10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

(Mark One)

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2016

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                  to           

Commission file number: 001-34145

Primoris Services Corporation

(Exact name of registrant as specified in its charter)

Delaware	20-4743916
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

2100 McKinney Avenue, Suite 1500 Dallas, Texas	75201
(Address of principal executive offices)	(Zip Code)

(214) 740-5600

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Name of exchange on which registered
Common Stock, $0.0001 par value	The NASDAQ Stock Market LLC

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  Yes ☒  No ☐

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.  Yes ☐  No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes ☒  No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 229.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes ☒  No ☐

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III in this Form 10-K or any amendment to this Form 10-K. ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company (as defined in Rule 12b-2 of the Exchange Act).

Large accelerated filer ☒	Accelerated filer ☐
Non-accelerated filer ☐	Smaller Reporting Company ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes ☐  No ☒

The aggregate market value of the voting common equity held by non-affiliates of the registrant was approximately $780.9 million based upon the closing price of such common equity as of June 30, 2016 (the last business day of the Registrant’s most recently completed second fiscal quarter). On February 28, 2017, there were 51,564,658 shares of common stock, par value $0.0001, outstanding. For purposes of this Annual Report on Form 10-K, in addition to those stockholders which fall within the definition of “affiliates” under Rule 405 of the Securities Act of 1933, holders of ten percent or more of the Registrant’s common stock are deemed to be affiliates.

TABLE OF CONTENTS

		Page
Part I
Item 1.	Business	4
Item 1A.	Risk Factors	11
Item 1B.	Unresolved Staff Comments	25
Item 2.	Properties	25
Item 3.	Legal Proceedings	26
Item 4.	Mine Safety Disclosures	27
Part II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	28
Item 6.	Selected Financial Data	31
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	32
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	58
Item 8.	Financial Statements and Supplementary Data	58
Item 9.	Changes In and Disagreements With Accountants on Accounting and Financial Disclosure	58
Item 9A.	Controls and Procedures	58
Item 9B.	Other Information	60
Part III
Item 10.	Directors, Executive Officers and Corporate Governance	61
Item 11.	Executive Compensation	62
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	62
Item 13.	Certain Relationships and Related Transactions, and Director Independence	62
Item 14.	Principal Accounting Fees and Services	62
Part IV
Item 15.	Exhibits and Financial Statement Schedules	63
Signatures		70
Index to Consolidated Financial Statements		F-1

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FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which are subject to the “safe harbor” created by those sections. Forward-looking statements include information concerning our possible or assumed future results of operations, business strategies, financing plans, competitive position, industry environment, potential growth opportunities, the effects of regulation and the economy, generally. Forward-looking statements include all statements that are not historical facts and usually can be identified by terms such as “anticipates,” “believes,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,” “projects,” “should,” “will,” “would” or similar expressions.

Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. We discuss many of these risks in detail in “Item 1A. Risk Factors”.  You should read this Annual Report on Form 10-K completely and with the understanding that our actual future results may be materially different from what we expect.

Given these uncertainties, you should not place undue reliance on forward-looking statements.  Forward-looking statements represent our management’s beliefs and assumptions only as of the date of this Annual Report on Form 10-K.  We assume no obligation to update forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in any forward-looking statements, even if new information becomes available.

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PART I

ITEM 1.  BUSINESS

Business Overview

Primoris Services Corporation (“Primoris”, the “Company”, “we”, “us”, or “our”) is a holding company of various subsidiaries which form one of the larger publicly traded specialty contractors and infrastructure companies in the United States. Serving diverse end-markets, we provide a wide range of construction, fabrication, maintenance, replacement, water and wastewater, and engineering services to major public utilities, petrochemical companies, energy companies, municipalities, state departments of transportation and other customers. We install, replace, repair and rehabilitate natural gas, refined product, water and wastewater pipeline systems; large diameter gas and liquid pipeline facilities; and heavy civil projects, earthwork and site development. We also construct mechanical facilities and other structures, including power plants, petrochemical facilities, refineries, water and wastewater treatment facilities and parking structures. Finally, we provide specialized process and product engineering services.

Historically, we have longstanding relationships with major utility, refining, petrochemical, power and engineering companies. We have completed major underground and industrial projects for a number of large natural gas transmission and petrochemical companies in the United States, as well as significant projects for our engineering customers. We enter into a large number of contracts each year and the projects can vary in length — from several weeks to as long as 60 months for completion of larger projects. Although we have not been dependent upon any one customer, in any year a small number of customers tend to constitute a substantial portion of our total revenues.

The Company’s common stock trades on the NASDAQ Select Global Market under the symbol “PRIM”.  Founded as ARB, Inc. (“ARB”) in 1960, we became organized as Primoris in Nevada in 2003, and we became a Delaware public company in July 2008 when we merged with a special purpose acquisition company (a non-operating shell company).

Our service capabilities and geographic footprint have expanded primarily through the following four significant acquisitions over the last eight years.

In 2009, we acquired James Construction Group, LLC, a privately-held Florida limited liability company (“JCG”).  Headquartered in Baton Rouge, Louisiana, JCG is one of the largest general contractors based in the Gulf Coast states and is engaged in highway, industrial and environmental construction, primarily in Louisiana, Texas, Mississippi and Florida.  JCG and its predecessor company have been in business for over 80 years.

In 2010, we acquired Rockford Corporation (“Rockford”).  Rockford specializes in construction of large diameter natural gas and liquid pipeline projects and related facilities throughout the United States.

In 2012, we purchased Sprint Pipeline Services, L.P. (“Sprint”), a Texas based company headquartered near Houston, which we renamed as Primoris Energy Services (“PES”).  PES provides a comprehensive range of pipeline construction, maintenance, upgrade, fabrication and specialty services primarily in the southeastern United States.

In November 2012, we purchased Q3 Contracting, Inc., a privately-held Minnesota corporation (“Q3C”).  Based in Little Canada, Minnesota (north of St. Paul), Q3C specializes in small diameter pipeline and gas distribution construction, restoration and other services, primarily in the upper Midwest region of the United States.

In addition to these primary acquisitions, we have entered into several agreements to purchase smaller businesses or business assets to start a business as we continue to seek opportunities to expand our skill sets or operating locations.  These include The Saxon Group (“Saxon”) and The Silva Group (“Silva”) (merged with JCG) which we acquired in 2012.  During 2014 we acquired Vadnais Trenchless Services, Inc. (“Vadnais”) and made three small acquisitions consisting of the purchase of the net assets of Surber Roustabout, LLC (“Surber”), Ram-Fab, LLC (“Ram-Fab”) and Williams Testing, LLC (“Williams”).  In February 2015, we acquired the net assets of Aevenia, Inc.  In 2016, we further enhanced our market reach with the purchase of the net assets of Mueller Concrete Construction Company

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(“Mueller”) and Northern Energy & Power (“Northern”).  We continue to evaluate potential acquisition candidates especially those with strong management teams with good reputations. 

In October 2016, the Company announced that it planned to divest its Texas heavy civil business unit, which operates as a division of JCG.  Until completion of a sale, the Company will continue to operate the business unit. 

Reportable Segments

The Company segregates its business into three reportable segments:  the West Construction Services segment (“West segment”), the East Construction Services segment (“East segment”) and the Energy segment (“Energy segment”).

The West segment includes the underground and industrial operations and construction services performed by ARB, ARB Structures, Inc., Rockford, Q3C, and Vadnais.  ARB and ARB Structures perform work primarily in California.  Rockford operates throughout the United States and Q3C operates in Colorado and the upper Midwest of the United States. The segment also includes two joint venture operations.  The West segment consists of business headquartered primarily in the Western United States.

The East segment includes the JCG Heavy Civil division, JCG Infrastructure and Maintenance division, BW Primoris and Cardinal Contractors, Inc. construction businesses, located primarily in the Southeastern United States and the Gulf Coast region of the United States.  In October 2016, the Company announced that it planned to divest its Texas heavy civil business unit, which operates as a division of JCG.  Until completion of a sale, the Company will continue to operate the business unit. 

The Energy segment includes the operations of the Primoris Energy Services (“PES”) pipeline and gas facility construction and maintenance operations and the PES Industrial division, whose operations are located primarily in the southeastern United States and in the Gulf Coast region.  Also included are the Primoris Aevenia, Inc. (“Aevenia”), Mueller, Northern, Surber and Ram-Fab operations and the OnQuest, Inc. and OnQuest Canada, ULC operations, which provide for the design and installation of liquid natural gas (“LNG”) facilities and high-performance furnaces and heaters for the oil refining, petrochemical and power generation industries.

Each of the three segments specializes in a range of services that include designing, building/installing, replacing, repairing/rehabilitating and providing management services for construction related projects. Our services include:

· Providing installation of underground pipeline, cable and conduits for entities in the petroleum, petrochemical and water industries;

· Providing maintenance services to utilities for installation and repair of gas distribution lines;

· Providing installation and maintenance of industrial facilities for entities in the petroleum, petrochemical and water industries;

· Providing installation of commercial and industrial cast-in-place structures;

· Providing construction of highways and bridges; and

· Providing industrial and environmental construction.

Strategy

Our strategy has remained consistent from year to year and continues to emphasize the following key elements:

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· Diversification Through Controlled Expansion.  We continue to emphasize the expansion of our scope of services beyond our current focus by increasing the scope of services offered to current customers and by adding new customers.  We will evaluate acquisitions that offer growth opportunities and the ability to leverage our resources as a leading service provider to the oil and gas, power, refining and water industries. Our strategy also considers selective expansion to new geographic regions.

· Emphasis on Retention of Existing Customers and Recurring Revenue.  In order to fully leverage our relationships with our existing customer base, we believe it is important to maintain strong customer relationships and to expand our base of recurring revenue sources and recurring customers.

· Ownership of Equipment.  Many of our services are equipment intensive. The cost of construction equipment, and in some cases the availability of construction equipment, provides a significant barrier to entry into several of our businesses. We believe that our ownership of a large and varied construction fleet and our maintenance facilities enhances our access to reliable equipment at a favorable cost.

· Stable Work Force.  Our business model emphasizes self-performance of a significant portion of our work.  In each of our separate segments, we maintain a stable work force of skilled, experienced laborers, many of whom are cross-trained in projects such as pipeline and facility construction, refinery maintenance, and piping systems.

· Selective Bidding.  We selectively bid on projects that we believe offer an opportunity to meet our profitability objectives or that offer the opportunity to enter promising new markets. In addition, we review our bidding opportunities to attempt to minimize concentration of work with any one customer, in any one industry, or in stressed labor markets.  We believe that by carefully positioning ourselves in market segments that have meaningful barriers of entry, we can position ourselves so that we compete with other strong, experienced bidders.

· Maintain a conservative capital structure and strong balance sheet. We have maintained a capital structure that provides access to debt financing as needed while relying on tangible net worth to provide the primary support for our operations.  We believe this structure provides both our customers and banks and bonding companies assurance of our financial capabilities.  We maintain a revolving credit facility to provide letter of credit capability; however, we have not had any outstanding bank borrowing against this facility while we have been a public company.

Backlog

Backlog is discussed in Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Annual Report on Form 10-K.

Customers

We have longstanding customer relationships with major utility, refining, petrochemical, power and engineering companies. We have completed major underground and industrial projects for a number of large natural gas transmission and petrochemical companies in the western United States, as well as significant projects for our engineering customers.  Through JCG, we expanded our customer base to include a significant presence in the Gulf Coast region of the United States; with Q3C, we expanded into the upper Midwest United States; and with Rockford, we operate throughout the United States.  Over time, the various acquisitions have also changed the composition of our customer base with significant increases in state agency projects. We enter into a large number of contracts each year and the projects can vary in length — from several weeks, to as long as 60 months for completion on larger projects. Although we have not been dependent upon any one customer in any year, a small number of customers tend to constitute a substantial portion of our total revenues.

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Our customers have included many of the leading energy and utility companies in the United States, including, among others, Enterprise Liquids Pipeline, Xcel Energy, Pacific Gas & Electric, Southern California Gas, Sempra Energy, Williams, NRG, Chevron, Calpine, and Kinder Morgan.

The following customers accounted for more than 5% of our revenues in the periods indicated:

Description of customer’s business	2016	2015	2014
Chemical/energy producer	10.4%	9.0%	*
Private gas and electric utility	10.1%	9.0%	7.0%
Texas DOT	9.7%	9.5%	8.8%
Public gas and electric utility	9.2%	6.2%	6.9%
Pipeline operator	6.2%	*	*
Pipeline operator	*	8.6%	*
Gas utility	*	6.6%	*
Petrochemical producer	*	*	7.9%
Pipeline operator	*	*	5.8%
Totals	45.6%	48.9%	36.4%

(*)Indicates a customer with less than 5% of revenues during such period.

As can be seen from the table, the customers accounting for revenues in excess of 5% each year varies from year to year due to the nature of our business.  A large construction project for a customer may result in significant revenues in that one year, with significantly less revenues in subsequent years after project completion.

For the years ended December 31, 2016, 2015 and 2014, 60.4%, 59.4% and 53.6%, respectively, of total revenues were generated from the top ten customers of the Company in each year.  In each of the years, a different group of customers comprised the top ten customers by revenue.

Management at each of our business units is responsible for developing and maintaining successful long-term relationships with customers. Our business unit management teams build existing customer relationships to secure additional projects and increase revenue from our current customer base.  Business unit managers are also responsible for pursuing growth opportunities with prospective new customers.

We believe that our strategic relationships with customers will result in future opportunities. Some of our strategic relationships are in the form of strategic alliance or long-term maintenance agreements.  However, we realize that future opportunities also require cost effective bids, as pricing is a key element for most construction projects.

Ongoing Projects

The following is a summary of significant ongoing construction projects demonstrating our capabilities in different markets at December 31, 2016:

						Remaining
			Approximate		Estimated	Backlog at
			Contract		Completion	December 31,
Segment	Project	Location	Amount		Date	2016
			(Millions)			(Millions)
West	500 MW Natural Gas Simple Cycle Power Plant	Carlsbad, CA	$	206	10/2018	$	191
West	125 Mile Natural Gas Pipeline	Central Florida	$	230	06/2017	$	107
East	I-49 Parkway	Broussard, LA	$	63	05/2017	$	27
East	Bell IH-35 — LP 363 To Troy	Troy, TX	$	129	02/2018	$	51
Energy	340MW EPC Simple Cycle Gas Turbine	Mid-Atlantic	$	62	04/2018	$	60
East & Energy	Industrial facility	Lake Charles, LA	$	475	07/2017	$	92

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Competition

We face substantial competition on large construction projects from both regional and national contractors. Competitors on small construction projects range from a few large construction companies to a variety of smaller contractors. We compete with many local and regional firms for construction services and with a number of large firms on select projects. Each business unit faces varied competition depending on the types of project and services offered.

We compete with different companies in different end markets.  For example, large competitors in our underground markets include Quanta Services, Inc. and MasTec Inc.; competitors in our industrial end markets include Kiewit Corporation; and competitors in our highway services include Sterling Construction Company, and privately-held Boh Brothers and Zachary Construction Company. In each market we may also compete with local, private companies.

We believe that the primary factors influencing competition in our industry are price, reputation for quality, delivery and safety, relevant experience, availability of skilled labor, machinery and equipment, financial strength, knowledge of local markets and conditions, and estimating abilities. We believe that we have the ability to compete favorably in all of these factors.

Geographic Areas — Financial Information

The majority of the Company’s revenues are derived from customers and projects geographically located in the United States with approximately 1% generated from sources outside the United States.  Assets located outside the United States also represent approximately 1% of total assets of the Company.  Our revenue from operations in Canada is primarily derived from our Energy segment’s office in Calgary, Canada, but relates to specific projects in other countries, including in the Far East and Australia.

Risks Attendant to Foreign Operations

In 2016 less than 1% of our revenue was attributable to external customers in foreign countries. The current expectation is that a similar portion of revenue will continue to come from international projects for the foreseeable future.  Though a small portion of our revenues, international operations are subject to foreign economic and political uncertainties and risks as disclosed more fully in Item 1A “Risk Factors” of this Annual Report.  Unexpected and adverse changes in the foreign countries in which we operate could result in project disruptions, increased costs and potential losses. Our business is subject to fluctuations in demand and to changing domestic and international economic and political conditions which are beyond our control.

Contract Provisions and Subcontracting

We typically structure contracts as unit-price, time and material, fixed-price or cost plus fixed fee.  A substantial portion of our revenue is derived from contracts that are fixed price or fixed unit price contracts. Under a fixed unit price contract, we are committed to providing materials or services required by a project at fixed unit prices.  While the fixed unit price contract shifts the risk of estimating the quantity of units required for a particular project to the party retaining us, any increase in our unit cost over the unit price bid, whether due to inflation, inefficiency, faulty estimates or other factors, is borne by us. Under a fixed price contract, we undertake to provide labor, equipment and services required by a project for a competitively bid or negotiated fixed price. The materials required under a fixed price contract, such as pipe, turbines, boilers and vessels, are often supplied by the party retaining us. 

Construction contracts are primarily obtained through competitive bidding or through negotiations with long-standing customers. We are typically invited to bid on projects undertaken by recurring customers who maintain pre-qualified contractor lists. Contractors are selected for the pre-approved contractor lists by virtue of their prior performance for such customers, as well as their experience, reputation for quality, safety record, financial strength and bonding capacity.

In evaluating bid opportunities, we consider such factors as the customer, the geographic location of the work, the availability of labor, our competitive advantage or disadvantage relative to other likely contractors, our current and

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projected workload, the likelihood of additional work, and the project’s cost and profitability estimates. We use computer-based estimating systems and our estimating staff has significant experience in the construction industry. The project estimates form the basis of a project budget against which performance is tracked through a project cost system, thereby enabling management to monitor a project. Project costs are accumulated and monitored regularly against billings and payments to assure proper understanding of cash flow on the project.

Most contracts provide for termination of the contract for the convenience of the owner. In addition, many contracts are subject to certain completion schedule requirements with liquidated damages, in the event schedules are not met. To date, these provisions have not materially adversely affected us.

We act as prime contractor on a majority of the construction projects we undertake. In the construction industry, the prime contractor is normally responsible for the performance of the entire contract, including subcontract work. Thus, we are potentially subject to increased costs and reputational risk associated with the failure of one or more subcontractors to perform as anticipated. While we subcontract specialized activities such as blasting, hazardous waste removal and electrical work, we perform most of the work on our projects with our own resources, including labor and equipment.

Our gas distribution services are typically provided pursuant to renewable contracts on a “unit-cost” basis. Fees on unit-cost contracts are negotiated and are earned based on units completed. Historically, substantially all of the gas distribution customers have renewed their maintenance contracts. Facilities maintenance services, such as regularly scheduled and emergency repair work, are provided on an ongoing basis at predetermined rates.

Risk Management, Insurance and Bonding

We maintain general liability and excess liability insurance, covering our construction equipment, and workers’ compensation insurance, in amounts consistent with industry practices. In the States of California, Texas and Louisiana, we self-insure our workers’ compensation claims in an amount of up to $250,000 per occurrence, and we maintain insurance covering larger claims. In addition, we maintain umbrella coverage policies.  We believe that our insurance programs are adequate.

We maintain a diligent safety and risk management program that has resulted in a favorable loss experience factor. Through our safety director and the employment of a large staff of regional and site specific safety managers, we have been able to effectively assess and control potential losses and liabilities in both the pre-construction and performance phases of our projects. Though we strongly focus on safety in the workplace, we cannot give assurances that we can prevent or reduce all injuries or claims in our workplace.

In connection with our business, we generally are required to provide various types of surety bonds guaranteeing our performance under certain public and private sector contracts. Our ability to obtain surety bonds depends upon our capitalization, working capital, backlog, past performance, management expertise and other factors and the surety company’s current underwriting standards.  To date, we have obtained the level of surety bonds necessary for the needs of our business.

Regulation

Our operations are subject to various federal, state, local and international laws and regulations including:

· Licensing, permitting and inspection requirements;

· Regulations relating to worker safety, including those established by the Occupational Safety and Health Administration;

· Permitting and inspection requirements applicable to construction projects; and

· Contractor licensing requirements.

We believe that we have all the licenses required to conduct our operations and that we are in substantial compliance with applicable regulatory requirements.

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Environmental Matters and Climate Change Impacts

We are subject to numerous federal, state, local and international environmental laws and regulations governing our operations, including the handling, transportation and disposal of non-hazardous and hazardous substances and wastes, as well as emissions and discharges into the environment, including discharges to air, surface water, groundwater and soil. We also are subject to laws and regulations that impose liability and cleanup responsibility for releases of hazardous substances into the environment. Under some of these laws and regulations, liability can be imposed for cleanup of previously owned or operated properties, or properties to which hazardous substances or wastes were sent by current or former operations at our facilities, regardless of whether we directly caused the contamination or violated any law at the time of discharge or disposal. The presence of contamination from such substances or wastes could interfere with ongoing operations or adversely affect our ability to sell, lease or use our properties as collateral for financing.

In addition, we could be held liable for significant penalties and damages under certain environmental laws and regulations and also could be subject to a revocation of our licenses or permits, which could materially and adversely affect our business and results of operations. Our contracts with our customers may also impose liabilities on us regarding environmental issues that arise through the performance of our services.  From time to time, we may incur costs and obligations for correcting environmental noncompliance matters and for remediation at or relating to certain of our properties. We believe that we are in substantial compliance with our environmental obligations to date and that any such obligations will not have a material adverse effect on our business or financial performance.

The potential physical impact of climate change on our operations is highly uncertain. Climate change may result in, among other things, changes in rainfall patterns, storm patterns and intensities and temperature levels. As discussed elsewhere in this Annual Report on Form 10-K, including in Item 1A. “Risk Factors”, our operating results are significantly influenced by weather. Therefore, major changes in historical weather patterns could significantly impact our future operating results. For example, if climate change results in significantly more adverse weather conditions in a given period, we could experience reduced productivity, which could negatively impact our revenues and gross margins.

Climate change could also affect our customers and the types of projects that they award.  Demand for power projects, underground pipelines or highway projects could be affected by significant changes in weather.  Reductions in project awards could adversely affect our operations and financial performance.

Employees

We believe that our employees are the most valuable resource in successfully completing construction work. Our ability to maintain sufficient continuous work for approximately 6,800 hourly employees helps us to instill in our employees loyalty to and understanding of our policies and contributes to our strong production, safety and quality record.

As of December 31, 2016, we employed 1,133 salaried employees and 6,793 hourly employees.  The total number of hourly personnel employed is subject to the volume of construction work in progress. During the calendar year 2016, the aggregate number of employees ranged from approximately 5,500 to 8,000.

The following is a summary of employees by status and location as of December 31, 2016:

							Other
	CA	LA	TX	CO	FL	MN	US	Canada	Total
Salaried	219	222	409	59	32	45	142	5	1,133
Hourly	1,422	1,500	1,601	565	358	131	1,201	15	6,793
Total	1,641	1,722	2,010	624	390	176	1,343	20	7,926

Several of our subsidiaries have operations that are unionized through the negotiation and execution of collective bargaining agreements. These collective bargaining agreements have varying terms and are subject to

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renegotiation upon expiration. We have not experienced recent work stoppages and believe our employee and union relations are good.

Website Access and Other Information

Our website address is www.prim.com. You may obtain free electronic copies of our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and any amendments to these reports through our website under the “Investors” tab or through the website of the Securities and Exchange Commission (the “SEC”) at www.sec.gov. These reports are available on our website as soon as reasonably practicable after we electronically file them with, or furnish them to, the SEC. In addition, our “Code of Ethics” (including a separate supplement which applies to our CEO, CFO and senior financial executives) and the charters of our Audit Committee, Compensation Committee and Governance and Nominating Committee are posted on our website under the “Investors/Governance” tab.  We intend to disclose on our website any amendments or waivers to our Code of Ethics that are required to be disclosed pursuant to Item 5.05 of Form 8-K. You may obtain copies of these items from our website.

We will make available to any stockholder, without charge, copies of our Annual Report on Form 10-K as filed with the SEC. For copies of this or any other information, stockholders should submit a request in writing to Primoris Services Corporation, Inc., Attn: Corporate Secretary, 2100 McKinney Avenue, Suite 1500, Dallas, TX 75201.

This Annual Report on Form 10-K and our website may contain information provided by other sources that we believe are reliable. However, we cannot assure you that the information obtained from other sources is accurate or complete. No information on our website is incorporated by reference herein and should not be considered part of this Annual Report.

ITEM 1A.  RISK FACTORS

Our business is subject to a variety of risks and uncertainties, many of which are described below (not necessarily in probability of occurrence or order of importance).  The following list is not all-inclusive, and there can be no assurance that we have correctly identified and appropriately assessed all factors affecting our business or that the publicly available or other information with respect to these matters is complete and correct. Additional risks and uncertainties not presently known to us or that we currently believe to be immaterial also may have a material adverse effect on our business in the future.  This Form 10-K includes projections, assumptions and beliefs that are intended to be “forward looking statements” and should be read in conjunction with the discussion of “Forward Looking Statements” at the beginning of this Annual Report on Form 10-K.

The following risk factors could have a material adverse effect our business, the results of our operations, our cash flow and the price of our shares.  These risk factors could prevent us from meeting our goals or expectations.

Risks Related Primarily to Operating our Business

Our financial and operating results may vary significantly from quarter-to-quarter and year-to-year.

Our business is subject to seasonal and annual fluctuations.  Some of the quarterly variation is the result of weather, particularly rain, ice and snow, which create difficult operating conditions.  Similarly, demand for routine repair and maintenance services for gas utilities is lower during their peak customer needs in the winter.  Some of the annual variation is the result of large construction projects which fluctuate based on general economic conditions and customer needs.  Annual and quarterly results may also be adversely affected by:

· Changes in our mix of customers, projects, contracts and business;

· Regional or national and/or general economic conditions and demand for our services;

· Variations and changes in the margins of projects performed during any particular quarter;

· Increases in the costs to perform services caused by changing weather conditions;

· The termination or expiration of existing agreements or contracts;

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· The budgetary spending patterns of customers;

· Increases in construction costs that we may be unable to pass through to our customers;

· Cost or schedule overruns on fixed-price contracts;

· Availability of qualified labor for specific projects;

· Changes in bonding requirements and bonding availability for existing and new agreements;

· The need and availability of letters of credit;

· Costs we incur to support growth whether organic or through acquisitions;

· The timing and volume of work under contract; and

· Losses experienced in our operations.

As a result, our operating results in any particular quarter may not be indicative of the operating results expected for any other quarter or for an entire year.

Demand for our services may decrease during economic recessions or volatile economic cycles, and a reduction in demand in end markets may adversely affect our business.

A substantial portion of our revenues and profits is generated from construction projects, the awarding of which we do not directly control.  The engineering and construction industry historically has experienced cyclical fluctuations in financial results due to economic recessions, downturns in business cycles of our customers, material shortages, price increases by subcontractors, interest rate fluctuations and other economic factors beyond our control. When the general level of economic activity deteriorates, our customers may delay or cancel upgrades, expansions, and/or maintenance and repairs to their systems. Many factors, including the financial condition of the industry, could adversely affect our customers and their willingness to fund capital expenditures in the future.

Economic, regulatory and market conditions affecting our specific end markets may adversely impact the demand for our services, resulting in the delay, reduction or cancellation of certain projects and these conditions may continue to adversely affect us in the future.

Much of the work that we perform in the highway markets involves funding by federal, state and local governments.  This funding is subject to fluctuation based on the budgets and operating priorities of the various government agencies.

We are also dependent on the amount of work our customers outsource. In a slower economy, our customers may decide to outsource less infrastructure services reducing demand for our services. In addition, consolidation, competition or capital constraints in the industries we serve may result in reduced spending by our customers.

Industry trends and government regulations could reduce demand for our pipeline construction services.

The demand for our pipeline construction services is dependent on the level of capital project spending by companies in the oil and gas industry.  This level of spending is subject to large fluctuations depending primarily on the current and expectations of future prices of oil and natural gas.  The price is a function of many factors, including levels of supply and demand, government policies and regulations, oil industry refining capacity and the potential development of alternative fuels.

Specific government decisions could affect demand for our construction services.  For example, a limitation on the use of “fracking” technology, or creation of significant regulatory issues for the construction of underground pipelines, could significantly reduce our underground work.

Conversely, government regulations may increase the demand for our pipeline services.  The anticipation by utilities that coal-fueled power plants may become uneconomical to operate because of potential environmental regulations has increased demand for gas pipeline construction for utility customers.

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Many of our customers are regulated by federal and state government agencies and the addition of new regulations or changes to existing regulations may adversely impact demand for our services and the profitability of those services.

Many of our energy customers are regulated by the Federal Energy Regulatory Commission, or FERC, and our utility customers are regulated by state public utility commissions. These agencies could change the way in which they interpret current regulations and may impose additional regulations. These changes could have an adverse effect on our customers and the profitability of the services they provide which could reduce demand for our services.

Our business may be materially adversely impacted by regional, national and/or global requirements to significantly limit or reduce greenhouse gas emissions in the future.

Greenhouse gases that result from human activities, including burning of fossil fuels, are the focus of increased scientific and political scrutiny and may be subjected to various legal requirements. International agreements, federal laws, state laws and various regulatory schemes limit or otherwise regulate emissions of greenhouse gases, and additional restrictions are under consideration by different governmental entities. We derive a significant amount of revenues and contract profits from engineering and construction services to clients that own and/or operate a wide range of process plants and own and/or operate electric power generating plants that generate electricity from burning natural gas or various types of solid fuels. These plants may emit greenhouse gases as part of the process to generate electricity or other products. Compliance with the existing greenhouse gas regulation may prove costly or difficult. It is possible that owners and operators of existing or future process plants and electric generating plants could be subject to new or changed environmental regulations that result in significantly limiting or reducing the amounts of greenhouse gas emissions, increasing the cost of emitting such gases or requiring emissions allowances. The costs of controlling such emissions or obtaining required emissions allowances could be significant. It also is possible that necessary controls or allowances may not be available. Such regulations could negatively impact client investments in capital projects in our markets, which could negatively impact the market for our products and/or services. This could materially adversely affect our business.

In addition, the establishment of rules limiting greenhouse gas emissions could impact our ability to perform construction services or to perform these services with current levels of profitability.  New regulations may require us to acquire different equipment or change processes.  The new equipment may not be available, or it may not be purchased or rented in a cost effective manner.  Project deferrals, delays or cancellations resulting from the potential regulations could adversely impact our business.

Changes to renewable portfolio standards and decreased demand for renewable energy projects could negatively impact our future results of operations, cash flows and liquidity.

A significant portion of our future business may be focused on providing construction and/or installation services to owners and operators of solar power and other renewable energy facilities. Currently, the development of solar and other renewable energy facilities is highly dependent on tax credits, the existence of renewable portfolio standards and other state incentives. Renewable portfolio standards are state-specific statutory provisions requiring that electric utilities generate a certain amount of electricity from renewable energy sources.  These standards have initiated significant growth in the renewable energy industry and a potential demand for renewable energy infrastructure construction services. Since renewable energy is generally more expensive to produce, elimination of, or changes to, existing renewable portfolio standards, tax credits or similar environmental policies may negatively affect future demand for our services.

We may lose business to competitors through the competitive bidding processes.

We are engaged in highly competitive businesses in which most customer contracts are awarded through bidding processes based on price and the acceptance of certain risks. We compete with other general and specialty contractors, both foreign and domestic, including large international contractors and small local contractors. The strong competition in our markets requires maintaining skilled personnel and investing in technology, and it also puts pressure on profit margins.  We do not obtain contracts from all of our bids and our inability to win bids at acceptable profit margins would adversely affect our business.

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We may be unsuccessful at generating internal growth which may affect our ability to expand our operations or grow our business.

Our ability to generate internal growth may be affected by, among other factors, our ability to:

· Attract new customers;

· Increase the number of projects performed for existing customers;

· Hire and retain qualified personnel;

· Successfully bid for new projects; and

· Adapt the range of services we offer to address our customers’ evolving construction needs.

In addition, our customers may reduce the number or size of projects available to us due to their inability to obtain capital.  Our customers may also reduce projects in response to economic conditions.

Many of the factors affecting our ability to generate internal growth may be beyond our control, and we cannot be certain that our strategies will be successful or that we will be able to generate cash flow sufficient to fund our operations and to support internal growth. If we are unsuccessful, we may not be able to achieve internal growth, expand our operations or grow our business.

The timing of new contracts may result in unpredictable fluctuations in our business.

Substantial portions of our revenues are derived from project-based work that is awarded through a competitive bid process. The portion of revenue generated from the competitive bid process for 2016, 2015 and 2014 was approximately 45%, 47%, and 64%, respectively. It is generally very difficult to predict the timing and geographic distribution of the projects that we will be awarded. The selection of, timing of or failure to obtain projects, delays in award of projects, the re-bidding or termination of projects due to budget overruns, cancellations of projects or delays in completion of contracts could result in the under-utilization of our assets and reduce our cash flows. Even if we are awarded contracts, we face additional risks that could affect whether, or when, work will begin. For example, some of our contracts are subject to financing, permitting and other contingencies that may delay or result in termination of projects. We may have difficulty in matching workforce size and equipment location with contract needs. In some cases, we may be required to bear the cost of a ready workforce and equipment that is larger than necessary, resulting in unpredictability in our cash flow, expenses and profitability. If any expected contract award or the related work release is delayed or not received, we could incur substantial costs without receipt of any corresponding revenues. Moreover, construction projects for which our services are contracted may require significant expenditures by us prior to receipt of relevant payments by a customer and may expose us to potential credit risk if the customer encounters financial difficulties. Finally, the winding down or completion of work on significant projects will reduce our revenue and earnings if these projects have not been replaced in the current period.

We derive a significant portion of our revenues from a few customers, and the loss of one or more of these customers could have significant effects on our revenues, resulting in adverse effects on our financial condition, results of operations and cash flows.

Our customer base is highly concentrated, with our top ten customers accounting for approximately 60% of our revenue in 2016, 59% of our revenue in 2015 and 53% of our revenue in 2014. However, the customers included in our top ten customer list generally vary from year to year.  Our revenue is dependent both on performance of larger construction projects and relatively smaller Master Services Agreements (“MSA”) contracts.  For the large construction projects, the completion of the project does not necessarily represent the permanent loss of a customer; however, the future revenues generated from work for that customer may fluctuate significantly.

We also generate ongoing revenues from our MSA customers, which are generally comprised of regulated gas utilities.  If we were to lose one of these customers, our revenue could significantly decline.  Reduced demand for our services by larger construction customers or a loss of a significant MSA customer could have an adverse effect on our business.

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Our international operations expose us to legal, political and economic risks in different countries as well as currency exchange rate fluctuations that could harm our business and financial results.  We could be adversely affected by our failure to comply with laws applicable to our foreign activities, such as the U.S. Foreign Corrupt Practices Act.

During 2016, 2015 and 2014, revenue attributable to our services outside of the United States was 0.6%, 0.9% and 1.0% of our total revenue, respectively.  While much of this revenue is derived from the operations of our Canadian subsidiary, OnQuest Canada, ULC, construction activities have occurred in several far eastern countries and in Australia. There are risks inherent in doing business internationally, including:

· Imposition of governmental controls and changes in laws, regulations, policies, practices, tariffs and taxes;

· Political and economic instability;

· Changes in United States and other national government trade policies affecting the market for our services;

· Potential non-compliance with a wide variety of laws and regulations, including the United States Foreign Corrupt Practices Act (“FCPA”) and similar non-United States laws and regulations;

· Currency exchange rate fluctuations, devaluations and other conversion restrictions;

· Restrictions on repatriating foreign profits back to the United States; and

· Difficulties in staffing and managing international operations.

The FCPA and similar anti-bribery laws in other jurisdictions prohibit U.S.-based companies and their intermediaries from making improper payments to non-U.S. officials for the purpose of obtaining or retaining business. We pursue opportunities in certain parts of the world that experience government corruption, and in certain circumstances, compliance with anti-bribery laws may conflict with local customs and practices. Our internal policies mandate compliance with all applicable anti-bribery laws. We require our partners, subcontractors, agents and others who work for us or on our behalf to comply with the FCPA and other anti-bribery laws. There is no assurance that our policies or procedures will protect us against liability under the FCPA or other laws for actions taken by our agents, employees and intermediaries. If we are found to be liable for FCPA violations (either due to our own acts or our inadvertence, or due to the acts or inadvertence of others), we could suffer from severe criminal or civil penalties or other sanctions, which could have a material adverse effect on our reputation and business.  In addition, detecting, investigating and resolving actual or alleged FCPA violations is expensive and could consume significant time and attention of our senior management.

Backlog may not be realized or may not result in revenues or profits.

Backlog is measured and defined differently by companies within our industry. We refer to “backlog” as our estimated revenue on uncompleted contracts, including the amount of revenue on contracts on which work has not begun, less the revenue we have recognized under such contracts plus an estimated level of MSA revenues for the next four quarters.  Backlog is not a comprehensive indicator of future revenues.  Most contracts may be terminated by our customers on short notice. Reductions in backlog due to cancellation by a customer, or for other reasons, could significantly reduce the revenue that we actually receive from contracts in backlog. In the event of a project cancellation, we may be reimbursed for certain costs, but we typically have no contractual right to the total revenues reflected in our backlog. Projects may remain in backlog for extended periods of time.  While backlog includes estimated MSA revenues, customers are not contractually obligated to purchase an amount of services under the MSA.

Given these factors, our backlog at any point in time may not accurately represent the revenue that we expect to realize during any period, and our backlog as of the end of a fiscal year may not be indicative of the revenue we expect to earn in the following fiscal year. Inability to realize revenue from our backlog could have an adverse effect our business.

Backlog is an indicator of future revenues; however, recognition of revenues from backlog does not necessarily ensure that the projects will be profitable.  Poor project or contract performance could impact profits from contracts included in backlog.  For projects for which a loss is expected, future revenues will be recorded with no margin, which may reduce the overall margin percentage for work performed.

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Our actual cost may be greater than expected in performing our fixed-price and unit-price contracts, causing us to realize significantly lower profits or losses on our projects.

We currently generate, and expect to continue to generate, a portion of our revenue and profits under fixed-price and unit-price contracts. The approximate portion of revenue generated from fixed-price contracts for the years 2016, 2015 and 2014 was 35%, 39% and 23%, respectively.  The approximate portion of revenue generated from unit-price contracts for the years 2016, 2015 and 2014 was 45%, 43%, and 32%, respectively.  In general, we must estimate the costs of completing a specific project to bid these types of contracts. The actual cost of labor and materials may vary from the costs we originally estimated, and we may not be successful in recouping additional costs from our customers. These variations may cause gross profits for a project to differ from those we originally estimated.  Reduced profitability or losses on projects could occur due to changes in a variety of factors such as:

· Failure to properly estimate costs of engineering, materials, equipment or labor;

· Unanticipated technical problems with the structures, materials or services being supplied by us, which may require that we spend our own money to remedy the problem;

· Project modifications not reimbursed by the client creating unanticipated costs;

· Changes in the costs of equipment, materials, labor or subcontractors;

· Our suppliers or subcontractors failure to perform;

· Changes in local laws and regulations, and;

· Delays caused by local weather conditions.

As projects grow in size and complexity, these factors may combine, and depending on the size of the particular project, variations from the estimated contract costs could have a material adverse effect on our business.

Weather can significantly affect our revenues and profitability.

Our ability to perform work and meet customer schedules can be affected by weather conditions such as snow, ice and rain.  Weather may affect our ability to work efficiently and can cause project delays and additional costs.  Our ability to negotiate change orders for the impact of weather on a project could impact our profitability.  In addition, the impact of weather can cause significant variability in our quarterly revenue and profitability.

We require subcontractors and suppliers to assist us in providing certain services, and we may be unable to retain the necessary subcontractors or obtain supplies to complete certain projects adversely affecting our business.

We use subcontractors to perform portions of our contracts and to manage workflow, particularly for design, engineering, procurement and some foundation work. While we are not dependent on any single subcontractor, general market conditions may limit the availability of subcontractors to perform portions of our contracts causing delays and increases in our costs.

We also use suppliers to provide the materials and some equipment used for projects.  If a supplier fails to provide supplies and equipment at a price we estimated, fails to provide supplies and equipment that are not of acceptable quantity or fails to provide supplies when scheduled, we may be required to source the supplies or equipment at a higher price or may be required to delay performance of the project.  The additional cost or project delays could negatively impact project profitability.

Failure of a subcontractor or supplier to comply with laws, rules or regulations could negatively affect our reputation and our business.

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We may enter into joint ventures which require satisfactory performance by our venture partners of their obligations.  The failure of our joint venture partners to perform their joint venture obligations could impose additional financial and performance obligations on us that could result in reduced profits or losses for us with respect to the joint venture.

As is typical in our industry, we may enter into various joint ventures and teaming arrangements where control may be shared with unaffiliated third parties.  At times, we also participate in joint ventures where we are not a controlling party. In such instances, we may have limited control over joint venture decisions and actions, including internal controls and financial reporting which may have an impact on our business.  If our joint venture partners fail to satisfactorily perform their joint venture obligations, the joint venture may be unable to adequately perform or deliver its contracted services. Under these circumstances, we may be required to make additional investments or provide additional services to ensure the adequate performance and delivery of the contracted services.  These additional obligations could result in reduced profits and may impact our reputation in the industry.

We may experience delays and defaults in client payments and we may pay our suppliers and subcontractors before receiving payment from our customers for the related services; we could experience an adverse effect on our financial condition, results of operations and cash flows.

We use subcontractors and material suppliers for portions of certain work, and our customers pay us for those related services. If we pay our suppliers and subcontractors for materials purchased and work performed for customers who fail to pay, or such customers delay in paying us for the related work or materials, we could experience a material adverse effect on our business.

Our inability to recover on claims against project owners or subcontractors for payment or performance could negatively affect our business.

We occasionally present claims or change orders to our clients and subcontractors for additional costs exceeding a contract price or for costs not included in the original contract price.  Change orders are modifications of an original contract that effectively change the provisions of the contract without adding new provisions.  They generally include changes in specifications or design, facilities, equipment, materials, sites and periods for completion of work.  Claims are amounts in excess of the agreed contract price (or amounts not included in the original contract price) that we seek to collect for customer-caused delays, errors in specifications and designs, contract terminations or other causes of unanticipated additional costs, such as costs caused by negative weather conditions.  These costs may or may not be recovered until the claim is resolved. In some instances, these claims can be the subject of lengthy legal proceedings, and it is difficult to accurately predict when they will be fully resolved. A failure to promptly document and negotiate a recovery for change orders and claims could have a negative impact on our cash flows, and an overall ability to recover change orders and claims could have a negative impact on our financial condition, results of operations and cash flows.

For some projects we may guarantee a timely completion or provide a performance guarantee which could result in additional costs, such as liquidated damages, to cover our obligations.

In our fixed-price contracts we may provide a project completion date, and in some of our projects we commit that the project will achieve specific performance standards.  If we do not complete the project as scheduled, or if the project does not meet the contracted performance standards, we may be held responsible for the impact to the client resulting from the delay or the inability to meet the standards.  Generally, the impact to the client is in the form of liquidated damages specified in the contract.

A significant portion of our business depends on our ability to provide surety bonds, and we may be unable to compete for or work on certain projects if we are not able to obtain the necessary surety bonds.

Our contracts frequently require that we provide payment and performance bonds to our customers. Under standard terms in the surety market, sureties issue or continue bonds on a project-by-project basis and can decline to issue bonds at any time or require the posting of additional collateral as a condition to issuing or renewing bonds.

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Current or future market conditions, as well as changes in our surety providers’ assessments of our operating and financial risk, could cause our surety providers to decline to issue or renew, or to substantially reduce, the availability of bonds for our work and could increase our bonding costs. These actions could be taken on short notice. If our surety providers were to limit or eliminate our access to bonding, our alternatives would include seeking bonding capacity from other sureties, finding more business that does not require bonds and posting other forms of collateral for project performance, such as letters of credit or cash. We may be unable to secure these alternatives in a timely manner, on acceptable terms, or at all. Accordingly, if we were to experience an interruption or reduction in the availability of bonding capacity, we may be unable to compete for or work on certain projects.

Our bonding requirements may limit our ability to incur indebtedness, which would limit our ability to refinance our existing credit facilities or to execute our business plan.

Our ability to obtain surety bonds depends upon various factors including our capitalization, working capital, tangible net worth and amount of our indebtedness. In order to help ensure that we can obtain required bonds, we may be limited in our ability to incur additional indebtedness that may be needed to refinance our existing credit facilities upon maturity and to execute our business plan.

We may be unable to win some new contracts if we cannot provide clients with letters of credit.

For many of our clients, surety bonds provide an adequate form of security, but for some clients, additional security in the form of a letter of credit may be required.  While we have capacity for letters of credit under our credit facility, the amount required by a client may be in excess of our credit limit.  Any such amount would be issued at the sole discretion of our lenders.  Failure to provide a letter of credit when required by a client may result in our inability to compete for or win a project.

During the ordinary course of our business, we may become subject to material lawsuits or indemnity claims.

We have in the past been, and may in the future be, named as a defendant in lawsuits, claims and other legal proceedings during the ordinary course of our business. These actions may seek, among other things, compensation for alleged personal injury, workers’ compensation, employment discrimination, breach of contract, property damage, punitive damages, and civil penalties or other losses or injunctive or declaratory relief. In addition, we generally indemnify our customers for claims related to the services we provide and actions we take under our contracts with them, and, in some instances, we may be allocated risk through our contract terms for actions by our customers or other third parties. Because our services in certain instances may be integral to the operation and performance of our customers’ infrastructure, we may become subject to lawsuits or claims for any failure of the systems on which we work, even if our services are not the cause of such failures, and we could be subject to civil and criminal liabilities to the extent that our services contributed to any property damage, personal injury or system failure. The outcome of any of these lawsuits, claims or legal proceedings could result in significant costs and diversion of management’s attention to the business. Payments of significant amounts, even if reserved, could adversely affect our reputation and our business.

We are self-insured against potential liabilities.

Although we maintain insurance policies with respect to employer’s liability, general liability, auto and workers compensation claims, those policies are subject to deductibles or self-insured retention amounts of up to $250,000 per occurrence. We are primarily self-insured for all claims that do not exceed the amount of the applicable deductible/self-insured retention. In addition, for our employees not part of a collective bargaining agreement, we provide employee health care benefit plans.  Our primary health insurance plan is subject to a deductible of $250,000 per individual claim per year.

Our insurance policies include various coverage requirements, including the requirement to give appropriate notice. If we fail to comply with these requirements, our coverage could be denied.

Losses under our insurance programs are accrued based upon our estimates of the ultimate liability for claims reported and an estimate of claims incurred but not reported.  Insurance liabilities are difficult to assess and estimate due

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to unknown factors, including the severity of an injury, the extent of damage, the determination of our liability in proportion to other parties and the number of incidents not reported. The accruals are based upon known facts and historical trends.

Our business is labor intensive.  If we are unable to attract and retain qualified managers and skilled employees, our operating costs may increase.

Our business is labor intensive and our ability to maintain our productivity and profitability may be limited by our ability to employ, train and retain skilled personnel necessary to meet our requirements. We may not be able to maintain an adequately skilled labor force necessary to operate efficiently and to support our growth strategy. We have from time-to-time experienced, and may in the future experience, shortages of certain types of qualified personnel. For example, periodically there are shortages of engineers, project managers, field supervisors, and other skilled workers capable of working on and supervising the construction of underground, heavy civil and industrial facilities, as well as providing engineering services. The supply of experienced engineers, project managers, field supervisors and other skilled workers may not be sufficient to meet current or expected demand. The beginning of new, large-scale infrastructure projects or increased competition for workers currently available to us, could affect our business, even if we are not awarded such projects. Labor shortages or increased labor costs could impair our ability to maintain our business or grow our revenues. If we are unable to hire employees with the requisite skills, we may also be forced to incur significant training expenses.

Our unionized workforce may commence work stoppages, which could adversely affect our operations.

As of December 31, 2016, approximately 32% of our hourly employees, primarily consisting of field laborers, were covered by collective bargaining agreements. Of the 84 collective bargaining agreements to which we are a party, 62 expire during 2017 and require renegotiation.  Although the majority of these agreements prohibit strikes and work stoppages, we cannot be certain that strikes or work stoppages will not occur in the future. Strikes or work stoppages would adversely impact our relationships with our customers and could have an adverse effect on our business.

Our ability to complete future acquisitions could be adversely affected because of our union status for a variety of reasons. For instance, in certain geographic areas, our union agreements may be incompatible with the union agreements of a business we want to acquire and some businesses may not want to become affiliated with a union company.  In addition, if we acquire a union affiliated company, we may increase our future exposure to withdrawal liabilities for any underfunded pension plans.

Withdrawal from multiemployer pension plans associated with our unionized workforce could adversely affect our financial condition and results of operations.

Our collective bargaining agreements generally require that we participate with other companies in multiemployer pension plans. To the extent those plans are underfunded, the Employee Retirement Income Security Act of 1974 (“ERISA”), as amended by the Multiemployer Pension Plan Amendments Act of 1980 (“MEPA”), may subject us to substantial liabilities under those plans if we withdraw from them or they are terminated. In addition, the Pension Protection Act of 2006 added new funding rules for multiemployer plans that are classified as endangered, seriously endangered or critical status.  For a plan in critical status, additional required contributions and benefit reductions may apply if a plan is determined to be underfunded, which could adversely affect our financial condition or results of operations.  For plans in critical status, we may be required to make additional contributions, generally in the form of surcharges on contributions otherwise required.  Participation in those plans with high funding levels could adversely affect our results of operations, financial condition or cash flows if we are not able to adequately mitigate these costs.

The amount of the withdrawal liability legislated by ERISA and MEPA varies for every pension plan to which we contribute.  For each plan, our liability is the total unfunded vested benefits of the plan multiplied by a fraction:  the numerator of the fraction is the sum of our contributions to the plan for the past ten years and the denominator is the sum of all contributions made by all employers for the past ten years.  For some pension plans to which we contribute, the

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unfunded vested benefits are in the billions of dollars.  If we cannot reduce the liability through exemptions or negotiations, the withdrawal from a plan could have a material adverse impact on our business.

We depend on key personnel and we may not be able to operate and grow our business effectively if we lose the services of any of our key persons or are unable to attract qualified and skilled personnel in the future.

We are dependent upon the efforts of our key personnel, and our ability to retain them and hire other qualified employees. The loss of our executive officers or other key personnel could affect our ability to run our business effectively. Competition for senior management personnel is intense, and we may not be able to retain our personnel. The loss of any key person requires the remaining key personnel to divert immediate and substantial attention to seeking a replacement. In addition, as some of our key persons approach retirement age, we need to provide for smooth transitions.  An inability to find a suitable replacement for any departing executive or senior officer on a timely basis could adversely affect our ability to operate and grow our business.

If we fail to integrate acquisitions successfully, we may experience operational challenges and risks which may have an adverse effect on our business.

As part of our growth strategy, we intend to acquire companies that expand, complement or diversify our business.  Acquisitions may expose us to operational challenges and risks, including, among others:

· The diversion of management’s attention from the day-to-day operations of the combined company;

· Managing a significantly larger company than before completion of an acquisition;

· The assimilation of new employees and the integration of business cultures;

· Training and facilitating the Company’s internal control processes within the acquired organization;

· Retaining key personnel;

· The integration of information, accounting, finance, sales, billing, payroll and regulatory compliance systems;

· Challenges in keeping existing customers and obtaining new customers;

· Challenges in combining service offerings and sales and marketing activities;

· The assumption of unknown liabilities of the acquired business for which there are inadequate reserves;

· The potential impairment of acquired goodwill and intangible assets; and

· The inability to enforce covenants not to compete.

If we cannot effectively manage the integration process or if any significant business activities are interrupted as a result of the integration process of any acquisition, our business could suffer.

Our business growth could outpace the capability of our internal infrastructure and may prohibit us from expanding our operations or execute our business plan.

Our internal infrastructure may not be adequate to support our operations as they expand. To the extent that we are unable to buy or build equipment necessary for a project, either due to a lack of available funding or equipment shortages in the marketplace, we may be forced to rent equipment on a short-term basis or to find alternative ways to perform the work without the benefit of equipment ideally suited for the job, which could increase the costs of completing the project. We often bid for work knowing that we will have to rent equipment on a short-term basis, and we include our assumptions of market equipment rental rates in our bid. If market rates for rental equipment increase between the time of bid submission and project execution, our margins for the project may be reduced. In addition, our equipment requires continuous maintenance, which we generally provide through our own repair facilities. If we are unable to continue to maintain the equipment in our fleet, we may be forced to obtain additional third-party repair services at a higher cost or be unable to bid on contracts.

We may not be able to divest underperforming operations at a price acceptable to us which could adversely affect our financial results.

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In the fourth quarter of 2016, we announced a plan to divest our Texas heavy civil operations.  We have engaged an investment banking firm to market and sell the assets.  However, there can be no assurance that we will be able to sell the related assets at a price and terms that are acceptable to us.  If we are unable to sell the business unit, we may incur additional costs and expenses as we complete the projects currently under contract, which may include retention bonus amounts and other incentives that could be needed to complete the projects.  These additional costs and expenses could adversely affect our financial results.

Our business may be affected by difficult work sites and environments which may adversely affect our ability to procure materials and labor.

We perform our work under a variety of conditions, including, but not limited to, difficult and hard to reach terrain, difficult site conditions and busy urban centers where delivery of materials and availability of labor may be impacted. Performing work under these conditions can slow our progress, potentially causing us to incur contractual liability to our customers. These difficult conditions may also cause us to incur additional, unanticipated costs that we might not be able to pass on to our customers.

We may incur liabilities or suffer negative financial or reputational impacts relating to health and safety matters.

Our operations are subject to extensive laws and regulations relating to the maintenance of safe conditions in the workplace. While we have invested, and will continue to invest, substantial resources in our environmental, health and safety programs, our industry involves a high degree of operational risk and there can be no assurance that we will avoid significant liability exposure. Although we have taken what we believe are appropriate precautions, we have suffered fatalities in the past and may suffer additional fatalities in the future. Serious accidents, including fatalities, may subject us to substantial penalties, civil litigation or criminal prosecution. Claims for damages to persons, including claims for bodily injury or loss of life, could result in substantial costs and liabilities, which could materially and adversely affect our financial condition, results of operations or cash flows. In addition, if our safety record were to substantially deteriorate over time or we were to suffer substantial penalties or criminal prosecution for violation of health and safety regulations, our customers could cancel our contracts and not award us future business.

We may incur additional healthcare costs arising from federal healthcare reform legislation.

In March 2010, the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010 (“ACA”) was signed into law in the U.S.  This legislation expanded health care coverage to many uninsured individuals and expands coverage to those already insured. The 2016 election results may cause changes to the ACA, which may cause us to incur additional healthcare and other costs for which we may not be reimbursed by our customers.  While we may be able to increase our customer billing rates to reflect such increased expense, there can be no guarantee that we will be able to pass these costs to our customers or that our competition will increase their bids to reflect the increased healthcare costs.  For our multi-year highway projects, we may not be able to anticipate further increases in healthcare costs associated with the healthcare reform legislation.

Interruptions in information technology or breaches in data security could adversely impact our operations, our ability to report financial results and our business.

We rely on computer, information and communication technology and related systems to operate our business.  As we continue to grow our business, we need to add software and hardware and effectively upgrade our systems and network infrastructure in order to improve the efficiency and protection of our systems and information.  Our computer and communications systems, and consequently our operations, could be damaged or interrupted by natural disasters, loss of power, telecommunications failures, acts of war, acts of terrorism, computer viruses, physical or electronic break-ins and actions by hackers and cyber-terrorists.  Any of these, or similar, events could cause system disruptions, delays and loss of critical information, delays in processing transactions and delays in the reporting of financial information.  While we have implemented network security and internal control measures, there can be no assurance that a system or network failure or data security breach would not adversely affect our business.

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As a holding company, we are dependent on our subsidiaries for cash distributions to fund debt payments, dividend payments and other liabilities.

We are a holding company with no operations or significant assets other than the stock that we own of our subsidiaries.  We depend on dividends, loans and distributions from these subsidiaries to service our indebtedness, pay dividends, fund share repurchases and satisfy other financial obligations.  If contractual limitations or legal regulations were to restrict the ability of our subsidiaries to make cash distributions to us, we may not have sufficient funds to cover our financial obligations.

We may need additional capital in the future for working capital, capital expenditures or acquisitions, and we may not be able to do so on favorable terms, or at all, which would impair our ability to operate our business or achieve our growth objectives.

Our ability to generate cash is essential for the funding of our operations and the servicing of our debt.  If existing cash balances together with the borrowing capacity under our credit facilities were not sufficient to make future investments, make acquisitions or provide needed working capital, we may require financing from other sources.  Our ability to obtain such additional financing in the future will depend on a number of factors including prevailing capital market conditions; conditions in our industry; and our operating results.  These factors may affect our ability to arrange additional financing on terms that are acceptable to us.  If additional funds were not available on acceptable terms, we may not be able to make future investments, take advantage of acquisitions or other opportunities or respond to competitive challenges.

Risks Related Primarily to the Financial Accounting of our Business

Our financial results are based upon estimates and assumptions that may differ from actual results.

In preparing our consolidated annual and quarterly financial statements in conformity with generally accepted accounting principles, many estimates and assumptions are used  in determining the reported revenues and expenses recognized during the periods presented, and disclosures of contingent assets and liabilities known to exist as of the date of the financial statements. These estimates and assumptions must be made because certain information that is used in the preparation of our financial statements cannot be calculated with a high degree of precision from data available, is dependent on future events, or is not capable of being readily calculated based on generally accepted methodologies. Often times, these estimates are particularly difficult to determine, and we must exercise significant judgment. Estimates may be used in our assessments of the allowance for doubtful accounts, useful lives of property and equipment, fair value assumptions in analyzing goodwill and long-lived asset impairments, self-insured claims liabilities, revenue recognition under percentage-of-completion accounting and provisions for income taxes. Actual results for estimates could differ materially from the estimates and assumptions that we used.

Our use of percentage-of-completion accounting could result in a reduction or elimination of previously reported revenue and profits.

We recognize revenue using the percentage-of-completion method of accounting, using the cost-to-cost method, where revenues are estimated based on the percentage of costs incurred to date to total estimated costs. This method is used because management considers expended costs to be the best available measure of progress on these contracts. The earnings or losses recognized on individual contracts are based on estimates of total contract revenues, total expected costs and costs incurred to date. Contract losses are recognized in full when determined, and contract profit estimates are adjusted based upon ongoing reviews of contract profitability.

Penalties or potential charges are recorded when known or finalized, which generally is during the latter stages of the contract. In addition, we record adjustments to estimated costs of contracts when we believe the change in the estimate is probable and the amounts can be reasonably estimated. These adjustments could result in both increases and decreases in profit margins. Actual results could differ from estimated amounts and could result in a reduction or elimination of previously recognized earnings. In certain circumstances, it is possible that such adjustments could be significant and could have an adverse effect on our business.

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Our reported results of operations and financial condition could be adversely affected as a result of changes in accounting standards.

In May 2014, the Financial Accounting Standards Board (“FASB”) finalized revised standards for revenue recognition which become effective for the Company beginning in 2018.  In February 2016, the FASB issued a revised standard for accounting of operating leases, which becomes affective for the Company beginning in 2019.  These changes and other future changes could result in changes in the way we report our financial results.

Our reported results of operations could be adversely affected as a result of impairments of goodwill, other intangible assets or investments.

When we acquire a business, we record an asset called “goodwill” for the excess amount we pay for the business over the net fair value of the tangible and intangible assets of the business we acquire. At December 31, 2016, our balance sheet included goodwill of $127 million and intangible assets of $33 million resulting from previous acquisitions.   Fair value is determined using a combination of the discounted cash flow, market multiple and market capitalization valuation approaches.  Under current accounting rules, goodwill and other intangible assets that have indefinite useful lives cannot be amortized, but instead must be tested at least annually for impairment, while intangible assets that have finite useful lives are amortized over their useful lives.  Any impairment of the goodwill or intangible assets recorded in connection with the various acquisitions, or for any future acquisitions, would negatively impact our results of operations.

In addition, we may enter into various types of investment arrangements, such as an equity interest we hold in a business entity.  Our equity method investments are carried at original cost and are included in other assets in our consolidated balance sheet and are adjusted for our proportionate share of the investees’ income, losses and distributions.  Equity investments are reviewed for impairment by assessing whether any decline in the fair value of the investment below its carrying value is other than temporary. In making this determination, factors such as the ability to recover the carrying amount of the investment and the inability of the investee to sustain future earnings capacity are evaluated in determining whether an impairment should be recognized.

We may not be able to meet all of the requirements of the new revenue recognition standard in a timely manner.

The FASB issued a new accounting standard, ASU 2014-09, “Revenue—Revenue from Contracts with Customers”, that supersedes U.S. GAAP guidance on revenue recognition and requires the use of more estimates and judgments than the present standards.  It also requires significant additional disclosures for revenue recognition.  While our initial expectation is that the standard may not have a material impact on our financial results, implementation of the standard will require significant changes to our information and documentation systems to meet the disclosure requirements of the standard.  If we cannot complete the required system improvements in a timely manner, we may need to disclose a material weakness in internal control over financial reporting.  That disclosure could result in a loss of investor confidence and decrease in the market value of our common stock, the reduced ability to obtain financing and the loss of customers.

We may not be successful in continuing to meet the internal control requirements of the Sarbanes-Oxley Act of 2002.

The Sarbanes-Oxley Act of 2002 has many requirements applicable to us regarding corporate governance and financial reporting, including the requirements for management to report on internal controls over financial reporting and for our independent registered public accounting firm to express an opinion over the operating effectiveness of our internal control over financial reporting. At December 31, 2016, our internal control over financial reporting was effective using the internal control framework issued by the Committee of Sponsoring Organizations (“COSO”) of the Treadway Commission:  Internal control—Integrated Framework (2013). 

We successfully completed the implementation of an integrated financial system in the majority of our West segment in 2016, excluding the Q3C operations.  With the completion of the conversion from the previous system, virtually all of the Company’s operations use the same information platform, allowing the Company to establish more

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consistent financial and operational controls.  While we plan to convert Q3C operations to the same platform in 2017, there can be no assurance that the conversion will be completed on schedule, which would mean continued use of manual processes and controls, which tend to increase the risk of control deficiencies.

Please note that there can be no assurance that our internal control over financial reporting will be effective in future years. Failure to maintain effective internal controls or the identification of material internal control deficiencies in acquisitions already made or made in the future could result in a decrease in the market value of our common stock, the reduced ability to obtain financing, the loss of customers, penalties and additional expenditures to meet the requirements in the future.

Starting in the fourth quarter of 2014, the Company’s management, outside counsel and Audit Committee of the Board of Directors have been reviewing and analyzing various issues relating to the methods used by the Company’s subsidiaries to recognize revenue and estimate contingencies for construction projects in progress.  The Company has implemented a number of changes in the documentation of contingencies and the control processes surrounding the recognition of revenue.  The Company continues to focus on making improvements that will enhance the controls and documentation.

We have been cooperating with an inquiry by the staff of the Securities and Exchange Commission, which appears to be focused on certain percentage-of-completion contract revenue recognition practices of the Company during 2013 and 2014.  We are continuing to respond to the staff’s inquiries in connection with this matter.  At this stage, we are unable to predict when the staff’s inquiry will conclude or the outcome.  Depending on the outcome of the inquiry, a government entity or other third party could bring an action and seek injunctions, fines, civil and criminal penalties, or other remedies, or assert other claims or litigation against the Company with respect to any issues that might arise in connection with the inquiry.  Findings from the inquiry could result in a loss of investor confidence and decrease in the market value of our common stock, the reduced ability to obtain financing and the loss of customers.

Risks Related to our Common Stock

Our common stock is subject to potential dilution to our stockholders.

As part of our acquisition strategy, we have issued shares of common stock and used shares of common stock as a part of contingent earn-out consideration, which have resulted in dilution to our stockholders.  Our Articles of Incorporation permit us to issue up to 90 million shares of common stock of which 51.58 million were outstanding at December 31, 2016.  While NASDAQ rules require that we obtain stockholder approval to issue more than 20% additional shares, stockholder approval is not required below that level. In addition, we can issue shares of preferred stock which could cause further dilution to the stockholder, resulting in reduced net income and cash flow available to common stockholders.

In 2013, our stockholders adopted our 2013 Equity Incentive Plan (“Equity Plan”).  The Equity Plan replaced a previous plan.  The Equity Plan authorized the Board of Directors to issue equity awards totaling 2,526,275 shares of our common stock.  Our current director compensation plan, our management long-term incentive plan and any additional equity awards made will have the effect of diluting our earnings per share and stockholders’ percentage of ownership.

Our Chairman is a significant stockholder, which may make it possible for him to have significant influence over the outcome of matters submitted to our stockholders for approval and his interests may differ from the interests of other stockholders.

As of December 31, 2016 our Chairman of the Board beneficially owned approximately 20% of the outstanding shares of our common stock. He may have significant influence over the outcome of all matters submitted to our stockholders for approval, including the election of our directors and other corporate actions. Such influence could have the effect of discouraging others from attempting to purchase us or take us over and could reduce the market price offered for our common stock.

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Delaware law and our charter documents may impede or discourage a takeover or change in control.

