Business Segments

12 Months Ended

Dec. 31, 2016

Business Segments [Abstract]

Business Segments

10.     Business Segments

The Company offers general contracting, pre-construction planning and comprehensive project management services, including planning and scheduling of manpower, equipment, materials and subcontractors required for the timely completion of a project in accordance with the terms and specifications contained in a construction contract. The Company also offers self-performed construction services: site work, concrete forming and placement, steel erection, electrical, mechanical, plumbing and heating, ventilation and air conditioning (HVAC). As described below, our business is conducted through three segments: Civil, Building and Specialty Contractors. These segments are determined based on how the Company’s Chairman and Chief Executive Officer (chief operating decision maker) aggregates business units when evaluating performance and allocating resources.

The Civil segment specializes in public works construction and the replacement and reconstruction of infrastructure. The civil contracting services include construction and rehabilitation of highways, bridges, tunnels, mass-transit systems, and water management and wastewater treatment facilities.

The Building segment has significant experience providing services to a number of specialized building markets for private and public works customers, including the high-rise residential, hospitality and gaming, transportation, health care, commercial and government offices, sports and entertainment, education, correctional facilities, biotech, pharmaceutical, industrial and high-tech markets.

The Specialty Contractors segment specializes in electrical, mechanical, plumbing, HVAC, fire protection systems and pneumatically placed concrete for a full range of civil and building construction projects in the industrial, commercial, hospitality and gaming, and mass-transit end markets. This segment provides the Company with unique strengths and capabilities that allow the Company to position itself as a full-service contractor with greater control over scheduled work, project delivery and risk management.

The following tables set forth certain reportable segment information relating to the Company’s operations for the years ended December 31, 2016,  2015 and 2014.

	Reportable Segments
					Specialty		Segment					Consolidated
(in thousands)	Civil		Building		Contractors		Total		Corporate			Total
Year ended December 31, 2016
Total revenue	$	1,830,857	$	2,146,747	$	1,234,272	$	5,211,876	$	—		$	5,211,876
Elimination of intersegment revenue		(161,894)		(76,906)		—		(238,800)		—			(238,800)
Revenue from external customers	$	1,668,963	$	2,069,841	$	1,234,272	$	4,973,076	$	—		$	4,973,076
Income from construction operations	$	172,668	$	51,564	$	37,908	$	262,140	$	(60,220)	(a)	$	201,920
Capital expenditures	$	13,541	$	516	$	1,005	$	15,062	$	681		$	15,743
Depreciation and amortization (b)	$	48,561	$	2,186	$	5,035	$	55,782	$	11,520		$	67,302
Year ended December 31, 2015
Total Revenue	$	2,005,193	$	1,900,492	$	1,228,030	$	5,133,715	$	—		$	5,133,715
Elimination of intersegment revenue		(115,286)		(97,957)		—		(213,243)		—			(213,243)
Revenue from external customers	$	1,889,907	$	1,802,535	$	1,228,030	$	4,920,472	$	—		$	4,920,472
Income from construction operations	$	145,213	$	(1,240)	$	15,682	$	159,655	$	(54,242)	(a)	$	105,413
Capital expenditures	$	8,383	$	2,877	$	1,193	$	12,453	$	23,459		$	35,912
Depreciation and amortization (b)	$	22,601	$	2,728	$	5,507	$	30,836	$	10,798		$	41,634
Year ended December 31, 2014
Total Revenue	$	1,730,468	$	1,558,431	$	1,301,328	$	4,590,227	$	—		$	4,590,227
Elimination of intersegment revenue		(43,324)		(54,594)		—		(97,918)		—			(97,918)
Revenue from external customers	$	1,687,144	$	1,503,837	$	1,301,328	$	4,492,309	$	—		$	4,492,309
Income from construction operations	$	220,554	$	24,697	$	50,998	$	296,249	$	(54,559)	(a)	$	241,690
Capital expenditures	$	65,377	$	735	$	6,974	$	73,086	$	1,927		$	75,013
Depreciation and amortization (b)	$	31,674	$	3,466	$	12,018	$	47,158	$	6,544		$	53,702

(a) Consists primarily of corporate general and administrative expenses.

(b) Depreciation and amortization is included in income from construction operations.

During the year ended December 31, 2016, the Company recorded the following offsetting adjustments in the Specialty Contractors segment: a favorable adjustment of $14.0 million for a completed project ($0.17 per diluted share) and an unfavorable adjustment of $13.8 million for a project that is substantially complete ($0.16 per diluted share).

During the year ended December 31, 2015, the Company recorded unfavorable adjustments in the Specialty Contractors segment totaling $45.6 million in income from construction operations ($0.53per diluted share) related to various Five Star Electric projects in New York, none of which were individually material. Most of these projects are complete or nearing completion. In addition, there were unfavorable adjustments to the estimated cost to complete a Building segment project, which has been completed and resulted in a decrease of $24.3 million in income from construction operations ($0.28per diluted share). Furthermore, the Company recorded an unfavorable adjustment totaling $23.9 million ($0.28 per diluted share) in the Civil segment for an adverse legal decision related to a long-standing litigation matter, for which the Company assumed liability as part of an acquisition in 2011. Finally, the Company recorded favorable adjustments for a Civil segment runway reconstruction project, which resulted in an increase of $13.7 million in income from construction operations ($0.16 per diluted share).

During the year ended December 31, 2014, the Company’s income from construction operations was positively impacted by changes in the estimated recoveries on two Civil segment projects and a Building segment hospitality and gaming project. The changes in estimates were driven by changes in cost recovery assumptions based on legal rulings pertaining to the Civil segment projects, as well as agreements reached with a customer regarding the Building segment hospitality and gaming project. The Building project change in estimate resulted in an $11.4 million increase in income from construction operations ($0.14 per diluted share). With respect to the two Civil segment projects, there was an increase of $25.9 million in income from construction operations ($0.30 per diluted share) and a $9.4 million decrease in income from construction operations ($0.11 per diluted share).

The above were the only changes in estimates considered material to the Company’s results of operations during the periods presented herein.

The following table sets forth the total assets for the reportable segments as of December 31, 2016 and 2015.

	As of December 31,
(in thousands)	2016		2015
Civil	$	2,152,123	$	1,957,991
Building		917,317		711,201
Specialty Contractors		813,851		808,598
Corporate and other (a)		155,329		383,510
Total Assets	$	4,038,620	$	3,861,300

(a) Consists principally of cash, equipment, tax-related assets and insurance-related assets, offset by the elimination of assets related to intersegment revenue.

Geographic Information

Information concerning principal geographic areas is as follows:

	Year Ended December 31,
(in thousands)	2016		2015		2014
Revenue:
United States	$	4,802,393	$	4,694,165	$	4,323,471
Foreign and U.S. territories		170,683		226,307		168,838
Total	$	4,973,076	$	4,920,472	$	4,492,309

	As of December 31,
(in thousands)	2016		2015
Assets:
United States	$	3,911,865	$	3,687,973
Foreign and U.S. territories		126,755		173,327
Total Assets	$	4,038,620	$	3,861,300

Reconciliation of Segment Information to Consolidated Amounts

The following table reconciles segment results to the consolidated income before income taxes for the years ended December 31, 2016, 2015 and 2014.

	Year Ended December 31,
(in thousands)	2016		2015		2014
Income from construction operations	$	201,920	$	105,413	$	241,690
Other income (expense), net		6,977		13,569		(8,217)
Interest expense		(59,782)		(45,143)		(46,035)
Income before income taxes	$	149,115	$	73,839	$	187,438