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Revenue from Contracts with Customers | 12 Months Ended
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Dec. 31, 2018
Revenue from Contract with Customer [Abstract] |
Revenue from Contracts with Customers | REVENUE FROM CONTRACTS WITH CUSTOMERS In accordance with ASC 606, the Company recognizes revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. To achieve this core principle, the Company applies the following five steps: (1) Identify the contract with a customer A contract with a customer exists when: (a) the parties have approved the contract and are committed to perform their respective obligations, (b) the rights of the parties can be identified, (c) payment terms can be identified, (d) the arrangement has commercial substance, and (e) collectibility of consideration is probable. Judgment is required when determining if the contractual criteria are met, specifically in the earlier stages of a project when a formally executed contract may not yet exist. In these situations, the Company evaluates all relevant facts and circumstances, including the existence of other forms of documentation or historical experience with our customers that may indicate a contractual agreement is in place and revenue should be recognized. In determining if the collectibility of consideration is probable, the Company considers the customer’s ability and intention to pay such consideration through an evaluation of several factors, including an assessment of the creditworthiness of the customer and our prior collection history with such customer. (2) Identify the performance obligations in the contract At contract inception, the Company assesses the goods or services promised in a contract and identifies, as a separate performance obligation, each distinct promise to transfer goods or services to the customer. The identified performance obligations represent the “unit of account” for purposes of determining revenue recognition. In order to properly identify separate performance obligations, the Company applies judgment in determining whether each good or service provided is: (a) capable of being distinct, whereby the customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer, and (b) distinct within the context of the contract, whereby the transfer of the good or service to the customer is separately identifiable from other promises in the contract. In addition, when assessing performance obligations within a contract, the Company considers the warranty provisions included within such contract. To the extent the warranty terms provide the customer with an additional service, other than assurance that the promised good or service complies with agreed upon specifications, such warranty is accounted for as a separate performance obligation. In determining whether a warranty provides an additional service, the Company considers each warranty provision in comparison to warranty terms which are standard in the industry. Our contracts are often modified through change orders to account for changes in the scope and price of the goods or services we are providing. Although the Company evaluates each change order to determine whether such modification creates a separate performance obligation, the majority of our change orders are for goods or services that are not distinct within the context of our original contract, and therefore, are not treated as separate performance obligations. (3) Determine the transaction price The transaction price represents the amount of consideration to which the Company expects to be entitled in exchange for transferring promised goods or services to our customers. The consideration promised within a contract may include fixed amounts, variable amounts, or both. To the extent the performance obligation includes variable consideration, including contract bonuses and penalties that can either increase or decrease the transaction price, the Company estimates the amount of variable consideration to be included in the transaction price utilizing one of two prescribed methods, depending on which method better predicts the amount of consideration to which the entity will be entitled. Such methods include: (a) the expected value method, whereby the amount of variable consideration to be recognized represents the sum of probability weighted amounts in a range of possible consideration amounts, and (b) the most likely amount method, whereby the amount of variable consideration to be recognized represents the single most likely amount in a range of possible consideration amounts. When applying these methods, the Company considers all information that is reasonably available, including historical, current and estimates of future performance. The expected value method is typically utilized in situations where a contract contains a large number of possible outcomes while the most likely amount method is typically utilized in situations where a contract has only two possible outcomes. Variable consideration is included in the transaction price only to the extent it is probable, in the Company’s judgment, that a significant future reversal in the amount of cumulative revenue recognized under the contract will not occur when the uncertainty associated with the variable consideration is subsequently resolved. This threshold is referred to as the variable consideration constraint. In assessing whether to apply the variable consideration constraint, the Company considers if factors exist that could increase the likelihood or the magnitude of a potential reversal of revenue, including, but not limited to, whether: (a) the amount of consideration is highly susceptible to factors outside of the Company’s influence, such as the actions of third parties, (b) the uncertainty surrounding the amount of consideration is not expected to be resolved for a long period of time, (c) the Company’s experience with similar types of contracts is limited or that experience