Income Taxes (Tables)

12 Months Ended

Dec. 31, 2023

Income Tax Disclosure [Abstract]

Components of Income (Loss) Before Income Taxes

The components of income before income taxes were as follows (in thousands):

	Year Ended December 31,
	2023		2022		2021
Income before income taxes:
Domestic	$	823,691	$	532,051	$	534,302
Foreign	146,265		171,835		88,599
Total	$	969,956	$	703,886	$	622,901

Provision for Income Taxes

The components of the provision for income taxes were as follows (in thousands):

	Year Ended December 31,
	2023		2022		2021
Current:
Federal	$	132,727	$	97,673	$	65,273
State	42,783		29,439		32,930
Foreign	39,941		23,078		6,644
Total current tax provision	215,451		150,190		104,847
Deferred:
Federal	16,055		29,657		27,762
State	(556)		4,225		(2,418)
Foreign	(11,683)		8,171		727
Total deferred tax provision (benefit)	3,816		42,053		26,071
Total provision for income taxes	$	219,267	$	192,243	$	130,918

Effective Income Tax Rate Reconciliation

The actual income tax provision differed from the income tax provision computed by applying the U.S. federal statutory corporate rate to income before provision for income taxes as follows (in thousands):

	Year Ended December 31,
	2023		2022		2021
Provision at the statutory rate	$	203,691	$	147,816	$	130,809
Increases (decreases) resulting from:
State taxes	41,920		28,320		27,204
Employee per diems, meals and entertainment	27,039		6,086		3,569
Tax contingency reserves, net	6,882		7,939		844
Foreign taxes	2,927		(638)		(9,359)
Company-owned life insurance	(2,262)		2,917		(6,969)
Taxes on certain equity method investments and non-controlling interests	(9,519)		(12,886)		(8,825)
Valuation allowance on deferred tax assets	(20,177)		23,366		6,107
Stock-based compensation	(35,007)		(24,066)		(21,271)
Other	3,773		13,389		8,809
Total provision for income taxes	$	219,267	$	192,243	$	130,918

Deferred Tax Assets and Liabilities and Net Deferred Income Tax Assets and Liabilities

The tax effects of these temporary differences, representing deferred tax assets and liabilities, result principally from the following (in thousands):

	December 31,
	2023		2022
Deferred income tax liabilities:
Property and equipment	$	(350,204)	$	(286,950)
Goodwill	(167,275)		(129,491)
Leased assets	(106,325)		(84,870)
Retainage	(16,590)		(28,773)
Other	(2,318)		—
Total deferred income tax liabilities	(642,712)		(530,084)
Deferred income tax assets:
Lease liabilities	103,308		84,189
Other intangible assets	100,478		73,654
Accruals and reserves	69,081		48,168
Stock and incentive compensation	62,590		55,413
Net operating loss carryforwards	62,523		56,556
Tax credits	28,802		34,413
Equity method investments and non-controlling interests	8,357		5,878
Deferred tax benefits on unrecognized tax positions	6,327		8,899
Other	—		5,849
Subtotal	441,466		373,019
Valuation allowance	(40,013)		(58,461)
Total deferred income tax assets	401,453		314,558
Total net deferred income tax liabilities	$	(241,259)	$	(215,526)

The net deferred income tax assets and liabilities comprised the following in the accompanying consolidated balance sheets (in thousands):

	December 31,
	2023		2022
Deferred income taxes:
Assets	$	12,745	$	12,335
Liabilities	(254,004)		(227,861)
Total net deferred income tax liabilities	$	(241,259)	$	(215,526)

Reconciliation of Unrecognized Tax Benefit

A reconciliation of unrecognized tax benefit balances is as follows (in thousands):

	December 31,
	2023		2022		2021
Balance at beginning of year	$	41,639	$	37,737	$	33,219
Additions based on tax positions related to the current year	10,304		11,699		6,881
Additions for tax positions of prior years	—		230		2,339
Reductions for tax positions of prior years	—		(407)		—
Reductions for audit settlements	—		(2,207)		—
Reductions resulting from a lapse of the applicable statute of limitations periods	(6,807)		(5,413)		(4,702)
Balance at end of year	$	45,136	$	41,639	$	37,737

Balances of Unrecognized Tax Benefits

The balances of unrecognized tax benefits, the amount of related interest and penalties and what Quanta believes to be the range of reasonably possible changes in the next 12 months are as follows (in thousands):

	December 31, 2023
Unrecognized tax benefits	$	45,136
Portion that, if recognized, would reduce tax expense and effective tax rate	$	42,650
Accrued interest on unrecognized tax benefits	$	4,903
Accrued penalties on unrecognized tax benefits	$	1,085
Reasonably possible reduction to the balance of unrecognized tax benefits in succeeding 12 months	$0 to $8,932
Portion that, if recognized, would reduce tax expense and effective tax rate	$0 to $8,660