Derrick A. Jensen
Chief Financial Officer at Quanta Services
Thanks, Duke, and good morning, everyone. Today, we announced record quarterly revenues of $3.9 billion for the fourth quarter of 2021. Net income attributable to common stock was $104.8 million or $0.71 per diluted share, and adjusted diluted earnings per share, a non-GAAP measure, was a record $1.54. Overall, the fourth quarter closed out another exceptional year of operational performance for Quanta. Our fourth quarter results include the introduction of our Renewable Energy Infrastructure Solutions segment, largely due to the inclusion of Blattner in our operating results beginning in October. At a high level, this segment primarily represents the solutions we're providing associated with interconnection, substation and generation infrastructure directly supporting the delivery of renewable electricity.
Historically, these activities were included within our electric segment. However, as the same market forces driving Blattner's growth will drive growth in these related areas, which included the aggregation of these services provided incremental clarity to the investment community. Our reported results exceeded our expectations for the fourth quarter in numerous areas, including revenues, adjusted EBITDA, EPS and adjusted EPS, with revenues and adjusted EBITDA delivering significant growth as compared to last year. I'll cover a few items impacting the quarter. Revenues continued to show significant growth compared to last year, in part due to record emergency storm response revenues, although only slightly above last year's ERS revenues. Additionally, revenues from acquired businesses were approximately $500 million in 4Q 2021, the majority of which was attributable to Blattner.
Operating margins in the quarter benefited from continued strong execution across our electric operations with margins exceeding 12%. Also contributing were the operating results of our integral unconsolidated affiliates. This primarily relates to the LUMA joint venture, but also includes contributions from a business that provides specialty site preparation and access solutions in which we acquired a 44% interest during the quarter, as we commented on in our third quarter earnings release, and they performed quite well during the quarter. Partially offsetting those dynamics were our communications operations, which had negative margins during the quarter due to the challenges experienced in certain regions. Specifically, one customer reduced the previously expected scope of work in certain markets, while the requirements to evidence the completion of the work have been subject to multiple changes.
Due to the elimination of future scope and associated construction activities, we were required to recognize in the quarter the full cost necessary for the preparation and submission of the modified closeout packages. For two other contracts with another customer, we recognized losses due to ongoing permitting delays, which were substantially hindering production, as well as increased cost to meet schedule commitments. These two projects are near completion. Importantly, our remaining aggregate communications operations are operating in the upper single-digit range, giving us the confidence that our longer-term margin profiles are achievable. Our previous guidance included expected contributions from transactions made in 3Q 2021 and 4Q 2021 through the date of our November earnings release of between $40 million and $60 million of adjusted EBITDA, a non-GAAP measure.
Ultimately, our fourth quarter results included contributions towards the higher end of this range. We recognized an incremental $8.1 million provision for credit loss or $0.04 per diluted share related to outstanding receivables owed by Limetree Refining that declared bankruptcy in July 2021 as we do not anticipate the receipt of any funds through the bankruptcy proceeding. We no longer have any exposure related to receivables owed from this customer. Operating margin in 4Q 2021 was negatively impacted by $146 million associated with amortization, deal costs and fair market value adjustments to earn-out liabilities, a combined 370 basis point impact, compared to $28 million of comparable costs and approximately 100 basis point impact in 4Q 2020. Also of note, the tax expense and effective rate for the fourth quarter and full year of 2021 were significantly lower than our previous guidance.
This reduction was largely driven by the favorable IRS clarification on per diem deductions for 2021 and the reversal of certain reserves for uncertain tax positions upon expiration of certain statutes of limitations. Our total backlog was $19.3 billion at the end of the fourth quarter, another record level. $1.6 billion of the backlog is attributable to fourth quarter acquisitions, the majority of which was from Blattner. But excluding those contributions, total backlog were still up over $600 million compared to 3Q 2021. 12-month backlog of $11.3 billion includes close to $1.5 billion of acquired backlog, but excluding those contributions still represents record 12-month backlog on an organic basis. We believe these increases continue to reinforce the repeatable and sustainable nature of the largest portion of our revenues and earnings and the demand for our industry-leading infrastructure solutions.
For the fourth quarter of 2021, we generated free cash flow, a non-GAAP measure, of $111 million, resulting in $246 million of free cash flow for the year. Our previous expectations of $350 million to $500 million of free cash flow for the year excluded significant change in control-related disbursements associated with acquired liabilities during the quarter associated with the Blattner transaction, which aggregated to $72 million and are required to be treated as operating cash outflow items in our GAAP calculation. We also took the opportunity in the fourth quarter of 2021 to accelerate the opportunistic and strategic procurement of around $50 million of equipment. Given the ongoing supply chain challenges in the equipment and vehicle markets, we felt it was the right long-term action to take to support the ongoing needs of our operations.