has limited predictive value, (d) the Company has a practice of either offering a broad range of price concessions or changing the payment terms and conditions of similar contracts in similar circumstances, and (e) the contract has a large number and broad range of possible consideration amounts. Pending change orders represent one of the most common forms of variable consideration included within contract value and typically represent contract modifications for which a change in scope has been authorized or acknowledged by our customer, but the final adjustment to contract price is yet to be negotiated. In estimating the transaction price for pending change orders, the Company considers all relevant facts, including documented correspondence with the customer regarding acknowledgment and/or agreement with the modification, as well as historical experience with the customer or similar contractual circumstances. Based upon this assessment, the Company estimates the transaction price, including whether the variable consideration constraint should be applied. Contract claims are another form of variable consideration which is common within our industry. Claim amounts represent revenue that has been recognized for contract modifications that are not submitted or are in dispute as to both scope and price. In estimating the transaction price for claims, the Company considers all relevant facts available. However, given the uncertainty surrounding claims, including the potential long-term nature of dispute resolution and the broad range of possible consideration amounts, there is an increased likelihood that any additional contract revenue associated with contract claims is constrained. The resolution of claims involves negotiations and, in certain cases, litigation. In the event litigation costs are incurred by us in connection with claims, such litigation costs are expensed as incurred, although we may seek to recover these costs. For some transactions, the receipt of consideration does not match the timing of the transfer of goods or services to the customer. For such contracts, the Company evaluates whether this timing difference represents a financing arrangement within the contract. Although rare, if a contract is determined to contain a significant financing component, the Company adjusts the promised amount of consideration for the effects of the time value of money when determining the transaction price of such contract. Although our customers may retain a portion of the contract price until completion of the project and final contract settlement, these retainage amounts are not considered a significant financing component as the intent of the withheld amounts is to provide the customer with assurance that we will complete our obligations under the contract rather than to provide financing to the customer. In addition, although we may be entitled to advanced payments from our customers on certain contracts, these advanced payments generally do not represent a significant financing component as the payments are used to meet working capital demands that can be higher in the early stages of a contract, as well as to protect us from our customer failing to meet its obligations under the contract. Changes in the estimates of transaction prices are recognized on a cumulative catch-up basis in the period in which the revisions to the estimates are made. Such changes in estimates can result in the recognition of revenue in a current period for performance obligations which were satisfied or partially satisfied in prior periods. Such changes in estimates may also result in the reversal of previously recognized revenue if the ultimate outcome differs from the Company’s previous estimate. For the year ended December 31, 2018, we recognized revenue of $7.3 million associated with the final settlement of contract value for three projects which were completed in prior periods. For the year ended December 31, 2017, we recognized $18.1 million of gross profit associated with the recovery of certain contract costs previously disputed on a project completed in 2016. In addition, for the years ended December 31, 2018 and 2017, there were no significant reversals of revenue recognized associated with the revision of transaction prices. (4) Allocate the transaction price to performance obligations in the contract For contracts that contain multiple performance obligations, the Company allocates the transaction price to each performance obligation based on a relative standalone selling price. The Company determines the standalone selling price based on the price at which the performance obligation would have been sold separately in similar circumstances to similar customers. If the standalone selling price is not observable, the Company estimates the standalone selling price taking into account all available information such as market conditions and internal pricing guidelines. In certain circumstances, the standalone selling price is determined using an expected profit margin on anticipated costs related to the performance obligation. (5) Recognize revenue as performance obligations are satisfied The Company recognizes revenue at the time the related performance obligation is satisfied by transferring a promised good or service to its customers. A good or service is considered to be transferred when the customer obtains control. The Company can transfer control of a good or service and satisfy its performance obligations either over time or at a point in time. The Company transfers control of a good or service over time and, therefore, satisfies a performance obligation and recognizes revenue over time if one of the following three criteria are met: (a) the customer simultaneously receives and consumes the benefits provided by the Company’s performance as we perform, (b) the Company’s performance creates or enhances an asset that the customer controls as the asset is created or enhanced, or (c) the Company’s performance