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Acquisitions | 12 Months Ended
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Dec. 31, 2015
Business Combinations [Abstract] |
Acquisitions |
5. | ACQUISITIONS:
2015 Acquisitions During 2015, Quanta acquired 11 companies. The results of eight of the acquired companies are generally included in Quanta’s Electric Power Infrastructure Services segment. These companies include a foundation services company located in the United States, an electrical contracting company located in the United States, an electrical engineering company located in Australia, a powerline construction company located in the United States, an engineering company located in Canada, an engineering, procurement and construction services company based in the United States, an underground construction contracting company located in Canada, and a supplier and material procurement specialist for the power and utility industry in Canada. The results of the remaining three acquired companies are generally included in Quanta’s Oil and Gas Infrastructure Services segment. These companies include a company that services above-ground storage tanks in the United States, an underground utility distribution contractor that provides services to gas and electric utilities in Canada, and a company that specializes in the engineering, procurement, construction, and commissioning of compression and surface facilities for the high pressure gas industry in Australia. The aggregate consideration for these acquisitions consisted of approximately $110.4 million paid or payable in cash, subject to net working capital adjustments, 461,037 shares of Quanta common stock valued on the settlement dates of the acquisitions at approximately $10.1 million, and $1.0 million in contingent consideration. As these transactions were effective during 2015, the results have been included in Quanta’s consolidated financial statements beginning on the respective dates of acquisition. These acquisitions should enable Quanta to further enhance its electric power and oil and gas infrastructure service offerings in the United States, Canada and Australia. Quanta is in the process of finalizing its assessments of the fair values of the acquired assets and assumed liabilities related to businesses acquired subsequent to December 31, 2014, 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 with possible updates primarily related certain tax estimates. The aggregate purchase consideration related to 2015 acquisitions was preliminarily allocated to acquired assets and assumed liabilities, which resulted in a preliminary allocation of approximately $44.7 million of net tangible assets, $51.9 million of goodwill and $25.0 million of other intangible assets. 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 $279.5 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. In addition, Quanta issued one share of Series G preferred stock associated with 899,858 of the exchangeable shares. 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. For additional information on the exchangeable shares and preferred stock, see Exchangeable Shares and Series F and Series G Preferred Stock in Note 11. 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. 2015, 2014 and 2013 Acquisitions The following table summarizes the aggregate consideration paid or payable as of December 31, 2015 for the 2015 and 2014 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).
|  | 2015 |  |  | 2014 |
Consideration: |  |  |  |  |  |  |  |
Value of Quanta common stock and exchangeable shares issued |  | $ | 10,127 |  |  | $ | 134,538 |
Cash paid or payable |  |  | 110,428 |  |  |  | 279,533 |
Contingent consideration |  |  | 1,001 |  |  |  | — |
Fair value of total consideration transferred or estimated to be transferred |  | $ | 121,556 |  |  | $ | 414,071 |
Current assets |  | $ | 35,188 |  |  | $ | 172,121 |
Property and equipment |  |  | 44,140 |  |  |  | 159,186 |
Other assets |  |  | 4 |  |  |  | 3,501 |
Identifiable intangible assets |  |  | 24,987 |  |  |  | 96,302 |
Current liabilities |  |  | (24,633 | ) |  |  | (145,646 | )
Deferred tax liabilities, net |  |  | (5,131 | ) |  |  | (32,856 | )
Other long-term liabilities |  |  | (5,606 | ) |  |  | (4,926 | )
Non-controlling interests |  |  | 747 |  |  |  | — |
Total identifiable net assets |  |  | 69,696 |  |  |  | 247,682 |
Goodwill |  |  | 51,860 |  |  |  | 166,389 |
|  | $ | 121,556 |  |  | $ | 414,071 |
The fair value of current assets acquired in 2015 included accounts receivable with a fair value of $20.6 million. The fair value of current assets acquired in 2014 included accounts receivable with a fair value of $117.2 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 2015, 2014 and 2013 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 2015 acquisitions, goodwill of $31.2 million was recorded for the businesses acquired that were included within Quanta’s Electric Power Infrastructure Services Division and $20.6 million was recorded for businesses included within Quanta’s Oil and Gas Infrastructure Services Division on the dates of acquisition. In connection with the 2014 acquisitions, goodwill of $72.3 million was recorded for the businesses included within Quanta’s Electric Power Infrastructure Services Division and $94.1 million was recorded for businesses included within Quanta’s Oil and Gas Infrastructure Services Division based on fair market values of assets and liabilities on the dates of acquisition. In connection with the 2013 acquisitions, goodwill of $112.5 million was recorded for businesses included within Quanta’s Electric Power Infrastructure Services Division and $143.3 million was recorded for the business included within Quanta’s Oil and Gas Infrastructure Services Division on the dates of acquisition. Goodwill of approximately $33.9 million and $43.5 million is expected to be deductible for income tax purposes related to the businesses acquired in 2015 and 2014. 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 2015 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 |  | $ | 16,257 |  |  |  | 13.7 |
Backlog |  |  | 2,552 |  |  |  | 1.3 |
Trade names |  |  | 4,002 |  |  |  | 8.8 |
Non-compete agreements |  |  | 2,176 |  |  |  | 5.0 |
Total intangible assets subject to amortization acquired in 2015 acquisitions |  | $ | 24,987 |  |  |  | 10.9 |
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, |
|  | 2015 |  |  | 2014 |  |  | 2013 |
Revenues |  | $ | 7,635,932 |  |  | $ | 8,476,584 |  |  | $ | 7,629,310 |
Gross profit |  | $ | 939,452 |  |  | $ | 1,248,827 |  |  | $ | 1,185,691 |
Selling, general and administrative expenses |  | $ | 600,057 |  |  | $ | 745,321 |  |  | $ | 563,877 |
Amortization of intangible assets |  | $ | 36,479 |  |  | $ | 47,777 |  |  | $ | 50,755 |
Net income from continuing operations |  | $ | 135,467 |  |  | $ | 303,772 |  |  | $ | 451,399 |
Net income from continuing operations attributable to common stock |  | $ | 124,550 |  |  | $ | 285,404 |  |  | $ | 432,011 |
Earnings per share from continuing operations attributable to common stock — basic and diluted |  | $ | 0.64 |  |  | $ | 1.28 |  |  | $ | 1.95 |
The pro forma combined results of operations for the years ended December 31, 2015 and 2014 have been prepared by adjusting the historical results of Quanta to include the historical results of the 2015 acquisitions as if they occurred January 1, 2014. The pro forma combined results of operations for the year ended December 31, 2014 have also 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 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 and the historical results of the 2013 acquisitions as if it occurred January 1, 2012. These pro forma combined historical results were also adjusted for the following: a reduction of interest expense as a result of the repayment of outstanding indebtedness of the acquired businesses, 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 2015, 2014 and 2013 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 exchangeable shares 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 2015, 2014 and 2013 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 $104.6 million and income from continuing operations before income taxes of approximately $0.3 million, which included $3.6 million of acquisition costs, were included in Quanta’s consolidated results of operations for the year ended December 31, 2015 related to the 11 acquisitions in 2015 following their respective dates of acquisition. 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 were 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.

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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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