As a Delaware corporation, anti-takeover provisions may impose an impediment to the ability of others to acquire control of us, even if a change of control would be of benefit to our stockholders.  In addition, certain provisions of our Articles of Incorporation and Bylaws also may impose an impediment or discourage others from a takeover.  These provisions include:

· Our Board of Directors is classified;

· Stockholders may not act by written consent;

· There are restrictions on the ability of a stockholder to call a special meeting or nominate a director for election; and

· Our Board of Directors can authorize the issuance of preferred shares.

These types of provisions may limit the ability of stockholders to obtain a premium for their shares.

ITEM 1B.UNRESOLVED STAFF COMMENTS

None.

ITEM 2.PROPERTIES

Facilities

Our executive offices are located at 2100 McKinney Avenue, Suite 1500, Dallas, Texas 75201. The telephone number of our executive office is (214) 740-5600. The East and Energy segments of our business have regional offices located in Baton Rouge, Louisiana; Houston, Fort Worth and Pasadena, Texas; Suwanee, Georgia; and Sarasota and Fort Lauderdale, Florida.  The Energy segment also has business offices located in San Dimas, California and in Calgary, Canada. The West segment has regional offices located in Lake Forest, Pittsburg, San Francisco, Bakersfield and San Diego, California, Little Canada, Minnesota and offices located in Hillsboro, Oregon; Denver, Colorado and Montrose, Pennsylvania.

We lease most of the facilities used in our operations. The leases are generally for 10 to 12-year terms, expiring through 2023.  The aggregate lease payments made for our facilities in 2016 were approximately $5.7 million. We believe that our facilities are adequate to meet our current and foreseeable requirements for the next several years.

We lease some of our facilities from Stockdale Investment Group, Inc. (“SIGI”).  We believe that these leases were entered into on similar terms as would have been negotiated with an independent third party.  Our Chairman of the Board of Directors and our largest stockholder, Brian Pratt and his family, holds a majority interest of SIGI.  John M. Perisich, our Executive Vice President and General Counsel, is secretary of SIGI. We intend to purchase the SIGI properties in the first quarter of 2017.

Property, Plant and Equipment

We own and maintain both construction and transportation equipment. To upgrade and expand our equipment fleet, we spent approximately $58.0 million in 2016 and in 2015 we spent approximately $67.1 million and in 2014 we spent approximately $88.0 million. We estimate that our capital equipment includes the following:

· Heavy construction and specialized equipment—3,443 units; and

· Transportation equipment—5,083 units.

We believe the ownership of equipment is generally preferable to leasing to ensure the equipment is available as needed. In addition, ownership has historically resulted in lower overall equipment costs. We attempt to obtain projects that will keep our equipment fully utilized in order to increase profit. All equipment is subject to scheduled maintenance to insure reliability. Maintenance facilities exist at most of our regional offices as well as on-site on major jobs to

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properly service and repair equipment. Major equipment not currently utilized is rented to third parties whenever possible to supplement equipment income.

The following summarizes total property, plant and equipment, net of accumulated depreciation, as of December 31, 2016 and 2015:

	2016		2015		Useful Life
	(In Thousands)		(In Thousands)
Land and buildings	$	56,878	$	56,248	Buildings 30 Years
Leasehold improvements		12,147		9,650	Lease Life
Office equipment		8,083		5,958	3 - 5 Years
Construction equipment		370,562		340,895	3 - 7 Years
Transportation equipment		98,113		93,613	3 - 18 Years
		545,783		506,364
Less: accumulated depreciation and amortization		(268,437)		(222,819)
Net property, plant and equipment	$	277,346	$	283,545

ITEM 3.LEGAL PROCEEDINGS

Legal Proceedings

The Company has been engaged in dispute resolution to collect money it believes it is owed for two construction projects completed in 2014.  Because of uncertainties associated with the projects, including uncertainty of the amounts that would be collected, the Company used a zero profit margin approach to recording revenues during the construction period for both projects. 

For one project, a cost reimbursable contract, the Company has recorded a receivable of $32.9 million with a reserve of approximately $18.3 million included in “billings in excess of costs and estimated earnings”.  At this time, the Company cannot predict the amount that it will collect. The dispute resolution for the $32.9 million receivable initially required international arbitration; however, in the first half of 2016, the owner sought bankruptcy protection in U.S. bankruptcy court. The Company has initiated litigation against the sureties who have provided lien and stop payment release bonds for the total amount owed and a trial is currently scheduled for the fourth quarter of 2017.

For the second project, the Company had recorded a receivable of $17.9 million. During the third quarter 2016, the Company settled the dispute with an exchange of general releases and receipt of $38 million in cash. 

The Company is subject to other claims and legal proceedings arising out of its business. The Company provides for costs related to contingencies when a loss from such claims is probable and the amount is reasonably determinable. In determining whether it is possible to provide an estimate of loss, or range of possible loss, the Company reviews and evaluates its litigation and regulatory matters on a quarterly basis in light of potentially relevant factual and legal developments. If we determine an unfavorable outcome is not probable or reasonably estimable, we do not accrue for a potential litigation loss. Management is unable to ascertain the ultimate outcome of other claims and legal proceedings; however, after review and consultation with counsel and taking into consideration relevant insurance coverage and related deductibles/self-insurance retention, management believes that it has meritorious defense to the claims and believes that the reasonably possible outcome of such claims will not, individually or in the aggregate, have a materially adverse effect on the consolidated results of operations, financial condition or cash flows of the Company.

Government Regulations

Our operations are subject to compliance with regulatory requirements of federal, state, and municipal agencies and authorities, including regulations concerning labor relations, affirmative action and the protection of the environment. While compliance with applicable regulatory requirements has not adversely affected operations in the

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past, there can be no assurance that these requirements will not change and that compliance with such requirements will not adversely affect operations.

ITEM 4.MINE SAFETY DISCLOSURES

Not applicable.

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PART II

ITEM 5.MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market Information

On July 31, 2008, our common stock began trading on the NASDAQ Global Market under the symbol “PRIM”. Previously, our common stock traded on the OTC Bulletin Board under the ticker symbol “RPSD”. Prior to their expiration on October 2, 2010, the Company had certain warrants and unit purchase options outstanding that were traded under the NASDAQ Global Market under the symbols “PRIMW” and “PRIMU”, respectively.

We had outstanding 51,576,442 shares of common stock and 394 stockholders of record as of December 31, 2016. These stockholders of record include depositories that hold shares of stock for brokerage firms, which in turn, hold shares of stock for numerous beneficial owners.

The following table shows the range of market prices of our common stock during 2016 and 2015.

	Market price per
	Share
	High		Low
Year Ended December 31, 2016
First quarter	$	25.25	$	18.10
Second quarter	$	24.86	$	17.60
Third quarter	$	21.07	$	16.13
Fourth quarter	$	24.53	$	18.71
Year Ended December 31, 2015
First quarter	$	22.98	$	16.75
Second quarter	$	20.00	$	17.07
Third quarter	$	19.75	$	16.26
Fourth quarter	$	23.79	$	17.17

Dividends

The following table shows cash dividends to our common stockholders declared by the Company during the two years ended December 31, 2016:

Declaration Date	Record Date	Payable Date	Amount Per Share
February 24, 2015	March 31, 2015	April 15, 2015	$	0.040
May 1, 2015	June 30, 2015	July 15, 2015	$	0.055
August 4, 2015	September 30, 2015	October 15, 2015	$	0.055
November 3, 2015	December 31, 2015	January 15, 2016	$	0.055
February 22, 2016	March 31, 2016	April 15, 2016	$	0.055
May 2, 2016	June 30, 2016	July 15, 2016	$	0.055
August 3, 2016	September 30, 2016	October 14, 2016	$	0.055
November 2, 2016	December 31, 2016	January 16, 2017	$	0.055

On February 21, 2017, the Board of Directors declared a $0.055 per common share dividend with a record date of March 31, 2017 and a payable date of on or about April 14, 2017. The payment of future dividends is contingent upon our revenues and earnings, capital requirements and general financial condition of the Company, as well as contractual restrictions and other considerations deemed relevant by the Board of Directors.

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Equity Compensation Plan Information

In July 2008, the shareholders approved and the Company adopted the Primoris Services Corporation 2008 Long-term Incentive Equity Plan, which was replaced by the Primoris Services Corporation 2013 Long-term Incentive Equity Plan (“2013 Equity Plan”), as approved by the shareholders and adopted by the Company on May 3, 2013.

In February 2016 our management employees purchased 85,907 shares of stock as part of a management incentive compensation program.  As part of the compensation of the non-employee members of the Board of Directors, the Company issued 10,450 shares of common stock in February 2016 and 11,745 shares in August 2016.  The issuance of the employee shares and the director shares was under the terms of the 2013 Equity Plan.

The following table gives information about our common stock that may be issued upon the exercise of options, warrants and rights under all of our existing equity compensation plans as of December 31, 2016.

			Number of securities
			remaining available
	Number of securities		for future issuance
	to be issued upon	Weighted-average	under equity
	exercise of	exercise price of	compensation plans
	outstanding options,	outstanding options,	(excluding securities
	warrants and rights	warrants and rights	reflected in column (a))
Plan category	(a)	(b)	(c)
Equity compensation plans approved by security holders	250,758	0	1,953,559
Equity compensation plans not approved by security holders	0	0	0
Total	250,758	0	1,953,559

These securities represent shares of common stock available for issuance under our 2013 Equity Plan.  The 2013 Equity Plan is discussed in Note 2 to our consolidated financial statements for the year ended December 31, 2016 included in Part II, Item 8 “Financial Statements and Supplementary Data”.

Repurchases of Securities

In August 2016, the Company’s Board of Directors authorized a share repurchase program under which the Company, from time to time and depending on market conditions, share price and other factors, could acquire shares of its common stock on the open market or in privately negotiated transactions up to an aggregate purchase price of $5.0 million.  During the month of December 2016, the Company purchased and cancelled 207,800 shares of stock for $5.0 million at an average cost of $24.02 per share. The share repurchase program expired on December 31, 2016.

There were no share repurchases authorized during 2015.

In February 2014, the Company’s Board of Directors authorized a share repurchase program under which the Company, from time to time and depending on market conditions, share price and other factors, could acquire shares of its common stock on the open market or in privately negotiated transactions up to an aggregate purchase price of $23 million.  During the period from February 2014 through September 2014, the Company purchased and cancelled 100,000 shares of stock for $2.8 million at an average cost of $28.44 per share.  The share repurchase program expired on December 31, 2014.

Sales of Unregistered Securities

The Company did not issue any unregistered shares of our common stock during 2015 or 2016.

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Performance Graph

The following Performance Graph and related information shall not be deemed to be filed with the SEC, nor shall such information be incorporated by reference into any future filing under the Securities Act of 1933 or Securities Exchange Act of 1934, each as amended, except to the extent that we specifically incorporate it by reference into such filing.

The following graph compares the cumulative total return to holders of the Company’s common stock during the five-year period from December 31, 2011, and in each quarter up through December 31, 2016. The return is compared to the cumulative total return during the same period achieved on the Standard & Poor’s 500 Stock Index (the “S&P 500”) and a peer group index selected by our management that includes five public companies within our industry (the “Peer Group”). The Peer Group is composed of MasTec, Inc., Matrix Service Company, Quanta Services, Inc., Sterling Construction Company, Inc. and Willbros Group, Inc.  The companies in the Peer Group were selected because they comprise a broad group of publicly held corporations, each of which has some operations similar to ours. When taken as a whole, management believes the Peer Group more closely resembles our total business than any individual company in the group.

The returns are calculated assuming that an investment with a value of $100 was made in the Company’s common stock and in each stock as of December 31, 2011.  All dividends were reinvested in additional shares of common stock, although none of the comparable companies paid dividends during the periods shown. The Peer Group investment is calculated based on a weighted average of the five company share prices. The graph lines merely connect the measuring dates and do not reflect fluctuations between those dates. The stock performance shown on the graph is not intended to be indicative of future stock performance.

COMPARISON OF DECEMBER 31, 2011 THROUGH DECEMBER 31, 2016

CUMULATIVE TOTAL RETURN

Among Primoris Services Corporation (“PRIM”), the S&P 500 and the Peer Group

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ITEM 6.SELECTED FINANCIAL DATA

The following selected financial data should be read in conjunction with Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our audited financial statements and the accompanying notes included elsewhere in this Annual Report on Form 10-K.

	Year Ended December 31,
	2016		2015		2014		2013		2012
	(In millions except share and per share data)
Statement of Operations Data:
Revenues	$	1,997	$	1,929	$	2,086	$	1,944	$	1,542
Cost of revenues		1,796		1,709		1,850		1,688		1,349
Gross profit		201		220		236		256		193
Selling, general and administrative expense		140		152		132		131		96
Impairment of goodwill		3		—		—		—		—
Operating income		58		68		104		125		97
Other income (expense)		(9)		(7)		(2)		(5)		(4)
Income before provision for income taxes		49		61		102		120		93
Income tax provision		(21)		(24)		(38)		(45)		(34)
Net Income	$	28	$	37	$	64	$	75	$	59
Less net income attributable to noncontrolling interests		(1)		—		(1)		(5)		(2)
Net income attributable to Primoris	$	27	$	37	$	63	$	70	$	57
Dividends per common share	$	0.22	$	0.205	$	0.15	$	0.135	$	0.12
Earnings per share attributable to Primoris:
Basic	$	0.52	$	0.71	$	1.22	$	1.35	$	1.10
Diluted	$	0.51	$	0.71	$	1.22	$	1.35	$	1.10
Weighted average common shares outstanding (in thousands):
Basic		51,762		51,647		51,607		51,540		51,391
Diluted		51,989		51,798		51,747		51,610		51,406

	As of December 31,
	2016		2015		2014		2013		2012
Balance Sheet Data:
Cash and cash equivalents	$	136	$	161	$	139	$	196	$	158
Short term investments	$	—	$	—	$	31	$	19	$	3
Accounts receivable, net	$	388	$	321	$	337	$	305	$	268
Total assets	$	1,171	$	1,132	$	1,111	$	1,051	$	931
Total current liabilities	$	450	$	416	$	419	$	430	$	421
Long-term debt/capital leases, net of current portion	$	203	$	220	$	205	$	193	$	132
Stockholders’ equity	$	499	$	483	$	454	$	398	$	333

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ITEM 7.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion of our financial condition and results of operations in conjunction with the financial statements and the notes to those statements included as item 8 in this Annual Report on Form 10-K. This discussion includes forward-looking statements that are based on current expectations and are subject to uncertainties and unknown or changed circumstances. For a further discussion, please see “Forward Looking Statements” at the beginning of this Annual Report on Form 10-K. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those risks inherent with our business as discussed in “Item 1A Risk Factors”.

The following discussion starts with an overview of our business and a discussion of trends, including seasonality, that affect our industry.  That is followed by an overview of the critical accounting policies and estimates that we use to prepare our financial statements.  Next we discuss our results of operations and liquidity and capital resources, including our off-balance sheet transactions and contractual obligations.  We conclude with a discussion of our outlook and backlog.

Introduction

Primoris is a holding company of various subsidiaries, which form one of the larger publicly traded specialty contractors and infrastructure companies in the United States.  Serving diverse end-markets, we provide a wide range of construction, fabrication, maintenance, replacement, water and wastewater, and engineering services to major public utilities, petrochemical companies, energy companies, municipalities, state departments of transportation and other customers. We install, replace, repair and rehabilitate natural gas, refined product, water and wastewater pipeline systems; large diameter gas and liquid pipeline facilities; and heavy civil projects, earthwork and site development. We also construct mechanical facilities and other structures, including power plants, petrochemical facilities, refineries, water and wastewater treatment facilities and parking structures. Finally, we provide specialized process and product engineering services.

We have longstanding customer relationships with major utility, refining, petrochemical, power and engineering companies. We have completed major underground and industrial projects for a number of large natural gas transmission and petrochemical companies in the western United States, as well as significant projects for our engineering customers.  We enter into a large number of contracts each year and the projects can vary in length — from several weeks, to as long as 48 months for completion on larger projects. Although we have not been dependent upon any one customer in any year, a small number of customers tend to constitute a substantial portion of our total revenues.

We recognize revenues and profitability on our contracts depending on the type of contract.  For our fixed price, or lump sum contracts, we record revenue as the work progresses on a percentage-of-completion basis, which means that we recognize revenue based on the percentage of costs incurred to date in proportion to the total estimated costs expected to complete the contract.  Fixed price contracts may include retainage provisions under which customers withhold a percentage of the contract price until the project is complete.  For our unit price, time and material, and cost-plus contracts, we recognize revenue as units are completed or services are performed.  The “Critical Accounting Policies and Estimates” section below provides additional information on our contracts and revenue recognition practices.

The Company segregates its business into three reportable segments, which include:  The West Construction Services segment (“West segment”), the East Construction Services segment (“East segment”) and the Energy segment (“Energy segment”).  The following is a brief description of each of our reportable segments and business activities.

The West segment includes the underground and industrial operations and construction services performed by ARB, Inc. (“ARB”), ARB Structures, Inc., Rockford Corporation (“Rockford”), Q3 Contracting, Inc. (“Q3C”), and Vadnais Trenchless Services, Inc. (“Vadnais”).  ARB and ARB Structures perform work primarily in California; while, Rockford operates throughout the United States and Q3C operates in Colorado and the upper Midwest United States. The segment also included two joint venture operations.  The West segment consists of business headquartered primarily in the western United States.

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The East segment includes the James Construction Group (“JCG”) Heavy Civil division, the JCG Infrastructure and Maintenance division, BW Primoris, LLC and Cardinal Contractors, Inc. construction business, located primarily in the Gulf Coast and southeastern regions of the United States.  In October 2016, the Company announced that it plans to divest its Texas heavy civil business unit, which operates as a division of JCG.  Until completion of a sale, the Company will continue to operate the business unit.

The Energy segment includes the operations of the Primoris Energy Services (“PES”) pipeline and gas facility construction and maintenance operations and the PES Industrial division, whose operations are located primarily in the Gulf Coast and southeastern regions of the United States.  Also included are the Primoris Aevenia, Inc. (“Aevenia”), Mueller, Northern, Surber and Ram-Fab operations and the OnQuest, Inc. and OnQuest Canada, ULC operations, which provide for the design and installation of liquid natural gas (“LNG”) facilities and high-performance furnaces and heaters for the oil refining, petrochemical and power generation industries.

The following table lists the Company’s primary operating subsidiaries and their reportable segments:

Subsidiary	Reportable Segment
ARB, Inc. (“ARB”)	West
ARB Structures, Inc.	West
Q3 Contracting, Inc. (“Q3C”)	West
Rockford Corporation (“Rockford”)	West
Vadnais Trenchless Services, Inc. (“Vadnais”)	West
Cardinal Contractors, Inc.	East
BW Primoris, LLC (“BWP”)	East
James Construction Group, LLC (“JCG”):	East
JCG Heavy Civil Division	East
JCG Infrastructure and Maintenance Division	East
Primoris Energy Services Corporation (“PES”)	Energy
PES Pipeline Services	Energy
PES Industrial Division	Energy
OnQuest, Inc.	Energy
OnQuest Canada, ULC	Energy
Primoris Aevenia, Inc.("Aevenia")	Energy

The Company owns a 50% interest in two separate joint ventures, both formed in 2015.  The Carlsbad Power Constructors joint venture (“Carlsbad”) will engineer and construct a gas-fired power generation facility and a joint venture titled “ARB Inc. & B&M Engineering Co.” (“Wilmington”) will also engineer and construct a gas-fired power generation facility.  Both projects are located in the Southern California area.  The joint venture operations are included as part of the West segment.  As a result of determining that the Company is the primary beneficiary of the two VIE’s, the results of the Carlsbad and Wilmington joint ventures are consolidated in the Company’s financial statements.  The Carlsbad project is expected to be completed in 2017 and the Wilmington project in 2018.

The Company owned 50% of the Blythe Power Constructors joint venture (“Blythe”) created for the installation of a parabolic trough solar field and steam generation system in California, and its operations have been included as part of the West Construction Services segment.  The Company determined that in accordance with FASB Topic 810, the Company was the primary beneficiary of a variable interest entity and has consolidated the results of Blythe in its financial statements. The project has been completed, the project warranty expired in May 2015 and dissolution of the joint venture was completed in the third quarter of 2015. 

Financial information for the joint ventures is presented in Note 13— “Noncontrolling Interests” of the Notes to Consolidated Financial Statements included in Item 8 of this Form 10-K.

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The Company continues to be acquisitive, with the following outlining the various acquisitions made over the past several years.

In January 2014, the Company created a wholly owned subsidiary, BW Primoris, LLC, a Texas limited liability company (“BWP”). BWP’s goal is to develop water projects, primarily in Texas, that will need the Company’s construction services.  In January 2014, BWP entered into an agreement to purchase the assets and business of Blaus Wasser, LLC, a Wyoming limited liability company, for approximately $5 million.  In 2015, BWP built a small water treatment facility for $13.8 million and beginning in 2016, the facility generated revenues through a take-or-pay contract with a West Texas municipal entity.

In May 2014, the Company created a wholly owned subsidiary, Vadnais Trenchless Services, Inc., a California corporation (“Vadnais”), which in June 2014, purchased the assets of Vadnais Corporation for $6.4 million. Vadnais Corporation was a general contractor specializing in micro-tunneling in California. The assets purchased were primarily equipment, buildings and land. 

During the third quarter 2014, the Company made three small purchases totaling $8.2 million acquiring the net assets of Surber Roustabout, LLC (“Surber”), Ram-Fab, LLC (“Ram-Fab”) and Williams Testing, LLC (“Williams”). Surber and Ram-Fab operate as divisions of PES, and Williams is a division of Cardinal Contractors, Inc. Surber provides general oil and gas related construction activities in Texas; Ram-Fab is a fabricator of custom piping systems located in Arkansas; and Williams provides construction services related to sewer pipeline maintenance, rehabilitation and integrity testing in the Florida market.

On February 28, 2015, the Company acquired the net assets of Aevenia, Inc. for $22.3 million in cash, and established a new entity, Aevenia, which operates as part of the Company’s Energy segment.  Aevenia is an energy and electrical construction company that specializes in overhead and underground line work, substations, telecom/fiber, and certain other client-specific on-demand call out services.  The majority of their work is delivered under unit-price Master Services Agreements (“MSAs”).  Aevenia has operations in Minnesota, North Dakota, South Dakota and Iowa.  On January 29, 2016, Aevenia acquired certain assets and liabilities of Mueller Concrete Construction Company ("Mueller") for $4.1 million, and on November 18, 2016, acquired the net assets of Northern Energy & Power (“Northern”) for $6.9 million.  Both Mueller and Northern operate as divisions of Aevenia.

On June 24, 2016, the Company’s subsidiary, Vadnais, purchased property, plant and equipment from Pipe Jacking Unlimited, Inc., consisting of specialty directional drilling and tunneling equipment for $13.4 million in cash. The Company determined this purchase did not meet the definition of a business as defined under ASC 805.

For some end markets we perform the same services in each of our West, East and Energy segments, while for other end markets, such as poured-in-place parking structures, only one of our segments currently serves the market.  The following table shows the approximate percentage of revenues over three years derived from our major end-markets, with prior periods conformed to the current year market breakdown:

	Twelve Months Ended	Twelve Months Ended	Twelve Months Ended
Market	December  2016	December 2015	December  2014
Underground capital projects	18%	12%	17%
Utility services	35%	34%	28%
Industrial	17%	16%	27%
Heavy Civil	24%	30%	22%
Engineering	1%	4%	3%
Other	5%	4%	3%
Total	100%	100%	100%

Material trends and uncertainties

We generate our revenue from both large and small construction and engineering projects. The award of these contracts is dependent on many factors, most of which are not within our control. We depend in part on spending by companies in the energy and oil and gas industries, the gas utility industry, as well as municipal water and wastewater

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customers. Over the past several years, each segment has benefited from demand for more efficient and environmentally friendly energy and power facilities, local highway and bridge needs and from the activity level in the oil and gas industry; however, each of these industries and the government agencies periodically are adversely affected by macroeconomic conditions. Economic factors outside of our control may affect the amount and size of contracts we are awarded in any particular period.

We closely monitor our customers to assess the effect that changes in economic, market and regulatory conditions may have on them. We have experienced reduced spending by some of our customers over the last several years, which we attribute to negative economic and market conditions, and we anticipate that these negative conditions may continue to affect demand for our services in the near-term. Major fluctuations in market prices of oil, gas and other fuel sources have affected demand for our services.  The recent significant reduction in the price of oil has created uncertainty with respect to demand for our oil and gas pipeline and roustabout services in the near term, with additional uncertainty over the length of time that prices will remain depressed.  We believe that our upstream operations, such as the construction of gathering lines within the oil shale formations, will remain at lower levels for an extended period.  We believe that over time, the need for pipeline infrastructure for mid-stream and utility companies will result in a continuing need for our services, but the impact of the low oil prices may delay midstream pipeline opportunities. The continuing changes in the regulatory environment also affects the demand for our services, either by increasing our work or delaying projects.  For example, the regulatory environment in California may well result in delays for the construction of gas-fired power plants while the regulators continue to search for significant renewable resources, but the renewable resources may create a demand for our construction services.  Finally, we believe that regulated gas utility customers will continue to invest in our maintenance and replacement services to maintain the integrity of their systems.

Seasonality, cyclicality and variability

Our results of operations are subject to quarterly variations. Some of the variation is the result of weather, particularly rain, ice and snow, which can impact our ability to perform construction services. While the majority of the Company’s work is in the southern half of the United States, these seasonal impacts can affect revenues and profitability in all of our businesses since gas and other utilities defer routine replacement and repair during their period of peak demand.  Any quarter can be affected either negatively or positively by atypical weather patterns in any part of the country.  In addition, demand for new projects tends to be lower during the early part of the year due to clients’ internal budget cycles.  As a result, the Company usually experiences higher revenues and earnings in the third and fourth quarters of the year as compared to the first two quarters.

The Company is also dependent on large construction projects which tend not to be seasonal, but can fluctuate from year to year based on general economic conditions.  Our business may be affected by declines or delays in new projects or by client project schedules.  Because of the cyclical nature of our business, the financial results for any period may fluctuate from prior periods, and the Company’s financial condition and operating results may vary from quarter to quarter.  Results from one quarter may not be indicative of its financial condition or operating results for any other quarter or for an entire year.

Critical Accounting Policies and Estimates

General—The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the financial statements and also affect the amounts of revenues and expenses reported for each period. These estimates and assumptions must be made because certain information that is used in the preparation of our financial statements cannot be calculated with a high degree of precision from data available, is dependent on future events, or is not capable of being readily calculated based on generally accepted methodologies. Often, estimates are particularly difficult to determine, and we must exercise significant judgment. Estimates may be used in our assessments of revenue recognition under percentage-of-completion accounting, the allowance for doubtful accounts, useful lives of property and equipment, fair value assumptions in analyzing goodwill and long-lived asset impairments, self-insured claims liabilities and deferred income taxes. Actual results could differ from those that result from using the estimates under different assumptions or conditions.

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An accounting policy is deemed to be critical if it requires an accounting estimate to be based on assumptions about matters that are highly uncertain at the time the estimate is made, and different estimates that reasonably could have been used, or changes in the accounting estimates that are reasonably likely to occur periodically, could materially impact our consolidated financial statements.

The following accounting policies are based on, among other things, judgments and assumptions made by management that include inherent risks and uncertainties. Management’s estimates are based on the relevant information available at the end of each period. We periodically review these accounting policies with the Audit Committee of the Board of Directors.

Revenue recognition

Fixed-price contracts — Historically, a substantial portion of our revenue has been generated under fixed-price contracts. For fixed-price contracts, we recognize revenues primarily using the percentage-of-completion method, which may result in uneven and irregular results. In the percentage-of-completion method, estimated revenues, estimated contract values and total costs incurred to date are used to calculate revenues earned.  Unforeseen events and circumstances can alter the estimate of the costs and potential profit associated with a particular contract.  Total estimated costs, and thus contract revenues and profit, can be impacted by changes in productivity, scheduling, the unit cost of labor, subcontracts, materials and equipment. Additionally, external factors such as weather, client needs, client delays in providing permits and approvals, labor availability, governmental regulation and politics may affect the progress of a project’s completion and thus the timing of revenue recognition.  To the extent that original cost estimates are modified, estimated costs to complete increase, delivery schedules are delayed, or progress under a contract is otherwise impeded, cash flow, revenue recognition and profitability from a particular contract may be adversely affected.

We consider unapproved change orders to be contract variations for which we have customer approval for a change in scope but for which we do not have an agreed upon price change.  Costs associated with unapproved change orders are included in the estimated cost to complete the contracts and are treated as project costs as incurred. We recognize revenue equal to costs incurred on unapproved change orders when realization of change order approval is probable.  Unapproved change orders involve the use of estimates, and it is reasonably possible that revisions to the estimated costs and recoverable amounts may be required in future reporting periods to reflect changes in estimates or final agreements with customers.

We consider claims to be amounts that we seek, or will seek, to collect from customers or others for customer-caused changes in contract specifications or design, or other customer-related causes of unanticipated additional contract costs on which there is no agreement with customers on both scope and price changes. Claims are included in the calculation of revenue when realization is probable and amounts can be reliably determined.  Revenue in excess of contract costs from claims is recognized when an agreement is reached with customers as to the value of the claims, which in some instances may not occur until after completion of work under the contract. Costs associated with claims are included in the estimated costs to complete the contracts and are treated as project costs when incurred.

Other contract forms — We also use unit-price, time and material, and cost reimbursable plus fee contracts.  For these jobs, revenue is recognized primarily based on contractual terms.  For example, time and material contract revenues are generally recognized on an input basis, based on labor hours incurred and on purchases made.  Similarly, unit price contracts generally recognize revenue on an output based measurement such as the completion of specific units at a specified unit price.

At any time, if an estimate of total contract cost indicates a loss on a contract, the projected loss is recognized in full at that time. The loss amount is recognized as an “accrued loss provision” and is included in the accrued expenses and other liabilities amount on the balance sheet. For fixed-price contracts, as the percentage-of-completion method is used to calculate revenues, the accrued loss

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provision is changed so that the gross profit for the contract remains zero in future periods. The provision for estimated losses on uncompleted contracts was $12.8 million and $7.3 million at December 31, 2016 and 2015, respectively.

Changes in job performance, job conditions and estimated profitability, including those arising from final contract settlements, may result in revisions to costs and income. These revisions are recognized in the period in which the revisions are identified.

In all forms of contracts, we estimate collectability of contract amounts at the same time that we estimate project costs.  If we anticipate that there may be issues associated with the collectability of the full amount calculated as revenue, we may reduce the amount recognized as revenue to reflect the uncertainty associated with realization of the eventual cash collection.  For example, when a cost reimbursable project exceeds the client’s expected budget amount, the client frequently requires an adjustment to the final amount.  Similarly, some utility clients reserve the right to audit costs for significant periods after performance of the work.  In these situations, we may choose to defer recognition of revenue up to the time that the client pays for the services.

The caption “Costs and estimated earnings in excess of billings” in the Consolidated Balance Sheet represents unbilled receivables, which arise when revenues have been recorded but the amount will not be billed until a later date.  Balances represent:  (a) unbilled amounts arising from the use of the percentage-of-completion method of accounting which may not be billed under the terms of the contract until a later date or project milestone, (b) incurred costs to be billed under cost reimbursement type contracts, (c) amounts arising from routine lags in billing, or (d) the revenue associated with unapproved change orders or claims when realization is probable and amounts can be reliably determined.  For those contracts in which billings exceed contract revenues recognized to date, the excess amounts are included in the caption “Billings in excess of costs and estimated earnings”.

In accordance with applicable terms of certain construction contracts, retainage amounts may be withheld by customers until completion and acceptance of the project.  Some payments of the retainage may not be received for a significant period after completion of our portion of a project.  In some jurisdictions, retainage amounts are deposited into an escrow account.

Valuation of acquired businesses—We use the fair value of the consideration paid and the fair value of the assets acquired and liabilities assumed to account for the purchase price of businesses.  The determination of fair value requires estimates and judgments of future cash flow expectations for the assignment of the fair values to the identifiable tangible and intangible assets.

Identifiable Tangible Assets.  Significant identifiable tangible assets acquired would include accounts receivable, costs and earnings in excess of billings for projects, inventory and fixed assets (generally consisting of construction equipment) for each acquisition. We determine the fair value of these assets on the acquisition date.  For current assets and current liabilities of an acquisition, the Company will evaluate whether the book value is equivalent to fair value due to their short term nature.  We estimate the fair value of fixed assets using a market approach, based on comparable market values for similar equipment of similar condition and age.

Identifiable Intangible Assets.  When necessary, we use the assistance of an independent third party valuation specialist to determine the fair value of the intangible assets acquired in the acquisitions.

A liability for contingent consideration based on future earnings is estimated at its fair value at the date of acquisition, with subsequent changes in fair value recorded in earnings as a gain or loss.  Fair value is estimated as of the acquisition date using estimated earnout payments based on management’s best estimate.

Accounting principles generally accepted in the United States provide a “measurement period” of up to one year in which to finalize all fair value estimates associated with the acquisition of a business.  Most estimates are preliminary until the end of the measurement period.  During the measurement period, adjustments to initial valuations and estimates

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that reflect newly discovered information that existed at the acquisition date are recorded.  After the measurement date, any adjustments would be recorded as a current period gain or loss.

Goodwill and Indefinite-Lived intangible Assets—Goodwill and certain intangible assets acquired in a business combination and determined to have indefinite useful lives are not amortized but are assessed for impairment annually and more frequently if triggering events occur. In performing these assessments, management relies on various factors, including operating results, business plans, economic projections, anticipated future cash flows, comparable transactions and other market data. There are inherent uncertainties related to these factors and judgment in applying them to the analysis of goodwill for impairment. Since judgment is involved in performing fair value measurements used in goodwill impairment analyses, there is risk that the carrying values of our goodwill may not be properly stated.

We account for goodwill, including evaluation of any goodwill impairment under ASC Topic 350 “Intangibles — Goodwill and Other”, performed at the reporting unit level for those units with recorded goodwill as of October 1 of each year, unless there are indications requiring a more frequent impairment test.           

At December 31, 2016, goodwill has arisen from acquisitions and is recorded at our reporting units as follows (in thousands):

Reporting Unit	Segment	2016		2015
Rockford	West	$	32,079	$	32,079
Q3C	West		13,160		13,160
JCG	East		40,150		42,866
PES	Energy		28,463		28,463
OnQuest Canada, ULC	Energy		2,441		2,441
Aevenia	Energy		10,933		5,152
Total Goodwill		$	127,226	$	124,161

Under ASU 2012-02 - Intangibles — Goodwill and Other (Topic 350):  Testing Indefinite-Lived Intangible Assets for Impairment, the Company can assess qualitative factors to determine if a quantitative impairment test of intangible assets is necessary.  Typically, however, the Company uses the two-step impairment test outlined in ASC Topic 350.  First, we compare the fair value of a reporting unit with its carrying amount. Fair value for the goodwill impairment test is determined utilizing a discounted cash flow analysis based on our financial plan discounted using our weighted average cost of capital and market indicators of terminal year cash flows. Other valuation methods may be used to corroborate the discounted cash flow method. If the carrying amount of a reporting unit is in excess of its fair value, goodwill is considered potentially impaired and further tests are performed to measure the amount of impairment loss. In the second step of the goodwill impairment test, we compare the implied fair value of reporting unit goodwill with the carrying amount of the reporting unit’s goodwill. If the carrying amount of the reporting unit’s goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to the carrying amount of goodwill over its implied fair value. The implied fair value of goodwill is determined in the same manner that the amount of goodwill recognized in a business combination was determined. We allocate the fair value of a reporting unit to all of the assets and liabilities of that unit, including intangible assets, as if the reporting unit had been acquired in a business combination. Any excess of the fair value of a reporting unit over the amounts assigned to its assets and liabilities represents the implied fair value of goodwill.

During the third quarter of 2016, the Company made a decision to divest its Texas heavy civil business unit, a division of JCG within the East Construction Services segment.  The Company will continue to operate the division while actively seeking a buyer.  Under the provisions of ASC 350, the planned divestiture triggered an analysis of the goodwill amount recorded on the JCG books in September 2016.  The analysis resulted in the Company recording a pretax, non-cash goodwill impairment charge of approximately $2.7 million in the third quarter 2016.  In the fourth quarter of 2015, an impairment expense of $0.4 million was recorded relating to the goodwill attributed to Cardinal Contractors, Inc., which is a part of the East Segment.  There were no other impairments of goodwill for the years ended December 31, 2016, 2015 and 2014.

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Disruptions to our business, such as end market conditions, protracted economic weakness, unexpected significant declines in operating results of reporting units and the divestiture of a significant component of a reporting unit, may result in our having to perform a goodwill impairment first step valuation analysis for some or all of our reporting units prior to the required annual assessment. These types of events and the resulting analysis could result in goodwill impairment charges in any periods in the future.

Reserve for uninsured risks—Estimates are inherent in the assessment of our exposure to uninsured risks. Significant judgments by us and, where possible, third-party experts are needed in determining probable and/or reasonably estimable amounts that should be recorded or disclosed in the financial statements.  Semiannually, we obtain a third-party actuarial valuation for some of our uninsured risks. The results of any changes in accounting estimates are reflected in the financial statements of the period in which we determine we need to record a change.

We self-insure worker’s compensation claims up to $0.25 million per claim.  We maintained a self-insurance reserve totaling approximately $18.8 million at December 31, 2016 and approximately $20.0 million at December 31, 2015. Claims administration expenses were charged to current operations as incurred.  Our accruals are based on judgment, the probability of losses, and where applicable, the consideration of opinions of internal and/or external legal counsel and third party consultants. The amount is included in “accrued expenses and other current liabilities” on our balance sheets. Actual payments that may be made in the future could materially differ from such reserves.

Income taxes—We account for income taxes under the asset and liability method as set forth in ASC Topic 740 “Income Taxes”, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined based on the temporary differences between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on net deferred tax assets or liabilities is recognized as an increase or decrease in net income in the period that includes the enactment date.

Deferred income tax assets may be reduced by a valuation allowance if, in the judgment of our management, it is more likely than not that all or a portion of a deferred tax asset will not be realized. In making such determination, we consider all available evidence, including recent financial operations, projected future taxable income, scheduled reversals of deferred tax liabilities, tax planning strategies, and the length of tax asset carryforward periods. The realization of deferred tax assets is primarily dependent upon our ability to generate sufficient future taxable earnings in certain jurisdictions. If we subsequently determine that some or all deferred tax assets that were previously offset by a valuation allowance are realizable, the value of the deferred tax assets would be increased by reducing the valuation allowance, thereby increasing income in the period when that determination was made.  As of December 31, 2016, no valuation allowance has been provided to the Company’s deferred tax assets, as the Company believes it is more likely than not that these deferred tax assets will be realized.

A tax position is recognized as a benefit only if it is more likely than not that the tax position would be sustained based on its technical merits in a tax examination, using the presumption that the tax authority has full knowledge of all relevant facts regarding the position.  The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on ultimate settlement with the tax authority.  For tax positions not meeting the more likely than not test, no tax benefit is recorded.

Long-Lived Assets—Assets held and used by the Company, primarily property, plant and equipment, are reviewed for impairment whenever events or changes in business circumstances indicate that the carrying amount of the asset may not be fully recoverable. We perform an undiscounted operation cash flow analysis to determine if an impairment exists. For purposes of recognition and measurement of an impairment for assets held for use, we group assets and liabilities at the lowest level for which cash flows are separately identified. If an impairment is determined to exist, any related impairment loss is calculated based on fair value. The calculation of the fair value of long-lived assets is based on assumptions concerning the amount and timing of estimated future cash flows and assumed discount rates, reflecting varying degrees of perceived risk. Since judgment is involved in determining the fair value and useful lives of long-lived assets, the future carrying value of our long-lived assets may have differing future fair values.

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Multiemployer plans —  Various subsidiaries in the West segment are signatories to collective bargaining agreements. These agreements require that the Company participate in and contribute to a number of multiemployer benefit plans for its union employees at rates determined by the agreements. The trustees for each multiemployer plan determine the eligibility and allocations of contributions and benefit amounts, determine the types of benefits and administer the plan. To the extent that any plans are underfunded, the Employee Retirement Income Security Act of 1974, as amended by the Multi-Employer Pension Plan Amendments Act of 1980, requires that if the Company were to withdraw from an agreement or if a plan is terminated, we may incur a withdrawal obligation. Since the withdrawal liability is based on estimates of our proportional share of the plan’s unfunded vested liability, as calculated by the plan’s actuaries, the potential withdrawal obligation may be significant.

In November 2011, members of the Pipe Line Contractors Association “PLCA” including ARB, Rockford and Q3C (prior to the Company’s acquisition in 2012), withdrew from the Central States Southeast and Southwest Areas Pension Fund multiemployer pension plan (“Plan”).  These withdrawals were made in order to mitigate additional liability in connection with the significantly underfunded Plan.  The Company recorded a withdrawal liability of $7.5 million, which was increased to $7.59 million after the acquisition of Q3C.  During the first quarter of 2016, the Company received a final payment schedule.  As a result of payments made and based on this schedule, the liability recorded at December 31, 2016 was $5.66 million.  The Company has no plans to withdraw from any other labor agreements.

Litigation and contingencies—Litigation and contingencies are included in our consolidated financial statements based on our assessment of the expected outcome of litigation proceedings or the expected resolution of the contingency.  We provide for costs related to contingencies when a loss from such claims is probable and the amount is reasonably determinable. In determining whether it is possible to provide an estimate of loss, or range of possible loss, we review and evaluate litigation and regulatory matters on a quarterly basis in light of potentially relevant factual and legal developments. If we determine an unfavorable outcome is not probable or reasonably estimable, we do not accrue for a potential litigation loss. Management is unable to ascertain the ultimate outcome of other claims and legal proceedings; however, after review and consultation with counsel and taking into consideration relevant insurance coverage and related deductibles/self-insurance retention, management believes that it has meritorious defense to the claims and believes that the reasonably possible outcome of such claims will not, individually or in the aggregate, have a materially adverse effect on the consolidated results of operations, financial condition or cash flows of the Company.  See Note 15 — “Commitments and Contingencies” in the Notes to Consolidated Financial Statements included in Item 8 of this Form 10-K for further information.

Recently Issued Accounting Pronouncements

See Note 2 — “Summary of Significant Accounting Policies - Recently Issued Accounting Pronouncements” of the Notes to Consolidated Financial Statements included in Item 8 of this Form 10-K for a discussion of recently issued accounting pronouncements.

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Results of Operations

Revenue, gross profit, operating income and net income for the years ended December 31, 2016, 2015 and 2014 were as follows: 

	Year Ended December 31,
	2016				2015			2014
			% of				% of			% of
	(Millions)		Revenue		(Millions)		Revenue	(Millions)		Revenue
Revenues	$	1,996.9	100.0%		$	1,929.4	100.0%	$	2,086.2	100.0%
Gross profit		201.3	10.1%			219.9	11.4%		236.0	11.3%
Selling, general and administrative expense		140.9	7.1%			151.7	7.9%		132.2	6.3%
Impairment of goodwill		2.7	0.1%			0.4	0.0%		—	0.0%
Operating income		57.7	2.9%			67.8	3.5%		103.8	5.0%
Other income (expense)		(8.9)	(0.4%)			(6.7)	(0.3%)		(1.5)	(0.1%)
Income before income taxes		48.8	2.4%			61.1	3.2%		102.3	4.9%
Provision for income taxes		(21.1)	(1.1%)			(23.9)	(1.3%)		(38.6)	(1.9%)
Net income		27.7	1.4%			37.2	1.9%		63.7	3.0%
Net income attributable to noncontrolling interests		(1.0)	(0.1%)			(0.3)	(0.0%)		(0.5)	(0.0%)
Net income attributable to Primoris	$	26.7	1.3%	%	$	36.9	1.9%	$	63.2	3.0%

Consolidated Results

Two events had a material impact on our results of operations in 2016.  In the third quarter we received a $38 million settlement for one of the construction projects that we had identified as part of our “Receivable Collection Actions”, discussed below.  Because we had recorded the project with zero gross profit, the settlement added $27.5 million to revenues and $26.7 million to gross profit.  Also in the third quarter, the Company recorded a charge of $37.3 million primarily related to certain Belton, Texas projects for the Texas Department of Transportation (“TXDOT”), as a result of project delays and productivity issues.  The Company has since announced its intent to divest its Texas heavy civil business unit.     

Revenues

2016 and 2015

Revenues for year ended December 31, 2016 increased by $67.5 million, or 3.5% compared to 2015.  The increase was primarily due to an increase of $64.1 million from Rockford’s pipeline work, $34.5 million for work at a large Southeast Louisiana petrochemical project and $35.4 million from a new collaboration agreement at ARB Underground.  These increases were partially offset by a revenue reduction of $50.1 million at OnQuest, a reduction of $16.4 million at Saxon and a reduction of $24.5 million at the JCG Heavy Civil division.  Revenues for 2016 also included the one-time benefit of $27.5 million from the settlement of one of the “Receivable Collection Actions”.

From an end-market perspective, revenues for the year increased by $121.1 million for underground capital projects compared to 2015.  Revenues increased by $32.6 million for the underground utility end-market; increased by $44.8 million for our industrial end-market; decreased by $99.4 million in our heavy civil end-market; decreased by $50.1 million in our engineering end market; and increased by $18.5 in our other end-markets, compared to the year ended December 31, 2015.

2015 and 2014

Revenues for year ended December 31, 2015 decreased by $156.8 million, or 7.5% compared to the same period in 2014. The decrease was primarily from the impact of unusually severe wet weather in the Gulf States during the first half of 2015 and the completion of two large projects in the Energy segment which were not fully replaced in 2015. The historic rainfall in the first half of the year, especially in the second quarter,  caused us to suspend operations

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on various projects and to incur additional costs to recover from the weather conditions.  Revenues were also impacted by the delay in certain capital projects as a result of lower oil prices.

From our historical end-market perspective, our end-market revenues during the year ended December 31, 2015 decreased by $120.8 million for underground capital projects and the industrial end-market revenues decreased by $252.6 million, as compared to the same period in 2014.  For the year ended December 31, 2015, revenues increased in our heavy civil end-market by $123.1 million, in our underground utility end-market by $65.9 million, in the engineering end-market by $9.6 million and by $18.0 million in our other end-markets, as compared to the year ended December 31, 2014.

Gross Profit

2016 and 2015

For the year ended December 31, 2016, gross profit decreased by $18.6 million, or 8.4% compared to 2015.  The decrease was primarily from the decrease at the JCG Heavy Civil division of $38.2 million, of which $33.4 million was from a decrease at the Belton, TX projects.  Gross profit decreased by $6.1 million at the Southeast Louisiana petrochemical project, in spite of an increase in revenue, as the scope of our work has changed to less equipment intensive, lower margin work.  Gross profit also decreased at ARB Underground by $6.3 million and $8.6 million at ARB Industrial with these decreases offset by a gross profit increase of $15.4 million at Rockford.  Our gross profit benefitted by $26.7 million from the settlement of the “Receivable Collection Actions”.

Gross profit as a percentage of revenues decreased from 11.4% in 2015 to 10.1% in 2016.

2015 and 2014

For the year ended December 31, 2015, gross profit decreased by $16.2 million, or 6.9% compared to the same period in 2014, primarily as a result of the 7.5% decrease in revenues and to inefficiencies associated with stopping and starting projects as a result of the weather delays in the Gulf States during the first half of 2015.

Gross profit as a percentage of revenue increased slightly to 11.4% from 11.3% from the same period in 2014.

Selling, general and administrative expenses

Selling, general and administrative expenses (“SG&A”) consist primarily of compensation and benefits to executive, management level and administrative employees, marketing and communications, professional fees, office rent and utilities and acquisition costs. 

2016 and 2015

For 2016, SG&A expenses were $140.8 million, compared to $151.7 million for 2015, a decrease of $10.9 million.  The decrease was primarily as a result of decreases in professional fees of $7.4 million due to reduced legal fees and due to completion of the implementation of the integrated financial system for most of the West segment.  The reduction in SG&A was also the result of a $2.6 million prior year one-time valuation adjustment for the value of a long-term asset.  Additionally, SG&A was reduced as a result of a decrease of $1.8 million in compensation and staffing levels, especially at our PES business unit.

SG&A as a percentage of revenue for the year ended December 31, 2016 decreased to 7.1% compared to 7.9% for the year ended December 31, 2015 as a result of the decreased expenses while revenues increased.

2015 and 2014

For 2015, SG&A expenses were $152.1 million, compared to $132.2 million in 2014, an increase of $19.9 million.  Of the increase, $3.9 million was from the 2015 acquisition of Aevenia and $1.6 million of the increase was due

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to the impact of the 2014 acquisitions of Vadnais, Surber and Ram-Fab.  Of the remaining $14.4 million increase, professional fees increased by $9.1 million, we recorded a one-time valuation adjustment for the value of a long-term asset of $2.6 million and the remaining $2.7 million increase represented expenses associated with increased compensation and staffing levels.  The majority of the increase in professional fees was an increase in legal fees associated with our collection efforts on the disputed receivables discussed later in this Item and the expenses incurred in our ongoing internal review of the methods used by our subsidiaries to recognize revenue and estimate contingencies for ongoing projects related to an inquiry by the staff of the Securities and Exchange Commission (see Note 15 – “Commitments and Contingencies”).  In addition, the increase in professional fees included fees associated with our efforts to improve our documentation of internal controls over financial reporting.

SG&A as a percentage of revenue for the year ended December 31, 2015 increased to 7.9% compared to 6.3% for the year ended December 31, 2014 as a result of both increased expenses and the decrease in revenues in 2015.

Other income and expense

Non-operating income and expense items for the years ended December 31, 2016, 2015 and 2014 were as follows:

	2016		2015		2014
	(Millions)		(Millions)		(Millions)
Income from non-consolidated investments	$	—	$	—	$	5.3
Foreign exchange gain (loss)		0.2		(0.8)		0.3
Other income (expense)		(0.3)		1.7		(0.8)
Interest income		0.1		0.1		0.1
Interest expense		(8.9)		(7.7)		(6.4)
Total other income (expense)	$	(8.9)	$	(6.7)	$	(1.5)

There was no income from non-consolidated investments for 2016 and 2015.  For 2014, income from non-consolidated investments was primarily from the sale of our interest of the WesPac Energy non-consolidated joint venture.

Foreign exchange gains and losses reflect currency exchange fluctuations of the United States dollar compared to the Canadian dollar.  Many of our contracts in Calgary, Canada are sold based on United States dollars, but a portion of the work is paid for with Canadian dollars creating a currency exchange difference.

Other expense for the year ended December 31, 2016 was $0.3 million, primarily from expenses associated with our joint venture efforts. Other income for the year ended December 31, 2015 of $1.7 million consisted primarily of the net reversal of $1.9 million in contingent consideration as Ram-Fab, Vadnais and Surber missed financial targets contemplated in their respective purchase agreements.  Net other expense of $0.8 million for the year ended December 31, 2014 was due to adjustments to the fair value of the contingent consideration liabilities related to the acquisitions of Q3C, Surber and Vadnais. 

Interest income is derived from interest earned on excess cash invested primarily in short term U.S. Treasury bills, backed by the federal government, and other investments that may not be backed by the federal government.

Increasing interest expense for each of the three years from 2014 through 2016 has been due to increased equipment debt financing, an increase in mortgage notes payable and additional borrowing under the Company’s agreement for senior secured notes. 

The weighted average interest rate on total debt outstanding at December 31, 2016, 2015 and 2014 was 2.9%, 2.9% and 3.0%, respectively.

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Provision for income taxes

The Company's provision for income tax decreased $2.8 million to $21.1 million for 2016 compared to 2015.  Decreased income tax of $5.1 million resulting from a decrease in pretax profits was partially offset by increased income tax of $2.3 million due to an increase in effective tax rates. The 2016 effective tax rate on income including noncontrolling interests was 43.27%. The 2016 effective tax rate on income attributable to Primoris (excluding noncontrolling interests) was 44.18%. Two factors contributed equally to the increase in the 2016 effective tax rate compared to 2015. First, state effective tax rates increased due to changes in the mix of profit by state and a prior year tax currently payable. Second, the Company implemented tax planning which resulted in reduced 2016 taxable income and an increase in the Company's deferred tax liability balance.  The reduction in anticipated 2016 taxable income resulted in a decrease in the available domestic production activities deduction. 

Our provision for income tax decreased $14.7 million to $23.9 million for 2015 compared to 2014 primarily as a result of the decrease in pretax profits.

Segment Results

The following discussion describes the significant factors contributing to the results of our three operating segments.  All intersegment revenues and gross profit, which were immaterial, have been eliminated in the following tables.

West Segment

Revenue and gross profit for the West segment for the years ending December 31, 2016, 2015 and 2014 were as follows:

	Year Ended December 31,
	2016			2015			2014
			% of			% of			% of
			Segment			Segment			Segment
	(Millions)		Revenue	(Millions)		Revenue		(Millions)	Revenue
West Segment
Revenue	$	1,041.3		$	913.6		$	964.1
Gross profit	$	145.2	13.9%	$	130.3	14.3%	$	143.5	14.9%

2016 and 2015

West segment revenue for 2016 increased by $127.7 million, or 14.0%, compared to 2015. The majority of this increase was the result of a $35.4 million increase at ARB Underground and a $64.1 million increase at Rockford. Rockford’s increase came from two large diameter pipeline projects in Florida which started in the third quarter of 2016, and ARB Underground realized an increase in revenue due to a new collaboration MSA arrangement for a major utility customer which began in 2016.

Gross profit for the West segment increased by $14.9 million or 11.5% for 2016 versus 2015. This increase was primarily the result of an increase in profitability at Q3C of $12.8 million, as well as additional gross profit earned at Rockford of $15.4 million resulting from the Florida projects as described above.

Gross profit as a percentage of revenues decreased slightly to 13.9% in 2016 compared to 14.3% in 2015.  This decline in margin is largely attributable to decreases realized at ARB Underground and ARB Industrial. Approximately 1% of the decrease in gross margin realized at ARB Underground is attributable to the collaboration MSA arrangement discussed above. Another contributor to the slight decline in gross margin percentage is due to the low margin percentage realized by ARB Industrial’s two joint venture projects in process, which earned a combined 7.4% gross margin on $27.0 million in revenues in 2016. These joint venture projects accounted for 22.1% of the revenues at ARB Industrial in 2016 versus 3.5% in 2015.

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2015 and 2014

West segment revenue for 2015 decreased by $50.5 million, or 5.2%, compared to 2014. Revenue declined at the ARB Industrial division by $105.0 million with $80.2 million of the decrease the result of completion of a solar plant project in the Mojave Desert in 2014.  The decrease was partially offset by increases at ARB Structures and Q3C totaling $62.2 million.  The ARB Structures revenue increase was driven primarily by work on a large parking structure in southern California, and the Q3C revenue increase was attributable primarily to additional work performed for its largest customer, a gas and electric utility, totaling $27.6 million.

Gross profit for the West segment decreased by $13.2 million or 9.2% for 2015 versus 2014. The primary reason was a reduction of gross profit at both ARB Industrial and Rockford totaling $17.4 million, offset by an increase at ARB Underground of $5.1 million. The declines were due to the reduction in revenue at ARB Industrial and the impact of the rain in the second quarter on the pipeline operations of Rockford.  The increase realized by ARB Underground was driven largely by increased MSA work performed for a major public gas and electric utility customer under its Pipeline Safety Enhancement Plan.

Gross profit as a percentage of revenues decreased to 14.3% in 2015 compared to 14.9% in 2014, still consistent with historical ratios. This decline in margin is largely attributable to Rockford’s margin decrease from 11.6% in 2014 to 8.6% in 2015 reflecting a reduced level of work in the fourth quarter of 2015 and the impact of the rainy weather on a large diameter pipeline job in the Houston, TX area.

East Segment

Revenue and gross profit for the East segment for the years ended December 31, 2016, 2015 and 2014 were as follows:

	Year Ended December 31,
	2016			2015			2014
			% of			% of			% of
			Segment			Segment			Segment
	(Millions)		Revenue	(Millions)		Revenue		(Millions)	Revenue
East Segment
Revenue	$	521.3		$	612.2		$	489.9
Gross profit	$	(15.9)	(3.1%)	$	42.5	6.9%	$	25.7	5.3%

2016 and 2015

East segment revenue for the year ended December 31, 2016 decreased by $90.9 million, or 14.8% from 2015.  Revenue at the JCG Infrastructure & Maintenance (“I&M”) division decreased by $76.4 million due primarily to the large petrochemical project in Louisiana and decreases in Texas I&M work.  JCG’s Heavy Civil division revenue decreased by $24.5 million.  Decreases in Louisiana DOT projects of $19.4 million and Mississippi DOT projects of $58.9 million were offset by increases in Arkansas DOT projects of $6.7 million, Texas DOT projects of $8.4 million and airport projects of $31.7 million.  Revenue at Cardinal Contractors increased $6.7 million as multiple ongoing projects located in Texas started late in 2015 and early in 2016.

East segment gross profit for the year ended December 31, 2016 decreased by $58.4 million, or 137.5%, compared to 2015.  Gross profit at JCG’s I&M division decreased by $25.9 million as a result of decreased revenues.  Gross profit decreased at JCG’s Heavy Civil division by $38.2 million, mainly related to the delays and productivity issues for the Belton area construction projects that are part of the Texas heavy civil business that is planned to be divested, as discussed in Note 16 – “Planned Divestiture of Texas Heavy Civil Business Unit” in the Notes to Consolidated Financial Statements included in Item 8 of this Form 10-K.  The reduced gross profit was also due to the reduced volume on Mississippi DOT projects. 

Gross profit as a percentage of revenues decreased to a loss of 3.1% in 2016 compared to profit of 6.9% in 2015 as a result of decreased margins on the Belton area projects within the Texas heavy civil division.

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2015 and 2014

East segment revenue for the year ended December 31, 2015 increased by $122.2 million, or 25.0% from 2014.  The increase was due primarily to JCG’s infrastructure and maintenance division work at a large petrochemical facility project in Louisiana.

East segment gross profit for the year ended December 31, 2015 increased by $16.8 million, or 65.1%, compared to 2014.  The increase was due primarily to the increased revenue for the JCG infrastructure and maintenance division petrochemical project in Louisiana.  Gross profit decreased at both JCG’s heavy civil division and Cardinal Contractors.  Gross profit for JCG heavy civil division projects decreased by $15.3 million primarily from delays at the Texas DOT projects in the Belton, TX area, and Cardinal Contractors gross profits decreased by $4.9 million, primarily from reduced margins for two Texas wastewater projects.

Gross profit as a percentage of revenues increased to 6.9% in 2015 compared to 5.3% in 2014 primarily as a result of the increase in revenues.

Energy Segment

Revenue and gross profit for the Energy segment for the years ended December 31, 2016, 2015 and 2014 were as follows:

	Year Ended December 31,
	2016			2015			2014
			% of			% of			% of
			Segment			Segment			Segment
	(Millions)		Revenue	(Millions)		Revenue		(Millions)	Revenue
Energy Segment
Revenue	$	434.3		$	403.6		$	632.2
Gross profit	$	72.0	16.6%	$	47.1	11.7%	$	66.8	10.6%

2016 and 2015

Revenue for 2016 for the Energy segment increased by $30.7 million, or 7.6% from 2015.  The settlement of a disputed receivable increased revenue by $27.5 million.  Excluding the effect of the settlement, revenue increased by $3.2 million, or 0.8% compared to 2015.  Revenues were higher by $60.6 million at the PES Industrial division and by $6.1 million at the PES Pipeline division.  For the Industrial division, the increase was primarily due to the petrochemical project in Louisiana, and for the Pipeline division the increase was from several smaller diameter pipeline projects in Texas.  Revenues for 2016 decreased $50.1 million at OnQuest and OnQuest Canada, $16.4 million at the PES Saxon division, primarily from completion of prior year projects.

Gross profit for the Energy segment increased by $24.9 million, or 52.9% for the year ended December 31, 2016, compared to 2015, with $26.7 million as a result of collection of the disputed amount. Excluding the impact of the collection settlement, gross profit decreased by $1.8 million, or 3.8%.  PES Industrial gross profit increased by $11.6 million as a result of increased volume at the petrochemical project in Louisiana partially offset by productivity issues in Texas.  Gross profit decreased $6.7 million at OnQuest and OnQuest Canada and $3.3 million at Cardinal Mechanical as a result of reduced volume.  The PES Pipeline division had a decrease in gross profit of $2.7 million as a result of productivity issues on several Texas pipeline projects.

Excluding the impact of the collected receivable, gross profit as a percent of revenue decreased to 11.2% in 2016 from 11.7% in 2015 primarily as a result of the productivity issues in Texas in the Industrial and Pipeline divisions.

2015 and 2014

Revenue for the Energy segment decreased by $228.6 million, or 36.2% from 2014.  The PES Industrial division revenue decreased by $116.0 million, primarily due to completion of a fertilizer plant project in 2014, and the impact of the unusually severe rainy weather during the first half of the year, which delayed our ability to start work for a

46

chemical plant project in Louisiana.  PES’s pipeline division revenue decreased by $113.9 million as a result of completion of a pipeline project in 2014.  For the PES Saxon division, revenue decreased by $36.6 million as a result of a 2014 completion of a project in the Houston Ship Channel, partially offset by increases from two projects in Pennsylvania.  OnQuest and OnQuest Canada revenue in 2015 increased by $9.6 million as a result of an LNG project in Florida.  Revenue for Aevenia, acquired on February 28, 2015, was $23.7 million.

Gross profit for the Energy segment decreased by $19.8 million, or 29.5% for the year ended December 31, 2015, compared to 2014.  The PES industrial division, PES pipeline division and the PES Saxon division gross profit decreased $27.1 million as a result of the reduction in revenue.  PES’s Specialty division gross profit increased $3.6 million as a result of the completion of a chilled water project in Texas.  Aevenia’s gross profit was $2.4 million.

Gross profit as a percentage of revenues increased to 11.7% in 2015 compared to 10.6% in 2014.  The increase was primarily the result of two offsetting factors.  The first was due to the effect of zero margin work on a large pipeline project at the PES Pipeline division in 2014 and it’s resulting lower prior year gross profit margin percentage.  Offsetting this was reduced 2015 gross profits caused by the heavy rains during the first half of 2015 and decreased labor efficiency rates.

Planned Divestiture of Texas Heavy Civil Business Unit

In October 2016, the Company announced that it planned to divest its Texas heavy civil business unit, which operates as a division of JCG.  Until completion of a sale, the Company will continue to operate the business unit.  The Company has engaged a financial advisor to assist in the sale and is actively marketing the business unit, though a sales price and other terms have not yet been established.  As a result, the planned divestiture is not classified as “held for sale” under ASC Topic 360.     

The Company recorded a charge of $37.3 million during the third quarter 2016 for the Belton area projects, which are part of the Texas heavy civil business that the Company is planning to divest.  This charge includes a reduction of the expected profitability of certain projects in the Belton, Texas area for the division and a reduction of costs and estimated earnings in excess of billings and an increase to the reserve for anticipated job losses.   Revenues of $10.0 million have been recognized for these projects as a result of incurred costs associated with claims.

The following table shows the revenues and gross profit of the Texas heavy civil business unit which is included in the revenues and gross profit tables for the East segment in Note 17 – “Reportable Segments” of the Notes to Consolidated Financial Statements included in Item 8 of this Form 10-K. 

	Year Ended December 31,
	2016			2015
			% of			% of
	(Millions)		Revenue	(Millions)		Revenue
Revenue	$	250.8		$	215.2
Gross profit	$	(41.3)	(16.5%)	$	(15.5)	(7.2%)

At December 31, 2016, the Texas heavy civil balance sheet included property, plant and equipment with a net book value of $47,093.  Additional balance sheet items include the following:  

	December 31,		December 31,
	2016		2015
	(Millions)		(Millions)
Accounts receivable	$	24.1	$	16.2
Costs and estimated earnings in excess of billings	$	25.7	$	15.3
Inventory and uninstalled contract materials	$	31.6	$	44.3
Billings in excess of costs and estimated earnings	$	30.6	$	47.2
Reserve for estimated losses on uncompleted contracts	$	11.3	$	4.7

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In addition, under the provisions of ASC 350, the planned divestiture triggered an analysis of the goodwill amount recorded on the JCG books in September 2016.  The analysis resulted in the Company recording a pretax, non-cash goodwill impairment charge of approximately $2.7 million in the third quarter 2016. 

There can be no assurance that the Company will enter into a sales transaction for the division nor is it possible to determine at this time the impact on results of operations or cash flow from a potential transaction.

Liquidity and Capital Resources

Cash Needs

Liquidity represents our ability to pay our liabilities when they become due, fund business operations and meet our contractual obligations and execute our business plan.  Our primary sources of liquidity are our cash balances at the beginning of each period and our net cash flow.  If needed, we have availability under our lines of credit to augment liquidity needs.  In order to maintain sufficient liquidity, we evaluate our working capital requirements on a regular basis.  We may elect to raise additional capital by issuing common stock, convertible notes, term debt or increasing our credit facility as necessary to fund our operations or to fund the acquisition of new businesses.

Our cash and cash equivalents totaled $135.8 million at December 31, 2016 compared to $161.1 million at December 31, 2015.  We anticipate that our cash and investments on hand, existing borrowing capacity under our credit facility and our future cash flows from operations will provide sufficient funds to enable us to meet our operating needs, our planned capital expenditures and our ability to grow for at least the next twelve months.

