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Goodwill and Intangible Assets
 12 Months Ended
Dec. 31, 2021
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Intangible Assets Goodwill and Intangible Assets
Goodwill
The following table presents the changes in the carrying amount of goodwill since its inception through December 31, 2021:
(in thousands)CivilBuildingSpecialty
Contractors		Total
Gross goodwill as of December 31, 2019$492,074 $424,724 $156,193 $1,072,991 
Accumulated impairment as of December 31, 2019(286,931)(424,724)(156,193)(867,848)
Goodwill as of December 31, 2019205,143 — — 205,143 
2020 activity— — — — 
Goodwill as of December 31, 2020205,143 — — 205,143 
Current year activity— — — — 
Goodwill as of December 31, 2021(a)
$205,143 $— $— $205,143 
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(a)As of December 31, 2021, accumulated impairment was $867.8 million.
The Company performed its annual impairment test in the fourth quarter of 2021 and concluded goodwill was not impaired. In addition, the Company determined that no triggering events occurred and no circumstances changed since the date of our annual impairment test that would more likely than not reduce the fair value of the Civil reporting unit below its carrying amount.
The Company will continue to monitor events and circumstances for changes that indicate the Civil reporting unit goodwill would need to be reevaluated for impairment during future interim periods prior to the annual impairment test. These future events and circumstances include, but are not limited to, changes in the overall financial performance of the Civil reporting unit, impacts to our business as a result of the COVID-19 pandemic, as well as other quantitative and qualitative factors which could indicate potential triggering events for possible impairment.
Second Quarter of 2019 Goodwill Impairment
In the second quarter of 2019, the Company recognized a non-cash impairment loss totaling $379.9 million, of which $210.2 million, $13.5 million and $156.2 million was in the Civil, Building and Specialty Contractors segments, respectively. While there was no single determinative event or factor, potential triggering events identified in the accounting guidance (ASC 350, Intangibles – Goodwill and Other) which led to the impairment conclusion included:
•The Company faced a declining stock price and observed a sustained decrease subsequent to the filing of the Company’s first quarter Form 10-Q on May 8, 2019, in both absolute terms and relative to its peers. Consistent with the average stock prices of companies in its peer group, the Company’s stock price had been trending lower over
several prior periods; however, during the second quarter of 2019, the Company’s stock price dropped to a 52-week low while the average stock price of companies in its peer group increased. The Company believed that delays experienced in resolving certain claims and unapproved change orders, which when combined with the increased working capital needs and significant negative operating cash flows in the first quarter of 2019, had contributed significantly to the sustained decrease in the Company’s stock price;
•The Company experienced significant negative operating cash flows from each of its reporting units in the first quarter of 2019, and that trend continued at the beginning of the second quarter; and
•The Company’s debt rating was downgraded by a major credit rating agency on May 17, 2019.
When performing the interim goodwill impairment test as of June 1, 2019 (the “Interim Test”), the Company utilized a weighted average of (1) an income approach and (2) a market approach to determine the fair value of the Company and each of its reporting units for the Interim Test. The income approach was based on estimated present value of future cash flows for each reporting unit. The market approach was based on assumptions about how market data relates to each reporting unit. The weighting of these two approaches was based on their individual correlation to the economics of each reporting unit as impacted by factors such as the availability of comparable market data for each reporting unit.
Assessing impairment inherently involves management judgments as to the assumptions used to calculate fair value of the reporting units and the impact of market conditions on those assumptions. The key inputs that the Company uses in its assumptions to estimate the fair value of its reporting units under the income-based approach are as follows:
•Weighted-average cost of capital (“WACC”), the risk-adjusted rate used to discount the projected cash flows;
•Cash flows generated from existing work and new awards; and
•Projected operating margins.
Expected future after-tax operating cash flows of each reporting unit are discounted to a present value using a risk-adjusted discount rate. Estimates of future cash flows require management to make significant assumptions concerning future operating performance including cash flows generated from existing work and new awards, projected operating margins, variations in the amount and timing of cash flows and the probability of achieving the estimated cash flows, as well as future economic conditions, which may differ from actual future cash flows. The discount rate, which is intended to reflect the risks inherent in future cash flow projections, used in estimating the present value of future cash flows, is based on estimates of the WACC of market participants relative to the reporting units. Financial and credit market volatility can directly impact certain inputs and assumptions used to develop the WACC.