Days sales outstanding, or DSO, measured 80 days for the fourth quarter, which is a reduction of nine days compared to the third quarter of 2021 and three days compared to the fourth quarter of 2020. The decreases were primarily due to the favorable impact of the acquisition of Blattner, which typically has lower DSO than certain of our other larger operating companies. This positive impact was partially offset by continued elevated working capital requirements associated with two larger Canadian transmission projects driving an increase in contract assets, which we've discussed in prior quarters. Both projects have been impacted by work stoppage protocols in Canada associated with COVID mitigation as well as delays attributable to, among other things, wildfires impacting access to work sites.
Discussions with both customers regarding change orders associated with these increased costs are ongoing, with multiple change orders already approved. The remaining amounts are being pursued in the normal course. We had total liquidity of $2.1 billion at year-end and a debt-to-EBITDA ratio of 2.3 as calculated under our credit agreement. While our leverage profile remains above our target range due to the acquisition financing, as we stated in prior calls, we expect to efficiently delever over the following quarters while continuing to create shareholder value through our dividend and repurchase programs as well as strategic acquisitions. To that end, during the fourth quarter, in addition to the three transactions we announced during our last earnings release, we acquired four additional businesses for a total combined consideration of approximately $230 million.
These four acquisitions all closed late in December and, other than incremental deal costs, were immaterial to our 4Q results. Turning to guidance. First, forecasting and providing specific commentary on the classification of uncommitted revenues between electric power versus renewables can be challenging. Accordingly, it's possible that as we progress through the year and gain more visibility into the nature of the work we'll be performing, there could be movements outside these initial segment ranges simply due to the type of infrastructure our activities will be supporting. As Duke commented, we deliver our portfolio of services, and we are comfortable with our aggregate expectations. Additionally, by following seasonality commentary addresses our expectations for 2022 as compared to our recast quarterly results for 2021, which align prior reported numbers to our new segmentation.
And these 2021 recasted segment numbers have been included in today's earnings release. As it relates to the electric power segment specifically, we see 2022 revenues ranging between $8.2 billion and $8.3 billion. Our base business continues to lead the growth in the segment driven primarily by North American utilities outsourcing activities required to replace, rebuild and upgrade existing infrastructure. Notably, these growth expectations are tempered by reduced storm revenues, $250 million of which are included in our current expectations compared to over $450 million in 2021. Additionally, revenue contributions from larger electric projects are forecasted to be around $200 million lower in 2022 as we expect to reach substantial completion on one of our larger Canadian projects in the first quarter.
Included within the segment are our communications operations, which we expect to grow double digits over 2021 levels to around $750 million of revenue in 2022. While we expect 2022 operating margins for the electric power segment to range between 10.7% and 11.3%, which includes contributions of between $45 million and $50 million of earnings from our integral unconsolidated affiliates, the largest portion of which relates to the LUMA joint venture in Puerto Rico. 2021 represented another exceptional year for our electric operations, and our margin profile was again above our historical norms and our original expectations due in part to the record emergency restoration service revenues. Our 2022 expectations for margins for the segment remain elevated but are more consistent with historical averages and are tempered by normalized storm revenues as well as our communications operations, which are expected to operate in the upper single digits in 2022.
As is typically the case, we expect that first quarter operating margins will be the lowest for the year, likely around 10%, with margins increasing into the second and third quarters and then slightly declining in the fourth quarter. The Renewable Energy Infrastructure Solutions segment full year revenues are expected to range between $3.8 billion and $4 billion, with the largest portion of the growth due to the acquisition of Blattner. As it relates to Blattner, we remain confident in the initial range of expectations for 2022 included in the September deal announcement. From a revenue seasonality perspective in 2022, we expect segment revenues to be between $900 million and $950 million in the first quarter, then growing sequentially into the third quarter with a slight decline in the fourth quarter.
We expect 2022 operating margins for the renewable energy segment to be around 9% for the year, translating into double-digit EBITDA margins, which is what we would expect from the segment. Due to the slightly higher project-oriented nature of this segment, margins will be more variable on a quarterly basis. As it stands today, similar to our other segments, we expect margins for the first quarter to be the lowest for the year, likely around 8%. Margins, therefore, have the opportunity to strengthen in subsequent quarters as volumes increase and we successfully execute through individual project contingencies throughout the year. The Underground Utility and Infrastructure Solutions segment has been heavily impacted by the uncertainties in the energy market and economy caused by COVID-19. However, we expect far fewer headwinds in 2022.
