In July 2022, Quanta acquired a business located in the United States that provides construction contracting services to utilities, specializing in trenching and underground pipeline and electrical conduit installation. Consideration for this acquisition included $22.0 million paid or payable in cash (subject to certain adjustments). Additionally, the former owners of this business are eligible to receive a potential payment of contingent consideration to the extent the acquired business achieves certain financial performance targets over a five-year period. The results of the acquired business are included in the Electric Power Infrastructure Solutions segment.

On October 13, 2021, Quanta completed the acquisition of Blattner, a large and leading utility-scale renewable energy infrastructure solutions provider that is located in and primarily operates in North America. Blattner provides comprehensive solutions to customers in the renewable energy industry, which generally include front-end engineering, procurement, project management and construction services for wind, solar and energy storage projects. Consideration for this acquisition included $2.43 billion paid in cash and 3,326,955 shares of Quanta common stock, which had a fair value of $345.4 million as of the date of the acquisition. Additionally, the former owners of Blattner are eligible to receive potential payment of up to $300.0 million of contingent consideration, payable to the extent the acquired business achieves certain financial performance targets. The contingent consideration payment is calculated based on a cumulative three-year performance period ending on December 31, 2024. As of December 31, 2022, the fair value of the contingent consideration liability was $134.5 million. Blattner’s results are included in the Renewable Energy Infrastructure Solutions segment.

During the year ended December 31, 2021, Quanta also acquired the following businesses: three businesses located in the United States that provide electric power construction and related services; a communications services business located in the United States that performs data center connection services; a business located in the United States that designs, develops and holds a certification for the manufacture of personal protective breathing equipment and related monitoring devices primarily used in the refining and petrochemical industries, including in connection with catalyst services; a business that provides turnaround and catalyst change-out services to the refining and petrochemical industries primarily in the United States and Canada; a business located in Canada that provides front-end land services for infrastructure development projects in Canada and the United States; a business located in the United States that primarily provides horizontal directional drilling services; and a communications services business located in the United States. The aggregate consideration for these acquisitions was $328.2 million paid or payable in cash and 187,093 shares of Quanta common stock, which had an aggregate fair value of $16.9 million as of the applicable acquisition dates. The results of the manufacturing business and the turnaround and catalyst change-out business are primarily included in the Underground Utility and Infrastructure Solutions segment and the results of the remaining businesses are primarily included in the Electric Power Infrastructure Solutions segment.

services; a professional engineering business located in the United States that provides infrastructure engineering and design services to electric utilities, gas utilities and communications services companies, as well as permitting and utility locating services; a business located in the United States that provides aviation services primarily for the utility industry; an electric power infrastructure business located in the United States that primarily provides underground conduit services; a business located in the United States that specializes in the deployment of short- and long-haul fiber optic cable and utilities; an industrial services business located in Canada that performs catalyst handling services, including changeover and shutdown maintenance, for customers in the refining and chemical industries; and a business located in the United States that provides heavy, civil, industrial and energy related services and specializes in the construction and maintenance of pipelines and metering stations. The aggregate consideration for these acquisitions was $359.6 million paid in cash and 1,334,469 shares of Quanta common stock, which had a fair value of $57.1 million as of the respective acquisition dates. Additionally, one of the acquisitions includes the potential payment of contingent consideration, payable if the acquired business achieves certain performance objectives over a five-year post-acquisition period. The results of the industrial services business and the business specializing in construction and maintenance of pipelines and metering stations are primarily included in the Underground Utility and Infrastructure Solutions segment and the results of the remaining businesses are primarily included in the Electric Power Infrastructure Solutions segment.

Purchase price allocations require significant use of estimates and are based on information that was available to management at the time these consolidated financial statements were prepared. Quanta uses a variety of information to estimate fair values, including quoted market prices, carrying amounts and valuation techniques such as discounted cash flows. When deemed appropriate, third-party appraisal firms are engaged to assist in fair value determination of fixed assets, intangible assets and certain other assets and liabilities.

