Business and Organization
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6 Months Ended | ||||
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Jun. 30, 2011
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Business and Organization [Abstract] | |||||
BUSINESS AND ORGANIZATION |
Quanta Services, Inc. (Quanta) is a leading national provider of
specialized contracting services, offering infrastructure
solutions to the electric power, natural gas and oil pipeline
and telecommunications industries. Quanta reports its results
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.
Electric
Power Infrastructure Services Segment
The Electric Power Infrastructure Services segment provides
comprehensive network solutions to customers in the electric
power industry. Services performed by the Electric Power
Infrastructure Services segment generally include the design,
installation, upgrade, repair and maintenance of electric power
transmission and distribution networks and substation facilities
along with other engineering and technical services. This
segment also provides emergency restoration services, including
the repair of infrastructure damaged by inclement weather, the
energized installation, maintenance and upgrade of electric
power infrastructure utilizing unique bare hand and hot stick
methods and our proprietary robotic arm technologies, and the
installation of “smart grid” technologies on electric
power networks. In addition, this segment designs, installs and
maintains renewable energy generation facilities, in particular
solar and wind, and related switchyards and transmission
networks. To a lesser extent, this segment provides services
such as the design, installation, maintenance and repair of
commercial and industrial wiring, installation of traffic
networks and the installation of cable and control systems for
light rail lines.
Natural
Gas and Pipeline Infrastructure Services Segment
The Natural Gas and Pipeline Infrastructure Services segment
provides comprehensive network solutions to customers involved
in the transportation of natural gas, oil and other pipeline
products. Services performed by the Natural Gas and Pipeline
Infrastructure Services segment generally include the design,
installation, repair and maintenance of natural gas and oil
transmission and distribution systems, compressor and pump
stations and gas gathering systems, as well as related
trenching, directional boring and automatic welding services. In
addition, this segment’s services include pipeline
protection, pipeline integrity and rehabilitation and
fabrication of pipeline support systems and related structures
and facilities. To a lesser extent, this segment designs,
installs and maintains airport fueling systems as well as water
and sewer infrastructure.
Telecommunications
Infrastructure Services Segment
The Telecommunications Infrastructure Services segment provides
comprehensive network solutions to customers in the
telecommunications and cable television industries. Services
performed by the Telecommunications Infrastructure Services
segment generally include the design, installation, repair and
maintenance of fiber optic, copper and coaxial cable networks
used for video, data and voice transmission, as well as the
design, installation and upgrade of wireless communications
networks, including towers, switching systems and
“backhaul” links from wireless systems to voice, data
and video networks. This segment also provides emergency
restoration services, including the repair of telecommunications
infrastructure damaged by inclement weather. To a lesser extent,
services provided under this segment include cable locating,
splicing and testing of fiber optic networks and residential
installation of fiber optic cabling.
Fiber
Optic Licensing Segment
The Fiber Optic Licensing segment designs, procures, constructs
and maintains fiber optic telecommunications infrastructure in
select markets and licenses the right to use these
point-to-point
fiber optic telecommunications facilities to its customers
pursuant to licensing agreements, typically with terms from five
to twenty-five years, inclusive of certain renewal options.
Under those agreements, customers are provided the right to use
a
portion of the capacity of a fiber optic facility, with the
facility owned and maintained by Quanta. The Fiber Optic
Licensing segment provides services to enterprise, education,
carrier, financial services and healthcare customers, as well as
other entities with high bandwidth telecommunication needs. The
telecommunication services provided through this segment are
subject to regulation by the Federal Communications Commission
and certain state public utility commissions.
Acquisition
On October 25, 2010, Quanta acquired Valard Construction LP
and certain of its affiliated entities (Valard), an electric
power infrastructure services company based in Alberta, Canada.
In connection with the acquisition, Quanta paid the former
owners of Valard approximately $118.9 million in cash and
issued 623,720 shares of Quanta common stock and 3,909,110
exchangeable shares of a Canadian subsidiary of Quanta. In
addition, Quanta issued to a voting trust on behalf of the
holders of the exchangeable shares, one share of Series F
preferred stock with voting rights equivalent to Quanta common
stock equal to the number of exchangeable shares outstanding at
any time. The aggregate value of the common stock and
exchangeable shares issued was approximately $88.5 million.
The exchangeable shares are substantially equivalent to, and
exchangeable on a
one-for-one
basis for, Quanta common stock. In connection with the
acquisition, Quanta also repaid $12.8 million in Valard
debt at the closing of the acquisition. As this transaction was
effective October 25, 2010, the results of Valard have been
included in the consolidated financial statements beginning on
such date. This acquisition allows Quanta to further expand its
capabilities and scope of services in Canada. Valard’s
financial results are generally included in Quanta’s
Electric Power Infrastructure Services segment.
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