does not create an asset with an alternative use to us, and we have an enforceable right to payment for performance completed to date. For our performance obligations satisfied over time, we recognize revenue by measuring the progress toward complete satisfaction of that performance obligation. The selection of the method to measure progress towards completion can be either an input method or an output method and requires judgment based on the nature of the goods or services to be provided. For our construction contracts, revenue is generally recognized over time as our performance creates or enhances an asset that the customer controls as it is created or enhanced. Our fixed price construction projects generally use a cost-to-cost input method to measure our progress towards complete satisfaction of the performance obligation as we believe it best depicts the transfer of control to the customer which occurs as we incur costs on our contracts. Under the cost-to-cost measure of progress, the extent of progress towards completion is measured based on the ratio of costs incurred to date to the total estimated costs at completion of the performance obligation. For our unit price construction contracts, progress towards complete satisfaction is measured through an output method, such as the amount of units produced or delivered, when our performance does not produce significant amounts of work in process or finished goods prior to complete satisfaction of such performance obligations. For our services contracts, revenue is also generally recognized over time as the customer simultaneously receives and consumes the benefits of our performance as we perform the service. For our fixed price service contracts with specified service periods, revenue is generally recognized on a straight-line basis over such service period when our inputs are expended evenly, and the customer receives and consumes the benefits of our performance throughout the contract term. The timing of revenue recognition for the manufacturing of new build heat exchangers within our United States industrial services segment depends on the payment terms of the contract, as our performance does not create an asset with an alternative use to us. For those contracts for which we have a right to payment for performance completed to date at all times throughout our performance, inclusive of a cancellation, we recognize revenue over time. These performance obligations use a cost-to-cost input method to measure our progress towards complete satisfaction of the performance obligation as we believe it best depicts the transfer of control to the customer which occurs as we incur costs on our contracts. However, for those contracts for which we do not have a right, at all times, to payment for performance completed to date, we recognize revenue at the point in time when control is transferred to the customer. For bill-and-hold arrangements, revenue is recognized when the customer obtains control of the heat exchanger, which may be prior to shipping, if the criteria of ASC 606 are met. For certain of our revenue streams, such as call-out repair and service work, outage services, refinery turnarounds and specialty welding services that are performed under time and materials contracts, our progress towards complete satisfaction of such performance obligations is measured using an output method as the customer receives and consumes the benefits of our performance completed to date. Due to uncertainties inherent in the estimation process, it is possible that estimates of costs to complete a performance obligation will be revised in the near-term. For those performance obligations for which revenue is recognized using a cost-to-cost input method, changes in total estimated costs, and related progress towards complete satisfaction of the performance obligation, are recognized on a cumulative catch-up basis in the period in which the revisions to the estimates are made. When the current estimate of total costs for a performance obligation indicate a loss, a provision for the entire estimated loss on the unsatisfied performance obligation is made in the period in which the loss becomes evident. During 2018, we recognized losses of $10.0 million related to a change in total estimated costs on a transportation project within our United States electrical construction and facilities services segment, resulting in part from contract scope issues. There were no other changes in total estimated costs that resulted in a significant impact to our operating results for the years ended December 31, 2018 and 2017. Disaggregation of Revenues Our revenues are principally derived from contracts to provide construction services relating to electrical and mechanical systems, as well as to provide a number of building services and industrial services to our customers. Our contracts are with many different customers in numerous industries. Refer to Note 18 - Segment Information of the notes to the consolidated financial statements for additional information on how we disaggregate our revenues by reportable segment, as well as a more complete description of our business. 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):
| 2018 |  | % of Total
United States electrical construction and facilities services: |  |  |
Commercial market sector | $ | 839,045 |  |  | 43 | %
Institutional market sector | 110,046 |  |  | 6 | %
Hospitality market sector | 32,338 |  |  | 2 | %
Manufacturing market sector | 388,157 |  |  | 20 | %
Healthcare market sector | 126,218 |  |  | 6 | %
Transportation market sector | 284,464 |  |  | 14 | %
Water and wastewater market sector | 23,337 |  |  | 1 | %
Short duration projects (1) | 120,109 |  |  | 6 | %
Service work | 34,105 |  |  | 2 | %
| 1,957,819 |  |  |
Less intersegment revenues | (3,496 | ) |  |
Total segment revenues | $ | 1,954,323 |  |  |
________
(1) | Represents those projects which generally are completed within three months or less.