Quanta is finalizing its purchase price allocations related to the business acquired during 2022, and further adjustments to the purchase price allocations may occur, with possible updates primarily related to tax estimates and the finalization of closing working capital adjustments. The following table summarizes the fair value of total consideration transferred or estimated to be transferred and the fair value of assets acquired and liabilities assumed as of the their respective acquisition dates, inclusive of any purchase price adjustments as of December 31, 2022 for acquisitions completed in the years shown below (in thousands).


	Acquisitions Closed in the Year Ended December 31,
	2022		2021
			Blattner		All Others
Consideration:
Cash paid or payable	$	21,990	$	2,434,877	$	328,155
Value of Quanta common stock issued	—		345,422		16,922
Contingent consideration	2,600		125,632		—
Fair value of total consideration transferred or estimated to be transferred	$	24,590	$	2,905,931	$	345,077

Cash and cash equivalents	$	101	$	171,950	$	9,911
Accounts receivable	1,755		411,835		63,033
Contract assets	—		13,622		8,322
Other current assets	72		57,803		6,262
Property and equipment	2,266		179,530		71,736
Other assets	—		191		230
Identifiable intangible assets	13,109		1,425,000		104,143
Current maturities of long-term debt and short-term debt	—		(2,304)		—
Accounts payable and accrued liabilities	(1,408)		(481,047)		(29,481)
Contract liabilities	(3,530)		(227,040)		(384)
Deferred tax liabilities, net	—		—		(2,424)
Other long-term liabilities	—		(7,764)		—

Total identifiable net assets	12,365		1,541,776		231,348
Goodwill	12,225		1,364,155		113,729
Fair value of net assets acquired	$	24,590	$	2,905,931	$	345,077

Goodwill included in the Renewable Energy Infrastructure Solutions Segment increased by $64.9 million during the year ended December 31, 2022 as a result of certain post-closing consideration adjustments associated with Quanta’s acquisition of Blattner. As of December 31, 2022, approximately $12.2 million, $1.49 billion, and $72.6 million of goodwill is expected to be deductible for income tax purposes related to acquisitions completed in 2022, 2021 and 2020.


	Acquisitions Closed in the Year Ended December 31,
	2022			2021
				Blattner			All Others
	Estimated Fair Value		Weighted Average Amortization Period in Years	Estimated Fair Value		Weighted Average Amortization Period in Years	Estimated Fair Value		Weighted Average Amortization Period in Years
Customer relationships	$	11,565	6.0	$	1,045,000	7.0	$	77,563	6.7
Backlog	557		0.5	130,000		0.7	6,431		1.2
Trade names	850		15.0	250,000		15.0	5,298		14.9
Non-compete agreements	137		5.0	—		N/A	5,823		5.0
Patented rights, developed technology, and process certifications	—		N/A	—		N/A	9,028		3.5
Total intangible assets subject to amortization	$	13,109	6.4	$	1,425,000	7.8	$	104,143	6.4

The fair value of customer relationships is estimated as of the date a business is acquired based on the value-in-use concept utilizing the income approach, specifically the multi-period excess earnings method. This method discounts to present value the projected cash flows attributable to the customer relationships, with consideration given to customer contract renewals and estimated customer attrition rates.

The significant estimates used by management in determining the fair values of customer relationship intangible assets include future revenues, discount rates and customer attrition rates. The following table includes the discount rates and customer attrition rates used to determine the fair value of customer relationship intangible assets for businesses acquired during the years ended December 31, 2022 and 2021 as of the respective acquisition dates:

Quanta values backlog for acquired businesses as of the acquisition date based upon the contractual nature of the backlog, discounted to present value. The values of trade names and curriculum are estimated using the relief-from-royalty method of the income approach, which is based on the assumption that in lieu of ownership, a company would be willing to pay a royalty for use of the trade name or curriculum. The value of a non-compete agreement is estimated based on the difference between the present value of the prospective cash flows with the agreement in place and the present value of the prospective cash flows without the agreement in place. The level of inputs used for these identifiable intangible asset fair value measurements is Level