The construction industry is capital intensive, and we expect to continue to make capital expenditures to meet anticipated needs for our services.  Historically, we have invested an amount that approximated the sum of depreciation and amortization expenses plus proceeds from equipment sales.  In 2016, capital expenditures were approximately $58.0 million.  For 2016, the amount of depreciation, amortization and equipment sales was approximately $77.6 million.  Capital expenses are expected to total $50 to $55 million for 2017.

Cash Flows

Cash flows during the years ended December 31, 2016, 2015 and 2014 are summarized as follows:

	Year ended
	December 31,
	2016		2015		2014
	(Millions)		(Millions)		(Millions)
Change in cash:
Net cash provided by operating activities	$	62.6	$	48.4	$	36.1
Net cash used in investing activities		(59.4)		(48.5)		(102.6)
Net cash provided by (used in) financing activities		(28.5)		21.8		9.9
Net change in cash and cash equivalents	$	(25.3)	$	21.7	$	(56.6)

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Operating Activities

The source of our cash flow from operating activities and the use of a portion of that cash in our operations for the years ended December 31, 2016, 2015 and 2014 were as follows:

	2016		2015		2014
	(Millions)		(Millions)		(Millions)
Operating Activities:
Operating income	$	57.7	$	67.8	$	103.8
Depreciation and amortization		68.0		65.2		58.4
Stock-based compensation expense		1.6		1.0		0.9
Gain on sale of property and equipment		(4.6)		(2.1)		(1.9)
Impairment of goodwill		2.7		0.4		—
Net deferred taxes		10.9		(7.0)		9.0
Changes in assets and liabilities		(43.7)		(46.3)		(88.7)
Foreign exchange gain (loss)		0.2		(0.8)		0.3
Interest income		0.1		0.1		0.1
Interest expense		(8.9)		(7.7)		(6.4)
Other income (expense)		(0.3)		1.7		(0.8)
Provision for income taxes		(21.1)		(23.9)		(38.6)
Net cash (used by) provided by operating activities	$	62.6	$	48.4	$	36.1

Net cash provided by operating activities for 2016 of $62.6 million increased by $14.2 million compared to 2015.  This increase was caused primarily by the increase in net deferred taxes of $17.9 million, by a $2.8 million increase in depreciation and amortization, an increase in non-cash goodwill impairment of $2.3 million and a $2.6 million reduction in the change in assets and liabilities. Cash was also provided by the reduced provision for income taxes of $2.8 million, offset by decreased operating income of $10.1 million. 

The components of the $43.7 million change in assets and liabilities for the year ended December 31, 2016 are summarized as follows:

· an increase of $2.1 million in customer retention deposits;

· an increase of $65.8 million in accounts receivable as revenues for the fourth quarter 2016 were stronger than in the same period in 2015, primarily as a result of significant work being performed during the fourth quarter 2016 on two Florida pipeline projects.  At December 31, 2016, accounts receivable represented 33.1% of our total assets compared to 28.3% at the end of 2015.  In general, we continue to maintain an excellent collection history, and we have certain lien rights that can provide additional security for collections.  However, as outlined in the section “Receivable Collection Actions”, we are in dispute resolution with one customer with a total receivable amount $32.9 million, or 8.5% of our total accounts receivable balance at December 31, 2016;

· an increase of $22.2 million in costs and estimated earnings in excess of billings. Increases associated with the time lag from when revenues were earned until the customer can be billed were approximately $63.9 million for ARB, primarily for two large utility customers, and $45.6 million for JCG, primarily for public agency heavy civil projects which require inspector approval prior to billing;

· a decrease in inventory and other current assets of $17.7 million primarily as a result of reduced inventory levels for JCG projects nearing completion;

· accounts payable increased by $42.9 million, primarily impacted by the timing of vendor payments and the increased activity for the two Florida pipeline projects in the fourth quarter of 2016;

· a decrease of $27.5 million in billings in excess of costs and estimated earnings reflecting the timing of work progression and billings; and

49

· a net increase of $10.8 million in accrued expenses, mainly due to an increase in payroll and payroll benefits payable as a result of the increased fourth quarter 2016 activity for the two Florida pipeline projects.

During the twelve months of 2016, we paid $8.6 million in income taxes compared to $18.7 million in the same period of the previous year.  The reduction in cash tax payments, net of refunds, in 2016 was the result of a decrease in the Company’s current tax provision.

Investing activities

	2016		2015		2014
	(Millions)		(Millions)		(Millions)
Capital expenditures — cash	$	58.0	$	67.1	$	88.0

We purchased property and equipment for $58.0 million, $67.1 million and $88.0 million in the years ended December 31, 2016, 2015 and 2014, respectively, principally for our construction activities.  We believe the ownership of equipment is generally preferable to renting equipment on a project-by-project basis, as ownership helps to ensure the equipment is available for our workload when needed. In addition, ownership has historically resulted in lower overall equipment costs.

We periodically sell equipment, typically to update our fleet. We received proceeds from the sale of used equipment of $9.6 million, $9.9 million and $5.8 million for 2016, 2015 and 2014, respectively.

During 2016 and 2015, we did not purchase any short-term investments, while we invested $33.8 million in 2014 in short-term investments.  We sold short-term investments amounting to $0.0 million, $31.0 million and $21.5 million in 2016, 2015 and 2014, respectively.  Short-term investments consisted primarily of U.S. Treasury bills with various financial institutions.

During 2016, we used $4.1 million in cash for the acquisition of Mueller and $6.9 million for Northern.  During 2015, we used $22.3 million in cash for the Aevenia acquisition and in 2014 we used $14.6 million in cash for the Vadnais and Surber/Ram-Fab/Williams acquisitions.

Financing activities

Financing activities used cash of $28.5 million in 2016. Significant transactions impacting cash flows from financing activities included:

· $45.0 million in new and refinanced notes secured by our equipment;

· $57.7 million in repayment of long-term debt and the repayment of $0.8 million in capital leases;

· Repurchase of common stock of $5.0 million;

· Dividend payments of $11.4 million to our stockholders during the year ended December 31, 2016; and

· $1.4 million in proceeds from the issuance of 85,907 shares of common stock purchased by the participants in the Primoris Long-term Retention Plan.

Debt Activities

Revolving Credit Facility

As of December 31, 2016, the Company had a revolving credit facility, as amended on December 12, 2014 (the “Credit Agreement”) with The PrivateBank and Trust Company, as administrative agent (the “Administrative Agent”) and co-lead arranger, The Bank of the West, as co-lead arranger, and IBERIABANK Corporation, Branch Banking and Trust Company and UMB Bank, N.A. (the “Lenders”). The Credit Agreement is a $125 million revolving credit facility whereby the Lenders agree to make loans on a revolving basis from time to time and to issue letters of credit for up to the $125 million committed amount. The termination date of the Credit Agreement is December 28, 2017.

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The principal amount of any loans under the Credit Agreement will bear interest at either: (i) LIBOR plus an applicable margin as specified in the Credit Agreement (based on the Company’s senior debt to EBITDA ratio as that term is defined in the Credit Agreement), or (ii) the Base Rate (which is the greater of (a) the Federal Funds Rate plus 0.5% or (b) the prime rate as announced by the Administrative Agent). Quarterly non-use fees, letter of credit fees and administrative agent fees are payable at rates specified in the Credit Agreement.

The principal amount of any loan drawn under the Credit Agreement may be prepaid in whole or in part, with a minimum prepayment of $5 million, at any time, potentially subject to make-whole provisions.

The Credit Agreement includes customary restrictive covenants for facilities of this type, as discussed below.

Commercial letters of credit outstanding under the credit agreement were $16.2 million at December 31, 2016 and $12.1 million at December 31, 2015.  Other than commercial letters of credit, there were no borrowings under this line of credit during the twelve months ended December 31, 2016, and available borrowing capacity at December 31, 2016 was $108.8 million.

Senior Secured Notes and Shelf Agreement

On December 28, 2012, the Company entered into a $50 million Senior Secured Notes purchase (“Senior Notes”) and a $25 million private shelf agreement (the “Notes Agreement”) by and among the Company, The Prudential Investment Management, Inc. and certain Prudential affiliates (the “Noteholders”).  On June 3, 2015, the Notes Agreement was amended to provide for the issuance of additional notes of up to $75 million over the next three year period ending June 3, 2018 (“Additional Senior Notes”).

The Senior Notes amount was funded on December 28, 2012.  The Senior Notes are due December 28, 2022 and bear interest at an annual rate of 3.65%, paid quarterly in arrears. Annual principal payments of $7.1 million are required from December 28, 2016 through December 28, 2021 with a final payment due on December 28, 2022. The principal amount may be prepaid, with a minimum prepayment of $5 million, at any time, subject to make-whole provisions.

On July 25, 2013, the Company drew $25 million available under the Notes Agreement.  The notes are due July 25, 2023 and bear interest at an annual rate of 3.85% paid quarterly in arrears.  Seven annual principal payments of $3.6 million are required from July 25, 2017 with a final payment due on July 25, 2023.

On November 9, 2015, the Company drew $25 million available under the Additional Senior Notes Agreement.  The notes are due November 9, 2025 and bear interest at an annual rate of 4.6% paid quarterly in arrears.  Seven annual principal payments of $3.6 million are required from November 9, 2019 with a final payment due on November 9, 2025.

Loans made under both the Credit Agreement and the Notes Agreement are secured by our assets, including, among others, our cash, inventory, goods, equipment (excluding equipment subject to permitted liens) and accounts receivable. All of our domestic subsidiaries have issued joint and several guaranties in favor of the Lenders and Noteholders for all amounts under the Credit Agreement and Notes Agreement.

Both the Credit Agreement and the Notes Agreement contain various restrictive and financial covenants including, among others, minimum tangible net worth, senior debt/EBITDA ratio, debt service coverage requirements and a minimum balance for unencumbered net book value for fixed assets. In addition, the agreements include restrictions on investments, change of control provisions and provisions in the event the Company disposes more than 20% of its total assets.

The Company was in compliance with the covenants for the Credit Agreement and the Notes Agreement at December 31, 2016.

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Canadian Credit Facility

The Company has a demand credit facility for $8.0 million in Canadian dollars with a Canadian bank for purposes of issuing commercial letters of credit in Canada.  The credit facility has an annual renewal and provides for the issuance of commercial letters of credit for a term of up to five years. The facility provides for an annual fee of 1% for any issued and outstanding commercial letters of credit. Letters of credit can be denominated in either Canadian or U.S. dollars. At December 31, 2016 and 2015, letters of credit outstanding totaled $0.0 million and $2.2 million in Canadian dollars, respectively.  At December 31, 2016, the available borrowing capacity was $8.0 million in Canadian dollars.  The credit facility contains a working capital restrictive covenant for our Canadian subsidiary, OnQuest Canada, ULC. At December 31, 2016, OnQuest Canada, ULC was in compliance with the covenant.

Contractual Obligations

As of December 31, 2016, we had $261.8 million of outstanding long-term debt and capital lease obligations.  There were no short-term borrowings.

A summary of contractual obligations as of December 31, 2016 were as follows:

	Total		1 Year		2 - 3 Years		4 - 5 Years		After 5 Years
	(In Millions)
Long-term debt and capital lease obligations	$	261.8	$	58.3	$	111.1	$	58.3	$	34.1
Interest on long-term debt (1)		25.1		7.0		9.8		4.9		3.4
Equipment operating leases		30.4		9.4		14.6		6.4		—
Real property leases		12.0		4.0		5.9		2.1		—
Real property leases—related parties		6.4		1.5		2.1		1.8		1.0
	$	335.7	$	80.2	$	143.5	$	73.5	$	38.5
Letters of credit	$	16.2	$	16.2	$	—	$	—	$	—

(1)The interest amount represents interest payments for our fixed rate debt assuming that principal payments are made as originally scheduled.

The table does not include potential obligations under multi-employer pension plans in which some of our employees participate.  Our multi-employer pension plan contribution rates are generally specified in our collective bargaining agreements, and contributions are made to the plans based on employee payrolls.  Our obligations for future periods cannot be determined because we cannot predict the number of employees that we will employ at any given time nor the plans in which they may participate.

We may also be required to make additional contributions to multi-employer pension plans if they become underfunded, and these contributions will be determined based on our union payroll.  The Pension Protection Act of 2006 added special funding and operational rules for multi-employer plans that are classified as “endangered,” “seriously endangered” or “critical” status.  Plans in these classifications must adopt measures to improve their funded status through a funding improvement or rehabilitation plan, which may require additional contributions from employers.  The amounts of additional funds that we may be obligated to contribute cannot be reasonably estimated and is not included in the table above.

In November 2011, members of the Pipe Line Contractors Association (“PLCA”) including ARB, Rockford and Q3C (prior to the Company’s acquisition in 2012), withdrew from the Central States Southeast and Southwest Areas Pension Fund multiemployer pension plan (“Plan”).  These withdrawals were made in order to mitigate additional liability in connection with the significantly underfunded Plan.  The Company recorded a withdrawal liability of $7.5 million, which was increased to $7.6 million after the acquisition of Q3C.  During the first quarter of 2016, the Company received a final payment schedule.  As a result of payments made and based on this schedule, the liability recorded at December 31, 2016 was $5.7 million.  The Company has no plans to withdraw from any other agreements.

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We have also excluded from the table any interest and fees associated with letters of credit and commitment fees under our credit facility since these amounts are unknown and variable.

Related Party Transactions

Primoris has entered into leasing transactions with Stockdale Investment Group, Inc. (“SIGI”).  Our Chairman of the Board of Directors and our largest stockholder, Brian Pratt and his family, holds a majority interest of SIGI.  John M. Perisich, our Executive Vice President and General Counsel, is secretary of SIGI. The leases are for three properties used by the Company in California, with various expiration dates, with the last expiring in 2023.  During both of the years ended December 31, 2016 and 2015, the Company paid SIGI lease payments of $0.8 million in each year, and $0.9 million in 2014 for the use of these properties.

Primoris leases properties from other individuals that were past sellers of acquisitions or are current employees.  The amounts leased are not material.

We believe that the amounts that we pay for the related party leases approximate terms that we could obtain from independent third parties.  In addition, related party transactions, any new leases, extensions of lease terms and changes in lease terms or amounts must be approved in advance by the independent directors of the Board of Directors Audit Committee.

Off Balance Sheet Transactions

As is common in our industry, we enter into certain off-balance sheet arrangements in the ordinary course of business that result in risks not directly reflected on our balance sheet.  We have no off-balance sheet financing arrangement with variable interest entities.  The following represent transactions, obligations or relationships that could be considered material off-balance sheet arrangements.

· Letters of credit issued under our lines of credit. At December 31, 2016, we had letters of credit outstanding of $16.2 million, primarily for international projects in our Energy segment, a large domestic pipeline project and for providing security to our insurance carriers.  These letters of credit are used by some of our carriers to ensure reimbursement for amounts that they are disbursing on our behalf, such as beneficiaries under our self-funded insurance program.  In addition, from time to time, certain customers require us to post a letter of credit to ensure payments to our subcontractors or guarantee performance under our contracts.  Letters of credit reduce our borrowing availability under our Credit Agreement and Canadian Credit Facility.  If these letters of credit were drawn on by the beneficiary, we would be required to reimburse the issuer of the letter of credit, and we may be required to record a charge to earnings for the reimbursement.  We do not believe that it is likely that any material claims will be made under a letter of credit.

· We enter into non-cancellable operating leases for some of our facilities, equipment and vehicles, including leases with related parties.  At December 31, 2016, equipment operating leases had a remaining commitment of $30.4 million and facility rental commitments were $18.5 million.

· Employment agreements which provide for compensation and benefits under certain circumstances and which may contain a change of control clause.  We may be obligated to make payments under the terms of these agreements.

· In the ordinary course of our business, we may be required by our customers to post surety bid or completion bonds in connection with services that we provide. At December 31, 2016, we had $1.45 billion in outstanding bonds.  We do not believe that it is likely that we would have to fund material claims under our surety arrangements.

· Certain of our subsidiaries are parties to collective bargaining agreements with unions.  In most instances, these agreements require that we contribute to multi-employer pension and health and welfare plans.  For

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many plans, the contributions are determined annually and required future contributions cannot be determined since contribution rates depend on the total number of union employees and actuarial calculations based on the demographics of all participants.  The Employee Retirement Income Security Act of 1974 (ERISA), as amended by the Multi-Employer Pension Amendments Act of 1980, subject employers to potential liabilities in the event of an employer’s complete or partial withdrawal of an underfunded multi-employer pension plan.  The Pension Protection Act of 2006 added new funding rules that are classified as “endangered”, “seriously endangered”, or “critical” status.  As discussed in Note 19 — “Multiemployer Plans” of the Notes to Consolidated Financial Statements included in Item 8 of this Form 10-K, we have recognized a withdrawal liability for one plan.  We currently do not anticipate withdrawal from any other multi-employer pension plans.  Withdrawal liabilities or requirements for increased future contributions could negatively impact our results of operations and liquidity.

· Other guarantees that we make from time to time, such as guaranteeing the obligations of our subsidiaries.

Receivable Collection Actions

As do all construction contractors, we negotiate payments with our customers from time to time, and we may encounter delays in receiving payments from our customers.  The Company has been engaged in dispute resolution to collect money it believes it is owed for two construction projects completed in 2014.  Because of uncertainties associated with the projects, including uncertainty of the amounts that would be collected, the Company used a zero profit margin approach to recording revenues during the construction period for both projects.

For one project, a cost reimbursable contract, the Company has recorded a receivable of $32.9 million with a reserve of approximately $18.3 million included in “billings in excess of costs and estimated earnings.”  At this time, the Company cannot predict the amount that it will collect nor the timing of any collection.  The dispute resolution for the $32.9 million receivable initially required international arbitration; however, in the first half of 2016, the owner sought bankruptcy protection in U.S. bankruptcy court.  The Company has initiated litigation against the sureties who have provided lien and stop payment release bonds for the total amount owed. 

For the second project, the Company had recorded a receivable of $17.9 million.  During the third quarter 2016, the Company settled the dispute with an exchange of general releases and receipt of $38 million in cash.  The Company has changed its zero estimate of profit and has accounted for the settlement as a change in accounting estimate which resulted in recognizing revenues of approximately $27.5 million and gross profit of approximately $26.7 million in the third quarter of 2016.

2017 Outlook

We believe that our end markets will continue their growth in 2017, in 2018 and beyond.  Our backlog at December 31, 2016 was at $2.8 billion, an all-time high.  We anticipate potential changes to the current stringent regulatory and environmental requirements for many of our clients’ infrastructure projects, which may improve the timing and certainty of the projects.  While fluctuating oil prices create uncertainty as to the timing of some of our opportunities, we are beginning to see preliminary bidding activity for larger gas, oil and derivatives projects.  We believe that Primoris has the financial and operational strength to meet either short-term delays or the impact of significant increases in work.  We continue to be optimistic about both short and longer-term opportunities.  Our view of the outlook for our major end markets currently is as follows:

· Construction of petroleum, natural gas, and natural gas liquid pipelines — We expect that at the current oil price, activities in most if not all of the shale basins will remain at reduced levels, reducing any upstream work such as gathering lines and petroleum transport pipelines for the near future.  If production from the shale formations continues to increase in the near future, the current disconnect between production and processing locations provides opportunities for our underground construction operations serving midstream companies, primarily Rockford, ARB Underground and Primoris Pipeline & Maintenance groups.  We expect that the efforts by gas utilities to move shale gas from the Marcellus region to Florida and other Atlantic states will continue and will provide significant opportunity for Rockford over the next 2-3 years.

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· Inspection, maintenance and replacement of gas utility infrastructure —We expect that continuing safety enhancements to the gas utility infrastructure will provide continuing opportunities for our ARB Underground operations, especially in California, as well as Q3C in the Midwest.  We also expect that ongoing gas utility repair and maintenance opportunities will continue to grow benefiting our Q3C and PES groups.

· Construction of natural gas-fired power plants and heavy industrial plants — We expect continued construction opportunities for both base-load and peak shaving power plants; however, we are aware that concerns expressed in California that gas fired power plants are not “acceptable” for environmental reasons may impact the timing of near term construction opportunities.  We believe that based on continuing population growth, the intermittency of renewable power resources and the environmental requirements associated with using ocean water for cooling, power plants will be needed in spite of vocal opposition to “non-green” sources.  In addition, the current low price of natural gas could result in the conversion of coal-fired power plants and conversion and expansion at chemical plants and industrial facilities in other parts of the United States.  These opportunities would benefit our ARB Industrial group and PES Industrial group.

· Construction of alternative energy facilities, wind farms, solar energy — We anticipate continued construction opportunities as state governments remain committed to renewable power standards, primarily benefitting ARB Industrial and to a lesser degree our PES group.

· Transportation infrastructure construction opportunities — We believe that passing of longer term highway funding by the federal government in 2015, results of the 2016 federal election, and voter approval of a highway funding proposition 7 in Texas will provide increased opportunity for our heavy civil and highway groups especially in Texas.  We expect that opportunities in the Louisiana market may improve but will remain at depressed levels except for specific programs.  This market primarily impacts the operations of JCG.  Of course, if we complete the divestiture of the Texas heavy civil business unit, we would not benefit from the Texas infrastructure market opportunities.

· Liquefied Natural Gas Facilities—We believe the LNG on-purpose opportunities for rail, barge, and other transportation needs will continue to grow, although such growth may be at a slow pace.  This market will primarily impact our OnQuest and PES groups.  We further believe the existing large scale LNG export facilities currently being planned will require services that will benefit our PES and JCG groups for field services.

Please note that our 2017 outlook and 2017 financial results could be adversely impacted by many factors including those discussed in Item 1A “Risk Factors” in this Annual Report on Form 10-K.  This “2017 Outlook” consists of forward-looking statements and should be read in conjunction with the cautions about forward looking statements found at the beginning of this Annual Report on Form 10-K.

Backlog

For companies in the construction industry, backlog can be an indicator of future revenue streams.  Different companies define and calculate backlog in different manners.  We define backlog as a combination of: (1) anticipated revenue from the uncompleted portions of existing contracts for which we have known revenue amounts for fixed price and fixed unit price contracts (“Fixed Backlog”), and (2) the estimated revenues on MSA’s for the next four quarters (“MSA Backlog”).  We normally do not include time-and-equipment, time-and-materials and cost reimbursable plus fee contracts in the calculation of backlog, since their final revenue amount is difficult to estimate in advance.  We will include these types of contracts in backlog if the customer specifies an anticipated revenue amount.

The two components of backlog, Fixed Backlog and MSA Backlog, are detailed below.

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Fixed Backlog

Fixed Backlog by reporting segment and the changes in Fixed Backlog for the periods ending December 31, 2016, 2015 and 2014 were as follows, in millions:

	Beginning Fixed						Ending Fixed		Revenue		Total Revenue
	Backlog at		Contract		Revenue		Backlog		Recognized from		for 12 Months
	December 31,		Additions to		Recognized from		at December 31,		Non-Fixed Backlog		ended December 31,
Reportable Segment	2015		Fixed Backlog		Fixed Backlog		2016		Projects		2016
West	$	577.1	$	1,201.6	$	507.2	$	1,271.5	$	534.2	$	1,041.4
East		752.3		395.0		506.6		640.7		14.6		521.2
Energy		187.8		422.0		395.6		214.2		38.7		434.3
Total	$	1,517.2	$	2,018.6	$	1,409.4	$	2,126.4	$	587.5	$	1,996.9

	Beginning Fixed						Ending Fixed		Revenue		Total Revenue
	Backlog at		Contract		Revenue		Backlog		Recognized from		for 12 months
	December 31,		Additions to		Recognized from		at December 31,		Non-Fixed Backlog		ended December 31,
Reportable Segment	2014		Fixed Backlog		Fixed Backlog		2015		Projects		2015
West	$	237.3	$	751.2	$	411.4	$	577.1	$	502.2	$	913.6
East		1,009.7		342.7		600.1		752.3		12.1		612.2
Energy		301.0		232.0		345.2		187.8		58.4		403.6
Total	$	1,548.0	$	1,325.9	$	1,356.7	$	1,517.2	$	572.7	$	1,929.4

	Beginning Fixed						Ending Fixed		Revenue		Total Revenue
	Backlog at		Contract		Revenue		Backlog		Recognized from		for 12 months
	December 31,		Additions to		Recognized from		at December 31,		Non-Fixed Backlog		ended December 31,
Reportable Segment	2013		Fixed Backlog		Fixed Backlog		2014		Projects		2014
West	$	224.6	$	576.7	$	564.0	$	237.3	$	400.1	$	964.1
East		1,017.7		468.8		476.8		1,009.7		13.1		489.9
Energy		240.7		594.7		534.4		301.0		97.8		632.2
Total	$	1,483.0	$	1,640.2	$	1,575.2	$	1,548.0	$	511.0	$	2,086.2

Revenues recognized from non-Fixed Backlog projects shown above are generated by MSA projects and projects completed under time-and-equipment, time-and-materials and cost-reimbursable-plus-fee contracts or are revenue from the sale of construction materials, such as rock or asphalt to outside third parties or sales of water services in the case of BW Primoris.

At December 31, 2016, our total Fixed Backlog was $2.13 billion, representing an increase of $609.2 million, or 40.1%, from $1.52 billion as of December 31, 2015.

During the third quarter 2016, Spring Ridge Constructors, LLC (“Spring Ridge”), a joint venture of which Rockford is a 25% partner, signed a contract with Atlantic Coast Pipeline, LLC for an approximately 600 mile pipeline in Virginia and North Carolina.  While Rockford has not completed its contracts with Spring Ridge, an estimated amount of $680 million has been included in the fixed backlog amount.  Rockford construction work is expected to begin in 2018. 

At December 31, 2016, backlog for the JCG Texas heavy civil division totaling $390 million was included in the total Fixed Backlog.

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MSA Backlog

The following table outlines historical MSA revenues for the twelve months ending December 31, 2016, 2015 and 2014 ($ in millions):

Year:	MSA Revenues
2014	502.0
2015	565.1
2016	576.2

MSA Backlog includes anticipated MSA revenues for the next twelve months.  We estimate MSA revenues based on historical trends, anticipated seasonal impacts and estimates of customer demand based on information from our customers.

The following table shows our estimated MSA Backlog at December 31, 2016, 2015 and 2014 by reportable segment (in millions):

	MSA Backlog		MSA Backlog		MSA Backlog
	at December 31,		at December 31,		at December 31,
Reportable Segment:	2016		2015		2014
West	$	615.3	$	500.2	$	396.1
East		21.0		4.0		3.4
Energy		35.2		66.5		45.4
Total	$	671.5	$	570.7	$	444.9

Total Backlog

The following table shows total backlog (Fixed Backlog plus MSA Backlog), by reportable segment at December 31, 2016, 2015 and 2014 (in millions):

	Total Backlog		Total Backlog		Total Backlog
	at December 31,		at December 31,		at December 31,
Reportable Segment:	2016		2015		2014
West	$	1,886.8	$	1,077.3	$	633.4
East		661.7		756.3		1,013.1
Energy		249.4		254.3		346.4
Total	$	2,797.9	$	2,087.9	$	1,992.9

We expect that during 2017, we will recognize as revenue approximately 58% of the West segment total backlog at December 31, 2016 approximately 70% of the East segment backlog and approximately 100% of the Energy segment backlog.

Backlog should not be considered a comprehensive indicator of future revenues, as a percentage of our revenues are derived from projects that are not part of a backlog calculation.  The backlog estimates include amounts from estimated MSA revenues, but our customers are not contractually obligated to purchase an amount of services from us under the MSAs.  Any of our contracts, MSA, fixed price or fixed unit price, may be terminated by our customers on relatively short notice. In the event of a project cancellation, we may be reimbursed for certain costs, but typically we have no contractual right to the total revenues reflected in backlog.  Projects may remain in backlog for extended periods of time as a result of customer delays, regulatory requirements or project specific issues.  Future revenues from projects completed under time-and-equipment, time-and-materials and cost-reimbursable-plus-fee contracts may not be included in our estimated backlog amount.

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Effects of Inflation and Changing Prices

Our operations are affected by increases in prices, whether caused by inflation or other economic factors. We attempt to recover anticipated increases in the cost of labor, equipment, fuel and materials through price escalation provisions in certain major contracts or by considering the estimated effect of such increases when bidding or pricing new work or by entering into back-to-back contracts with suppliers and subcontractors.

ITEM 7A.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

In the ordinary course of business, we are exposed to risks related to market conditions. These risks primarily include fluctuations in foreign currency exchange rates, interest rates and commodity prices. We may seek to manage these risks through the use of financial derivative instruments. These instruments may include foreign currency exchange contracts and interest rate swaps.

We do not execute transactions or use financial derivative instruments for trading or speculative purposes. We enter into transactions with counter parties that are generally financial institutions in a matter to limit significant exposure with any one party.

The carrying amounts for cash and cash equivalents, accounts receivable, short term investments, short-term debt, accounts payable and accrued liabilities shown in the consolidated balance sheets approximate fair value at December 31, 2016 and 2015, due to the generally short maturities of these items. At December 31, 2016 and 2015, we did not hold any short term investments.  At December 31, 2014, we held short term investments which were primarily in four to six month U.S. Treasury bills with various financial institutions that are backed by the federal government.  We typically hold our investments to maturity.

At December 31, 2016, all of our long-term debt was subject to fixed interest rates.

At December 31, 2016 and 2015, we had no derivative financial instruments.

ITEM 8.FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Our financial statements, supplementary financial data and financial statement schedules are included in a separate section at the end of this Annual Report on Form 10-K. The financial statements, supplementary data and schedules are listed in the index on page F-1 of this Annual Report on Form 10-K and are incorporated herein by reference.

ITEM 9.CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), as appropriate, to allow for timely decisions regarding required disclosure. In designing and evaluating our disclosure controls and procedures, our management recognizes that any system of controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, as ours are designed to do, and our management necessarily is required to apply its judgment in evaluating the cost-benefit relationship of possible controls

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and procedures. The Company’s disclosure controls and procedures are designed to provide reasonable assurance of achieving their stated objectives.

In connection with the preparation of this Annual Report on Form 10-K, as of December 31, 2016, an evaluation was performed under the supervision and with the participation of our management, including our CEO and CFO, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act). Based on that evaluation, our CEO and CFO concluded that our disclosure controls and procedures were effective at the reasonable assurance level to ensure that the information required to be disclosed by us in our reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and to ensure that the information required to be disclosed by us in reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our CEO and CFO, as appropriate, to allow timely decisions regarding required disclosures.

Management’s Annual Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Our internal control over financial reporting includes those policies and procedures that:

(i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;

(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and

(iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Under the supervision and with the participation of our management, including our CEO and CFO, our management conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2016. Management based this assessment on the framework in “Internal Control–Integrated Framework (2013)” issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on that evaluation, our CEO and CFO concluded that our internal control over financial reporting was effective as of December 31, 2016.  Management reviewed the results of its assessment with the Audit Committee of our Board of Directors. 

Independent Registered Public Accounting Firm Report

Moss Adams LLP, the independent registered public accounting firm that audited our consolidated financial statements included in this Annual Report on Form 10-K, has issued a report on the Company’s internal control over financial reporting as of December 31, 2016. The report, which expresses an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting as of December 31, 2016, is included in “Item 8.  Financial Statements and Supplemental Data” under the heading “Report of Independent Registered Public Accounting Firm.”

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ITEM 9B.OTHER INFORMATION

None.

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PART III

ITEM 10.DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Directors

Information relating to the officers and directors of our company, other corporate governance matters and other information required under this Item 10 is set forth in our Proxy Statement for our 2017 Annual Meeting of Stockholders (“Proxy Statement”) which will be filed with the SEC no later than April 12, 2017, and the information is incorporated herein by reference. The following is a listing of certain information regarding our executive officers.

Executive Officers

David King.  Mr. King has served as our President and Chief Executive Officer since August 2015 and has served as one of our Directors since May 2015.  Mr. King directs strategy, establishes goals and oversees our operation.  Prior to that, Mr. King was our Executive Vice President, Chief Operating Officer since March 2014.  Prior to joining Primoris, Mr. King spent several years at CB&I, most recently as President of Lummus Engineered Products.  From 2010 to 2013 he was President of CB&I Project Engineering & Construction based in The Hague, Netherlands responsible for P&L operations worldwide.  From 2009 to 2010 he was Group Vice President for Downstream Operations for CB&I Lummus located in The Woodlands, Texas.   Mr. King also managed and helped establish the Global Services Group for CB&I in 2008 to 2009.  He has extensive EPF&C industry experience in energy-related projects, LNG, offshore, pipelines, refining, petrochemicals, gas processing, oil sands, synthesis gas and gas-to-liquids. Mr. King received his bachelor’s degree in Mechanical Engineering from Texas Tech University, an MBA from the University of Texas, Tyler, and an Advanced Executive Management Degree from Insead University in Fontainebleau, France.  Mr. King is 64 years old.

Peter J. Moerbeek.  Mr. Moerbeek was named as our Executive Vice President, Chief Financial Officer effective February 6, 2009. He has served as one of our Directors since July 2008. Previously, he served as Chief Executive Officer of a private-equity funded company engaged in the acquisition and operation of water and wastewater utilities. As a founder of the company from June 2006 to February 2007, he was involved in raising equity capital for the company. From August 1995 to June 2006, Mr. Moerbeek held several positions with publicly traded Southwest Water Company, including a Director from 2001 to 2006; President and Chief Operating Officer from 2004 to 2006; President of the Services Group from 1997 to 2006; Secretary from 1995 to 2004; and Chief Financial Officer from 1995 to 2002. From 1989 to 2005, Mr. Moerbeek was the Chief Financial and Operations Officer for publicly-traded Pico Products, Inc. Mr. Moerbeek received a B.S. in Electrical Engineering in 1969 and a MBA in 1971 from the University of Washington. Mr. Moerbeek is 69 years old.

Thomas E. McCormick.  Mr. McCormick was named as our Chief Operating Officer, effective April 7, 2016.  He has extensive engineering & construction industry experience in projects for many energy-related end markets, including pipelines, refining, petrochemicals, gas processing, LNG, oil sands and industrial gases.  Since February 2007, he has held a variety of executive positions with CB&I.  Such positions included President for Oil & Gas, Senior Vice President – Gas Processing & Oil Sands, Global Vice President –Downstream Operations, and Vice President Operations. Prior to 2007, Mr. McCormick worked for more than 17 years at BE&K Engineering on a variety of heavy civil projects. Mr. McCormick has a Bachelor of Science degree in Civil Engineering from Florida State University and an Advanced Executive Management Degree from Insead University in Fontainebleau, France.  Mr. McCormick is 54 years old.

John M. Perisich.  Mr. Perisich has served as our Executive Vice President and General Counsel effective May 3, 2013.  He previously served as our Senior Vice President and General Counsel from February 2006 and prior to that, was Vice President and General Counsel of Primoris. Mr. Perisich joined ARB in 1995. Prior to joining ARB, Mr. Perisich practiced law at Klein, Wegis, a full service law firm based in Bakersfield, California. He received a B.A. degree from UCLA in 1987, and a J.D. from the University of Santa Clara in 1991. Mr. Perisich is 52 years old.

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ITEM 11.EXECUTIVE COMPENSATION

Information required under this Item 11 is set forth in our Proxy Statement and is incorporated herein by reference, except for the information set forth under the caption, “Compensation Committee Report” of our Proxy Statement, which specifically is not incorporated herein by reference.

ITEM 12.SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

Information required under this Item 12 is set forth in our Proxy Statement and is incorporated herein by reference.

ITEM 13.CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

The information required under this Item 13 is set forth in our Proxy Statement and is incorporated herein by reference.

ITEM 14.PRINCIPAL ACCOUNTING FEES AND SERVICES

Information regarding principal accounting fees and services and other information required under this Item 14 is set forth in our Proxy Statement and is incorporated herein by reference.

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PART IV

ITEM 15.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES

(A)We have filed the following documents as part of this Report:

1. Consolidated Balance Sheets of Primoris Services Corporation and subsidiaries as of December 31, 2016 and 2015 and the related Consolidated Statements of Income, Stockholders’ Equity and Cash Flows for the years ended December 31, 2016, 2015 and 2014.

2. Report of Moss Adams LLP, independent registered public accounting firm, related to the consolidated financial statements in part (A)(1) above.

3. Notes to the consolidated financial statements in part (A)(1) above.

4. List of exhibits required by Item 601 of Regulation S-K.  See part (B) below.

(B)        The following is a complete list of exhibits filed as part of this Report, some of which are incorporated herein by reference from certain other of our reports, registration statements and other filings with the SEC, as referenced below:

Exhibit No.	Description
Exhibit 2.1	Agreement and Plan of Merger, dated February 19, 2008, by and among Rhapsody Acquisition Corp., Primoris Corporation and certain stockholders of Primoris Corporation (1)
Exhibit 2.2	First Amendment to Agreement and Plan of Merger, dated May 15, 2008, by and among Rhapsody Acquisition Corp., Primoris Corporation and certain stockholders of Primoris Corporation (2)
Exhibit 2.3	Membership Interest Purchase Agreement, dated July 1, 2010, by and between Primoris Services Corporation, Kealine Holdings LLC and WesPac Energy LLC (3)
Exhibit 2.4	Agreement and Plan of Merger, dated November 8, 2010, by and among Primoris Services Corporation, a Delaware corporation, Primoris Merger Sub, Inc., a Delaware corporation and a wholly-owned subsidiary of Primoris Services Corporation, Rockford Holdings Corporation, a privately-held Delaware corporation, all of the stockholders of Rockford Holdings Corporation and Christopher S. Wallace as representative of the stockholders of Rockford Holdings Corporation (4)
Exhibit 2.5	Stock Purchase Agreement, dated November 8, 2012, by and among Primoris Services Corporation, a Delaware corporation, Q3 Contracting Inc., a privately-held Minnesota corporation, all of the shareholders of Q3 Contracting Inc. and Jay P. Osborn as representative of the shareholders of Q3 Contracting Inc. (5)
Exhibit 3.1	Fourth Amended and Restated Certificate of Incorporation of Primoris Services Corporation, dated May 21, 2009 (6)
Exhibit 3.2	Amended and Restated Bylaws of Primoris Services Corporation (7)
Exhibit 3.3	Certificate of Designations, Powers, Preferences and Rights of the Series A Non-Voting Contingent Convertible Preferred Stock of Primoris Services Corporation, dated December 14, 2009 (8)

63

Exhibit No.	Description
Exhibit 4.1	Specimen Common Stock Certificate (9)
Exhibit 10.1	2008 Long-Term Equity Incentive Plan (#)(10)
Exhibit 10.2	2013 Equity Incentive Plan (#)(11)
Exhibit 10.3	Third Amendment to Loan and Security Agreement, dated March 3, 2011, by and among Primoris Services Corporation and The PrivateBank and Trust Company (13)
Exhibit 10.4	Fourth Amendment to Loan and Security Agreement, dated October 20, 2011, by and among Primoris Services Corporation and The PrivateBank and Trust Company (14)
Exhibit 10.5	Credit Agreement, dated September 23, 2011, by and among Primoris Services Corporation and Bank of the West (15)
Exhibit 10.6	Fifth Amendment to Loan and Security Agreement, dated November 28, 2011, by and among Primoris Services Corporation and The PrivateBank and Trust Company (15)
Exhibit 10.7	Loan and Security Agreement, dated November 30, 2011, by and among Stellaris LLC, James Construction Group LLC and JPMorgan Chase Bank, N.A. (15)
Exhibit 10.8	Business Purpose Promissory Note, dated November 30, 2011, by and among Stellaris LLC, James Construction Group LLC and JPMorgan Chase Bank, N.A. (15)
Exhibit 10.9	Schedule A-1 Equipment Collateral, dated November 30, 2011, by and between Stellaris LLC, James Construction Group LLC and JPMorgan Chase Bank, N.A. (15)
Exhibit 10.10	Amendment No. 3 to the Master Loan and Security Agreement Loan and Security Agreement, dated November 30, 2011, by and among James Construction Group LLC, Stellaris LLC, ARB Inc. and Fifth Third Bank (15)
Exhibit 10.11	Promissory Note, dated November 30, 2011, by and among James Construction Group LLC, Stellaris LLC, ARB Inc. and Fifth Third Bank (15)
Exhibit 10.12	Master Loan and Security Agreement, dated December 21, 2011, by and among ARB, Inc. and Banc of America Leasing & Capital, LLC (16)
Exhibit 10.13	Equipment Security Note, dated December 21, 2011, by and among ARB, Inc., Stellaris LLC, Rockford Corporation and Banc of America Leasing & Capital, LLC (16)
Exhibit 10.14	Addendum to Master Loan and Security Agreement, dated December 21, 2011, by and among ARB, Inc., Stellaris LLC, Rockford Corporation and Banc of America Leasing & Capital, LLC (16)

64

Exhibit No.	Description
Exhibit 10.15	Guaranty, dated December 21, 2011, by and among Primoris Services Corporation and Banc of America Leasing & Capital, LLC (16)
Exhibit 10.16	General Indemnity Agreement, dated January 24, 2012, by and among Primoris Services Corporation, ARB, Inc. ARB Structures, Inc., OnQuest, Inc., OnQuest Heaters, Inc. Born Heaters Canada ULC, Cardinal Contractors, Inc., Cardinal Southeast, Inc., Stellaris, LLC, GML Coatings, LLC, James Construction Group, LLC, Juniper Rock Corporation, Rockford Corporation; Alaska Continental Pipeline, Inc., All Day Electric Company, Inc. Primoris Renewables, LLC, Rockford Pipelines Canada, Inc. and Chubb Group of Insurance Companies (17)
Exhibit 10.17	Fifth Amendment to Loan and Security Agreement, dated April 4, 2012, by and among Primoris Services Corporation and The PrivateBank and Trust Company (18)
Exhibit 10.18	Equipment Security Note, dated June 20, 2012, by and among Stellaris, LLC, James Construction Group, LLC and Banc of America Leasing & Capital, LLC (19)
Exhibit 10.19	Amendment Number 1 to Master Loan and Security Agreement, dated June 20, 2012, by and among Stellaris, LLC, James Construction Group, LLC and Banc of America Leasing & Capital, LLC (19)
Exhibit 10.20	Seventh Amendment to Loan and Security Agreement, dated July 18, 2012, by and among Primoris Services Corporation and The PrivateBank and Trust Company (21)
Exhibit 10.21	Eighth Amendment to Loan and Security Agreement, dated October 29, 2012, by and among Primoris Services Corporation and The PrivateBank and Trust Company (21)
Exhibit 10.22	Master Loan and Security Agreement, dated November 1, 2012, by and between Stellaris, LLC and Banc of America Leasing & Capital, LLC (22)
Exhibit 10.23	Amendment to Master Loan and Security Agreement, dated November 7, 2012, by and among Stellaris, LLC, James Construction Group, LLC, Miller Springs Materials, LLC, Primoris Energy Services Corporation and Banc of America Leasing & Capital, LLC (22)
Exhibit 10.24	Equipment Security Note, dated November 1, 2012, by and among Stellaris, LLC, James Construction Group, LLC, Miller Springs Materials, LLC, Primoris Energy Services Corporation and Banc of America Leasing & Capital, LLC (22)
Exhibit 10.25	Loan Agreement, dated December 13, 2012, by and between Stellaris, LLC and Q3 Contracting, Inc. and RBS Asset Finance, Inc. (23)
Exhibit 10.26	Note, dated December 13, 2012, by and among Stellaris, LLC and Q3 Contracting, Inc. and RBS Asset Finance, Inc. (23)
Exhibit 10.27	Guaranty, dated December 13, 2012, by and among Primoris Services Corporation and RBS Asset Finance, Inc. (23)

65

Exhibit No.	Description
Exhibit 10.28	Credit Agreement, dated December 28, 2012, by and among Primoris Services Corporation and The PrivateBank and Trust Company, The Bank of the West and IBERIABANK Corporation (24)
Exhibit 10.29	Note Purchase and Private Shelf Agreement, dated December 28, 2012, by and among Primoris Services Corporation and Prudential Investment Management, Inc. and certain Prudential affiliates (24)
Exhibit 10.30	Master Loan and Security Agreement, dated August 31, 2009, by and between Stellaris, LLC and Fifth Third Bank (12)
Exhibit 10.31	Promissory Note, dated June 11, 2013, by and among Stellaris, LLC and Fifth Third Bank pursuant to the Master Loan and Security Agreement dated August 31, 2009 (25)
Exhibit 10.32	Master Loan and Security Agreement, dated June 13, 2013, by and among Stellaris, LLC, James Construction Group, LLC, Rockford Corporation and Wells Fargo Equipment Finance, Inc. and Loan Schedules, dated June 13, 2013 (25)
Exhibit 10.33	Confirmation of Acceptance Agreement, dated June 13, 2013, by and among Primoris Services Corporation and Prudential Investment Management, Inc. and certain Prudential affiliates pursuant to the Note Purchase and Private Shelf Agreement, dated December 28, 2012 and five 3.85% Senior Secured Notes, Series B, due July 25, 2023 (25)
Exhibit 10.34	Loan Agreement, dated September 17, 2013, by and among Stellaris, LLC, James Construction Group LLC and Rockford Corporation and RBS Asset Finance, Inc. (26)
Exhibit 10.35	Loan and Security Agreement, dated September 20, 2013, by and between PNC Equipment Finance, LLC and Stellaris LLC and Q3 Contracting, Inc. (26)
Exhibit 10.36	Contribution Agreement, dated as of September 30, 2013, by and among WesPac Energy LLC, Kealine Holdings LLC, Primoris Services Corporation and WesPac Midstream LLC and Highstar WesPac Main Interco LLC and Highstar WesPac Prism/IV-A Interco LLC (26)
Exhibit 10.37	Master Loan and Security Agreement, dated December 6, 2013 by and between Stellaris, LLC and Banc of America Leasing & Capital, LLC (27)
Exhibit 10.38	Equipment Security Note, dated as of December 6, 2013, by and between Stellaris, LLC, ARB, Inc. James Construction Group, LLC, and Rockford Corporation and Banc of America Leasing & Capital, LLC (27)
Exhibit 10.39	Master Security Agreement, dated September 18, 2014, by and among Primoris Services Corporation, Rockford Corporation and Key Equipment Finance, a division of KeyBank National Association. (28)
Exhibit 10.40	Promissory Note and Collateral Schedule No. 1, dated September 18, 2014, by and between Primoris Energy Services Corporation, Rockford Corporation and Key Equipment Finance, a division of KeyBank National Association. (28)

66

Exhibit No.	Description
Exhibit 10.41	Master Loan and Security Agreement, dated September 19, 2014, by and among Fifth Third Bank and Primoris Services Corporation, James Construction Group, LLC and Q3 Contracting, Inc. (28)
Exhibit 10.42	Amendment No. 1 to Master Loan and Security Agreement, dated as of September 23, 2014, by and among Fifth Third Bank and Stellaris LLC. (28)
Exhibit 10.43	Promissory Note, dated September 19, 2014, by and among Primoris Services Corporation, James Construction Group, LLC, Q3 Contracting, Inc. and Fifth Third Bank. (28)
Exhibit 10.44	Third Amendment to Credit Agreement, dated as of December 12, 2014, by and among Primoris Services Corporation and The PrivateBank and Trust Company, The Bank of the West, IBERIABANK Corporation, Branch Banking and Trust Company and UMB Bank, N.A. (29)
Exhibit 10.45	Waiver and Amendment Agreement, dated as of April 30, 2014, by and among Primoris Services Corporation and The PrivateBank and Trust Company and other financial institutions party to the Credit Agreement. (29)
Exhibit 10.46	Second Amendment and Waiver Agreement, dated as of August 25, 2014, by and among Primoris Services Corporation and The PrivateBank and Trust Company and other financial institutions party to the Credit Agreement. (29)
Exhibit 10.47	Agreement for Services, dated August 1, 2015, by and among Primoris Services Corporation and Brian Pratt. (#) (31)
Exhibit 10.48	Employment Agreement, dated August 1, 2015, by and among Primoris Services Corporation and David L. King. (#) (31)
Exhibit 10.49	Third Letter Amendment to Shelf Agreement, dated as of June 3, 2015, by and among Primoris Services Corporation and Prudential Investment Management, Inc. and each other Holder (as defined in the Shelf Agreement). (32)
Exhibit 10.50	Employment Agreement, dated April 5, 2016, by and among Primoris Services Corporation and Thomas McCormick. (#) (33)
Exhibit 14.1	Code of Ethics and Business Conduct (30)
Exhibit 21.1	Subsidiaries and equity investments of Primoris Services Corporation (*)
Exhibit 23.1	Consent of Moss Adams LLP (*)
Exhibit 31.1	Certification of chief executive officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (*)

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Exhibit No.	Description
Exhibit 31.2	Certification of chief financial officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (*)
Exhibit 32.1	Certification of chief executive officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (*)
Exhibit 32.2	Certification of chief financial officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (*)
Exhibit 101 INS	XBRL Instance Document (*)
Exhibit 101 SCH	XBRL Taxonomy Extension Schema Document (*)
Exhibit 101 CAL	XBRL Taxonomy Extension Calculation Linkbase Document (*)
Exhibit 101 LAB	XBRL Taxonomy Extension Label Linkbase Document (*)
Exhibit 101 PRE	XBRL Taxonomy Extension Presentation Linkbase Document (*)
Exhibit 101 DEF	XBRL Taxonomy Extension Definition Linkbase Document (*)

(#)Management contract or compensatory plan, contract or arrangement.

(*)Filed herewith.

(1)	Filed as an exhibit to our Current Report on Form 8-K, as filed with the SEC on February 20, 2008, and such exhibit is incorporated herein by reference.
(2)	Filed as an exhibit to our Registration Statement on Form S-4/A (Amendment No. 3) (File No. 333-150343), as filed with the SEC on July 1, 2008, and such exhibit is incorporated herein by reference.
(3)	Filed as an exhibit to our Current Report on Form 8-K, as filed with the SEC on July 8, 2010, and such exhibit is incorporated herein by reference.
(4)	Filed as an exhibit to our Current Report on Form 8-K, as filed with the SEC on November 12, 2010, and such exhibit is incorporated herein by reference.
(5)	Filed as an exhibit to our Current Report on Form 8-K, as filed with the SEC on November 15, 2012, and such exhibit is incorporated herein by reference.
(6)	Filed as an exhibit to our Quarterly Report on Form 10-Q, as filed with the SEC on August 12, 2009, and such exhibit is incorporated herein by reference.
(7)	Filed as an exhibit to our Current Report on Form 8-K, as filed with the SEC on August 6, 2008, and such exhibit is incorporated herein by reference.
(8)	Filed as exhibit to our Current Report on Form 8-K, as filed with the SEC on December 17, 2009, and such exhibit is incorporated herein by reference.
(9)	Filed as an exhibit to our Registration Statement on Form S-1 (File No. 333-134694), as filed with the SEC on June 2, 2006, and such exhibit is incorporated herein by reference.
(10)	Attached as an annex to our Registration Statement on Form S-4/A (Amendment No. 4) (File No. 333-150343), as filed with the SEC on July 9, 2008, and such annex is incorporated herein by reference.
(11)	Attached as Appendix A to our Definitive Proxy Statement on Schedule 14A filed with the SEC on April 9, 2013, and such Appendix is incorporated herein by reference.
(12)	Filed as an exhibit to our Current Report on Form 8-K, as filed with the SEC on July 1, 2010, and such exhibit is incorporated herein by reference.
(13)	Filed as an exhibit to our Annual Report on Form 10-K, as filed with the SEC on March 16, 2011, and such exhibit is incorporated herein by reference.
(14)	Filed as an exhibit to our Current Report on Form 8-K, as filed with the SEC on October 25, 2011, and such exhibit is incorporated herein by reference.
(15)	Filed as an exhibit to our Current Report on Form 8-K, as filed with the SEC on December 14, 2011, and such exhibit is incorporated herein by reference.

68

(16)	Filed as an exhibit to our Current Report on Form 8-K, as filed with the SEC on December 30, 2011, and such exhibit is incorporated herein by reference.
(17)	Filed as an exhibit to our Annual Report on Form 10-K, as filed with the SEC on March 5, 2012, and such exhibit is incorporated herein by reference.
(18)	Filed as an exhibit to our Annual Report on Form 10-Q, as filed with the SEC on May 9, 2012, and such exhibit is incorporated herein by reference.
(19)	Filed as an exhibit to our Current Report on Form 8-K, as filed with the SEC on June 28, 2012, and such exhibit is incorporated herein by reference.
(20)	Filed as an exhibit to our Current Report on Form 8-K, as filed with the SEC on July 23, 2012, and such exhibit is incorporated herein by reference.
(21)	Filed as an exhibit to our Current Report on Form 8-K, as filed with the SEC on November 2, 2012, and such exhibit is incorporated herein by reference.
(22)	Filed as an exhibit to our Current Report on Form 8-K, as filed with the SEC on November 9, 2012, and such exhibit is incorporated herein by reference.
(23)	Filed as an exhibit to our Current Report on Form 8-K, as filed with the SEC on December 18, 2012, and such exhibit is incorporated herein by reference.
(24)	Filed as an exhibit to our Current Report on Form 8-K, as filed with the SEC on January 7, 2013, and such exhibit is incorporated herein by reference.
(25)	Filed as an exhibit to our Quarterly Report on Form 10-Q, as filed with the SEC on August 7, 2013, and such exhibit is incorporated herein by reference.
(26)	Filed as an exhibit to our Quarterly Report on Form 10-Q, as filed with the SEC on November 5, 2013, and such exhibit is incorporated herein by reference.
(27)	Filed as an exhibit to our Annual Report on Form 10-K, as filed with the SEC on March 3, 2014, and such exhibit is incorporated herein by reference.
(28)	Filed as an exhibit to our Quarterly Report on Form 10-Q, as filed with the SEC on November 7, 2014, and such exhibit is incorporated herein by reference.
(29)	Filed as an exhibit to our Current Report on Form 8-K, as filed with the SEC on December 18, 2014, and such exhibit is incorporated herein by reference.
(30)	Filed as an exhibit to our Annual Report on Form 10-K, as filed with the SEC on March 11, 2010, and such exhibit is incorporated herein by reference.
(31)	Files as an exhibit to our Annual Report on Form 10-K, as filed with the SEC on February 29, 2016, and such exhibit is incorporated herein by reference.
(32)	Filed as an exhibit to our Current Report on Form 8-K, as filed with the SEC on June 9, 2015, and such exhibit is incorporated herein by reference.
(33)	Filed as an exhibit to our Current Report on Form 8-K, as filed with the SEC on April 7, 2016, and such exhibit is incorporated herein by reference.

69

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

Primoris Services Corporation (Registrant)

BY:	/s/ DAVID L. KING	BY:	/s/ PETER J. MOERBEEK
	David L. King		Peter J. Moerbeek
	President and Chief Executive Officer		Executive Vice President, Chief Financial Officer
	(Principal Executive Officer)		(Principal Financial and Accounting Officer)
Date:	February 28, 2017

Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed by the following persons on behalf of the Registrant and in the capacities indicated and on the date indicated.

BY:	/s/ BRIAN PRATT
	Brian Pratt
	Chairman of the Board of Directors
BY:	/s/ DAVID L. KING
	David L. King
	Director
BY:	/s/ PETER J. MOERBEEK
	Peter J. Moerbeek
	Director
BY:	/s/ PETER C. BROWN
	Peter C. Brown
	Director
BY:	/s/ STEPHEN C. COOK
	Stephen C. Cook
	Director
BY:	/s/ JOHN P. SCHAUERMAN
	John P. Schauerman
	Director
BY:	/s/ ROBERT A. TINSTMAN
	Robert A. Tinstman
	Director
BY:	/s/ THOMAS E. TUCKER
	Thomas E. Tucker
	Director
Date:	February 28, 2017

70

PRIMORIS SERVICES CORPORATION

INDEX TO FINANCIAL STATEMENTS

	Page
Report of Independent Registered Public Accounting Firm	F-2
Consolidated Balance Sheets as of December 31, 2016 and 2015	F-3
Consolidated Statements of Income for the Years Ended December 31, 2016, 2015 and 2014	F-4
Consolidated Statements of Stockholders’ Equity for the Years Ended December 31, 2016, 2015 and 2014	F-5
Consolidated Statements of Cash Flows for the Years Ended December 31, 2016, 2015 and 2014	F-6
Notes to Consolidated Financial Statements	F-8

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders

Primoris Services Corporation

We have audited the accompanying consolidated balance sheets of Primoris Services Corporation (the “Company”) as of December 31, 2016 and 2015, and the related consolidated statements of income, stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2016. We also have audited the Company’s internal control over financial reporting as of December 31, 2016, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control Over Financial Reporting appearing under Item 9A. Our responsibility is to express an opinion on these consolidated financial statements and an opinion on the Company’s internal control over financial reporting based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the consolidated financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall consolidated financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Primoris Services Corporation as of December 31, 2016 and 2015, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2016, in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, Primoris Services Corporation maintained, in all material respects, effective internal control over financial reporting as of December 31, 2016, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

/s/ Moss Adams LLP

Los Angeles, California

February 28, 2017

F-2

PRIMORIS SERVICES CORPORATION

CONSOLIDATED BALANCE SHEETS

(In Thousands, Except Share Amounts)

	December 31,			December 31,
	2016		2015
ASSETS
Current assets:
Cash and cash equivalents	$	135,823	$	161,122
Customer retention deposits		481		2,598
Accounts receivable, net		388,000		320,588
Costs and estimated earnings in excess of billings		138,618		116,455
Inventory and uninstalled contract materials		49,201		67,796
Prepaid expenses and other current assets		19,258		18,265
Total current assets		731,381		686,824
Property and equipment, net		277,346		283,545
Deferred tax asset - long-term		—		1,075
Intangible assets, net		32,841		36,438
Goodwill		127,226		124,161
Other long-term assets		2,004		211
Total assets	$	1,170,798	$	1,132,254
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	168,110	$	124,450
Billings in excess of costs and estimated earnings		112,606		139,875
Accrued expenses and other current liabilities		108,006		93,596
Dividends payable		2,839		2,842
Current portion of capital leases		188		974
Current portion of long-term debt		58,189		54,436
Total current liabilities		449,938		416,173
Long-term capital leases, net of current portion		15		22
Long-term debt, net of current portion		203,381		219,853
Deferred tax liabilities		9,830		—
Other long-term liabilities		9,064		12,741
Total liabilities		672,228		648,789
Commitments and contingencies
Stockholders’ equity
Common stock—$.0001 par value; 90,000,000 shares authorized; 51,576,442 and 51,676,140 issued and outstanding at December 31, 2016 and December 31, 2015		5		5
Additional paid-in capital		162,128		163,344
Retained earnings		335,218		319,899
Non-controlling interest		1,219		217
Total stockholders’ equity		498,570		483,465
Total liabilities and stockholders’ equity	$	1,170,798	$	1,132,254

See accompanying notes.

F-3

PRIMORIS SERVICES CORPORATION

CONSOLIDATED STATEMENTS OF INCOME

(In Thousands, Except Per Share Amounts)

	Year Ended December 31,
	2016		2015		2014
Revenues	$	1,996,948	$	1,929,415	$	2,086,194
Cost of revenues		1,795,641		1,709,542		1,850,154
Gross profit		201,307		219,873		236,040
Selling, general and administrative expenses		140,842		151,703		132,248
Impairment of goodwill		2,716		401		—
Operating income		57,749		67,769		103,792
Other income (expense):
Income from non-consolidated entities		—		—		5,264
Foreign exchange gain (loss)		202		(763)		374
Other income (expense)		(315)		1,723		(757)
Interest income		149		56		88
Interest expense		(8,914)		(7,688)		(6,433)
Income before provision for income taxes		48,871		61,097		102,328
Provision for income taxes		(21,146)		(23,946)		(38,646)
Net income		27,725		37,151		63,682
Less net income attributable to noncontrolling interests		(1,002)		(279)		(526)
Net income attributable to Primoris	$	26,723	$	36,872	$	63,156
Dividends per common share	$	0.22	$	0.205	$	0.15
Earnings per share:
Basic	$	0.52	$	0.71	$	1.22
Diluted	$	0.51	$	0.71	$	1.22
Weighted average common shares outstanding:
Basic		51,762		51,647		51,607
Diluted		51,989		51,798		51,747

See accompanying notes.

F-4

PRIMORIS SERVICES CORPORATION

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In Thousands, Except Share Amounts)

				Additional				Non		Total
	Common Stock			Paid-in		Retained		Controlling		Stockholders’
	Shares	Amount		Capital		Earnings		Interest		Equity
Balance, December 31, 2013	51,571,394	$	5	$	159,196	$	238,216	$	1,031	$	398,448
Net income	—		—		—		63,156		526		63,682
Issuance of shares to employees and directors	90,002		—		2,897		—		—		2,897
Amortization of Restricted Stock Units	—		—		934		—		—		934
Dividend equivalent Units accrued - Restricted Stock Units	—		—		3		(3)		—		—
Repurchase of stock	(100,000)		—		(2,844)		—		—		(2,844)
Distribution of non-controlling entities	—		—		—		—		(1,590)		(1,590)
Dividends	—		—		—		(7,741)		—		(7,741)
Balance, December 31, 2014	51,561,396	$	5	$	160,186	$	293,628	$	(33)	$	453,786
Net income	—		—		—		36,872		279		37,151
Issuance of shares to employees and directors	114,744		—		2,096		—		—		2,096
Amortization of Restricted Stock Units	—		—		1,050		—		—		1,050
Dividend equivalent Units accrued - Restricted Stock Units	—		—		12		(12)		—		—
Distribution of non-controlling entities	—		—		—		—		(29)		(29)
Dividends	—		—		—		(10,589)		—		(10,589)
Balance, December 31, 2015	51,676,140	$	5	$	163,344	$	319,899	$	217	$	483,465
Net income	—		—		—		26,723		1,002		27,725
Issuance of shares to employees and directors	108,102		—		2,133		—		—		2,133
Amortization of Restricted Stock Units	—		—		1,627		—		—		1,627
Dividend equivalent Units accrued - Restricted Stock Units	—		—		23		(23)		—		—
Repurchase of stock	(207,800)		—		(4,999)		—		—		(4,999)
Dividends	—		—		—		(11,381)		—		(11,381)
Balance, December 31, 2016	51,576,442	$	5	$	162,128	$	335,218	$	1,219	$	498,570

See accompanying notes.

F-5

PRIMORIS SERVICES CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands)

	Year Ended December 31,
	2016		2015		2014
Cash flows from operating activities:
Net income	$	27,725	$	37,151	$	63,682
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation		61,433		58,408		50,918
Amortization of intangible assets		6,597		6,793		7,504
Goodwill and intangible asset impairment		2,716		401		—
Stock-based compensation expense		1,627		1,050		934
Gain on sale of property and equipment		(4,677)		(2,116)		(1,895)
Income from non-consolidated entities		—		—		(5,264)
Net deferred tax liabilities (assets)		10,905		(7,004)		8,970
Changes in assets and liabilities:
Customer retention deposits		2,117		(2,117)		4,823
Accounts receivable		(65,806)		19,528		(29,659)
Costs and estimated earnings in excess of billings		(22,163)		(47,499)		(11,508)
Other current assets		17,665		4,949		(25,767)
Other long-term assets		(1,792)		189		72
Accounts payable		42,934		(5,086)		921
Billings in excess of costs and estimated earnings		(27,519)		(19,619)		(14,770)
Contingent earnout liabilities		—		(6,722)		(4,145)
Accrued expenses and other current liabilities		14,492		11,729		(7,354)
Other long-term liabilities		(3,677)		(1,658)		(1,361)
Net cash provided by operating activities		62,577		48,377		36,101
Cash flows from investing activities:
Purchase of property and equipment		(58,027)		(67,097)		(87,954)
Proceeds from sale of property and equipment		9,603		9,889		5,814
Purchase of short-term investments		—		—		(33,770)
Sale of short-term investments		—		30,992		21,464
Cash received for the sale of equity method investments		—		—		6,439
Cash paid for acquisitions		(10,997)		(22,302)		(14,596)
Net cash used in investing activities		(59,421)		(48,518)		(102,603)
Cash flows from financing activities:
Proceeds from issuance of long-term debt		45,000		75,278		58,519
Repayment of capital leases		(793)		(1,336)		(3,276)
Repayment of long-term debt		(57,719)		(43,927)		(35,107)
Proceeds from issuance of common stock purchased by management under long-term incentive plan		1,440		1,621		1,671
Cash distribution to non-controlling interest holder		—		(29)		(1,590)
Repurchase of common stock		(4,999)		—		(2,844)
Dividends paid		(11,384)		(9,809)		(7,483)
Net cash provided by (used in) financing activities		(28,455)		21,798		9,890
Net change in cash and cash equivalents		(25,299)		21,657		(56,612)
Cash and cash equivalents at beginning of the period		161,122		139,465		196,077
Cash and cash equivalents at end of the period	$	135,823	$	161,122	$	139,465

See accompanying notes.

F-6

PRIMORIS SERVICES CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

(In Thousands)

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

	Year Ended December 31,
	2016		2015		2014
Cash paid during the year for:
Interest	$	8,819	$	7,688	$	6,432
Income taxes, net of refunds received	$	8,624	$	18,696	$	57,613

SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND FINANCING ACTIVITIES

	Year Ended December 31,
	2016		2015		2014
	(Unaudited)
Obligations incurred for the acquisition of property and equipment	$	—	$	25	$	—
Dividends declared and not yet paid	$	2,839	$	2,842	$	2,062

See accompanying notes.

