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Acquisitions | 12 Months Ended
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Dec. 31, 2014
Business Combinations [Abstract] |
Acquisitions |
5. | ACQUISITIONS:
2014 Acquisitions During 2014, Quanta completed nine acquisitions, which enabled Quanta to further enhance its electric power and oil and gas infrastructure service offerings in the United States and Canada and expand its capabilities in Australia to include electric power infrastructure service offerings. These acquisitions included four electric power infrastructure services companies located in Canada; two oil and gas infrastructure services businesses located in Canada; an electric power infrastructure services company located in Australia; a U.S. based general engineering and construction company specializing in hydrant fueling, waterfront and utility construction for the U.S. Department of Defense that is generally included in Quanta’s Oil and Gas Infrastructure Services segment; and a geotechnical and geological engineering services company based in the United States that is generally included in Quanta’s Electric Power Infrastructure Services segment. The aggregate consideration paid for these acquisitions consisted of approximately $284.3 million in cash, 686,382 shares of Quanta common stock and 3,825,971 exchangeable shares of Canadian subsidiaries of Quanta that are exchangeable on a one-for-one basis for Quanta common stock. The exchangeable shares provide holders with rights equivalent to Quanta common stockholders with respect to dividends and other economic rights. In addition, Quanta issued one share of Series G preferred stock associated with 899,858 of the exchangeable shares, which generally votes on the same matters as Quanta common stock and is entitled to a number of votes equal to the number of such exchangeable shares outstanding at that time. The exchangeable shares not associated with preferred stock do not have voting rights. The aggregate value of the securities issued related to 2014 acquisitions on the respective closing or settlement dates of the acquisitions, totaled approximately $134.5 million. As these transactions were effective during 2014, the results of each acquired company have been included in Quanta’s consolidated financial statements beginning on the respective dates of acquisition. Quanta is in the process of finalizing its assessments of the fair values of acquired assets and assumed liabilities related to the third and fourth quarter 2014 acquisitions, and further adjustments to the purchase price allocations may occur. Quanta expects to complete the purchase accounting process as soon as practicable but no later than one year from the respective acquisition dates. The aggregate purchase consideration related to the third and fourth quarter 2014 acquisitions was preliminarily allocated to acquired assets and assumed liabilities, which resulted in a preliminary allocation of approximately $106.9 million of net tangible assets, $116.1 million of goodwill and $73.9 million of other intangible assets. 2013 Acquisitions During 2013, Quanta acquired six businesses, which enabled Quanta to further enhance its electric power infrastructure and oil and gas infrastructure service offerings in the United States, Canada and Australia. The aggregate consideration paid for these acquisitions consisted of approximately $341.1 million in cash and 3,547,482 shares of Quanta common stock valued, as of the respective dates of issuance, at approximately $88.9 million. The results for each company have been included in Quanta’s consolidated financial statements beginning on the respective dates of acquisition. 2012 Acquisitions During 2012, Quanta acquired four businesses, which enabled Quanta to expand its electric power infrastructure services in Canada and its electric power infrastructure services and oil and gas infrastructure service offerings in the U.S. The aggregate consideration for these acquisitions consisted of approximately $57.5 million in cash, 1,927,113 shares of Quanta common stock valued at approximately $37.3 million, as of the respective dates of acquisition, and the repayment of $11.0 million in debt. The results for each company have been included in Quanta’s consolidated financial statements beginning on the respective dates of acquisition. 2014, 2013 and 2012 Acquisitions The following table summarizes the aggregate consideration paid or payable as of December 31, 2014 for the 2014 and 2013 acquisitions and presents the allocation of these amounts to the net tangible and identifiable intangible assets based on their estimated fair values as of the respective acquisition dates. This allocation requires a significant use of estimates and is based on information that was available to management at the time these consolidated financial statements were prepared (in thousands).
|  | 2014 |  |  | 2013 |
Consideration: |  |  |  |  |  |  |  |
Value of Quanta common stock and exchangeable shares issued |  | $ | 134,538 |  |  | $ | 88,895 |
Cash paid or payable |  |  | 284,312 |  |  |  | 341,064 |
Fair value of total consideration transferred |  | $ | 418,850 |  |  | $ | 429,959 |
Current assets |  | $ | 172,298 |  |  | $ | 193,895 |
Property and equipment |  |  | 159,186 |  |  |  | 60,988 |
Other assets |  |  | 3,500 |  |  |  | 1,009 |
Identifiable intangible assets |  |  | 96,302 |  |  |  | 55,124 |
Current liabilities |  |  | (144,252 | ) |  |  | (127,430 | )
Deferred tax liabilities, net |  |  | (37,743 | ) |  |  | (4,083 | )
Other long-term liabilities |  |  | (4,926 | ) |  |  | (5,350 | )
Total identifiable net assets |  |  | 244,365 |  |  |  | 174,153 |
Goodwill |  |  | 174,485 |  |  |  | 255,806 |
|  | $ | 418,850 |  |  | $ | 429,959 |
The fair value of current assets acquired in 2014 included accounts receivable with a fair value of $117.0 million. The fair value of current assets acquired in 2013 included accounts receivable with a fair value of $83.9 million. Goodwill represents the excess of the purchase price over the net amount of the fair values assigned to assets acquired and liabilities assumed. The 2014, 2013 and 2012 acquisitions strategically expanded Quanta’s Canadian, Australian and domestic electric power and oil and gas service offerings, which Quanta believes contributes to the recognition of the goodwill. In connection with the 2014 acquisitions, goodwill of $71.5 million was recorded for reporting units included within Quanta’s Electric Power Division and $103.0 million was recorded for reporting units included within Quanta’s Oil and Gas Infrastructure Division on the dates of acquisition. In connection with the 2013 acquisitions, goodwill of $112.5 million was recorded for reporting units included within Quanta’s Electric Power Division and $143.3 million was recorded for reporting units included within Quanta’s Oil and Gas Infrastructure Division on the dates of acquisition. In connection with the 2012 acquisitions, goodwill of $57.5 million was recorded for reporting units included within Quanta’s Electric Power Division and $7.3 million was recorded for the reporting unit included within Quanta’s Oil and Gas Infrastructure Division on the dates of acquisition. Goodwill of approximately $30.1 million and $213.6 million is expected to be deductible for income tax purposes related to the businesses acquired in 2014 and 2013. The following table summarizes the estimated fair values of identifiable intangible assets and the related weighted average amortization periods by type as of the respective acquisition dates for the 2014 acquisitions (in thousands, except for weighted average amortization periods, which are in years).
