted from equity incentive awards vesting at a higher fair market value than their grant date fair market value, as compared to the recognition of $32.4 million associated with this tax benefit for the six months ended June 30, 2023.

Current wording

Provision for income taxes. The effective tax rates for the nine months ended September 30, 2024 and 2023 were 22.5% and 21.1%. The tax rate for the nine months ended September 30, 2024 was favorably impacted by the recognition of a $47.8 million benefit that resulted from equity incentive awards vesting at a higher fair market value than their grant date fair market value, as compared to the recognition of $34.0 million associated with this tax benefit for the nine months ended September 30, 2023. Additionally, the tax rate for the nine months ended September 30, 2023 was favorably impacted by the realization of the loss on the Starry investment for tax purposes, and the corresponding release of the valuation allowance initially recorded during the year ended December 31, 2022.

Previous wording

Net income attributable to non-controlling interests. The increase in net income attributable to non-controlling interests is primarily related to the $5.0 million gain on the sale of the investment in a non-integral equity unconsolidated affiliate recorded during the six months ended June 30, 2024, as described above.

Current wording

Net income attributable to non-controlling interests. The increase in net income attributable to non-controlling interests is primarily related to increased activity on certain joint ventures and the $5.0 million gain on the sale of the investment in a non-integral equity unconsolidated affiliate recorded during the nine months ended September 30, 2024, as described above.

Previous wording

Comprehensive income. See Statements of Comprehensive Income in Item 1. Financial Statementsof Part I of this Quarterly Report. Comprehensive income decreased by $10.4 million in the six months ended June 30, 2024 as compared to the six months ended June 30, 2023, primarily due to a $64.0 million decrease in foreign currency translation adjustments, partially offset by a $54.4 million increase in net income. The predominant functional currencies for our operations outside the U.S. are Canadian and Australian dollars. Foreign currency translation losses for the six months ended June 30, 2024 primarily resulted from the strengthening of the U.S. dollar against the Canadian and Australian dollars.

Current wording

Comprehensive income. See Statements of Comprehensive Income in Item 1. Financial Statementsof Part I of this Quarterly Report. Comprehensive income increased by $64.8 million in the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023, primarily due to a $79.9 million increase in net income, partially offset by a $14.3 million decrease in foreign currency translation adjustments. The predominant functional currencies for our operations outside the U.S. are Canadian and Australian dollars. Foreign currency translation losses for the nine months ended September 30, 2024 primarily resulted from the strengthening of the U.S. dollar against the Canadian dollar.

Previous wording

Revenues. The increase in revenues for the three months ended June 30, 2024 was primarily due to increased demand for generation and transmission services for renewable generation projects.

Current wording

Revenues. The increase in revenues for the three months ended September 30, 2024 was primarily due to increased demand for generation and transmission services for renewable generation projects, as well as approximately$150 million in revenues attributable to acquired businesses.

Previous wording

Operating Income. The increase in operating income and operating margin was primarily due to the increase in revenues during the three months ended June 30, 2024.

Current wording

Operating Income. The increase in operating income and operating margin was partially due to the increase in revenues during the three months ended September 30, 2024 and the negative impact during the three months ended September 30, 2023 due to variability in overall project timing and increased unabsorbed costs related to higher levels of fixed costs for resources required to support the future increase in project activity.

Previous wording

Revenues. The decrease in revenues for the three months ended June 30, 2024 was primarily due to lower revenues from large pipeline projects in Canada, which was partially offset by increased revenues associated with large pipeline projects in the United States and approximately $55 million in revenues attributable to an acquired business.

Current wording

Revenues. The decrease in revenues for the three months ended September 30, 2024 was primarily due to lower revenues from large pipeline projects, partially offset by approximately$55 million in revenues attributable to an acquired business.

Previous wording

Operating Income. The decrease in operating income and operating margin for the three months ended June 30, 2024 was primarily due to the decreased revenues in Canada, which contributed to lower levels of fixed cost absorption.

Current wording

Operating Income. The decrease in operating income and operating margin for the three months ended September 30, 2024 was primarily due to decreased revenues, which contributed to lower levels of fixed cost absorption, as well as the overall mix of work performed in the period.

Previous wording

The increase in corporate and non-allocated costs during the three months ended June 30, 2024 was primarily due to a $9.2 million increase in amortization of intangible assets and a $6.6 million increase in acquisition and integration costs.