F-7

PRIMORIS SERVICES CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Dollars in thousands, except share and per share amounts

Note 1—Nature of Business

Organization and operations — Primoris Services Corporation is a holding company of various construction and product engineering subsidiaries.  The Company’s underground and directional drilling operations install, replace and repair natural gas, petroleum, telecommunications and water pipeline systems, including large diameter pipeline systems. The Company’s industrial, civil and engineering operations build and provide maintenance services to industrial facilities including power plants, petrochemical facilities, and other processing plants; construct multi-level parking structures; and engage in the construction of highways, bridges and other environmental construction activities. The Company is incorporated in the State of Delaware, and its corporate headquarters are located at 2100 McKinney Avenue, Suite 1500, Dallas, Texas 75201.

Reportable Segments —The  Company segregates its business into three reportable segments: the West Construction Services segment (“West segment”), the East Construction Services segment (“East segment”) and the Energy segment (“Energy segment”).   See Note 17 — “Reportable Segments”.

The following table lists the Company’s primary operating subsidiaries and their reportable segments:

Subsidiary	Reportable Segment
ARB, Inc. (“ARB”)	West
ARB Structures, Inc.	West
Q3 Contracting, Inc. (“Q3C”)	West
Rockford Corporation (“Rockford”)	West
Vadnais Trenchless Services, Inc. (“Vadnais”)	West
Cardinal Contractors, Inc.	East
BW Primoris, LLC (“BWP”)	East
James Construction Group, LLC (“JCG”):	East
JCG Heavy Civil Division	East
JCG Infrastructure and Maintenance Division	East
Primoris Energy Services Corporation (“PES”)	Energy
PES Pipeline Services	Energy
PES Industrial Division	Energy
OnQuest, Inc.	Energy
OnQuest Canada, ULC	Energy
Primoris Aevenia, Inc. (“Aevenia”)	Energy

The Company owned 50% of the Blythe Power Constructors joint venture (“Blythe”) created for the installation of a parabolic trough solar field and steam generation system in California, and its operations have been included as part of the West Construction Services segment.  The Company determined that in accordance with FASB Topic 810, the Company was the primary beneficiary of a variable interest entity and has consolidated the results of Blythe in its financial statements.  The project has been completed, the project warranty expired in May 2015 and dissolution of the joint venture was completed in the third quarter 2015. 

The Company owns a 50% interest in two separate joint ventures, both formed in 2015.  The Carlsbad Power Constructors joint venture (“Carlsbad”) will engineer and construct a gas-fired power generation facility and a joint venture titled “ARB Inc. & B&M Engineering Co.” (“Wilmington”) will also engineer and construct a gas-fired power generation facility.  Both projects are located in the Southern California area.  The joint venture operations are included as part of the West segment.  As a result of determining that the Company is the primary beneficiary of the two VIE’s, the results of the Carlsbad and Wilmington joint ventures are consolidated in the Company’s financial statements.  The Carlsbad project is expected to be completed in 2018 and the Wilmington project in 2018.

F-8

Financial information for the joint ventures is presented in Note 13— “Noncontrolling Interests”.

In May 2014, the Company created a wholly owned subsidiary, Vadnais Trenchless Services, Inc., a California company (“Vadnais”), which on June 5, 2014, purchased the assets of Vadnais Corporation for $6.4 million. Vadnais Corporation was a general contractor specializing in micro-tunneling based in California. The assets purchased were primarily equipment, building and land. 

During the third quarter of 2014, the Company made three small purchases totaling $8.2 million acquiring the net assets of Surber Roustabout, LLC (“Surber”), Ram-Fab, LLC (“Ram-Fab”) and Williams Testing, LLC (“Williams”). Surber and Ram-Fab operate as divisions of PES, and Williams is a division of Cardinal Contractors, Inc. Surber provides general oil and gas related construction activities in Texas; Ram-Fab is a fabricator of custom piping systems located in Arkansas; and Williams provides construction services related to sewer pipeline maintenance, rehabilitation and integrity testing in the Florida market.

On February 28, 2015, the Company acquired the net assets of Aevenia, Inc. for $22.3 million in cash, and established a new entity, Primoris Aevenia, Inc. (“Aevenia”), which operates as part of the Company’s Energy segment.  Aevenia is an energy and electrical construction company that specializes in overhead and underground line work, substations, telecom/fiber, and certain other client-specific on-demand call out services.  The majority of their work is delivered under unit-price Master Services Agreements (“MSAs”).  Aevenia has operations in Minnesota, North Dakota, South Dakota and Iowa. 

On January 29, 2016, the Company acquired the net assets of Mueller Concrete Construction Company (“Mueller”) for $4.1 million and on November 18, 2016, acquired the net assets of Northern Energy & Power (“Northern”) for $6.9 million.  Both Mueller and Northern operate as divisions of Aevenia.  See Note 4— “Business Combinations”.

Unless specifically noted otherwise, as used throughout these consolidated financial statements, “Primoris”, “the Company”, “we”, “our”, “us” or “its” refers to the business, operations and financial results of the Company and its wholly-owned subsidiaries.

Seasonality—Primoris’ results of operations are subject to quarterly variations. Most of the variation is the result of weather, particularly rain, ice and snow, which can impact the Company’s ability to perform construction services. While the majority of the Company’s work is in the southern half of the United States, these seasonal impacts affect revenues and profitability since gas and other utilities defer routine replacement and repair during their period of peak demand.  Any quarter can be affected either negatively or positively by atypical weather patterns in any part of the country.  In addition, demand for new projects tends to be lower during the early part of the year due to clients’ internal budget cycles. As a result, the Company usually experiences higher revenues and earnings in the third and fourth quarters of the year as compared to the first two quarters, with the fourth quarter revenues and earnings usually less than the third quarter revenues and earnings but higher than the second quarter revenues and earnings.

Variability—In addition to seasonality, the Company is dependent on large construction projects, which tend not to be seasonal, but can fluctuate from year to year based on general economic conditions and client requirements. Our business may be affected by declines or delays in new projects or by client project schedules.  Because of the cyclical nature of our business, the financial results for any period may fluctuate from prior periods, and the Company’s financial condition and operating results may vary from quarter-to-quarter. Results from one quarter may not be indicative of its financial condition or operating results for any other quarter or for an entire year.

Note 2—Summary of Significant Accounting Policies

Basis of presentation—The accompanying consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and the financial statement rules and regulations of the Securities and Exchange Commission (“SEC”).  References for Financial Accounting Standards Board (“FASB”) standards are made to the FASB Accounting Standards Codification (“ASC”).

F-9

Principles of consolidation—The accompanying Consolidated Financial Statements include the accounts of the Company, its wholly-owned subsidiaries and the noncontrolling interests of the Blythe, Carlsbad and Wilmington joint ventures, which are variable interest entities for which the Company is the primary beneficiary as determined under the provisions of ASC Topic 810.  All intercompany balances and transactions have been eliminated in consolidation.

Use of estimates—The preparation of the Company’s Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. As a construction contractor, the Company uses estimates for costs to complete construction projects and the contract value of construction projects.  These estimates have a direct effect on gross profit as reported in these consolidated financial statements. Actual results could materially differ from the Company’s estimates.

Operating cycle— In the accompanying consolidated balance sheets, assets and liabilities relating to long-term construction contracts (e.g. costs and estimated earnings in excess of billings, billings in excess of costs and estimated earnings) are considered current assets and current liabilities, since they are expected to be realized or liquidated in the normal course of contract completion, although completion may require more than one calendar year.

Consequently, the Company has significant working capital invested in assets that may have a liquidation period extending beyond one year. The Company has claims receivable and retention due from various customers and others that are currently in dispute, the realization of which is subject to binding arbitration, final negotiation or litigation, all of which may extend beyond one calendar year.

Cash and cash equivalents—The Company considers all highly liquid investments with an original maturity of three months or less when purchased as cash equivalents.

Short-term investments—The Company classifies as short-term investments all securities or other assets acquired which have ready marketability and can be liquidated, if necessary, within the current operating cycle and which have readily determinable fair values. Short-term investments are classified as available for sale and are recorded at fair value using the specific identification method. At December 31, 2016 and 2015, the Company had no short-term investments.  In prior years, the majority of the Company’s short-term investments were in short-term dollar-denominated bank deposits and U.S. Treasury Bills in order to provide government backing of the investments.

Customer retention deposits— Customer retention deposits consist of contract retention payments made by customers into bank escrow cash accounts as required in some state jurisdictions. Investments for these amounts are limited to highly graded U.S. and municipal government debt obligations, investment grade commercial paper and CDs, which limits credit risk on these balances. Escrow cash accounts are released to the Company by customers as projects are completed in accordance with contract terms.

Inventory and uninstalled contract materials—Inventory consists of expendable construction materials and small tools that will be used in construction projects and is valued at the lower of cost, using first-in, first-out method, or market.  Uninstalled contract materials are certain job specific materials not yet installed, primarily for highway construction projects, which are valued using the specific identification method relating the cost incurred to a specific project.  In most cases, the Company is able to invoice a state agency for the materials, but title is not passed to the state agency until the materials are installed.

Business combinations—Business combinations are accounted for using the acquisition method of accounting.  We use the fair value of the assets acquired and liabilities assumed to account for the purchase price of businesses.  The determination of fair value requires estimates and judgments of future cash flow expectations to assign fair values to the identifiable tangible and intangible assets.  GAAP provides a “measurement period” of up to one year in which to finalize all fair value estimates associated with the acquisition of a business. Most estimates are preliminary until the end of the measurement period.  During the measurement period, any material, newly discovered information that existed at

F-10

the acquisition date would be reflected as an adjustment to the initial valuations and estimates.  After the measurement date, any adjustments would be recorded as a current period income or expense. 

Goodwill and other intangible assets—The Company accounts for goodwill in accordance with ASC Topic 350 “Intangibles — Goodwill and Other”.  Under ASC Topic 350, goodwill is subject to an annual impairment test as of the first day of the fourth quarter of each year, with more frequent testing if indicators of potential impairment exist.  The impairment review is performed at the reporting unit level for those units with recorded goodwill.

During the third quarter 2016, the Company made a decision to divest its Texas heavy civil business unit, a division of JCG within the East segment.  The Company will continue to operate the division while actively seeking a buyer.  In accordance with ASC Topic 350, the event of the planned divestiture triggered an analysis of goodwill in the JCG reporting unit, resulting in a pretax, non-cash goodwill impairment charge of approximately $2.7 million.  See Note 16 — “Planned Divestiture of Texas Heavy Civil Business Unit”.  In the fourth quarter of 2015, an impairment expense of $401 was recorded relating to the goodwill attributed to Cardinal Contractors, Inc., which is part of the East Segment.  There was no impairment of goodwill for the year ended December 31, 2014.

Income tax— Current income tax expense is the amount of income taxes expected to be paid for the financial results of the current year. A deferred income tax liability or asset is established for the expected future tax consequences resulting from the differences in financial reporting and tax basis of assets and liabilities between GAAP and the tax codes. A valuation allowance is provided if it is more likely than not that some or all of the deferred tax assets will not be realized. The Company provides for uncertain tax positions when such tax positions do not meet the recognition thresholds or measurement standards as set forth in ASC Topic 740. The difference between a tax position taken or expected to be taken on the Company’s income tax returns and the benefit recognized on our financial statements is referred to as an unrecognized tax benefit.  Amounts for uncertain tax positions are adjusted in periods when new information becomes available or when positions are effectively settled. The Company recognizes accrued interest and penalties related to uncertain tax positions, if any, as a component of income tax expense.

Comprehensive income—The Company accounts for comprehensive income in accordance with ASC Topic 220 “Comprehensive Income”, which specifies the computation, presentation and disclosure requirements for comprehensive income (loss). During the reported periods, the Company had no material other comprehensive income.

Foreign operations—At December 31, 2016, the Company had operations in Canada with assets aggregating approximately $11,823, compared to $14,111 at December 31, 2015.  The Canadian operations had revenues of $11,158 and income before tax of $774 for the year ended December 31, 2016; revenues of $17,763 and income before tax of $252 for the year ended December 31, 2015, and revenues of $19,840 and income before tax of $3,183 for the year ended December 31, 2014.

Functional currencies and foreign currency translation— The Company uses the United States dollar as its functional currency in Canada for the Canadian operations of OnQuest Canada, as substantially all monetary transactions are made in U.S. dollars, and other significant economic facts and circumstances currently support that position. Since these factors may change, the Company periodically assesses its position with respect to the functional currency of its foreign subsidiary. Non-monetary balance sheet items and related revenue, gain, expense and loss accounts are valued using historical rates.  All other items are re-measured using the current exchange rate in effect at the balance sheet date. Foreign exchange gains of $202 in 2016, losses of $763 in 2015 and gains of $374 in 2014 are included in the “other income or expense” line of the Consolidated Statements of Income.

Partnerships and joint ventures  — As is normal in the construction industry, the Company is periodically a member of a partnership or a joint venture.  These partnerships or joint ventures are used primarily for the execution of single contracts or projects.  The Company’s ownership can vary from a small noncontrolling ownership to a significant ownership interest.  The Company evaluates each partnership or joint venture to determine whether the entity is considered a variable interest entity (“VIE”) as defined in ASC Topic 810, and if a VIE, whether the Company is the primary beneficiary of the VIE, which would require the Company to consolidate the VIE with the Company’s financial statements.  When consolidation occurs, the Company accounts for the interests of the other parties as a noncontrolling

F-11

interest and discloses the net income attributable to noncontrolling interests. See Note 13 — “Noncontrolling Interests" for further information.

Equity method of accounting— The Company accounts for its interest in an investment using the equity method of accounting per ASC Topic 323 if the Company is not the primary beneficiary of a VIE or does not have a controlling interest. The investment is recorded at cost and the carrying amount is adjusted periodically to recognize the Company’s proportionate share of income or loss, additional contributions made and dividends and capital distributions received.  The Company records the effect of any impairment or an other than temporary decrease in the value of its investment.

In the event a partially owned equity affiliate were to incur a loss and the Company’s cumulative proportionate share of the loss exceeded the carrying amount of the equity method investment, application of the equity method would be suspended and the Company’s proportionate share of further losses would not be recognized unless the Company committed to provide further financial support to the affiliate. The Company would resume application of the equity method once the affiliate became profitable and the Company’s proportionate share of the affiliate’s earnings equals the Company’s cumulative proportionate share of losses that were not recognized during the period the application of the equity method was suspended.

Cash concentration—The Company places its cash in short term U.S. Treasury bonds and certificates of deposit (“CDs”). At December 31, 2016 and 2015, the Company had cash balances of $135.8 million and $161.1 million, respectively.  At December 31, 2016, the $135.8 million of cash consisted of $100.5 million in U.S. Treasury bill funds, backed by the federal government, and the remaining $35.3 million are held in high credit quality financial institutions in order to mitigate the risk of holding funds not backed by the federal government or in excess of federally backed limits.  At December 31, 2015, the $161.1 million of cash consisted of $131.2 million held in U.S. Treasury bill funds and $29.9 million with high credit quality financial institutions.

Collective bargaining agreements—Approximately 32% of the Company’s hourly employees, primarily consisting of field laborers, were covered by collective bargaining agreements in 2016. Upon renegotiation of such agreements, the Company could be exposed to increases in hourly costs and work stoppages. Of the 84 collective bargaining agreements to which the Company is a party to, 62 will require renegotiation during 2017.  The Company has not had a work stoppage in more than 20 years.

Multiemployer plans — Various subsidiaries in the West segment are signatories to collective bargaining agreements.  These agreements require that the Company participate in and contribute to a number of multiemployer benefit plans for its union employees at rates determined by the agreements. The trustees for each multiemployer plan determine the eligibility and allocations of contributions and benefit amounts, determine the types of benefits and administer the plan. Federal law requires that if the Company were to withdraw from an agreement, it would incur a withdrawal obligation. The potential withdrawal obligation may be significant. In accordance with GAAP, any withdrawal liability would be recorded when it is probable that a liability exists and can be reasonably estimated. In November 2011, the Company withdrew from the Central States Southeast and Southwest Areas Pension Fund multiemployer pension plan, as discussed in Note 15 — “Commitments and Contingencies”.  The Company has no plans to withdraw from any other agreements.

Worker’s compensation insurance—The Company self-insures worker’s compensation claims to a certain level. The Company maintained a self-insurance reserve totaling $28,006 and $26,779 at December 31, 2016 and 2015, respectively. The amount is included in “Accrued expenses and other current liabilities” on the accompanying Consolidated Balance Sheets. Claims administration expenses are charged to current operations as incurred.  Future payments may materially differ from the reserve amounts.

Fair value of financial instruments—The consolidated financial statements include financial instruments for which the fair value may differ from amounts reflected on a historical basis. Financial instruments of the Company consist of cash, accounts receivable, short-term investments, accounts payable and certain accrued liabilities.  These financial instruments generally approximate fair market value based on their short-term nature.  The carrying value of the

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Company’s long-term debt approximates fair value based on comparison with current prevailing market rates for loans of similar risks and maturities.

The fair value of financial instruments is measured and disclosure is made in accordance with ASC Topic 820, “Fair Value Measurements and Disclosures”.

Revenue recognition

Fixed-price contracts — Historically, a substantial portion of the Company’s revenue has been generated under fixed-price contracts. For fixed-price contracts, the Company recognizes revenues primarily using the percentage-of-completion method, which may result in uneven and irregular results. In the percentage-of-completion method, estimated contract values, estimated cost at completion and total costs incurred to date are used to calculate revenues earned. Unforeseen events and circumstances can alter the estimate of the costs and potential profit associated with a particular contract. Total estimated costs, and thus contract revenues and income, can be impacted by changes in productivity, scheduling, the unit cost of labor, subcontracts, materials and equipment. Additionally, external factors such as weather, client needs, client delays in providing permits and approvals, labor availability, governmental regulation and politics may affect the progress of a project’s completion and thus the timing of revenue recognition. To the extent that original cost estimates are modified, estimated costs to complete increase, delivery schedules are delayed, or progress under a contract is otherwise impeded, cash flow, revenue recognition and profitability from a particular contract may be adversely affected.

The Company considers unapproved change orders to be contract variations for which it has customer approval for a change in scope but for which it does not have an agreed upon price change. Costs associated with unapproved change orders are included in the estimated cost to complete the contracts and are treated as project costs as incurred. The Company recognizes no margin, where revenue is equal to costs incurred, on unapproved change orders based on an estimated probability of realization from change order approval. Unapproved change orders involve the use of estimates, and it is reasonably possible that revisions to the estimated costs and recoverable amounts may be required in future reporting periods to reflect changes in estimates or final agreements with customers.

The Company considers claims to be amounts it seeks, or will seek, to collect from customers or others for customer-caused changes in contract specifications or design, or other customer-related causes of unanticipated additional contract costs, on which there is no agreement with customers on both scope and price changes. Claims can also be caused by non-customer-caused changes, such as weather delays or rain.  Claims are included in the calculation of revenues when realization is probable and amounts can be reliably determined. Revenue in excess of contract costs from claims is recognized when an agreement is reached with customers as to the value of the claims, which in some instances may not occur until after completion of work under the contract. Costs associated with claims are included in the estimated costs to complete the contracts and are treated as project costs when incurred.

Other contract forms — The Company also uses unit-price, time and material, and cost reimbursable plus fee contracts.  For these jobs, revenue is recognized primarily based on contractual terms. For example, time and material contract revenues are generally recognized on an input basis, based on labor hours incurred and on purchases made. Similarly, unit price contracts generally recognize revenue on an output based measurement such as the completion of specific units at a specified unit price.

At any time, if an estimate of total contract cost indicates a loss on a contract, the projected loss is recognized in full at that time and recognized as an “accrued loss provision” which is included in the accrued expenses and other liabilities amount on the balance sheet.  For fixed price contracts, as the percentage-of-completion method is used to calculate revenues, the accrued loss provision is changed so that the gross profit for the contract remains zero in future periods. If we anticipate that there will be a loss for unit price or cost reimbursable contracts, the projected loss is recognized in full at that time.

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Changes in job performance, job conditions and estimated profitability, including those arising from final contract settlements, may result in revisions to costs and income. These revisions are recognized in the period in which the revisions are identified.

In all forms of contracts, the Company estimates its collectability of contract amounts at the same time that it estimates project costs.  If the Company anticipates that there may be issues associated with the collectability of the full amount calculated as revenues, the Company may reduce the amount recognized as revenue to reflect the uncertainty associated with realization of the eventual cash collection.  For example, when a cost reimbursable project exceeds the client’s expected budget amount, the client frequently requests an adjustment to the final amount.  Similarly, some utility clients reserve the right to audit costs for significant periods after performance of the work.  In these situations, the Company may choose to defer recognition of revenue up to the time that the client pays for the services.

The caption “Costs and estimated earnings in excess of billings” in the Consolidated Balance Sheet represents unbilled receivables which arise when revenues have been recorded but the amount will not be billed until a later date.  Balances represent:  (a) unbilled amounts arising from the use of the percentage-of-completion method of accounting which may not be billed under the terms of the contract until a later date or project milestone, (b) incurred costs to be billed under cost reimbursement type contracts, (c) amounts arising from routine lags in billing, or (d) the revenue associated with unapproved change orders or claims when realization is probable and amounts can be reliably determined.  For those contracts in which billings exceed contract revenues recognized to date, the excess amounts are included in the caption “Billings in excess of costs and estimated earnings”.

In accordance with applicable terms of certain construction contracts, retainage amounts may be withheld by customers until completion and acceptance of the project.  Some payments of the retainage may not be received for a significant period after completion of our portion of a project.  In some jurisdictions, retainage amounts are deposited into an escrow account.

Accounts receivable—Accounts receivable and contract receivables are primarily with public and private companies and governmental agencies located in the United States. Credit terms for payment of products and services are extended to customers in the normal course of business and no interest is charged. Contract receivables are generally progress billings on projects, and as a result, are short term in nature.  Generally, the Company requires no collateral from its customers, but files statutory liens or stop notices on any construction projects when collection problems are anticipated. While a project is underway, the Company estimates its collectability of contract amounts at the same time that it estimates project costs.  As discussed in the “Revenue recognition” section above, realization of the eventual cash collection may be recognized as adjustments to the contract profitability, otherwise, the Company uses the allowance method of accounting for losses from uncollectible accounts. Under this method an allowance is provided based upon historical experience and management’s evaluation of outstanding contract receivables at the end of each year. Receivables are written off in the period deemed uncollectible. The allowance for doubtful accounts at December 31, 2016 and 2015 was $1,030 and $480, respectively.

Significant revision in contract estimate  —  Revenue recognition is based on the percentage-of-completion method for firm fixed-price contracts. Under this method, the costs incurred to date as a percentage of total estimated costs are used to calculate revenue. Total estimated costs, and thus contract revenues and margin, are impacted by many factors, which can cause significant changes in estimates during the life cycle of a project.

For projects that were in process at the end of the prior year, there can be a difference in revenues and profits that would have been recognized in the prior year, had current year estimates of costs to complete been known at the end of the prior year. 

During the year ended December 31, 2016, certain contracts had revisions in cost estimates from those projected at December 31, 2015. If the revised estimates had been applied in the prior year, the gross profit earned on these contracts would have resulted in a decrease of approximately $1,685 in gross profit in 2015. Similarly, had the revised estimates as of December 31, 2015 been applied in the prior year; the gross profit earned on these contracts

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would have resulted in an increase of approximately $1,540 in gross profit in 2014. The revised estimates for the year ended December 31, 2014 would have resulted in a gross profit increase of approximately $17,266 in the year 2013.

The following table presents the approximate financial impact of the changes in estimates that would have been reflected in the prior years 2015 and 2014 had the revised estimates been applied to the particular year.

	Net impact of change in estimate
	for the years ended December 31,
	2015		2014
Revised estimates in 2016 that impact 2015	$	(1,685)	$	—
Revised estimates in 2015 that impact 2014		(1,540)		1,540
Revised estimates in 2014 that impact 2013		—		(17,266)
Net impact to gross margin	$	(3,225)	$	(15,726)
EPS impact to year	$	(0.04)	$	(0.19)

During the third quarter 2016, the Company settled a dispute with a customer on collection of a receivable of $17.9 million, receiving $38 million in cash.  Prior to settlement, the Company recorded revenues with zero margin.  The Company recognized the settlement as a change in accounting estimate which resulted in recognizing revenues of approximately $27.5 million and gross profit of approximately $26.7 million in the third quarter of 2016.  The settlement of this project dispute was not included in the table above.

Customer concentration — The Company operates in multiple industry segments encompassing the construction of commercial, industrial and public works infrastructure assets throughout primarily the United States. Typically, the top ten customers in any one calendar year generate revenues in excess of 50% of total revenues; however, the group that comprise the top ten customers varies from year to year. See Note 18 — “Customer Concentrations” for further discussion.

Property and equipment—Property and equipment are recorded at cost and are depreciated using the straight-line method over the estimated useful lives of the related assets, usually ranging from three to thirty years. Maintenance and repairs are charged to expense as incurred. Significant renewals and betterments are capitalized. At the time of retirement or other disposition of property and equipment, the cost and accumulated depreciation are removed from the accounts, and any resulting gain or loss is reflected in operations.

The Company assesses the recoverability of property and equipment whenever events or changes in business circumstances indicate that the carrying amount of the asset may not be fully recoverable.  We perform an analysis to determine if impairment exists.  The amount of property and equipment impairment, if any, is measured based on fair value and is charged to operations in the period in which property and equipment impairment is determined by management. As of December 31, 2016 and 2015, the Company’s management has not identified any material impairment of its property and equipment.

Taxes collected from customers—Taxes collected from the Company’s customers are recorded on a net basis.

Share-based payments and stock-based compensation—In July 2008, the shareholders approved and the Company adopted the Primoris Services Corporation 2008 Long-term Incentive Equity Plan, which was replaced by the Primoris Services Corporation 2013 Long-term Incentive Equity Plan (“Equity Plan”) after approval of the shareholders and adoption by the Company on May 3, 2013.  Detailed discussion of shares issued under the Equity Plan are included in Note 21 — “Deferred Compensation Agreements and Stock-Based Compensation” and in Note 25—“Stockholders’ Equity”. Such share issuances include grants of Restricted Stock Units to executives, issuance of stock to certain senior managers and executives and issuances of stock to non-employee members of the Board of Directors.

Contingent Earnout Liabilities—As part of past acquisitions, the Company agreed to pay cash to the sellers upon meeting certain operating performance targets for specified periods subsequent to the acquisition date.  Each quarter, the Company evaluates the fair value of the estimated contingency and records a non-operating charge for the change in the fair value.  Upon meeting the target, the Company reflects the full liability on the balance sheet and records

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a charge to “Selling, general and administration expense” for the change in the fair value of the liability from the prior period.   See Note 14 — “Contingent Earnout Liabilities” for further discussion.

Recently Issued Accounting Pronouncements

In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606)”, with several clarifying updates issued during 2016. The new standard is effective for reporting periods beginning after December 15, 2017. The new standard will supersede all current revenue recognition standards and guidance.  Revenue recognition will occur when promised goods or services are transferred to customers in amounts that reflect the consideration to which the company expects to be entitled to in exchange for those goods or services. The mandatory adoption will require new qualitative and quantitative disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments, information about contract balances and performance obligations, and assets recognized from costs incurred to obtain or fulfill a contract. The standard permits two implementation approaches at the beginning of 2018: the “full retrospective method” that requires restatement of prior years and the “modified retrospective method” that requires prospective application of the new standard as a cumulative-effect adjustment. The Company expects to adopt this new standard using the modified retrospective method that will result in a cumulative-effect adjustment to retained earnings as of the date of adoption.  The adoption will only apply to customer contracts that are not substantially complete as of January 1, 2018.

The Company is currently evaluating the impact of adopting the standard on the Company’s financial position, results of operations, cash flows and related disclosures.  Although it is early in our evaluation process, we do not expect Topic 606 to have a material impact on our financial statements, though internal documentation and record keeping may be significantly impacted.  The impact to our results is not believed to be material because Topic 606 generally supports the recognition of revenue over time under the cost-to-cost method for the majority of our contracts, which is consistent with our current percentage of completion revenue recognition model.  In most of our fixed price contracts, the customer typically controls the work in process as evidenced either by contractual termination clauses or by our rights to payment for work performed to date to deliver services that do not have an alternative use to the Company. 

The Company does not expect the new standard to materially affect the total revenue that can be recognized over the life of a construction project; however, the revenue recognized on a quarterly basis during the construction period may change. We believe that Topic 606 is likely to be more impactful to certain of our lump sum projects as a result of the following potential changes from our current practices:

§ Performance obligations – Topic 606 requires a review of contracts and contract modifications to determine whether there are multiple performance obligations.  Each separate performance obligation must be accounted for as a distinct project, which could impact the timing of revenue recognition.  There is a potential that some of our contracts may have multiple performance obligations which may affect the timing of revenue recognition

§ Variable consideration – In accordance with Topic 606, revenue recognition must account for variable consideration, including potential liquidated damages and customer discounts. Currently, we assess the impact of liquidated damages as an estimated cost of the project.  The adoption of the new standard may affect the timing of the recognition of revenue for both liquidated damages and discounts. 

§ Mobilization costs – Mobilization costs typically include costs to provide labor, equipment and facilities to a project site and they are recorded currently as project costs as incurred.  Topic 606 requires these costs to be capitalized as an asset and amortized over the duration of the project.

§ Significant components – For some projects, we may purchase equipment from a third party, such as micro–LNG equipment, and install the equipment at the project site.  Under today’s standard, the Company recognizes the associated revenue and profit for the equipment.  Depending on the terms of the contract, under the new standard, revenue may be recognized without profit.   

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We do not expect Topic 606 to have a material impact on our consolidated balance sheets, though we expect certain reclassifications among financial statement accounts to align with the new standard.  We also expect significant expanded disclosures relating to revenue recognized during each period.

In August 2014, the FASB issued ASU 2014-15 “Presentation of Financial Statements — Going Concern (Subtopic 205-40)” to address the diversity in practice in determining when there is substantial doubt about an entity’s ability to continue as a going concern and when and how an entity must disclose certain relevant conditions and events. This standard requires an entity to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the entity’s ability to continue as a going concern for a period of one year after the date that the financial statements are issued (or available to be issued). The standard is effective for annual and interim periods ending after December 15, 2016. The Company adopted this guidance effective January 1, 2016.  It had no effect on the Company’s financial statements.

In February 2015, the FASB issued ASU 2015-02 “Consolidation (Topic 810): Amendment to the Consolidation Analysis”, which amends existing consolidation guidance, including amending the guidance related to determining whether an entity is a variable interest entity. The update is effective for interim and annual periods beginning after December 15, 2015. As of January 1, 2016, the Company adopted this ASU, which did not have a material impact on the Company’s consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02 “Leases (Topic 842)”. The ASU will require recognition of operating leases with lease terms of more than twelve months on the balance sheet as both assets for the rights and liabilities for the obligations created by the leases. The ASU will require disclosures that provide qualitative and quantitative information for the lease assets and liabilities recorded in the financial statements. The standard is effective for fiscal years beginning after December 15, 2018. The Company will establish procedures to adopt the ASU.

In March 2016, the FASB issued ASU 2016-09 “Compensation — Stock Compensation (Topic 718) — Improvements to Employee Share-Based Payment Accounting”. The ASU modifies the accounting for excess tax benefits and tax deficiencies associated with share-based payments by requiring that excess tax benefits or deficiencies be included in the income statement rather than in equity. Additionally, the tax benefits for dividends on share-based payment awards will also be reflected in the income statement. As a result of these modifications, the ASU requires that the tax-related cash flows resulting from share-based payments will be shown on the cash flow statement as operating activities rather than as financing activities. This guidance is effective for annual periods beginning after December 15, 2016, with early adoption permitted. Adoption of this ASU is not expected to have a material effect on the Company’s consolidated financial statements.

In January 2017, the Financial Accounting Standards Board ("FASB") issued ASU 2017-04, "Simplifying the Test for Goodwill Impairment". ASU 2017-04 removes the second step of the goodwill impairment test, which requires a hypothetical purchase price allocation. A goodwill impairment will now be the amount by which a reporting unit's carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. ASU 2017-04 is effective for interim and annual reporting periods beginning after December 15, 2019 and will be applied prospectively. Management does not expect the adoption of ASU 2017-04 to have an impact on the Company's financial position, results of operations or cash flows.

In January 2017, the FASB issued ASU 2017-01, "Business Combinations (Topic 805): Clarifying the Definition of a Business" which changes the definition of a business to assist entities with evaluating when a set of transferred assets and activities is a business. ASU 2017-01 requires an entity to evaluate if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets; if so, the set of transferred assets and activities is not a business. ASU 2017-01 is effective for interim and annual reporting periods beginning after December 15, 2017. Management does not expect the adoption of ASU 2017-01 to have any impact on the company's financial position, results of operations or cash flows.

In the first quarter of 2016, the company adopted ASU 2015-15, "Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements — Amendments to SEC Paragraphs Pursuant to Staff Announcement at June 18, 2015 EITF Meeting (SEC Update)", which clarifies the presentation and measurement of debt

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issuance costs incurred in connection with line of credit arrangements. The adoption of ASU 2015-15 did not have an impact on the company's financial position, results of operations or cash flows.

Other new pronouncements issued but not effective until after December 31, 2016 are not expected to have a material impact on the consolidated results of operations, financial position or cash flows of the Company.

Note 3—Fair Value Measurements

ASC Topic 820, “Fair Value Measurements and Disclosures” defines fair value, establishes a framework for measuring fair value in GAAP and requires certain disclosures about fair value measurements.  ASC Topic 820 addresses fair value GAAP for financial assets and financial liabilities that are re-measured and reported at fair value at each reporting period and for non-financial assets and liabilities that are re-measured and reported at fair value on a non-recurring basis.

In general, fair values determined by Level 1 inputs use quoted prices (unadjusted) in active markets for identical assets or liabilities. Fair values determined by Level 2 inputs use data points that are observable such as quoted prices, interest rates and yield curves. Fair values determined by Level 3 inputs are “unobservable data points” for the asset or liability and include situations where there is little, if any, market activity for the asset or liability.

The following table presents, for each of the fair value hierarchy levels identified under ASC Topic 820, the Company’s financial assets and certain liabilities that are required to be measured at fair value at December 31, 2016 and 2015:

			Fair Value Measurements at Reporting Date
					Significant
	Amount		Quoted Prices		Other	Significant
	Recorded		in Active Markets		Observable	Unobservable
	on Balance		for Identical Assets		Inputs	Inputs
	Sheet		(Level 1)		(Level 2)	(Level 3)
Assets as of December 31, 2016:
Cash and cash equivalents	$	135,823	$	135,823	—		—
Liabilities as of December 31, 2016:
None
Assets as of December 31, 2015:
Cash and cash equivalents	$	161,122	$	161,122	—		—
Liabilities as of December 31, 2015:
None

Other financial instruments of the Company not listed in the table consist of accounts receivable, accounts payable and certain accrued liabilities.  These financial instruments generally approximate fair value based on their short-term nature.  The carrying value of the Company’s long-term debt approximates fair value based on comparison with current prevailing market rates for loans of similar risks and maturities.

F-18

The following table provides changes to the Company’s contingent consideration liability Level 3 fair value measurements during the years ended December 31, 2016 and 2015:

	Significant Unobservable Inputs
	(Level 3)
Contingent Consideration Liability	2016		2015
Beginning balance, January 1, 2016 and 2015	$	—	$	6,922
Additions to contingent consideration liability:
Change in fair value of contingent consideration liability during year		—		125
Reductions in the contingent consideration liability:
Payment to Q3C sellers for meeting performance targets		—		(5,000)
Reduction due to non-attainment of performance target – Surber, Ram Fab and Vadnais		—		(2,047)
Ending balance, December 31, 2016 and 2015	$	—	$	—

On a quarterly basis, the Company assesses the estimated fair value of the contractual obligation to pay the contingent consideration and any changes in estimated fair value are recorded as a non-operating charge in the Company’s statement of income.  Fluctuations in the fair value of contingent consideration are impacted by two unobservable inputs, management’s estimate of the probability (which has ranged from 33% to 100%) of the acquired company meeting the contractual operating performance target and the estimated discount rate (a rate that approximates the Company’s cost of capital). Significant changes in either of those inputs in isolation would result in a different fair value measurement.  Generally, a change in the assumption of the probability of meeting the performance target is accompanied by a directionally similar change in the fair value of contingent consideration liability, whereas a change in assumption used of the estimated discount rate is accompanied by a directionally opposite change in the fair value of contingent consideration liability.

Upon meeting the target, the Company reflects the full liability on the balance sheet and records a charge to “Selling, general and administration expense” for the change in the fair value of the liability from the prior period.   See Note 14 — “Contingent Earnout Liabilities” for further discussion.

Note 4—Business Combinations

2016 Acquisitions

On January 29, 2016, the Company’s subsidiary, Aevenia, acquired certain assets and liabilities of Mueller Concrete Construction Company ("Mueller") for $4.1 million. The purchase was accounted for using the acquisition method of accounting. During the second quarter of 2016, the Company finalized its estimate of fair value of the acquired assets of Mueller, which included $2.0 million of fixed assets, $2.0 million of goodwill and $0.1 million of inventory. Mueller operates as a division of Aevenia.

On June 24, 2016, the Company’s subsidiary, Vadnais, purchased property, plant and equipment from Pipe Jacking Unlimited, Inc., consisting of specialty directional drilling and tunneling equipment for $13.4 million in cash. The Company determined this purchase did not meet the definition of a business as defined under ASC 805. The purchase price approximated the estimated fair value of the equipment. The Company believes the purchase of the equipment will aid in the Company’s pipeline construction projects and enhance the work provided to our utility clients.

On November 18, 2016, the Company’s subsidiary, Aevenia, acquired certain assets and liabilities of Northern Energy & Power ("Northern") for $6.9 million.  Northern serves the renewable energy sector with a specific focus on Solar Photovoltaic (PV) installations in the United States (projects range from 1 MW to 200 MW Direct Current - target projects are from $1.5 million to as large as $150 million).  The purchase was accounted for using the acquisition method of accounting.  The assets were purchased for their estimated fair value and consisted of $3.0 million of intangible assets, $3.8 million of goodwill and $0.1 million of net working capital.  Northern operates as a division of Aevenia.

Legal and other costs related to the acquisitions during 2016 were immaterial and were expensed during 2016.

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2015 Acquisitions

On February 28, 2015, the Company acquired the net assets of Aevenia, Inc. for $22.3 million in cash, and established a new entity, Primoris Aevenia, Inc. (“Aevenia”), which operates as part of the Company’s Energy segment.  The acquisition provides electrical construction expertise for the Company and provides a greater presence and convenient access to the central plains area of the United States.  The purchase was accounted for using the acquisition method of accounting.  The assets were purchased for their estimated fair value and included current assets, current liabilities, plant and equipment, intangible assets and goodwill.  From the acquisition date through December 31, 2015, Aevenia contributed revenues of $23,695 and gross margin of $2,378.  Costs related to the Aevenia acquisition in the amount of $151 were expensed in 2015.

The fair value of the assets acquired and the liabilities assumed for the 2016 and 2015 acquisitions is detailed in the section below “Schedule of Assets Acquired and Liabilities Assumed”.

Summary of Cash Paid for Acquisitions

The following table summarizes the cash paid for acquisitions for the years ended December 31, 2016 and 2015.

	Year ended December 31,
	2016		2015
Northern — purchased November 18, 2016	$	6,889	$	—
Mueller — purchased January 29, 2016		4,108		—
Aevenia — purchased February 28, 2015		—		22,302
Cash paid	$	10,997	$	22,302

Schedule of Assets Acquired and Liabilities Assumed

The following table summarizes the fair value of the assets acquired and the liabilities assumed at the acquisition date:

	Year ended December 31,
	2016		2015
	Acquisitions		Acquisition
Accounts receivable	$	1,606	$	2,734
Inventory and other assets		64		1,154
Prepaid expenses		—		322
Property, plant and equipment		2,133		11,173
Intangible assets		3,000		3,850
Goodwill		5,781		5,152
Accounts payable		(726)		(743)
Accrued expenses		(861)		(1,340)
Total	$	10,997	$	22,302

Identifiable Tangible Assets.  For each of the acquisitions, significant identifiable tangible assets acquired include accounts receivable, inventory and fixed assets, consisting primarily of construction equipment. The Company determined that the recorded value of accounts receivable and inventory reflect fair value of those assets. The Company estimated the fair value of fixed assets on the effective dates of the acquisitions using a market approach, based on comparable market values for similar equipment of similar condition and age.

Identifiable Intangible Assets.  The Company used the assistance of an independent third party valuation specialist to estimate the fair value of the intangible assets acquired for the acquisitions.  Based on the Company’s

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assessment, the acquired intangible asset categories, fair value and average amortization periods, generally on a straight-line basis, are as follows:

	Amortization	2016		2015
	Period	Fair Value		Fair Value
Non-compete agreements	2 to 5 years	$	—	$	1,350
Customer relationships	5 to 10 years		3,000		2,500
Total		$	3,000	$	3,850

The fair value for the non-compete agreements was valued based on a discounted “income approach” model, including estimated financial results with and without the non-compete agreements in place.  The agreements were analyzed based on the potential impact of competition that certain individuals could have on the financial results, assuming the agreements were not in place.  An estimate of the probability of competition was applied and the results were compared to a similar model assuming the agreements were in place.

The customer relationships were valued utilizing the “excess earnings method” of the income approach.  The estimated discounted cash flows associated with existing customers and projects were based on historical and market participant data. Such discounted cash flows were net of fair market returns on the various tangible and intangible assets that are necessary to realize the potential cash flows.

Goodwill. Goodwill for Northern is derived from the expected benefits of services in the renewable energy sector with a specific focus on Solar Photovoltaic (PV) installations in the United States.  Goodwill for Aevenia largely consists of expected benefits from providing electrical construction expertise for the Company and the greater presence and convenient access to the central plains area of the United States.  Goodwill also includes the value of the assembled workforce of the various acquired businesses.

The goodwill and other intangible assets associated with the acquisitions are deductible for income tax purposes over a fifteen-year period.

Supplemental Unaudited Pro Forma Information

The following pro forma information for the twelve months ended December 31, 2016 and 2015 presents the results of operations of the Company as if the 2016 acquisitions of Mueller and Northern, and the 2015 acquisition of Aevenia had occurred at the beginning of 2015.  The supplemental pro forma information has been adjusted to include:

· the pro forma impact of amortization of intangible assets and depreciation of property, plant and equipment, based on the purchase price allocations; and

· the pro forma tax effect of both the income before income taxes and the pro forma adjustments, calculated using a tax rate of 40.0% for the years ended December 31, 2016 and 2015.

The pro forma results are presented for illustrative purposes only and are not necessarily indicative of, or intended to represent, the results that would have been achieved had the various acquisitions been completed on January 1, 2015. For example, the pro forma results do not reflect any operating efficiencies and associated cost savings that the Company might have achieved with respect to the acquisitions.

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	2016		2015
	(unaudited)		(unaudited)
Revenues	$	2,026,867	$	1,963,754
Income before provision for income taxes	$	54,328	$	63,827
Net income attributable to Primoris	$	29,997	$	38,510
Weighted average common shares outstanding:
Basic		51,762		51,647
Diluted		51,989		51,798
Earnings per share:
Basic	$	0.58	$	0.75
Diluted	$	0.58	$	0.74

Note 5—Accounts Receivable

The following is a summary of accounts receivable at December 31:

	2016		2015
Contracts receivable, net of allowance for doubtful accounts of $1,030 at December 31, 2016 and $480 at December 31, 2015, respectively	$	340,871	$	288,300
Retention receivable		46,394		31,396
		387,265		319,696
Other accounts receivable		735		892
	$	388,000	$	320,588

Note 6—Costs and Estimated Earnings on Uncompleted Contracts

Costs and estimated earnings on uncompleted contracts consist of the following at December 31:

	2016		2015
Costs incurred on uncompleted contracts	$	5,391,124	$	5,413,224
Gross profit recognized		456,871		625,280
		5,847,995		6,038,504
Less: billings to date		(5,821,983)		(6,061,924)
	$	26,012	$	(23,420)

This amount is included in the accompanying consolidated balance sheets at December 31 under the following captions:

	2016		2015
Costs and estimated earnings in excess of billings	$	138,618	$	116,455
Billings in excess of cost and estimated earnings		(112,606)		(139,875)
	$	26,012	$	(23,420)

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Note 7—Property and Equipment

The following is a summary of property and equipment at December 31:

	2016		2015		Useful Life
Land and buildings	$	56,878	$	54,827	30 years
Leasehold improvements		12,147		11,071	Lease life
Office equipment		8,083		5,958	3 - 5 years
Construction equipment		370,562		340,895	3 - 7 years
Transportation equipment		98,113		93,613	3 - 18 years
		545,783		506,364
Less: accumulated depreciation and amortization		(268,437)		(222,819)
Property and equipment, net	$	277,346	$	283,545

Note 8—Equity Method Investments

WesPac Energy LLC and WesPac Midstream LLC

In 2010, the Company acquired a 50% membership interest in WesPac Energy LLC, a limited liability company that developed pipeline and terminal projects, primarily for the oil and gas industry.  This membership interest was later formed into WesPac Midstream LLC, a Delaware limited liability company.  In 2014, the Company’s ownership interest in Midstream was sold for $5,250 in cash, which was recorded as income from non-consolidated entities.

Alvah, Inc.

As part of its acquisition of Q3C in November 2012, the Company acquired a 49% membership interest in Alvah, Inc., a California corporation (“Alvah”).  Alvah was engaged in electrical contracting activities, primarily in Northern California.  On February 5, 2014, the majority owner of Alvah, in accordance with the original investment agreement, elected to purchase the Company’s minority interest effective January 1, 2014 for a cash payment of $1,189.

Note 9—Goodwill and Intangible Assets

Goodwill was recorded at our reporting units at December 31 as follows:

Reporting Unit	Segment	2016		2015
Rockford	West	$	32,079	$	32,079
Q3C	West		13,160		13,160
JCG (includes JCG Heavy Civil and Infrastructure and Maintenance divisions)	East		40,150		42,866
PES (includes PPS, PES Industrial, FSSI, Saxon and Surber divisions)	Energy		28,463		28,463
OnQuest Canada, ULC	Energy		2,441		2,441
Aevenia	Energy		10,933		5,152
Total Goodwill		$	127,226	$	124,161

The table below summarizes the intangible asset categories, amounts and the average amortization periods, which are generally on a straight-line basis, at December 31:

	Amortization
	Period	2016		2015
Tradename	3 to 10 years	$	11,754	$	15,019
Customer relationships	3 to 15 years		20,136		19,995
Non-compete agreements	2 to 5 years		951		1,424
		$	32,841	$	36,438

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Amortization expense of intangible assets was $6,597, $6,793 and $7,504 for the years ended December 31, 2016, 2015 and 2014, respectively. Estimated future amortization expense for intangible assets as of December 31, 2016 is as follows:

	Estimated
	Intangible
For the Years Ending	Amortization
December 31,	Expense
2017	$	6,673
2018		6,291
2019		6,111
2020		3,712
2021		2,805
Thereafter		7,249
	$	32,841

Note 10—Accounts Payable and Accrued Liabilities

At December 31, 2016 and 2015, accounts payable included retention amounts of approximately $10,562 and $8,375, respectively. These amounts due to subcontractors have been retained pending contract completion and customer acceptance of jobs.

The following is a summary of accrued expenses and other current liabilities at December 31:

	2016		2015
Payroll and related employee benefits	$	42,718	$	33,358
Insurance, including self-insurance reserves		42,546		44,695
Reserve for estimated losses on uncompleted contracts		12,801		7,261
Corporate income taxes and other taxes		3,368		2,447
Accrued administrative cost		3,791		1,415
Other		2,782		4,420
	$	108,006	$	93,596

Note 11—Capital Leases

The Company leases vehicles and certain equipment under capital leases. The economic substance of the leases is as a financing transaction for acquisition of the vehicles and equipment, and accordingly, the leases  are recorded as assets and liabilities. Included in depreciation expense is amortization of vehicles and equipment held under capital leases, amortized over their useful lives on a straight-line basis.

At December 31, 2016, total assets under capital leases were $2,469, accumulated depreciation was $2,332 and the net book value was $137. For 2015, total assets under capital leases were $4,874, accumulated depreciation was $4,103 and the net book value of assets was $771.

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The following is a schedule by year of the future minimum lease payments required under capital leases together with their present value as of December 31:

2017	$	188
2018		6
2019		6
2020		5
2021		—
Total minimum lease payments	$	205
Amounts representing interest		(2)
Net present value of minimum lease payments		203
Less: current portion of capital lease obligations		(188)
Long-term capital lease obligations	$	15

Note 12—Credit Arrangements

Long-term debt and credit facilities consist of the following at December 31:

Commercial Notes Payable and Mortgage Notes Payable

	2016		2015
Commercial equipment notes payable to various commercial equipment finance companies and banks with interest rates that range from 1.78% to 3.51% per annum. Monthly principal and interest payments are due in the amount of $2,521 per month until the maturity dates, which range from August 13, 2017 to December 13, 2020. The notes are secured by certain construction equipment of the Company	$	55,579	$	83,711
Commercial equipment notes payable to various commercial equipment finance companies and banks with  interest rates that range from 1.94% to 2.75% per annum. Monthly principal and interest payments are due in the amount of $999 per month until the maturity dates, which range from March 31, 2019 to September 24, 2021. The notes are secured by certain construction equipment assets of the Company		33,254		44,587
Commercial equipment notes payable to various commercial equipment finance companies and banks with interest rates that range from 2.01% to 2.19% per annum. Monthly principal and interest payments are due in the amount of $735 per month until the maturity dates, which range from March 5, 2020 to September 24, 2020. The notes are secured by certain construction equipment assets of the Company		29,702		38,041
Commercial equipment notes payable to various commercial equipment finance companies and banks with interest rates that range from 1.83% to 2.06% per annum. Monthly principal and interest payments are due in the amount of $788 per month until the maturity dates, which range from August 15, 2021 to October 14, 2021. The notes are secured by certain construction equipment assets of the Company		42,613		—
Two secured mortgage notes payable to a bank, with an interest rate of 4.3% per annum.  Monthly principal and interest payments of $60 per month began January 1, 2016 and continue until the maturity date of January 1, 2031. The notes are secured by two buildings		7,564		7,950
Senior Secured Notes payable to an insurance finance company, with interest rates that range from 3.65% to 4.60% per annum, with quarterly interest payments.  Principal repayment for the $50,000 loan starts on December 28, 2016, for the $25,000 loan on July 15, 2017 and for the second $25,000 loan on November 9, 2019, and continue until their maturity dates, which range from December 28, 2022 to November 9, 2025.  The notes are secured by the assets of the Company		92,858		100,000
		261,570		274,289
Less: current portion		(58,189)		(54,436)
Long-term debt, net of current portion	$	203,381	$	219,853

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Scheduled maturities of long-term debt are as follows:

	Year Ending
	December 31,
2017	$	58,189
2018		55,741
2019		55,246
2020		35,850
2021		22,449
Thereafter		34,095
	$	261,570

Revolving Credit Facility

As of December 31, 2016, the Company had a revolving credit facility, as amended on December 12, 2014 (the “Credit Agreement”) with The PrivateBank and Trust Company, as administrative agent (the “Administrative Agent”) and co-lead arranger, The Bank of the West, as co-lead arranger, and IBERIABANK Corporation, Branch Banking and Trust Company and UMB Bank, N.A. (the “Lenders”). The Credit Agreement is a $125 million revolving credit facility whereby the Lenders agreed to make loans on a revolving basis from time to time and to issue letters of credit for up to the $125 million committed amount. The termination date of the Credit Agreement is December 28, 2017.

The principal amount of any loans under the Credit Agreement will bear interest at either: (i) LIBOR plus an applicable margin as specified in the Credit Agreement (based on the Company’s senior debt to EBITDA ratio as that term is defined in the Credit Agreement), or (ii) the Base  Rate (which is the greater of (a) the Federal Funds Rate plus 0.5% or (b) the prime rate as announced by the Administrative Agent). Quarterly non-use fees, letter of credit fees and administrative agent fees are payable at rates specified in the Credit Agreement.

The principal amount of any loan drawn under the Credit Agreement may be prepaid in whole or in part, with a minimum prepayment of $5 million, at any time, potentially subject to make-whole provisions.

The Credit Agreement includes customary restrictive covenants for facilities of this type, as discussed below.

Commercial letters of credit outstanding were $16,182 at December 31, 2016 and $12,105 at December 31, 2015.  Other than commercial letters of credit, there were no borrowings under this line of credit during the twelve months ended December 31, 2016, and available borrowing capacity at December 31, 2016 was $108,818.

Senior Secured Notes and Shelf Agreement

On December 28, 2012, the Company entered into a $50 million Senior Secured Notes purchase (“Senior Notes”) and a $25 million private shelf agreement (the “Notes Agreement”) by and among the Company, The Prudential Investment Management, Inc. and certain Prudential affiliates (the “Noteholders”). On June 3, 2015, the Notes Agreement was amended to provide for the issuance of additional notes of up to $75 million over the next three year period ending June 3, 2018 (“Additional Senior Notes”).

The Senior Notes amount was funded on December 28, 2012. The Senior Notes are due December 28, 2022 and bear interest at an annual rate of 3.65%, paid quarterly in arrears. Annual principal payments of $7.1 million are required from December 28, 2016 through December 28, 2021 with a final payment due on December 28, 2022. The principal amount may be prepaid, with a minimum prepayment of $5 million, at any time, subject to make-whole provisions.

On July 25, 2013, the Company drew $25 million available under the Notes Agreement.  The notes are due July 25, 2023 and bear interest at an annual rate of 3.85% paid quarterly in arrears.  Seven annual principal payments of $3.6 million are required from July 25, 2017 with a final payment due on July 25, 2023.

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On November 9, 2015, the Company drew $25 million available under the Additional Senior Notes Agreement.  The notes are due November 9, 2025 and bear interest at an annual rate of 4.6% paid quarterly in arrears.  Seven annual principal payments of $3.6 million are required from November 9, 2019 with a final payment due on November 9, 2025.

Loans made under both the Credit Agreement and the Notes Agreement are secured by our assets, including, among others, our cash, inventory, goods, equipment (excluding equipment subject to permitted liens) and accounts receivable. All of our domestic subsidiaries have issued joint and several guaranties in favor of the Lenders and Noteholders for all amounts under the Credit Agreement and Notes Agreement.

Both the Credit Agreement and the Notes Agreement contain various restrictive and financial covenants including among others, minimum tangible net worth, senior debt/EBITDA ratio, debt service coverage requirements and a minimum balance for unencumbered net book value for fixed assets. In addition, the agreements include restrictions on investments, change of control provisions and provisions in the event the Company disposes more than 20% of its total assets.

The Company was in compliance with the covenants for the Credit Agreement and Notes Agreement at December 31, 2016.

Canadian Credit Facility

The Company has a demand credit facility for $8,000 in Canadian dollars with a Canadian bank for purposes of issuing commercial letters of credit in Canada.  The credit facility has an annual renewal and provides for the issuance of commercial letters of credit for a term of up to five years. The facility provides for an annual fee of 1% for any issued and outstanding commercial letters of credit. Letters of credit can be denominated in either Canadian or U.S. dollars. At December 31, 2016 and 2015, letters of credit outstanding totaled $0 and $2,179 in Canadian dollars, respectively.  At December 31, 2016, the available borrowing capacity was $8,000 in Canadian dollars.  The credit facility contains a working capital restrictive covenant for our Canadian subsidiary, OnQuest Canada, ULC.  At December 31, 2016, OnQuest Canada, ULC was in compliance with the covenant.

Note 13 — Noncontrolling Interests

The Company is currently involved in several joint ventures, each of which have been determined to be a variable interest entity (“VIE”) and the Company was determined to be the primary beneficiary in each as a result of its significant influence over the joint venture operations.

Each joint venture is a partnership, and consequently, no tax effect was recognized for the income.  The net assets of the joint ventures are restricted for use by the specific project and are not available for general operations of the Company. 

The Carlsbad joint venture operating activities began in 2015 and are included in the Company’s consolidated statements of income as follows for the years ended December 31:

	2016		2015
Revenues	$	7,254	$	2,887
Net income attributable to noncontrolling interests		325		172

The Carlsbad joint venture made no distributions to the partners and the Company made no capital contributions to the Carlsbad joint venture during the year ending December 31, 2016. The project is expected to be completed in 2018.

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The carrying value of the assets and liabilities associated with the operations of the Carlsbad joint venture are included in the Company’s consolidated balance sheets at December 31 as follows:

	2016		2015
Cash	$	4,630	$	1,952
Accounts receivable	$	—	$	955
Costs and estimated earnings in excess of billings	$	124	$	—
Billings in excess of costs and estimated earnings	$	3,426	$	1,311
Other current liabilities	$	332	$	1,251

The Wilmington joint venture operating activities began in 2015 and are included in the Company’s consolidated statements of income as follows for the years ended December 31:

	2016		2015
Revenues	$	19,781	$	1,364
Net income attributable to noncontrolling interests		676		48

Wilmington joint venture made no distributions to the partners and the Company made no capital contributions to the Wilmington joint venture during the year ending December 31, 2016. The project is expected to be completed in 2018.

The carrying value of the assets and liabilities associated with the operations of the Wilmington joint venture are included in the Company’s consolidated balance sheets at December 31 as follows:

	2016		2015
Cash	$	2,415	$	2,339
Accounts receivable	$	4,242	$	2,003
Billings in excess of costs and estimated earnings	$	2,572	$	2,978
Other current liabilities	$	2,637	$	1,269

The Blythe joint venture project has been completed; the project warranty expired in May 2015 and dissolution of the joint venture was completed in the third quarter 2015.  Revenues attributable to the joint venture in 2015 were $119 and the carrying value of the assets and liabilities associated with the operations of the Blythe joint venture were immaterial at December 31, 2015.

Note 14 — Contingent Earnout Liabilities

The Company paid $5,000 to the sellers of Q3C based on achievement of their operating performance targets each year, as outlined in the purchase agreement in March 2015.

The June 2014 acquisition of Vadnais Company included an earnout of $900, with $450 payable in September 2015 and $450 payable in September 2016, contingent upon meeting a certain performance targets for each of the two periods.  The estimated fair value of the contingent consideration on the acquisition date was $679. In September 2015, the Company determined that the operations of Vadnais did not meet the September 2015 performance targets. As a result, the contingent consideration balance of $396 was credited to non-operating income at September 30, 2015.  In December 2015, the Company determined that the September 2016 target was not likely to be achieved, and the remaining balance of $368 was credited to non-operating income. 

 The purchase of Surber in July 2014 provided a contingent earnout amount of up to $1.4 million that could be earned during the period 2014 through 2016.  The estimated fair value for the contingent earnout was $1.0 million on the acquisition date.  In the fourth quarter 2015, the seller and the Company agreed that none of the targets for the Surber operations were likely to be achieved, and the remaining balance of $1,083 was credited to non-operating revenue. 

The August 2014 purchase of Ram-Fab provided for a contingent earnout amount of $0.2 million which could be earned based on estimated earnings of a six-month operating project.  Because the operating results for the Ram-Fab

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project were not met during the acquisition measurement period, the contingent earnout liability was reduced in June 2015 and the value of intangible assets of the acquisition was reduced by the same amount. 

Note 15—Commitments and Contingencies

Leases—The Company leases certain property and equipment under non-cancelable operating leases, which expire at various dates through 2023.  The leases require the Company to pay all taxes, insurance, maintenance, and utilities and are classified as operating leases in accordance with ASC Topic 840 “Leases”.

The future minimum lease payments required under non-cancelable operating leases are as follows:

			Real
			Property
For the Years Ending	Real		(Related				Total
December 31,	Property		Party)		Equipment		Commitments
2017	$	4,015	$	1,519	$	9,384	$	14,918
2018		3,436		1,210		8,289		12,935
2019		2,453		938		6,305		9,696
2020		1,345		852		4,041		6,238
2021		793		854		2,366		4,013
Thereafter		—		1,042		—		1,042
	$	12,042	$	6,415	$	30,385	$	48,842

Leases identified above as related party leases represent property with entities related through common ownership by stockholders, officers, and directors of the Company.

Total lease expense during the years ended December 31, 2016, 2015 and 2014 was $22,526, $21,815 and $14,325, respectively, including amounts paid to related parties of $1,495, $1,445 and $1,505, respectively.

Withdrawal liability for multiemployer pension plan— In November 2011, members of the Pipe Line Contractors Association “PLCA” including ARB, Rockford and Q3C (prior to the Company’s acquisition in 2012), withdrew from the Central States Southeast and Southwest Areas Pension Fund multiemployer pension plan (“Plan”).  These withdrawals were made in order to mitigate additional liability in connection with the significantly underfunded Plan.  The Company recorded a withdrawal liability of $7,500, which was increased to $7,585 after the acquisition of Q3C.  During the first quarter of 2016, the Company received a final payment schedule.  As a result of payments made and based on this schedule, the liability recorded at December 31, 2016 was $5,655.  The Company has no plans to withdraw from any other labor agreements.

Letters of credit—As of December 31, 2016 and 2015, the Company had total letters of credit outstanding of approximately $16,182 and $13,679, respectively.  The outstanding amounts include the U.S. dollar equivalents for letters of credit issued in Canadian dollars.

NTTA settlement—On February 7, 2012, the Company was sued in an action entitled North Texas Tollway Authority (“NTTA”), Plaintiff v. James Construction Group, LLC, and KBR, Inc., Defendants, v. Reinforced Earth Company, Third-Party Defendant (the “Lawsuit”).

On February 25, 2015 the Lawsuit was settled for an expected cost to the Company of $9 million.  One of the defendants paid the Company $8 million to remove all of their liability.  A second defendant agreed to provide up to $5.4 million to pay for the total expected remediation cost of approximately $22.4 million.  The Company will use the $17 million to pay for a third-party contractor approved by the NTTA.  At December 31, 2016, the remaining accrual balance was $14.3 million.  In the event that the total remediation costs exceed the estimated amount, the second defendant would pay 20% of the excess amount and the Company would pay for 80% of the excess amount. 

Litigation—The Company has been engaged in dispute resolution to collect money it believes it is owed for two construction projects completed in 2014.  Because of uncertainties associated with the projects, including

F-29

uncertainty of the amounts that would be collected, the Company used a zero profit margin approach to recording revenues during the construction period for both projects.

For one project, a cost reimbursable contract, the Company has recorded a receivable of $32.9 million with a reserve of approximately $18.3 million included in “billings in excess of costs and estimated earnings.”  At this time, the Company cannot predict the amount that it will collect nor the timing of any collection.  The dispute resolution for the $32.9 million receivable initially required international arbitration; however, in the first half of 2016, the owner sought bankruptcy protection in U.S. bankruptcy court.  The Company has initiated litigation against the sureties who have provided lien and stop payment release bonds for the total amount owed. 

For the second project, the Company had recorded a receivable of $17.9 million.  During the third quarter 2016, the Company settled the dispute with an exchange of general releases and receipt of $38 million in cash.  The Company has changed its zero estimate of profit and has accounted for the settlement as a change in accounting estimate which resulted in recognizing revenues of approximately $27.5 million and gross profit of approximately $26.7 million in the third quarter of 2016.

The Company is subject to other claims and legal proceedings arising out of its business. The Company provides for costs related to contingencies when a loss from such claims is probable and the amount is reasonably determinable. In determining whether it is possible to provide an estimate of loss, or range of possible loss, the Company reviews and evaluates its litigation and regulatory matters on a quarterly basis in light of potentially relevant factual and legal developments. If we determine an unfavorable outcome is not probable or reasonably estimable, we do not accrue for a potential litigation loss. Management is unable to ascertain the ultimate outcome of other claims and legal proceedings; however, after review and consultation with counsel and taking into consideration relevant insurance coverage and related deductibles/self-insurance retention, management believes that it has meritorious defense to the claims and believes that the reasonably possible outcome of such claims will not, individually or in the aggregate, have a materially adverse effect on the consolidated results of operations, financial condition or cash flows of the Company.

SEC Inquiry—The Company has been cooperating with an inquiry by the staff of the Securities and Exchange Commission which appears to be focused on certain percentage-of-completion contract revenue recognition practices of the Company during the time period 2013 and 2014.  The Company is continuing to respond to the staff’s inquiries in connection with this matter.  At this stage, the Company is unable to predict when the staff’s inquiry will conclude or the outcome.

Bonding—As of December 31, 2016, 2015 and 2014, the Company had bid and completion bonds issued and outstanding totaling approximately $1.45 billion, $1.48 billion and $1.52 billion, respectively.

Contingent Consideration — Earnouts related to acquisitions are discussed in Note 14 — “Contingent Earnout Liabilities”.

Note 16 –Planned Divestiture of Texas Heavy Civil Business Unit

In October 2016,  the Company announced that it planned to divest its Texas heavy civil business unit, which operates as a division of JCG.  Until completion of a sale, the Company will continue to operate the business unit.  The Company has engaged a financial advisor to assist in the sale and is actively marketing the business unit, though a sales price and other terms have not yet been established.  As a result, the planned divestiture is not classified as “held for sale” under ASC Topic 360.     

