v3.25.4
LEASES
 12 Months Ended
Dec. 31, 2025
Leases [Abstract]  
LEASES LEASES:
Quanta primarily leases land, buildings, vehicles, construction equipment and office equipment. As of December 31, 2025, the majority of Quanta’s leases had remaining lease terms of less than 11 years. Certain leases include options to extend their terms in increments of up to ten years and/or options to terminate. The components of lease costs in the accompanying consolidated statements of operations are as follows (in thousands):
 Year Ended December 31,
Lease and lease financing costClassification202520242023
Finance lease cost:
Amortization of lease assets
Depreciation (1)
$12,321 $11,462 $4,944 
Interest on lease liabilitiesInterest and other financing expenses2,445 2,798 1,463 
Lease financing transactions:(2)
Depreciation
Depreciation (1)
13,092 10,396 7,698 
Interest
Interest and other financing expenses27,505 17,600 12,992 
Operating lease costCost of services and Selling, general and administrative expenses129,611 108,879 93,133 
Short-term and variable lease cost (3)
Cost of services and Selling, general and administrative expenses1,483,281 1,245,011 1,106,454 
Total lease and lease financing cost $1,668,255 $1,396,146 $1,226,684 
(1)    Depreciation is included within “Cost of services” and “Selling, general and administrative expenses” in the accompanying consolidated statements of operations.
(2)    Certain of Quanta’s equipment rental agreements contain purchase options pursuant to which the purchase price is offset by a portion of the rental payments. When these purchase options are exercised by a third-party lessor on behalf of Quanta, the transaction is deemed to be a financing transaction for accounting purposes, which results in the recognition of an asset equal to the purchase price and a corresponding liability.
(3)    Short-term lease cost includes both leases and rentals with initial terms of one year or less. Variable lease cost is insignificant.
Quanta has entered into arrangements with certain related parties to lease real and personal property and facilities. Typically, the parties are employees of Quanta who are also the former owners of businesses acquired by Quanta, and the real property and facilities continue to be utilized by Quanta subsequent to the acquisitions. Quanta utilizes third-party market valuations to evaluate rental rates for these properties and facilities, and the lease agreements generally have remaining lease terms of up to 11 years, subject to renewal options. Related party lease expense was $27.2 million, $18.7 million and $16.5 million for the years ended December 31, 2025, 2024 and 2023.
The components of leases in the accompanying consolidated balance sheets were as follows (in thousands):
December 31,
Lease typeClassification20252024
Assets:
Operating lease right-of-use assetsOperating lease right-of-use assets$400,814 $299,895 
Finance lease assetsProperty and equipment, net of accumulated depreciation87,242 43,018 
Lease financing transaction assets
Property and equipment, net of accumulated depreciation193,658 155,548 
Total lease and lease financing assets
 $681,714 $498,461 
Liabilities:
Current:
OperatingCurrent portion of operating lease liabilities$114,377 $94,162 
FinanceCurrent maturities of long-term debt and short-term debt69,608 11,641 
Lease financing transaction liabilities Current maturities of long-term debt and short-term debt17,933 11,307 
Non-current:
OperatingOperating lease liabilities, net of current portion309,671 222,359 
FinanceLong-term debt, net of current maturities23,447 36,352 
Lease financing transaction liabilities Long-term debt, net of current maturities180,914 144,242 
Total lease and lease financing liabilities
 $715,950 $520,063 
Future minimum lease payments for operating leases and finance leases were as follows (in thousands):
As of December 31, 2025
 Operating LeasesFinance LeasesTotal
2026$133,445 $71,256 $204,701 
2027108,919 9,810 118,729 
202881,279 7,602 88,881 
202954,540 5,207 59,747 
203035,988 2,560 38,548 
Thereafter70,163 259 70,422 
Total future minimum payments related to operating leases and finance leases484,334 96,694 581,028 
Less imputed interest(60,286)(3,639)(63,925)
Total$424,048 $93,055 $517,103 
Future minimum lease payments for short-term leases were $42.1 million as of December 31, 2025. As of December 31, 2025, Quanta also had minimum lease payments related to operating lease obligations of $47.7 million for leases that had not yet commenced as of such date, are expected to commence in 2026 and have lease terms of one to eleven years. Additionally, as described above, certain of Quanta’s equipment rental agreements contain purchase options pursuant to which the purchase price is offset by a portion of the rental payments. The future payments related to these lease financing transactions totaled
$142.1 million and comprise principal and interest payments. The principal payments related to lease financing transactions required to be made during the next five years are included in the debt maturity table in Note 10.
The weighted average remaining lease terms (other than for short-term leases) and discount rates were as follows:
 As of December 31,
20252024
Weighted average remaining lease term (in years):
Operating leases4.874.48
Finance leases1.364.35
Weighted average discount rate:
Operating leases5.4 %5.1 %
Finance leases5.7 %6.1 %
Quanta has also guaranteed the residual value under certain of its equipment operating leases and real estate finance leases, agreeing to pay any difference between the residual value and the fair market value of the underlying asset at the date of lease termination. Historically, the fair value of the assets at the time of lease termination generally has approximated or exceeded the residual value guarantees, and therefore such guarantees are not expected to result in significant payments.
