Revenue Recognition

6 Months Ended

Jun. 30, 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 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 June 30, 2019 and 2018 were as follows:

	Three months ended June 30, 2019
	T&D					C&I					Total
(in thousands)	Amount		Percent			Amount		Percent			Amount		Percent
Fixed price	$	119,572		46.7	%	$	115,117		59.7	%	$	234,689		52.3	%
Unit price		52,162		20.4			12,855		6.7			65,017		14.5
T&E		76,841		30.0			37,193		19.3			114,034		25.4
Other		7,335		2.9			27,701		14.3			35,036		7.8
	$	255,910		100.0	%	$	192,866		100.0	%	$	448,776		100.0	%

	Three months ended June 30, 2018
	T&D					C&I					Total
(in thousands)	Amount		Percent			Amount		Percent			Amount		Percent
Fixed price	$	77,230		39.2	%	$	90,439		63.4	%	$	167,669		49.4	%
Unit price		41,631		21.1			15,408		10.8			57,039		16.8
T&E		68,073		34.6			8,942		6.3			77,015		22.7
Other		9,991		5.1			27,962		19.5			37,953		11.1
	$	196,925		100.0	%	$	142,751		100.0	%	$	339,676		100.0	%

The components of the Company’s revenue by contract type for the six months ended June 30, 2019 and 2018 were as follows:

		Six months ended June 30, 2019
		T&D				C&I				Total
(in thousands)		Amount	Percent			Amount	Percent			Amount	Percent
Fixed price	$	252,896	47.9	%	$	248,828	64.1	%	$	501,724		54.7	%
Unit price		103,356	19.6			22,843	5.9			126,199		13.8
T&E		153,149	29.0			49,724	12.8			202,873		22.1
Other		19,057	3.5			67,017	17.2			86,074		9.4
	$	528,458	100.0	%	$	388,412	100.0	%	$	916,870		100.0	%

	Six months ended June 30, 2018
	T&D					C&I					Total
(in thousands)	Amount		Percent			Amount		Percent			Amount		Percent
Fixed price	$	156,665		37.9	%	$	179,594		66.0	%	$	336,259		49.1	%
Unit price		87,307		21.1			25,058		9.2			112,365		16.4
T&E		148,418		35.9			18,399		6.8			166,817		24.3
Other		20,921		5.1			48,925		18.0			69,846		10.2
	$	413,311		100.0	%	$	271,976		100.0	%	$	685,287		100.0	%

The components of the Company’s revenue by market type for the three months ended June 30, 2019 and 2018 were as follows:

	Three months ended June 30, 2019						Three months ended June 30, 2018
(in thousands)	Amount		Percent			Segment	Amount		Percent			Segment
Transmission	$	169,466		37.8	%	T&D	$	121,708		35.8	%	T&D
Distribution		86,444		19.2		T&D		75,217		22.2		T&D
Electrical construction		192,866		43.0		C&I		142,751		42.0		C&I
Total revenue	$	448,776		100.0	%		$	339,676		100.0	%

The components of the Company’s revenue by market type for the six months ended June 30, 2019 and 2018 were as follows:

	Six months ended June 30, 2019						Six months ended June 30, 2018
(in thousands)	Amount		Percent			Segment	Amount		Percent			Segment
Transmission	$	357,231		39.0	%	T&D	$	256,161		37.4	%	T&D
Distribution		171,227		18.6		T&D		157,150		22.9		T&D
Electrical construction		388,412		42.4		C&I		271,976		39.7		C&I
Total revenue	$	916,870		100.0	%		$	685,287		100.0	%

Remaining Performance Obligations

As of June 30, 2019, the Company had $1.06 billion of remaining performance obligations. The Company’s remaining performance obligations include 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 June 30, 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 at June 30, 2019
(In thousands)	Total		Amount estimated to not be recognized within 12 months		Total at December 31, 2018

T&D	$	389,579	$	19,141	$	418,178
C&I		673,336		154,287		644,547
Total	$	1,062,915	$	173,428	$	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.”