In January 2024, Quanta acquired two businesses located in the United States including: a business that provides specialty environmental solutions to industrial and petrochemical companies (which will be primarily included in the Underground and Infrastructure segment) and a business that specializes in testing, manufacturing and distributing safety equipment and supplies (which will be primarily included in the Electric Power and Renewable Energy segments). The consideration for these transactions consisted of approximately $379.9 million paid or payable in cash on the dates of the acquisitions and 221,700 shares of Quanta common stock issued in consideration for one of the acquired businesses, which had a fair value of $44.9 million as of the date of the acquisition. Additionally, the former owners of one of these businesses are eligible to receive a potential payment of contingent consideration to the extent the acquired business achieves certain financial and operating performance targets over a three-year period. The final amount of consideration for these acquisitions remains subject to certain post-closing adjustments, including with respect to net working capital. Quanta is in the process of performing procedures to determine the fair value of assets acquired and liabilities assumed related to these acquisitions.

During the year ended December 31, 2023, Quanta acquired five 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); a business that provides concrete construction services (primarily included in the Electric Power and Renewable Energy segments); a business specializing in power studies, maintenance testing and commissioning primarily for utility and commercial customers (included in the Electric Power segment) and a business that manufactures power transformers for the electric utility, renewable energy, municipal power and industrial markets (included in the Electric Power and Renewable Energy segments). The consideration for these transactions consisted of approximately $782.4 million paid or payable in cash (subject to certain adjustments) and 1,238,576 shares of Quanta common stock, which had a fair value of $158.9 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. Consideration for this acquisition included $22.3 million paid or payable in cash. 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 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 and could also be subject to Quanta management discretion. As of December 31, 2023, the fair value of the contingent consideration liability was $139.9 million. Blattner’s results are included in the Renewable Energy 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 and Infrastructure segment and the results of the remaining businesses are primarily included in the Electric Power 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 businesses acquired in 2023, and further adjustments to the purchase price allocations may occur, with possible updates primarily related to intangible asset values, property and equipment values, certain contingent liabilities, tax estimates, and the finalization of closing working capital adjustments. The following table summarizes the estimated fair value of total consideration transferred or estimated to be transferred and the fair value of


	Year Ended December 31,
	2023		2022
Consideration:
Cash paid or payable	$	782,351	$	22,328
Value of Quanta common stock issued	158,922		—
Contingent consideration	6,850		2,600
Fair value of total consideration transferred or estimated to be transferred	$	948,123	$	24,928

Cash and cash equivalents	$	123,891	$	101
Accounts receivable	92,799		1,755
Contract assets	17,200		—
Inventories	74,872		—
Prepaid expenses and other current assets	5,830		72

Property and equipment	200,988		2,266
Operating lease assets	16,264		—
Other assets	4,553		—
Identifiable intangible assets	191,115		13,109

Accounts payable and accrued liabilities	(89,227)		(1,408)
Contract liabilities	(102,752)		(3,530)
Operating lease liabilities, current	(3,080)		—
Deferred tax liabilities, net	(21,489)		—
Operating lease liabilities, non-current	(13,790)		—
Other long-term liabilities	(2,682)		—

Total identifiable net assets	494,492		12,365
Goodwill	453,631		12,563
Fair value of net assets acquired	$	948,123	$	24,928

The following table summarizes the estimated fair values of identifiable intangible assets for the acquisitions completed in 2023 and 2022 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).


	Year Ended December 31,
	2023			2022
	Estimated Fair Value		Weighted Average Amortization Period in Years	Estimated Fair Value		Weighted Average Amortization Period in Years
Customer relationships	$	108,780	4.9	$	11,565	6.0
Backlog	53,064		2.0	557		0.5
Trade names	22,297		15.0	850		15.0
Non-compete agreements	6,974		5.0	137		5.0

Total intangible assets subject to amortization	$	191,115	5.3	$	13,109	6.4

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 year ended December 31, 2023 and 2022 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 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. 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 3.

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, the performance of acquired businesses in post-acquisition periods, and in certain cases, management discretion. These changes are reflected in “Change in fair value of contingent consideration liabilities” in the accompanying consolidated statements of operations.

The fair value determinations of contingent consideration liabilities incorporate significant inputs not observable in the market, including revenue forecasts, operating margins, discount rates and the probability of achieving certain performance targets during designated post-acquisition periods. Accordingly, the level of inputs used for these fair value measurements is Level 3.

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 $336.8 million as of December 31, 2023. During the years ended December 31, 2023, 2022 and 2021, Quanta settled certain contingent consideration liabilities with cash payments of $5.0 million, $1.6 million and $0.3 million.

The following unaudited supplemental pro forma results of operations for Quanta, which incorporate the acquisitions completed in 2023, 2022 and 2021, 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, 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 year ended December 31, 2022 and 2021 were prepared by further 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 were prepared by further adjusting the historical results of Quanta to include the historical results of the businesses acquired in 2021 as if such acquisitions occurred January 1, 2020.

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.