The Company recorded a charge of $37.3 million during the third quarter 2016 for the Belton area projects, which are part of the Texas heavy civil business that the Company is planning to divest.  This charge includes a reduction of the expected profitability of certain projects in the Belton, Texas area for the division and a reduction of costs and estimated earnings in excess of billings and an increase to the reserve for anticipated job losses.   Revenues of $10.0 million have been recognized for these projects as a result of incurred costs associated with claims.

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In addition, under the provisions of ASC 350, the planned divestiture triggered an analysis of the goodwill amount recorded on the JCG books in September 2016.  The analysis resulted in the Company recording a pretax, non-cash goodwill impairment charge of approximately $2.7 million in the third quarter 2016. 

There can be no assurance that the Company will enter into a sales transaction for the division nor is it possible to determine at this time the impact on results of operations or cash flow from a potential transaction.

Note 17—Reportable Segments

The Company segregates its business into three reportable segments:  the West Construction Services segment (“West segment”), the East Construction Services segment (“East segment”) and the Energy segment (“Energy segment”). 

The West segment includes the underground and industrial operations and construction services performed by ARB, ARB Structures, Inc., Rockford, Q3C, and Vadnais.  Most of the entities perform work primarily in California; however, Rockford operates throughout the United States and Q3C operates in Colorado and the upper Midwest United States.  The Blythe, Carlsbad and Wilmington joint ventures have also been included as part of the segment. 

The East segment includes the JCG Heavy Civil division, the JCG Infrastructure and Maintenance division, BW Primoris and the Cardinal Contractors, Inc. construction business, located primarily in the southeastern United States and in the Gulf Coast region of the United States.  In October 2016, the Company announced that it planned to divest its Texas heavy civil business unit, which operates as a division of JCG.  Until completion of a sale, the Company will continue to operate the business unit.  

The Energy segment includes the operations of the PES pipeline and gas facility construction and maintenance operations and the PES Industrial division, whose operations are located primarily in the southeastern United States and in the Gulf Coast region.  The segment also includes the Aevenia (with the 2016 acquired divisions of Mueller and Northern), Surber and Ram-Fab operations as well as the OnQuest, Inc. and OnQuest Canada, ULC operations, which provide for the design and installation of LNG facilities and high-performance furnaces and heaters for the oil refining, petrochemical and power generation industries.

All intersegment revenues and gross profit, which were immaterial, have been eliminated in the following tables.

Segment Revenues

Revenue by segment for the years ended December 31, 2016, 2015 and 2014 was as follows:

	2016			2015			2014
			% of			% of			% of
			Total			Total			Total
Reportable Segment	Revenue		Revenue	Revenue		Revenue	Revenue		Revenue
West	$	1,041,341	52.2%	$	913,626	47.4%	$	964,093	46.2%
East		521,301	26.1%		612,174	31.7%		489,926	23.5%
Energy		434,306	21.7%		403,615	20.9%		632,175	30.3%
Total	$	1,996,948	100.0%	$	1,929,415	100.0%	$	2,086,194	100.0%

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Segment Gross Profit

Gross profit by segment for the years ended December 31, 2016, 2015 and 2014 was as follows:

	2016			2015			2014
			% of			% of			% of
Reportable Segment	Gross Profit		Revenue	Gross Profit		Revenue	Gross Profit		Revenue
West	$	145,239	13.9%	$	130,255	14.3%	$	143,468	14.9%
East		(15,938)	(3.1%)		42,523	6.9%		25,749	5.3%
Energy		72,006	16.6%		47,095	11.7%		66,823	10.6%
Total	$	201,307	10.1%	$	219,873	11.4%	$	236,040	11.3%

Segment Goodwill

The amount of goodwill recorded by segment at December 31, 2016 and 2015 was as follows:

Reportable Segment		2016		2015
West	$	45,239	$	45,239
East		40,150		42,866
Energy		41,837		36,056
Total	$	127,226	$	124,161

As part of the Company’s annual review of goodwill impairment, an impairment expense of $401 was recorded in December 2015 for the goodwill attributed to Cardinal Contractors, Inc. and in the third quarter 2016, an impairment expense of $2,716 recorded as part of the Company’s decision to sell the Texas Heavy Civil operations – See Note 16 – “Planned Divestiture of Texas Heavy Civil Business Unit”.

Geographic Region — Revenues and Total Assets

The majority of the Company’s revenues are derived from customers in the United States, and less than 1% is generated from sources outside of the United States.  At December 31, 2016 approximately 1% of total assets were located outside of the United States.

Note 18—Customer Concentrations

The Company operates in multiple industry segments encompassing the construction of commercial, industrial, and public works infrastructure assets throughout primarily the United States.  Typically, the top ten customers in any one calendar year generate revenues in excess of 50% of total revenues and consist of a different group of customers in each year.

During the years ended December 31, 2016, 2015 and 2014, the Company generated 45.6%, 48.9% and 36.4%, of its revenues, respectively, from the following customers:

Description of
Customer’s	2016			2015			2014
Business	Amount		Percentage	Amount		Percentage	Amount		Percentage
Chemical/Energy producer	$	208,458	10.4%	$	173,931	9.0%	$	*	*
Private gas and electric utility		201,443	10.1%		173,232	9.0%		145,677	7.0%
Texas DOT		193,049	9.7%		183,847	9.5%		183,221	8.8%
Public gas and electric utility		184,002	9.2%		120,507	6.2%		144,567	6.9%
Pipeline operator		123,055	6.2%		*	*		*	*
Pipeline operator		*	*		165,578	8.6%		*	*
Gas utility		*	*		127,128	6.6%		*	*
Petrochemical producer		*	*		*	*		164,634	7.9%
Pipeline operator		*	*		*	*		121,220	5.8%
	$	910,007	45.6%	$	944,223	48.9%	$	759,319	36.4%

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(*)Indicates a customer with less than 5% of revenues during such period.

For the years ended December 31, 2016, 2015 and 2014, approximately 60.4%, 59.4% and 53.6%, respectively, of total revenues were generated from the top ten customers of the Company in that year.  In each of the years, a different group of customers comprised the top ten customers by revenue.

At December 31, 2016, approximately 20.8% of the Company’s accounts receivable were due from one customer, and that customer provided 6.2% of the Company’s revenues for the year ended December 31, 2016. At December 31, 2015, approximately 15.7% of the Company’s accounts receivable were due from one customer, and that customer provided 9.0% of the Company’s revenues for the year ended December 31, 2015.

Note 19 — Multiemployer Plans

Union Plans—Various subsidiaries in the West segment are signatories to collective bargaining agreements.  These agreements require that the Company participate in and contribute to a number of multiemployer benefit plans for its union employees at rates determined by the agreements.  The trustees for each multiemployer plan determine the eligibility and allocations of contributions and benefit amounts, determine the types of benefits and administer the plan.

The Company contributed $34,183, $34,296 and $38,107, to multiemployer pension plans for the years ended December 31, 2016, 2015 and 2014, respectively. These costs were charged to the related construction contracts in process.  Contributions during 2016 and 2015 decreased from the prior years as a result of a decrease in the number of man-hours worked by our union labor.

For the Company, the financial risks of participating in multiemployer plans are different from single-employer plans in the following respects:

· Assets contributed to the multiemployer plan by one employer may be used to provide benefits to employees of other participating employers.

· If a participating employer stops contributing to the plan, the unfunded obligations of the plan may be borne by the remaining participating employers.

· If a participating employer chooses to stop participating in the plan, a withdrawal liability may be created based on the unfunded vested benefits for all employees in the plan.

Under U.S. legislation regarding multiemployer pension plans, an employer is required to pay an amount that represents its proportionate share of a plan’s unfunded vested benefits in the event of withdrawal from a plan or upon plan termination.

The Company participates in a number of multiemployer pension plans, and its potential withdrawal obligation may be significant.  Any withdrawal liability would be recorded when it is probable that a liability exists and can be reasonably estimated, in accordance with GAAP.  As discussed in Note 15—“Commitments and Contingencies,” in 2011 the Company withdrew from the Central States Southeast and Southwest Areas Pension Fund multiemployer pension plan.  The Company has no plans to withdraw from any other labor agreements.

During the last three years, the Company made annual contributions to 78 pension plans.  None of the pension plans that the Company contributed to in 2016 listed the Company in the plan’s Form 5500 as providing more than 5% of the plan’s total contributions.  Two of the pension plans that the Company contributed to in 2015 listed the Company in the plan’s Form 5500 as providing more than 5% of the plan’s total contributions.  The contribution to one plan was $2,180 and $457 for the second plan.  One of the pension plans listed the Company on their Form 5500 as providing

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more than 5% of the plan’s total 2014 contributions.  The contributions for the plan amounted to $5,659 for the twelve months ending December 31, 2014.

Our participation in significant plans for the years ended December 31, 2016, 2015 and 2014 is outlined in the table below.  The “EIN/Pension Plan Number” column provides the Employer Identification Number (“EIN”) and the three digit plan number.  The “Zone Status” is based on the latest information that we received from the plan and is certified by the plan’s actuary.  Among other factors, plans in the red zone are generally less than 65 percent funded, plans in the yellow zone are less than 80 percent funded, and plans in the green zone are at least 80 percent funded.  The “FIP/RP Status Pending/Implemented” column indicates plans for which a financial improvement plan (“FIP”) or a rehabilitation plan (“RP”) is either pending or has been implemented.  The “Surcharge Imposed” column includes plans in a red zone status that require a payment of a surcharge in excess or regular contributions.  The next column lists the expiration date of the Company’s collective bargaining agreement related to the plan. The table follows:

Collective

FIP/RP

Bargaining

EIN /

Pension Protection Act Zone

Status

Agreement

Pension Plan

Status

Pending /

Surcharge

Expiration

Contributions of the Company

Pension Fund Name

Number

2016

2015

Implemented

Imposed

Date

2016

2015

2014

Central Pension Fund of the International Union of Operating Engineers and Participating Employers

36-6052390/001

Green at February 1, 2015

Green at February 1, 2014

No

No

6/04/2017

$

5,373

$

5,659

$

6,204

Laborers Pension Trust Fund for Northern California

94-6277608/001

Yellow at June 1, 2015

Yellow at June 1, 2014

No

No

6/30/2019

3,598

3,150

3,116

Construction Laborers Pension Trust for Southern California

43-6159056/001

Green at January 1, 2015

Green at January 1, 2014

No

No

6/30/2018

2,742

3,067

2,444

Pipeline Industry Benefit Fund

73-6146433/001

Green at January 1, 2015

Green at January 1, 2014

No

No

6/04/2017

2,740

3,783

2,686

Southern California Pipetrades Trust Funds

51-6108443/001

Green at January 1, 2015

Green at January 1, 2014

No

No

6/30/2018

2,614

2,180

5,239

Laborers International Union of North America National (Industrial) Pension Fund

52-6074345/001

Red at January 1, 2015

Red at January 1, 2014

No

No

6/04/2017

2,415

3,287

3,382

Contributions to significant plans

19,482

21,126

23,071

Contributions to other multiemployer plans

14,701

13,170

15,036

Total contributions made

$

34,183

$

34,296

$

38,107

Note 20—Company Retirement Plans

401(k) Plan—The Company provides a 401(k) plan for its employees not covered by collective bargaining agreements. Under the plan, employees are allowed to contribute up to 100% of their compensation, within the Internal Revenue Service (“IRS”) prescribed annual limit.  The Company makes employer match contributions of 100% of the first 3% and 50% of the next 2% of employee contributions, which vest immediately. The Company may, at the discretion of its Board of Directors, make an additional profit share contribution to the 401(k) plan. No such contributions were made during 2014 through 2016. The Company’s contribution to the plan for the years ended December 31, 2016, 2015 and 2014 were $3,904, $3,702 and $3,111, respectively.  Employees of the various acquisitions made by the Company from 2012 through 2016 became eligible for the Company’s 401(k) plan. 

OnQuest Canada, ULC RRSP-DPSP Plan—The Company provides a RRSP-DPSP plan (Registered Retirement Saving Plan—Deferred Profit Sharing Plan) for its employees of OnQuest Canada, ULC. There are two components to the plan. The RRSP portion is contributed to by the employee, while the Company portion is paid to the DPSP. Under this plan, the Company makes employer match contributions of 100% of the first 3% and 50% of the next 2% of employee contributions. Vesting in the DPSP portion is one year of employment. The Company’s contribution to the DPSP during the years ended December 31, 2016, 2015 and 2014 was $52, $55 and $69, respectively.

The Company has no other post-retirement benefits.

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Note 21—Deferred Compensation Agreements and Stock-Based Compensation

Primoris Long-Term Retention Plan (“LTR Plan”) —  The Company adopted a long-term retention plan for certain senior managers and executives.  The voluntary plan provides for the deferral of one half of the participant’s annual earned bonus for one year.  Except in the case of death, disability or involuntary separation from service, the deferred compensation is vested to the participant only if actively employed by the Company on the payment date of bonus amounts the following year.  The amount of compensation deferred under this plan is calculated each year.  Total deferred compensation liability under this plan as of December 31, 2016 and 2015 was $4,459 and $5,220, respectively.

Participants in the long term retention plan may elect to purchase Company common stock at a discounted price.  For bonuses earned in 2016 and 2015, the participants could use up to one sixth of their bonus amount to purchase shares of stock, whose price was calculated as 75% of the average market closing price for the month of January 2017 and December 2015, respectively.  The 25% discount is treated as compensation to the participant.

JCG Stakeholder Incentive Plan — In December 2016 and 2015, JCG maintained a deferred compensation plan for some senior management employees.  The plan provided for annual vesting over a five-year period.  Once vested and upon a triggering event, such as termination, death or disability, the deferred benefit amount plus interest is paid in equal monthly installments over three years.  The amount of compensation deferred under the plan is calculated each year.  In 2014, the terms of the plan were changed, and the participants were given the option of payment of accrued amounts over a three year period or payments made as part of the LTR plan with 50% of the accrued amount added to the LTR payments made in 2015 and the remainder added to LTR payments to be made in 2016.  At December 31, 2016, there was no deferred compensation liability under this plan, and at December 31, 2015 the liability was $278.

Stock-based compensation —  In July 2008, the shareholders approved and the Company adopted the Primoris Services Corporation 2008 Long-term Incentive Equity Plan, which was replaced by the Primoris Services Corporation 2013 Long-term Incentive Equity Plan (“Equity Plan”), after approval by the shareholders and adoption by the Company on May 3, 2013.

The Company’s Board of Directors has granted 249,065 Restricted Stock Units (“Units”) to executives under the Equity Plan.  The grants were documented in RSU Award Agreements which provide for a vesting schedule and require continuing employment of the executive.  The Units are subject to earlier acceleration, termination, cancellation or forfeiture as provided in the underlying RSU Award Agreement. 

At December 31, 2016, a total of 99,256 Units were vested.  The vesting schedule for the remaining Units follows:

	Number of Units
For the Years Ending December 31,	to Vest
2017	74,394
2018	25,138
2019	48,219
2020	2,058
2021	—
	149,809

Under guidance of ASC Topic 718 “Compensation — Stock Compensation”, stock-based compensation cost is measured at the date of grant, based on the calculated fair value of the stock-based award, and is recognized as expense over the employee’s requisite service period (generally the vesting period of the award).

The fair value of the Units was based on the closing market price of our common stock on the day prior to the date of the grant. Stock compensation expense for the Units is being amortized using the straight-line method over the service period. For the twelve months ended December 31, 2016 and 2015, the Company recognized $1,627 and $1,050, respectively, in compensation expense.  At December 31, 2016, approximately $2.1 million of unrecognized compensation expense remains for the Units, which will be recognized over the next 3.25 years through April 1, 2020.

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Vested Units accrue “Dividend Equivalents” (as defined in the Equity Plan) which will be accrued as additional Units.  At December 31, 2016, a total of 1,693 Dividend Equivalent Units were accrued. 

Note 22—Related Party Transactions

Primoris has entered into leasing transactions with Stockdale Investment Group, Inc. (“SIGI”).  Our Chairman of the Board of Directors and our largest stockholder, Brian Pratt and his family, holds a majority interest of SIGI.  John M. Perisich, our Executive Vice President and General Counsel, is secretary of SIGI.  The leases are for three properties used by the Company in California, with various expiration dates, with the last expiring in 2023.  During the years ended December 31, 2016, 2015 and 2014, the Company paid $849, $831 and $862, respectively, in lease payments to SIGI for the use of these properties.  We intend to purchase the SIGI properties in the first quarter of 2017.

Primoris leases properties from other individuals that were past sellers of acquisitions or are current employees.  The amounts leased are not material and each arrangement was approved by the Board of Directors. 

Note 23—Income Taxes

The components of the provision for income taxes are as follows:

	2016		2015		2014
Current provision (benefit)
Federal	$	4,726	$	26,948	$	28,203
State		5,423		3,640		5,398
Foreign		92		362		1,074
		10,241		30,950		34,675
Deferred provision (benefit)
Federal		11,560		(7,099)		3,586
State		(727)		155		457
Foreign		72		(60)		(72)
		10,905		(7,004)		3,971
Total	$	21,146	$	23,946	$	38,646

A reconciliation of income tax expense compared to the amount of income tax expense that would result by applying the U.S. federal statutory income tax rate to pre-tax income is as follows:

	2016	2015	2014
U.S. federal statutory income tax rate	35.00%	35.00%	35.00%
State taxes, net of federal income tax impact	6.38%	4.20%	4.66%
Foreign tax credit	(0.35)%	(0.50)%	(0.98)%
Canadian income tax	0.35%	0.50%	0.98%
Domestic production activities deduction	(1.10)%	(3.91)%	(3.07)%
Nondeductible meals & entertainment	5.36%	5.09%	3.38%
Other items	(1.46)%	(1.01)%	(2.01)%
Effective tax rate on income before provision for income taxes excluding income attributable to noncontrolling interests	44.18%	39.37%	37.96%
Impact of income from noncontrolling interests on effective tax rate	(0.91)%	(0.18)%	(0.19)%
Effective tax rate on income before provision for income taxes and noncontrolling interests	43.27%	39.19%	37.77%

Deferred income taxes are recognized for temporary differences between the financial reporting basis of the assets and liabilities and their respective tax basis and operating losses, capital losses and tax credit carry-forwards based on enacted tax rates expected to be in effect when such amounts are realized or settled. However, deferred tax assets are recognized only to the extent that it is more likely than not that they will be realized based upon consideration of

F-36

available evidence, including future reversals of existing taxable temporary differences, future projected taxable income and tax planning strategies.

The tax effect of temporary differences that give rise to deferred income taxes for the year ended December 31, 2016 and 2015 are as follows:

	2016		2015
Deferred tax assets:
Accrued compensation	$	5,804	$	9,673
Accrued workers compensation		9,855		10,058
Capital loss carryforward		1,077		1,800
Foreign tax credit		1,349		1,293
Insurance reserves		3,248		5,489
Loss reserves		4,841		2,887
Pension liability		1,979		2,805
State income taxes		2,011		469
Other		288		882
Total deferred tax assets		30,452		35,356
Deferred tax liabilities
Depreciation and amortization		(38,327)		(33,304)
Prepaid expenses and other		(1,955)		(977)
Total deferred tax liabilities		(40,282)		(34,281)
Net deferred tax assets (liabilities)	$	(9,830)	$	1,075

As of December 31, 2016, the tax effects of capital loss carryforwards were $1,077; state net operating losses were $486; and foreign tax credits were $1,349.  These carryforwards will begin to expire in 2019, 2021 and 2019, respectively.  The Company believes it is more likely than not that it will realize the benefit of the deferred tax assets.

The Company’s federal tax returns are subject to examination by the Internal Revenue Service for tax years after 2012.  The statutes of limitation of state and foreign jurisdictions vary generally between 3 to 5 years.  Accordingly, the tax years 2011 through 2015 remain open to examination by the state and foreign jurisdiction in which the Company operates.

A reconciliation of the beginning and ending amounts and aggregate changes in the balance of unrecognized tax benefits for each period is as follows:

	2016		2015		2014
Beginning balance	$	—	$	456	$	5,382
Increases in balances for tax positions taken during the current year		—		—		—
Increases in balances for tax positions taken during prior years		—		—		—
Settlements and effective settlements with tax authorities		—		(456)		(4,878)
Lapse of statute of limitations		—		—		(48)
Total	$	—	$	—	$	456

The Company recognizes accrued interest and penalties related to uncertain tax positions in income tax expense, which were not material for the three years presented.

F-37

Note 24—Dividends and Earnings Per Share

The Company has paid or declared cash dividends during 2015 and 2016 as follows:

Declaration Date	Record Date	Payable Date	Amount Per Share
February 24, 2015	March 31, 2015	April 15, 2015	$	0.040
May 1, 2015	June 30, 2015	July 15, 2015	$	0.055
August 4, 2015	September 30, 2015	October 15, 2015	$	0.055
November 3, 2015	December 31, 2015	January 15, 2016	$	0.055
February 22, 2016	March 31, 2016	April 15, 2016	$	0.055
May 2, 2016	June 30, 2016	July 15, 2016	$	0.055
August 3, 2016	September 30, 2016	October 14, 2016	$	0.055
November 2, 2016	December 31, 2016	January 16, 2017	$	0.055

The payment of future dividends is contingent upon our revenues and earnings, capital requirements and general financial condition of the Company, as well as contractual restrictions and other considerations deemed relevant by the Board of Directors.

The table below presents the computation of basic and diluted earnings per share for the years ended December 31, 2016, 2015 and 2014 follows:

	2016		2015		2014
Numerator:
Net income	$	27,725	$	37,151	$	63,682
Net income attributable to noncontrolling interests		(1,002)		(279)		(526)
Net income attributable to Primoris	$	26,723	$	36,872	$	63,156
Denominator (shares in thousands):
Weighted average shares for computation of basic earnings per share		51,762		51,647		51,607
Dilutive effect of shares issued to independent directors		3		2		2
Dilutive effect of restricted stock units (1)		224		149		138.0
Weighted average shares for computation of diluted earnings per share		51,989		51,798		51,747
Earnings per share attributable to Primoris:
Basic	$	0.52	$	0.71	$	1.22
Diluted	$	0.51	$	0.71	$	1.22

(1) Represents the effect of the grant of 249,065 shares of Restricted Stock Units and 1,693 vested Dividend Equivalent Units.

Note 25—Stockholders’ Equity

Common Stock

The Company is authorized to issue 90,000,000 shares of $0.0001 par value common stock, of which 51,576,442 and 51,676,140 shares were issued and outstanding as of December 31, 2016 and 2015, respectively. As of December 31, 2016, there were 394 holders of record of our common stock.

The Company issued 85,907 shares of common stock in 2016 and 96,828 shares of common stock in 2015 under the Company’s LTR Plan.  The shares were purchased by the participants in the LTR Plan with payment made to the Company of $1,440 in 2016 and $1,621 in 2015.  The Company’s LTR Plan for managers and executives allows participants to use a portion of their annual bonus amount to purchase Company common stock at a discount from the market price.  The shares purchased in March 2016 were for bonus amounts earned in 2015, and the number of shares was calculated at 75% of the average closing price of December 2015. 

F-38

The Company issued shares of common stock under the Equity Plan to the non-employee members of the Board of Directors as part of the Company’s quarterly compensation provided to the Directors.  Shares issued were as follows:

· 11,745 shares in August 2016,

· 10,450 shares in February 2016,

· 9,748 shares in August 2015,

· 8,168 shares in March 2015,

· 6,172 shares in August 2014, and

· 6,375 shares in February 2014,

The shares were fully vested upon issuance and have a one-year trading restriction.

As discussed in Note 21—“Deferred Compensation Agreements and Stock-Based Compensation”, the Board of Directors has granted a total of 249,065 shares of Units under the Equity Plan.

At December 31, 2016, there were 1,953,559 shares of common stock reserved to provide for the grant and exercise of all future stock option grants, SARS, Units and grants of restricted shares under the Equity Plan. Other than the Units discussed above, there were no stock options, SARS or restricted shares of stock issued or outstanding at December 31, 2016.

Share Repurchase Plan

In August 2016, the Company’s Board of Directors authorized a share repurchase program under which the Company, from time to time and depending on market conditions, share price and other factors, could acquire shares of its common stock on the open market or in privately negotiated transactions up to an aggregate purchase price of $5 million.   During the month of December 2016, the Company purchased and cancelled 207,800 shares of stock for $5.0 million at an average cost of $24.02 per share. The share repurchase program expired on December 31, 2016.

In February 2014, the Company’s Board of Directors authorized a share repurchase program under which the Company, from time to time and depending on market conditions, share price and other factors, could acquire shares of its common stock on the open market or in privately negotiated transactions up to an aggregate purchase price of $23 million.  During the period from February 2014 through September 2014, the Company purchased and cancelled 100,000 shares of stock for $2.8 million at an average cost of $28.44 per share.  This share repurchase program expired on December 31, 2014.

Preferred Stock

The Company is authorized to issue 1,000,000 shares of $0.0001 par value preferred stock.  No shares of Preferred Stock were outstanding at December 31, 2016 or 2015.

Warrants

At December 31, 2016 and 2015, there were no warrants outstanding.

F-39

Note 26—Selected Quarterly Financial Information (Unaudited)

Selected unaudited quarterly consolidated financial information is presented in the following tables:

	Year Ended December 31, 2016
	1st		2nd		3rd		4th
(In thousands, except per share data)	Quarter		Quarter		Quarter		Quarter
Revenues	$	430,446	$	456,811	$	507,828	$	601,863
Gross profit		39,277		43,285		50,129		68,616
Impairment of goodwill		—		—		2,716		—
Net income		2,916		5,287		4,756		14,766
Net income attributable to Primoris		2,693		5,056		4,504		14,470
Earnings per share:
Basic earnings per share	$	0.05	$	0.10	$	0.09	$	0.28
Diluted earnings per share	$	0.05	$	0.10	$	0.09	$	0.28
Weighted average shares outstanding (in thousands)
Basic		51,725		51,772		51,780		51,771
Diluted		51,881		52,022		52,034		52,021

	Year Ended December 31, 2015
	1st		2nd		3rd		4th
(In thousands, except per share data)	Quarter		Quarter		Quarter		Quarter
Revenues	$	392,780	$	483,545	$	555,945	$	497,145
Gross profit		38,005		46,496		71,647		63,725
Impairment of goodwill		—		—		—		401
Net income		1,672		3,692		19,079		12,708
Net income attributable to Primoris		1,672		3,638		19,007		12,555
Earnings per share:
Basic earnings per share	$	0.03	$	0.07	$	0.37	$	0.24
Diluted earnings per share	$	0.03	$	0.07	$	0.37	$	0.24
Weighted average shares outstanding (in thousands)
Basic		51,572		51,666		51,672		51,676
Diluted		51,726		51,815		51,824		51,825

	Year Ended December 31, 2014
	1st		2nd		3rd		4th
(In thousands, except per share data)	Quarter		Quarter		Quarter		Quarter
Revenues	$	470,074	$	515,291	$	613,237	$	487,592
Gross profit		49,757		61,194		75,473		49,616
Net income		11,265		16,003		27,390		9,024
Net income attributable to Primoris		10,833		16,003		27,390		8,930
Earnings per share:
Basic earnings per share	$	0.21	$	0.31	$	0.53	$	0.17
Diluted earnings per share	$	0.21	$	0.31	$	0.53	$	0.17
Weighted average shares outstanding (in thousands)
Basic		51,610		51,655		51,606		51,561
Diluted		51,714		51,804		51,759		51,710

F-40

Note 27—Subsequent Event

On February 21, 2017, the Board of Directors declared a cash dividend of $0.055 per common share for stockholders of record as of March 31, 2017, payable on or about April 14, 2017.

F-41

EXHIBIT INDEX

Exhibit No.	Description
Exhibit 2.1	Agreement and Plan of Merger, dated February 19, 2008, by and among Rhapsody Acquisition Corp., Primoris Corporation and certain stockholders of Primoris Corporation (1)
Exhibit 2.2	First Amendment to Agreement and Plan of Merger, dated May 15, 2008, by and among Rhapsody Acquisition Corp., Primoris Corporation and certain stockholders of Primoris Corporation (2)
Exhibit 2.3	Membership Interest Purchase Agreement, dated July 1, 2010, by and between Primoris Services Corporation, Kealine Holdings LLC and WesPac Energy LLC (3)
Exhibit 2.4	Agreement and Plan of Merger, dated November 8, 2010, by and among Primoris Services Corporation, a Delaware corporation, Primoris Merger Sub, Inc., a Delaware corporation and a wholly-owned subsidiary of Primoris Services Corporation, Rockford Holdings Corporation, a privately-held Delaware corporation, all of the stockholders of Rockford Holdings Corporation and Christopher S. Wallace as representative of the stockholders of Rockford Holdings Corporation (4)
Exhibit 2.5	Stock Purchase Agreement, dated November 8, 2012, by and among Primoris Services Corporation, a Delaware corporation, Q3 Contracting Inc., a privately-held Minnesota corporation, all of the shareholders of Q3 Contracting Inc. and Jay P. Osborn as representative of the shareholders of Q3 Contracting Inc. (5)
Exhibit 3.1	Fourth Amended and Restated Certificate of Incorporation of Primoris Services Corporation, dated May 21, 2009 (6)
Exhibit 3.2	Amended and Restated Bylaws of Primoris Services Corporation (7)
Exhibit 3.3	Certificate of Designations, Powers, Preferences and Rights of the Series A Non-Voting Contingent Convertible Preferred Stock of Primoris Services Corporation, dated December 14, 2009 (8)
Exhibit 4.1	Specimen Common Stock Certificate (9)
Exhibit 10.1	2008 Long-Term Equity Incentive Plan (#)(10)
Exhibit 10.2	2013 Equity Incentive Plan (#)(11)
Exhibit 10.3	Third Amendment to Loan and Security Agreement, dated March 3, 2011, by and among Primoris Services Corporation and The PrivateBank and Trust Company (13)
Exhibit 10.4	Fourth Amendment to Loan and Security Agreement, dated October 20, 2011, by and among Primoris Services Corporation and The PrivateBank and Trust Company (14)
Exhibit 10.5	Credit Agreement, dated September 23, 2011, by and among Primoris Services Corporation and Bank of the West (15)

70

Exhibit No.	Description
Exhibit 10.6	Fifth Amendment to Loan and Security Agreement, dated November 28, 2011, by and among Primoris Services Corporation and The PrivateBank and Trust Company (15)
Exhibit 10.7	Loan and Security Agreement, dated November 30, 2011, by and among Stellaris LLC, James Construction Group LLC and JPMorgan Chase Bank, N.A. (15)
Exhibit 10.8	Business Purpose Promissory Note, dated November 30, 2011, by and among Stellaris LLC, James Construction Group LLC and JPMorgan Chase Bank, N.A. (15)
Exhibit 10.9	Schedule A-1 Equipment Collateral, dated November 30, 2011, by and between Stellaris LLC, James Construction Group LLC and JPMorgan Chase Bank, N.A. (15)
Exhibit 10.10	Amendment No. 3 to the Master Loan and Security Agreement Loan and Security Agreement, dated November 30, 2011, by and among James Construction Group LLC, Stellaris LLC, ARB Inc. and Fifth Third Bank (15)
Exhibit 10.11	Promissory Note, dated November 30, 2011, by and among James Construction Group LLC, Stellaris LLC, ARB Inc. and Fifth Third Bank (15)
Exhibit 10.12	Master Loan and Security Agreement, dated December 21, 2011, by and among ARB, Inc. and Banc of America Leasing & Capital, LLC (16)
Exhibit 10.13	Equipment Security Note, dated December 21, 2011, by and among ARB, Inc., Stellaris LLC, Rockford Corporation and Banc of America Leasing & Capital, LLC (16)
Exhibit 10.14	Addendum to Master Loan and Security Agreement, dated December 21, 2011, by and among ARB, Inc., Stellaris LLC, Rockford Corporation and Banc of America Leasing & Capital, LLC (16)
Exhibit 10.15	Guaranty, dated December 21, 2011, by and among Primoris Services Corporation and Banc of America Leasing & Capital, LLC (16)
Exhibit 10.16	General Indemnity Agreement, dated January 24, 2012, by and among Primoris Services Corporation, ARB, Inc. ARB Structures, Inc., OnQuest, Inc., OnQuest Heaters, Inc. Born Heaters Canada ULC, Cardinal Contractors, Inc., Cardinal Southeast, Inc., Stellaris, LLC, GML Coatings, LLC, James Construction Group, LLC, Juniper Rock Corporation, Rockford Corporation; Alaska Continental Pipeline, Inc., All Day Electric Company, Inc. Primoris Renewables, LLC, Rockford Pipelines Canada, Inc. and Chubb Group of Insurance Companies (17)
Exhibit 10.17	Fifth Amendment to Loan and Security Agreement, dated April 4, 2012, by and among Primoris Services Corporation and The PrivateBank and Trust Company (18)
Exhibit 10.18	Equipment Security Note, dated June 20, 2012, by and among Stellaris, LLC, James Construction Group, LLC and Banc of America Leasing & Capital, LLC (19)

71

Exhibit No.	Description
Exhibit 10.19	Amendment Number 1 to Master Loan and Security Agreement, dated June 20, 2012, by and among Stellaris, LLC, James Construction Group, LLC and Banc of America Leasing & Capital, LLC (19)
Exhibit 10.20	Seventh Amendment to Loan and Security Agreement, dated July 18, 2012, by and among Primoris Services Corporation and The PrivateBank and Trust Company (21)
Exhibit 10.21	Eighth Amendment to Loan and Security Agreement, dated October 29, 2012, by and among Primoris Services Corporation and The PrivateBank and Trust Company (21)
Exhibit 10.22	Master Loan and Security Agreement, dated November 1, 2012, by and between Stellaris, LLC and Banc of America Leasing & Capital, LLC (22)
Exhibit 10.23	Amendment to Master Loan and Security Agreement, dated November 7, 2012, by and among Stellaris, LLC, James Construction Group, LLC, Miller Springs Materials, LLC, Primoris Energy Services Corporation and Banc of America Leasing & Capital, LLC (22)
Exhibit 10.24	Equipment Security Note, dated November 1, 2012, by and among Stellaris, LLC, James Construction Group, LLC, Miller Springs Materials, LLC, Primoris Energy Services Corporation and Banc of America Leasing & Capital, LLC (22)
Exhibit 10.25	Loan Agreement, dated December 13, 2012, by and between Stellaris, LLC and Q3 Contracting, Inc. and RBS Asset Finance, Inc. (23)
Exhibit 10.26	Note, dated December 13, 2012, by and among Stellaris, LLC and Q3 Contracting, Inc. and RBS Asset Finance, Inc. (23)
Exhibit 10.27	Guaranty, dated December 13, 2012, by and among Primoris Services Corporation and RBS Asset Finance, Inc. (23)
Exhibit 10.28	Credit Agreement, dated December 28, 2012, by and among Primoris Services Corporation and The PrivateBank and Trust Company, The Bank of the West and IBERIABANK Corporation (24)
Exhibit 10.29	Note Purchase and Private Shelf Agreement, dated December 28, 2012, by and among Primoris Services Corporation and Prudential Investment Management, Inc. and certain Prudential affiliates (24)
Exhibit 10.30	Master Loan and Security Agreement, dated August 31, 2009, by and between Stellaris, LLC and Fifth Third Bank (12)
Exhibit 10.31	Promissory Note, dated June 11, 2013, by and among Stellaris, LLC and Fifth Third Bank pursuant to the Master Loan and Security Agreement dated August 31, 2009 (25)
Exhibit 10.32	Master Loan and Security Agreement, dated June 13, 2013, by and among Stellaris, LLC, James Construction Group, LLC, Rockford Corporation and Wells Fargo Equipment Finance, Inc. and Loan Schedules, dated June 13, 2013 (25)

72

Exhibit No.	Description
Exhibit 10.33	Confirmation of Acceptance Agreement, dated June 13, 2013, by and among Primoris Services Corporation and Prudential Investment Management, Inc. and certain Prudential affiliates pursuant to the Note Purchase and Private Shelf Agreement, dated December 28, 2012 and five 3.85% Senior Secured Notes, Series B, due July 25, 2023 (25)
Exhibit 10.34	Loan Agreement, dated September 17, 2013, by and among Stellaris, LLC, James Construction Group LLC and Rockford Corporation and RBS Asset Finance, Inc. (26)
Exhibit 10.35	Loan and Security Agreement, dated September 20, 2013, by and between PNC Equipment Finance, LLC and Stellaris LLC and Q3 Contracting, Inc. (26)
Exhibit 10.36	Contribution Agreement, dated as of September 30, 2013, by and among WesPac Energy LLC, Kealine Holdings LLC, Primoris Services Corporation and WesPac Midstream LLC and Highstar WesPac Main Interco LLC and Highstar WesPac Prism/IV-A Interco LLC (26)
Exhibit 10.37	Master Loan and Security Agreement, dated December 6, 2013 by and between Stellaris, LLC and Banc of America Leasing & Capital, LLC (27)
Exhibit 10.38	Equipment Security Note, dated as of December 6, 2013, by and between Stellaris, LLC, ARB, Inc. James Construction Group, LLC, and Rockford Corporation and Banc of America Leasing & Capital, LLC (27)
Exhibit 10.39	Master Security Agreement, dated September 18, 2014, by and among Primoris Services Corporation, Rockford Corporation and Key Equipment Finance, a division of KeyBank National Association. (28)
Exhibit 10.40	Promissory Note and Collateral Schedule No. 1, dated September 18, 2014, by and between Primoris Energy Services Corporation, Rockford Corporation and Key Equipment Finance, a division of KeyBank National Association. (28)
Exhibit 10.41	Master Loan and Security Agreement, dated September 19, 2014, by and among Fifth Third Bank and Primoris Services Corporation, James Construction Group, LLC and Q3 Contracting, Inc. (28)
Exhibit 10.42	Amendment No. 1 to Master Loan and Security Agreement, dated as of September 23, 2014, by and among Fifth Third Bank and Stellaris LLC. (28)
Exhibit 10.43	Promissory Note, dated September 19, 2014, by and among Primoris Services Corporation, James Construction Group, LLC, Q3 Contracting, Inc. and Fifth Third Bank. (28)
Exhibit 10.44	Third Amendment to Credit Agreement, dated as of December 12, 2014, by and among Primoris Services Corporation and The PrivateBank and Trust Company, The Bank of the West, IBERIABANK Corporation, Branch Banking and Trust Company and UMB Bank, N.A. (29)

73

Exhibit No.	Description
Exhibit 10.45	Waiver and Amendment Agreement, dated as of April 30, 2014, by and among Primoris Services Corporation and The PrivateBank and Trust Company and other financial institutions party to the Credit Agreement. (29)
Exhibit 10.46	Second Amendment and Waiver Agreement, dated as of August 25, 2014, by and among Primoris Services Corporation and The PrivateBank and Trust Company and other financial institutions party to the Credit Agreement. (29)
Exhibit 10.47	Agreement for Services, dated August 1, 2015, by and among Primoris Services Corporation and Brian Pratt. (#) (31)
Exhibit 10.48	Employment Agreement, dated August 1, 2015, by and among Primoris Services Corporation and David L. King. (#) (31)
Exhibit 10.49	Third Letter Amendment to Shelf Agreement, dated as of June 3, 2015, by and among Primoris Services Corporation and Prudential Investment Management, Inc. and each other Holder (as defined in the Shelf Agreement). (32)
Exhibit 10.50	Employment Agreement, dated April 5, 2016, by and among Primoris Services Corporation and Thomas McCormick. (#) (33)
Exhibit 14.1	Code of Ethics and Business Conduct (30)
Exhibit 21.1	Subsidiaries and equity investments of Primoris Services Corporation (*)
Exhibit 23.1	Consent of Moss Adams LLP (*)
Exhibit 31.1	Certification of chief executive officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (*)
Exhibit 31.2	Certification of chief financial officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (*)
Exhibit 32.1	Certification of chief executive officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (*)
Exhibit 32.2	Certification of chief financial officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (*)
Exhibit 101 INS	XBRL Instance Document (*)
Exhibit 101 SCH	XBRL Taxonomy Extension Schema Document (*)
Exhibit 101 CAL	XBRL Taxonomy Extension Calculation Linkbase Document (*)
Exhibit 101 LAB	XBRL Taxonomy Extension Label Linkbase Document (*)
Exhibit 101 PRE	XBRL Taxonomy Extension Presentation Linkbase Document (*)
Exhibit 101 DEF	XBRL Taxonomy Extension Definition Linkbase Document (*)

74

(#)Management contract or compensatory plan, contract or arrangement.

(*)Filed herewith.

(1)	Filed as an exhibit to our Current Report on Form 8-K, as filed with the SEC on February 20, 2008, and such exhibit is incorporated herein by reference.
(2)	Filed as an exhibit to our Registration Statement on Form S-4/A (Amendment No. 3) (File No. 333-150343), as filed with the SEC on July 1, 2008, and such exhibit is incorporated herein by reference.
(3)	Filed as an exhibit to our Current Report on Form 8-K, as filed with the SEC on July 8, 2010, and such exhibit is incorporated herein by reference.
(4)	Filed as an exhibit to our Current Report on Form 8-K, as filed with the SEC on November 12, 2010, and such exhibit is incorporated herein by reference.
(5)	Filed as an exhibit to our Current Report on Form 8-K, as filed with the SEC on November 15, 2012, and such exhibit is incorporated herein by reference.
(6)	Filed as an exhibit to our Quarterly Report on Form 10-Q, as filed with the SEC on August 12, 2009, and such exhibit is incorporated herein by reference.
(7)	Filed as an exhibit to our Current Report on Form 8-K, as filed with the SEC on August 6, 2008, and such exhibit is incorporated herein by reference.
(8)	Filed as exhibit to our Current Report on Form 8-K, as filed with the SEC on December 17, 2009, and such exhibit is incorporated herein by reference.
(9)	Filed as an exhibit to our Registration Statement on Form S-1 (File No. 333-134694), as filed with the SEC on June 2, 2006, and such exhibit is incorporated herein by reference.
(10)	Attached as an annex to our Registration Statement on Form S-4/A (Amendment No. 4) (File No. 333-150343), as filed with the SEC on July 9, 2008, and such annex is incorporated herein by reference.
(11)	Attached as Appendix A to our Definitive Proxy Statement on Schedule 14A filed with the SEC on April 9, 2013, and such Appendix is incorporated herein by reference.
(12)	Filed as an exhibit to our Current Report on Form 8-K, as filed with the SEC on July 1, 2010, and such exhibit is incorporated herein by reference.
(13)	Filed as an exhibit to our Annual Report on Form 10-K, as filed with the SEC on March 16, 2011, and such exhibit is incorporated herein by reference.
(14)	Filed as an exhibit to our Current Report on Form 8-K, as filed with the SEC on October 25, 2011, and such exhibit is incorporated herein by reference.
(15)	Filed as an exhibit to our Current Report on Form 8-K, as filed with the SEC on December 14, 2011, and such exhibit is incorporated herein by reference.
(16)	Filed as an exhibit to our Current Report on Form 8-K, as filed with the SEC on December 30, 2011, and such exhibit is incorporated herein by reference.
(17)	Filed as an exhibit to our Annual Report on Form 10-K, as filed with the SEC on March 5, 2012, and such exhibit is incorporated herein by reference.
(18)	Filed as an exhibit to our Annual Report on Form 10-Q, as filed with the SEC on May 9, 2012, and such exhibit is incorporated herein by reference.
(19)	Filed as an exhibit to our Current Report on Form 8-K, as filed with the SEC on June 28, 2012, and such exhibit is incorporated herein by reference.
(20)	Filed as an exhibit to our Current Report on Form 8-K, as filed with the SEC on July 23, 2012, and such exhibit is incorporated herein by reference.
(21)	Filed as an exhibit to our Current Report on Form 8-K, as filed with the SEC on November 2, 2012, and such exhibit is incorporated herein by reference.
(22)	Filed as an exhibit to our Current Report on Form 8-K, as filed with the SEC on November 9, 2012, and such exhibit is incorporated herein by reference.
(23)	Filed as an exhibit to our Current Report on Form 8-K, as filed with the SEC on December 18, 2012, and such exhibit is incorporated herein by reference.
(24)	Filed as an exhibit to our Current Report on Form 8-K, as filed with the SEC on January 7, 2013, and such exhibit is incorporated herein by reference.
(25)	Filed as an exhibit to our Quarterly Report on Form 10-Q, as filed with the SEC on August 7, 2013, and such exhibit is incorporated herein by reference.
(26)	Filed as an exhibit to our Quarterly Report on Form 10-Q, as filed with the SEC on November 5, 2013, and such exhibit is incorporated herein by reference.

75

(27)	Filed as an exhibit to our Annual Report on Form 10-K, as filed with the SEC on March 3, 2014, and such exhibit is incorporated herein by reference.
(28)	Filed as an exhibit to our Quarterly Report on Form 10-Q, as filed with the SEC on November 7, 2014, and such exhibit is incorporated herein by reference.
(29)	Filed as an exhibit to our Current Report on Form 8-K, as filed with the SEC on December 18, 2014, and such exhibit is incorporated herein by reference.
(30)	Filed as an exhibit to our Annual Report on Form 10-K, as filed with the SEC on March 11, 2010, and such exhibit is incorporated herein by reference.
(31)	Files as an exhibit to our Annual Report on Form 10-K, as filed with the SEC on February 29, 2016, and such exhibit is incorporated herein by reference.
(32)	Filed as an exhibit to our Current Report on Form 8-K, as filed with the SEC on June 9, 2015, and such exhibit is incorporated herein by reference.
(33)	Filed as an exhibit to our Current Report on Form 8-K, as filed with the SEC on April 7, 2016, and such exhibit is incorporated herein by reference.

76

EX-21.1

Exhibit 21.1

Subsidiaries and Equity Investments of the Registrant

Subsidiary	Jurisdiction of Organization
ARB, Inc.	California
ARB Structures, Inc.	California
ARB Chile, Ltda.	Chile
Alaska Continental Pipeline. Inc.	Delaware
OnQuest Canada, ULC (formerly Born Heaters Canada)	Alberta, Canada
Cardinal Contractors, Inc.	Florida
Cardinal Mechanical, Inc.	Texas
Calidus, LLC	Nevada
Force Specialty Services, Inc.	Texas
GML Coatings, LLC	Florida
James Construction Group, LLC	Florida
Juniper Rock Corporation	California
OnQuest, Inc.	California
OnQuest Heaters, Inc.	Delaware
Pipe Jacking Trenchless, Inc.	California
Primoris Aevenia, Inc.	Texas
Primoris Electric, Inc.	California
Primoris Pipeline Services Corporation	Texas
Primoris Energy Services Corporation	Texas (1)
Ram-Fab, LLC	South Carolina
Q3 Contracting, Inc.	Minnesota
Rockford Corporation	Oregon
Rockford Holdings Corporation	Delaware
Rockford Pipelines Canada, Inc.	Alberta, Canada
Saxon Construction, Inc.	Texas
Stellaris, LLC	Nevada
Vadnais Trenchless Services, Inc.	California

(1) Under a trademark license agreement, Primoris Energy Services Corporation used the tradename “Sprint Pipeline Services” during the period ending March 2015.

With the exception of Primoris Energy Services Corporation and OnQuest Canada, ULC, the subsidiaries do not conduct business under any names other than those set forth above.

Equity Investments of the Registrant

Organization	Jurisdiction of Organization	Registrant’s Equity Interest
ARB Inc. & B&M Engineering Co — A JV	California	50	%
Alvah, Inc. (a)	California	49	%
Blythe Power Constructors (b)	California	50	%
Carlsbad Power Constructors	California	50	%
St.-Bernard Levee Partners	Delaware	30	%
WesPac Energy, LLC (a)	Nevada	50	%
WesPac Midstream, LLC (a)	Delaware	7.5	%

(a) This equity investment was sold during the twelve months ended December 31, 2014.

(b) The project underlying this entity was completed and operational in 2015.

The above noted entities do not conduct business under any names other than those set forth above.

EX-23.1

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in the following Registration Statements of Primoris Services Corporation (the “Company”) of our report dated February 28, 2017, relating to the consolidated financial statements of the Company and the effectiveness of internal control over financial reporting of the Company appearing in this Annual Report on Form 10-K for the year ended December 31, 2016:

· Registration Statement on Form S-8 (No. 333-188553) pertaining to the 2013 Equity Incentive Plan of Primoris Services Corporation;

· Registration Statement on Form S-8 (No. 333-159491) pertaining to the Long-Term Incentive Equity Plan of Primoris Services Corporation;

· Registration Statement on Form S-3 (No 333-161331) pertaining to the registration of common stock; and

· Registration Statement on Form S-3 (No 333-174602) pertaining to the registration of common stock.

/s/ Moss Adams LLP

Los Angeles, California

February 28, 2017

EX-31.1

Exhibit 31.1

Certification of Chief Executive Officer

RULE 13a-14(a)/15d-14(a) CERTIFICATION PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, David L. King, certify that:

1. I have reviewed this Annual Report on Form 10-K for the period ended December 31, 2016, of Primoris Services Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 28, 2017

/s/ DAVID L. KING

David L. King

President, Chief Executive Officer and Director

(Principal Executive Officer)

EX-31.2

Exhibit 31.2

Certification of Chief Financial Officer

RULE 13a-14(a)/15d-14(a) CERTIFICATION PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Peter J. Moerbeek, certify that:

1. I have reviewed this Annual Report on Form 10-K for the period ended December 31, 2016, of Primoris Services Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 28, 2017

/s/ PETER J. MOERBEEK

Peter J. Moerbeek

Executive Vice President, Chief Financial Officer

(Principal Financial and Accounting Officer)

EX-32.1

Exhibit 32.1

Certification of Chief Executive Officer

Certification Pursuant to Section 906

of the Sarbanes-Oxley Act of 2002

(18 U.S.C. Section 1350)

In connection with the Annual Report of Primoris Services Corporation (the “Company”) on Form 10-K for the period ended December 31, 2016, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, David L. King, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

In witness whereof, the undersigned has executed and delivered this certificate as of the date set forth opposite his signature below.

Date: February 28, 2017	/s/ DAVID L. KING
	David L. King
	President, Chief Executive Officer and Director
	(Principal Executive Officer)

The foregoing certification is being furnished solely to accompany the Report pursuant to 18. U.S.C. Section 1350, and is not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and is not to be incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing. A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities Exchange Commission or its staff upon request.

EX-32.2

Exhibit 32.2

Certification of Chief Financial Officer

Certification Pursuant to Section 906

of the Sarbanes-Oxley Act of 2002

(18 U.S.C. Section 1350)

In connection with the Annual Report of Primoris Services Corporation (the “Company”) on Form 10-K for the period ended December 31, 2016, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Peter J. Moerbeek, Executive Vice President, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

In witness whereof, the undersigned has executed and delivered this certificate as of the date set forth opposite his signature below.

8
Date: February 28, 2017	/s/ PETER J. MOERBEEK
	Peter J. Moerbeek
	Executive Vice President, Chief Financial Officer
	(Principal Financial and Accounting Officer)

The foregoing certification is being furnished solely to accompany the Report pursuant to 18. U.S.C. Section 1350, and is not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and is not to be incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing. A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities Exchange Commission or its staff upon request.

XML

Document and Entity Information - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2016	Feb. 28, 2017	Jun. 30, 2016
Document and Entity Information
Entity Registrant Name	Primoris Services Corp
Entity Central Index Key	0001361538
Document Type	10-K
Document Period End Date	Dec. 31, 2016
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Public Float			$ 780.9
Entity Common Stock, Shares Outstanding		51,564,658
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	FY

XML

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Current assets:
Cash and cash equivalents	$ 135,823	$ 161,122
Customer retention deposits	481	2,598
Accounts receivable, net	388,000	320,588
Costs and estimated earnings in excess of billings	138,618	116,455
Inventory and uninstalled contract materials	49,201	67,796
Prepaid expenses and other current assets	19,258	18,265
Total current assets	731,381	686,824
Property and equipment, net	277,346	283,545
Deferred tax asset - long-term		1,075
Intangible assets, net	32,841	36,438
Goodwill	127,226	124,161
Other long-term assets	2,004	211
Total assets	1,170,798	1,132,254
Current liabilities:
Accounts payable	168,110	124,450
Billings in excess of costs and estimated earnings	112,606	139,875
Accrued expenses and other current liabilities	108,006	93,596
Dividends payable	2,839	2,842
Current portion of capital leases	188	974
Current portion of long-term debt	58,189	54,436
Total current liabilities	449,938	416,173
Long-term capital leases, net of current portion	15	22
Long-term debt, net of current portion	203,381	219,853
Deferred tax liabilities	9,830
Other long-term liabilities	9,064	12,741
Total liabilities	672,228	648,789
Commitments and contingencies
Stockholders' equity
Common stock—$.0001 par value; 90,000,000 shares authorized; 51,576,442 and 51,676,140 issued and outstanding at December 31, 2016 and December 31, 2015	5	5
Additional paid-in capital	162,128	163,344
Retained earnings	335,218	319,899
Noncontrolling interests	1,219	217
Total stockholders' equity	498,570	483,465
Total liabilities and stockholders' equity	$ 1,170,798	$ 1,132,254

XML

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Dec. 31, 2016	Dec. 31, 2015
CONSOLIDATED BALANCE SHEETS
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized	90,000,000	90,000,000
Common stock, shares issued	51,576,442	51,676,140
Common stock, shares outstanding	51,576,442	51,676,140

XML

CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
CONSOLIDATED STATEMENTS OF INCOME
Revenues	$ 1,996,948	$ 1,929,415	$ 2,086,194
Cost of revenues	1,795,641	1,709,542	1,850,154
Gross profit	201,307	219,873	236,040
Selling, general and administrative expenses	140,842	151,703	132,248
Impairment of goodwill	2,716	401
Operating income	57,749	67,769	103,792
Other income (expense):
Income (loss) from non-consolidated entities			5,264
Foreign exchange gain (loss)	202	(763)	374
Other income (expense)	(315)	1,723	(757)
Interest income	149	56	88
Interest expense	(8,914)	(7,688)	(6,433)
Income before provision for income taxes	48,871	61,097	102,328
Provision for income taxes	(21,146)	(23,946)	(38,646)
Net income	27,725	37,151	63,682
Less net income attributable to noncontrolling interests	(1,002)	(279)	(526)
Net income attributable to Primoris	$ 26,723	$ 36,872	$ 63,156
Earnings per share:
Basic (in dollars per share)	$ 0.52	$ 0.71	$ 1.22
Diluted (in dollars per share)	$ 0.51	$ 0.71	$ 1.22
Weighted average common shares outstanding:
Basic (in shares)	51,762	51,647	51,607
Diluted (in shares)	51,989	51,798	51,747

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CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands	Common Stock	Additional Paid-in Capital	Retained Earnings	Non Controlling Interest	Total
Balance at Dec. 31, 2013	$ 5	$ 159,196	$ 238,216	$ 1,031	$ 398,448
Balance (in shares) at Dec. 31, 2013	51,571,394
Increase (Decrease) in Stockholders' Equity Roll Forward
Net income			63,156	526	63,682
Issuance of shares to employees and directors		2,897			2,897
Issuance of shares to employees and directors (in shares)	90,002
Amortization of Restricted Stock Units		934			934
Dividend equivalent Units accrued - Restricted Stock Units		3	(3)
Repurchase of stock		(2,844)			(2,844)
Repurchase of stock (in shares)	(100,000)
Distribution of non-controlling entities				(1,590)	(1,590)
Dividends			(7,741)		(7,741)
Balance at Dec. 31, 2014	$ 5	160,186	293,628	(33)	453,786
Balance (in shares) at Dec. 31, 2014	51,561,396
Increase (Decrease) in Stockholders' Equity Roll Forward
Net income			36,872	279	37,151
Issuance of shares to employees and directors		2,096			2,096
Issuance of shares to employees and directors (in shares)	114,744
Amortization of Restricted Stock Units		1,050			1,050
Dividend equivalent Units accrued - Restricted Stock Units		12	(12)
Distribution of non-controlling entities				(29)	(29)
Dividends			(10,589)		(10,589)
Balance at Dec. 31, 2015	$ 5	163,344	319,899	217	483,465
Balance (in shares) at Dec. 31, 2015	51,676,140
Increase (Decrease) in Stockholders' Equity Roll Forward
Net income			26,723	1,002	27,725
Issuance of shares to employees and directors		2,133			2,133
Issuance of shares to employees and directors (in shares)	108,102
Amortization of Restricted Stock Units		1,627			1,627
Dividend equivalent Units accrued - Restricted Stock Units		23	(23)
Repurchase of stock		(4,999)			(4,999)
Repurchase of stock (in shares)	(207,800)
Dividends			(11,381)		(11,381)
Balance at Dec. 31, 2016	$ 5	$ 162,128	$ 335,218	$ 1,219	$ 498,570
Balance (in shares) at Dec. 31, 2016	51,576,442
Increase (Decrease) in Stockholders' Equity Roll Forward
Dividend equivalent Units accrued – Restricted Stock Units					1,693

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CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Cash flows from operating activities:
Net income	$ 27,725	$ 37,151	$ 63,682
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation	61,433	58,408	50,918
Amortization of intangible assets	6,597	6,793	7,504
Goodwill and intangible asset impairment	2,716	401
Stock-based compensation expense	1,627	1,050	934
Gain on sale of property and equipment	(4,677)	(2,116)	(1,895)
Income from non-consolidated entities			(5,264)
Net deferred tax liabilities (assets)	10,905	(7,004)	8,970
Changes in assets and liabilities:
Customer retention deposits	2,117	(2,117)	4,823
Accounts receivable	(65,806)	19,528	(29,659)
Costs and estimated earnings in excess of billings	(22,163)	(47,499)	(11,508)
Other current assets	17,665	4,949	(25,767)
Other long-term assets	(1,792)	189	72
Accounts payable	42,934	(5,086)	921
Billings in excess of costs and estimated earnings	(27,519)	(19,619)	(14,770)
Contingent earnout liabilities		(6,722)	(4,145)
Accrued expenses and other current liabilities	14,492	11,729	(7,354)
Other long-term liabilities	(3,677)	(1,658)	(1,361)
Net cash provided by operating activities	62,577	48,377	36,101
Cash flows from investing activities:
Purchase of property and equipment	(58,027)	(67,097)	(87,954)
Proceeds from sale of property and equipment	9,603	9,889	5,814
Purchase of short-term investments			(33,770)
Sale of short-term investments		30,992	21,464
Cash received for the sale of equity method investments			6,439
Cash paid for acquisitions	(10,997)	(22,302)	(14,596)
Net cash used in investing activities	(59,421)	(48,518)	(102,603)
Cash flows from financing activities:
Proceeds from issuance of long-term debt	45,000	75,278	58,519
Repayment of capital leases	(793)	(1,336)	(3,276)
Repayment of long-term debt	(57,719)	(43,927)	(35,107)
Proceeds from issuance of common stock purchased by management under long-term incentive plan	1,440	1,621	1,671
Cash distribution to non-controlling interest holder		(29)	(1,590)
Repurchase of common stock	(4,999)		(2,844)
Dividends paid	(11,384)	(9,809)	(7,483)
Net cash provided by (used in) financing activities	(28,455)	21,798	9,890
Net change in cash and cash equivalents	(25,299)	21,657	(56,612)
Cash and cash equivalents at beginning of the period	161,122	139,465	196,077
Cash and cash equivalents at end of the period	135,823	161,122	139,465
Cash paid during the period for:
Interest	8,819	7,688	6,432
Income taxes, net of refunds received	8,624	18,696	57,613
SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING AND FINANCING ACTIVITIES
Obligations incurred for the acquisition of property and equipment		25
Dividends declared and not yet paid	$ 2,839	$ 2,842	$ 2,062

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Nature of Business

12 Months Ended

Dec. 31, 2016

Nature of Business

Nature of Business

PRIMORIS SERVICES CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Dollars in thousands, except share and per share amounts

Note 1—Nature of Business

Organization and operations — Primoris Services Corporation is a holding company of various construction and product engineering subsidiaries.  The Company’s underground and directional drilling operations install, replace and repair natural gas, petroleum, telecommunications and water pipeline systems, including large diameter pipeline systems. The Company’s industrial, civil and engineering operations build and provide maintenance services to industrial facilities including power plants, petrochemical facilities, and other processing plants; construct multi-level parking structures; and engage in the construction of highways, bridges and other environmental construction activities. The Company is incorporated in the State of Delaware, and its corporate headquarters are located at 2100 McKinney Avenue, Suite 1500, Dallas, Texas 75201.

Reportable Segments —The  Company segregates its business into three reportable segments: the West Construction Services segment (“West segment”), the East Construction Services segment (“East segment”) and the Energy segment (“Energy segment”).   See Note 17 — “Reportable Segments”.

The following table lists the Company’s primary operating subsidiaries and their reportable segments:

Subsidiary	Reportable Segment
ARB, Inc. (“ARB”)	West
ARB Structures, Inc.	West
Q3 Contracting, Inc. (“Q3C”)	West
Rockford Corporation (“Rockford”)	West
Vadnais Trenchless Services, Inc. (“Vadnais”)	West
Cardinal Contractors, Inc.	East
BW Primoris, LLC (“BWP”)	East
James Construction Group, LLC (“JCG”):	East
JCG Heavy Civil Division	East
JCG Infrastructure and Maintenance Division	East
Primoris Energy Services Corporation (“PES”)	Energy
PES Pipeline Services	Energy
PES Industrial Division	Energy
OnQuest, Inc.	Energy
OnQuest Canada, ULC	Energy
Primoris Aevenia, Inc. (“Aevenia”)	Energy

The Company owned 50% of the Blythe Power Constructors joint venture (“Blythe”) created for the installation of a parabolic trough solar field and steam generation system in California, and its operations have been included as part of the West Construction Services segment.  The Company determined that in accordance with FASB Topic 810, the Company was the primary beneficiary of a variable interest entity and has consolidated the results of Blythe in its financial statements.  The project has been completed, the project warranty expired in May 2015 and dissolution of the joint venture was completed in the third quarter 2015. 

The Company owns a 50% interest in two separate joint ventures, both formed in 2015.  The Carlsbad Power Constructors joint venture (“Carlsbad”) will engineer and construct a gas-fired power generation facility and a joint venture titled “ARB Inc. & B&M Engineering Co.” (“Wilmington”) will also engineer and construct a gas-fired power generation facility.  Both projects are located in the Southern California area.  The joint venture operations are included as part of the West segment.  As a result of determining that the Company is the primary beneficiary of the two VIE’s, the results of the Carlsbad and Wilmington joint ventures are consolidated in the Company’s financial statements.  The Carlsbad project is expected to be completed in 2018 and the Wilmington project in 2018.

Financial information for the joint ventures is presented in Note 13— “Noncontrolling Interests”.

In May 2014, the Company created a wholly owned subsidiary, Vadnais Trenchless Services, Inc., a California company (“Vadnais”), which on June 5, 2014, purchased the assets of Vadnais Corporation for $6.4 million. Vadnais Corporation was a general contractor specializing in micro-tunneling based in California. The assets purchased were primarily equipment, building and land. 

During the third quarter of 2014, the Company made three small purchases totaling $8.2 million acquiring the net assets of Surber Roustabout, LLC (“Surber”), Ram-Fab, LLC (“Ram-Fab”) and Williams Testing, LLC (“Williams”). Surber and Ram-Fab operate as divisions of PES, and Williams is a division of Cardinal Contractors, Inc. Surber provides general oil and gas related construction activities in Texas; Ram-Fab is a fabricator of custom piping systems located in Arkansas; and Williams provides construction services related to sewer pipeline maintenance, rehabilitation and integrity testing in the Florida market.

On February 28, 2015, the Company acquired the net assets of Aevenia, Inc. for $22.3 million in cash, and established a new entity, Primoris Aevenia, Inc. (“Aevenia”), which operates as part of the Company’s Energy segment.  Aevenia is an energy and electrical construction company that specializes in overhead and underground line work, substations, telecom/fiber, and certain other client-specific on-demand call out services.  The majority of their work is delivered under unit-price Master Services Agreements (“MSAs”).  Aevenia has operations in Minnesota, North Dakota, South Dakota and Iowa. 

On January 29, 2016, the Company acquired the net assets of Mueller Concrete Construction Company (“Mueller”) for $4.1 million and on November 18, 2016, acquired the net assets of Northern Energy & Power (“Northern”) for $6.9 million.  Both Mueller and Northern operate as divisions of Aevenia.  See Note 4— “Business Combinations”.

Unless specifically noted otherwise, as used throughout these consolidated financial statements, “Primoris”, “the Company”, “we”, “our”, “us” or “its” refers to the business, operations and financial results of the Company and its wholly-owned subsidiaries.

Seasonality—Primoris’ results of operations are subject to quarterly variations. Most of the variation is the result of weather, particularly rain, ice and snow, which can impact the Company’s ability to perform construction services. While the majority of the Company’s work is in the southern half of the United States, these seasonal impacts affect revenues and profitability since gas and other utilities defer routine replacement and repair during their period of peak demand.  Any quarter can be affected either negatively or positively by atypical weather patterns in any part of the country.  In addition, demand for new projects tends to be lower during the early part of the year due to clients’ internal budget cycles. As a result, the Company usually experiences higher revenues and earnings in the third and fourth quarters of the year as compared to the first two quarters, with the fourth quarter revenues and earnings usually less than the third quarter revenues and earnings but higher than the second quarter revenues and earnings.