Current wording

The increase in corporate and non-allocated costs during the three months ended September 30, 2024 was primarily due to a $39.1 million increase in amortization of intangible assets and a $11.6 million increase in compensation expense, which was attributable to increased salaries and incentive compensation expense in support of business growth.

Previous wording

Revenues. The increase in revenues for the six months ended June 30, 2024 was primarily due to approximately $120 million in revenues attributable to acquired businesses, partially offset by the timing of work and a shift in resources to meet the demand in the Renewable Energy segment.

Current wording

Revenues. The increase in revenues for the nine months ended September 30, 2024 was primarily due to approximately$570 million in revenues attributable to acquired businesses and higher emergency restoration services revenues as compared to the nine months ended September 30, 2023. These increases are partially offset by the timing of work and a shift of resources to meet the demand in the Renewable Energy segment.

Previous wording

Operating Income. The increase in operating income and operating margin for the three months ended June 30, 2024 was primarily due to the increase in revenues and a change in the overall mix of revenues.

Current wording

Operating Income. The increase in operating income and operating margin for the nine months ended September 30, 2024 was primarily due to the increase in revenues, change in the overall mix of work, including an increase in higher margin emergency restoration services, partially offset by lower operating margins associated with telecommunication projects.

Previous wording

Revenues. The increase in revenues for the six months ended June 30, 2024 was primarily due to increased demand for generation and transmission services for renewable generation projects.

Current wording

Revenues. The increase in revenues for the nine months ended September 30, 2024 was primarily due to increased demand for generation and transmission services for renewable generation projects, as well as approximately$155 million in revenues attributable to acquired businesses.

Previous wording

Operating Income. The increase in operating income and operating margin was primarily due to the increase in revenues during the six months ended June 30, 2024. Additionally, operating income and operating margin during the six months ended June 30, 2023 were negatively impacted by delays, logistical challenges and other issues outside of our control that increased costs associated with a large renewable energy project in Canada. Operating margin for the six months ended June 30, 2024 was negatively impacted by decreased operating income margins on various solar projects in the United States that were the result of decreased productivity.

Current wording

Operating Income. The increase in operating income and operating margin was primarily due to the increase in revenues during the nine months ended September 30, 2024, partially offset by decreased productivity and increased costs on various solar projects in the United States. Additionally, operating income and operating margin during the nine months ended September 30, 2023 were negatively impacted by delays, logistical challenges and other issues outside of our control that increased costs associated with a large renewable energy project in Canada.

Previous wording

Revenues. The decrease in revenues for the six months ended June 30, 2024 was primarily due to lower revenues from large pipeline projects in Canada, which was partially offset by increased revenues associated with large pipeline projects in the United States and approximately $115 million in revenues attributable to an acquired business.

Current wording

Revenues. The decrease in revenues for the nine months ended September 30, 2024 was primarily due to lower revenues from large pipeline projects, partially offset by approximately$170 million in revenues attributable to an acquired business.

Previous wording

Operating Income. The decrease in operating income and operating margin for the six months ended June 30, 2024 was primarily due to decreased revenues in Canada, which contributed to lower levels of fixed cost absorption, and an $11.2 million loss recorded during the six months ended June 30, 2024 related to the disposition of a non-core business.

Current wording

Operating Income. The decrease in operating income and operating margin for the nine months ended September 30, 2024 was primarily due to decreased revenues and overall mix of work performed during the period, which contributed to lower levels of fixed cost absorption, and an $11.9 million loss recorded during the nine months ended September 30, 2024 related to the disposition of a non-core business.

Previous wording

The increase in corporate and non-allocated costs during the six months ended June 30, 2024 was primarily due to a $14.3 million increase in intangible asset amortization, as well as an aggregate increase of $12.1 million primarily related to compensation expense, which was attributable to non-cash stock compensation expense and salaries in support of business growth.

Current wording

The increase in corporate and non-allocated costs during the nine months ended September 30, 2024 was primarily due to a $53.4 million increase in intangible asset amortization and a $23.5 million increase in compensation expense, which was attributable to increased salaries, incentive compensation and non-cash stock compensation expense in support of business growth.

Previous wording

(1) The amount for the six months ended June 30, 2024 is a loss of $11.2 million on the disposition of a non-core business, partially offset by a gain of $7.5 million as a result of the sale of a non-integral equity method investment.

