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Acquisitions (Tables)
3 Months Ended
Mar. 31, 2020
Business Combinations [Abstract]  
Aggregate Consideration Paid or Payable and Allocation Net Assets
The following table summarizes the aggregate consideration paid or payable as of March 31, 2020 for the acquisitions completed in 2020 and 2019 and presents the allocation of these amounts to net tangible and identifiable intangible assets based on their estimated fair values as of the respective acquisition dates, inclusive of any purchase price adjustments. These 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 fair value assessments for the acquired assets and assumed liabilities related to businesses acquired subsequent to March 31, 2019, and further adjustments to the purchase price allocations may occur. As of March 31, 2020, the estimated fair values of the net assets acquired were preliminary, with possible updates primarily related to pre-acquisition contingent
liabilities, as further described in Legal Proceedings — Hallen Acquisition Assumed Liability in Note 11, and tax estimates. Consideration amounts are also subject to the finalization of closing working capital adjustments. The aggregate consideration paid or payable for businesses acquired between March 31, 2019 and March 31, 2020 was allocated to acquired assets and assumed liabilities, which resulted in an allocation of $87.6 million to net tangible assets, $190.0 million to identifiable intangible assets and $100.7 million to goodwill and $3.1 million to bargain purchase gain (in thousands).
 
 
2020
 
2019
Consideration:
 
 
 
 
Cash paid or payable
 
$
19,377

 
$
399,279

Value of Quanta common stock issued
 
4,158

 
1,791

Contingent consideration
 
2,250

 

Fair value of total consideration transferred or estimated to be transferred
 
$
25,785

 
$
401,070

 
 
 
 
 
Accounts receivable
 
$
4,888

 
$
112,142

Contract assets
 

 
11,869

Other current assets
 
1,691

 
14,290

Property and equipment
 
6,233

 
60,133

Other assets
 

 
149

Identifiable intangible assets
 
4,561

 
192,786

Contract liabilities
 

 
(11,856
)
Other current liabilities
 
(1,174
)
 
(73,698
)
Deferred tax liabilities, net
 
(483
)
 
(6,398
)
Other long-term liabilities
 

 
(5,345
)
Total identifiable net assets
 
15,716

 
294,072

Goodwill
 
10,069

 
110,137

Fair value of net assets acquired
 
25,785

 
404,209

Bargain purchase gain
 

 
(3,139
)
Fair value of total consideration transferred or estimated to be transferred
 
$
25,785

 
$
401,070


Estimated Fair Values of Identifiable Intangible Assets and Related Weighted Average Amortization
The following table summarizes the estimated fair values of identifiable intangible assets for the acquisitions completed in 2020 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).    
 
 
Estimated Fair Value
 
Weighted Average Amortization Period in Years
Customer relationships
 
$
3,180

 
4.4
Backlog
 
205

 
1.0
Trade names
 
349

 
15.0
Non-compete agreements
 
827

 
5.0
Total intangible assets subject to amortization related to acquisitions completed in 2020
 
$
4,561

 
5.2

Unaudited Supplemental Pro Forma Results of Operations
The following unaudited supplemental pro forma results of operations for Quanta, which incorporates the acquisitions completed in 2020 and 2019, have been provided for illustrative purposes only and do not purport to 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. Future results may vary significantly from the results reflected in the following pro forma financial information because of future events and transactions, as well as other factors (in thousands, except per share amounts):
 
 
Three Months Ended
 
 
March 31,
 
 
2020
 
2019
Revenues
 
$
2,766,950

 
$
2,968,237

Gross profit
 
333,402

 
397,098

Selling, general and administrative expenses
 
231,102

 
243,857

Amortization of intangible assets
 
18,067

 
22,212

Net income
 
42,004

 
127,083

Net income attributable to common stock
 
39,187

 
126,536

 
 
 
 
 
Earnings per share:
 
 
 
 
Basic
 
$
0.27

 
$
0.87

Diluted
 
$
0.27

 
$
0.86