Variability—In addition to seasonality, the Company is dependent on large construction projects, which tend not to be seasonal, but can fluctuate from year to year based on general economic conditions and client requirements. Our business may be affected by declines or delays in new projects or by client project schedules.  Because of the cyclical nature of our business, the financial results for any period may fluctuate from prior periods, and the Company’s financial condition and operating results may vary from quarter-to-quarter. Results from one quarter may not be indicative of its financial condition or operating results for any other quarter or for an entire year.

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Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2016

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

Note 2—Summary of Significant Accounting Policies

Basis of presentation—The accompanying consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and the financial statement rules and regulations of the Securities and Exchange Commission (“SEC”).  References for Financial Accounting Standards Board (“FASB”) standards are made to the FASB Accounting Standards Codification (“ASC”).

Principles of consolidation—The accompanying Consolidated Financial Statements include the accounts of the Company, its wholly-owned subsidiaries and the noncontrolling interests of the Blythe, Carlsbad and Wilmington joint ventures, which are variable interest entities for which the Company is the primary beneficiary as determined under the provisions of ASC Topic 810.  All intercompany balances and transactions have been eliminated in consolidation.

Use of estimates—The preparation of the Company’s Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. As a construction contractor, the Company uses estimates for costs to complete construction projects and the contract value of construction projects.  These estimates have a direct effect on gross profit as reported in these consolidated financial statements. Actual results could materially differ from the Company’s estimates.

Operating cycle— In the accompanying consolidated balance sheets, assets and liabilities relating to long-term construction contracts (e.g. costs and estimated earnings in excess of billings, billings in excess of costs and estimated earnings) are considered current assets and current liabilities, since they are expected to be realized or liquidated in the normal course of contract completion, although completion may require more than one calendar year.

Consequently, the Company has significant working capital invested in assets that may have a liquidation period extending beyond one year. The Company has claims receivable and retention due from various customers and others that are currently in dispute, the realization of which is subject to binding arbitration, final negotiation or litigation, all of which may extend beyond one calendar year.

Cash and cash equivalents—The Company considers all highly liquid investments with an original maturity of three months or less when purchased as cash equivalents.

Short-term investments—The Company classifies as short-term investments all securities or other assets acquired which have ready marketability and can be liquidated, if necessary, within the current operating cycle and which have readily determinable fair values. Short-term investments are classified as available for sale and are recorded at fair value using the specific identification method. At December 31, 2016 and 2015, the Company had no short-term investments.  In prior years, the majority of the Company’s short-term investments were in short-term dollar-denominated bank deposits and U.S. Treasury Bills in order to provide government backing of the investments.

Customer retention deposits— Customer retention deposits consist of contract retention payments made by customers into bank escrow cash accounts as required in some state jurisdictions. Investments for these amounts are limited to highly graded U.S. and municipal government debt obligations, investment grade commercial paper and CDs, which limits credit risk on these balances. Escrow cash accounts are released to the Company by customers as projects are completed in accordance with contract terms.

Inventory and uninstalled contract materials—Inventory consists of expendable construction materials and small tools that will be used in construction projects and is valued at the lower of cost, using first-in, first-out method, or market.  Uninstalled contract materials are certain job specific materials not yet installed, primarily for highway construction projects, which are valued using the specific identification method relating the cost incurred to a specific project.  In most cases, the Company is able to invoice a state agency for the materials, but title is not passed to the state agency until the materials are installed.

Business combinations—Business combinations are accounted for using the acquisition method of accounting.  We use the fair value of the assets acquired and liabilities assumed to account for the purchase price of businesses.  The determination of fair value requires estimates and judgments of future cash flow expectations to assign fair values to the identifiable tangible and intangible assets.  GAAP provides a “measurement period” of up to one year in which to finalize all fair value estimates associated with the acquisition of a business. Most estimates are preliminary until the end of the measurement period.  During the measurement period, any material, newly discovered information that existed at the acquisition date would be reflected as an adjustment to the initial valuations and estimates.  After the measurement date, any adjustments would be recorded as a current period income or expense.  

Goodwill and other intangible assets—The Company accounts for goodwill in accordance with ASC Topic 350 “Intangibles — Goodwill and Other”.  Under ASC Topic 350, goodwill is subject to an annual impairment test as of the first day of the fourth quarter of each year, with more frequent testing if indicators of potential impairment exist.  The impairment review is performed at the reporting unit level for those units with recorded goodwill.

During the third quarter 2016, the Company made a decision to divest its Texas heavy civil business unit, a division of JCG within the East segment.  The Company will continue to operate the division while actively seeking a buyer.  In accordance with ASC Topic 350, the event of the planned divestiture triggered an analysis of goodwill in the JCG reporting unit, resulting in a pretax, non-cash goodwill impairment charge of approximately $2.7 million.  See Note 16 — “Planned Divestiture of Texas Heavy Civil Business Unit”.  In the fourth quarter of 2015, an impairment expense of $401 was recorded relating to the goodwill attributed to Cardinal Contractors, Inc., which is part of the East Segment.  There was no impairment of goodwill for the year ended December 31, 2014.

Income tax— Current income tax expense is the amount of income taxes expected to be paid for the financial results of the current year. A deferred income tax liability or asset is established for the expected future tax consequences resulting from the differences in financial reporting and tax basis of assets and liabilities between GAAP and the tax codes. A valuation allowance is provided if it is more likely than not that some or all of the deferred tax assets will not be realized. The Company provides for uncertain tax positions when such tax positions do not meet the recognition thresholds or measurement standards as set forth in ASC Topic 740. The difference between a tax position taken or expected to be taken on the Company’s income tax returns and the benefit recognized on our financial statements is referred to as an unrecognized tax benefit.  Amounts for uncertain tax positions are adjusted in periods when new information becomes available or when positions are effectively settled. The Company recognizes accrued interest and penalties related to uncertain tax positions, if any, as a component of income tax expense.

Comprehensive income—The Company accounts for comprehensive income in accordance with ASC Topic 220 “Comprehensive Income”, which specifies the computation, presentation and disclosure requirements for comprehensive income (loss). During the reported periods, the Company had no material other comprehensive income.

Foreign operations—At December 31, 2016, the Company had operations in Canada with assets aggregating approximately $11,823, compared to $14,111 at December 31, 2015.  The Canadian operations had revenues of $11,158 and income before tax of $774 for the year ended December 31, 2016; revenues of $17,763 and income before tax of $252 for the year ended December 31, 2015, and revenues of $19,840 and income before tax of $3,183 for the year ended December 31, 2014.

Functional currencies and foreign currency translation— The Company uses the United States dollar as its functional currency in Canada for the Canadian operations of OnQuest Canada, as substantially all monetary transactions are made in U.S. dollars, and other significant economic facts and circumstances currently support that position. Since these factors may change, the Company periodically assesses its position with respect to the functional currency of its foreign subsidiary. Non-monetary balance sheet items and related revenue, gain, expense and loss accounts are valued using historical rates.  All other items are re-measured using the current exchange rate in effect at the balance sheet date. Foreign exchange gains of $202 in 2016, losses of $763 in 2015 and gains of $374 in 2014 are included in the “other income or expense” line of the Consolidated Statements of Income.

Partnerships and joint ventures  — As is normal in the construction industry, the Company is periodically a member of a partnership or a joint venture.  These partnerships or joint ventures are used primarily for the execution of single contracts or projects.  The Company’s ownership can vary from a small noncontrolling ownership to a significant ownership interest.  The Company evaluates each partnership or joint venture to determine whether the entity is considered a variable interest entity (“VIE”) as defined in ASC Topic 810, and if a VIE, whether the Company is the primary beneficiary of the VIE, which would require the Company to consolidate the VIE with the Company’s financial statements.  When consolidation occurs, the Company accounts for the interests of the other parties as a noncontrolling interest and discloses the net income attributable to noncontrolling interests. See Note 13 — “Noncontrolling Interests" for further information.

Equity method of accounting— The Company accounts for its interest in an investment using the equity method of accounting per ASC Topic 323 if the Company is not the primary beneficiary of a VIE or does not have a controlling interest. The investment is recorded at cost and the carrying amount is adjusted periodically to recognize the Company’s proportionate share of income or loss, additional contributions made and dividends and capital distributions received.  The Company records the effect of any impairment or an other than temporary decrease in the value of its investment.

In the event a partially owned equity affiliate were to incur a loss and the Company’s cumulative proportionate share of the loss exceeded the carrying amount of the equity method investment, application of the equity method would be suspended and the Company’s proportionate share of further losses would not be recognized unless the Company committed to provide further financial support to the affiliate. The Company would resume application of the equity method once the affiliate became profitable and the Company’s proportionate share of the affiliate’s earnings equals the Company’s cumulative proportionate share of losses that were not recognized during the period the application of the equity method was suspended.

Cash concentration—The Company places its cash in short term U.S. Treasury bonds and certificates of deposit (“CDs”). At December 31, 2016 and 2015, the Company had cash balances of $135.8 million and $161.1 million, respectively.  At December 31, 2016, the $135.8 million of cash consisted of $100.5 million in U.S. Treasury bill funds, backed by the federal government, and the remaining $35.3 million are held in high credit quality financial institutions in order to mitigate the risk of holding funds not backed by the federal government or in excess of federally backed limits.  At December 31, 2015, the $161.1 million of cash consisted of $131.2 million held in U.S. Treasury bill funds and $29.9 million with high credit quality financial institutions.

Collective bargaining agreements—Approximately 32% of the Company’s hourly employees, primarily consisting of field laborers, were covered by collective bargaining agreements in 2016. Upon renegotiation of such agreements, the Company could be exposed to increases in hourly costs and work stoppages. Of the 84 collective bargaining agreements to which the Company is a party to, 62 will require renegotiation during 2017.  The Company has not had a work stoppage in more than 20 years.

Multiemployer plans — Various subsidiaries in the West segment are signatories to collective bargaining agreements.  These agreements require that the Company participate in and contribute to a number of multiemployer benefit plans for its union employees at rates determined by the agreements. The trustees for each multiemployer plan determine the eligibility and allocations of contributions and benefit amounts, determine the types of benefits and administer the plan. Federal law requires that if the Company were to withdraw from an agreement, it would incur a withdrawal obligation. The potential withdrawal obligation may be significant. In accordance with GAAP, any withdrawal liability would be recorded when it is probable that a liability exists and can be reasonably estimated. In November 2011, the Company withdrew from the Central States Southeast and Southwest Areas Pension Fund multiemployer pension plan, as discussed in Note 15 — “Commitments and Contingencies”.  The Company has no plans to withdraw from any other agreements.

Worker’s compensation insurance—The Company self-insures worker’s compensation claims to a certain level. The Company maintained a self-insurance reserve totaling $28,006 and $26,779 at December 31, 2016 and 2015, respectively. The amount is included in “Accrued expenses and other current liabilities” on the accompanying Consolidated Balance Sheets. Claims administration expenses are charged to current operations as incurred.  Future payments may materially differ from the reserve amounts.

Fair value of financial instruments—The consolidated financial statements include financial instruments for which the fair value may differ from amounts reflected on a historical basis. Financial instruments of the Company consist of cash, accounts receivable, short-term investments, accounts payable and certain accrued liabilities.  These financial instruments generally approximate fair market value based on their short-term nature.  The carrying value of the Company’s long-term debt approximates fair value based on comparison with current prevailing market rates for loans of similar risks and maturities.

The fair value of financial instruments is measured and disclosure is made in accordance with ASC Topic 820, “Fair Value Measurements and Disclosures”.

Revenue recognition

Fixed-price contracts — Historically, a substantial portion of the Company’s revenue has been generated under fixed-price contracts. For fixed-price contracts, the Company recognizes revenues primarily using the percentage-of-completion method, which may result in uneven and irregular results. In the percentage-of-completion method, estimated contract values, estimated cost at completion and total costs incurred to date are used to calculate revenues earned. Unforeseen events and circumstances can alter the estimate of the costs and potential profit associated with a particular contract. Total estimated costs, and thus contract revenues and income, can be impacted by changes in productivity, scheduling, the unit cost of labor, subcontracts, materials and equipment. Additionally, external factors such as weather, client needs, client delays in providing permits and approvals, labor availability, governmental regulation and politics may affect the progress of a project’s completion and thus the timing of revenue recognition. To the extent that original cost estimates are modified, estimated costs to complete increase, delivery schedules are delayed, or progress under a contract is otherwise impeded, cash flow, revenue recognition and profitability from a particular contract may be adversely affected.

The Company considers unapproved change orders to be contract variations for which it has customer approval for a change in scope but for which it does not have an agreed upon price change. Costs associated with unapproved change orders are included in the estimated cost to complete the contracts and are treated as project costs as incurred. The Company recognizes no margin, where revenue is equal to costs incurred, on unapproved change orders based on an estimated probability of realization from change order approval. Unapproved change orders involve the use of estimates, and it is reasonably possible that revisions to the estimated costs and recoverable amounts may be required in future reporting periods to reflect changes in estimates or final agreements with customers.

The Company considers claims to be amounts it seeks, or will seek, to collect from customers or others for customer-caused changes in contract specifications or design, or other customer-related causes of unanticipated additional contract costs, on which there is no agreement with customers on both scope and price changes. Claims can also be caused by non-customer-caused changes, such as weather delays or rain.  Claims are included in the calculation of revenues when realization is probable and amounts can be reliably determined. Revenue in excess of contract costs from claims is recognized when an agreement is reached with customers as to the value of the claims, which in some instances may not occur until after completion of work under the contract. Costs associated with claims are included in the estimated costs to complete the contracts and are treated as project costs when incurred.

Other contract forms — The Company also uses unit-price, time and material, and cost reimbursable plus fee contracts.  For these jobs, revenue is recognized primarily based on contractual terms. For example, time and material contract revenues are generally recognized on an input basis, based on labor hours incurred and on purchases made. Similarly, unit price contracts generally recognize revenue on an output based measurement such as the completion of specific units at a specified unit price.

At any time, if an estimate of total contract cost indicates a loss on a contract, the projected loss is recognized in full at that time and recognized as an “accrued loss provision” which is included in the accrued expenses and other liabilities amount on the balance sheet.  For fixed price contracts, as the percentage-of-completion method is used to calculate revenues, the accrued loss provision is changed so that the gross profit for the contract remains zero in future periods. If we anticipate that there will be a loss for unit price or cost reimbursable contracts, the projected loss is recognized in full at that time.

Changes in job performance, job conditions and estimated profitability, including those arising from final contract settlements, may result in revisions to costs and income. These revisions are recognized in the period in which the revisions are identified.

In all forms of contracts, the Company estimates its collectability of contract amounts at the same time that it estimates project costs.  If the Company anticipates that there may be issues associated with the collectability of the full amount calculated as revenues, the Company may reduce the amount recognized as revenue to reflect the uncertainty associated with realization of the eventual cash collection.  For example, when a cost reimbursable project exceeds the client’s expected budget amount, the client frequently requests an adjustment to the final amount.  Similarly, some utility clients reserve the right to audit costs for significant periods after performance of the work.  In these situations, the Company may choose to defer recognition of revenue up to the time that the client pays for the services.

The caption “Costs and estimated earnings in excess of billings” in the Consolidated Balance Sheet represents unbilled receivables which arise when revenues have been recorded but the amount will not be billed until a later date.  Balances represent:  (a) unbilled amounts arising from the use of the percentage-of-completion method of accounting which may not be billed under the terms of the contract until a later date or project milestone, (b) incurred costs to be billed under cost reimbursement type contracts, (c) amounts arising from routine lags in billing, or (d) the revenue associated with unapproved change orders or claims when realization is probable and amounts can be reliably determined.  For those contracts in which billings exceed contract revenues recognized to date, the excess amounts are included in the caption “Billings in excess of costs and estimated earnings”.

In accordance with applicable terms of certain construction contracts, retainage amounts may be withheld by customers until completion and acceptance of the project.  Some payments of the retainage may not be received for a significant period after completion of our portion of a project.  In some jurisdictions, retainage amounts are deposited into an escrow account.

Accounts receivable—Accounts receivable and contract receivables are primarily with public and private companies and governmental agencies located in the United States. Credit terms for payment of products and services are extended to customers in the normal course of business and no interest is charged. Contract receivables are generally progress billings on projects, and as a result, are short term in nature.  Generally, the Company requires no collateral from its customers, but files statutory liens or stop notices on any construction projects when collection problems are anticipated. While a project is underway, the Company estimates its collectability of contract amounts at the same time that it estimates project costs.  As discussed in the “Revenue recognition” section above, realization of the eventual cash collection may be recognized as adjustments to the contract profitability, otherwise, the Company uses the allowance method of accounting for losses from uncollectible accounts. Under this method an allowance is provided based upon historical experience and management’s evaluation of outstanding contract receivables at the end of each year. Receivables are written off in the period deemed uncollectible. The allowance for doubtful accounts at December 31, 2016 and 2015 was $1,030 and $480, respectively.

Significant revision in contract estimate  —  Revenue recognition is based on the percentage-of-completion method for firm fixed-price contracts. Under this method, the costs incurred to date as a percentage of total estimated costs are used to calculate revenue. Total estimated costs, and thus contract revenues and margin, are impacted by many factors, which can cause significant changes in estimates during the life cycle of a project.

For projects that were in process at the end of the prior year, there can be a difference in revenues and profits that would have been recognized in the prior year, had current year estimates of costs to complete been known at the end of the prior year. 

During the year ended December 31, 2016, certain contracts had revisions in cost estimates from those projected at December 31, 2015. If the revised estimates had been applied in the prior year, the gross profit earned on these contracts would have resulted in a decrease of approximately $1,685 in gross profit in 2015. Similarly, had the revised estimates as of December 31, 2015 been applied in the prior year; the gross profit earned on these contracts would have resulted in an increase of approximately $1,540 in gross profit in 2014. The revised estimates for the year ended December 31, 2014 would have resulted in a gross profit increase of approximately $17,266 in the year 2013.

The following table presents the approximate financial impact of the changes in estimates that would have been reflected in the prior years 2015 and 2014 had the revised estimates been applied to the particular year.

	Net impact of change in estimate
	for the years ended December 31,
	2015		2014
Revised estimates in 2016 that impact 2015	$	(1,685)	$	—
Revised estimates in 2015 that impact 2014		(1,540)		1,540
Revised estimates in 2014 that impact 2013		—		(17,266)
Net impact to gross margin	$	(3,225)	$	(15,726)
EPS impact to year	$	(0.04)	$	(0.19)

During the third quarter 2016, the Company settled a dispute with a customer on collection of a receivable of $17.9 million, receiving $38 million in cash.  Prior to settlement, the Company recorded revenues with zero margin.  The Company recognized the settlement as a change in accounting estimate which resulted in recognizing revenues of approximately $27.5 million and gross profit of approximately $26.7 million in the third quarter of 2016.  The settlement of this project dispute was not included in the table above.

Customer concentration — The Company operates in multiple industry segments encompassing the construction of commercial, industrial and public works infrastructure assets throughout primarily the United States. Typically, the top ten customers in any one calendar year generate revenues in excess of 50% of total revenues; however, the group that comprise the top ten customers varies from year to year. See Note 18 — “Customer Concentrations” for further discussion.

Property and equipment—Property and equipment are recorded at cost and are depreciated using the straight-line method over the estimated useful lives of the related assets, usually ranging from three to thirty years. Maintenance and repairs are charged to expense as incurred. Significant renewals and betterments are capitalized. At the time of retirement or other disposition of property and equipment, the cost and accumulated depreciation are removed from the accounts, and any resulting gain or loss is reflected in operations.

The Company assesses the recoverability of property and equipment whenever events or changes in business circumstances indicate that the carrying amount of the asset may not be fully recoverable.  We perform an analysis to determine if impairment exists.  The amount of property and equipment impairment, if any, is measured based on fair value and is charged to operations in the period in which property and equipment impairment is determined by management. As of December 31, 2016 and 2015, the Company’s management has not identified any material impairment of its property and equipment.

Taxes collected from customers—Taxes collected from the Company’s customers are recorded on a net basis.

Share-based payments and stock-based compensation—In July 2008, the shareholders approved and the Company adopted the Primoris Services Corporation 2008 Long-term Incentive Equity Plan, which was replaced by the Primoris Services Corporation 2013 Long-term Incentive Equity Plan (“Equity Plan”) after approval of the shareholders and adoption by the Company on May 3, 2013.  Detailed discussion of shares issued under the Equity Plan are included in Note 21 — “Deferred Compensation Agreements and Stock-Based Compensation” and in Note 25—“Stockholders’ Equity”. Such share issuances include grants of Restricted Stock Units to executives, issuance of stock to certain senior managers and executives and issuances of stock to non-employee members of the Board of Directors.

Contingent Earnout Liabilities—As part of past acquisitions, the Company agreed to pay cash to the sellers upon meeting certain operating performance targets for specified periods subsequent to the acquisition date.  Each quarter, the Company evaluates the fair value of the estimated contingency and records a non-operating charge for the change in the fair value.  Upon meeting the target, the Company reflects the full liability on the balance sheet and records a charge to “Selling, general and administration expense” for the change in the fair value of the liability from the prior period.   See Note 14 — “Contingent Earnout Liabilities” for further discussion.

Recently Issued Accounting Pronouncements

In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606)”, with several clarifying updates issued during 2016. The new standard is effective for reporting periods beginning after December 15, 2017. The new standard will supersede all current revenue recognition standards and guidance.  Revenue recognition will occur when promised goods or services are transferred to customers in amounts that reflect the consideration to which the company expects to be entitled to in exchange for those goods or services. The mandatory adoption will require new qualitative and quantitative disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments, information about contract balances and performance obligations, and assets recognized from costs incurred to obtain or fulfill a contract. The standard permits two implementation approaches at the beginning of 2018: the “full retrospective method” that requires restatement of prior years and the “modified retrospective method” that requires prospective application of the new standard as a cumulative-effect adjustment. The Company expects to adopt this new standard using the modified retrospective method that will result in a cumulative-effect adjustment to retained earnings as of the date of adoption.  The adoption will only apply to customer contracts that are not substantially complete as of January 1, 2018.

The Company is currently evaluating the impact of adopting the standard on the Company’s financial position, results of operations, cash flows and related disclosures.  Although it is early in our evaluation process, we do not expect Topic 606 to have a material impact on our financial statements, though internal documentation and record keeping may be significantly impacted.  The impact to our results is not believed to be material because Topic 606 generally supports the recognition of revenue over time under the cost-to-cost method for the majority of our contracts, which is consistent with our current percentage of completion revenue recognition model.  In most of our fixed price contracts, the customer typically controls the work in process as evidenced either by contractual termination clauses or by our rights to payment for work performed to date to deliver services that do not have an alternative use to the Company. 

The Company does not expect the new standard to materially affect the total revenue that can be recognized over the life of a construction project; however, the revenue recognized on a quarterly basis during the construction period may change. We believe that Topic 606 is likely to be more impactful to certain of our lump sum projects as a result of the following potential changes from our current practices:

§ Performance obligations – Topic 606 requires a review of contracts and contract modifications to determine whether there are multiple performance obligations.  Each separate performance obligation must be accounted for as a distinct project, which could impact the timing of revenue recognition.  There is a potential that some of our contracts may have multiple performance obligations which may affect the timing of revenue recognition

§ Variable consideration – In accordance with Topic 606, revenue recognition must account for variable consideration, including potential liquidated damages and customer discounts. Currently, we assess the impact of liquidated damages as an estimated cost of the project.  The adoption of the new standard may affect the timing of the recognition of revenue for both liquidated damages and discounts. 

§ Mobilization costs – Mobilization costs typically include costs to provide labor, equipment and facilities to a project site and they are recorded currently as project costs as incurred.  Topic 606 requires these costs to be capitalized as an asset and amortized over the duration of the project.

§ Significant components – For some projects, we may purchase equipment from a third party, such as micro–LNG equipment, and install the equipment at the project site.  Under today’s standard, the Company recognizes the associated revenue and profit for the equipment.  Depending on the terms of the contract, under the new standard, revenue may be recognized without profit.   

We do not expect Topic 606 to have a material impact on our consolidated balance sheets, though we expect certain reclassifications among financial statement accounts to align with the new standard.  We also expect significant expanded disclosures relating to revenue recognized during each period.

In August 2014, the FASB issued ASU 2014-15 “Presentation of Financial Statements — Going Concern (Subtopic 205-40)” to address the diversity in practice in determining when there is substantial doubt about an entity’s ability to continue as a going concern and when and how an entity must disclose certain relevant conditions and events. This standard requires an entity to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the entity’s ability to continue as a going concern for a period of one year after the date that the financial statements are issued (or available to be issued). The standard is effective for annual and interim periods ending after December 15, 2016. The Company adopted this guidance effective January 1, 2016.  It had no effect on the Company’s financial statements.

In February 2015, the FASB issued ASU 2015-02 “Consolidation (Topic 810): Amendment to the Consolidation Analysis”, which amends existing consolidation guidance, including amending the guidance related to determining whether an entity is a variable interest entity. The update is effective for interim and annual periods beginning after December 15, 2015. As of January 1, 2016, the Company adopted this ASU, which did not have a material impact on the Company’s consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02 “Leases (Topic 842)”. The ASU will require recognition of operating leases with lease terms of more than twelve months on the balance sheet as both assets for the rights and liabilities for the obligations created by the leases. The ASU will require disclosures that provide qualitative and quantitative information for the lease assets and liabilities recorded in the financial statements. The standard is effective for fiscal years beginning after December 15, 2018. The Company will establish procedures to adopt the ASU.

In March 2016, the FASB issued ASU 2016-09 “Compensation — Stock Compensation (Topic 718) — Improvements to Employee Share-Based Payment Accounting”. The ASU modifies the accounting for excess tax benefits and tax deficiencies associated with share-based payments by requiring that excess tax benefits or deficiencies be included in the income statement rather than in equity. Additionally, the tax benefits for dividends on share-based payment awards will also be reflected in the income statement. As a result of these modifications, the ASU requires that the tax-related cash flows resulting from share-based payments will be shown on the cash flow statement as operating activities rather than as financing activities. This guidance is effective for annual periods beginning after December 15, 2016, with early adoption permitted. Adoption of this ASU is not expected to have a material effect on the Company’s consolidated financial statements.

In January 2017, the Financial Accounting Standards Board ("FASB") issued ASU 2017-04, "Simplifying the Test for Goodwill Impairment". ASU 2017-04 removes the second step of the goodwill impairment test, which requires a hypothetical purchase price allocation. A goodwill impairment will now be the amount by which a reporting unit's carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. ASU 2017-04 is effective for interim and annual reporting periods beginning after December 15, 2019 and will be applied prospectively. Management does not expect the adoption of ASU 2017-04 to have an impact on the Company's financial position, results of operations or cash flows.

In January 2017, the FASB issued ASU 2017-01, "Business Combinations (Topic 805): Clarifying the Definition of a Business" which changes the definition of a business to assist entities with evaluating when a set of transferred assets and activities is a business. ASU 2017-01 requires an entity to evaluate if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets; if so, the set of transferred assets and activities is not a business. ASU 2017-01 is effective for interim and annual reporting periods beginning after December 15, 2017. Management does not expect the adoption of ASU 2017-01 to have any impact on the company's financial position, results of operations or cash flows.

In the first quarter of 2016, the company adopted ASU 2015-15, "Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements — Amendments to SEC Paragraphs Pursuant to Staff Announcement at June 18, 2015 EITF Meeting (SEC Update)", which clarifies the presentation and measurement of debt issuance costs incurred in connection with line of credit arrangements. The adoption of ASU 2015-15 did not have an impact on the company's financial position, results of operations or cash flows.

Other new pronouncements issued but not effective until after December 31, 2016 are not expected to have a material impact on the consolidated results of operations, financial position or cash flows of the Company.

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Fair Value Measurements

12 Months Ended

Dec. 31, 2016

Fair Value Measurements

Fair Value Measurements

Note 3—Fair Value Measurements

ASC Topic 820, “Fair Value Measurements and Disclosures” defines fair value, establishes a framework for measuring fair value in GAAP and requires certain disclosures about fair value measurements.  ASC Topic 820 addresses fair value GAAP for financial assets and financial liabilities that are re-measured and reported at fair value at each reporting period and for non-financial assets and liabilities that are re-measured and reported at fair value on a non-recurring basis.

In general, fair values determined by Level 1 inputs use quoted prices (unadjusted) in active markets for identical assets or liabilities. Fair values determined by Level 2 inputs use data points that are observable such as quoted prices, interest rates and yield curves. Fair values determined by Level 3 inputs are “unobservable data points” for the asset or liability and include situations where there is little, if any, market activity for the asset or liability.

The following table presents, for each of the fair value hierarchy levels identified under ASC Topic 820, the Company’s financial assets and certain liabilities that are required to be measured at fair value at December 31, 2016 and 2015:

			Fair Value Measurements at Reporting Date
					Significant
	Amount		Quoted Prices		Other	Significant
	Recorded		in Active Markets		Observable	Unobservable
	on Balance		for Identical Assets		Inputs	Inputs
	Sheet		(Level 1)		(Level 2)	(Level 3)
Assets as of December 31, 2016:
Cash and cash equivalents	$	135,823	$	135,823	—		—
Liabilities as of December 31, 2016:
None
Assets as of December 31, 2015:
Cash and cash equivalents	$	161,122	$	161,122	—		—
Liabilities as of December 31, 2015:
None

Other financial instruments of the Company not listed in the table consist of accounts receivable, accounts payable and certain accrued liabilities.  These financial instruments generally approximate fair value based on their short-term nature.  The carrying value of the Company’s long-term debt approximates fair value based on comparison with current prevailing market rates for loans of similar risks and maturities.

The following table provides changes to the Company’s contingent consideration liability Level 3 fair value measurements during the years ended December 31, 2016 and 2015:

	Significant Unobservable Inputs
	(Level 3)
Contingent Consideration Liability	2016		2015
Beginning balance, January 1, 2016 and 2015	$	—	$	6,922
Additions to contingent consideration liability:
Change in fair value of contingent consideration liability during year		—		125
Reductions in the contingent consideration liability:
Payment to Q3C sellers for meeting performance targets		—		(5,000)
Reduction due to non-attainment of performance target – Surber, Ram Fab and Vadnais		—		(2,047)
Ending balance, December 31, 2016 and 2015	$	—	$	—

On a quarterly basis, the Company assesses the estimated fair value of the contractual obligation to pay the contingent consideration and any changes in estimated fair value are recorded as a non-operating charge in the Company’s statement of income.  Fluctuations in the fair value of contingent consideration are impacted by two unobservable inputs, management’s estimate of the probability (which has ranged from 33% to 100%) of the acquired company meeting the contractual operating performance target and the estimated discount rate (a rate that approximates the Company’s cost of capital). Significant changes in either of those inputs in isolation would result in a different fair value measurement.  Generally, a change in the assumption of the probability of meeting the performance target is accompanied by a directionally similar change in the fair value of contingent consideration liability, whereas a change in assumption used of the estimated discount rate is accompanied by a directionally opposite change in the fair value of contingent consideration liability.

Upon meeting the target, the Company reflects the full liability on the balance sheet and records a charge to “Selling, general and administration expense” for the change in the fair value of the liability from the prior period.   See Note 14 — “Contingent Earnout Liabilities” for further discussion.

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Business Combinations

12 Months Ended

Dec. 31, 2016

Business Combinations

Business Combinations

Note 4—Business Combinations

2016 Acquisitions

On January 29, 2016, the Company’s subsidiary, Aevenia, acquired certain assets and liabilities of Mueller Concrete Construction Company ("Mueller") for $4.1 million. The purchase was accounted for using the acquisition method of accounting. During the second quarter of 2016, the Company finalized its estimate of fair value of the acquired assets of Mueller, which included $2.0 million of fixed assets, $2.0 million of goodwill and $0.1 million of inventory. Mueller operates as a division of Aevenia.

On June 24, 2016, the Company’s subsidiary, Vadnais, purchased property, plant and equipment from Pipe Jacking Unlimited, Inc., consisting of specialty directional drilling and tunneling equipment for $13.4 million in cash. The Company determined this purchase did not meet the definition of a business as defined under ASC 805. The purchase price approximated the estimated fair value of the equipment. The Company believes the purchase of the equipment will aid in the Company’s pipeline construction projects and enhance the work provided to our utility clients.

On November 18, 2016, the Company’s subsidiary, Aevenia, acquired certain assets and liabilities of Northern Energy & Power ("Northern") for $6.9 million.  Northern serves the renewable energy sector with a specific focus on Solar Photovoltaic (PV) installations in the United States (projects range from 1 MW to 200 MW Direct Current - target projects are from $1.5 million to as large as $150 million).  The purchase was accounted for using the acquisition method of accounting.  The assets were purchased for their estimated fair value and consisted of $3.0 million of intangible assets, $3.8 million of goodwill and $0.1 million of net working capital.  Northern operates as a division of Aevenia.

Legal and other costs related to the acquisitions during 2016 were immaterial and were expensed during 2016.

2015 Acquisitions

On February 28, 2015, the Company acquired the net assets of Aevenia, Inc. for $22.3 million in cash, and established a new entity, Primoris Aevenia, Inc. (“Aevenia”), which operates as part of the Company’s Energy segment.  The acquisition provides electrical construction expertise for the Company and provides a greater presence and convenient access to the central plains area of the United States.  The purchase was accounted for using the acquisition method of accounting.  The assets were purchased for their estimated fair value and included current assets, current liabilities, plant and equipment, intangible assets and goodwill.  From the acquisition date through December 31, 2015, Aevenia contributed revenues of $23,695 and gross margin of $2,378.  Costs related to the Aevenia acquisition in the amount of $151 were expensed in 2015.

The fair value of the assets acquired and the liabilities assumed for the 2016 and 2015 acquisitions is detailed in the section below “Schedule of Assets Acquired and Liabilities Assumed”.

Summary of Cash Paid for Acquisitions

The following table summarizes the cash paid for acquisitions for the years ended December 31, 2016 and 2015.

	Year ended December 31,
	2016		2015
Northern — purchased November 18, 2016	$	6,889	$	—
Mueller — purchased January 29, 2016		4,108		—
Aevenia — purchased February 28, 2015		—		22,302
Cash paid	$	10,997	$	22,302

Schedule of Assets Acquired and Liabilities Assumed

The following table summarizes the fair value of the assets acquired and the liabilities assumed at the acquisition date:

	Year ended December 31,
	2016		2015
	Acquisitions		Acquisition
Accounts receivable	$	1,606	$	2,734
Inventory and other assets		64		1,154
Prepaid expenses		—		322
Property, plant and equipment		2,133		11,173
Intangible assets		3,000		3,850
Goodwill		5,781		5,152
Accounts payable		(726)		(743)
Accrued expenses		(861)		(1,340)
Total	$	10,997	$	22,302

Identifiable Tangible Assets.  For each of the acquisitions, significant identifiable tangible assets acquired include accounts receivable, inventory and fixed assets, consisting primarily of construction equipment. The Company determined that the recorded value of accounts receivable and inventory reflect fair value of those assets. The Company estimated the fair value of fixed assets on the effective dates of the acquisitions using a market approach, based on comparable market values for similar equipment of similar condition and age.

Identifiable Intangible Assets.  The Company used the assistance of an independent third party valuation specialist to estimate the fair value of the intangible assets acquired for the acquisitions.  Based on the Company’s assessment, the acquired intangible asset categories, fair value and average amortization periods, generally on a straight-line basis, are as follows:

	Amortization	2016		2015
	Period	Fair Value		Fair Value
Non-compete agreements	2 to 5 years	$	—	$	1,350
Customer relationships	5 to 10 years		3,000		2,500
Total		$	3,000	$	3,850

The fair value for the non-compete agreements was valued based on a discounted “income approach” model, including estimated financial results with and without the non-compete agreements in place.  The agreements were analyzed based on the potential impact of competition that certain individuals could have on the financial results, assuming the agreements were not in place.  An estimate of the probability of competition was applied and the results were compared to a similar model assuming the agreements were in place.

The customer relationships were valued utilizing the “excess earnings method” of the income approach.  The estimated discounted cash flows associated with existing customers and projects were based on historical and market participant data. Such discounted cash flows were net of fair market returns on the various tangible and intangible assets that are necessary to realize the potential cash flows.

Goodwill. Goodwill for Northern is derived from the expected benefits of services in the renewable energy sector with a specific focus on Solar Photovoltaic (PV) installations in the United States.  Goodwill for Aevenia largely consists of expected benefits from providing electrical construction expertise for the Company and the greater presence and convenient access to the central plains area of the United States.  Goodwill also includes the value of the assembled workforce of the various acquired businesses.

The goodwill and other intangible assets associated with the acquisitions are deductible for income tax purposes over a fifteen-year period.

Supplemental Unaudited Pro Forma Information

The following pro forma information for the twelve months ended December 31, 2016 and 2015 presents the results of operations of the Company as if the 2016 acquisitions of Mueller and Northern, and the 2015 acquisition of Aevenia had occurred at the beginning of 2015.  The supplemental pro forma information has been adjusted to include:

· the pro forma impact of amortization of intangible assets and depreciation of property, plant and equipment, based on the purchase price allocations; and

· the pro forma tax effect of both the income before income taxes and the pro forma adjustments, calculated using a tax rate of 40.0% for the years ended December 31, 2016 and 2015.

The pro forma results are presented for illustrative purposes only and are not necessarily indicative of, or intended to represent, the results that would have been achieved had the various acquisitions been completed on January 1, 2015. For example, the pro forma results do not reflect any operating efficiencies and associated cost savings that the Company might have achieved with respect to the acquisitions.

	2016		2015
	(unaudited)		(unaudited)
Revenues	$	2,026,867	$	1,963,754
Income before provision for income taxes	$	54,328	$	63,827
Net income attributable to Primoris	$	29,997	$	38,510
Weighted average common shares outstanding:
Basic		51,762		51,647
Diluted		51,989		51,798
Earnings per share:
Basic	$	0.58	$	0.75
Diluted	$	0.58	$	0.74

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Accounts Receivable

12 Months Ended

Dec. 31, 2016

Accounts Receivable.

Accounts Receivable

Note 5—Accounts Receivable

The following is a summary of accounts receivable at December 31:

	2016		2015
Contracts receivable, net of allowance for doubtful accounts of $1,030 at December 31, 2016 and $480 at December 31, 2015, respectively	$	340,871	$	288,300
Retention receivable		46,394		31,396
		387,265		319,696
Other accounts receivable		735		892
	$	388,000	$	320,588

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Costs and Estimated Earnings on Uncompleted Contracts

12 Months Ended

Dec. 31, 2016

Costs and Estimated Earnings on Uncompleted Contracts

Costs and Estimated Earnings on Uncompleted Contracts

Note 6—Costs and Estimated Earnings on Uncompleted Contracts

Costs and estimated earnings on uncompleted contracts consist of the following at December 31:

	2016		2015
Costs incurred on uncompleted contracts	$	5,391,124	$	5,413,224
Gross profit recognized		456,871		625,280
		5,847,995		6,038,504
Less: billings to date		(5,821,983)		(6,061,924)
	$	26,012	$	(23,420)

This amount is included in the accompanying consolidated balance sheets at December 31 under the following captions:

	2016		2015
Costs and estimated earnings in excess of billings	$	138,618	$	116,455
Billings in excess of cost and estimated earnings		(112,606)		(139,875)
	$	26,012	$	(23,420)

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Property and Equipment

12 Months Ended

Dec. 31, 2016

Property and Equipment

Property and Equipment

Note 7—Property and Equipment

The following is a summary of property and equipment at December 31:

	2016		2015		Useful Life
Land and buildings	$	56,878	$	54,827	30 years
Leasehold improvements		12,147		11,071	Lease life
Office equipment		8,083		5,958	3 - 5 years
Construction equipment		370,562		340,895	3 - 7 years
Transportation equipment		98,113		93,613	3 - 18 years
		545,783		506,364
Less: accumulated depreciation and amortization		(268,437)		(222,819)
Property and equipment, net	$	277,346	$	283,545

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Equity Method Investments

12 Months Ended

Dec. 31, 2016

Equity Method Investments.

Equity Method Investments

Note 8—Equity Method Investments

WesPac Energy LLC and WesPac Midstream LLC

In 2010, the Company acquired a 50% membership interest in WesPac Energy LLC, a limited liability company that developed pipeline and terminal projects, primarily for the oil and gas industry.  This membership interest was later formed into WesPac Midstream LLC, a Delaware limited liability company.  In 2014, the Company’s ownership interest in Midstream was sold for $5,250 in cash, which was recorded as income from non-consolidated entities.

Alvah, Inc.

As part of its acquisition of Q3C in November 2012, the Company acquired a 49% membership interest in Alvah, Inc., a California corporation (“Alvah”).  Alvah was engaged in electrical contracting activities, primarily in Northern California.  On February 5, 2014, the majority owner of Alvah, in accordance with the original investment agreement, elected to purchase the Company’s minority interest effective January 1, 2014 for a cash payment of $1,189.

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Goodwill and Intangible Assets

12 Months Ended

Dec. 31, 2016

Goodwill and Intangible Assets

Goodwill and Intangible Assets

Note 9—Goodwill and Intangible Assets

Goodwill was recorded at our reporting units at December 31 as follows:

Reporting Unit	Segment	2016		2015
Rockford	West	$	32,079	$	32,079
Q3C	West		13,160		13,160
JCG (includes JCG Heavy Civil and Infrastructure and Maintenance divisions)	East		40,150		42,866
PES (includes PPS, PES Industrial, FSSI, Saxon and Surber divisions)	Energy		28,463		28,463
OnQuest Canada, ULC	Energy		2,441		2,441
Aevenia	Energy		10,933		5,152
Total Goodwill		$	127,226	$	124,161

The table below summarizes the intangible asset categories, amounts and the average amortization periods, which are generally on a straight-line basis, at December 31:

	Amortization
	Period	2016		2015
Tradename	3 to 10 years	$	11,754	$	15,019
Customer relationships	3 to 15 years		20,136		19,995
Non-compete agreements	2 to 5 years		951		1,424
		$	32,841	$	36,438

Amortization expense of intangible assets was $6,597,  $6,793 and $7,504 for the years ended December 31, 2016, 2015 and 2014, respectively. Estimated future amortization expense for intangible assets as of December 31, 2016 is as follows:

	Estimated
	Intangible
For the Years Ending	Amortization
December 31,	Expense
2017	$	6,673
2018		6,291
2019		6,111
2020		3,712
2021		2,805
Thereafter		7,249
	$	32,841

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Accounts Payable and Accrued Liabilities

12 Months Ended

Dec. 31, 2016

Accounts Payable and Accrued Liabilities

Accounts Payable and Accrued Liabilities

Note 10—Accounts Payable and Accrued Liabilities

At December 31, 2016 and 2015, accounts payable included retention amounts of approximately $10,562 and $8,375, respectively. These amounts due to subcontractors have been retained pending contract completion and customer acceptance of jobs.

The following is a summary of accrued expenses and other current liabilities at December 31:

	2016		2015
Payroll and related employee benefits	$	42,718	$	33,358
Insurance, including self-insurance reserves		42,546		44,695
Reserve for estimated losses on uncompleted contracts		12,801		7,261
Corporate income taxes and other taxes		3,368		2,447
Accrued administrative cost		3,791		1,415
Other		2,782		4,420
	$	108,006	$	93,596

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Capital Leases

12 Months Ended

Dec. 31, 2016

Capital Leases

Capital Leases

Note 11—Capital Leases

The Company leases vehicles and certain equipment under capital leases. The economic substance of the leases is as a financing transaction for acquisition of the vehicles and equipment, and accordingly, the leases  are recorded as assets and liabilities. Included in depreciation expense is amortization of vehicles and equipment held under capital leases, amortized over their useful lives on a straight-line basis.

At December 31, 2016, total assets under capital leases were $2,469, accumulated depreciation was $2,332 and the net book value was $137. For 2015, total assets under capital leases were $4,874, accumulated depreciation was $4,103 and the net book value of assets was $771.

The following is a schedule by year of the future minimum lease payments required under capital leases together with their present value as of December 31:

2017	$	188
2018		6
2019		6
2020		5
2021		—
Total minimum lease payments	$	205
Amounts representing interest		(2)
Net present value of minimum lease payments		203
Less: current portion of capital lease obligations		(188)
Long-term capital lease obligations	$	15

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Credit Arrangements

12 Months Ended

Dec. 31, 2016

Credit Arrangements

Credit Arrangements

Note 12—Credit Arrangements

Long-term debt and credit facilities consist of the following at December 31:

Commercial Notes Payable and Mortgage Notes Payable

	2016		2015
Commercial equipment notes payable to various commercial equipment finance companies and banks with interest rates that range from 1.78% to 3.51% per annum. Monthly principal and interest payments are due in the amount of $2,521 per month until the maturity dates, which range from August 13, 2017 to December 13, 2020. The notes are secured by certain construction equipment of the Company	$	55,579	$	83,711
Commercial equipment notes payable to various commercial equipment finance companies and banks with  interest rates that range from 1.94% to 2.75% per annum. Monthly principal and interest payments are due in the amount of $999 per month until the maturity dates, which range from March 31, 2019 to September 24, 2021. The notes are secured by certain construction equipment assets of the Company		33,254		44,587
Commercial equipment notes payable to various commercial equipment finance companies and banks with interest rates that range from 2.01% to 2.19% per annum. Monthly principal and interest payments are due in the amount of $735 per month until the maturity dates, which range from March 5, 2020 to September 24, 2020. The notes are secured by certain construction equipment assets of the Company		29,702		38,041
Commercial equipment notes payable to various commercial equipment finance companies and banks with interest rates that range from 1.83% to 2.06% per annum. Monthly principal and interest payments are due in the amount of $788 per month until the maturity dates, which range from August 15, 2021 to October 14, 2021. The notes are secured by certain construction equipment assets of the Company		42,613		—
Two secured mortgage notes payable to a bank, with an interest rate of 4.3% per annum.  Monthly principal and interest payments of $60 per month began January 1, 2016 and continue until the maturity date of January 1, 2031. The notes are secured by two buildings		7,564		7,950
Senior Secured Notes payable to an insurance finance company, with interest rates that range from 3.65% to 4.60% per annum, with quarterly interest payments.  Principal repayment for the $50,000 loan starts on December 28, 2016, for the $25,000 loan on July 15, 2017 and for the second $25,000 loan on November 9, 2019, and continue until their maturity dates, which range from December 28, 2022 to November 9, 2025.  The notes are secured by the assets of the Company		92,858		100,000
		261,570		274,289
Less: current portion		(58,189)		(54,436)
Long-term debt, net of current portion	$	203,381	$	219,853

Scheduled maturities of long-term debt are as follows:

	Year Ending
	December 31,
2017	$	58,189
2018		55,741
2019		55,246
2020		35,850
2021		22,449
Thereafter		34,095
	$	261,570

Revolving Credit Facility

As of December 31, 2016, the Company had a revolving credit facility, as amended on December 12, 2014 (the “Credit Agreement”) with The PrivateBank and Trust Company, as administrative agent (the “Administrative Agent”) and co-lead arranger, The Bank of the West, as co-lead arranger, and IBERIABANK Corporation, Branch Banking and Trust Company and UMB Bank, N.A. (the “Lenders”). The Credit Agreement is a $125 million revolving credit facility whereby the Lenders agreed to make loans on a revolving basis from time to time and to issue letters of credit for up to the $125 million committed amount. The termination date of the Credit Agreement is December 28, 2017.

The principal amount of any loans under the Credit Agreement will bear interest at either: (i) LIBOR plus an applicable margin as specified in the Credit Agreement (based on the Company’s senior debt to EBITDA ratio as that term is defined in the Credit Agreement), or (ii) the Base  Rate (which is the greater of (a) the Federal Funds Rate plus 0.5% or (b) the prime rate as announced by the Administrative Agent). Quarterly non-use fees, letter of credit fees and administrative agent fees are payable at rates specified in the Credit Agreement.

The principal amount of any loan drawn under the Credit Agreement may be prepaid in whole or in part, with a minimum prepayment of $5 million, at any time, potentially subject to make-whole provisions.

The Credit Agreement includes customary restrictive covenants for facilities of this type, as discussed below.

Commercial letters of credit outstanding were $16,182 at December 31, 2016 and $12,105 at December 31, 2015.  Other than commercial letters of credit, there were no borrowings under this line of credit during the twelve months ended December 31, 2016, and available borrowing capacity at December 31, 2016 was $108,818.

Senior Secured Notes and Shelf Agreement

On December 28, 2012, the Company entered into a $50 million Senior Secured Notes purchase (“Senior Notes”) and a $25 million private shelf agreement (the “Notes Agreement”) by and among the Company, The Prudential Investment Management, Inc. and certain Prudential affiliates (the “Noteholders”). On June 3, 2015, the Notes Agreement was amended to provide for the issuance of additional notes of up to $75 million over the next three year period ending June 3, 2018 (“Additional Senior Notes”).

The Senior Notes amount was funded on December 28, 2012. The Senior Notes are due December 28, 2022 and bear interest at an annual rate of 3.65%, paid quarterly in arrears. Annual principal payments of $7.1 million are required from December 28, 2016 through December 28, 2021 with a final payment due on December 28, 2022. The principal amount may be prepaid, with a minimum prepayment of $5 million, at any time, subject to make-whole provisions.

On July 25, 2013, the Company drew $25 million available under the Notes Agreement.  The notes are due July 25, 2023 and bear interest at an annual rate of 3.85% paid quarterly in arrears.  Seven annual principal payments of $3.6 million are required from July 25, 2017 with a final payment due on July 25, 2023.

On November 9, 2015, the Company drew $25 million available under the Additional Senior Notes Agreement.  The notes are due November 9, 2025 and bear interest at an annual rate of 4.6% paid quarterly in arrears.  Seven annual principal payments of $3.6 million are required from November 9, 2019 with a final payment due on November 9, 2025.

Loans made under both the Credit Agreement and the Notes Agreement are secured by our assets, including, among others, our cash, inventory, goods, equipment (excluding equipment subject to permitted liens) and accounts receivable. All of our domestic subsidiaries have issued joint and several guaranties in favor of the Lenders and Noteholders for all amounts under the Credit Agreement and Notes Agreement.

Both the Credit Agreement and the Notes Agreement contain various restrictive and financial covenants including among others, minimum tangible net worth, senior debt/EBITDA ratio, debt service coverage requirements and a minimum balance for unencumbered net book value for fixed assets. In addition, the agreements include restrictions on investments, change of control provisions and provisions in the event the Company disposes more than 20% of its total assets.

The Company was in compliance with the covenants for the Credit Agreement and Notes Agreement at December 31, 2016.

Canadian Credit Facility

The Company has a demand credit facility for $8,000 in Canadian dollars with a Canadian bank for purposes of issuing commercial letters of credit in Canada.  The credit facility has an annual renewal and provides for the issuance of commercial letters of credit for a term of up to five years. The facility provides for an annual fee of 1% for any issued and outstanding commercial letters of credit. Letters of credit can be denominated in either Canadian or U.S. dollars. At December 31, 2016 and 2015, letters of credit outstanding totaled $0 and $2,179 in Canadian dollars, respectively.  At December 31, 2016, the available borrowing capacity was $8,000 in Canadian dollars.  The credit facility contains a working capital restrictive covenant for our Canadian subsidiary, OnQuest Canada, ULC.  At December 31, 2016, OnQuest Canada, ULC was in compliance with the covenant.

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Noncontrolling Interests

12 Months Ended

Dec. 31, 2016

Noncontrolling Interests

Noncontrolling Interests

Note 13 — Noncontrolling Interests

The Company is currently involved in several joint ventures, each of which have been determined to be a variable interest entity (“VIE”) and the Company was determined to be the primary beneficiary in each as a result of its significant influence over the joint venture operations.

Each joint venture is a partnership, and consequently, no tax effect was recognized for the income.  The net assets of the joint ventures are restricted for use by the specific project and are not available for general operations of the Company. 

The Carlsbad joint venture operating activities began in 2015 and are included in the Company’s consolidated statements of income as follows for the years ended December 31:

	2016		2015
Revenues	$	7,254	$	2,887
Net income attributable to noncontrolling interests		325		172

The Carlsbad joint venture made no distributions to the partners and the Company made no capital contributions to the Carlsbad joint venture during the year ending December 31, 2016. The project is expected to be completed in 2018.

The carrying value of the assets and liabilities associated with the operations of the Carlsbad joint venture are included in the Company’s consolidated balance sheets at December 31 as follows:

	2016		2015
Cash	$	4,630	$	1,952
Accounts receivable	$	—	$	955
Costs and estimated earnings in excess of billings	$	124	$	—
Billings in excess of costs and estimated earnings	$	3,426	$	1,311
Other current liabilities	$	332	$	1,251

The Wilmington joint venture operating activities began in 2015 and are included in the Company’s consolidated statements of income as follows for the years ended December 31:

	2016		2015
Revenues	$	19,781	$	1,364
Net income attributable to noncontrolling interests		676		48

Wilmington joint venture made no distributions to the partners and the Company made no capital contributions to the Wilmington joint venture during the year ending December 31, 2016. The project is expected to be completed in 2018.

The carrying value of the assets and liabilities associated with the operations of the Wilmington joint venture are included in the Company’s consolidated balance sheets at December 31 as follows:

	2016		2015
Cash	$	2,415	$	2,339
Accounts receivable	$	4,242	$	2,003
Billings in excess of costs and estimated earnings	$	2,572	$	2,978
Other current liabilities	$	2,637	$	1,269

The Blythe joint venture project has been completed; the project warranty expired in May 2015 and dissolution of the joint venture was completed in the third quarter 2015.  Revenues attributable to the joint venture in 2015 were $119 and the carrying value of the assets and liabilities associated with the operations of the Blythe joint venture were immaterial at December 31, 2015.

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Contingent Earnout Liabilities

12 Months Ended

Dec. 31, 2016

Contingent Earnout Liabilities

Contingent Earnout Liabilities

Note 14 — Contingent Earnout Liabilities

The Company paid $5,000 to the sellers of Q3C based on achievement of their operating performance targets each year, as outlined in the purchase agreement in March 2015.

The June 2014 acquisition of Vadnais Company included an earnout of $900, with $450 payable in September 2015 and $450 payable in September 2016, contingent upon meeting a certain performance targets for each of the two periods.  The estimated fair value of the contingent consideration on the acquisition date was $679. In September 2015, the Company determined that the operations of Vadnais did not meet the September 2015 performance targets. As a result, the contingent consideration balance of $396 was credited to non-operating income at September 30, 2015.  In December 2015, the Company determined that the September 2016 target was not likely to be achieved, and the remaining balance of $368 was credited to non-operating income. 

 The purchase of Surber in July 2014 provided a contingent earnout amount of up to $1.4 million that could be earned during the period 2014 through 2016.  The estimated fair value for the contingent earnout was $1.0 million on the acquisition date.  In the fourth quarter 2015, the seller and the Company agreed that none of the targets for the Surber operations were likely to be achieved, and the remaining balance of $1,083 was credited to non-operating revenue. 

The August 2014 purchase of Ram-Fab provided for a contingent earnout amount of $0.2 million which could be earned based on estimated earnings of a six-month operating project.  Because the operating results for the Ram-Fab project were not met during the acquisition measurement period, the contingent earnout liability was reduced in June 2015 and the value of intangible assets of the acquisition was reduced by the same amount. 

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Commitments and Contingencies

12 Months Ended

Dec. 31, 2016

Commitments and Contingencies.

Commitments and Contingencies

Note 15—Commitments and Contingencies

Leases—The Company leases certain property and equipment under non-cancelable operating leases, which expire at various dates through 2023.  The leases require the Company to pay all taxes, insurance, maintenance, and utilities and are classified as operating leases in accordance with ASC Topic 840 “Leases”.

The future minimum lease payments required under non-cancelable operating leases are as follows:

			Real
			Property
For the Years Ending	Real		(Related				Total
December 31,	Property		Party)		Equipment		Commitments
2017	$	4,015	$	1,519	$	9,384	$	14,918
2018		3,436		1,210		8,289		12,935
2019		2,453		938		6,305		9,696
2020		1,345		852		4,041		6,238
2021		793		854		2,366		4,013
Thereafter		—		1,042		—		1,042
	$	12,042	$	6,415	$	30,385	$	48,842

Leases identified above as related party leases represent property with entities related through common ownership by stockholders, officers, and directors of the Company.

Total lease expense during the years ended December 31, 2016, 2015 and 2014 was $22,526,  $21,815 and $14,325, respectively, including amounts paid to related parties of $1,495,  $1,445 and $1,505, respectively.

Withdrawal liability for multiemployer pension plan— In November 2011, members of the Pipe Line Contractors Association “PLCA” including ARB, Rockford and Q3C (prior to the Company’s acquisition in 2012), withdrew from the Central States Southeast and Southwest Areas Pension Fund multiemployer pension plan (“Plan”).  These withdrawals were made in order to mitigate additional liability in connection with the significantly underfunded Plan.  The Company recorded a withdrawal liability of $7,500, which was increased to $7,585 after the acquisition of Q3C.  During the first quarter of 2016, the Company received a final payment schedule.  As a result of payments made and based on this schedule, the liability recorded at December 31, 2016 was $5,655.  The Company has no plans to withdraw from any other labor agreements.

Letters of credit—As of December 31, 2016 and 2015, the Company had total letters of credit outstanding of approximately $16,182 and $13,679, respectively.  The outstanding amounts include the U.S. dollar equivalents for letters of credit issued in Canadian dollars.

NTTA settlement—On February 7, 2012, the Company was sued in an action entitled North Texas Tollway Authority (“NTTA”), Plaintiff v. James Construction Group, LLC, and KBR, Inc., Defendants, v. Reinforced Earth Company, Third-Party Defendant (the “Lawsuit”).

On February 25, 2015 the Lawsuit was settled for an expected cost to the Company of $9 million.  One of the defendants paid the Company $8 million to remove all of their liability.  A second defendant agreed to provide up to $5.4 million to pay for the total expected remediation cost of approximately $22.4 million.  The Company will use the $17 million to pay for a third-party contractor approved by the NTTA.  At December 31, 2016, the remaining accrual balance was $14.3 million.  In the event that the total remediation costs exceed the estimated amount, the second defendant would pay 20% of the excess amount and the Company would pay for 80% of the excess amount. 

Litigation—The Company has been engaged in dispute resolution to collect money it believes it is owed for two construction projects completed in 2014.  Because of uncertainties associated with the projects, including uncertainty of the amounts that would be collected, the Company used a zero profit margin approach to recording revenues during the construction period for both projects.

For one project, a cost reimbursable contract, the Company has recorded a receivable of $32.9 million with a reserve of approximately $18.3 million included in “billings in excess of costs and estimated earnings.”  At this time, the Company cannot predict the amount that it will collect nor the timing of any collection.  The dispute resolution for the $32.9 million receivable initially required international arbitration; however, in the first half of 2016, the owner sought bankruptcy protection in U.S. bankruptcy court.  The Company has initiated litigation against the sureties who have provided lien and stop payment release bonds for the total amount owed. 

For the second project, the Company had recorded a receivable of $17.9 million.  During the third quarter 2016, the Company settled the dispute with an exchange of general releases and receipt of $38 million in cash.  The Company has changed its zero estimate of profit and has accounted for the settlement as a change in accounting estimate which resulted in recognizing revenues of approximately $27.5 million and gross profit of approximately $26.7 million in the third quarter of 2016.

The Company is subject to other claims and legal proceedings arising out of its business. The Company provides for costs related to contingencies when a loss from such claims is probable and the amount is reasonably determinable. In determining whether it is possible to provide an estimate of loss, or range of possible loss, the Company reviews and evaluates its litigation and regulatory matters on a quarterly basis in light of potentially relevant factual and legal developments. If we determine an unfavorable outcome is not probable or reasonably estimable, we do not accrue for a potential litigation loss. Management is unable to ascertain the ultimate outcome of other claims and legal proceedings; however, after review and consultation with counsel and taking into consideration relevant insurance coverage and related deductibles/self-insurance retention, management believes that it has meritorious defense to the claims and believes that the reasonably possible outcome of such claims will not, individually or in the aggregate, have a materially adverse effect on the consolidated results of operations, financial condition or cash flows of the Company.

SEC Inquiry—The Company has been cooperating with an inquiry by the staff of the Securities and Exchange Commission which appears to be focused on certain percentage-of-completion contract revenue recognition practices of the Company during the time period 2013 and 2014.  The Company is continuing to respond to the staff’s inquiries in connection with this matter.  At this stage, the Company is unable to predict when the staff’s inquiry will conclude or the outcome.

Bonding—As of December 31, 2016, 2015 and 2014, the Company had bid and completion bonds issued and outstanding totaling approximately $1.45 billion,  $1.48 billion and $1.52 billion, respectively.

Contingent Consideration — Earnouts related to acquisitions are discussed in Note 14 — “Contingent Earnout Liabilities”.

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Planned Divestiture of Texas Heavy Civil Business Unit

12 Months Ended

Dec. 31, 2016

Planned Divestiture of Texas Heavy Civil Business Unit

Planned Divestiture of Texas Heavy Civil Business Unit

Note 16 –Planned Divestiture of Texas Heavy Civil Business Unit

In October 2016, the Company announced that it planned to divest its Texas heavy civil business unit, which operates as a division of JCG.  Until completion of a sale, the Company will continue to operate the business unit.  The Company has engaged a financial advisor to assist in the sale and is actively marketing the business unit, though a sales price and other terms have not yet been established.  As a result, the planned divestiture is not classified as “held for sale” under ASC Topic 360.     

The Company recorded a charge of $37.3 million during the third quarter 2016 for the Belton area projects, which are part of the Texas heavy civil business that the Company is planning to divest.  This charge includes a reduction of the expected profitability of certain projects in the Belton, Texas area for the division and a reduction of costs and estimated earnings in excess of billings and an increase to the reserve for anticipated job losses.   Revenues of $10.0 million have been recognized for these projects as a result of incurred costs associated with claims.

In addition, under the provisions of ASC 350, the planned divestiture triggered an analysis of the goodwill amount recorded on the JCG books in September 2016.  The analysis resulted in the Company recording a pretax, non-cash goodwill impairment charge of approximately $2.7 million in the third quarter 2016. 

There can be no assurance that the Company will enter into a sales transaction for the division nor is it possible to determine at this time the impact on results of operations or cash flow from a potential transaction.

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Reportable Segments

12 Months Ended

Dec. 31, 2016

Reportable Segments

Reportable Segments

Note 17—Reportable Segments

The Company segregates its business into three reportable segments:  the West Construction Services segment (“West segment”), the East Construction Services segment (“East segment”) and the Energy segment (“Energy segment”). 

The West segment includes the underground and industrial operations and construction services performed by ARB, ARB Structures, Inc., Rockford, Q3C, and Vadnais.  Most of the entities perform work primarily in California; however, Rockford operates throughout the United States and Q3C operates in Colorado and the upper Midwest United States.  The Blythe, Carlsbad and Wilmington joint ventures have also been included as part of the segment. 

The East segment includes the JCG Heavy Civil division, the JCG Infrastructure and Maintenance division, BW Primoris and the Cardinal Contractors, Inc. construction business, located primarily in the southeastern United States and in the Gulf Coast region of the United States.  In October 2016, the Company announced that it planned to divest its Texas heavy civil business unit, which operates as a division of JCG.  Until completion of a sale, the Company will continue to operate the business unit.  

The Energy segment includes the operations of the PES pipeline and gas facility construction and maintenance operations and the PES Industrial division, whose operations are located primarily in the southeastern United States and in the Gulf Coast region.  The segment also includes the Aevenia (with the 2016 acquired divisions of Mueller and Northern), Surber and Ram-Fab operations as well as the OnQuest, Inc. and OnQuest Canada, ULC operations, which provide for the design and installation of LNG facilities and high-performance furnaces and heaters for the oil refining, petrochemical and power generation industries.

All intersegment revenues and gross profit, which were immaterial, have been eliminated in the following tables.

Segment Revenues

Revenue by segment for the years ended December 31, 2016, 2015 and 2014 was as follows:

	2016			2015			2014
			% of			% of			% of
			Total			Total			Total
Reportable Segment	Revenue		Revenue	Revenue		Revenue	Revenue		Revenue
West	$	1,041,341	52.2%	$	913,626	47.4%	$	964,093	46.2%
East		521,301	26.1%		612,174	31.7%		489,926	23.5%
Energy		434,306	21.7%		403,615	20.9%		632,175	30.3%
Total	$	1,996,948	100.0%	$	1,929,415	100.0%	$	2,086,194	100.0%

Segment Gross Profit

Gross profit by segment for the years ended December 31, 2016, 2015 and 2014 was as follows:

	2016			2015			2014
			% of			% of			% of
Reportable Segment	Gross Profit		Revenue	Gross Profit		Revenue	Gross Profit		Revenue
West	$	145,239	13.9%	$	130,255	14.3%	$	143,468	14.9%
East		(15,938)	(3.1%)		42,523	6.9%		25,749	5.3%
Energy		72,006	16.6%		47,095	11.7%		66,823	10.6%
Total	$	201,307	10.1%	$	219,873	11.4%	$	236,040	11.3%

Segment Goodwill

The amount of goodwill recorded by segment at December 31, 2016 and 2015 was as follows:

Reportable Segment		2016		2015
West	$	45,239	$	45,239
East		40,150		42,866
Energy		41,837		36,056
Total	$	127,226	$	124,161

As part of the Company’s annual review of goodwill impairment, an impairment expense of $401 was recorded in December 2015 for the goodwill attributed to Cardinal Contractors, Inc. and in the third quarter 2016, an impairment expense of $2,716 recorded as part of the Company’s decision to sell the Texas Heavy Civil operations – See Note 16 – “Planned Divestiture of Texas Heavy Civil Business Unit”.

