[4] Goodwill and Intangible Assets

The following table presents the changes in the carrying amount of goodwill allocated to the Company's reporting units for the periods presented:

							Specialty		Management
(in thousands)	Building			Civil			Contractors		Services			Total


Gross Goodwill Balance	$	402,926		$	319,254		$	-	$	66,638		$	788,818
Accumulated Impairment		(146,847	)		-			-		(20,051	)		(166,898	)
Balance at December 31, 2010		256,079			319,254			-		46,587			621,920
Goodwill recorded in connection with the acquisition of Fisk, Anderson,Lunda, GreenStar and Becho		140,907			129,775			-		-			270,682
Reallocation based on relative fair value (1)		(123,566	)		(18,267	)		141,833		-			-
Balance at December 31, 2011		273,420			430,762			141,833		46,587			892,602
Acquisition related adjustments		-			(869	)		-		-			(869	)
Impairment charge		(262,918	)		(55,740	)		-		(2,429	)		(321,087	)
Balance at December 31, 2012	$	10,502		$	374,153		$	141,833	$	44,158		$	570,646

(1) During the third quarter of 2011, the Company completed a reorganization which resulted in the formation of the Specialty Contractors reporting unit and reportable segment. The Specialty Contractors reporting unit consists of the following subsidiary companies: WDF, FSE, Nagelbush, Fisk, Desert Mechanical, Inc. ("DMI") (all previously included in the Building reporting unit), and Superior Gunite (previously included in the Civil reporting unit). The reorganization enabled the Company to focus on vertical integration through increased self-performed work capabilities, while maintaining the specialty contractors business with third parties, and strengthened the Company's position as a full-service contractor with greater control over scheduled delivery and risk management. The Company reallocated goodwill between its reorganized reporting units based on a relative fair value assessment in accordance with the guidance on segment reporting.

The net change in the carrying amount of goodwill for the year ended December 31, 2012 was primarily due to a goodwill impairment charge of $321.1 million recorded in the second quarter of 2012. See "Goodwill Impairment" below. Since the interim goodwill impairment test as of June 30, 2012, the Company's annual impairment test, performed in the fourth quarter of 2012, did not indicate any further adjustment to goodwill. No events or circumstances have occurred since June 30, 2012 that would indicate any additional impairment adjustment of goodwill. At December 31, 2012, the fair value of the Management Services reporting unit exceeded its carrying value by 4.5%, while the fair values of the Building, Civil and Specialty Contractors reporting units exceeded their carrying values by more than 10%.

Goodwill Impairment

During the second quarter of 2012, the Company experienced a sustained decrease in its stock price, causing its market capitalization to be substantially less than its carrying value and its implied control premium to increase beyond the implied control premium that was reconciled in its 2011 annual impairment analysis, and beyond the observable market comparable level. Additionally, deterioration in broader market conditions including stock market volatility, particularly in the construction industry, impacted the weighted average cost of capital rate assumptions used in deriving the fair values of the Company's reporting units, which are primarily based on market inputs. Finally, several of the Company's reporting units experienced degradation in the timing of projected cash flows used in deriving the fair values of those reporting units in its 2011 annual impairment analysis caused by delays in the timing of awards and start of new work that the Company anticipated would enter into backlog in the first half of 2012, and a general decrease in profit margins on new work awards that were factored into the Company's forecast assumptions.

In the Building reporting unit, the most significant decrease in estimated new work cash flow was the result of political decisions that negatively impacted the advance of a large project for an existing customer. In addition, the Company observed an unfavorable change in the margin mix of new work obtained in the first half of 2012 compared with prior years. The majority of the new work awards in the first half of 2012 as well as the near term new work prospects were comprised of lower margin private customer work and not the higher margin public works the Building reporting unit completed in the past. The projected cash flows for the Building reporting unit as of June 30, 2012 took into consideration the changes in assumptions on new work awards and unfavorable change in margin mix, consistent with its actual results in the first half of 2012.

In the Civil reporting unit, the fourth quarter of 2011 valuation anticipated the award and start and/or ramp-up of a number of projects during 2012. Many of these projects were delayed for several reasons including political pressures, timing of funding, and general economic concerns. The change in the estimated timing of recent awards and resulting ramp-up of production resulted in deterioration in anticipated future cash flows from fourth quarter of 2011 expectations. The projected cash flows for the Civil reporting unit as of June 30, 2012 took into consideration the change in estimated timing of award and ramp-up of new work.

Within the Management Services reporting unit valuation for the fourth quarter of 2011, cash flow projections included the anticipated ramp-up of work associated with the movement of Pacific Marine Corps operations from the island of Okinawa to the island of Guam. During April 2012, United States bipartisan legislators were unable to come to agreement on government spending cuts and certain government projects were suspended. This left doubt around the timing and magnitude of the proposed move. The projected cash flows for the Management Services reporting unit as of June 30, 2012 took into consideration the uncertainty of timing surrounding significant projects with the Pacific Marine Corps on the island of Guam.

As part of the valuation process, the aggregate fair value of the Company was compared to its market capitalization at the valuation date in order to determine the implied control premium. The implied control premium was then compared to the control premiums paid in recent transactions within the industry. The Company's implied market control premium of 78.1% and 42.5%, as of the fourth quarter of 2011 and the second quarter of 2012 valuation, respectively, were determined to be in an acceptable range of market transactions observed in the construction and engineering industry in the past several years.

