10-K 1 tv536230-ar.htm 10-K
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549​
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FORM 10-K
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the fiscal year ended December 31, 2019
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from           to
Commission file number: 1-08325
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MYR GROUP INC.​
(Exact name of registrant as specified in its charter)​
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​ | ​ | ​ | ​ | Delaware (State or other jurisdiction of incorporation or organization) | ​ | ​ | 36-3158643 (I.R.S. Employer Identification No.) | ​ | ​

1701 Golf Road, Suite 3-1012
Rolling Meadows, IL 60008
(Address of principal executive offices, including zip code)
(847) 290-1891
(Registrant’s telephone number, including area code)
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Securities registered pursuant to Section 12(b) of the Act:

​ | Title of each class | ​ | ​ | Trading Symbol(s) | ​ | ​ | Name of each exchange on which registered | ​
​ | Common Stock, $0.01 par value | ​ | ​ | MYRG | ​ | ​ | The Nasdaq Stock Market LLC (Nasdaq Global Market) | ​

Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  Yes ☐ No ☒
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.  Yes ☐ No ☒
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of  “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

​ | ​ | ​ | ​ | Large accelerated filer ☐ | ​ | ​ | Accelerated filer ☒ | ​ | ​
​ | ​ | ​ | ​ | Non-accelerated filer ☐ | ​ | ​ | Smaller reporting company ☐ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | Emerging growth company ☐ | ​ | ​

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).  Yes ☐ No ☒
As of June 28, 2019 (the last business day of the registrant’s most recently completed second fiscal quarter), the aggregate market value of the outstanding common equity held by non-affiliates of the registrant was approximately $506.5 million, based upon the closing sale price of the common stock on such date as reported by the Nasdaq Global Market (for purposes of calculating this amount, only directors, officers and beneficial owners of 10% or more of the outstanding capital stock of the registrant have been deemed affiliates).
As of February 28, 2020 there were 16,657,072 shares of the registrant’s $0.01 par value common stock outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant’s definitive proxy statement to be filed with the Securities and Exchange Commission (the “SEC”) in connection with its 2020 annual meeting of stockholders to be held on April 23, 2020, are incorporated into Part III hereof.
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MYR GROUP INC.
ANNUAL REPORT ON FORM 10-K
FOR THE YEAR ENDED DECEMBER 31, 2019
TABLE OF CONTENTS

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PART I | ​
​ Item 1. Business ​ | ​ | ​ | ​ | ​ | 3 | ​ | ​
​ Item 1A. Risk Factors ​ | ​ | ​ | ​ | ​ | 12 | ​ | ​
​ Item 1B. Unresolved Staff Comments ​ | ​ | ​ | ​ | ​ | 29 | ​ | ​
​ Item 2. Properties ​ | ​ | ​ | ​ | ​ | 29 | ​ | ​
​ Item 3. Legal Proceedings ​ | ​ | ​ | ​ | ​ | 29 | ​ | ​
​ Item 4. Mine Safety Disclosures ​ | ​ | ​ | ​ | ​ | 29 | ​ | ​
PART II | ​
​ Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities ​ | ​ | ​ | ​ | ​ | 30 | ​ | ​
​ Item 6. Selected Financial Data ​ | ​ | ​ | ​ | ​ | 32 | ​ | ​
​ Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations ​ | ​ | ​ | ​ | ​ | 36 | ​ | ​
​ Item 7A. Quantitative and Qualitative Disclosures About Market Risk ​ | ​ | ​ | ​ | ​ | 54 | ​ | ​
​ Item 8. Financial Statements and Supplementary Data ​ | ​ | ​ | ​ | ​ | 55 | ​ | ​
​ Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure ​ | ​ | ​ | ​ | ​ | 98 | ​ | ​
​ Item 9A. Controls and Procedures ​ | ​ | ​ | ​ | ​ | 98 | ​ | ​
​ Item 9B. Other Information ​ | ​ | ​ | ​ | ​ | 99 | ​ | ​
PART III | ​
​ Item 10. Directors, Executive Officers and Corporate Governance ​ | ​ | ​ | ​ | ​ | 100 | ​ | ​
​ Item 11. Executive Compensation ​ | ​ | ​ | ​ | ​ | 100 | ​ | ​
​ Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters ​ | ​ | ​ | ​ | ​ | 100 | ​ | ​
​ Item 13. Certain Relationships and Related Transactions, and Director Independence ​ | ​ | ​ | ​ | ​ | 101 | ​ | ​
​ Item 14. Principal Accounting Fees and Services ​ | ​ | ​ | ​ | ​ | 101 | ​ | ​
PART IV | ​
​ Item 15. Exhibits and Financial Statement Schedules ​ | ​ | ​ | ​ | ​ | 102 | ​ | ​
​ Item 16. Form 10-K Summary ​ | ​ | ​ | ​ | ​ | 102 | ​ | ​

