Debt Obligations

9 Months Ended

Sep. 30, 2022

Debt Disclosure [Abstract]

Debt Obligations

10. DEBT OBLIGATIONS:

Quanta’s long-term debt obligations consisted of the following (in thousands):

	September 30, 2022		December 31, 2021
0.950% Senior Notes due October 2024	$	500,000	$	500,000
2.900% Senior Notes due October 2030	1,000,000		1,000,000
2.350% Senior Notes due January 2032	500,000		500,000
3.050% Senior Notes due October 2041	500,000		500,000
Borrowings under senior credit facility	952,360		1,199,841
Borrowings under commercial paper program	400,450		—
Other long-term debt	89,504		64,800
Finance leases	3,612		2,546
Unamortized discount and financing costs	(27,060)		(29,295)
Total long-term debt obligations	3,918,866		3,737,892
Less — Current maturities of long-term debt	32,344		13,418
Total long-term debt obligations, net of current maturities	$	3,886,522	$	3,724,474

Quanta’s current maturities of long-term debt and short-term debt consisted of the following (in thousands):

	September 30, 2022		December 31, 2021
Current maturities of long-term debt	$	32,344	13,418
Short-term debt	—		15,748
Current maturities of long-term debt and short-term debt	$	32,344	$	29,166

Senior Notes

The interest amounts due on Quanta’s senior notes are set forth below (dollars in thousands).

Title of the Notes	Interest Amount		Payment Dates	Commencement Date
0.950% Senior Notes due October 2024	$	2,375	April 1 and October 1	April 1, 2022
2.900% Senior Notes due October 2030	$	14,500	April 1 and October 1	April 1, 2021
2.350% Senior Notes due January 2032	$	5,875	January 15 and July 15	July 15, 2022
3.050% Senior Notes due October 2041	$	7,625	April 1 and October 1	April 1, 2022

Senior Credit Facility

The credit agreement for Quanta’s senior credit facility (as amended, the credit agreement) provides for a $750.0 million term loan facility and aggregate revolving commitments of $2.64 billion, with a maturity date of October 8, 2026. Borrowings under the senior credit facility and the applicable interest rates were as follows (dollars in thousands):

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2022			2021			2022			2021
Maximum amount outstanding	$	1,684,783		$	517,883		$	1,684,783		$	576,993
Average daily amount outstanding	$	1,448,976		$	416,089		$	1,391,130		$	360,609
Weighted-average interest rate	3.65		%	2.13		%	2.60		%	2.05		%

On August 23, 2022, Quanta entered into an amendment to the credit agreement, which among other things, permits proceeds of revolving loans to be used to provide credit support for Quanta’s commercial paper program, as described further below; established Term Secured Overnight Financing Rate (Term SOFR) (as defined in the credit agreement) as the benchmark rate for the senior credit facility (including both the term loan facility and the revolving credit facility), in replacement of London Interbank Offered Rate (LIBOR) (as defined therein prior to giving effect to the amendment), effective as of the date of the amendment; and revised certain other terms and provisions.

The credit agreement contains certain covenants, including, as of the end of any fiscal quarter of Quanta, (i) a maximum Consolidated Leverage Ratio (as defined in the credit agreement) of 3.5 to 1.0 (except that in connection with certain permitted acquisitions in excess of $200.0 million, such ratio is 4.0 to 1.0 for the fiscal quarter in which the acquisition is completed and the four subsequent fiscal quarters) and (ii) a minimum Consolidated Interest Coverage Ratio (as defined in the credit agreement) of 3.0 to 1.0. As of September 30, 2022, Quanta was in compliance with all of the financial covenants under the credit agreement.

Term Loan. As of September 30, 2022, Quanta had $750.0 million outstanding under its term loan facility. The term loan facility requires quarterly principal payments on the first business day of each January, April, July and October, beginning in January 2023, in the amount of $4.7 million per quarter in 2023 and 2024, $9.4 million per quarter in 2025 and $18.8 million per quarter in 2026. The aggregate remaining principal amount outstanding must be paid by the maturity date of the senior credit facility.

Revolving Loans. As of September 30, 2022, Quanta had $202.4 million of outstanding revolving loans under the senior credit facility. Of the total outstanding revolving loan borrowings, $120.0 million were denominated in U.S. dollars, $65.1 million were denominated in Canadian dollars and $17.3 million were denominated in Australian dollars. As of September 30, 2022, Quanta also had $410.3 million of letters of credit issued under the senior credit facility, of which $318.3 million were denominated in U.S. dollars and $92.0 million were denominated in currencies other than the U.S. dollar, primarily Australian and Canadian dollars. Additionally, available commitments for revolving loans under the senior credit facility must be

maintained in order to provide credit support for notes issued under Quanta’s commercial paper program, and therefore such notes effectively reduce the available borrowing capacity under the senior credit facility.

As of September 30, 2022, $1.63 billion remained available under the senior credit facility for new revolving loans, letters of credit and support of the commercial paper program in U.S. dollars and certain alternative currencies.

Deferred Financing Costs. As of September 30, 2022 and December 31, 2021, capitalized deferred financing costs, net of accumulated amortization, related to Quanta’s revolving loans under its senior credit facility and commercial paper program were $8.9 million and $10.1 million and are included in “Other assets, net” in the accompanying condensed consolidated balance sheets.

Commercial Paper Program

On August 23, 2022, Quanta entered into a commercial paper program that allows Quanta to issue unsecured commercial paper notes in an amount up to a maximum aggregate face amount of $1.0 billion outstanding at any time. The notes are sold under customary market terms in the U.S. commercial paper market at a discount from par or at par and bear interest at rates determined at the time of issuance. The maturities of the notes may vary, but may not exceed 397 days from the date of issuance. Quanta began issuing notes under this program on September 2, 2022 and had $400.5 million of outstanding notes as of September 30, 2022, with a weighted average interest rate of 3.83%. During the three months ended September 30, 2022, Quanta had maximum borrowings outstanding of $426.3 million and weighted average borrowings of $211.4 million outstanding under the program. Additionally, during the three months ended September 30, 2022, the weighted average interest rate for all borrowings under the program was 3.46%, and the weighted average maturity was 9 days. The notes and related discount are included in “Long-term debt, net of current maturities” in the accompanying condensed consolidated balance sheet.