We are currently anticipating double-digit revenue growth off of 2021, with full year revenues expected to range between $4 billion and $4.2 billion. This growth is expected to be led by our industrial, Canadian and Australian operations, each of which has dealt with significant challenges associated with COVID-related impacts for the last two years. Additionally, our gas utility business continues to see nice year-over-year growth opportunities. Operating margins are expected to improve meaningfully in 2022. We see segment margins ranging between 6.5% and 7.5%, led primarily by recovery from our industrial and Canadian operations. Consistent with years past, our first quarter traditionally has lower activity in the segment due to weather seasonality, which impacts our revenues and precious margins to slightly below mid-single digits.
However, we expect solid improvement into the second and third quarters with a seasonal decline in the fourth quarter. The number and size of acquisitions in 2021 will significantly change the magnitude of amortization, acquisition and integration costs and certain other corporate and unallocated costs as well as the quarter-to-quarter timing of these items. We've included some additional information on these as well as further segment seasonality comments and other guidance items in the outlook summary that was posted in connection with the earnings release and can be found on our IR website at quantaservices.com. One incremental item for 2022. Early last year, Quanta made a $90 million minority investment in a private company that provides broadband technology.
The company has entered into an agreement with a special purpose acquisition company and pursuant to the transaction is expected to emerge as a publicly traded company in the first half of the year. Once effective, our current interest would become common equity and would be subject to mark-to-market accounting, with changes in value recorded in other income. We expect to adjust for these changes in value when reporting adjusted EBITDA and adjusted EPS but have not forecasted any valuation movements curve. These segment operating ranges support our expectation for 2022 annual consolidated revenues of $16 billion to $16.5 billion and adjusted EBITDA of between $1.59 billion and $1.7 billion. This represents another record level of adjusted EBITDA and full year adjusted EBITDA margins over 10%.
With these operating results, we estimate our range of GAAP diluted earnings per share attributable to common stock for 2022 to be between $3.56 and $4.06 and anticipate non-GAAP adjusted diluted earnings per share to be between $6 and $6.50. Turning to cash flow. The contract assets I spoke of earlier associated with the Canadian transmission project impacted our operating cash flows in 2021 but are expected to represent inflows of cash in 2022 as components reach resolution. These positive effects will be partially offset by the payment of approximately $46 million of change in control-related payments associated with the Blattner acquisition and the payment of $54 million of previously deferred payroll taxes in accordance with the CARES Act in 2020. As such, we currently expect 2022 free cash flow to range between $650 million and $850 million with capital expenditures of around $400 million.
As we caution every year, quarterly free cash flow is subject to sizable movements due to various customer and project dynamics that occur in the normal course of operations. Reflecting on our 2021 performance, we delivered another exceptional year, led by solid execution in the field and highlighted by the transformational acquisition of Blattner during the fourth quarter. We ended the year with approximately $1.3 billion of adjusted EBITDA, a record for Quanta, which represents a nearly 16.8% CAGR since 2016. More importantly, our record adjusted EPS of $4.92 represents a 26.6% CAGR since 2016. Looking forward, we continue to see the opportunity to deliver adjusted EPS growth that outpaces our adjusted EBITDA growth, led by margin expansion and operating leverage in the field, coupled with strategic capital deployments focused on delivering long-term returns to our stockholders.
Over the last five years, we have deployed approximately $3.9 billion in cash for M&A and strategic investments, $827 million for stock repurchases and $86 million on dividends. Against this backdrop, our financial strategy and consistent performance have been acknowledged by our rating agencies, which reiterated our investment-grade rating subsequent to the debt raised to fund the Blattner acquisition. Going into 2022, we have significant liquidity available and approximately $473 million of availability remaining on our current stock repurchase program. Though we are focused on delevering in the near term, we remain committed to delivering shareholder value through strategic acquisitions and opportunistic repurchase activity. Overall, we continue to believe we are in the early stages of a significant infrastructure investment cycle and that we are uniquely positioned in the markets we serve to deliver comprehensive, end-to-end solutions to support North America's transition to carbon-neutral energy infrastructure.
This concludes our formal presentation, and we'll now open the line for Q&A. Operator?
