| 6. | GOODWILL AND OTHER INTANGIBLE ASSETS: |
A summary of changes in Quanta’s goodwill is as follows (in thousands):
| Electric Power Division |
Oil and Gas Infrastructure Division |
Fiber Optic Licensing Division |
Total | |||||||||||||
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Goodwill balance at December 31, 2011 |
$ | 988,702 | $ | 113,598 | $ | 368,511 | $ | 1,470,811 | ||||||||
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Goodwill acquired during 2012 |
57,451 | 7,328 | — | 64,779 | ||||||||||||
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Foreign currency translation related to goodwill |
2,087 | (32 | ) | — | 2,055 | |||||||||||
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Operating unit reorganization |
16,912 | 16,809 | (33,721 | ) | — | |||||||||||
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Goodwill balance at December 31, 2012 |
1,065,152 | 137,703 | 334,790 | 1,537,645 | ||||||||||||
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Goodwill acquired during 2013 |
112,549 | 143,257 | — | 255,806 | ||||||||||||
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Foreign currency translation related to goodwill |
(9,617 | ) | (3,117 | ) | — | (12,734 | ) | |||||||||
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Goodwill balance at December 31, 2013 |
$ | 1,168,084 | $ | 277,843 | $ | 334,790 | $ | 1,780,717 | ||||||||
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As described in Note 2, Quanta’s operating units are organized into one of Quanta’s three internal divisions and, accordingly, Quanta’s goodwill associated with each of its operating units has been aggregated on a divisional basis and reported in the table above. These divisions are closely aligned with Quanta’s reportable segments based on the predominant type of work performed by the operating units within the divisions. From time to time, operating units may be reorganized among Quanta’s internal divisions, as Quanta periodically re-evaluates strategies to better align its operations as business environments evolve. The table above presents these changes as reclassifications during the period in which the reorganization occurred. During 2012, two separate and unrelated operating units in the fiber optic licensing division were recategorized in order to improve the productivity of certain operations and more effectively accomplish management’s overall strategic plan. One operating unit was reorganized into the electric power division and the other operating unit was reorganized into the oil and gas infrastructure division. Based on Quanta’s strategic plan, management determined that that these operating units’ performance could be improved and their operations could potentially be increased by assigning their business lines into comparable or synergistic operations. The reorganization also resulted in reductions in redundant administrative costs, reassignments of strategic customer relationships and progress toward management’s business development strategies.
Activity in Quanta’s intangible assets consists of the following (in thousands):
| As of December 31, 2012 |
Twelve Months Ended December 31, 2013 |
As of December 31, 2013 |
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| Intangible Assets |
Accumulated Amortization |
Amortization Expense |
Additions | Foreign Currency Adjustments |
Intangible Assets, Net |
Remaining Weighted Average Amortization Period in Years |
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Customer relationships |
$ | 170,465 | $ | (47,777 | ) | $ | (12,096 | ) | $ | 31,854 | $ | (2,639 | ) | $ | 139,807 | 10.4 | ||||||||||||
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Backlog |
126,057 | (119,068 | ) | (9,698 | ) | 12,405 | (98 | ) | 9,598 | 1.3 | ||||||||||||||||||
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Trade names |
32,559 | (3,014 | ) | (1,251 | ) | 8,321 | (501 | ) | 36,114 | 23.9 | ||||||||||||||||||
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Non-compete agreements |
27,406 | (20,706 | ) | (2,368 | ) | 1,944 | (241 | ) | 6,035 | 3.1 | ||||||||||||||||||
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Patented rights and developed technology |
20,931 | (7,517 | ) | (2,102 | ) | 600 | (89 | ) | 11,823 | 5.1 | ||||||||||||||||||
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Total intangible assets subject to amortization |
377,418 | (198,082 | ) | (27,515 | ) | 55,124 | (3,568 | ) | 203,377 | 11.8 | ||||||||||||||||||
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Other intangible assets not subject to amortization |
4,500 | — | — | — | — | 4,500 | N/A | |||||||||||||||||||||
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Total intangible assets |
$ | 381,918 | $ | (198,082 | ) | $ | (27,515 | ) | $ | 55,124 | $ | (3,568 | ) | $ | 207,877 | N/A | ||||||||||||
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Amortization expense for intangible assets was $27.5 million, $37.7 million and $29.0 million for the years ended December 31, 2013, 2012 and 2011, respectively. The estimated future aggregate amortization expense of intangible assets as of December 31, 2013 is set forth below (in thousands):
| For the Fiscal Year Ending December 31, | ||||
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2014 |
$ | 27,917 | ||
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2015 |
19,492 | |||
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2016 |
18,664 | |||
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2017 |
17,705 | |||
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2018 |
17,418 | |||
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Thereafter |
102,181 | |||
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Total |
$ | 203,377 | ||
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