| 2018 |  | % of Total
United States mechanical construction and facilities services: |  |  |
Commercial market sector | $ | 1,063,571 |  |  | 35 | %
Institutional market sector | 292,255 |  |  | 9 | %
Hospitality market sector | 93,827 |  |  | 3 | %
Manufacturing market sector | 430,286 |  |  | 14 | %
Healthcare market sector | 241,113 |  |  | 8 | %
Transportation market sector | 19,415 |  |  | 1 | %
Water and wastewater market sector | 176,574 |  |  | 6 | %
Short duration projects (1) | 335,953 |  |  | 11 | %
Service work | 385,671 |  |  | 13 | %
| 3,038,665 |  |  |
Less intersegment revenues | (18,358 | ) |  |
Total segment revenues | $ | 3,020,307 |  |  |
________
(1) | Represents those projects which generally are completed within three months or less.
| 2018 |  | % of Total
United States building services: |  |  |
Commercial site-based services | $ | 519,641 |  |  | 28 | %
Government site-based services | 213,677 |  |  | 11 | %
Mechanical services | 1,032,082 |  |  | 55 | %
Energy services | 110,085 |  |  | 6 | %
Total segment revenues | $ | 1,875,485 |  |  |
United States industrial services: |  |  |
Field services | $ | 694,994 |  |  | 80 | %
Shop services | 170,651 |  |  | 20 | %
Total segment revenues | $ | 865,645 |  |  |
Total United States operations | $ | 7,715,760 |  |  |
United Kingdom building services: |  |  |
Service work | $ | 216,880 |  |  | 52 | %
Projects & extras | 197,991 |  |  | 48 | %
Total segment revenues | $ | 414,871 |  |  |
Total worldwide operations | $ | 8,130,631 |  |  |
Contract Assets and Contract Liabilities Accounts receivable are recognized in the period when our right to consideration is unconditional. Accounts receivable are recognized net of an allowance for doubtful accounts. A considerable amount of judgment is required in assessing the likelihood of realization of receivables. The timing of revenue recognition may differ from the timing of invoicing to customers. Contract assets include unbilled amounts from our long-term construction projects when revenues recognized under the cost-to-cost measure of progress exceed the amounts invoiced to our customers, as the amounts cannot be billed under the terms of our contracts. Such amounts are recoverable from our customers based upon various measures of performance, including achievement of certain milestones, completion of specified units or completion of a contract. In addition, many of our time and materials arrangements, as well as our contracts to perform turnaround services within the United States industrial services segment, are billed in arrears pursuant to contract terms that are standard within the industry, resulting in contract assets and/or unbilled receivables being recorded, as revenue is recognized in advance of billings. Also included in contract assets are amounts we seek or will seek to collect from customers or others for errors or changes in contract specifications or design, contract change orders or modifications in dispute or unapproved as to both scope and/or price, or other customer-related causes of unanticipated additional contract costs (claims and unapproved change orders). Our contract assets do not include capitalized costs to obtain and fulfill a contract. Contract assets are generally classified as current within the Consolidated Balance Sheets. As of December 31, 2018 and 2017, contract assets included unbilled revenues for unapproved change orders of approximately $25.2 million and $17.4 million, respectively. As of December 31, 2018 and 2017, there were no claim amounts included within contract assets or accounts receivable. There were contractually billed amounts and retention related to contracts with unapproved change orders and claims of approximately $96.1 million and $57.6 million as of December 31, 2018 and 2017, respectively. For contracts in claim status, contractually billed amounts will generally not be paid by the customer to us until final resolution of related claims. Contract liabilities from our long-term construction contracts arise when amounts invoiced to our customers exceed revenues recognized under the cost-to-cost measure of progress. Contract liabilities additionally include advanced payments from our customers on certain contracts. Contract liabilities decrease as we recognize revenue from the satisfaction of the related performance obligation and are recorded as either current or long-term, depending upon when we expect to recognize such revenue. The long-term portion of contract liabilities is included in “Other long-term obligations” in the Consolidated Balance Sheets. Net contract liabilities consisted of the following (in thousands):
