QUANTA SERVICES INC, QUANTA SERVICES MANAGEMENT ...

QUANTA SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Goodwill represents the excess of the purchase price over the net amount of the fair values assigned to
assets acquired and liabilities assumed. The 2011 and 2010 acquisitions strategically expand Quanta’s Canadian
service offering, add an Australian service offering and enhance its domestic electric power infrastructure service
offerings, which Quanta believes contributes to the recognition of the goodwill. In connection with the 2011
acquisitions, goodwill of $34.9 million was recorded for reporting units included within Quanta’s electric power
division and $8.9 million was recorded for the reporting unit included within Quanta’s natural gas and pipeline
division at December 31, 2011. In connection with the 2010 acquisition, goodwill of $109.4 million was recorded
and included within Quanta’s electric power division at December 31, 2010. None of this goodwill is expected to
be deductible for income tax purposes other than $13.1 million recorded in 2011.
The following unaudited supplemental pro forma results of operations 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):
2011
Year Ended December 31,
2010 2009
Revenues ....................................... $4,700,382 $4,212,447 $4,717,882
Gross profit ..................................... $ 645,477 $ 701,314 $ 914,737
Selling, general and administrative expenses ........... $ 381,290 $ 367,373 $ 379,210
Amortization of intangible assets .................... $ 34,253 $ 55,756 $ 55,532
Net income attributable to common stock .............
Earnings per share attributable to common stock:
$ 141,123 $ 167,361 $ 304,304
Basic .......................................... $ 0.66 $ 0.78 $ 1.43
Diluted ......................................... $ 0.66 $ 0.77 $ 1.41
The pro forma combined results of operations for the years ended December 31, 2011 and 2010 have been
prepared by adjusting the historical results of Quanta to include the historical results of the 2011 acquisitions as if
they occurred January 1, 2010. The pro forma combined results of operations for the year ended
December 31, 2010 have also been prepared by adjusting the historical results of Quanta to include the historical
results of the 2010 acquisition as if it occurred January 1, 2009. The pro forma combined results of operations for
the year ended December 31, 2009 have been prepared by adjusting the historical results of Quanta to include the
historical results of the 2010 acquisition as if it occurred January 1, 2009 and the historical results of the 2009
acquisitions as if they all occurred January 1, 2008. These pro forma combined historical results were then
adjusted for the following: a reduction of interest expense and interest income as a result of the repayment of
outstanding indebtedness and the retirement of preferred stock, a reduction of interest income as a result of the
cash consideration paid, an increase in amortization expense due to the incremental intangible assets recorded
related to the 2011, 2010 and 2009 acquisitions, an increase in depreciation expense within cost of services
related to the net impact of adjusting acquired property and equipment to the acquisition date fair value and
conforming depreciable lives with Quanta’s accounting policies, an increase in the number of outstanding shares
of Quanta common stock and certain reclassifications to conform the acquired companies’ presentation to
Quanta’s accounting policies. The pro forma results of operations do not include any adjustments to eliminate the
impact of acquisition related costs or any cost savings or other synergies that may result from the 2011, 2010 and
2009 acquisitions. As noted above, the pro forma results of operations do not purport to be indicative of the
actual results that would have been achieved by the combined company for the periods presented or that may be
achieved by the combined company in the future.
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