Goodwill and Other Intangible Assets

12 Months Ended

Dec. 31, 2018

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND OTHER INTANGIBLE ASSETS:

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 the operating units has been aggregated on a divisional basis in the table below. These divisions are closely aligned with Quanta’s reportable segments, and operating units are assigned to a division based on the predominant type of work performed. From time to time, an operating unit may be reorganized between divisions if warranted due to changes in its predominant business.

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



	Electric Power Infrastructure Services Division			Pipeline and Industrial Infrastructure Services Division			Total
Balance at December 31, 2015:
Goodwill	$	1,226,245		$	366,306		$	1,592,551
Accumulated impairment	—			(39,893		)	(39,893		)
	$	1,226,245		$	326,413		1,552,658

Goodwill recorded related to 2016 acquisitions	24,168			21,018			45,186
Purchase price allocation adjustments	229			(214		)	15
Foreign currency translation adjustments	3,337			1,973			5,310

Balance at December 31, 2016:
Goodwill	1,253,979			388,923			1,642,902
Accumulated impairment	—			(39,733		)	(39,733		)
	1,253,979			349,190			1,603,169

Goodwill recorded related to 2017 acquisitions	5,866			296,542			302,408
Purchase price allocation adjustments	(619		)	(659		)	(1,278		)
Goodwill impaired during 2017	—			(57,011		)	(57,011		)
Foreign currency translation adjustments	13,301			8,011			21,312

Balance at December 31, 2017:
Goodwill	1,272,527			693,905			1,966,432
Accumulated impairment	—			(97,832		)	(97,832		)
	1,272,527			596,073			1,868,600

Goodwill recorded related to 2018 acquisitions	56,337			—			56,337
Purchase price allocation adjustments	51			—			51
Foreign currency translation adjustments	(15,837		)	(9,272		)	(25,109		)

Balance at December 31, 2018:
Goodwill	1,313,078			683,284			1,996,362
Accumulated impairment	—			(96,483		)	(96,483		)
	$	1,313,078		$	586,801		$	1,899,879

Adjustments primarily represent changes in deferred tax liability estimates and would not have had a material impact on Quanta’s consolidated financial statements in prior periods had these adjustments been booked at the respective acquisition dates. The goodwill impairment in the year ended December 31, 2017 was associated with two reporting units within the Pipeline and Industrial Infrastructure Services Division. Specifically, a reporting unit that provides material handling services had experienced lower operating margins and was expected to continue to face a highly competitive environment in its select markets, and a reporting unit that provides marine and offshore services had experienced prolonged periods of reduced revenues and operating margins and was expected to continue to experience lower levels of activity in the U.S. Gulf of Mexico and other offshore markets.

Quanta’s intangible assets and the remaining weighted average amortization periods related to its intangible assets subject to amortization were as follows (in thousands except for weighted average amortization periods, which are in years):



															As of
	As of							As of							December 31,
	December 31, 2018							December 31, 2017							2018
	Intangible Assets		Accumulated Amortization			Intangible Assets, Net		Intangible Assets		Accumulated Amortization			Intangible Assets, Net		Remaining Weighted Average Amortization Period in Years
Customer relationships	$	359,967	$	(165,715	)	$	194,252	$	327,334	$	(137,333	)	$	190,001	6.2
Backlog	135,578		(134,592		)	986		136,266		(135,847		)	419		0.7
Trade names	81,058		(21,559		)	59,499		74,797		(17,057		)	57,740		15.4
Non-compete agreements	40,728		(30,168		)	10,560		37,760		(27,659		)	10,101		3.6
Patented rights and developed technology	22,482		(19,175		)	3,307		22,529		(17,611		)	4,918		2.7
Curriculum	9,448		(872		)	8,576		—		—			—		9.1
Total intangible assets subject to amortization	649,261		(372,081		)	277,180		598,686		(335,507		)	263,179		8.0
Engineering license	3,000		—			3,000		—		—			—
Total intangible assets	$	652,261	$	(372,081	)	$	280,180	$	598,686	$	(335,507	)	$	263,179

Amortization expense for intangible assets was $44.0 million, $32.2 million and $31.7 million for the years ended December 31, 2018, 2017 and 2016, respectively. During the year ended December 31, 2017, Quanta recorded an impairment charge of $1.1 million related to a customer relationships intangible asset, which primarily resulted from a strategic decision to restructure a business within a reporting unit in Quanta’s Pipeline and Industrial Infrastructure Services Division. The impairment charge recognized in 2017 is reflected in the accumulated amortization balances above.

The estimated future aggregate amortization expense of intangible assets subject to amortization as of December 31, 2018 is set forth below (in thousands):



Year Ending December 31:
2019	$	47,135
2020	44,980
2021	42,657
2022	39,129
2023	31,323
Thereafter	71,956
Total	$	277,180