Quarterly report pursuant to Section 13 or 15(d)

Segment Information

 v2.3.0.11
Segment Information
 6 Months Ended
Jun. 30, 2011
Segment Information [Abstract]  
SEGMENT INFORMATION
 
10.   SEGMENT INFORMATION:
 
Quanta presents its operations under four reportable segments: (1) Electric Power Infrastructure Services, (2) Natural Gas and Pipeline Infrastructure Services, (3) Telecommunications Infrastructure Services and (4) Fiber Optic Licensing. This structure is generally focused on 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 three internal divisions, namely, the electric power division, natural gas and pipeline division and telecommunications division. These internal divisions are closely aligned with the reportable segments described above based on their operating units’ predominant type of work, with the operating units providing predominantly telecommunications and fiber optic licensing services being managed within the same internal division.
 
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 services across industries, for example, joint trenching projects to install distribution lines for electric power, natural gas and telecommunications customers.
 
In addition, Quanta’s integrated operations and common administrative support at each of its operating units requires that certain allocations, including allocations of shared and indirect costs, such as facility costs, indirect operating expenses including depreciation, and general and administrative costs, are 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 tables (in thousands):
 
                                 
    Three Months Ended
 		    Six Months Ended
 		 
    June 30     June 30  
    2011     2010     2011     2010  
 
Revenues from external customers:
                               
Electric Power
  $ 667,082     $ 463,350     $ 1,233,543     $ 920,171  
Natural Gas and Pipeline
    209,658       263,120       386,481       452,054  
Telecommunications
    106,422       117,662       185,815       195,888  
Fiber Optic Licensing
    27,752       26,370       54,034       50,672  
                                 
Consolidated
  $ 1,010,914     $ 870,502     $ 1,859,873     $ 1,618,785  
                                 
Operating income (loss):
                               
Electric Power
  $ 70,082     $ 50,389     $ 101,400     $ 90,206  
Natural Gas and Pipeline
    (1,190 )     25,896       (38,183 )     44,270  
Telecommunications
    9,039       7,694       5,427       6,894  
Fiber Optic Licensing
    13,182       13,880       25,217       25,999  
Corporate and non-allocated costs
    (33,383 )     (33,034 )     (63,047 )     (60,254 )
                                 
Consolidated
  $ 57,730     $ 64,825     $ 30,814     $ 107,115  
                                 
Depreciation:
                               
Electric Power
  $ 12,172     $ 10,068     $ 24,606     $ 19,969  
Natural Gas and Pipeline
    10,813       11,322       20,688       22,498  
Telecommunications
    1,488       1,758       2,886       3,464  
Fiber Optic Licensing
    3,435       3,131       6,853       6,169  
Corporate and non-allocated costs
    1,260       1,012       2,331       1,775  
                                 
Consolidated
  $ 29,168     $ 27,291     $ 57,364     $ 53,875  
                                 
 
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, including operating machinery, equipment and vehicles, as well as office equipment, buildings and leasehold improvements, 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 June 30, 2011 and 2010, Quanta derived $111.2 million and $50.8 million of its revenues from foreign operations, the majority of which was earned in Canada. During the six months ended June 30, 2011 and 2010, Quanta derived $245.6 million and $98.2 million of its revenues from foreign operations, the majority of which was earned in Canada. In addition, Quanta held property and equipment of $94.9 million and $94.0 million in foreign countries as of June 30, 2011 and December 31, 2010.