In January 2023, Quanta acquired three businesses located in the United States including: a business that provides services related to high-voltage transmission lines, overhead and underground distribution, emergency restoration and industrial and commercial wiring and lighting (primarily included in the Electric Power segment); a business that procures parts, assembles kits for sale, manages logistics and installs solar tracking equipment for utility and development customers (primarily included in the Renewable Energy segment); and a business that provides concrete construction services (primarily included in the Electric Power and Renewable Energy segments). The consideration for these transactions consisted of approximately $463.5 million paid or payable in cash (subject to certain adjustments) and 1,018,946 shares of Quanta common stock, which had a fair value of $123.5 million as of the dates of the acquisitions.

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, primarily included in the Electric Power segment. The consideration for this transaction included $22.3 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 post-acquisition period.

Quanta is finalizing its purchase price allocations related to businesses acquired in 2023, 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 aggregate consideration paid or payable for businesses acquired between June 30, 2022 and June 30, 2023 was allocated to acquired assets and assumed liabilities, which resulted in an allocation of $184.8 million to net tangible assets, $120.5 million to identifiable intangible assets and $306.6 million to goodwill.

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 their respective acquisition dates as of June 30, 2023 for acquisitions completed in the six months ended June 30, 2023 (in thousands):


	Six Months Ended
	June 30, 2023
Consideration:
Cash paid or payable	$	463,482
Value of Quanta common stock issued	123,503

Fair value of total consideration transferred or estimated to be transferred	$	586,985

Cash and cash equivalents	$	14,832
Accounts receivable	46,389
Contract assets	195
Inventories	56,960
Prepaid expenses and other current assets	4,392
Property and equipment	144,217
Operating lease assets	14,189
Other assets	4,553
Identifiable intangible assets	107,430

Accounts payable and accrued liabilities	(61,739)
Contract liabilities	(3,071)
Operating lease liabilities, current	(2,552)
Deferred tax liabilities, net	(20,556)
Operating lease liabilities, non-current	(12,242)


Total identifiable net assets	292,997
Goodwill	293,988
Fair value of net assets acquired	$	586,985

As of June 30, 2023, approximately $238.2 million of goodwill is expected to be deductible for income tax purposes related to acquisitions completed in the six months ended June 30, 2023.

The following table summarizes the estimated fair values of identifiable intangible assets for the acquisitions completed in the six months ended June 30, 2023 as of the acquisition dates and the related weighted average amortization periods by type (in thousands, except for weighted average amortization periods, which are in years).


	Six Months Ended
	June 30, 2023
	Estimated Fair Value		Weighted Average Amortization Period in Years
Customer relationships	$	79,240	4.6
Backlog	11,095		0.9
Trade names	12,615		15.0
Non-compete agreements	4,480		5.0

Total intangible assets subject to amortization	$	107,430	5.5

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 six months ended June 30, 2023 as of the respective acquisition dates:

As described above, certain business acquisitions have contingent consideration liabilities associated with the transactions. The aggregate fair value of these outstanding contingent consideration liabilities and their classification in the accompanying consolidated balance sheets is as follows (in thousands):


	June 30, 2023		December 31, 2022
Accounts payable and accrued expenses	$	—	$	5,000
Insurance and other non-current liabilities	143,517		143,517
Total contingent consideration liabilities	$	143,517	$	148,517

The fair value determinations of contingent consideration liabilities incorporate significant inputs not observable in the market. Accordingly, the level of inputs used for these fair value measurements is Level 3. The following table includes the volatility factors, weighted average costs of capital and discount rates used to determine the fair value of contingent consideration liabilities during the six months ended June 30, 2023:

Quanta’s outstanding contingent consideration liabilities are subject to a maximum payment amount, and the aggregate maximum payment amount of these liabilities totaled $321.8 million as of June 30, 2023. During the six months ended June 30, 2023 and 2022, Quanta settled certain contingent consideration liabilities with cash payments of $5.0 million and $1.6 million.

The following unaudited supplemental pro forma results of operations for Quanta, which incorporate the acquisitions completed in the six months ended June 30, 2023 and the year ended December 31, 2022, 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).


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2023		2022		2023		2022
Revenues	$	5,048,610	$	4,358,240	$	9,477,436	$	8,450,003




Net income attributable to common stock	$	165,899	$	88,671	$	260,945	$	173,129

The pro forma combined results of operations for the three and six months ended June 30, 2023 and 2022 were prepared by adjusting the historical results of Quanta to include the historical results of the businesses acquired in 2023 as if such acquisitions had occurred January 1, 2022. The pro forma combined results of operations for the three and six months ended June 30, 2022 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. 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; an increase in amortization expense due to the intangible assets recorded; elimination of inter-company sales; and changes in depreciation expense to adjust acquired property and equipment to the acquisition date fair value and to conform with Quanta’s accounting policies. 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.