Current wording

(1) The amount for the nine months ended September 30, 2024 is a loss of $11.9 million on the disposition of a non-core business, partially offset by a gain of $7.5 million as a result of the sale of a non-integral equity method investment.

Previous wording

As of June 30, 2024 and December 31, 2023, MSAs accounted for 41% and 45% of our estimated 12-month backlog and 54% and 55% of our total backlog. Generally, our customers are not contractually committed to specific volumes of services under our MSAs, and most of our contracts can be terminated on short notice even if we are not in default. We determine the estimated backlog for these MSAs using recurring historical trends, factoring in seasonal demand and projected customer needs based upon ongoing communications. In addition, many of our MSAs are subject to renewal, and these potential renewals are considered in determining estimated backlog. As a result, estimates for remaining performance obligations and backlog are subject to change based on, among other things, project accelerations; project cancellations or delays, including but not limited to those caused by commercial issues, regulatory requirements, natural disasters, emergencies and adverse weather conditions; and final acceptance of change orders by customers. These factors can cause revenues to be realized in periods and at levels that are different than originally projected.

Current wording

As of September 30, 2024 and December 31, 2023, MSAs accounted for 38% and 45% of our estimated 12-month backlog and 49% and 55% of our total backlog. Generally, our customers are not contractually committed to specific volumes of services under our MSAs, and most of our contracts can be terminated on short notice even if we are not in default. We determine the estimated backlog for these MSAs using recurring historical trends, factoring in seasonal demand and projected customer needs based upon ongoing communications. In addition, many of our MSAs are subject to renewal, and these potential renewals are considered in determining estimated backlog. As a result, estimates for remaining performance obligations and backlog are subject to change based on, among other things, project accelerations; project cancellations or delays, including but not limited to those caused by commercial issues, regulatory requirements, natural disasters, emergencies and adverse weather conditions; and final acceptance of change orders by customers. These factors can cause revenues to be realized in periods and at levels that are different than originally projected.

Previous wording

The increase in remaining performance obligations from December 31, 2023 to June 30, 2024 was primarily attributable to multiple new project awards, while the increase in backlog from December 31, 2023 to June 30, 2024 was primarily attributable to new project awards included in the Electric Power segment.

Current wording

The increases in both remaining performance obligations and backlog from December 31, 2023 to September 30, 2024 were partially due to the impact of acquisitions that occurred in the nine months ended September 30, 2024 as well as increased new project awards with existing customers, and the increase in backlog was also attributable to new project awards included in the Electric Power segment.

Previous wording

During the six months ended June 30, 2024, there were no material changes outside the ordinary course of business in the specified contractual obligations or changes to our capital allocation priorities as set forth in Item 7. Management’s Discussion and Analysis of Financial Conditionand Results of Operations in Part II of the 2023 Annual Report. Subsequent to June 30, 2024, and as described below, we entered into, and borrowed the full amount available under, a new $400 million 90-day term loan facility, borrowed approximately $1.2 million under our commercial paper program and amended our credit facility. We anticipate that our future cash flows from operating activities, cash and cash equivalents on hand, existing borrowing capacity under our senior credit facility and commercial paper program and ability to access capital markets for additional capital will provide sufficient funds to enable us to meet our cash requirements for the next twelve months and over the longer term.

Current wording

In July 2024, and as described below, we entered into, and borrowed the full amount available under, a new $400 million 90-day term loan facility, borrowed approximately $1.2 billion under our commercial paper program and amended our credit facility. In August 2024, we issued $1.25 billion aggregate principal amount of senior notes and received net proceeds of $1.24 billion and used the proceeds to repay certain borrowings that were utilized to acquire CEI. These debt financing arrangements and interest related to such arrangements are more fully described in Note 8 of the Notes to Condensed Consolidated Financial Statements in Item 1. Financial Statements of Part I of this Quarterly Report. Additionally, on October 1, 2024, we repaid the $500.0 million aggregate principal amount of our 0.950% senior notes due October 2024. During the nine months ended September 30, 2024, there were no other material changes outside the ordinary course of business in the specified contractual obligations or changes to our capital allocation priorities as set forth in Item 7. Management’s Discussion and Analysis of Financial Conditionand Results of Operations in Part II of the 2023 Annual Report.

