Business Segments

6 Months Ended

Jun. 30, 2020

(18) 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 contracting services provided by the Civil segment 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 technology.

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.

To the extent that a contract is co-managed and co-executed among segments, the Company allocates the share of revenues and costs of the contract to each segment to reflect the shared responsibilities in the management and execution of the project.

The following tables set forth certain reportable segment information relating to the Company’s operations for the three and six months ended June 30, 2020 and 2019:



	Reportable Segments
					Specialty								Consolidated
(in thousands)	Civil			Building	Contractors		Total			Corporate			Total
Three Months Ended June 30, 2020
Total revenue	$	644,685	$	490,317	$	234,497	$	1,369,499		$	—		$	1,369,499
Elimination of intersegment revenue		(75,709)		(17,296)		(67)		(93,072)			—			(93,072)
Revenue from external customers	$	568,976	$	473,021	$	234,430	$	1,276,427		$	—		$	1,276,427
Income (loss) from construction operations	$	65,398	$	17,789	$	(11,388)	$	71,799	^(a)	$	(14,103)	^(b)	$	57,696
Capital expenditures	$	18,951	$	186	$	255	$	19,392		$	301		$	19,693
Depreciation and amortization^(c)	$	21,775	$	428	$	995	$	23,198		$	2,767		$	25,965

Three Months Ended June 30, 2019
Total revenue	$	541,117	$	433,559	$	223,299	$	1,197,975		$	—		$	1,197,975
Elimination of intersegment revenue		(67,459)		(5,241)		—		(72,700)			—			(72,700)
Revenue from external customers	$	473,658	$	428,318	$	223,299	$	1,125,275		$	—		$	1,125,275
Income (loss) from construction operations	$	(164,472)	$	(3,810)	$	(159,795)	$	(328,077)	^(d)	$	(13,640)	^(b)	$	(341,717)
Capital expenditures	$	24,439	$	150	$	110	$	24,699		$	235		$	24,934
Depreciation and amortization^(c)	$	10,285	$	497	$	1,061	$	11,843		$	2,754		$	14,597

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(a)During the three months ended June 30, 2020, income (loss) from construction operations was impacted by $13.2 million (an unfavorable after-tax impact of $9.5 million, or $0.19 per diluted share) due to an adverse arbitration ruling pertaining to an electrical project in New York in the Specialty Contractors segment.

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

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

(d)During the three months ended June 30, 2019, the Company recorded a non-cash goodwill impairment charge of $379.9 million in income (loss) from construction operations (an unfavorable after-tax impact of $329.5 million, or $6.56 per diluted share) resulting from an interim impairment test the Company performed as of June 1, 2019.



	Reportable Segments
					Specialty								Consolidated
(in thousands)	Civil			Building	Contractors		Total			Corporate			Total
Six Months Ended June 30, 2020
Total revenue	$	1,224,771	$	995,400	$	516,949	$	2,737,120		$	—		$	2,737,120
Elimination of intersegment revenue		(169,166)		(40,615)		(183)		(209,964)			—			(209,964)
Revenue from external customers	$	1,055,605	$	954,785	$	516,766	$	2,527,156		$	—		$	2,527,156
Income (loss) from construction operations	$	111,519	$	21,305	$	(3,109)	$	129,715	^(a)	$	(24,792)	^(b)	$	104,923
Capital expenditures	$	30,143	$	198	$	728	$	31,069		$	317		$	31,386
Depreciation and amortization^(c)	$	40,391	$	855	$	1,988	$	43,234		$	5,542		$	48,776

Six Months Ended June 30, 2019
Total revenue	$	924,739	$	869,802	$	414,826	$	2,209,367		$	—		$	2,209,367
Elimination of intersegment revenue		(117,587)		(8,018)		—		(125,605)			—			(125,605)
Revenue from external customers	$	807,152	$	861,784	$	414,826	$	2,083,762		$	—		$	2,083,762
Income (loss) from construction operations	$	(122,727)	$	(677)	$	(167,283)	$	(290,687)	^(d)	$	(28,117)	^(b)	$	(318,804)
Capital expenditures	$	38,451	$	205	$	233	$	38,889		$	457		$	39,346
Depreciation and amortization^(c)	$	19,655	$	1,000	$	2,125	$	22,780		$	5,534		$	28,314

____________________________________________________________________________________________________

(a)During the six months ended June 30, 2020, income (loss) from construction operations was impacted by $13.2 million (an unfavorable after-tax impact of $9.5 million, or $0.19 per diluted share) due to an adverse arbitration ruling pertaining to an electrical project in New York in the Specialty Contractors segment.

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

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

(d)During the six months ended June 30, 2019, the Company recorded a non-cash goodwill impairment charge of $379.9 million in income (loss) from construction operations (an unfavorable after-tax impact of $329.5 million, or $6.57 per diluted share) resulting from an interim impairment test the Company performed as of June 1, 2019.

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



	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2020		2019		2020		2019
Income (loss) from construction operations	$	57,696	$	(341,717)	$	104,923	$	(318,804)
Other income (expense)		(797)		900		(316)		1,322
Interest expense		(16,464)		(17,522)		(32,900)		(33,947)
Income (loss) before income taxes	$	40,435	$	(358,339)	$	71,707	$	(351,429)

Total assets by segment were as follows:



	As of		As of
(in thousands)	June 30, 2020		December 31, 2019
Civil	$	3,084,528	$	2,791,402
Building		1,083,421		995,298
Specialty Contractors		664,161		635,180
Corporate and other^(a)		(68,507)		63,897
Total assets	$	4,763,603	$	4,485,777

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