Throughout this report, references to “MYR Group,” the “Company,” “we,” “us,” and “our” refer to MYR Group Inc. and its consolidated subsidiaries, except as otherwise indicated or as the context otherwise requires.
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FORWARD-LOOKING STATEMENTS
Statements in this Annual Report on Form 10-K contain various forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934 (the “Exchange Act”), which represent our management’s beliefs and assumptions concerning future events. When used in this document and in documents incorporated by reference, forward-looking statements include, without limitation, statements regarding financial forecasts or projections, and our expectations, beliefs, intentions or future strategies that are signified by the words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “likely,” “may,” “objective,” “outlook,” “plan,” “project,” “unlikely,” “possible,” “potential,” “should” or other words that convey the uncertainty of future events or outcomes. The forward-looking statements in this Annual Report on Form 10-K speak only as of the date of this Annual Report on Form 10-K. We disclaim any obligation to update these statements (unless required by securities laws) and we caution you not to rely on them unduly. We have based these forward-looking statements on our current expectations and assumptions about future events. While our management considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks, contingencies and uncertainties, most of which are difficult to predict, and many of which are beyond our control. These and other important factors, including those discussed in Item 1A — “Risk Factors” of this report, and in any risk factors or cautionary statements contained in our other filings with the SEC, may cause our actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by these forward-looking statements.
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PART I
Item 1.
Business
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General
We are a holding company of specialty electrical construction service providers that was established in 1995 through the merger of long-standing specialty contractors. Through our subsidiaries, we serve the electric utility infrastructure, commercial and industrial construction markets. Our operations are currently conducted through wholly owned subsidiaries, including: The L. E. Myers Co.; Harlan Electric Company; Great Southwestern Construction, Inc.; Sturgeon Electric Company, Inc.; MYR Transmission Services, Inc.; E.S. Boulos Company; Western Pacific Enterprises Ltd.; High Country Line Construction, Inc.; MYR Transmission Services Canada, Ltd.; Northern Transmission Services, Ltd.; Sturgeon Electric California, LLC; GSW Integrated Services, LLC; Huen Electric, Inc. and CSI Electrical Contractors, Inc. We primarily provide electrical construction services through a network of local offices located throughout the United States and western Canada. We provide a broad range of services, including design, engineering, procurement, construction, upgrade, maintenance and repair services, with a particular focus on construction, maintenance and repair.
Our principal executive offices are located at 1701 Golf Road, Suite 3-1012, Rolling Meadows, Illinois 60008. The telephone number of our principal executive offices is (847) 290-1891.
Reportable Segments
Through our subsidiaries, we are a leading specialty contractor serving the electric utility infrastructure, commercial and industrial construction markets in the United States and western Canada. We manage and report our operations through two electrical contracting service segments: Transmission and Distribution (“T&D”) and Commercial and Industrial (“C&I”). We generally focus on improving our profitability by selecting projects we believe will provide attractive margins, actively monitoring the costs of completing our projects, holding customers accountable for costs related to changes to contract specifications and rewarding our employees for effectively managing costs.
Transmission and Distribution segment We have operated in the transmission and distribution industry since 1891. We are one of the largest U.S. contractors servicing the T&D sector of the electric utility industry. We provide a broad range of services on electric transmission and distribution networks and substation facilities, which include design, engineering, procurement, construction, upgrade, maintenance and repair services, with a particular focus on construction, maintenance and repair, to customers in the electric utility industry throughout the United States and western Canada. Our T&D services include the construction and maintenance of high voltage transmission lines, substations, lower voltage underground and overhead distribution systems, renewable power facilities and limited gas construction services. We also provide emergency restoration services in response to hurricane, ice or other storm-related damage.
In our T&D segment, we generally serve the electric utility industry as a prime contractor, through traditional design-bid-build or engineering, procurement and construction (“EPC”) forms of project delivery. We have long-standing relationships with many of our T&D customers who rely on us to construct and maintain reliable electric and other utility infrastructure. We also provide many services to our customers under multi-year master service agreements (“MSAs”) and other variable-term service agreements.