|  | Estimated Fair Value at Acquisition Date |  |  | Weighted Average Amortization Period at Acquisition Date |
Customer relationships |  | $ | 65,243 |  |  |  | 12.2 |
Backlog |  |  | 17,059 |  |  |  | 1.1 |
Trade names |  |  | 10,436 |  |  |  | 9.7 |
Non-compete agreements |  |  | 3,160 |  |  |  | 5.0 |
Patented rights and developed technology |  |  | 404 |  |  |  | 10.0 |
Total intangible assets subject to amortization acquired in 2014 acquisitions |  | $ | 96,302 |  |  |  | 9.7 |
The unaudited supplemental pro forma results of operations have been provided for illustrative purposes only and do not purport to be indicative of the actual results that would have been achieved by the combined companies for the periods presented or that may be achieved by the combined companies in the future. Future results may vary significantly from the results reflected in the following pro forma financial information because of future events and transactions, as well as other factors (in thousands, except per share amounts):
|  | Year Ended December 31, |
|  | 2014 |  |  | 2013 |  |  | 2012 |
Revenues |  | $ | 8,391,061 |  |  | $ | 7,740,575 |  |  | $ | 6,477,648 |
Gross profit |  | $ | 1,267,778 |  |  | $ | 1,254,211 |  |  | $ | 1,060,370 |
Selling, general and administrative expenses |  | $ | 737,488 |  |  | $ | 579,818 |  |  | $ | 478,184 |
Amortization of intangible assets |  | $ | 43,658 |  |  | $ | 52,405 |  |  | $ | 52,339 |
Net income from continuing operations |  | $ | 322,358 |  |  | $ | 481,263 |  |  | $ | 344,925 |
Net income from continuing operations attributable to common stock |  | $ | 303,990 |  |  | $ | 461,875 |  |  | $ | 328,898 |
Earnings per share from continuing operations attributable to common stock — basic and diluted |  | $ | 1.37 |  |  | $ | 2.08 |  |  | $ | 1.52 |
The pro forma combined results of operations for the years ended December 31, 2014 and 2013 have been prepared by adjusting the historical results of Quanta to include the historical results of the 2014 acquisitions as if they occurred January 1, 2013. The pro forma combined results of operations for the year ended December 31, 2013 have also been prepared by adjusting the historical results of Quanta to include the historical results of the 2013 acquisitions as if they occurred January 1, 2012. The pro forma combined results of operations for the year ended December 31, 2012 have been prepared by adjusting the historical results of Quanta to include the historical results of the 2013 acquisitions as if they occurred January 1, 2012 and the historical results of the 2012 acquisitions as if it occurred January 1, 2011. These pro forma combined historical results were then adjusted for the following: a reduction of interest expense as a result of the repayment of outstanding indebtedness, a reduction of interest income as a result of the cash consideration paid net of cash received, an increase in amortization expense due to the incremental intangible assets recorded related to the 2014, 2013 and 2012 acquisitions, an increase or decrease in depreciation expense within cost of services related to the net impact of adjusting acquired property and equipment to the acquisition date fair value and conforming depreciable lives with Quanta’s accounting policies, an increase in the number of outstanding shares of Quanta common stock and certain reclassifications to conform the acquired companies’ presentation to Quanta’s accounting policies. The pro forma results of operations do not include any adjustments to eliminate the impact of acquisition related costs or any cost savings or other synergies that may result from the 2014, 2013 and 2012 acquisitions. As noted above, the pro forma results of operations do not purport to be indicative of the actual results that would have been achieved by the combined company for the periods presented or that may be achieved by the combined company in the future. Revenues of approximately $314.1 million and income from continuing operations before income taxes of approximately $3.4 million, which included $11.6 million of acquisition costs, were included in Quanta’s consolidated results of operations for the year ended December 31, 2014 related to the nine 2014 acquisitions following their respective dates of acquisition. Additionally, revenues of approximately $251.3 million and income from continuing operations before income taxes of approximately $18.2 million are included in Quanta’s consolidated results of operations for the year ended December 31, 2013 related to the six 2013 acquisitions following their respective dates of acquisition. Additionally, revenues of approximately $125.7 million and income from continuing operations before income taxes of approximately $6.2 million are included in Quanta’s consolidated results of operations for the year ended December 31, 2012 related to the four 2012 acquisitions following their respective dates of acquisition.

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- Definition The entire disclosure for business combinations, including leverage buyout transactions (as applicable), and divestitures. This may include a description of a business combination or divestiture (or series of individually immaterial business combinations or divestitures) completed during the period, including background, timing, and assets and liabilities recognized and reclassified or sold. This element does not include fixed asset sales and plant closings. + References No definition available. + Details
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