Goodwill and Other Intangible Assets

12 Months Ended

Dec. 31, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangible Assets

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, 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 related to acquisitions completed in 2017	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 related to acquisitions completed in 2018	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
Goodwill related to acquisitions completed in 2019	43,183			67,200			110,383
Purchase price allocation adjustments	1,503			—			1,503
Foreign currency translation adjustments	7,399			3,511			10,910
Balance at December 31, 2019:
Goodwill	1,365,163			753,938			2,119,101
Accumulated impairment	—			(96,426		)	(96,426		)
	$	1,365,163		$	657,512		$	2,022,675

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, 2019							December 31, 2018							2019
	Intangible Assets		Accumulated Amortization			Intangible Assets, Net		Intangible Assets		Accumulated Amortization			Intangible Assets, Net		Remaining Weighted Average Amortization Period in Years
Customer relationships	$	532,808	$	(213,915	)	$	318,893	$	359,967	$	(165,715	)	$	194,252	6.5
Backlog	144,704		(141,580		)	3,124		135,578		(134,592		)	986		2.8
Trade names	93,396		(26,145		)	67,251		81,058		(21,559		)	59,499		14.6
Non-compete agreements	43,281		(32,868		)	10,413		40,728		(30,168		)	10,560		3.1
Patented rights and developed technology	22,719		(20,682		)	2,037		22,482		(19,175		)	3,307		2.2
Curriculum	11,712		(2,696		)	9,016		9,448		(872		)	8,576		8.3
Total intangible assets subject to amortization	848,620		(437,886		)	410,734		649,261		(372,081		)	277,180		7.7
Engineering license	3,000		—			3,000		3,000		—			3,000
Total intangible assets	$	851,620	$	(437,886	)	$	413,734	$	652,261	$	(372,081	)	$	280,180

Amortization expense for intangible assets was $62.1 million, $44.0 million and $32.2 million for the years ended December 31, 2019, 2018 and 2017.

The estimated future aggregate amortization expense of intangible assets subject to amortization as of December 31, 2019 is set forth below (in thousands):

Year Ending December 31:
2020	$	70,455
2021	67,804
2022	62,848
2023	54,421
2024	41,437
Thereafter	113,769
Total	$	410,734