To develop the cash flows generated from new awards and future operating margins, the Company tracks known prospects of significance for each of its reporting units and considers the estimated timing of when the work is expected to be bid, started and completed. The Company also gives consideration to its relationships with the prospective owners; the pool of competitors that are capable of performing large, complex work; business strategy; and the Company’s history of success in winning new work in each reporting unit. With regard to operating margins, the Company gives consideration to its historical reporting unit operating margins in the end markets that the prospective work opportunities are most significant, expected margins from existing work, current market trends in recent new work procurement, and business strategy.
The Company also estimated the fair value of its reporting units under a market-based approach by applying industry-comparable multiples of revenues and operating earnings to its reporting units’ revenues and operating earnings. The conditions and prospects of companies in the engineering and construction industry depend on common factors such as overall demand for services.
Intangible Assets
Intangible assets consist of the following:
As of December 31, 2021Weighted-Average Amortization Period
(in thousands)CostAccumulated
Amortization		Accumulated Impairment ChargeCarrying Value
Trade names (non-amortizable)$117,600 $— $(67,190)$50,410 Indefinite
Trade names (amortizable)(a)
69,250 (23,650)(23,232)22,368 20 years
Contractor license6,000 — (6,000)— N/A
Customer relationships39,800 (23,053)(16,645)102 12 years
Construction contract backlog149,290 (137,102)— 12,188 3 years
Total$381,940 $(183,805)$(113,067)$85,068 
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(a)In 2021, the Company sold an immaterial subsidiary, which had amortizable trade names with a gross cost of $5.1 million and a carrying value of $2.6 million at the time of sale.
As of December 31, 2020Weighted-Average Amortization Period
(in thousands)CostAccumulated
Amortization		Accumulated Impairment ChargeCarrying Value
Trade names (non-amortizable)$117,600 $— $(67,190)$50,410 Indefinite
Trade names (amortizable)74,350 (23,754)(23,232)27,364 20 years
Contractor license6,000 — (6,000)— N/A
Customer relationships39,800 (22,103)(16,645)1,052 12 years
Construction contract backlog149,290 (105,001)— 44,289 3 years
Total$387,040 $(150,858)$(113,067)$123,115 
Amortization expense related to amortizable intangible assets was $35.5 million, $32.2 million and $6.2 million for the years ended December 31, 2021, 2020 and 2019, respectively. The increase in amortization expense in 2021 and 2020, compared to 2019, was due to the acquisition of an additional 25% interest in a Civil segment joint venture during the fourth quarter of 2019, which increased the Company’s ownership interest from 50% to 75% and gave it a controlling financial interest in the joint venture, thereby requiring consolidation by the Company. The transaction was accounted for as a business combination achieved in stages, and under ASC 805, Business Combinations, the previously held equity interest in the joint venture was remeasured at the acquisition date fair value. The transaction resulted in a gain of $37.8 million recognized in earnings, which was included in general and administrative expenses in the Company’s Consolidated Statement of Operations in 2019, and in the recording of an intangible asset for construction contract backlog of $75.6 million, which is amortized as the related contract backlog is recognized as revenue.
Future amortization expense related to amortizable intangible assets will be approximately $14.5 million for 2022, $2.2 million per year for the years 2023 through 2026, and $11.4 million thereafter.
The Company performed its annual impairment test for non-amortizable trade names during the fourth quarter of 2021. Based on this assessment, the Company concluded that its non-amortizable trade names were not impaired. In addition, the Company determined that no triggering events occurred and no circumstances changed since the date of our annual impairment test that would indicate impairment of its non-amortizable trade names. Other amortizable intangible assets are reviewed for impairment whenever circumstances indicate that the future cash flows generated by the assets might be less than the assets’ net carrying value. The Company had no impairment of intangible assets during the years ended December 31, 2021, 2020 or 2019.