Geographic Region — Revenues and Total Assets

The majority of the Company’s revenues are derived from customers in the United States, and less than 1% is generated from sources outside of the United States.  At December 31, 2016 approximately 1% of total assets were located outside of the United States.

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Customer Concentrations

12 Months Ended

Dec. 31, 2016

Customer Concentrations

Customer Concentrations

Note 18—Customer Concentrations

The Company operates in multiple industry segments encompassing the construction of commercial, industrial, and public works infrastructure assets throughout primarily the United States.  Typically, the top ten customers in any one calendar year generate revenues in excess of 50% of total revenues and consist of a different group of customers in each year.

During the years ended December 31, 2016, 2015 and 2014, the Company generated 45.6%,  48.9% and 36.4%, of its revenues, respectively, from the following customers:

Description of
Customer’s	2016			2015			2014
Business	Amount		Percentage	Amount		Percentage	Amount		Percentage
Chemical/Energy producer	$	208,458	10.4%	$	173,931	9.0%	$	*	*
Private gas and electric utility		201,443	10.1%		173,232	9.0%		145,677	7.0%
Texas DOT		193,049	9.7%		183,847	9.5%		183,221	8.8%
Public gas and electric utility		184,002	9.2%		120,507	6.2%		144,567	6.9%
Pipeline operator		123,055	6.2%		*	*		*	*
Pipeline operator		*	*		165,578	8.6%		*	*
Gas utility		*	*		127,128	6.6%		*	*
Petrochemical producer		*	*		*	*		164,634	7.9%
Pipeline operator		*	*		*	*		121,220	5.8%
	$	910,007	45.6%	$	944,223	48.9%	$	759,319	36.4%

(*)Indicates a customer with less than 5% of revenues during such period.

For the years ended December 31, 2016, 2015 and 2014, approximately 60.4%,  59.4% and 53.6%, respectively, of total revenues were generated from the top ten customers of the Company in that year.  In each of the years, a different group of customers comprised the top ten customers by revenue.

At December 31, 2016, approximately 20.8% of the Company’s accounts receivable were due from one customer, and that customer provided 6.2% of the Company’s revenues for the year ended December 31, 2016. At December 31, 2015, approximately 15.7% of the Company’s accounts receivable were due from one customer, and that customer provided 9.0% of the Company’s revenues for the year ended December 31, 2015.

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Multiemployer Plans

12 Months Ended

Dec. 31, 2016

Multiemployer Plans

Multiemployer Plans

Note 19 — Multiemployer Plans

Union Plans—Various subsidiaries in the West segment are signatories to collective bargaining agreements.  These agreements require that the Company participate in and contribute to a number of multiemployer benefit plans for its union employees at rates determined by the agreements.  The trustees for each multiemployer plan determine the eligibility and allocations of contributions and benefit amounts, determine the types of benefits and administer the plan.

The Company contributed $34,183,  $34,296 and $38,107, to multiemployer pension plans for the years ended December 31, 2016, 2015 and 2014, respectively. These costs were charged to the related construction contracts in process.  Contributions during 2016 and 2015 decreased from the prior years as a result of a decrease in the number of man-hours worked by our union labor.

For the Company, the financial risks of participating in multiemployer plans are different from single-employer plans in the following respects:

· Assets contributed to the multiemployer plan by one employer may be used to provide benefits to employees of other participating employers.

· If a participating employer stops contributing to the plan, the unfunded obligations of the plan may be borne by the remaining participating employers.

· If a participating employer chooses to stop participating in the plan, a withdrawal liability may be created based on the unfunded vested benefits for all employees in the plan.

Under U.S. legislation regarding multiemployer pension plans, an employer is required to pay an amount that represents its proportionate share of a plan’s unfunded vested benefits in the event of withdrawal from a plan or upon plan termination.

The Company participates in a number of multiemployer pension plans, and its potential withdrawal obligation may be significant.  Any withdrawal liability would be recorded when it is probable that a liability exists and can be reasonably estimated, in accordance with GAAP.  As discussed in Note 15—“Commitments and Contingencies,” in 2011 the Company withdrew from the Central States Southeast and Southwest Areas Pension Fund multiemployer pension plan.  The Company has no plans to withdraw from any other labor agreements.

During the last three years, the Company made annual contributions to 78 pension plans.  None of the pension plans that the Company contributed to in 2016 listed the Company in the plan’s Form 5500 as providing more than 5% of the plan’s total contributions.  Two of the pension plans that the Company contributed to in 2015 listed the Company in the plan’s Form 5500 as providing more than 5% of the plan’s total contributions.  The contribution to one plan was $2,180 and $457 for the second plan.  One of the pension plans listed the Company on their Form 5500 as providing more than 5% of the plan’s total 2014 contributions.  The contributions for the plan amounted to $5,659 for the twelve months ending December 31, 2014.

Our participation in significant plans for the years ended December 31, 2016, 2015 and 2014 is outlined in the table below.  The “EIN/Pension Plan Number” column provides the Employer Identification Number (“EIN”) and the three digit plan number.  The “Zone Status” is based on the latest information that we received from the plan and is certified by the plan’s actuary.  Among other factors, plans in the red zone are generally less than 65 percent funded, plans in the yellow zone are less than 80 percent funded, and plans in the green zone are at least 80 percent funded.  The “FIP/RP Status Pending/Implemented” column indicates plans for which a financial improvement plan (“FIP”) or a rehabilitation plan (“RP”) is either pending or has been implemented.  The “Surcharge Imposed” column includes plans in a red zone status that require a payment of a surcharge in excess or regular contributions.  The next column lists the expiration date of the Company’s collective bargaining agreement related to the plan. The table follows:

Collective

FIP/RP

Bargaining

EIN /

Pension Protection Act Zone

Status

Agreement

Pension Plan

Status

Pending /

Surcharge

Expiration

Contributions of the Company

Pension Fund Name

Number

2016

2015

Implemented

Imposed

Date

2016

2015

2014

Central Pension Fund of the International Union of Operating Engineers and Participating Employers

36-6052390/001

Green at February 1, 2015

Green at February 1, 2014

No

No

6/04/2017

$

5,373

$

5,659

$

6,204

Laborers Pension Trust Fund for Northern California

94-6277608/001

Yellow at June 1, 2015

Yellow at June 1, 2014

No

No

6/30/2019

3,598

3,150

3,116

Construction Laborers Pension Trust for Southern California

43-6159056/001

Green at January 1, 2015

Green at January 1, 2014

No

No

6/30/2018

2,742

3,067

2,444

Pipeline Industry Benefit Fund

73-6146433/001

Green at January 1, 2015

Green at January 1, 2014

No

No

6/04/2017

2,740

3,783

2,686

Southern California Pipetrades Trust Funds

51-6108443/001

Green at January 1, 2015

Green at January 1, 2014

No

No

6/30/2018

2,614

2,180

5,239

Laborers International Union of North America National (Industrial) Pension Fund

52-6074345/001

Red at January 1, 2015

Red at January 1, 2014

No

No

6/04/2017

2,415

3,287

3,382

Contributions to significant plans

19,482

21,126

23,071

Contributions to other multiemployer plans

14,701

13,170

15,036

Total contributions made

$

34,183

$

34,296

$

38,107

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Company Retirement Plans

12 Months Ended

Dec. 31, 2016

Company Retirement Plans

Company Retirement Plans

Note 20—Company Retirement Plans

401(k) Plan—The Company provides a 401(k) plan for its employees not covered by collective bargaining agreements. Under the plan, employees are allowed to contribute up to 100% of their compensation, within the Internal Revenue Service (“IRS”) prescribed annual limit.  The Company makes employer match contributions of 100% of the first 3% and 50% of the next 2% of employee contributions, which vest immediately. The Company may, at the discretion of its Board of Directors, make an additional profit share contribution to the 401(k) plan. No such contributions were made during 2014 through 2016. The Company’s contribution to the plan for the years ended December 31, 2016, 2015 and 2014 were $3,904,  $3,702 and $3,111, respectively.  Employees of the various acquisitions made by the Company from 2012 through 2016 became eligible for the Company’s 401(k) plan. 

OnQuest Canada, ULC RRSP-DPSP Plan—The Company provides a RRSP-DPSP plan (Registered Retirement Saving Plan—Deferred Profit Sharing Plan) for its employees of OnQuest Canada, ULC. There are two components to the plan. The RRSP portion is contributed to by the employee, while the Company portion is paid to the DPSP. Under this plan, the Company makes employer match contributions of 100% of the first 3% and 50% of the next 2% of employee contributions. Vesting in the DPSP portion is one year of employment. The Company’s contribution to the DPSP during the years ended December 31, 2016, 2015 and 2014 was $52,  $55 and $69, respectively.

The Company has no other post-retirement benefits.

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Deferred Compensation Agreements and Stock-Based Compensation

12 Months Ended

Dec. 31, 2016

Deferred Compensation Agreements and Stock-Based Compensation

Deferred Compensation Agreements and Stock-Based Compensation

Note 21—Deferred Compensation Agreements and Stock-Based Compensation

Primoris Long-Term Retention Plan (“LTR Plan”) —  The Company adopted a long-term retention plan for certain senior managers and executives.  The voluntary plan provides for the deferral of one half of the participant’s annual earned bonus for one year.  Except in the case of death, disability or involuntary separation from service, the deferred compensation is vested to the participant only if actively employed by the Company on the payment date of bonus amounts the following year.  The amount of compensation deferred under this plan is calculated each year.  Total deferred compensation liability under this plan as of December 31, 2016 and 2015 was $4,459 and $5,220, respectively.

Participants in the long term retention plan may elect to purchase Company common stock at a discounted price.  For bonuses earned in 2016 and 2015, the participants could use up to one sixth of their bonus amount to purchase shares of stock, whose price was calculated as 75% of the average market closing price for the month of January 2017 and December 2015, respectively.  The 25% discount is treated as compensation to the participant.

JCG Stakeholder Incentive Plan — In December 2016 and 2015, JCG maintained a deferred compensation plan for some senior management employees.  The plan provided for annual vesting over a five-year period.  Once vested and upon a triggering event, such as termination, death or disability, the deferred benefit amount plus interest is paid in equal monthly installments over three years.  The amount of compensation deferred under the plan is calculated each year.  In 2014, the terms of the plan were changed, and the participants were given the option of payment of accrued amounts over a three year period or payments made as part of the LTR plan with 50% of the accrued amount added to the LTR payments made in 2015 and the remainder added to LTR payments to be made in 2016.  At December 31, 2016, there was no deferred compensation liability under this plan, and at December 31, 2015 the liability was $278.

Stock-based compensation —  In July 2008, the shareholders approved and the Company adopted the Primoris Services Corporation 2008 Long-term Incentive Equity Plan, which was replaced by the Primoris Services Corporation 2013 Long-term Incentive Equity Plan (“Equity Plan”), after approval by the shareholders and adoption by the Company on May 3, 2013.

The Company’s Board of Directors has granted 249,065 Restricted Stock Units (“Units”) to executives under the Equity Plan.  The grants were documented in RSU Award Agreements which provide for a vesting schedule and require continuing employment of the executive.  The Units are subject to earlier acceleration, termination, cancellation or forfeiture as provided in the underlying RSU Award Agreement. 

At December 31, 2016, a total of 99,256 Units were vested.  The vesting schedule for the remaining Units follows:

	Number of Units
For the Years Ending December 31,	to Vest
2017	74,394
2018	25,138
2019	48,219
2020	2,058
2021	—
	149,809

Under guidance of ASC Topic 718 “Compensation — Stock Compensation”, stock-based compensation cost is measured at the date of grant, based on the calculated fair value of the stock-based award, and is recognized as expense over the employee’s requisite service period (generally the vesting period of the award).

The fair value of the Units was based on the closing market price of our common stock on the day prior to the date of the grant. Stock compensation expense for the Units is being amortized using the straight-line method over the service period. For the twelve months ended December 31, 2016 and 2015, the Company recognized $1,627 and $1,050, respectively, in compensation expense.  At December 31, 2016, approximately $2.1 million of unrecognized compensation expense remains for the Units, which will be recognized over the next 3.25 years through April 1, 2020.

Vested Units accrue “Dividend Equivalents” (as defined in the Equity Plan) which will be accrued as additional Units.  At December 31, 2016, a total of 1,693 Dividend Equivalent Units were accrued. 

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Related Party Transactions

12 Months Ended

Dec. 31, 2016

Related Party Transactions

Related Party Transactions

Note 22—Related Party Transactions

Primoris has entered into leasing transactions with Stockdale Investment Group, Inc. (“SIGI”).  Our Chairman of the Board of Directors and our largest stockholder, Brian Pratt and his family, holds a majority interest of SIGI.  John M. Perisich, our Executive Vice President and General Counsel, is secretary of SIGI.  The leases are for three properties used by the Company in California, with various expiration dates, with the last expiring in 2023.  During the years ended December 31, 2016, 2015 and 2014, the Company paid $849,  $831 and $862, respectively, in lease payments to SIGI for the use of these properties.  We intend to purchase the SIGI properties in the first quarter of 2017.

Primoris leases properties from other individuals that were past sellers of acquisitions or are current employees.  The amounts leased are not material and each arrangement was approved by the Board of Directors. 

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Income Taxes

12 Months Ended

Dec. 31, 2016

Income Taxes

Income Taxes

Note 23—Income Taxes

The components of the provision for income taxes are as follows:

	2016		2015		2014
Current provision (benefit)
Federal	$	4,726	$	26,948	$	28,203
State		5,423		3,640		5,398
Foreign		92		362		1,074
		10,241		30,950		34,675
Deferred provision (benefit)
Federal		11,560		(7,099)		3,586
State		(727)		155		457
Foreign		72		(60)		(72)
		10,905		(7,004)		3,971
Total	$	21,146	$	23,946	$	38,646

A reconciliation of income tax expense compared to the amount of income tax expense that would result by applying the U.S. federal statutory income tax rate to pre-tax income is as follows:

	2016	2015	2014
U.S. federal statutory income tax rate	35.00%	35.00%	35.00%
State taxes, net of federal income tax impact	6.38%	4.20%	4.66%
Foreign tax credit	(0.35)%	(0.50)%	(0.98)%
Canadian income tax	0.35%	0.50%	0.98%
Domestic production activities deduction	(1.10)%	(3.91)%	(3.07)%
Nondeductible meals & entertainment	5.36%	5.09%	3.38%
Other items	(1.46)%	(1.01)%	(2.01)%
Effective tax rate on income before provision for income taxes excluding income attributable to noncontrolling interests	44.18%	39.37%	37.96%
Impact of income from noncontrolling interests on effective tax rate	(0.91)%	(0.18)%	(0.19)%
Effective tax rate on income before provision for income taxes and noncontrolling interests	43.27%	39.19%	37.77%

Deferred income taxes are recognized for temporary differences between the financial reporting basis of the assets and liabilities and their respective tax basis and operating losses, capital losses and tax credit carry-forwards based on enacted tax rates expected to be in effect when such amounts are realized or settled. However, deferred tax assets are recognized only to the extent that it is more likely than not that they will be realized based upon consideration of available evidence, including future reversals of existing taxable temporary differences, future projected taxable income and tax planning strategies.

The tax effect of temporary differences that give rise to deferred income taxes for the year ended December 31, 2016 and 2015 are as follows:

	2016		2015
Deferred tax assets:
Accrued compensation	$	5,804	$	9,673
Accrued workers compensation		9,855		10,058
Capital loss carryforward		1,077		1,800
Foreign tax credit		1,349		1,293
Insurance reserves		3,248		5,489
Loss reserves		4,841		2,887
Pension liability		1,979		2,805
State income taxes		2,011		469
Other		288		882
Total deferred tax assets		30,452		35,356
Deferred tax liabilities
Depreciation and amortization		(38,327)		(33,304)
Prepaid expenses and other		(1,955)		(977)
Total deferred tax liabilities		(40,282)		(34,281)
Net deferred tax assets (liabilities)	$	(9,830)	$	1,075

As of December 31, 2016, the tax effects of capital loss carryforwards were $1,077; state net operating losses were $486; and foreign tax credits were $1,349.  These carryforwards will begin to expire in 2019, 2021 and 2019, respectively.  The Company believes it is more likely than not that it will realize the benefit of the deferred tax assets.

The Company’s federal tax returns are subject to examination by the Internal Revenue Service for tax years after 2012.  The statutes of limitation of state and foreign jurisdictions vary generally between 3 to 5 years.  Accordingly, the tax years 2011 through 2015 remain open to examination by the state and foreign jurisdiction in which the Company operates.

A reconciliation of the beginning and ending amounts and aggregate changes in the balance of unrecognized tax benefits for each period is as follows:

	2016		2015		2014
Beginning balance	$	—	$	456	$	5,382
Increases in balances for tax positions taken during the current year		—		—		—
Increases in balances for tax positions taken during prior years		—		—		—
Settlements and effective settlements with tax authorities		—		(456)		(4,878)
Lapse of statute of limitations		—		—		(48)
Total	$	—	$	—	$	456

The Company recognizes accrued interest and penalties related to uncertain tax positions in income tax expense, which were not material for the three years presented.

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Dividends and Earnings Per Share

12 Months Ended

Dec. 31, 2016

Dividends and Earnings Per Share

Dividends and Earnings Per Share

Note 24—Dividends and Earnings Per Share

The Company has paid or declared cash dividends during 2015 and 2016 as follows:

Declaration Date	Record Date	Payable Date	Amount Per Share
February 24, 2015	March 31, 2015	April 15, 2015	$	0.040
May 1, 2015	June 30, 2015	July 15, 2015	$	0.055
August 4, 2015	September 30, 2015	October 15, 2015	$	0.055
November 3, 2015	December 31, 2015	January 15, 2016	$	0.055
February 22, 2016	March 31, 2016	April 15, 2016	$	0.055
May 2, 2016	June 30, 2016	July 15, 2016	$	0.055
August 3, 2016	September 30, 2016	October 14, 2016	$	0.055
November 2, 2016	December 31, 2016	January 16, 2017	$	0.055

The payment of future dividends is contingent upon our revenues and earnings, capital requirements and general financial condition of the Company, as well as contractual restrictions and other considerations deemed relevant by the Board of Directors.

The table below presents the computation of basic and diluted earnings per share for the years ended December 31, 2016, 2015 and 2014 follows:

	2016		2015		2014
Numerator:
Net income	$	27,725	$	37,151	$	63,682
Net income attributable to noncontrolling interests		(1,002)		(279)		(526)
Net income attributable to Primoris	$	26,723	$	36,872	$	63,156
Denominator (shares in thousands):
Weighted average shares for computation of basic earnings per share		51,762		51,647		51,607
Dilutive effect of shares issued to independent directors		3		2		2
Dilutive effect of restricted stock units (1)		224		149		138.0
Weighted average shares for computation of diluted earnings per share		51,989		51,798		51,747
Earnings per share attributable to Primoris:
Basic	$	0.52	$	0.71	$	1.22
Diluted	$	0.51	$	0.71	$	1.22

(1) Represents the effect of the grant of 249,065 shares of Restricted Stock Units and 1,693 vested Dividend Equivalent Units.

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Stockholders' Equity

12 Months Ended

Dec. 31, 2016

Stockholders' Equity

Stockholders' Equity

Note 25—Stockholders’ Equity

Common Stock

The Company is authorized to issue 90,000,000 shares of $0.0001 par value common stock, of which 51,576,442 and 51,676,140 shares were issued and outstanding as of December 31, 2016 and 2015, respectively. As of December 31, 2016, there were 394 holders of record of our common stock.

The Company issued 85,907 shares of common stock in 2016 and 96,828 shares of common stock in 2015 under the Company’s LTR Plan.  The shares were purchased by the participants in the LTR Plan with payment made to the Company of $1,440 in 2016 and $1,621 in 2015.  The Company’s LTR Plan for managers and executives allows participants to use a portion of their annual bonus amount to purchase Company common stock at a discount from the market price.  The shares purchased in March 2016 were for bonus amounts earned in 2015, and the number of shares was calculated at 75% of the average closing price of December 2015. 

The Company issued shares of common stock under the Equity Plan to the non-employee members of the Board of Directors as part of the Company’s quarterly compensation provided to the Directors.  Shares issued were as follows:

· 11,745 shares in August 2016,

· 10,450 shares in February 2016,

· 9,748 shares in August 2015,

· 8,168 shares in March 2015,

· 6,172 shares in August 2014, and

· 6,375 shares in February 2014,

The shares were fully vested upon issuance and have a one-year trading restriction.

As discussed in Note 21—“Deferred Compensation Agreements and Stock-Based Compensation”, the Board of Directors has granted a total of 249,065 shares of Units under the Equity Plan.

At December 31, 2016, there were 1,953,559 shares of common stock reserved to provide for the grant and exercise of all future stock option grants, SARS, Units and grants of restricted shares under the Equity Plan. Other than the Units discussed above, there were no stock options, SARS or restricted shares of stock issued or outstanding at December 31, 2016.

Share Repurchase Plan

In August 2016, the Company’s Board of Directors authorized a share repurchase program under which the Company, from time to time and depending on market conditions, share price and other factors, could acquire shares of its common stock on the open market or in privately negotiated transactions up to an aggregate purchase price of $5 million.   During the month of December 2016, the Company purchased and cancelled 207,800 shares of stock for $5.0 million at an average cost of $24.02 per share. The share repurchase program expired on December 31, 2016.

In February 2014, the Company’s Board of Directors authorized a share repurchase program under which the Company, from time to time and depending on market conditions, share price and other factors, could acquire shares of its common stock on the open market or in privately negotiated transactions up to an aggregate purchase price of $23 million.  During the period from February 2014 through September 2014, the Company purchased and cancelled 100,000 shares of stock for $2.8 million at an average cost of $28.44 per share.  This share repurchase program expired on December 31, 2014.

Preferred Stock

The Company is authorized to issue 1,000,000 shares of $0.0001 par value preferred stock.  No shares of Preferred Stock were outstanding at December 31, 2016 or 2015.

Warrants

At December 31, 2016 and 2015, there were no warrants outstanding.

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Selected Quarterly Financial Information (Unaudited)

12 Months Ended

Dec. 31, 2016

Selected Quarterly Financial Information (Unaudited)

Selected Quarterly Financial Information (Unaudited)

Note 26—Selected Quarterly Financial Information (Unaudited)

Selected unaudited quarterly consolidated financial information is presented in the following tables:

	Year Ended December 31, 2016
	1st		2nd		3rd		4th
(In thousands, except per share data)	Quarter		Quarter		Quarter		Quarter
Revenues	$	430,446	$	456,811	$	507,828	$	601,863
Gross profit		39,277		43,285		50,129		68,616
Impairment of goodwill		—		—		2,716		—
Net income		2,916		5,287		4,756		14,766
Net income attributable to Primoris		2,693		5,056		4,504		14,470
Earnings per share:
Basic earnings per share	$	0.05	$	0.10	$	0.09	$	0.28
Diluted earnings per share	$	0.05	$	0.10	$	0.09	$	0.28
Weighted average shares outstanding (in thousands)
Basic		51,725		51,772		51,780		51,771
Diluted		51,881		52,022		52,034		52,021

	Year Ended December 31, 2015
	1st		2nd		3rd		4th
(In thousands, except per share data)	Quarter		Quarter		Quarter		Quarter
Revenues	$	392,780	$	483,545	$	555,945	$	497,145
Gross profit		38,005		46,496		71,647		63,725
Impairment of goodwill		—		—		—		401
Net income		1,672		3,692		19,079		12,708
Net income attributable to Primoris		1,672		3,638		19,007		12,555
Earnings per share:
Basic earnings per share	$	0.03	$	0.07	$	0.37	$	0.24
Diluted earnings per share	$	0.03	$	0.07	$	0.37	$	0.24
Weighted average shares outstanding (in thousands)
Basic		51,572		51,666		51,672		51,676
Diluted		51,726		51,815		51,824		51,825

	Year Ended December 31, 2014
	1st		2nd		3rd		4th
(In thousands, except per share data)	Quarter		Quarter		Quarter		Quarter
Revenues	$	470,074	$	515,291	$	613,237	$	487,592
Gross profit		49,757		61,194		75,473		49,616
Net income		11,265		16,003		27,390		9,024
Net income attributable to Primoris		10,833		16,003		27,390		8,930
Earnings per share:
Basic earnings per share	$	0.21	$	0.31	$	0.53	$	0.17
Diluted earnings per share	$	0.21	$	0.31	$	0.53	$	0.17
Weighted average shares outstanding (in thousands)
Basic		51,610		51,655		51,606		51,561
Diluted		51,714		51,804		51,759		51,710

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Subsequent Event

12 Months Ended

Dec. 31, 2016

Subsequent Event

Subsequent Event

Note 27—Subsequent Event

On February 21, 2017, the Board of Directors declared a cash dividend of $0.055 per common share for stockholders of record as of March 31, 2017, payable on or about April 14, 2017.

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Basis of Presentation (Policies)

12 Months Ended

Dec. 31, 2016

Summary of Significant Accounting Policies

Basis of presentation

Basis of presentation—The accompanying consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and the financial statement rules and regulations of the Securities and Exchange Commission (“SEC”).  References for Financial Accounting Standards Board (“FASB”) standards are made to the FASB Accounting Standards Codification (“ASC”).

Principles of consolidation

Principles of consolidation—The accompanying Consolidated Financial Statements include the accounts of the Company, its wholly-owned subsidiaries and the noncontrolling interests of the Blythe, Carlsbad and Wilmington joint ventures, which are variable interest entities for which the Company is the primary beneficiary as determined under the provisions of ASC Topic 810.  All intercompany balances and transactions have been eliminated in consolidation.

Use of estimates

Use of estimates—The preparation of the Company’s Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. As a construction contractor, the Company uses estimates for costs to complete construction projects and the contract value of construction projects.  These estimates have a direct effect on gross profit as reported in these consolidated financial statements. Actual results could materially differ from the Company’s estimates.

Operating cycle

Operating cycle— In the accompanying consolidated balance sheets, assets and liabilities relating to long-term construction contracts (e.g. costs and estimated earnings in excess of billings, billings in excess of costs and estimated earnings) are considered current assets and current liabilities, since they are expected to be realized or liquidated in the normal course of contract completion, although completion may require more than one calendar year.

Consequently, the Company has significant working capital invested in assets that may have a liquidation period extending beyond one year. The Company has claims receivable and retention due from various customers and others that are currently in dispute, the realization of which is subject to binding arbitration, final negotiation or litigation, all of which may extend beyond one calendar year.

Cash and cash equivalents

Cash and cash equivalents—The Company considers all highly liquid investments with an original maturity of three months or less when purchased as cash equivalents.

Short-term investments

Short-term investments—The Company classifies as short-term investments all securities or other assets acquired which have ready marketability and can be liquidated, if necessary, within the current operating cycle and which have readily determinable fair values. Short-term investments are classified as available for sale and are recorded at fair value using the specific identification method. At December 31, 2016 and 2015, the Company had no short-term investments.  In prior years, the majority of the Company’s short-term investments were in short-term dollar-denominated bank deposits and U.S. Treasury Bills in order to provide government backing of the investments.

Customer retention deposits

Customer retention deposits— Customer retention deposits consist of contract retention payments made by customers into bank escrow cash accounts as required in some state jurisdictions. Investments for these amounts are limited to highly graded U.S. and municipal government debt obligations, investment grade commercial paper and CDs, which limits credit risk on these balances. Escrow cash accounts are released to the Company by customers as projects are completed in accordance with contract terms.

Inventory and uninstalled contract materials

Inventory and uninstalled contract materials—Inventory consists of expendable construction materials and small tools that will be used in construction projects and is valued at the lower of cost, using first-in, first-out method, or market.  Uninstalled contract materials are certain job specific materials not yet installed, primarily for highway construction projects, which are valued using the specific identification method relating the cost incurred to a specific project.  In most cases, the Company is able to invoice a state agency for the materials, but title is not passed to the state agency until the materials are installed.

Business combinations

Business combinations—Business combinations are accounted for using the acquisition method of accounting.  We use the fair value of the assets acquired and liabilities assumed to account for the purchase price of businesses.  The determination of fair value requires estimates and judgments of future cash flow expectations to assign fair values to the identifiable tangible and intangible assets.  GAAP provides a “measurement period” of up to one year in which to finalize all fair value estimates associated with the acquisition of a business. Most estimates are preliminary until the end of the measurement period.  During the measurement period, any material, newly discovered information that existed at the acquisition date would be reflected as an adjustment to the initial valuations and estimates.  After the measurement date, any adjustments would be recorded as a current period income or expense.

Goodwill and other intangible assets

Goodwill and other intangible assets—The Company accounts for goodwill in accordance with ASC Topic 350 “Intangibles — Goodwill and Other”.  Under ASC Topic 350, goodwill is subject to an annual impairment test as of the first day of the fourth quarter of each year, with more frequent testing if indicators of potential impairment exist.  The impairment review is performed at the reporting unit level for those units with recorded goodwill.

During the third quarter 2016, the Company made a decision to divest its Texas heavy civil business unit, a division of JCG within the East segment.  The Company will continue to operate the division while actively seeking a buyer.  In accordance with ASC Topic 350, the event of the planned divestiture triggered an analysis of goodwill in the JCG reporting unit, resulting in a pretax, non-cash goodwill impairment charge of approximately $2.7 million.  See Note 16 — “Planned Divestiture of Texas Heavy Civil Business Unit”.  In the fourth quarter of 2015, an impairment expense of $401 was recorded relating to the goodwill attributed to Cardinal Contractors, Inc., which is part of the East Segment.  There was no impairment of goodwill for the year ended December 31, 2014.

Income tax

Income tax— Current income tax expense is the amount of income taxes expected to be paid for the financial results of the current year. A deferred income tax liability or asset is established for the expected future tax consequences resulting from the differences in financial reporting and tax basis of assets and liabilities between GAAP and the tax codes. A valuation allowance is provided if it is more likely than not that some or all of the deferred tax assets will not be realized. The Company provides for uncertain tax positions when such tax positions do not meet the recognition thresholds or measurement standards as set forth in ASC Topic 740. The difference between a tax position taken or expected to be taken on the Company’s income tax returns and the benefit recognized on our financial statements is referred to as an unrecognized tax benefit.  Amounts for uncertain tax positions are adjusted in periods when new information becomes available or when positions are effectively settled. The Company recognizes accrued interest and penalties related to uncertain tax positions, if any, as a component of income tax expense.

Comprehensive income

Comprehensive income—The Company accounts for comprehensive income in accordance with ASC Topic 220 “Comprehensive Income”, which specifies the computation, presentation and disclosure requirements for comprehensive income (loss). During the reported periods, the Company had no material other comprehensive income.

Foreign operations

Foreign operations—At December 31, 2016, the Company had operations in Canada with assets aggregating approximately $11,823, compared to $14,111 at December 31, 2015.  The Canadian operations had revenues of $11,158 and income before tax of $774 for the year ended December 31, 2016; revenues of $17,763 and income before tax of $252 for the year ended December 31, 2015, and revenues of $19,840 and income before tax of $3,183 for the year ended December 31, 2014.

Functional currencies and foreign currency translation

Functional currencies and foreign currency translation— The Company uses the United States dollar as its functional currency in Canada for the Canadian operations of OnQuest Canada, as substantially all monetary transactions are made in U.S. dollars, and other significant economic facts and circumstances currently support that position. Since these factors may change, the Company periodically assesses its position with respect to the functional currency of its foreign subsidiary. Non-monetary balance sheet items and related revenue, gain, expense and loss accounts are valued using historical rates.  All other items are re-measured using the current exchange rate in effect at the balance sheet date. Foreign exchange gains of $202 in 2016, losses of $763 in 2015 and gains of $374 in 2014 are included in the “other income or expense” line of the Consolidated Statements of Income.

Partnerships and joint ventures

Partnerships and joint ventures  — As is normal in the construction industry, the Company is periodically a member of a partnership or a joint venture.  These partnerships or joint ventures are used primarily for the execution of single contracts or projects.  The Company’s ownership can vary from a small noncontrolling ownership to a significant ownership interest.  The Company evaluates each partnership or joint venture to determine whether the entity is considered a variable interest entity (“VIE”) as defined in ASC Topic 810, and if a VIE, whether the Company is the primary beneficiary of the VIE, which would require the Company to consolidate the VIE with the Company’s financial statements.  When consolidation occurs, the Company accounts for the interests of the other parties as a noncontrolling interest and discloses the net income attributable to noncontrolling interests. See Note 13 — “Noncontrolling Interests" for further information.

Equity method of accounting

Equity method of accounting— The Company accounts for its interest in an investment using the equity method of accounting per ASC Topic 323 if the Company is not the primary beneficiary of a VIE or does not have a controlling interest. The investment is recorded at cost and the carrying amount is adjusted periodically to recognize the Company’s proportionate share of income or loss, additional contributions made and dividends and capital distributions received.  The Company records the effect of any impairment or an other than temporary decrease in the value of its investment.

In the event a partially owned equity affiliate were to incur a loss and the Company’s cumulative proportionate share of the loss exceeded the carrying amount of the equity method investment, application of the equity method would be suspended and the Company’s proportionate share of further losses would not be recognized unless the Company committed to provide further financial support to the affiliate. The Company would resume application of the equity method once the affiliate became profitable and the Company’s proportionate share of the affiliate’s earnings equals the Company’s cumulative proportionate share of losses that were not recognized during the period the application of the equity method was suspended.

Cash concentration

Cash concentration—The Company places its cash in short term U.S. Treasury bonds and certificates of deposit (“CDs”). At December 31, 2016 and 2015, the Company had cash balances of $135.8 million and $161.1 million, respectively.  At December 31, 2016, the $135.8 million of cash consisted of $100.5 million in U.S. Treasury bill funds, backed by the federal government, and the remaining $35.3 million are held in high credit quality financial institutions in order to mitigate the risk of holding funds not backed by the federal government or in excess of federally backed limits.  At December 31, 2015, the $161.1 million of cash consisted of $131.2 million held in U.S. Treasury bill funds and $29.9 million with high credit quality financial institutions.

Collective bargaining agreements

Collective bargaining agreements—Approximately 32% of the Company’s hourly employees, primarily consisting of field laborers, were covered by collective bargaining agreements in 2016. Upon renegotiation of such agreements, the Company could be exposed to increases in hourly costs and work stoppages. Of the 84 collective bargaining agreements to which the Company is a party to, 62 will require renegotiation during 2017.  The Company has not had a work stoppage in more than 20 years.

Multiemployer plans

Multiemployer plans — Various subsidiaries in the West segment are signatories to collective bargaining agreements.  These agreements require that the Company participate in and contribute to a number of multiemployer benefit plans for its union employees at rates determined by the agreements. The trustees for each multiemployer plan determine the eligibility and allocations of contributions and benefit amounts, determine the types of benefits and administer the plan. Federal law requires that if the Company were to withdraw from an agreement, it would incur a withdrawal obligation. The potential withdrawal obligation may be significant. In accordance with GAAP, any withdrawal liability would be recorded when it is probable that a liability exists and can be reasonably estimated. In November 2011, the Company withdrew from the Central States Southeast and Southwest Areas Pension Fund multiemployer pension plan, as discussed in Note 15 — “Commitments and Contingencies”.  The Company has no plans to withdraw from any other agreements.

Worker's compensation insurance

Worker’s compensation insurance—The Company self-insures worker’s compensation claims to a certain level. The Company maintained a self-insurance reserve totaling $28,006 and $26,779 at December 31, 2016 and 2015, respectively. The amount is included in “Accrued expenses and other current liabilities” on the accompanying Consolidated Balance Sheets. Claims administration expenses are charged to current operations as incurred.  Future payments may materially differ from the reserve amounts.

Fair value of financial instruments

Fair value of financial instruments—The consolidated financial statements include financial instruments for which the fair value may differ from amounts reflected on a historical basis. Financial instruments of the Company consist of cash, accounts receivable, short-term investments, accounts payable and certain accrued liabilities.  These financial instruments generally approximate fair market value based on their short-term nature.  The carrying value of the Company’s long-term debt approximates fair value based on comparison with current prevailing market rates for loans of similar risks and maturities.

The fair value of financial instruments is measured and disclosure is made in accordance with ASC Topic 820, “Fair Value Measurements and Disclosures”.

Revenue recognition

Revenue recognition

Fixed-price contracts — Historically, a substantial portion of the Company’s revenue has been generated under fixed-price contracts. For fixed-price contracts, the Company recognizes revenues primarily using the percentage-of-completion method, which may result in uneven and irregular results. In the percentage-of-completion method, estimated contract values, estimated cost at completion and total costs incurred to date are used to calculate revenues earned. Unforeseen events and circumstances can alter the estimate of the costs and potential profit associated with a particular contract. Total estimated costs, and thus contract revenues and income, can be impacted by changes in productivity, scheduling, the unit cost of labor, subcontracts, materials and equipment. Additionally, external factors such as weather, client needs, client delays in providing permits and approvals, labor availability, governmental regulation and politics may affect the progress of a project’s completion and thus the timing of revenue recognition. To the extent that original cost estimates are modified, estimated costs to complete increase, delivery schedules are delayed, or progress under a contract is otherwise impeded, cash flow, revenue recognition and profitability from a particular contract may be adversely affected.

The Company considers unapproved change orders to be contract variations for which it has customer approval for a change in scope but for which it does not have an agreed upon price change. Costs associated with unapproved change orders are included in the estimated cost to complete the contracts and are treated as project costs as incurred. The Company recognizes no margin, where revenue is equal to costs incurred, on unapproved change orders based on an estimated probability of realization from change order approval. Unapproved change orders involve the use of estimates, and it is reasonably possible that revisions to the estimated costs and recoverable amounts may be required in future reporting periods to reflect changes in estimates or final agreements with customers.

The Company considers claims to be amounts it seeks, or will seek, to collect from customers or others for customer-caused changes in contract specifications or design, or other customer-related causes of unanticipated additional contract costs, on which there is no agreement with customers on both scope and price changes. Claims can also be caused by non-customer-caused changes, such as weather delays or rain.  Claims are included in the calculation of revenues when realization is probable and amounts can be reliably determined. Revenue in excess of contract costs from claims is recognized when an agreement is reached with customers as to the value of the claims, which in some instances may not occur until after completion of work under the contract. Costs associated with claims are included in the estimated costs to complete the contracts and are treated as project costs when incurred.

Other contract forms — The Company also uses unit-price, time and material, and cost reimbursable plus fee contracts.  For these jobs, revenue is recognized primarily based on contractual terms. For example, time and material contract revenues are generally recognized on an input basis, based on labor hours incurred and on purchases made. Similarly, unit price contracts generally recognize revenue on an output based measurement such as the completion of specific units at a specified unit price.

At any time, if an estimate of total contract cost indicates a loss on a contract, the projected loss is recognized in full at that time and recognized as an “accrued loss provision” which is included in the accrued expenses and other liabilities amount on the balance sheet.  For fixed price contracts, as the percentage-of-completion method is used to calculate revenues, the accrued loss provision is changed so that the gross profit for the contract remains zero in future periods. If we anticipate that there will be a loss for unit price or cost reimbursable contracts, the projected loss is recognized in full at that time.

Changes in job performance, job conditions and estimated profitability, including those arising from final contract settlements, may result in revisions to costs and income. These revisions are recognized in the period in which the revisions are identified.

In all forms of contracts, the Company estimates its collectability of contract amounts at the same time that it estimates project costs.  If the Company anticipates that there may be issues associated with the collectability of the full amount calculated as revenues, the Company may reduce the amount recognized as revenue to reflect the uncertainty associated with realization of the eventual cash collection.  For example, when a cost reimbursable project exceeds the client’s expected budget amount, the client frequently requests an adjustment to the final amount.  Similarly, some utility clients reserve the right to audit costs for significant periods after performance of the work.  In these situations, the Company may choose to defer recognition of revenue up to the time that the client pays for the services.

The caption “Costs and estimated earnings in excess of billings” in the Consolidated Balance Sheet represents unbilled receivables which arise when revenues have been recorded but the amount will not be billed until a later date.  Balances represent:  (a) unbilled amounts arising from the use of the percentage-of-completion method of accounting which may not be billed under the terms of the contract until a later date or project milestone, (b) incurred costs to be billed under cost reimbursement type contracts, (c) amounts arising from routine lags in billing, or (d) the revenue associated with unapproved change orders or claims when realization is probable and amounts can be reliably determined.  For those contracts in which billings exceed contract revenues recognized to date, the excess amounts are included in the caption “Billings in excess of costs and estimated earnings”.

In accordance with applicable terms of certain construction contracts, retainage amounts may be withheld by customers until completion and acceptance of the project.  Some payments of the retainage may not be received for a significant period after completion of our portion of a project.  In some jurisdictions, retainage amounts are deposited into an escrow account.

Accounts receivable

Accounts receivable—Accounts receivable and contract receivables are primarily with public and private companies and governmental agencies located in the United States. Credit terms for payment of products and services are extended to customers in the normal course of business and no interest is charged. Contract receivables are generally progress billings on projects, and as a result, are short term in nature.  Generally, the Company requires no collateral from its customers, but files statutory liens or stop notices on any construction projects when collection problems are anticipated. While a project is underway, the Company estimates its collectability of contract amounts at the same time that it estimates project costs.  As discussed in the “Revenue recognition” section above, realization of the eventual cash collection may be recognized as adjustments to the contract profitability, otherwise, the Company uses the allowance method of accounting for losses from uncollectible accounts. Under this method an allowance is provided based upon historical experience and management’s evaluation of outstanding contract receivables at the end of each year. Receivables are written off in the period deemed uncollectible. The allowance for doubtful accounts at December 31, 2016 and 2015 was $1,030 and $480, respectively.

Significant revision in contract estimate

Significant revision in contract estimate  —  Revenue recognition is based on the percentage-of-completion method for firm fixed-price contracts. Under this method, the costs incurred to date as a percentage of total estimated costs are used to calculate revenue. Total estimated costs, and thus contract revenues and margin, are impacted by many factors, which can cause significant changes in estimates during the life cycle of a project.

For projects that were in process at the end of the prior year, there can be a difference in revenues and profits that would have been recognized in the prior year, had current year estimates of costs to complete been known at the end of the prior year. 

During the year ended December 31, 2016, certain contracts had revisions in cost estimates from those projected at December 31, 2015. If the revised estimates had been applied in the prior year, the gross profit earned on these contracts would have resulted in a decrease of approximately $1,685 in gross profit in 2015. Similarly, had the revised estimates as of December 31, 2015 been applied in the prior year; the gross profit earned on these contracts would have resulted in an increase of approximately $1,540 in gross profit in 2014. The revised estimates for the year ended December 31, 2014 would have resulted in a gross profit increase of approximately $17,266 in the year 2013.

The following table presents the approximate financial impact of the changes in estimates that would have been reflected in the prior years 2015 and 2014 had the revised estimates been applied to the particular year.

	Net impact of change in estimate
	for the years ended December 31,
	2015		2014
Revised estimates in 2016 that impact 2015	$	(1,685)	$	—
Revised estimates in 2015 that impact 2014		(1,540)		1,540
Revised estimates in 2014 that impact 2013		—		(17,266)
Net impact to gross margin	$	(3,225)	$	(15,726)
EPS impact to year	$	(0.04)	$	(0.19)

During the third quarter 2016, the Company settled a dispute with a customer on collection of a receivable of $17.9 million, receiving $38 million in cash.  Prior to settlement, the Company recorded revenues with zero margin.  The Company recognized the settlement as a change in accounting estimate which resulted in recognizing revenues of approximately $27.5 million and gross profit of approximately $26.7 million in the third quarter of 2016.  The settlement of this project dispute was not included in the table above.

Customer concentration

Customer concentration — The Company operates in multiple industry segments encompassing the construction of commercial, industrial and public works infrastructure assets throughout primarily the United States. Typically, the top ten customers in any one calendar year generate revenues in excess of 50% of total revenues; however, the group that comprise the top ten customers varies from year to year. See Note 18 — “Customer Concentrations” for further discussion.

Property and equipment

Property and equipment—Property and equipment are recorded at cost and are depreciated using the straight-line method over the estimated useful lives of the related assets, usually ranging from three to thirty years. Maintenance and repairs are charged to expense as incurred. Significant renewals and betterments are capitalized. At the time of retirement or other disposition of property and equipment, the cost and accumulated depreciation are removed from the accounts, and any resulting gain or loss is reflected in operations.

The Company assesses the recoverability of property and equipment whenever events or changes in business circumstances indicate that the carrying amount of the asset may not be fully recoverable.  We perform an analysis to determine if impairment exists.  The amount of property and equipment impairment, if any, is measured based on fair value and is charged to operations in the period in which property and equipment impairment is determined by management. As of December 31, 2016 and 2015, the Company’s management has not identified any material impairment of its property and equipment.

Taxes collected from customers

Taxes collected from customers—Taxes collected from the Company’s customers are recorded on a net basis.

Share-based payments and stock-based compensation

Share-based payments and stock-based compensation—In July 2008, the shareholders approved and the Company adopted the Primoris Services Corporation 2008 Long-term Incentive Equity Plan, which was replaced by the Primoris Services Corporation 2013 Long-term Incentive Equity Plan (“Equity Plan”) after approval of the shareholders and adoption by the Company on May 3, 2013.  Detailed discussion of shares issued under the Equity Plan are included in Note 21 — “Deferred Compensation Agreements and Stock-Based Compensation” and in Note 25—“Stockholders’ Equity”. Such share issuances include grants of Restricted Stock Units to executives, issuance of stock to certain senior managers and executives and issuances of stock to non-employee members of the Board of Directors.

Contingent Earnout Liabilities

Contingent Earnout Liabilities—As part of past acquisitions, the Company agreed to pay cash to the sellers upon meeting certain operating performance targets for specified periods subsequent to the acquisition date.  Each quarter, the Company evaluates the fair value of the estimated contingency and records a non-operating charge for the change in the fair value.  Upon meeting the target, the Company reflects the full liability on the balance sheet and records a charge to “Selling, general and administration expense” for the change in the fair value of the liability from the prior period.   See Note 14 — “Contingent Earnout Liabilities” for further discussion.

Recently Issued Accounting Pronouncements

Recently Issued Accounting Pronouncements

In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606)”, with several clarifying updates issued during 2016. The new standard is effective for reporting periods beginning after December 15, 2017. The new standard will supersede all current revenue recognition standards and guidance.  Revenue recognition will occur when promised goods or services are transferred to customers in amounts that reflect the consideration to which the company expects to be entitled to in exchange for those goods or services. The mandatory adoption will require new qualitative and quantitative disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments, information about contract balances and performance obligations, and assets recognized from costs incurred to obtain or fulfill a contract. The standard permits two implementation approaches at the beginning of 2018: the “full retrospective method” that requires restatement of prior years and the “modified retrospective method” that requires prospective application of the new standard as a cumulative-effect adjustment. The Company expects to adopt this new standard using the modified retrospective method that will result in a cumulative-effect adjustment to retained earnings as of the date of adoption.  The adoption will only apply to customer contracts that are not substantially complete as of January 1, 2018.

The Company is currently evaluating the impact of adopting the standard on the Company’s financial position, results of operations, cash flows and related disclosures.  Although it is early in our evaluation process, we do not expect Topic 606 to have a material impact on our financial statements, though internal documentation and record keeping may be significantly impacted.  The impact to our results is not believed to be material because Topic 606 generally supports the recognition of revenue over time under the cost-to-cost method for the majority of our contracts, which is consistent with our current percentage of completion revenue recognition model.  In most of our fixed price contracts, the customer typically controls the work in process as evidenced either by contractual termination clauses or by our rights to payment for work performed to date to deliver services that do not have an alternative use to the Company. 

The Company does not expect the new standard to materially affect the total revenue that can be recognized over the life of a construction project; however, the revenue recognized on a quarterly basis during the construction period may change. We believe that Topic 606 is likely to be more impactful to certain of our lump sum projects as a result of the following potential changes from our current practices:

§ Performance obligations – Topic 606 requires a review of contracts and contract modifications to determine whether there are multiple performance obligations.  Each separate performance obligation must be accounted for as a distinct project, which could impact the timing of revenue recognition.  There is a potential that some of our contracts may have multiple performance obligations which may affect the timing of revenue recognition

§ Variable consideration – In accordance with Topic 606, revenue recognition must account for variable consideration, including potential liquidated damages and customer discounts. Currently, we assess the impact of liquidated damages as an estimated cost of the project.  The adoption of the new standard may affect the timing of the recognition of revenue for both liquidated damages and discounts. 

§ Mobilization costs – Mobilization costs typically include costs to provide labor, equipment and facilities to a project site and they are recorded currently as project costs as incurred.  Topic 606 requires these costs to be capitalized as an asset and amortized over the duration of the project.

§ Significant components – For some projects, we may purchase equipment from a third party, such as micro–LNG equipment, and install the equipment at the project site.  Under today’s standard, the Company recognizes the associated revenue and profit for the equipment.  Depending on the terms of the contract, under the new standard, revenue may be recognized without profit.   

We do not expect Topic 606 to have a material impact on our consolidated balance sheets, though we expect certain reclassifications among financial statement accounts to align with the new standard.  We also expect significant expanded disclosures relating to revenue recognized during each period.

In August 2014, the FASB issued ASU 2014-15 “Presentation of Financial Statements — Going Concern (Subtopic 205-40)” to address the diversity in practice in determining when there is substantial doubt about an entity’s ability to continue as a going concern and when and how an entity must disclose certain relevant conditions and events. This standard requires an entity to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the entity’s ability to continue as a going concern for a period of one year after the date that the financial statements are issued (or available to be issued). The standard is effective for annual and interim periods ending after December 15, 2016. The Company adopted this guidance effective January 1, 2016.  It had no effect on the Company’s financial statements.

In February 2015, the FASB issued ASU 2015-02 “Consolidation (Topic 810): Amendment to the Consolidation Analysis”, which amends existing consolidation guidance, including amending the guidance related to determining whether an entity is a variable interest entity. The update is effective for interim and annual periods beginning after December 15, 2015. As of January 1, 2016, the Company adopted this ASU, which did not have a material impact on the Company’s consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02 “Leases (Topic 842)”. The ASU will require recognition of operating leases with lease terms of more than twelve months on the balance sheet as both assets for the rights and liabilities for the obligations created by the leases. The ASU will require disclosures that provide qualitative and quantitative information for the lease assets and liabilities recorded in the financial statements. The standard is effective for fiscal years beginning after December 15, 2018. The Company will establish procedures to adopt the ASU.

In March 2016, the FASB issued ASU 2016-09 “Compensation — Stock Compensation (Topic 718) — Improvements to Employee Share-Based Payment Accounting”. The ASU modifies the accounting for excess tax benefits and tax deficiencies associated with share-based payments by requiring that excess tax benefits or deficiencies be included in the income statement rather than in equity. Additionally, the tax benefits for dividends on share-based payment awards will also be reflected in the income statement. As a result of these modifications, the ASU requires that the tax-related cash flows resulting from share-based payments will be shown on the cash flow statement as operating activities rather than as financing activities. This guidance is effective for annual periods beginning after December 15, 2016, with early adoption permitted. Adoption of this ASU is not expected to have a material effect on the Company’s consolidated financial statements.

In January 2017, the Financial Accounting Standards Board ("FASB") issued ASU 2017-04, "Simplifying the Test for Goodwill Impairment". ASU 2017-04 removes the second step of the goodwill impairment test, which requires a hypothetical purchase price allocation. A goodwill impairment will now be the amount by which a reporting unit's carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. ASU 2017-04 is effective for interim and annual reporting periods beginning after December 15, 2019 and will be applied prospectively. Management does not expect the adoption of ASU 2017-04 to have an impact on the Company's financial position, results of operations or cash flows.

In January 2017, the FASB issued ASU 2017-01, "Business Combinations (Topic 805): Clarifying the Definition of a Business" which changes the definition of a business to assist entities with evaluating when a set of transferred assets and activities is a business. ASU 2017-01 requires an entity to evaluate if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets; if so, the set of transferred assets and activities is not a business. ASU 2017-01 is effective for interim and annual reporting periods beginning after December 15, 2017. Management does not expect the adoption of ASU 2017-01 to have any impact on the company's financial position, results of operations or cash flows.

In the first quarter of 2016, the company adopted ASU 2015-15, "Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements — Amendments to SEC Paragraphs Pursuant to Staff Announcement at June 18, 2015 EITF Meeting (SEC Update)", which clarifies the presentation and measurement of debt issuance costs incurred in connection with line of credit arrangements. The adoption of ASU 2015-15 did not have an impact on the company's financial position, results of operations or cash flows.

Other new pronouncements issued but not effective until after December 31, 2016 are not expected to have a material impact on the consolidated results of operations, financial position or cash flows of the Company.

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Nature of Business (Tables)

12 Months Ended

Dec. 31, 2016

Nature of Business

Schedule of list of primary operating subsidiaries and their reportable segment

Subsidiary	Reportable Segment
ARB, Inc. (“ARB”)	West
ARB Structures, Inc.	West
Q3 Contracting, Inc. (“Q3C”)	West
Rockford Corporation (“Rockford”)	West
Vadnais Trenchless Services, Inc. (“Vadnais”)	West
Cardinal Contractors, Inc.	East
BW Primoris, LLC (“BWP”)	East
James Construction Group, LLC (“JCG”):	East
JCG Heavy Civil Division	East
JCG Infrastructure and Maintenance Division	East
Primoris Energy Services Corporation (“PES”)	Energy
PES Pipeline Services	Energy
PES Industrial Division	Energy
OnQuest, Inc.	Energy
OnQuest Canada, ULC	Energy
Primoris Aevenia, Inc. (“Aevenia”)	Energy

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Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2016

Summary of Significant Accounting Policies

Schedule of the financial impact of the changes in estimates that would have been reflected in the prior years had the revised estimates been applied to the particular year

	Net impact of change in estimate
	for the years ended December 31,
	2015		2014
Revised estimates in 2016 that impact 2015	$	(1,685)	$	—
Revised estimates in 2015 that impact 2014		(1,540)		1,540
Revised estimates in 2014 that impact 2013		—		(17,266)
Net impact to gross margin	$	(3,225)	$	(15,726)
EPS impact to year	$	(0.04)	$	(0.19)

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Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2016

Fair Value Measurements

Schedule of financial assets and liabilities which are required to be measured at fair value

			Fair Value Measurements at Reporting Date
					Significant
	Amount		Quoted Prices		Other	Significant
	Recorded		in Active Markets		Observable	Unobservable
	on Balance		for Identical Assets		Inputs	Inputs
	Sheet		(Level 1)		(Level 2)	(Level 3)
Assets as of December 31, 2016:
Cash and cash equivalents	$	135,823	$	135,823	—		—
Liabilities as of December 31, 2016:
None
Assets as of December 31, 2015:
Cash and cash equivalents	$	161,122	$	161,122	—		—
Liabilities as of December 31, 2015:
None

Schedule of changes to the Company's contingent consideration liability Level 3 fair value measurements

	Significant Unobservable Inputs
	(Level 3)
Contingent Consideration Liability	2016		2015
Beginning balance, January 1, 2016 and 2015	$	—	$	6,922
Additions to contingent consideration liability:
Change in fair value of contingent consideration liability during year		—		125
Reductions in the contingent consideration liability:
Payment to Q3C sellers for meeting performance targets		—		(5,000)
Reduction due to non-attainment of performance target – Surber, Ram Fab and Vadnais		—		(2,047)
Ending balance, December 31, 2016 and 2015	$	—	$	—

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Business Combinations (Tables)

12 Months Ended

Dec. 31, 2016

Business Combinations

Summary of the cash paid for acquisitions

	Year ended December 31,
	2016		2015
Northern — purchased November 18, 2016	$	6,889	$	—
Mueller — purchased January 29, 2016		4,108		—
Aevenia — purchased February 28, 2015		—		22,302
Cash paid	$	10,997	$	22,302

Summary of the fair value of assets acquired and the liabilities assumed

	Year ended December 31,
	2016		2015
	Acquisitions		Acquisition
Accounts receivable	$	1,606	$	2,734
Inventory and other assets		64		1,154
Prepaid expenses		—		322
Property, plant and equipment		2,133		11,173
Intangible assets		3,000		3,850
Goodwill		5,781		5,152
Accounts payable		(726)		(743)
Accrued expenses		(861)		(1,340)
Total	$	10,997	$	22,302

Schedule of the acquired intangible assets categories, fair value and average amortization periods

	Amortization	2016		2015
	Period	Fair Value		Fair Value
Non-compete agreements	2 to 5 years	$	—	$	1,350
Customer relationships	5 to 10 years		3,000		2,500
Total		$	3,000	$	3,850

Schedule of pro forma results

	2016		2015
	(unaudited)		(unaudited)
Revenues	$	2,026,867	$	1,963,754
Income before provision for income taxes	$	54,328	$	63,827
Net income attributable to Primoris	$	29,997	$	38,510
Weighted average common shares outstanding:
Basic		51,762		51,647
Diluted		51,989		51,798
Earnings per share:
Basic	$	0.58	$	0.75
Diluted	$	0.58	$	0.74

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Accounts Receivable (Tables)

12 Months Ended

Dec. 31, 2016

Accounts Receivable.

Summary of accounts receivable

	2016		2015
Contracts receivable, net of allowance for doubtful accounts of $1,030 at December 31, 2016 and $480 at December 31, 2015, respectively	$	340,871	$	288,300
Retention receivable		46,394		31,396
		387,265		319,696
Other accounts receivable		735		892
	$	388,000	$	320,588

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Costs and Estimated Earnings on Uncompleted Contracts (Tables)

12 Months Ended

Dec. 31, 2016

Costs and Estimated Earnings on Uncompleted Contracts

Schedule of costs and estimated earnings on uncompleted contracts

	2016		2015
Costs incurred on uncompleted contracts	$	5,391,124	$	5,413,224
Gross profit recognized		456,871		625,280
		5,847,995		6,038,504
Less: billings to date		(5,821,983)		(6,061,924)
	$	26,012	$	(23,420)

Schedule of costs and estimated earnings on uncompleted contracts included in consolidated balance sheet

	2016		2015
Costs and estimated earnings in excess of billings	$	138,618	$	116,455
Billings in excess of cost and estimated earnings		(112,606)		(139,875)
	$	26,012	$	(23,420)

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Property and Equipment (Tables)

12 Months Ended

Dec. 31, 2016

Property and Equipment

Summary of property and equipment

	2016		2015		Useful Life
Land and buildings	$	56,878	$	54,827	30 years
Leasehold improvements		12,147		11,071	Lease life
Office equipment		8,083		5,958	3 - 5 years
Construction equipment		370,562		340,895	3 - 7 years
Transportation equipment		98,113		93,613	3 - 18 years
		545,783		506,364
Less: accumulated depreciation and amortization		(268,437)		(222,819)
Property and equipment, net	$	277,346	$	283,545

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Goodwill and Intangible Assets (Tables)

12 Months Ended

Dec. 31, 2016

Goodwill and Intangible Assets

Schedule of goodwill by reporting unit

Reporting Unit	Segment	2016		2015
Rockford	West	$	32,079	$	32,079
Q3C	West		13,160		13,160
JCG (includes JCG Heavy Civil and Infrastructure and Maintenance divisions)	East		40,150		42,866
PES (includes PPS, PES Industrial, FSSI, Saxon and Surber divisions)	Energy		28,463		28,463
OnQuest Canada, ULC	Energy		2,441		2,441
Aevenia	Energy		10,933		5,152
Total Goodwill		$	127,226	$	124,161

Summary of intangible asset categories, amounts and the average amortization periods

	Amortization
	Period	2016		2015
Tradename	3 to 10 years	$	11,754	$	15,019
Customer relationships	3 to 15 years		20,136		19,995
Non-compete agreements	2 to 5 years		951		1,424
		$	32,841	$	36,438

Schedule of estimated future amortization expense for intangible assets

	Estimated
	Intangible
For the Years Ending	Amortization
December 31,	Expense
2017	$	6,673
2018		6,291
2019		6,111
2020		3,712
2021		2,805
Thereafter		7,249
	$	32,841

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Accounts Payable and Accrued Liabilities (Tables)

12 Months Ended

Dec. 31, 2016

Accounts Payable and Accrued Liabilities

Summary of accrued expenses and other current liabilities

	2016		2015
Payroll and related employee benefits	$	42,718	$	33,358
Insurance, including self-insurance reserves		42,546		44,695
Reserve for estimated losses on uncompleted contracts		12,801		7,261
Corporate income taxes and other taxes		3,368		2,447
Accrued administrative cost		3,791		1,415
Other		2,782		4,420
	$	108,006	$	93,596

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Capital Leases (Tables)

12 Months Ended

Dec. 31, 2016

Capital Leases

Schedule of future minimum lease payments required under capital leases together with their present value

2017	$	188
2018		6
2019		6
2020		5
2021		—
Total minimum lease payments	$	205
Amounts representing interest		(2)
Net present value of minimum lease payments		203
Less: current portion of capital lease obligations		(188)
Long-term capital lease obligations	$	15

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Credit Arrangements (Tables)

12 Months Ended

Dec. 31, 2016

Credit Arrangements

Schedule of credit facilities and long-term debt

	2016		2015
Commercial equipment notes payable to various commercial equipment finance companies and banks with interest rates that range from 1.78% to 3.51% per annum. Monthly principal and interest payments are due in the amount of $2,521 per month until the maturity dates, which range from August 13, 2017 to December 13, 2020. The notes are secured by certain construction equipment of the Company	$	55,579	$	83,711
Commercial equipment notes payable to various commercial equipment finance companies and banks with  interest rates that range from 1.94% to 2.75% per annum. Monthly principal and interest payments are due in the amount of $999 per month until the maturity dates, which range from March 31, 2019 to September 24, 2021. The notes are secured by certain construction equipment assets of the Company		33,254		44,587
Commercial equipment notes payable to various commercial equipment finance companies and banks with interest rates that range from 2.01% to 2.19% per annum. Monthly principal and interest payments are due in the amount of $735 per month until the maturity dates, which range from March 5, 2020 to September 24, 2020. The notes are secured by certain construction equipment assets of the Company		29,702		38,041
Commercial equipment notes payable to various commercial equipment finance companies and banks with interest rates that range from 1.83% to 2.06% per annum. Monthly principal and interest payments are due in the amount of $788 per month until the maturity dates, which range from August 15, 2021 to October 14, 2021. The notes are secured by certain construction equipment assets of the Company		42,613		—
Two secured mortgage notes payable to a bank, with an interest rate of 4.3% per annum.  Monthly principal and interest payments of $60 per month began January 1, 2016 and continue until the maturity date of January 1, 2031. The notes are secured by two buildings		7,564		7,950
Senior Secured Notes payable to an insurance finance company, with interest rates that range from 3.65% to 4.60% per annum, with quarterly interest payments.  Principal repayment for the $50,000 loan starts on December 28, 2016, for the $25,000 loan on July 15, 2017 and for the second $25,000 loan on November 9, 2019, and continue until their maturity dates, which range from December 28, 2022 to November 9, 2025.  The notes are secured by the assets of the Company		92,858		100,000
		261,570		274,289
Less: current portion		(58,189)		(54,436)
Long-term debt, net of current portion	$	203,381	$	219,853

Schedule of maturities of long-term debt

	Year Ending
	December 31,
2017	$	58,189
2018		55,741
2019		55,246
2020		35,850
2021		22,449
Thereafter		34,095
	$	261,570

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Noncontrolling Interests (Tables)

12 Months Ended

Dec. 31, 2016

Carlsbad

Schedule of joint venture operating activities included in the Company's consolidated statements of income

	2016		2015
Revenues	$	7,254	$	2,887
Net income attributable to noncontrolling interests		325		172

Schedule of the carrying value of the assets and liabilities included in the Company's consolidated balance sheets

	2016		2015
Cash	$	4,630	$	1,952
Accounts receivable	$	—	$	955
Costs and estimated earnings in excess of billings	$	124	$	—
Billings in excess of costs and estimated earnings	$	3,426	$	1,311
Other current liabilities	$	332	$	1,251

Wilmington

Schedule of joint venture operating activities included in the Company's consolidated statements of income

	2016		2015
Revenues	$	19,781	$	1,364
Net income attributable to noncontrolling interests		676		48

Schedule of the carrying value of the assets and liabilities included in the Company's consolidated balance sheets

	2016		2015
Cash	$	2,415	$	2,339
Accounts receivable	$	4,242	$	2,003
Billings in excess of costs and estimated earnings	$	2,572	$	2,978
Other current liabilities	$	2,637	$	1,269

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Commitments and Contingencies (Tables)

12 Months Ended

Dec. 31, 2016

Commitments and Contingencies.

