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, 2012

Goodwill and Other Intangible Assets [Abstract]

5.	GOODWILL AND OTHER INTANGIBLE ASSETS:

A summary of changes in Quanta’s goodwill is as follows (in thousands):


	Electric Power Division			Natural Gas and Pipeline Division			Telecommunications Division			Total
Balance at December 31, 2011:
Goodwill	$	988,702		$	113,598		$	562,174		$	1,664,474
Accumulated impairment		—			—			(63,264	)		(63,264	)

Goodwill, net		988,702			113,598			498,910			1,601,210
Goodwill acquired during 2012		57,451			7,328			—			64,779
Foreign currency translation related to goodwill		(864	)		(163	)		—			(1,027	)

Balance at June 30, 2012
Goodwill		1,045,289			120,763			562,174			1,728,226
Accumulated impairment		—			—			(63,264	)		(63,264	)

Goodwill, net	$	1,045,289		$	120,763		$	498,910		$	1,664,962

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. From time to time, operating units may be reorganized among Quanta’s internal divisions, as Quanta periodically re-evaluates strategies to better align its operations as business environments evolve.

Activity in Quanta’s intangible assets consists of the following (in thousands):


	As of December 31, 2011					Six Months Ended June 30, 2012								As of June 30, 2012
	Intangible Assets		Accumulated Amortization			Amortization Expense			Additions		Foreign Currency Adjustments			Intangible Assets, Net		Remaining Weighted Average Amortization Period in Years
Customer relationships	$	171,893	$	(38,158	)	$	(5,797	)	$	5,311	$	(387	)	$	132,862		11.6
Backlog		121,779		(101,153	)		(8,758	)		4,906		262			17,036		1.4
Trade names		29,661		(1,948	)		(521	)		2,768		(23	)		29,937		27.7
Non-compete agreements		27,414		(17,604	)		(2,901	)		1,926		(45	)		8,790		3.3
Patented rights and developed technology		16,378		(5,538	)		(966	)		3,020		—			12,894		7.1

Total intangible assets subject to amortization		367,125		(164,401	)		(18,943	)		17,931		(193	)		201,519		12.5
Other intangible assets not subject to amortization		4,500		—			—			—		—			4,500		N/A

Total intangible assets	$	371,625	$	(164,401	)	$	(18,943	)	$	17,931	$	(193	)	$	206,019		N/A

Amortization expense for intangible assets was $9.5 million and $6.9 million for the three months ended June 30, 2012 and 2011 and $18.9 million and $13.1 million for the six months ended June 30, 2012 and 2011. The estimated future aggregate amortization expense of intangible assets as of June 30, 2012 is set forth below (in thousands):


For the Fiscal Year Ending December 31—
Remainder of 2012	$	19,385
2013		20,602
2014		18,549
2015		16,207
2016		15,353
Thereafter		111,423

Total	$	201,519

- Definition

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.

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