| 2018 |  | 2017
Contract assets, current | $ | 158,243 |  |  | $ | 122,621 |
Contract assets, non-current | — |  |  | — |
Contract liabilities, current | (552,290 | ) |  | (524,156 | )
Contract liabilities, non-current | (2,069 | ) |  | — |
Deferred revenue (1) | — |  |  | (47,328 | )
Net contract liabilities | $ | (396,116 | ) |  | $ | (448,863 | )
________
(1) | Represents deferred revenue on service contracts, which was included in “Accrued expenses and other” and “Other long-term liabilities” in the Consolidated Balance Sheet as of December 31 2017. For the periods after December 31, 2017, these amounts are included within “Contract liabilities.”
Included within net contract liabilities were $359.2 million and $401.5 million of net contract liabilities on uncompleted construction projects as of December 31, 2018 and 2017, respectively, as follows:
| 2018 |  | 2017
Costs incurred on uncompleted construction contracts | $ | 8,656,642 |  |  | $ | 8,258,802 |
Estimated earnings, thereon | 1,172,224 |  |  | 1,081,509 |
| 9,828,866 |  |  | 9,340,311 |
Less: billings to date | 10,188,023 |  |  | 9,741,846 |
| $ | (359,157 | ) |  | $ | (401,535 | )
The $52.7 million decrease in net contract liabilities for the year ended December 31, 2018 was primarily attributable to the $42.4 million decrease in the net contract liabilities on our uncompleted long-term construction contracts as a result of the completion or substantial completion of certain large projects which were previously billed in advance pursuant to contract terms. Contract assets and contract liabilities increased by approximately $3.8 million and $9.4 million, respectively, as a result of acquisitions made in 2018. There was no significant impairment of contract assets recognized during the period. Contract Retentions As of December 31, 2018 and 2017, accounts receivable included $254.6 million and $243.5 million, respectively, of retainage billed under terms of our contracts. These retainage amounts represent amounts which have been contractually invoiced to customers where payments have been partially withheld pending the achievement of certain milestones, satisfaction of other contractual conditions or completion of the project. We estimate that approximately 86% of this retainage will be collected during 2019. As of December 31, 2018 and 2017, accounts payable included $43.3 million and $41.0 million, respectively, of retainage withheld under terms of our subcontracts. These retainage amounts represent amounts invoiced to the Company by our subcontractors where payments have been partially withheld pending the achievement of certain milestones, satisfaction of other contractual conditions or upon completion of the project. We estimate that approximately 83% of this retainage will be paid during 2019. Transaction Price Allocated to Remaining Unsatisfied 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):
| 2018 |  | % of Total
Remaining performance obligations: |  |  |
United States electrical construction and facilities services | $ | 1,085,571 |  |  | 27 | %
United States mechanical construction and facilities services | 2,245,584 |  |  | 57 | %
United States building services | 435,074 |  |  | 11 | %
United States industrial services | 67,529 |  |  | 2 | %
Total United States operations | 3,833,758 |  |  | 97 | %
United Kingdom building services | 130,524 |  |  | 3 | %
Total worldwide operations | $ | 3,964,282 |  |  | 100 | %
