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Revenue from Contracts with Customers Revenue from Contracts with Customers (Tables)

9 Months Ended

Sep. 30, 2018

Revenue from Contract with Customer [Abstract]

Disaggregation of Revenue

The following tables provide further disaggregation of our revenues by categories we use to evaluate our financial performance within each of our reportable segments (in thousands):

	For the three months ended September 30, 2018				% of Total			For the nine months ended September 30, 2018				% of Total
United States electrical construction and facilities services:
Commercial market sector	$	196,293			40	%		$	579,958			41	%
Institutional market sector	27,903				6	%		86,971				6	%
Hospitality market sector	9,860				2	%		22,665				2	%
Manufacturing market sector	100,563				20	%		280,375				20	%
Healthcare market sector	28,121				6	%		103,307				7	%
Transportation market sector	72,816				15	%		216,591				15	%
Water and wastewater market sector	4,194				1	%		14,947				1	%
Short duration projects (1)	38,452				8	%		93,177				6	%
Service work	8,147				2	%		25,151				2	%
	486,349							1,423,142
Less intersegment revenues	(375		)					(2,874		)
Total segment revenues	$	485,974						$	1,420,268

United States mechanical construction and facilities services:
Commercial market sector	$	289,032			37	%		$	784,543			35	%
Institutional market sector	78,084				10	%		221,790				10	%
Hospitality market sector	26,170				3	%		73,888				3	%
Manufacturing market sector	96,203				12	%		295,126				13	%
Healthcare market sector	55,844				7	%		181,964				8	%
Transportation market sector	3,072				1	%		13,002				1	%
Water and wastewater market sector	43,032				6	%		122,302				6	%
Short duration projects (1)	76,711				10	%		236,720				11	%
Service work	107,168				14	%		291,694				13	%
	775,316							2,221,029
Less intersegment revenues	(2,984		)					(9,193		)
Total segment revenues	$	772,332						$	2,211,836

 ________

(1) Represents those projects which generally are completed within three months or less.

	For the three months ended September 30, 2018				% of Total			For the nine months ended September 30, 2018				% of Total
United States building services:
Commercial site-based services	$	120,917			26	%		$	386,721			28	%
Government site-based services	52,332				11	%		162,888				12	%
Mechanical services	276,722				58	%		764,313				55	%
Energy services	23,730				5	%		75,564				5	%
Total segment revenues	$	473,701						$	1,389,486

United States industrial services:
Field services	$	169,036			79	%		$	442,653			78	%
Shop services	45,440				21	%		124,117				22	%
Total segment revenues	$	214,476						$	566,770
Total United States operations	$	1,946,483						$	5,588,360

United Kingdom building services:
Service work	$	51,815			52	%		$	162,088			52	%
Projects & extras	48,751				48	%		150,875				48	%
Total segment revenues	$	100,566						$	312,963
Total worldwide operations	$	2,047,049						$	5,901,323

Contract Assets and Contract Liabilities

Net contract liabilities consisted of the following (in thousands):

	September 30, 2018				December 31, 2017
Contract assets, current	$	168,665			$	122,621
Contract assets, non-current	—				—
Contract liabilities, current	(531,284		)		(524,156		)
Contract liabilities, non-current	(2,905		)		—
Deferred revenue (1)	—				(47,328		)
Net contract liabilities	$	(365,524	)		$	(448,863	)

 ________

(1)

Represents deferred revenue on service contracts, which was included in “Accrued expenses and other” and “Other long-term liabilities” in the Condensed Consolidated Balance Sheet as of December 31 2017. For the periods after December 31, 2017, these amounts are included within “Contract liabilities.”

