Quanta Services, Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Goodwill and Other Intangible Assets

Goodwill and Other Intangible Assets

6 Months Ended

Jun. 30, 2011

Goodwill and Other Intangible Assets [Abstract]


4.	GOODWILL AND OTHER INTANGIBLE ASSETS:

A summary of changes in Quanta’s goodwill between December 31, 2010 and June 30, 2011 is as follows (in thousands):


			Natural Gas and
	Electric Power		Pipeline			Telecommunications
	Division		Division			Division			Total

Balance at December 31, 2010:
Goodwill	$	741,276	$	337,911		$	545,232		$	1,624,419
Accumulated impairment		—		—			(63,264	)		(63,264	)

Goodwill, net		741,276		337,911			481,968			1,561,155
Foreign currency translation related to goodwill		2,766		—			—			2,766
Operating unit reorganization		—		(16,942	)		16,942			—
Purchase price adjustments related to prior periods		—		(50	)		—			(50	)

Balance at June 30, 2011:
Goodwill		744,042		320,919			562,174			1,627,135
Accumulated impairment		—		—			(63,264	)		(63,264	)

Goodwill, net	$	744,042	$	320,919		$	498,910		$	1,563,871

As described in Note 2, Quanta’s operating units are organized into one of Quanta’s three internal divisions and accordingly, Quanta’s goodwill associated with each of 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 based on the predominant type of work performed by the operating units within the divisions.

Intangible assets are comprised of (in thousands):


	As of					Six Months Ended							As of
	December 31, 2010					June 30, 2011							June 30, 2011
											Foreign
	Intangible		Accumulated			Amortization					Currency		Intangible
	Assets		Amortization			Expense			Additions		Adjustments		Assets, Net

Customer relationships	$	153,100	$	(27,880	)	$	(5,045	)	$	—	$	595	$	120,770
Backlog		108,421		(88,429	)		(4,907	)		—		306		15,391
Trade names		27,249		(1,005	)		(455	)		—		84		25,873
Non-compete agreements		23,954		(13,164	)		(2,097	)		—		62		8,755
Patented rights and developed technology		16,078		(4,257	)		(633	)		—		—		11,188

Total intangible assets subject to amortization		328,802		(134,735	)		(13,137	)		—		1,047		181,977
Other intangible assets not subject to amortization		—		—			—			4,500		—		4,500

Total intangible assets	$	328,802	$	(134,735	)	$	(13,137	)	$	4,500	$	1,047	$	186,477

Expenses for the amortization of intangible assets were $6.9 million and $9.1 million for the three months ended June 30, 2011 and 2010 and $13.1 million and $14.9 million for the six months ended June 30, 2011 and 2010. The remaining weighted average amortization period for all intangible assets as of June 30, 2011 is 12.6 years, while the remaining weighted average amortization periods for customer relationships, backlog, trade names, non-compete agreements and the patented rights and developed technology are 12.1 years, 1.9 years, 28.4 years, 2.8 years and 9.3 years, respectively. The estimated future aggregate amortization expense of intangible assets as of June 30, 2011 is set forth below (in thousands):


For the Fiscal Year Ending December 31 —
2011 (Remainder)	$	13,038
2012		24,278
2013		14,209
2014		13,609
2015		12,829
Thereafter		104,014

Total intangible assets subject to amortization	$	181,977

- Definition

Discloses 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 or 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. This element may be used as a single block of text to include the entire intangible asset disclosure including data and tables.

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