Our remaining performance obligations at December 31, 2018 were $3.96 billion. Remaining performance obligations increase with awards of new contracts and decrease as we perform work and recognize revenue on existing contracts. We include a project within our remaining performance obligations at such time the project is awarded and agreement on contract terms has been reached. Our remaining performance obligations include amounts related to contracts for which a fixed price contract value is not assigned when a reasonable estimate of total transaction price can be made. Remaining performance obligations include unrecognized revenues to be realized from uncompleted construction contracts. Although many of our construction contracts are subject to cancellation at the election of our customers, in accordance with industry practice, we do not limit the amount of unrecognized revenue included within remaining performance obligations due to the inherent substantial economic penalty that would be incurred by our customers upon cancellation. We believe our reported remaining performance obligations for our construction contracts are firm and contract cancellations have not had a material adverse effect on us. Remaining performance obligations also include unrecognized revenues expected to be realized over the remaining term of service contracts. However, to the extent a service contract includes a cancellation clause which allows for the termination of such contract by either party without a substantive penalty, the remaining contract term, and therefore, the amount of unrecognized revenues included within remaining performance obligations, is limited to the notice period required for the termination. Our remaining performance obligations are comprised of: (a) original contract amounts, (b) change orders for which we have received written confirmations from our customers, (c) pending change orders for which we expect to receive confirmations in the ordinary course of business, (d) claim amounts that we have made against customers for which we have determined we have a legal basis under existing contractual arrangements and as to which the variable consideration constraint does not apply, and (e) other forms of variable consideration to the extent that such variable consideration has been included within the transaction price of our contracts. Such claim and other variable consideration amounts were immaterial for all periods presented. 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 | $ | 996,524 |  |  | $ | 89,047 |
United States mechanical construction and facilities services | 1,742,587 |  |  | 502,997 |
United States building services | 424,462 |  |  | 10,612 |
United States industrial services | 67,529 |  |  | — |
Total United States operations | 3,231,102 |  |  | 602,656 |
United Kingdom building services | 77,884 |  |  | 52,640 |
Total worldwide operations | $ | 3,308,986 |  |  | $ | 655,296 |
Impact of the Adoption of ASC 606 on our Financial Statements The Company adopted ASC 606 on a modified retrospective basis. As part of such adoption, the new standard was applied only to those contracts which were not completed as of the date of adoption. Additionally, the Company has not retrospectively restated contract positions for contract modifications made prior to the adoption of ASC 606. The cumulative effect of applying the new guidance was recorded on January 1, 2018 as a reduction to retained earnings in the amount of $0.9 million, net of tax. The majority of this adjustment related to: (a) a change in the measurement of our progress towards complete satisfaction of performance obligations for certain of our contracts within the United States electrical construction and facilities services segment, (b) a change in the timing of revenue recognition from a point in time to over time for certain repair projects within the United Kingdom building services segment, (c) the recognition of revenue for certain bill-and-hold arrangements within our United States industrial services segment that was not allowed under previous revenue recognition guidance, (d) the recognition of variable consideration for contract bonuses within certain of our construction contracts, and (e) a change in the timing of revenue recognition from a point in time to over time for certain of our contracts within our United States industrial services segment to manufacture or repair heat exchangers. These adjustments were not material to our financial position either individually or in the aggregate. The impact of our adoption of ASC 606 on the Consolidated Balance Sheet and Consolidated Statement of Operations, as of and for the year ended December 31, 2018 was as follows (in thousands):
