Goodwill and Other Intangible Assets
|12 Months Ended|
Dec. 31, 2015
|Goodwill and Intangible Assets Disclosure [Abstract]|
|Goodwill and Other Intangible Assets||
A summary of changes in Quanta’s goodwill is as follows (in thousands):
The purchase price allocation adjustments recorded in the year ended December 31, 2015 resulted primarily from net working capital adjustments and changes in tax estimates. The goodwill impairment in the year ended December 31, 2015 primarily resulted from lower forecasted oil and gas services revenues for Quanta’s Gulf of Mexico operations and certain operations in Australia, due to the extended low commodity price environment. The two reporting units impacted are in Quanta’s Oil and Gas Infrastructure Services Division.
Also, as described in Note 2, Quanta’s operating units are organized into one of Quanta’s two internal divisions and, accordingly, the goodwill associated with its operating units has been aggregated on a divisional basis and reported in the table above. These divisions are closely aligned with Quanta’s reportable segments and are based on the predominant type of work performed by each operating unit. From time to time, operating units may be reorganized between these internal divisions as business environments evolve.
Quanta’s intangible assets subject to amortization and the remaining weighted average amortization periods related to such assets were as follows (in thousands except for weighted average amortization periods, which are in years):
Amortization expense for intangible assets was $34.8 million, $34.3 million and $25.9 million for the years ended December 31, 2015, 2014 and 2013, respectively. Additionally, during the year ended December 31, 2015, Quanta recorded an impairment charge of $12.1 million related to customer relationships, trade names and non-compete agreement intangible assets. These intangible asset impairments primarily resulted from lower forecasted oil and gas services revenues for Quanta’s Gulf of Mexico operations and certain operations in Australia, due to the extended low commodity price environment. The two reporting units impacted are in Quanta’s Oil and Gas Infrastructure Services Division. The impairment charge is reflected in the December 31, 2015 accumulated amortization balances above.
The estimated future aggregate amortization expense of intangible assets subject to amortization as of December 31, 2015 is set forth below (in thousands):
The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.
Reference 1: http://www.xbrl.org/2003/role/presentationRef