As part of the review process for the reporting unit valuations, the Company created multiple income-based and market-based valuation models to understand the sensitivity of the variables used in determining the fair value. These models were reviewed with the Company's external fair value specialists who assisted in the process by providing insight into acceptable ranges on various valuation assumptions as well as preferred valuation techniques.

Weighted average cost of capital rates used to discount the projected cash flows were developed via the capital asset pricing model which is primarily based upon market inputs. The Company used discount rates that management felt were an accurate reflection of the risks associated with the forecasted cash flows of its respective reporting units. Weighted average cost of capital inputs ranged from 15% - 16.5% for the Company's reporting units. As discussed above, since the Company's 2011 annual impairment analysis, the weighted average cost of capital rates were impacted by broader market conditions including the recent stock market volatility, particularly in the construction industry.

Similar to previous valuations, the Company noted that small changes to valuation assumptions could have a significant impact on the concluded value; however, the Company gained comfort over the assumptions selected for valuation through comparison to historical transaction benchmarks, third party industry expectations, and the Company's previous models.

With regard to the Company's reporting units, the carrying values of the Company's Building, Civil and Management Services reporting units were greater than their fair values, and as such, the Company performed the second step of the goodwill impairment test for these reporting units which resulted in goodwill impairments as discussed above. In this second step, the Company determined the fair value of the individual assets and liabilities of the reporting units that failed Step 1 and calculated the implied fair value of goodwill for those reporting units. The Company included in this calculation the valuation of assets and liabilities that would occur in a theoretical purchase price allocation of the reporting unit in accordance with the Financial Accounting Standards Board's (the "FASB") Accounting Standards Codification ("ASC") 805 – Business Combinations, as well as the value of backlog, trade name, and customer relationships and the impact of deferred tax liabilities and assets arising from the fair valuation of these assets and liabilities.

The fair value of the Specialty Contractors reporting unit substantially exceeded its carrying value, and as such, it was not necessary to perform the second step of the goodwill impairment test for this reporting unit.

In conducting the initial step of its goodwill evaluation, the Company also evaluated its finite lived tangible and intangible assets due to the degradation in the timing of projected cash flows since the Company's 2011 impairment analysis and changes in the planned use of certain intangible assets. The Company compared the fair value of the finite lived tangible and intangible assets to their carrying value and determined that the carrying value of a portion of these assets exceeded their fair value as determined by the income-based valuation approach and by benchmarking against observable market prices. This income-based valuation approach involved key assumptions similar to those used in the goodwill impairment analysis for the Company's reporting units as discussed above, (e.g. projections of future cash flows associated with the Company's trade name, contractor license, customer relationship and contract backlog intangible assets that were recorded in previous acquisitions).

Based on these circumstances and events, the Company performed an interim goodwill and indefinite lived intangible asset impairment test as of June 30, 2012 and, as a result, the Company recorded a goodwill impairment charge of $321.1 million and an indefinite lived intangible assets impairment charge of $16.4 million in the second quarter of 2012. The Company also evaluated its finite lived tangible and intangible assets due to the degradation in the timing of projected cash flows since the Company's 2011 impairment analysis and changes in the planned use of certain intangible assets, and this analysis resulted in a $39.1 million impairment charge on the Company's finite lived intangible assets in the second quarter of 2012.

Intangible assets consist of the following:

	December 31, 2012
											Weighted
						Accumulated					Average
			Accumulated			Impairment			Carrying		Amortization
	Cost		Amortization			Charge			Value		Period
	(in thousands)
Trade names (non-amortizable)	$	117,600	$	-		$	(67,190	)	$	50,410	Indefinite
Trade names (amortizable)		74,350		(3,854	)		(23,232	)		47,264	20 years
Contractor license		6,000		-			(6,000	)		-	Indefinite
Customer relationships		39,800		(13,029	)		(16,645	)		10,126	11.4 years
Construction contract backlog		73,706		(54,685	)		-			19,021	3.6 years
Total	$	311,456	$	(71,568	)	$	(113,067	)	$	126,821


	December 31, 2011
											Weighted
						Accumulated					Average
			Accumulated			Impairment			Carrying		Amortization
	Cost		Amortization			Charge			Value		Period
	(in thousands)
Trade names (non-amortizable)	$	117,600	$	-		$	(56,100	)	$	61,500	Indefinite
Trade names (amortizable)		74,350		(788	)		(800	)		72,762	20 years
Contractor license		6,000		-			(680	)		5,320	Indefinite
Customer relationships		39,800		(10,585	)		-			29,215	11.6 years
Construction contract backlog		71,140		(41,938	)		-			29,202	2.9 years
Total	$	308,890	$	(53,311	)	$	(57,580	)	$	197,999

Amortization expense for the years ended December 31, 2012, 2011, and 2010 totaled $18.3 million, $13.1 million and $8.1 million, respectively. At December 31, 2012, amortization expense is estimated to be $13.1 million in 2013, $11.9 million in 2014, $5.3 million in 2015, $3.5 million in 2016, $3.5 million in 2017 and $39.1 million thereafter.