| As reported |  | As adjusted
| December 31, 2018
ASSETS |  |  |
Current assets: |  |  |
Cash and cash equivalents | $ | 363,907 |  |  | $ | 363,907 |
Accounts receivable | 1,773,620 |  |  | 1,778,930 |
Contract assets | 158,243 |  |  | 145,583 |
Inventories | 42,321 |  |  | 54,173 |
Prepaid expenses and other | 48,116 |  |  | 46,687 |
Total current assets | 2,386,207 |  |  | 2,389,280 |
Investments, notes and other long-term receivables | 2,899 |  |  | 2,899 |
Property, plant and equipment, net | 134,351 |  |  | 134,351 |
Goodwill | 990,887 |  |  | 990,887 |
Identifiable intangible assets, net | 488,286 |  |  | 488,286 |
Other assets | 86,177 |  |  | 86,177 |
Total assets | $ | 4,088,807 |  |  | $ | 4,091,880 |
LIABILITIES AND EQUITY |  |  |
Current liabilities: |  |  |
Current maturities of long-term debt and capital lease obligations | $ | 16,013 |  |  | $ | 16,013 |
Accounts payable | 652,091 |  |  | 652,091 |
Contract liabilities | 552,290 |  |  | 511,089 |
Accrued payroll and benefits | 343,069 |  |  | 343,069 |
Other accrued expenses and liabilities | 170,935 |  |  | 219,166 |
Total current liabilities | 1,734,398 |  |  | 1,741,428 |
Borrowings under revolving credit facility | 25,000 |  |  | 25,000 |
Long-term debt and capital lease obligations | 254,764 |  |  | 254,764 |
Other long-term obligations | 333,204 |  |  | 333,204 |
Total liabilities | 2,347,366 |  |  | 2,354,396 |
Total equity | 1,741,441 |  |  | 1,737,484 |
Total liabilities and equity | $ | 4,088,807 |  |  | $ | 4,091,880 |
| As reported |  | As adjusted
| 2018
Revenues | $ | 8,130,631 |  |  | $ | 8,117,087 |
Cost of sales | 6,925,178 |  |  | 6,918,281 |
Gross profit | 1,205,453 |  |  | 1,198,806 |
Selling, general and administrative expenses | 799,157 |  |  | 799,157 |
Restructuring expenses | 2,306 |  |  | 2,306 |
Impairment loss on identifiable intangible assets | 907 |  |  | 907 |
Operating income | 403,083 |  |  | 396,436 |
Net periodic pension (cost) income | 2,743 |  |  | 2,743 |
Interest expense | (13,544 | ) |  | (13,544 | )
Interest income | 2,746 |  |  | 2,746 |
Income from continuing operations before income taxes | 395,028 |  |  | 388,381 |
Income tax provision | 109,106 |  |  | 107,270 |
Income from continuing operations | 285,922 |  |  | 281,111 |
Loss from discontinued operation, net of income taxes | (2,345 | ) |  | (2,345 | )
Net income including noncontrolling interests | 283,577 |  |  | 278,766 |
Less: Net income attributable to noncontrolling interests | (46 | ) |  | (46 | )
Net income attributable to EMCOR Group, Inc. | $ | 283,531 |  |  | $ | 278,720 |
Basic earnings per common share: |  |  |
From continuing operations attributable to EMCOR Group, Inc. common stockholders | $ | 4.92 |  |  | $ | 4.84 |
Diluted earnings per common share: |  |  |
From continuing operations attributable to EMCOR Group, Inc. common stockholders | $ | 4.89 |  |  | $ | 4.81 |
The adoption of ASC 606 had no impact on the Company’s cash flows from operations. The differences between our reported operating results and the pro forma operating results presented in the above tables for the year ended December 31, 2018 primarily related to the previously referenced items identified upon adoption of ASC 606.

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- Definition The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -URI http://asc.fasb.org/topic&trid=49130388 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -URI http://asc.fasb.org/topic&trid=2122369 + Details
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