Quanta’s aggregate contingent consideration liabilities can change due to additional business acquisitions, settlement of outstanding liabilities, accretion in present value and changes in the estimated fair value of amounts and the performance of acquired businesses in post-acquisition periods. These changes are reflected in “Change in fair value of contingent consideration liabilities” in the accompanying consolidated statements of operations. The fair values of these liabilities were primarily determined using a Monte Carlo simulation valuation methodology based on probability-weighted performance projections and other inputs, including a weighted average cost of capital and an expected volatility factor for each acquisition. The expected volatility factors are based on historical asset volatility of selected guideline public companies. Performance projections are discounted using a risk-adjusted weighted average cost of capital which reflects the overall level of inherent risk of the business acquired. Depending on contingent consideration payment terms, the present values of the estimated payments are discounted based on a risk-free rate and/or Quanta’s cost of debt. The weighted averages of these inputs are based on the fair value of the contingent consideration at the dates of the respective acquisitions. The fair value determinations incorporate significant inputs not observable in the market. Accordingly, the level of inputs used for these fair value measurements is Level 3. Significant changes in any of these assumptions could result in a significantly higher or lower potential liability.

The majority of Quanta’s outstanding contingent consideration liabilities are subject to a maximum payment amount, and the aggregate maximum payment amount of these liabilities totaled $326.6 million as of December 31, 2022. During the years ended December 31, 2022, 2021 and 2020, Quanta settled certain contingent consideration liabilities with cash payments of $1.6 million, $0.3 million and $76.0 million. Quanta also settled certain contingent consideration liabilities with the issuance of 4,277 shares of Quanta common stock during the year ended December 31, 2020.

The following unaudited supplemental pro forma results of operations for Quanta, which incorporate the acquisitions completed in 2022, 2021 and 2020, have been provided for illustrative purposes only and may not 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 (in thousands).

The pro forma combined results of operations for the years ended December 31, 2022 and 2021 were prepared by adjusting the historical results of Quanta to include the historical results of the business acquired in 2022 as if such acquisition had occurred January 1, 2021. The pro forma combined results of operations for the year ended December 31, 2021 and 2020 were prepared by adjusting the historical results of Quanta to include historical results of the businesses acquired in 2021 as if such acquisitions had occurred January 1, 2020. The pro forma combined results of operations for the year ended December 31,

These pro forma combined historical results were adjusted for the following: a reduction of interest and other financing expenses as a result of the repayment of outstanding indebtedness of the acquired businesses; an increase in interest and other financing expenses as a result of the cash consideration paid and debt incurred by Quanta for the purpose of financing the acquisition of Blattner; an increase in amortization expense due to the intangible assets recorded; elimination of inter-company sales; changes in depreciation expense to adjust acquired property and equipment to the acquisition date fair value and to conform with Quanta’s accounting policies; an increase in the number of outstanding shares of Quanta common stock; and elimination of certain transaction costs incurred by Blattner and directly related to the acquisition of the business by Quanta. The pro forma combined results of operations do not include any adjustments to eliminate the impact of acquisition-related costs incurred by Quanta or any cost savings or other synergies that resulted or may result from the acquisitions.

Revenues of $15.5 million and income before income taxes of $2.0 million, which includes $1.4 million of amortization expense and $0.6 million of acquisition-related costs, related to the acquisition completed in 2022 are included in Quanta’s consolidated results of operations for the year ended December 31, 2022. Revenues of $499.6 million and a loss before income taxes of $71.6 million, which included $80.3 million of amortization expense and $41.5 million of acquisition-related costs, related to acquisitions completed in 2021 are included in Quanta’s consolidated results of operations for the year ended December 31, 2021. Revenues of $133.5 million and a loss before income taxes of $1.3 million, which included $6.4 million of amortization expense and $17.5 million of acquisition-related costs, related to the acquisitions completed in 2020 are included in Quanta’s consolidated results of operations for the year ended December 31, 2020.