Remaining Performance Obligations

The following table presents the transaction price allocated to remaining unsatisfied performance obligations (“remaining performance obligations”) for each of our reportable segments and their respective percentages of total remaining performance obligations (in thousands, except for percentages):

	September 30, 2018				% of Total
Remaining performance obligations:
United States electrical construction and facilities services	$	1,181,620			30	%
United States mechanical construction and facilities services	2,152,271				54	%
United States building services	434,386				11	%
United States industrial services	74,659				2	%
Total United States operations	3,842,936				97	%
United Kingdom building services	126,732				3	%
Total worldwide operations	$	3,969,668			100	%

Remaining Performance Obligations, Expected Timing of Satisfaction

Refer to the table below for additional information regarding our remaining performance obligations, including an estimate of when we expect to recognize such remaining performance obligations as revenue (in thousands):

	Within one year				Greater than one year
Remaining performance obligations:
United States electrical construction and facilities services	$	1,054,046			$	127,574
United States mechanical construction and facilities services	1,571,103				581,168
United States building services	421,903				12,483
United States industrial services	74,659				—
Total United States operations	3,121,711				721,225
United Kingdom building services	76,905				49,827
Total worldwide operations	$	3,198,616			$	771,052

Schedule of Changes in Accounting Principles

The following tables compare the differences between our reported and pro forma results under previous revenue guidance for each financial statement line item within our reported Condensed Consolidated Balance Sheet and Condensed Consolidated Statement of Operations, as of and for the three and nine months ended September 30, 2018 (in thousands):

	As reported				Pro forma
	September 30, 2018 (Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	353,912			$	353,912
Accounts receivable	1,715,462				1,715,012
Contract assets	168,665				162,481
Inventories	41,932				50,019
Prepaid expenses and other	44,221				43,068
Total current assets	2,324,192				2,324,492
Investments, notes and other long-term receivables	3,542				3,542
Property, plant and equipment, net	128,765				128,765
Goodwill	978,243				978,243
Identifiable intangible assets, net	471,447				471,447
Other assets	89,704				89,704
Total assets	$	3,995,893			$	3,996,193
LIABILITIES AND EQUITY
Current liabilities:
Current maturities of long-term debt and capital lease obligations	$	15,769			$	15,769
Accounts payable	529,618				529,618
Contract liabilities	531,284				486,518
Accrued payroll and benefits	343,797				343,797
Other accrued expenses and liabilities	169,100				213,048
Total current liabilities	1,589,568				1,588,750
Borrowings under revolving credit facility	25,000				25,000
Long-term debt and capital lease obligations	258,569				258,569
Other long-term obligations	343,630				343,998
Total liabilities	2,216,767				2,216,317
Total equity	1,779,126				1,779,876
Total liabilities and equity	$	3,995,893			$	3,996,193

	As reported				Pro forma				As reported				Pro forma
	For the three months ended September 30, 2018 (Unaudited)								For the nine months ended September 30, 2018 (Unaudited)
Revenues	$	2,047,049			$	2,038,281			$	5,901,323			$	5,893,227
Cost of sales	1,737,710				1,732,027				5,032,021				5,028,089
Gross profit	309,339				306,254				869,302				865,138
Selling, general and administrative expenses	197,334				197,334				578,266				578,266
Restructuring expenses	229				229				693				693
Impairment loss on identifiable intangible assets	—				—				907				907
Operating income	111,776				108,691				289,436				285,272
Net periodic pension (cost) income	615				615				2,069				2,069
Interest expense	(3,588		)		(3,588		)		(10,041		)		(10,041		)
Interest income	852				852				2,030				2,030
Income from continuing operations before income taxes	109,655				106,570				283,494				279,330
Income tax provision	29,711				28,875				76,873				75,744
Income from continuing operations	79,944				77,695				206,621				203,586
Loss from discontinued operation, net of income taxes	(523		)		(523		)		(1,010		)		(1,010		)
Net income including noncontrolling interests	79,421				77,172				205,611				202,576
Less: Net income attributable to noncontrolling interests	(48		)		(48		)		(48		)		(48		)
Net income attributable to EMCOR Group, Inc.	$	79,373			$	77,124			$	205,563			$	202,528
Basic earnings per common share:
From continuing operations attributable to EMCOR Group, Inc. common stockholders	$	1.37			$	1.33			$	3.54			$	3.48
Diluted earnings per common share:
From continuing operations attributable to EMCOR Group, Inc. common stockholders	$	1.36			$	1.33			$	3.52			$	3.46

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