Business Segments

6 Months Ended

Jun. 30, 2017

Business Segments [Abstract]

Business Segments

(14)     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 for private and public works customers in a number of specialized building markets, including: 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.

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 three and six months ended June 30, 2017 and 2016:

	Reportable Segments
					Specialty							Consolidated
(in thousands)	Civil			Building	Contractors		Total		Corporate			Total
Three Months Ended June 30, 2017
Total revenue	$	538,552	$	508,769	$	281,857	$	1,329,178	$	—		$	1,329,178
Elimination of intersegment revenue		(65,970)		(15,934)		—		(81,904)		—			(81,904)
Revenue from external customers	$	472,582	$	492,835	$	281,857	$	1,247,274	$	—		$	1,247,274
Income from construction operations	$	58,144	$	5,736	$	(14,007)	$	49,873	$	(15,828)	(a)	$	34,045
Capital expenditures	$	1,850	$	104	$	286	$	2,240	$	271		$	2,511
Depreciation and amortization (b)	$	5,236	$	513	$	1,193	$	6,942	$	2,820		$	9,762
Three Months Ended June 30, 2016
Total revenue	$	504,930	$	546,157	$	318,902	$	1,369,989	$	—		$	1,369,989
Elimination of intersegment revenue		(39,223)		(22,636)		—		(61,859)		—			(61,859)
Revenue from external customers	$	465,707	$	523,521	$	318,902	$	1,308,130	$	—		$	1,308,130
Income from construction operations	$	45,056	$	13,223	$	5,413	$	63,692	$	(14,863)	(a)	$	48,829
Capital expenditures	$	3,545	$	81	$	119	$	3,745	$	124		$	3,869
Depreciation and amortization (b)	$	12,447	$	549	$	1,263	$	14,259	$	2,887		$	17,146

____________________________________________________________________________________________________

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

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

	Reportable Segments
					Specialty							Consolidated
(in thousands)	Civil			Building	Contractors		Total		Corporate			Total
Six Months Ended June 30, 2017
Total revenue	$	905,363	$	1,019,936	$	597,553	$	2,522,852	$	—		$	2,522,852
Elimination of intersegment revenue		(128,206)		(30,011)		—		(158,217)		—			(158,217)
Revenue from external customers	$	777,157	$	989,925	$	597,553	$	2,364,635	$	—		$	2,364,635
Income from construction operations	$	90,032	$	10,977	$	755	$	101,764	$	(30,702)	(a)	$	71,062
Capital expenditures	$	7,417	$	148	$	293	$	7,858	$	325		$	8,183
Depreciation and amortization (b)	$	21,554	$	1,031	$	2,385	$	24,970	$	5,788		$	30,758
Six Months Ended June 30, 2016
Total revenue	$	872,431	$	1,034,151	$	600,675	$	2,507,257	$	—		$	2,507,257
Elimination of intersegment revenue		(70,866)		(42,892)		—		(113,758)		—			(113,758)
Revenue from external customers	$	801,565	$	991,259	$	600,675	$	2,393,499	$	—		$	2,393,499
Income from construction operations	$	78,721	$	25,673	$	14,826	$	119,220	$	(30,269)	(a)	$	88,951
Capital expenditures	$	7,157	$	302	$	744	$	8,203	$	478		$	8,681
Depreciation and amortization (b)	$	20,531	$	1,106	$	2,568	$	24,205	$	5,751		$	29,956

____________________________________________________________________________________________________

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

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

During the first half of 2016, the Company recorded net favorable adjustments totaling $3.0 million in income from construction operations ($0.04 per diluted share) for various Five Star Electric projects in New York in the Specialty Contractors segment. The net impact included material adjustments related to two electrical subcontract projects: 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 was nearly complete ($0.17 per diluted share). These were the only changes in estimates considered material to the Company’s results of operations during the periods presented herein.

A reconciliation of segment results to the consolidated income before income taxes is as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2017		2016		2017		2016
Income from construction operations	$	34,045	$	48,829	$	71,062	$	88,951
Other income, net		40,990		2,485		41,406		3,166
Interest expense		(22,519)		(15,534)		(38,083)		(29,614)
Income before income taxes	$	52,516	$	35,780	$	74,385	$	62,503

Total assets by segment are as follows:

(in thousands)	June 30, 2017		December 31, 2016
Civil	$	2,311,858	$	2,152,123
Building		878,501		917,317
Specialty Contractors		844,919		813,851
Corporate and other (a)		129,588		155,329
Total assets	$	4,164,866	$	4,038,620

____________________________________________________________________________________________________

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