LEASES LEASES:
Quanta primarily leases land, buildings, vehicles, construction equipment and office equipment. As of December 31, 2025, the majority of Quanta’s leases had remaining lease terms of less than 11 years. Certain leases include options to extend their terms in increments of up to ten years and/or options to terminate. The components of lease costs in the accompanying consolidated statements of operations are as follows (in thousands):
 Year Ended December 31,
Lease and lease financing costClassification202520242023
Finance lease cost:
Amortization of lease assets
Depreciation (1)
$12,321 $11,462 $4,944 
Interest on lease liabilitiesInterest and other financing expenses2,445 2,798 1,463 
Lease financing transactions:(2)
Depreciation
Depreciation (1)
13,092 10,396 7,698 
Interest
Interest and other financing expenses27,505 17,600 12,992 
Operating lease costCost of services and Selling, general and administrative expenses129,611 108,879 93,133 
Short-term and variable lease cost (3)
Cost of services and Selling, general and administrative expenses1,483,281 1,245,011 1,106,454 
Total lease and lease financing cost $1,668,255 $1,396,146 $1,226,684 
(1)    Depreciation is included within “Cost of services” and “Selling, general and administrative expenses” in the accompanying consolidated statements of operations.
(2)    Certain of Quanta’s equipment rental agreements contain purchase options pursuant to which the purchase price is offset by a portion of the rental payments. When these purchase options are exercised by a third-party lessor on behalf of Quanta, the transaction is deemed to be a financing transaction for accounting purposes, which results in the recognition of an asset equal to the purchase price and a corresponding liability.
(3)    Short-term lease cost includes both leases and rentals with initial terms of one year or less. Variable lease cost is insignificant.
Quanta has entered into arrangements with certain related parties to lease real and personal property and facilities. Typically, the parties are employees of Quanta who are also the former owners of businesses acquired by Quanta, and the real property and facilities continue to be utilized by Quanta subsequent to the acquisitions. Quanta utilizes third-party market valuations to evaluate rental rates for these properties and facilities, and the lease agreements generally have remaining lease terms of up to 11 years, subject to renewal options. Related party lease expense was $27.2 million, $18.7 million and $16.5 million for the years ended December 31, 2025, 2024 and 2023.
The components of leases in the accompanying consolidated balance sheets were as follows (in thousands):
December 31,
Lease typeClassification20252024
Assets:
Operating lease right-of-use assetsOperating lease right-of-use assets$400,814 $299,895 
Finance lease assetsProperty and equipment, net of accumulated depreciation87,242 43,018 
Lease financing transaction assets
Property and equipment, net of accumulated depreciation193,658 155,548 
Total lease and lease financing assets
 $681,714 $498,461 
Liabilities:
Current:
OperatingCurrent portion of operating lease liabilities$114,377 $94,162 
FinanceCurrent maturities of long-term debt and short-term debt69,608 11,641 
Lease financing transaction liabilities Current maturities of long-term debt and short-term debt17,933 11,307 
Non-current:
OperatingOperating lease liabilities, net of current portion309,671 222,359 
FinanceLong-term debt, net of current maturities23,447 36,352 
Lease financing transaction liabilities Long-term debt, net of current maturities180,914 144,242 
Total lease and lease financing liabilities
 $715,950 $520,063 
Future minimum lease payments for operating leases and finance leases were as follows (in thousands):
As of December 31, 2025
 Operating LeasesFinance LeasesTotal
2026$133,445 $71,256 $204,701 
2027108,919 9,810 118,729 
202881,279 7,602 88,881 
202954,540 5,207 59,747 
203035,988 2,560 38,548 
Thereafter70,163 259 70,422 
Total future minimum payments related to operating leases and finance leases484,334 96,694 581,028 
Less imputed interest(60,286)(3,639)(63,925)
Total$424,048 $93,055 $517,103 
Future minimum lease payments for short-term leases were $42.1 million as of December 31, 2025. As of December 31, 2025, Quanta also had minimum lease payments related to operating lease obligations of $47.7 million for leases that had not yet commenced as of such date, are expected to commence in 2026 and have lease terms of one to eleven years. Additionally, as described above, certain of Quanta’s equipment rental agreements contain purchase options pursuant to which the purchase price is offset by a portion of the rental payments. The future payments related to these lease financing transactions totaled
$142.1 million and comprise principal and interest payments. The principal payments related to lease financing transactions required to be made during the next five years are included in the debt maturity table in Note 10.
The weighted average remaining lease terms (other than for short-term leases) and discount rates were as follows:
 As of December 31,
20252024
Weighted average remaining lease term (in years):
Operating leases4.874.48
Finance leases1.364.35
Weighted average discount rate:
Operating leases5.4 %5.1 %
Finance leases5.7 %6.1 %
Quanta has also guaranteed the residual value under certain of its equipment operating leases and real estate finance leases, agreeing to pay any difference between the residual value and the fair market value of the underlying asset at the date of lease termination. Historically, the fair value of the assets at the time of lease termination generally has approximated or exceeded the residual value guarantees, and therefore such guarantees are not expected to result in significant payments.