Schedule of future minimum lease payments required under non-cancelable operating leases

			Real
			Property
For the Years Ending	Real		(Related				Total
December 31,	Property		Party)		Equipment		Commitments
2017	$	4,015	$	1,519	$	9,384	$	14,918
2018		3,436		1,210		8,289		12,935
2019		2,453		938		6,305		9,696
2020		1,345		852		4,041		6,238
2021		793		854		2,366		4,013
Thereafter		—		1,042		—		1,042
	$	12,042	$	6,415	$	30,385	$	48,842

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Reportable Segments (Tables)

12 Months Ended

Dec. 31, 2016

Reportable Segments

Schedule of revenue by segment

	2016			2015			2014
			% of			% of			% of
			Total			Total			Total
Reportable Segment	Revenue		Revenue	Revenue		Revenue	Revenue		Revenue
West	$	1,041,341	52.2%	$	913,626	47.4%	$	964,093	46.2%
East		521,301	26.1%		612,174	31.7%		489,926	23.5%
Energy		434,306	21.7%		403,615	20.9%		632,175	30.3%
Total	$	1,996,948	100.0%	$	1,929,415	100.0%	$	2,086,194	100.0%

Schedule of gross profit by segment

	2016			2015			2014
			% of			% of			% of
Reportable Segment	Gross Profit		Revenue	Gross Profit		Revenue	Gross Profit		Revenue
West	$	145,239	13.9%	$	130,255	14.3%	$	143,468	14.9%
East		(15,938)	(3.1%)		42,523	6.9%		25,749	5.3%
Energy		72,006	16.6%		47,095	11.7%		66,823	10.6%
Total	$	201,307	10.1%	$	219,873	11.4%	$	236,040	11.3%

Schedule of amount of goodwill recorded by segment

Reportable Segment		2016		2015
West	$	45,239	$	45,239
East		40,150		42,866
Energy		41,837		36,056
Total	$	127,226	$	124,161

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Customer Concentrations (Tables)

12 Months Ended

Dec. 31, 2016

Customer Concentrations

Schedule of revenue from customers

Description of
Customer’s	2016			2015			2014
Business	Amount		Percentage	Amount		Percentage	Amount		Percentage
Chemical/Energy producer	$	208,458	10.4%	$	173,931	9.0%	$	*	*
Private gas and electric utility		201,443	10.1%		173,232	9.0%		145,677	7.0%
Texas DOT		193,049	9.7%		183,847	9.5%		183,221	8.8%
Public gas and electric utility		184,002	9.2%		120,507	6.2%		144,567	6.9%
Pipeline operator		123,055	6.2%		*	*		*	*
Pipeline operator		*	*		165,578	8.6%		*	*
Gas utility		*	*		127,128	6.6%		*	*
Petrochemical producer		*	*		*	*		164,634	7.9%
Pipeline operator		*	*		*	*		121,220	5.8%
	$	910,007	45.6%	$	944,223	48.9%	$	759,319	36.4%

(*)Indicates a customer with less than 5% of revenues during such period.

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Multiemployer Plans (Tables)

12 Months Ended

Dec. 31, 2016

Multiemployer Plans

Schedule of the entity's contributions to different pension funds

Collective

FIP/RP

Bargaining

EIN /

Pension Protection Act Zone

Status

Agreement

Pension Plan

Status

Pending /

Surcharge

Expiration

Contributions of the Company

Pension Fund Name

Number

2016

2015

Implemented

Imposed

Date

2016

2015

2014

Central Pension Fund of the International Union of Operating Engineers and Participating Employers

36-6052390/001

Green at February 1, 2015

Green at February 1, 2014

No

No

6/04/2017

$

5,373

$

5,659

$

6,204

Laborers Pension Trust Fund for Northern California

94-6277608/001

Yellow at June 1, 2015

Yellow at June 1, 2014

No

No

6/30/2019

3,598

3,150

3,116

Construction Laborers Pension Trust for Southern California

43-6159056/001

Green at January 1, 2015

Green at January 1, 2014

No

No

6/30/2018

2,742

3,067

2,444

Pipeline Industry Benefit Fund

73-6146433/001

Green at January 1, 2015

Green at January 1, 2014

No

No

6/04/2017

2,740

3,783

2,686

Southern California Pipetrades Trust Funds

51-6108443/001

Green at January 1, 2015

Green at January 1, 2014

No

No

6/30/2018

2,614

2,180

5,239

Laborers International Union of North America National (Industrial) Pension Fund

52-6074345/001

Red at January 1, 2015

Red at January 1, 2014

No

No

6/04/2017

2,415

3,287

3,382

Contributions to significant plans

19,482

21,126

23,071

Contributions to other multiemployer plans

14,701

13,170

15,036

Total contributions made

$

34,183

$

34,296

$

38,107

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Stock-Based Compensation (Tables)

12 Months Ended

Dec. 31, 2016

Stock-Based Compensation

Schedule of units to vest for remaining restricted stock units

	Number of Units
For the Years Ending December 31,	to Vest
2017	74,394
2018	25,138
2019	48,219
2020	2,058
2021	—
	149,809

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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2016

Income Taxes

Schedule of components of the provision for income taxes

	2016		2015		2014
Current provision (benefit)
Federal	$	4,726	$	26,948	$	28,203
State		5,423		3,640		5,398
Foreign		92		362		1,074
		10,241		30,950		34,675
Deferred provision (benefit)
Federal		11,560		(7,099)		3,586
State		(727)		155		457
Foreign		72		(60)		(72)
		10,905		(7,004)		3,971
Total	$	21,146	$	23,946	$	38,646

Schedule of reconciliation of income tax expense compared to the amount of income tax expense that would result by applying U.S. federal statutory income tax rate to pre-tax income

	2016	2015	2014
U.S. federal statutory income tax rate	35.00%	35.00%	35.00%
State taxes, net of federal income tax impact	6.38%	4.20%	4.66%
Foreign tax credit	(0.35)%	(0.50)%	(0.98)%
Canadian income tax	0.35%	0.50%	0.98%
Domestic production activities deduction	(1.10)%	(3.91)%	(3.07)%
Nondeductible meals & entertainment	5.36%	5.09%	3.38%
Other items	(1.46)%	(1.01)%	(2.01)%
Effective tax rate on income before provision for income taxes excluding income attributable to noncontrolling interests	44.18%	39.37%	37.96%
Impact of income from noncontrolling interests on effective tax rate	(0.91)%	(0.18)%	(0.19)%
Effective tax rate on income before provision for income taxes and noncontrolling interests	43.27%	39.19%	37.77%

Schedule of tax effect of temporary differences that give rise to deferred income taxes

	2016		2015
Deferred tax assets:
Accrued compensation	$	5,804	$	9,673
Accrued workers compensation		9,855		10,058
Capital loss carryforward		1,077		1,800
Foreign tax credit		1,349		1,293
Insurance reserves		3,248		5,489
Loss reserves		4,841		2,887
Pension liability		1,979		2,805
State income taxes		2,011		469
Other		288		882
Total deferred tax assets		30,452		35,356
Deferred tax liabilities
Depreciation and amortization		(38,327)		(33,304)
Prepaid expenses and other		(1,955)		(977)
Total deferred tax liabilities		(40,282)		(34,281)
Net deferred tax assets (liabilities)	$	(9,830)	$	1,075

Schedule of reconciliation of the beginning and ending amounts and aggregate changes in the balance of unrecognized tax benefits

	2016		2015		2014
Beginning balance	$	—	$	456	$	5,382
Increases in balances for tax positions taken during the current year		—		—		—
Increases in balances for tax positions taken during prior years		—		—		—
Settlements and effective settlements with tax authorities		—		(456)		(4,878)
Lapse of statute of limitations		—		—		(48)
Total	$	—	$	—	$	456

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Dividends and Earnings Per Share (Tables)

12 Months Ended

Dec. 31, 2016

Dividends and Earnings Per Share

Schedule of cash dividends paid or declared

Declaration Date	Record Date	Payable Date	Amount Per Share
February 24, 2015	March 31, 2015	April 15, 2015	$	0.040
May 1, 2015	June 30, 2015	July 15, 2015	$	0.055
August 4, 2015	September 30, 2015	October 15, 2015	$	0.055
November 3, 2015	December 31, 2015	January 15, 2016	$	0.055
February 22, 2016	March 31, 2016	April 15, 2016	$	0.055
May 2, 2016	June 30, 2016	July 15, 2016	$	0.055
August 3, 2016	September 30, 2016	October 14, 2016	$	0.055
November 2, 2016	December 31, 2016	January 16, 2017	$	0.055

Schedule of computation of basic and diluted earnings per share

	2016		2015		2014
Numerator:
Net income	$	27,725	$	37,151	$	63,682
Net income attributable to noncontrolling interests		(1,002)		(279)		(526)
Net income attributable to Primoris	$	26,723	$	36,872	$	63,156
Denominator (shares in thousands):
Weighted average shares for computation of basic earnings per share		51,762		51,647		51,607
Dilutive effect of shares issued to independent directors		3		2		2
Dilutive effect of restricted stock units (1)		224		149		138.0
Weighted average shares for computation of diluted earnings per share		51,989		51,798		51,747
Earnings per share attributable to Primoris:
Basic	$	0.52	$	0.71	$	1.22
Diluted	$	0.51	$	0.71	$	1.22

Represents the effect of the grant of 249,065 shares of Restricted Stock Units and 1,693 vested Dividend Equivalent Units.

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Selected Quarterly Financial Information (Unaudited) (Tables)

12 Months Ended

Dec. 31, 2016

Selected Quarterly Financial Information (Unaudited)

Schedule of selected unaudited quarterly consolidated financial information

	Year Ended December 31, 2016
	1st		2nd		3rd		4th
(In thousands, except per share data)	Quarter		Quarter		Quarter		Quarter
Revenues	$	430,446	$	456,811	$	507,828	$	601,863
Gross profit		39,277		43,285		50,129		68,616
Impairment of goodwill		—		—		2,716		—
Net income		2,916		5,287		4,756		14,766
Net income attributable to Primoris		2,693		5,056		4,504		14,470
Earnings per share:
Basic earnings per share	$	0.05	$	0.10	$	0.09	$	0.28
Diluted earnings per share	$	0.05	$	0.10	$	0.09	$	0.28
Weighted average shares outstanding (in thousands)
Basic		51,725		51,772		51,780		51,771
Diluted		51,881		52,022		52,034		52,021

	Year Ended December 31, 2015
	1st		2nd		3rd		4th
(In thousands, except per share data)	Quarter		Quarter		Quarter		Quarter
Revenues	$	392,780	$	483,545	$	555,945	$	497,145
Gross profit		38,005		46,496		71,647		63,725
Impairment of goodwill		—		—		—		401
Net income		1,672		3,692		19,079		12,708
Net income attributable to Primoris		1,672		3,638		19,007		12,555
Earnings per share:
Basic earnings per share	$	0.03	$	0.07	$	0.37	$	0.24
Diluted earnings per share	$	0.03	$	0.07	$	0.37	$	0.24
Weighted average shares outstanding (in thousands)
Basic		51,572		51,666		51,672		51,676
Diluted		51,726		51,815		51,824		51,825

	Year Ended December 31, 2014
	1st		2nd		3rd		4th
(In thousands, except per share data)	Quarter		Quarter		Quarter		Quarter
Revenues	$	470,074	$	515,291	$	613,237	$	487,592
Gross profit		49,757		61,194		75,473		49,616
Net income		11,265		16,003		27,390		9,024
Net income attributable to Primoris		10,833		16,003		27,390		8,930
Earnings per share:
Basic earnings per share	$	0.21	$	0.31	$	0.53	$	0.17
Diluted earnings per share	$	0.21	$	0.31	$	0.53	$	0.17
Weighted average shares outstanding (in thousands)
Basic		51,610		51,655		51,606		51,561
Diluted		51,714		51,804		51,759		51,710

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Nature of Business (Details) $ in Thousands					3 Months Ended	12 Months Ended
	Nov. 18, 2016 USD ($)	Jan. 29, 2016 USD ($)	Feb. 28, 2015 USD ($)	Jun. 05, 2014 USD ($)	Sep. 30, 2014 USD ($) item	Dec. 31, 2016 USD ($) segment item	Dec. 31, 2015 USD ($)
Nature of Business
Number of reportable segments | segment						3
Number of joint ventures | item						2
Capitalized property, plant and equipment						$ 545,783	$ 506,364
Aevenia
Nature of Business
Amount of purchase of assets and liabilities			$ 22,300
Mueller
Nature of Business
Amount of purchase of assets and liabilities		$ 4,100
Northern
Nature of Business
Amount of purchase of assets and liabilities	$ 6,900
Surber, Ram-Fab and Williams
Nature of Business
Amount of purchase of assets and liabilities					$ 8,200
Number of small purchases made | item					3
Vadnais | West | Vadnais
Nature of Business
Amount of purchase of assets and liabilities				$ 6,400
Blythe
Nature of Business
Ownership percentage						50.00%
Carlsbad
Nature of Business
Ownership percentage						50.00%
Wilmington
Nature of Business
Ownership percentage						50.00%

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Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended		12 Months Ended
	Dec. 31, 2015	Sep. 30, 2016	Dec. 31, 2015	Dec. 31, 2016	Dec. 31, 2015
Operating cycle
Minimum liquidation period of assets in which significant working capital has been invested				1 year
Goodwill impairment charge			$ 401	$ 2,716	$ 401
Short-term investments
Short-term investments	$ 0		0	$ 0	$ 0
JCG | East | Texas Heavy Civil Business unit
Operating cycle
Goodwill impairment charge		$ 2,700
Cardinal Contractors | East
Operating cycle
Goodwill impairment charge	$ 401		$ 401

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Summary of Significant Accounting Policies - Foreign Operations (Details) $ / shares in Units, $ in Thousands	3 Months Ended												12 Months Ended
	Dec. 31, 2016 USD ($)	Sep. 30, 2016 USD ($)	Jun. 30, 2016 USD ($)	Mar. 31, 2016 USD ($)	Dec. 31, 2015 USD ($) $ / shares	Sep. 30, 2015 USD ($)	Jun. 30, 2015 USD ($)	Mar. 31, 2015 USD ($)	Dec. 31, 2014 USD ($) $ / shares	Sep. 30, 2014 USD ($)	Jun. 30, 2014 USD ($)	Mar. 31, 2014 USD ($)	Dec. 31, 2016 USD ($) item	Dec. 31, 2015 USD ($) $ / shares	Dec. 31, 2014 USD ($) $ / shares	Dec. 31, 2013 USD ($)
Foreign operations
Assets	$ 1,170,798				$ 1,132,254								$ 1,170,798	$ 1,132,254
Revenues	601,863	$ 507,828	$ 456,811	$ 430,446	497,145	$ 555,945	$ 483,545	$ 392,780	$ 487,592	$ 613,237	$ 515,291	$ 470,074	1,996,948	1,929,415	$ 2,086,194
Functional currencies and foreign currency translation
Foreign exchange gain (loss)													202	(763)	374
Cash concentration
Cash and cash equivalents	135,823				161,122				139,465				135,823	161,122	139,465	$ 196,077
Treasury bill funds	100,500				131,200								100,500	131,200
Cash balances with various high credit quality financial institutions	35,300				29,900								$ 35,300	29,900
Collective bargaining agreements
Percentage of labor force subject to collective bargaining agreements													32.00%
Number of collective bargaining agreements | item													84
Number of collective bargaining agreements requiring renegotiation during the year | item													62
Number of years without work stoppages													20 years
Accounts receivable
Allowance for doubtful accounts	1,030				480								$ 1,030	480
Other contract forms
Future gross profit on contracts due to change from accrued loss provision													0
Estimated net impact of change in estimate
Revised estimates in current year that impact prior period					(1,685)				1,540					(1,685)	1,540
Revised estimates in current year that impact prior period					(1,540)				(17,266)					(1,540)	(17,266)
Net impact to gross margin					$ (3,225)				$ (15,726)					$ (3,225)	$ (15,726)
EPS impact to year | $ / shares					$ (0.04)				$ (0.19)					$ (0.04)	$ (0.19)
Gross profit	68,616	50,129	43,285	$ 39,277	$ 63,725	$ 71,647	$ 46,496	$ 38,005	$ 49,616	$ 75,473	$ 61,194	$ 49,757	201,307	$ 219,873	$ 236,040
Disputed Receivables
Foreign operations
Revenues		27,500
Estimated net impact of change in estimate
Receivable related to a dispute with a customer			17,900
Receipts related to disputed receivable		38,000
Gross profit		$ 26,700	$ 0
Accrued Expenses and Other Current Liabilities
Worker's compensation insurance
Self insurance reserve	28,006				26,779								28,006	26,779
Canada
Foreign operations
Assets	$ 11,823				$ 14,111								11,823	14,111
Revenues													11,158	17,763	19,840
Income before tax of Canadian operations													$ 774	$ 252	$ 3,183

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Summary of Significant Accounting Policies - Customer Concentration (Details) - Revenues. - Customer concentration - Top ten customers	12 Months Ended
	Dec. 31, 2016 customer item
Customer concentration
Number of top customers | customer	10
Number of calendar years in which top customers typically generate minimum specified percentage of revenue | item	1
Minimum percentage of revenues generated by top ten customers	50.00%

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Summary of Significant Accounting Policies - Property and Equipment (Details)	12 Months Ended
	Dec. 31, 2016
Minimum
Property and equipment
Estimated useful lives of the related assets	3 years
Maximum
Property and equipment
Estimated useful lives of the related assets	30 years

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Fair Value Measurements (Details) - Recurring - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Quoted Prices in Active Markets for Identical Assets (Level 1)
Assets
Cash and cash equivalents	$ 135,823	$ 161,122
Amount Recorded on Balance Sheet
Assets
Cash and cash equivalents	$ 135,823	$ 161,122

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Fair Value Measurements - Contingent Consideration Liability (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2016 item	Dec. 31, 2015 USD ($)	Dec. 31, 2014 USD ($)
Rollforward of contingent consideration liability level three fair value measurements
Change in fair value of contingent consideration liability during year		$ (6,722)	$ (4,145)
Contingent Consideration Liability | Significant Unobservable Inputs (Level 3)
Rollforward of contingent consideration liability level three fair value measurements
Balance at the beginning of the period		6,922
Change in fair value of contingent consideration liability during year		125
Balance at the end of the period			$ 6,922
Additional information
Number of unobservable inputs | item	2
Minimum probability of acquired entity meeting contractual operating performance target (as a percent)	33.00%
Maximum probability of acquired entity meeting contractual operating performance target (as a percent)	100.00%
Contingent Consideration Liability | Significant Unobservable Inputs (Level 3) | Q3 Contracting
Rollforward of contingent consideration liability level three fair value measurements
Payment to Q3C sellers for meeting performance targets		(5,000)
Contingent Consideration Liability | Significant Unobservable Inputs (Level 3) | Surber, Vadnais and Ram Fab
Rollforward of contingent consideration liability level three fair value measurements
Reduction due to non-attainment of performance target - Surber, Ram Fab and Vadnais		$ (2,047)

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Business Combinations (Details) $ in Thousands					1 Months Ended	10 Months Ended	12 Months Ended
	Nov. 18, 2016 USD ($) MWh	Jun. 24, 2016 USD ($)	Jan. 29, 2016 USD ($)	Feb. 28, 2015 USD ($)	Mar. 31, 2015 USD ($)	Dec. 31, 2015 USD ($)	Dec. 31, 2016 USD ($)	Dec. 31, 2015 USD ($)	Dec. 31, 2014 USD ($)	Jun. 30, 2016 USD ($)
Business combinations
Operating income							$ 57,749	$ 67,769	$ 103,792
Goodwill						$ 124,161	$ 127,226	$ 124,161
Pipe Jacking Unlimited Inc | Vadnais
Business combinations
Purchase of property, plant and equipment		$ 13,400
Aevenia
Business combinations
Fair value of consideration				$ 22,300
Acquisition costs						151
Revenue since acquisition						23,695
Gross profit (loss) since acquisition						$ 2,378
Mueller
Business combinations
Fair value of consideration			$ 4,100
Mueller | Aevenia
Business combinations
Fair value of consideration			$ 4,100
Plant and equipment										$ 2,000
Goodwill										2,000
Fair value of inventory acquired										$ 100
Northern
Business combinations
Fair value of consideration	$ 6,900
Northern | Aevenia
Business combinations
Fair value of consideration	6,900
Intangibles assets	3,000
Goodwill	3,800
Net working capital	$ 100
Northern | Minimum | Aevenia
Business combinations
Anticipated Solar Photovoltaic installations (in MW) | MWh	1
Anticipated revenue from Solor Photovoltaic projects	$ 1,500
Northern | Maximum | Aevenia
Business combinations
Anticipated Solar Photovoltaic installations (in MW) | MWh	200
Anticipated revenue from Solor Photovoltaic projects	$ 150,000
Q3 Contracting | 2014 earnout target
Business combinations
Cash payment made					$ 5,000

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Business Combinations - Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Business combinations
Cash paid for acquisitions	$ 10,997	$ 22,302	$ 14,596
Fair value of the assets acquired and the liabilities assumed
Intangible assets	3,000	3,850
Goodwill	127,226	124,161
2016 Acquisition
Fair value of the assets acquired and the liabilities assumed
Accounts receivable	1,606
Inventory and other assets	64
Property, plant and equipment	2,133
Intangible assets	3,000
Goodwill	5,781
Accounts payable	(726)
Accrued expenses	(861)
Total	10,997
2015 Acquisitions
Fair value of the assets acquired and the liabilities assumed
Accounts receivable		2,734
Inventory and other assets		1,154
Prepaid expenses		322
Property, plant and equipment		11,173
Intangible assets		3,850
Goodwill		5,152
Accounts payable		(743)
Accrued expenses		(1,340)
Total		22,302
Aevenia
Business combinations
Cash paid for acquisitions		$ 22,302
Mueller
Business combinations
Cash paid for acquisitions	4,108
Northern
Business combinations
Cash paid for acquisitions	$ 6,889

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Business Combinations - Acquired Intangible Assets (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Acquired intangible assets
Fair Value	$ 3,000	$ 3,850
Period for which goodwill and other intangible assets are deductible for income tax purposes	15 years
Pro forma results
Pro forma tax rate used in calculating taxes on income from continuing operations (as a percent)	40.00%	40.00%
Revenues	$ 2,026,867	$ 1,963,754
Income before provision for income taxes	54,328	63,827
Net income attributable to Primoris	$ 29,997	$ 38,510
Weighted average common shares outstanding:
Basic (in shares)	51,762	51,647
Diluted (in shares)	51,989	51,798
Earnings per share:
Basic (in dollars per share)	$ 0.58	$ 0.75
Diluted (in dollars per share)	$ 0.58	$ 0.74
Non-compete agreements
Acquired intangible assets
Fair Value		$ 1,350
Non-compete agreements | Minimum
Acquired intangible assets
Amortization Period	2 years
Non-compete agreements | Maximum
Acquired intangible assets
Amortization Period	5 years
Customer relationships
Acquired intangible assets
Fair Value	$ 3,000	$ 2,500
Customer relationships | Minimum
Acquired intangible assets
Amortization Period	5 years
Customer relationships | Maximum
Acquired intangible assets
Amortization Period	10 years

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Accounts Receivable (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Accounts Receivable.
Contracts receivable, net of allowance for doubtful accounts of $1,030 at December 31, 2016 and $480 at December 31, 2015, respectively	$ 340,871	$ 288,300
Retention receivable	46,394	31,396
Contracts receivable and retention	387,265	319,696
Other accounts receivable	735	892
Accounts receivable, net	388,000	320,588
Allowance for doubtful accounts	$ 1,030	$ 480

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Costs and Estimated Earnings on Uncompleted Contracts (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Costs and Estimated Earnings on Uncompleted Contracts
Costs incurred on uncompleted contracts	$ 5,391,124	$ 5,413,224
Gross profit recognized	456,871	625,280
Costs and Estimated Earnings on Uncompleted Contracts	5,847,995	6,038,504
Less: billings to date	(5,821,983)	(6,061,924)
Net cost and estimated earnings in excess of billings	26,012	(23,420)
Amount included in consolidated balance sheet
Costs and estimated earnings in excess of billings	138,618	116,455
Billings in excess of costs and estimated earnings	(112,606)	(139,875)
Net cost and estimated earnings in excess of billings	$ 26,012	$ (23,420)

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Property and Equipment (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Property and equipment
Gross property and equipment	$ 545,783	$ 506,364
Less: accumulated depreciation and amortization	(268,437)	(222,819)
Property and equipment, net	$ 277,346	283,545
Minimum
Property and equipment
Useful Life	3 years
Maximum
Property and equipment
Useful Life	30 years
Land and buildings
Property and equipment
Gross property and equipment	$ 56,878	54,827
Useful Life	30 years
Leasehold improvements
Property and equipment
Gross property and equipment	$ 12,147	11,071
Office equipment
Property and equipment
Gross property and equipment	$ 8,083	5,958
Office equipment | Minimum
Property and equipment
Useful Life	3 years
Office equipment | Maximum
Property and equipment
Useful Life	5 years
Construction equipment
Property and equipment
Gross property and equipment	$ 370,562	340,895
Construction equipment | Minimum
Property and equipment
Useful Life	3 years
Construction equipment | Maximum
Property and equipment
Useful Life	7 years
Transportation equipment
Property and equipment
Gross property and equipment	$ 98,113	$ 93,613
Transportation equipment | Minimum
Property and equipment
Useful Life	3 years
Transportation equipment | Maximum
Property and equipment
Useful Life	18 years

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Equity Method Investments (Details) - USD ($) $ in Thousands		1 Months Ended	12 Months Ended
	Feb. 05, 2014	Aug. 31, 2014	Dec. 31, 2014	Nov. 30, 2012	Dec. 31, 2010
Equity method investments
Cash paid by 51% owner under net asset buy-out option to the entity			$ 6,439
WesPac
Equity method investments
Membership interest (as a percent)					50.00%
WesPac & WesPac-Midstream
Equity method investments
Cash proceeds from sale of projects		$ 5,250
Alvah, Inc.
Equity method investments
Membership interest (as a percent)				49.00%
Cash paid by 51% owner under net asset buy-out option to the entity	$ 1,189

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Goodwill and Intangible Assets - Goodwill (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Goodwill
Goodwill	$ 127,226	$ 124,161
West
Goodwill
Goodwill	45,239	45,239
East
Goodwill
Goodwill	40,150	42,866
Energy
Goodwill
Goodwill	41,837	36,056
Rockford | West
Goodwill
Goodwill	32,079	32,079
Q3 Contracting | West
Goodwill
Goodwill	13,160	13,160
JCG | East
Goodwill
Goodwill	40,150	42,866
PES | Energy
Goodwill
Goodwill	28,463	28,463
Aevenia | Energy
Goodwill
Goodwill	10,933	5,152
OnQuest Canada, ULC | Energy
Goodwill
Goodwill	$ 2,441	$ 2,441

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Goodwill and Intangible Assets - Intangible Assets (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Intangible assets
Total	$ 32,841	$ 36,438
Amortization expense of intangible assets	6,597	6,793	$ 7,504
Estimated future amortization expense for intangible assets
2017	6,673
2018	6,291
2019	6,111
2020	3,712
2021	2,805
Thereafter	7,249
Tradename
Intangible assets
Total	$ 11,754	15,019
Tradename | Minimum
Intangible assets
Amortization Period	3 years
Tradename | Maximum
Intangible assets
Amortization Period	10 years
Customer relationships
Intangible assets
Total	$ 20,136	19,995
Customer relationships | Minimum
Intangible assets
Amortization Period	3 years
Customer relationships | Maximum
Intangible assets
Amortization Period	15 years
Non-compete agreements
Intangible assets
Total	$ 951	$ 1,424
Non-compete agreements | Minimum
Intangible assets
Amortization Period	2 years
Non-compete agreements | Maximum
Intangible assets
Amortization Period	5 years

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Accounts Payable and Accrued Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Accounts Payable and Accrued Liabilities
Retention amounts included in accounts payable	$ 10,562	$ 8,375
Accrued expenses and other current liabilities
Payroll and related employee benefits	42,718	33,358
Insurance, including self-insurance reserves	42,546	44,695
Reserve for estimated losses on uncompleted contracts	12,801	7,261
Corporate income taxes and other taxes	3,368	2,447
Accrued administrative cost	3,791	1,415
Other	2,782	4,420
Total accrued expenses and other current liabilities	$ 108,006	$ 93,596

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Capital Leases (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Capital Leases
Total assets under capital leases	$ 2,469	$ 4,874
Accumulated depreciation of assets under capital leases	2,332	4,103
Net book value of assets under capital leases	137	771
Future minimum lease payments required under capital leases
2017	188
2018	6
2019	6
2020	5
Total minimum lease payments	205
Amounts representing interest	(2)
Net present value of minimum lease payments	203
Less: current portion of capital lease obligations	(188)	(974)
Long-term capital lease obligation	$ 15	$ 22

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Credit Arrangements (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2016 USD ($) loan building	Dec. 31, 2015 USD ($)
Credit arrangements
Total long-term debt	$ 261,570	$ 274,289
Less: current portion	(58,189)	(54,436)
Long-term Debt, Excluding Current Maturities, Total	203,381	219,853
Scheduled maturities of long-term debt
2017	58,189
2018	55,741
2019	55,246
2020	35,850
2021	22,449
Thereafter	34,095
Commercial equipment notes payable, maturing range from August 13, 2017 to December 13, 2020
Credit arrangements
Total long-term debt	55,579	83,711
Monthly payment of principal and interest	$ 2,521	$ 2,521
Commercial equipment notes payable, maturing range from August 13, 2017 to December 13, 2020 | Minimum
Credit arrangements
Debt Instrument, Interest Rate, Stated Percentage	1.78%	1.78%
Commercial equipment notes payable, maturing range from August 13, 2017 to December 13, 2020 | Maximum
Credit arrangements
Debt Instrument, Interest Rate, Stated Percentage	3.51%	3.51%
Commercial equipment notes payable, maturing range from March 31, 2019 to September 24, 2021
Credit arrangements
Total long-term debt	$ 33,254	$ 44,587
Monthly payment of principal and interest	$ 999	$ 999
Commercial equipment notes payable, maturing range from March 31, 2019 to September 24, 2021 | Minimum
Credit arrangements
Debt Instrument, Interest Rate, Stated Percentage	1.94%	1.94%
Commercial equipment notes payable, maturing range from March 31, 2019 to September 24, 2021 | Maximum
Credit arrangements
Debt Instrument, Interest Rate, Stated Percentage	2.75%	2.75%
Commercial equipment notes payable, maturing range from March 5, 2020 to September 24, 2020
Credit arrangements
Total long-term debt	$ 29,702	$ 38,041
Monthly payment of principal and interest	$ 735	$ 735
Commercial equipment notes payable, maturing range from March 5, 2020 to September 24, 2020 | Minimum
Credit arrangements
Debt Instrument, Interest Rate, Stated Percentage	2.01%	2.01%
Commercial equipment notes payable, maturing range from March 5, 2020 to September 24, 2020 | Maximum
Credit arrangements
Debt Instrument, Interest Rate, Stated Percentage	2.19%	2.19%
Commercial equipment notes payable, maturing range from August 15, 2021 To October 14, 2021
Credit arrangements
Total long-term debt	$ 42,613
Monthly payment of principal and interest	$ 788
Commercial equipment notes payable, maturing range from August 15, 2021 To October 14, 2021 | Minimum
Credit arrangements
Debt Instrument, Interest Rate, Stated Percentage	1.83%
Commercial equipment notes payable, maturing range from August 15, 2021 To October 14, 2021 | Maximum
Credit arrangements
Debt Instrument, Interest Rate, Stated Percentage	2.06%
Secured mortgage notes, maturing on January 2031
Credit arrangements
Total long-term debt	$ 7,564	$ 7,950
Monthly payment of principal and interest	$ 60	$ 60
Debt Instrument, Interest Rate, Stated Percentage	4.30%	4.30%
Number of secured mortgage notes payable to a bank | loan	2
Number of assets secured | building	2
Senior secured notes, maturing between 2022 to 2025
Credit arrangements
Total long-term debt	$ 92,858	$ 100,000
Senior secured notes, maturing between 2022 to 2025 | Minimum
Credit arrangements
Debt Instrument, Interest Rate, Stated Percentage	3.65%	3.65%
Senior secured notes, maturing between 2022 to 2025 | Maximum
Credit arrangements
Debt Instrument, Interest Rate, Stated Percentage	4.60%	4.60%

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Credit Arrangements - Background (Details) CAD in Thousands, $ in Thousands			12 Months Ended
	Nov. 09, 2015 USD ($) payment	Jul. 25, 2013 USD ($) payment	Dec. 31, 2016 USD ($)	Dec. 31, 2016 CAD	Dec. 31, 2016 USD ($)	Dec. 31, 2015 CAD	Dec. 31, 2015 USD ($)	Jun. 03, 2015 USD ($)	Dec. 28, 2012 USD ($)
Senior Notes
Credit arrangements
Interest rate (as a percent)	4.60%			3.65%	3.65%
Required principal payment	$ 3,600		$ 7,100
Initial principal amount	$ 25,000								$ 50,000
Number of annual principal payments | payment	7
Senior Notes | Minimum
Credit arrangements
Prepayment to be paid on debt			$ 5,000
Notes Agreement
Credit arrangements
Interest rate (as a percent)		3.85%
Required principal payment		$ 3,600
Initial principal amount		$ 25,000							$ 25,000
Number of annual principal payments | payment		7
Notes Agreement | Minimum
Credit arrangements
Restrictions on investments, change of control provisions and provisions as a percentage of total assets to be disposed off			20.00%
Notes Agreement | Maximum
Credit arrangements
Initial principal amount								$ 75,000
Credit Agreement
Credit arrangements
Maximum borrowing capacity					$ 125,000
Available borrowing capacity					108,818
Credit Agreement | Federal funds rate
Credit arrangements
Basis spread on variable rate (as a percent)			0.50%
Credit Agreement | Minimum
Credit arrangements
Prepayment to be paid on debt			$ 5,000
Restrictions on investments, change of control provisions and provisions as a percentage of total assets to be disposed off			20.00%
Credit Agreement | Revolving line of credit
Credit arrangements
Maximum borrowing capacity					125,000
Borrowings outstanding					0
Credit Agreement | Commercial letters of credit
Credit arrangements
Total commercial letters of credit outstanding					$ 16,182		$ 12,105
Canadian Credit Facility | Commercial letters of credit
Credit arrangements
Maximum borrowing capacity | CAD				CAD 8,000
Total commercial letters of credit outstanding | CAD				0		CAD 2,179
Available borrowing capacity | CAD				CAD 8,000
Annual fee (as a percent)			1.00%
Canadian Credit Facility | Commercial letters of credit | Maximum
Credit arrangements
Term of credit facility			5 years

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Noncontrolling Interests (Details) $ in Thousands	3 Months Ended												12 Months Ended
	Dec. 31, 2016 USD ($) item	Sep. 30, 2016 USD ($)	Jun. 30, 2016 USD ($)	Mar. 31, 2016 USD ($)	Dec. 31, 2015 USD ($)	Sep. 30, 2015 USD ($)	Jun. 30, 2015 USD ($)	Mar. 31, 2015 USD ($)	Dec. 31, 2014 USD ($)	Sep. 30, 2014 USD ($)	Jun. 30, 2014 USD ($)	Mar. 31, 2014 USD ($)	Dec. 31, 2016 USD ($) item	Dec. 31, 2015 USD ($)	Dec. 31, 2014 USD ($)
Noncontrolling Interests
Number of joint ventures | item	2												2
Revenues	$ 601,863	$ 507,828	$ 456,811	$ 430,446	$ 497,145	$ 555,945	$ 483,545	$ 392,780	$ 487,592	$ 613,237	$ 515,291	$ 470,074	$ 1,996,948	$ 1,929,415	$ 2,086,194
Net income attributable to noncontrolling interests													1,002	279	526
Tax effect on income recognized													21,146	23,946	38,646
Distributions to non-controlling interests														29	$ 1,590
Accounts receivable	388,000				320,588								388,000	320,588
Costs and estimated earnings in excess of billings	138,618				116,455								138,618	116,455
Billings in excess of costs and estimated earnings	112,606				139,875								112,606	139,875
Current liabilities	$ 449,938				416,173								$ 449,938	416,173
Blythe | Primary beneficiary
Noncontrolling Interests
Revenues														119
Carlsbad
Noncontrolling Interests
Ownership percentage	50.00%												50.00%
Carlsbad | Primary beneficiary
Noncontrolling Interests
Revenues													$ 7,254	2,887
Net income attributable to noncontrolling interests													325	172
Distributions to partners													0
Capital contributions													0
Cash	$ 4,630				1,952								4,630	1,952
Accounts receivable					955									955
Costs and estimated earnings in excess of billings	124												124
Billings in excess of costs and estimated earnings	3,426				1,311								3,426	1,311
Current liabilities	$ 332				1,251								$ 332	1,251
Wilmington
Noncontrolling Interests
Ownership percentage	50.00%												50.00%
Billings in excess of costs and estimated earnings	$ 2,572				2,978								$ 2,572	2,978
Wilmington | Primary beneficiary
Noncontrolling Interests
Revenues													19,781	1,364
Net income attributable to noncontrolling interests													676	48
Distributions to partners													0
Capital contributions													0
Cash	2,415				2,339								2,415	2,339
Accounts receivable	4,242				2,003								4,242	2,003
Current liabilities	$ 2,637				$ 1,269								$ 2,637	$ 1,269

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Contingent Earnout Liabilities (Details) - USD ($) $ in Thousands	1 Months Ended					3 Months Ended
	Dec. 31, 2015	Sep. 30, 2015	Mar. 31, 2015	Aug. 31, 2014	Jun. 30, 2014	Dec. 31, 2015	Jul. 31, 2014
Q3 Contracting | 2014 earnout target
Contingent earnout liabilities
Cash paid			$ 5,000
Q3 Contracting | 2013 earnout target
Contingent earnout liabilities
Cash paid			$ 5,000
Vadnais
Contingent earnout liabilities
Contingent consideration in cash					$ 900
Performance targets ( in years)					2 years
Fair value of the contingent consideration					$ 679
Contingent consideration credited to non-operating income	$ 368	$ 396
Vadnais | 2015 earnout target
Contingent earnout liabilities
Contingent consideration in cash					450
Vadnais | 2016 earnout target
Contingent earnout liabilities
Contingent consideration in cash					$ 450
Surber | Business combination contingent consideration earnout target period of 2014 through 2016
Contingent earnout liabilities
Contingent consideration in cash							$ 1,400
Fair value of the contingent consideration							$ 1,000
Contingent consideration credited to non-operating income						$ 1,083
RamFab
Contingent earnout liabilities
Contingent consideration in cash				$ 200
Contingent earnout period (in years)				6 months

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Commitments and Contingencies - Leases (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Future minimum lease payments required under non-cancelable operating leases
2017	$ 14,918
2018	12,935
2019	9,696
2020	6,238
2021	4,013
Thereafter	1,042
Total	48,842
Leases
Total lease expense	22,526	$ 21,815	$ 14,325
Lease payments to related party	1,495	$ 1,445	$ 1,505
Real Property
Future minimum lease payments required under non-cancelable operating leases
2017	4,015
2018	3,436
2019	2,453
2020	1,345
2021	793
Total	12,042
Real Property (Related Party)
Future minimum lease payments required under non-cancelable operating leases
2017	1,519
2018	1,210
2019	938
2020	852
2021	854
Thereafter	1,042
Total	6,415
Equipment
Future minimum lease payments required under non-cancelable operating leases
2017	9,384
2018	8,289
2019	6,305
2020	4,041
2021	2,366
Total	$ 30,385

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Commitments and Contingencies (Details) $ in Thousands		3 Months Ended												12 Months Ended
	Feb. 25, 2015 USD ($)	Dec. 31, 2016 USD ($) item	Sep. 30, 2016 USD ($)	Jun. 30, 2016 USD ($)	Mar. 31, 2016 USD ($)	Dec. 31, 2015 USD ($)	Sep. 30, 2015 USD ($)	Jun. 30, 2015 USD ($)	Mar. 31, 2015 USD ($)	Dec. 31, 2014 USD ($)	Sep. 30, 2014 USD ($)	Jun. 30, 2014 USD ($)	Mar. 31, 2014 USD ($)	Dec. 31, 2016 USD ($) item	Dec. 31, 2015 USD ($)	Dec. 31, 2014 USD ($)	Nov. 30, 2012 USD ($)	Nov. 30, 2011 USD ($)
Commitments and contingencies
Billings in excess of costs and estimated earnings		$ 112,606				$ 139,875								$ 112,606	$ 139,875
Revenues		601,863	$ 507,828	$ 456,811	$ 430,446	497,145	$ 555,945	$ 483,545	$ 392,780	$ 487,592	$ 613,237	$ 515,291	$ 470,074	1,996,948	1,929,415	$ 2,086,194
Gross Profit		68,616	50,129	43,285	$ 39,277	63,725	$ 71,647	$ 46,496	$ 38,005	49,616	$ 75,473	$ 61,194	$ 49,757	201,307	219,873	236,040
Withdrawal liability recorded		$ 5,655												5,655			$ 7,585	$ 7,500
Monthly payments towards the liability amount														$ 34,183	34,296	38,107
Disputed Receivables
Commitments and contingencies
Receivable recorded relating to the project				17,900
Reduction in accounts receivables due to settlement receipts			38,000
Revenues			27,500
Gross Profit			26,700	$ 0
Construction Projects
Commitments and contingencies
Number of projects under litigation | item		2												2
Construction Project One
Commitments and contingencies
Receivable recorded relating to the project		$ 32,900												$ 32,900
Billings in excess of costs and estimated earnings		18,300												18,300
Construction Project Two | Disputed Receivables
Commitments and contingencies
Receivable recorded relating to the project										17,900						17,900
Reduction in accounts receivables due to settlement receipts			38,000
Revenues			27,500
Gross Profit			$ 26,700													0
JCG | North Texas Tollway Authority v. James Construction Group, LLC
Commitments and contingencies
Settlement	$ (9,000)
Defendants paid to remove the liability	8,000
Expected remediation cost	22,400
Estimated cost of remediating issues for lawsuit		17,000												17,000
Remaining accrual balance		$ 14,300												$ 14,300
Percentage of expected costs second defendant would pay		20.00%												20.00%
Percentage of expected costs Company would pay		80.00%												80.00%
JCG | North Texas Tollway Authority v. James Construction Group, LLC | Maximum
Commitments and contingencies
Agreed payments by second defendant in expected remediation costs toward settlement	$ 5,400
Letters of credit
Commitments and contingencies
Total commercial letters of credit outstanding		$ 16,182				13,679								$ 16,182	13,679
Bonding
Commitments and contingencies
Bid and completion bonds issued and outstanding		$ 1,450,000				$ 1,480,000				$ 1,520,000				$ 1,450,000	$ 1,480,000	$ 1,520,000

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Planned Divestiture of Texas Heavy Civil Business Unit (Details) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Sep. 30, 2016	Dec. 31, 2015	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Planned Divestiture
Goodwill impairment charge		$ 401	$ 2,716	$ 401
Revenue and gross profit
% of Revenue			10.10%	11.40%	11.30%
Balance sheet information
Property, plant and equipment, net		283,545	$ 277,346	$ 283,545
Costs and estimated earnings in excess of billings		116,455	138,618	116,455
Billings in excess of costs and estimated earnings		139,875	112,606	139,875
Reserve for estimated losses on uncompleted contracts		$ 7,261	$ 12,801	$ 7,261
East
Revenue and gross profit
% of Revenue			(3.10%)	6.90%	5.30%
Texas Heavy Civil Business unit | JCG | East
Planned Divestiture
Charge against income	$ 37,300
Goodwill impairment charge	2,716
Texas Heavy Civil Business unit | JCG | East | Belton Texas area projects
Revenue and gross profit
Revenue	$ 10,000

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Reportable Segments (Details) $ in Thousands	3 Months Ended												12 Months Ended
	Dec. 31, 2016 USD ($)	Sep. 30, 2016 USD ($)	Jun. 30, 2016 USD ($)	Mar. 31, 2016 USD ($)	Dec. 31, 2015 USD ($)	Sep. 30, 2015 USD ($)	Jun. 30, 2015 USD ($)	Mar. 31, 2015 USD ($)	Dec. 31, 2014 USD ($)	Sep. 30, 2014 USD ($)	Jun. 30, 2014 USD ($)	Mar. 31, 2014 USD ($)	Dec. 31, 2016 USD ($) segment	Dec. 31, 2015 USD ($)	Dec. 31, 2014 USD ($)
Segment reporting information
Number of reportable segments | segment													3
Revenue	$ 601,863	$ 507,828	$ 456,811	$ 430,446	$ 497,145	$ 555,945	$ 483,545	$ 392,780	$ 487,592	$ 613,237	$ 515,291	$ 470,074	$ 1,996,948	$ 1,929,415	$ 2,086,194
% of Total Revenue													100.00%	100.00%	100.00%
Gross Profit	68,616	50,129	$ 43,285	$ 39,277	63,725	$ 71,647	$ 46,496	$ 38,005	$ 49,616	$ 75,473	$ 61,194	$ 49,757	$ 201,307	$ 219,873	$ 236,040
% of Revenue													10.10%	11.40%	11.30%
Goodwill	127,226				124,161								$ 127,226	$ 124,161
Goodwill impairment charge					401								2,716	401
West
Segment reporting information
Revenue													$ 1,041,341	$ 913,626	$ 964,093
% of Total Revenue													52.20%	47.40%	46.20%
Gross Profit													$ 145,239	$ 130,255	$ 143,468
% of Revenue													13.90%	14.30%	14.90%
Goodwill	45,239				45,239								$ 45,239	$ 45,239
East
Segment reporting information
Revenue													$ 521,301	$ 612,174	$ 489,926
% of Total Revenue													26.10%	31.70%	23.50%
Gross Profit													$ (15,938)	$ 42,523	$ 25,749
% of Revenue													(3.10%)	6.90%	5.30%
Goodwill	40,150				42,866								$ 40,150	$ 42,866
East | JCG | Texas Heavy Civil Business unit
Segment reporting information
Goodwill impairment charge		$ 2,716
Energy
Segment reporting information
Revenue													$ 434,306	$ 403,615	$ 632,175
% of Total Revenue													21.70%	20.90%	30.30%
Gross Profit													$ 72,006	$ 47,095	$ 66,823
% of Revenue													16.60%	11.70%	10.60%
Goodwill	$ 41,837				$ 36,056								$ 41,837	$ 36,056

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Reportable Segments - Revenue and Total Assets by Geographic Area (Details)	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Revenues and total assets by geographic area
% of Revenue	100.00%	100.00%	100.00%
Non-United States
Revenues and total assets by geographic area
% of total assets	1.00%
Non-United States | Maximum
Revenues and total assets by geographic area
% of Revenue	1.00%

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Customer Concentrations (Details) $ in Thousands	3 Months Ended												12 Months Ended
	Dec. 31, 2016 USD ($)	Sep. 30, 2016 USD ($)	Jun. 30, 2016 USD ($)	Mar. 31, 2016 USD ($)	Dec. 31, 2015 USD ($)	Sep. 30, 2015 USD ($)	Jun. 30, 2015 USD ($)	Mar. 31, 2015 USD ($)	Dec. 31, 2014 USD ($)	Sep. 30, 2014 USD ($)	Jun. 30, 2014 USD ($)	Mar. 31, 2014 USD ($)	Dec. 31, 2016 USD ($) customer item	Dec. 31, 2015 USD ($) customer	Dec. 31, 2014 USD ($)
Customer concentrations
Amount	$ 601,863	$ 507,828	$ 456,811	$ 430,446	$ 497,145	$ 555,945	$ 483,545	$ 392,780	$ 487,592	$ 613,237	$ 515,291	$ 470,074	$ 1,996,948	$ 1,929,415	$ 2,086,194
Revenues. | Customer concentration
Customer concentrations
Amount													$ 910,007	$ 944,223	$ 759,319
Percentage													45.60%	48.90%	36.40%
Revenues. | Customer concentration | Chemical/Energy Producer
Customer concentrations
Amount													$ 208,458	$ 173,931
Percentage													10.40%	9.00%
Revenues. | Customer concentration | Chemical/Energy Producer | Maximum
Customer concentrations
Percentage															5.00%
Revenues. | Customer concentration | Private gas and electric utility
Customer concentrations
Amount													$ 201,443	$ 173,232	$ 145,677
Percentage													10.10%	9.00%	7.00%
Revenues. | Customer concentration | Texas DOT
Customer concentrations
Amount													$ 193,049	$ 183,847	$ 183,221
Percentage													9.70%	9.50%	8.80%
Revenues. | Customer concentration | Public gas and electric utility
Customer concentrations
Amount													$ 184,002	$ 120,507	$ 144,567
Percentage													9.20%	6.20%	6.90%
Revenues. | Customer concentration | Pipeline Operator
Customer concentrations
Amount													$ 123,055
Percentage													6.20%
Revenues. | Customer concentration | Pipeline Operator | Maximum
Customer concentrations
Percentage														5.00%	5.00%
Revenues. | Customer concentration | Pipeline Operator
Customer concentrations
Amount														$ 165,578
Percentage														8.60%
Revenues. | Customer concentration | Pipeline Operator | Maximum
Customer concentrations
Percentage													5.00%		5.00%
Revenues. | Customer concentration | Gas utility
Customer concentrations
Amount														$ 127,128
Percentage														6.60%
Revenues. | Customer concentration | Gas utility | Maximum
Customer concentrations
Percentage													5.00%		5.00%
Revenues. | Customer concentration | Petrochemical producer
Customer concentrations
Amount															$ 164,634
Percentage															7.90%
Revenues. | Customer concentration | Petrochemical producer | Maximum
Customer concentrations
Percentage													5.00%	5.00%
Revenues. | Customer concentration | Pipeline Operator
Customer concentrations
Amount															$ 121,220
Percentage															5.80%
Revenues. | Customer concentration | Pipeline Operator | Maximum
Customer concentrations
Percentage													5.00%	5.00%
Revenues. | Customer concentration | Top ten customers
Customer concentrations
Number of calendar years in which top customers typically generate minimum specified percentage of revenue | item													1
Minimum percentage of revenues generated by top ten customers													50.00%
Percentage													60.40%	59.40%	53.60%
Number of top customers | customer													10
Revenues. | Customer concentration | One customer
Customer concentrations
Percentage													6.20%	9.00%
Accounts receivable | Customer concentration | One customer
Customer concentrations
Percentage													20.80%	15.70%
Number of customers | customer													1	1

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Multiemployer Plans (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2016 USD ($) item	Dec. 31, 2015 USD ($) item	Dec. 31, 2014 USD ($) item
Multiemployer plans
Number of pension plans in which annual contribution was made by the entity during last three years | item	78
Number of pension plans in which the entity contributed | item	0	2	1
Contributions for significant plans	$ 19,482	$ 21,126	$ 23,071
Contributions to other multiemployer plans	14,701	13,170	15,036
Total contributions made	34,183	34,296	38,107
One Plan
Multiemployer plans
Contributions for specified plans		2,180	5,659
Second Plan
Multiemployer plans
Contributions for specified plans		457
Central Pension Fund of the International Union of Operating Engineers and Participating Employers
Multiemployer plans
Contributions for significant plans	5,373	5,659	6,204
Laborers Pension Trust Fund for Northern California
Multiemployer plans
Contributions for significant plans	3,598	3,150	3,116
Construction Laborers Pension Trust for Southern California
Multiemployer plans
Contributions for significant plans	2,742	3,067	2,444
Pipeline Industry Benefit Fund
Multiemployer plans
Contributions for significant plans	2,740	3,783	2,686
Southern California Pipetrades Trust Funds
Multiemployer plans
Contributions for significant plans	2,614	2,180	5,239
Laborers International Union of North America National (Industrial) Pension Fund
Multiemployer plans
Contributions for significant plans	$ 2,415	$ 3,287	$ 3,382

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Company Retirement Plans (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2016 USD ($) item	Dec. 31, 2015 USD ($)	Dec. 31, 2014 USD ($)
401(k) Plan
Company retirement plans
Maximum contribution by employees (as a percent)	100.00%
Employer match of employee contributions on first level of eligible compensation (as a percent)	100.00%
Percentage of eligible compensation, first level, matched by employer	3.00%
Employer match of employee contributions on the second level of eligible compensation (as a percent)	50.00%
Percentage of eligible compensation, second level, partially matched by employer	2.00%
Employer discretionary contributions	$ 0	$ 0	$ 0
Employer's contribution	$ 3,904	3,702	3,111
On Quest Canada, ULC RRSP-DPSP Plan
Company retirement plans
Number of components of the plan | item	2
Employer match of employee contributions on first level of eligible compensation (as a percent)	100.00%
Percentage of eligible compensation, first level, matched by employer	3.00%
Employer match of employee contributions on the second level of eligible compensation (as a percent)	50.00%
Percentage of eligible compensation, second level, partially matched by employer	2.00%
Number of years of employment as a vesting period of DPSP portion	1 year
Employer's contribution	$ 52	$ 55	$ 69

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Deferred Compensation Agreements and Stock-Based Compensation (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
LTR Plan
Deferred compensation agreements
Percentage of participant's annual earned bonus deferred	50.00%
Period of deferral of annual earned bonus	1 year
Total deferred compensation liability	$ 4,459	$ 5,220
Maximum percentage of participant's earned bonus amount up to which common stock can be purchased in a stock purchase plan	16.67%
Percentage of average market closing prices used in determining number of common stock that could be purchased by participants	75.00%	75.00%
Discounted price from the average December market price at which shares purchased by participants in LTR Plan (as a percent)	25.00%
JCG Stakeholder Incentive Plan
Deferred compensation agreements
Total deferred compensation liability	$ 0	$ 278
Vesting period	5 years
Period of payment of deferred benefit amount plus interest in equal monthly installments	3 years		3 years
Percentage of amounts accrued added to the 2015 payments		50.00%

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Deferred Compensation Agreements and Stock-Based Compensation - Restricted Stock Units (Details) - USD ($) $ in Thousands		12 Months Ended
	May 03, 2013	Dec. 31, 2016	Dec. 31, 2015
Stock-based compensation
Accrued dividend equivalent units		1,693
Restricted Stock Units
Stock-based compensation
Units granted	249,065
Number of Units to Vest		149,809
Restricted Stock Units | 2017
Stock-based compensation
Number of Units to Vest		74,394
Restricted Stock Units | 2018
Stock-based compensation
Number of Units to Vest		25,138
Restricted Stock Units | 2019
Stock-based compensation
Number of Units to Vest		48,219
Restricted Stock Units | 2020
Stock-based compensation
Number of Units to Vest		2,058
Equity Plan | Restricted Stock Units
Stock-based compensation
Units granted		249,065
Number of vested units		99,256
Compensation expense recognized		$ 1,627	$ 1,050
Unrecognized compensation expense		$ 2,100
Period to recognize unrecognized compensation expense		3 years 3 months
Accrued dividend equivalent units		1,693
Executives | Equity Plan | Restricted Stock Units
Stock-based compensation
Units granted	249,065

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Related Party Transactions (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2016 USD ($) property	Dec. 31, 2015 USD ($)	Dec. 31, 2014 USD ($)
Related party transactions
Number of leased properties | property	3
Lease payments to related party	$ 1,495	$ 1,445	$ 1,505
SIGI
Related party transactions
Lease payments to related party	$ 849	$ 831	$ 862

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Income Taxes (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Current provision (benefit)
Federal	$ 4,726	$ 26,948	$ 28,203
State	5,423	3,640	5,398
Foreign	92	362	1,074
Total	10,241	30,950	34,675
Deferred provision (benefit)
Federal	11,560	(7,099)	3,586
State	(727)	155	457
Foreign	72	(60)	(72)
Total	10,905	(7,004)	3,971
Total	$ 21,146	$ 23,946	$ 38,646
Reconciliation of income tax expense compared to the amount of income tax expense that would result by applying U.S. federal statutory income tax rate to pre-tax income
U.S. federal statutory income tax rate (as a percent)	35.00%	35.00%	35.00%
State taxes, net of federal income tax impact (as a percent)	6.38%	4.20%	4.66%
Foreign tax credit (as a percent)	(0.35%)	(0.50%)	(0.98%)
Canadian income tax (as a percent)	0.35%	0.50%	0.98%
Domestic production activities deduction (as a percent)	(1.10%)	(3.91%)	(3.07%)
Nondeductible meals & entertainment (as a percent)	5.36%	5.09%	3.38%
Other items (as a percent)	(1.46%)	(1.01%)	(2.01%)
Effective tax rate on income before provision for income taxes excluding income attributable to noncontrolling interests (as a percent)	44.18%	39.37%	37.96%
Impact of income from noncontrolling interests on effective tax rate (as a percent)	(0.91%)	(0.18%)	(0.19%)
Effective tax rate on income before provision for income taxes and noncontrolling interests (as a percent)	43.27%	39.19%	37.77%
Deferred tax assets:
Accrued compensation	$ 5,804	$ 9,673
Accrued workers compensation	9,855	10,058
Capital loss carryforward	1,077	1,800
Foreign tax credit	1,349	1,293
Insurance reserves	3,248	5,489
Loss reserves	4,841	2,887
Pension liability	1,979	2,805
State income taxes	2,011	469
Other	288	882
Total deferred tax assets	30,452	35,356
Deferred tax liabilities
Depreciation and amortization	(38,327)	(33,304)
Prepaid expense and other	(1,955)	(977)
Total deferred tax liabilities	(40,282)	(34,281)
Net deferred tax assets (liabilities)		1,075
Net deferred tax assets (liabilities)	$ (9,830)
Minimum period of statute of limitations of state and foreign jurisdictions	3 years
Maximum period of statute of limitations of state and foreign jurisdictions	5 years
Reconciliation and aggregate changes for unrecognized tax benefits
Beginning balance		456	$ 5,382
Settlements and effective settlements with tax authorities		$ (456)	(4,878)
Lapse of statute of limitations			(48)
Total			$ 456
State
Deferred tax liabilities
Net operating loss	$ 486

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Dividends and Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands									3 Months Ended												12 Months Ended
	Nov. 02, 2016	Aug. 03, 2016	May 02, 2016	Feb. 22, 2016	Nov. 03, 2015	Aug. 04, 2015	May 01, 2015	Feb. 24, 2015	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Earnings Per Share
Cash dividend declared (in dollars per share)	$ 0.055	$ 0.055	$ 0.055	$ 0.055	$ 0.055	$ 0.055	$ 0.055	$ 0.040													$ 0.22	$ 0.205	$ 0.15
Total dividend paid																					$ 11,384	$ 9,809	$ 7,483
Numerator:
Net income									$ 14,766	$ 4,756	$ 5,287	$ 2,916	$ 12,708	$ 19,079	$ 3,692	$ 1,672	$ 9,024	$ 27,390	$ 16,003	$ 11,265	27,725	37,151	63,682
Net income attributable to noncontrolling interests																					(1,002)	(279)	(526)
Net income attributable to Primoris									$ 14,470	$ 4,504	$ 5,056	$ 2,693	$ 12,555	$ 19,007	$ 3,638	$ 1,672	$ 8,930	$ 27,390	$ 16,003	$ 10,833	$ 26,723	$ 36,872	$ 63,156
Denominator (shares in thousands):
Weighted average shares for computation of basic earnings per share									51,771	51,780	51,772	51,725	51,676	51,672	51,666	51,572	51,561	51,606	51,655	51,610	51,762	51,647	51,607
Dilutive effect of shares issued to independent directors																					3	2	2
Dilutive effect of restricted stock units																					224	149	138
Weighted average shares for computation of diluted earnings per share									52,021	52,034	52,022	51,881	51,825	51,824	51,815	51,726	51,710	51,759	51,804	51,714	51,989	51,798	51,747
Earnings per share attributable to Primoris:
Basic earnings per share (in dollars per share)									$ 0.28	$ 0.09	$ 0.10	$ 0.05	$ 0.24	$ 0.37	$ 0.07	$ 0.03	$ 0.17	$ 0.53	$ 0.31	$ 0.21	$ 0.52	$ 0.71	$ 1.22
Diluted earnings per share (in dollars per share)									$ 0.28	$ 0.09	$ 0.10	$ 0.05	$ 0.24	$ 0.37	$ 0.07	$ 0.03	$ 0.17	$ 0.53	$ 0.31	$ 0.21	$ 0.51	$ 0.71	$ 1.22

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Dividends and Earnings Per Share - Dilutive Effect (Details) - shares		12 Months Ended
	May 03, 2013	Dec. 31, 2016
Earnings per share
Accrued Dividend Equivalent Units		1,693
Restricted Stock Units
Earnings per share
Units granted	249,065
Equity Plan | Restricted Stock Units
Earnings per share
Units granted		249,065
Accrued Dividend Equivalent Units		1,693

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Stockholders' Equity (Details) $ / shares in Units, $ in Thousands		1 Months Ended							8 Months Ended	12 Months Ended
	May 03, 2013 shares	Dec. 31, 2016 USD ($) $ / shares shares	Aug. 31, 2016 USD ($) shares	Feb. 29, 2016 shares	Aug. 31, 2015 shares	Mar. 31, 2015 shares	Aug. 31, 2014 shares	Feb. 28, 2014 USD ($) shares	Sep. 30, 2014 USD ($) $ / shares shares	Dec. 31, 2016 USD ($) item $ / shares shares	Dec. 31, 2015 USD ($) $ / shares shares
Common Stock
Common stock, shares authorized		90,000,000								90,000,000	90,000,000
Common stock, par value (in dollars per share) | $ / shares		$ 0.0001								$ 0.0001	$ 0.0001
Common stock, shares issued		51,576,442								51,576,442	51,676,140
Common stock, shares outstanding		51,576,442								51,576,442	51,676,140
Number of holders of common stock | item										394
Shares of common stock issued as a part of quarterly compensation of non-employee members of the Board of Directors			11,745	10,450	9,748	8,168	6,172	6,375
Period of restriction on trade for shares issued to non-employee members of the board of directors under the Primoris Long-term Retention Plan										1 year
Accrued Dividend Equivalent Units		1,693								1,693
Aggregate purchase price up to which shares can be acquired under share repurchase program | $			$ 5,000					$ 23,000
Number of shares purchased and cancelled under the share repurchase program		207,800							100,000
Amount paid for shares purchased and cancelled under share repurchase program | $		$ 5,000							$ 2,800
Average cost of repurchased shares of stock (in dollars per share) | $ / shares		$ 24.02							$ 28.44
Preferred Stock
Preferred stock, authorized (in shares)		1,000,000								1,000,000	1,000,000
Par value of preferred stock (in dollars per share) | $ / shares		$ 0.0001								$ 0.0001	$ 0.0001
Preferred stock, shares outstanding		0								0	0
Warrants
Warrants outstanding (in shares)		0								0	0
Restricted Stock Units
Common Stock
Units granted	249,065
LTR Plan
Common Stock
Shares of common stock issued under the long-term incentive plan										85,907	96,828
Amount received in exchange for shares of common stock under a long term incentive plan | $										$ 1,440	$ 1,621
Percentage of average market closing prices used in determining number of common stock that could be purchased by participants										75.00%	75.00%
Discounted price from the average December market price at which shares purchased by participants in LTR Plan (as a percent)										25.00%
Equity Plan | Restricted Stock Units
Common Stock
Units granted										249,065
Accrued Dividend Equivalent Units		1,693								1,693
Shares of common stock reserved for issuance upon exercise of all future stock option grants, SARS and grants of restricted shares under the 2013 Equity Plan		1,953,559								1,953,559

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Selected Quarterly Financial Information (Unaudited) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended												12 Months Ended
	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Selected Quarterly Financial Information
Revenues	$ 601,863	$ 507,828	$ 456,811	$ 430,446	$ 497,145	$ 555,945	$ 483,545	$ 392,780	$ 487,592	$ 613,237	$ 515,291	$ 470,074	$ 1,996,948	$ 1,929,415	$ 2,086,194
Gross Profit	68,616	50,129	43,285	39,277	63,725	71,647	46,496	38,005	49,616	75,473	61,194	49,757	201,307	219,873	236,040
Impairment of goodwill					401								2,716	401
Net income	14,766	4,756	5,287	2,916	12,708	19,079	3,692	1,672	9,024	27,390	16,003	11,265	27,725	37,151	63,682
Net income attributable to Primoris	$ 14,470	$ 4,504	$ 5,056	$ 2,693	$ 12,555	$ 19,007	$ 3,638	$ 1,672	$ 8,930	$ 27,390	$ 16,003	$ 10,833	$ 26,723	$ 36,872	$ 63,156
Earnings per share:
Basic earnings per share (in dollars per share)	$ 0.28	$ 0.09	$ 0.10	$ 0.05	$ 0.24	$ 0.37	$ 0.07	$ 0.03	$ 0.17	$ 0.53	$ 0.31	$ 0.21	$ 0.52	$ 0.71	$ 1.22
Diluted earnings per share (in dollars per share)	$ 0.28	$ 0.09	$ 0.10	$ 0.05	$ 0.24	$ 0.37	$ 0.07	$ 0.03	$ 0.17	$ 0.53	$ 0.31	$ 0.21	$ 0.51	$ 0.71	$ 1.22
Weighted average common shares outstanding:
Basic (in shares)	51,771	51,780	51,772	51,725	51,676	51,672	51,666	51,572	51,561	51,606	51,655	51,610	51,762	51,647	51,607
Diluted (in shares)	52,021	52,034	52,022	51,881	51,825	51,824	51,815	51,726	51,710	51,759	51,804	51,714	51,989	51,798	51,747

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Subsequent Event (Details) - $ / shares										12 Months Ended
	Feb. 21, 2017	Nov. 02, 2016	Aug. 03, 2016	May 02, 2016	Feb. 22, 2016	Nov. 03, 2015	Aug. 04, 2015	May 01, 2015	Feb. 24, 2015	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Subsequent Event
Cash dividend declared (in dollars per share)		$ 0.055	$ 0.055	$ 0.055	$ 0.055	$ 0.055	$ 0.055	$ 0.055	$ 0.040	$ 0.22	$ 0.205	$ 0.15
Subsequent Event.
Subsequent Event
Cash dividend declared (in dollars per share)	$ 0.055