Revenue Recognition

3 Months Ended

Mar. 31, 2019

Revenue from Contract with Customer [Abstract]

7. Revenue Recognition

Disaggregation of Revenue

A majority of the Company’s revenues are earned through contracts with customers that normally provide for payment upon completion of specified work or units of work as identified in the contract. Although there is considerable variation in the terms of these contracts, they are primarily structured as fixed-price contracts, under which the Company agrees to do the entire project for a fixed amount, or unit-price contracts, under which the Company agrees to do the work at a fixed price per unit of work as specified in the contract. The Company also enters into time-and-equipment and time-and-materials contracts under which the Company is paid for labor and equipment at negotiated hourly billing rates and for other expenses, including materials, as incurred at rates agreed to in the contract. Finally, the Company sometimes enters into cost-plus contracts, where the Company is paid for costs plus a negotiated margin. On occasion, time-and-equipment, time-and-materials and cost-plus contracts require the Company to include a guaranteed not-to-exceed maximum price.

Historically, fixed-price and unit-price contracts have had the highest potential margins; however, they have had a greater risk in terms of profitability because cost overruns may not be recoverable. Time-and-equipment, time-and-materials and cost-plus contracts have historically had less margin upside, but generally have had a lower risk of cost overruns. The Company also provides services under master service agreements (“MSAs”) and other variable-term service agreements. MSAs normally cover maintenance, upgrade and extension services, as well as new construction. Work performed under MSAs is typically billed on a unit-price, time-and-materials or time-and-equipment basis. MSAs are typically one to three years in duration; however, most of the Company’s contracts, including MSAs, may be terminated by the customer on short notice, typically 30 to 90 days, even if the Company is not in default under the contract. Under MSAs, customers generally agree to use the Company for certain services in a specified geographic region. Most MSAs include no obligation for the contract counterparty to assign specific volumes of work to the Company and do not require the counterparty to use the Company exclusively, although in some cases the MSA contract gives the Company a right of first refusal for certain work. Additional information related to the Company’s market types is provided in Note 11–Segment Information.

The components of the Company’s revenue by contract type for the three months ended March 31, 2019 and 2018 were as follows:

	Three months ended March 31, 2019
	T&D					C&I					Total
(in thousands)	Amount		Percent			Amount		Percent			Amount		Percent
Fixed price	$	133,324		48.9	%	$	133,711		68.4	%	$	267,035		57.0	%
Unit price		51,194		18.8			9,988		5.1			61,182		13.1
T&E		76,308		28.0			12,531		6.4			88,839		19.0
Other		11,722		4.3			39,316		20.1			51,038		10.9
	$	272,548		100.0	%	$	195,546		100.0	%	$	468,094		100.0	%

	Three months ended March 31, 2018
	T&D					C&I					Total
(in thousands)	Amount		Percent			Amount		Percent			Amount		Percent
Fixed price	$	79,435		36.7	%	$	89,155		69.0	%	$	168,590		48.8	%
Unit price		45,676		21.1			9,650		7.5			55,326		16.0
T&E		80,345		37.1			9,457		7.3			89,802		26.0
Other		10,930		5.1			20,963		16.2			31,893		9.2
	$	216,386		100.0	%	$	129,225		100.0	%	$	345,611		100.0	%

The components of the Company’s revenue by market type for the three months ended March 31, 2019 and 2018 were as follows:

	Three months ended March 31, 2019						Three months ended March 31, 2018
(in thousands)	Amount		Percent			Segment	Amount		Percent			Segment
Transmission	$	187,765		40.1	%	T&D	$	134,452		38.9	%	T&D
Distribution		84,783		18.1		T&D		81,934		23.7		T&D
Electrical construction		195,546		41.8		C&I		129,225		37.4		C&I
Total Revenue	$	468,094		100.0	%		$	345,611		100.0	%

Remaining Performance Obligations

As of March 31, 2019, the Company had $1.06 billion of remaining performance obligations. The Company’s remaining performance obligations includes projects that have a written award, a letter of intent, a notice to proceed or an agreed upon work order to perform work on mutually accepted terms and conditions.

The following table summarizes the amount of remaining performance obligations that the Company expects to be realized as of March 31, 2019 and the amount of the remaining performance obligations that the Company reasonably estimates will not be recognized within the next twelve months.

	Remaining Performance Obligations as of March 31, 2019
(In thousands)	Total		Amount estimated to not be recognized within 12 months		Total at December 31, 2018

T&D	$	398,382	$	40,445	$	418,178
C&I		657,741		123,611		644,547
Total	$	1,056,123	$	164,056	$	1,062,725

The Company expects a vast majority of the remaining performance obligations to be recognized within twenty-four months, although the timing of the Company’s performance is not always under its control. Additionally, the difference between the remaining performance obligations and backlog is due to the exclusion of a portion of the Company’s MSAs under certain contract types from the Company’s remaining performance obligations as these contracts can be canceled for convenience at any time by the Company or the customer without considerable cost incurred by the customer. Additional information related to backlog is provided in “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of

Operations.”