Previous wording

(1)Further information with respect to our cash and cash equivalents is set forth below and in Note 15 of the Notes to Condensed Consolidated Financial Statements in Item 1. Financial Statements of Part I of this Quarterly Report. This amount includes $258.8 million in jurisdictions outside of the U.S., principally in Canada and Australia. There are currently no legal or economic restrictions that would materially impede our ability to repatriate such cash.

Current wording

(1) Further information with respect to our cash and cash equivalents is set forth below and in Note 15 of the Notes to Condensed Consolidated Financial Statements in Item 1. Financial Statements of Part I of this Quarterly Report. This amount includes $303.0 million in jurisdictions outside of the U.S., principally in Australia. There are currently no legal or economic restrictions that would materially impede our ability to repatriate such cash.

Previous wording

On July 31, 2024, we amended our senior credit facility to, among other things, (i) increase the aggregate commitments for revolving loans from $2.64 billion to $2.80 billion and (ii) extend the maturity date for revolving loans under the senior credit facility from October 8, 2026 to July 31, 2029. For additional information regarding this short-term facility and the amendment to our senior credit facility, see Note 8 of the Notes to Condensed Consolidated Financial Statements in Item 1. Financial Statements of Part I of this Quarterly Report.

Current wording

On July 31, 2024, we amended our senior credit facility to, among other things, (i) increase the aggregate commitments for revolving loans from $2.64 billion to $2.80 billion and (ii) extend the maturity date for revolving loans under the senior credit facility from October 8, 2026 to July 31, 2029. In August 2024, we issued $1.25 billion aggregate principal amount of senior notes and received net proceeds of $1.24 billion and used the proceeds to repay certain borrowings that were utilized to acquire CEI. For additional information regarding the amendment to our senior credit facility and the issuance of the senior notes, see Note 8 of the Notes to Condensed Consolidated Financial Statements in Item 1. Financial Statements of Part I of this Quarterly Report.

Previous wording

We are evaluating our longer-term debt financing options, and we may seek to access the capital markets from time to time to raise additional capital, increase liquidity as we deem necessary, refinance or extend the term of our existing indebtedness, fund acquisitions or otherwise fund our capital needs. While our financial strategy and consistent performance have allowed us to maintain investment grade ratings, our ability to access capital markets in the future depends on a number of factors, including our financial performance and financial position, our credit ratings, industry conditions, general economic conditions, our backlog, capital expenditure commitments, market conditions and market perceptions of us and our industry.

Current wording

We may seek to access the capital markets from time to time to raise additional capital, increase liquidity as we deem necessary, refinance or extend the term of our existing indebtedness, fund acquisitions or otherwise fund our capital needs. While our financial strategy and consistent performance have allowed us to maintain investment grade ratings, our ability to access capital markets in the future depends on a number of factors, including our financial performance and financial position, our credit ratings, industry conditions, general economic conditions, our backlog, capital expenditure commitments, market conditions and market perceptions of us and our industry.

Previous wording

Sources and Uses of Cash, Cash Equivalents and Restricted Cash During the Six Months Ended June 30, 2024 and 2023

Current wording

Sources and Uses of Cash, Cash Equivalents and Restricted Cash During the Nine Months Ended September 30, 2024 and 2023

Previous wording

Net cash provided by operating activities of $629.3 million and $165.8 million in the six months ended June 30, 2024 and 2023 primarily reflected earnings adjusted for non-cash items and cash provided and used by the main components of working capital: “Accounts and notes receivable,” “Contract assets,” “Accounts payable and accrued expenses,” and “Contract liabilities.” Net cash provided by operating activities during the six months ended June 30, 2023 was negatively impacted by incremental working capital requirements and the timing of billings related to the large renewable transmission project in Canada as discussed further in Note 3 of the Notes to Condensed Consolidated Financial Statements in Item 1. Financial Statements of Part I of this Quarterly Report.

Current wording

Net cash provided by operating activities of $1.37 billion and $572.4 million in the nine months ended September 30, 2024 and 2023 primarily reflected earnings adjusted for non-cash items and cash provided and used by the main components of working capital: “Accounts and notes receivable,” “Contract assets,” “Accounts payable and accrued expenses,” and “Contract liabilities.” Net cash provided by operating activities during the nine months ended September 30, 2023 was negatively impacted by incremental working capital requirements and the timing of billings related to the large renewable transmission project in Canada as discussed further in Note 3 of the Notes to Condensed Consolidated Financial Statements in Item 1. Financial Statements of Part I of this Quarterly Report.