(15) 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 HVAC (heating, ventilation and air conditioning). As described below, the Company’s 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 cost and risk management.

The following tables set forth certain reportable segment information relating to the Company’s operations for the three and nine months ended September 30, 2018 and 2017:



	Reportable Segments
					Specialty							Consolidated
(in thousands)	Civil			Building	Contractors		Total		Corporate			Total
Three Months Ended September 30, 2018
Total revenue	$	479,581	$	457,304	$	236,157	$	1,173,042	$	—		$	1,173,042
Elimination of intersegment revenue		(48,093)		(1,812)		—		(49,905)		—			(49,905)
Revenue from external customers	$	431,488	$	455,492	$	236,157	$	1,123,137	$	—		$	1,123,137
Income (loss) from construction operations	$	41,282	$	8,853	$	11,561	$	61,696	$	(14,390)	(a)	$	47,306
Capital expenditures	$	15,364	$	277	$	70	$	15,711	$	397		$	16,108
Depreciation and amortization(b)	$	8,031	$	488	$	1,081	$	9,600	$	2,817		$	12,417

Three Months Ended September 30, 2017
Total revenue	$	458,487	$	500,420	$	310,137	$	1,269,044	$	—		$	1,269,044
Elimination of intersegment revenue		(62,667)		(6,872)		—		(69,539)		—			(69,539)
Revenue from external customers	$	395,820	$	493,548	$	310,137	$	1,199,505	$	—		$	1,199,505
Income (loss) from construction operations	$	38,144	$	14,058	$	14,575	$	66,777	$	(17,705)	(a)	$	49,072
Capital expenditures	$	1,248	$	36	$	81	$	1,365	$	164		$	1,529
Depreciation and amortization(b)	$	5,213	$	502	$	1,166	$	6,881	$	2,824		$	9,705

(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
Nine Months Ended September 30, 2018
Total revenue	$	1,266,595	$	1,395,896	$	781,591	$	3,444,082	$	—		$	3,444,082
Elimination of intersegment revenue		(169,520)		(3,184)		—		(172,704)		—			(172,704)
Revenue from external customers	$	1,097,075	$	1,392,712	$	781,591	$	3,271,378	$	—		$	3,271,378
Income (loss) from construction operations(a)	$	93,560	$	27,814	$	26,250	$	147,624	$	(46,428)	(b)	$	101,196
Capital expenditures	$	61,912	$	1,147	$	704	$	63,763	$	648		$	64,411
Depreciation and amortization(c)	$	20,356	$	1,458	$	3,299	$	25,113	$	8,468		$	33,581

Nine Months Ended September 30, 2017
Total revenue	$	1,363,850	$	1,520,356	$	907,690	$	3,791,896	$	—		$	3,791,896
Elimination of intersegment revenue		(190,873)		(36,883)		—		(227,756)		—			(227,756)
Revenue from external customers	$	1,172,977	$	1,483,473	$	907,690	$	3,564,140	$	—		$	3,564,140
Income (loss) from construction operations	$	128,176	$	25,035	$	15,330	$	168,541	$	(48,407)	(b)	$	120,134
Capital expenditures	$	8,665	$	184	$	374	$	9,223	$	489		$	9,712
Depreciation and amortization(c)	$	26,767	$	1,533	$	3,551	$	31,851	$	8,612		$	40,463

(a)

During the nine months ended September 30, 2018, the Company recorded a charge of $17.8 million in income from construction operations (an after-tax impact of $12.8 million, or $0.25 per diluted share), which was primarily non-cash, as a result of the unexpected outcome of an arbitration decision related to a subcontract back charge dispute on a Civil segment project in New York that was completed in 2013.

(b)

Consists primarily of corporate general and administrative expenses.

(c)

Depreciation and amortization is included in income from construction operations.

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



	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2018		2017		2018		2017
Income from construction operations	$	47,306	$	49,072	$	101,196	$	120,134
Other income, net		1,909		967		3,739		42,373
Interest expense		(16,411)		(15,643)		(47,474)		(53,726)
Income before income taxes	$	32,804	$	34,396	$	57,461	$	108,781

Total assets by segment are as follows:



	As of		As of
(in thousands)	September 30, 2018		December 31, 2017
Civil	$	2,597,653	$	2,452,108
Building		936,365		909,207
Specialty Contractors		760,017		767,807
Corporate and other(a)		131,133		135,001
Total assets	$	4,425,168	$	4,264,123

(a)

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