Commercial and Industrial segment We have provided electrical contracting services for commercial and industrial construction since 1912. Our C&I segment provides services such as the design, installation, maintenance and repair of commercial and industrial wiring, the installation of traffic networks and the installation of bridge, roadway and tunnel lighting in the United States and western Canada. We concentrate our efforts on projects where our technical and project management expertise are critical to successful and timely execution. Typical C&I contracts cover electrical contracting services for airports, hospitals, data centers, hotels, stadiums, convention centers, renewable energy projects, manufacturing plants, processing facilities, waste-water treatment facilities, mining facilities and transportation control and management systems.
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In our C&I segment, we generally provide our electric construction and maintenance services as a subcontractor to general contractors, but also contract directly with facility owners. We have a diverse customer base with many long-standing relationships.
Additional financial information related to our business segments is provided under “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and in Note 16 — Segment Information to our Financial Statements.
Customers
Our T&D customers include many of the leading companies in the electric utility industry. These customers include investor-owned utilities, cooperatives, private developers, government-funded utilities, independent power producers, independent transmission companies, industrial facility owners and other contractors. Our C&I customer base includes general contractors, commercial and industrial facility owners, governmental agencies and developers.
We have long-standing relationships with many of our customers, and we cultivate these relationships at all levels of our organization from senior management to project supervisors. We seek to build upon our customer relationships to secure additional projects from our current customer base. Many of our customer relationships originated decades ago and are maintained through a partnering approach, which includes project evaluation and consulting, quality performance, performance measurement and direct customer contact. At all levels of management, we maintain a focus on pursuing growth opportunities with prospective customers. In addition, our management teams promote and market our services for prospective large-scale projects and national accounts. We believe that our industry experience, technical expertise, customer relationships and emphasis on safety and customer service contribute to obtaining new contracts with both existing and new customers.
For the years ended December 31, 2019, 2018 and 2017, our top 10 customers accounted for 30.8%, 32.9%, and 40.4%, of our revenues, respectively. For the years ended December 31, 2019 and 2018, no single customer accounted for more than 10.0% of annual revenues. For the year ended December 31, 2017, one T&D customer accounted for 10.7% of our revenues.
For the years ended December 31, 2019, 2018 and 2017, revenues derived from T&D customers accounted for 54.8%, 58.3% and 62.7% of our total revenues, respectively, and revenues derived from C&I customers accounted for 45.2%, 41.7% and 37.3% of our total revenues, respectively.
Types of Service Arrangements and Bidding Process
We enter into contracts principally through a competitive bid process. Our typical construction project begins with the preparation and submission of a bid to a customer. If selected as the successful bidder, we generally enter into a contract with the customer that provides 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 the contracts we undertake, our contracts are primarily structured as:
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fixed-price agreements, under which we agree to perform the defined scope for a fixed amount;
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unit-price agreements, under which we agree to perform the work at a fixed price per unit of work as specified in the agreement;
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time-and-equipment and time-and-materials contracts, under which we agree to perform the work at negotiated hourly billing rates for labor and equipment and for other expenses, including materials, as incurred at rates agreed to in the contract; and
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cost-plus contracts, where we are paid for our costs plus a negotiated margin.
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On occasion, time-and-equipment, time-and-materials, cost-plus and shared savings contracts require us to include a guaranteed not-to-exceed maximum price.
Fixed-price and unit-price contracts typically have higher potential margins; however, they hold 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 less margin upside, but generally have a lower risk of cost
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overruns. Work in our T&D segment is generally completed under fixed-price, time-and-materials, time-and-equipment, unit-price and cost-plus agreements. Work in our C&I segment is typically performed under fixed-price, time-and-materials, cost-plus, and unit-price agreements. Fixed-price contracts accounted for 61.3% of total revenue for the year ended December 31, 2019, including 49.7% of our total revenue for our T&D segment and 75.2% of our total revenue for our C&I segment.
Our EPC contracts are typically fixed-price and may be entered into through joint ventures. We may act as the prime contractor for an EPC project where we perform the procurement and construction functions but use a subcontractor to perform the engineering component, or we may use a subcontractor for both engineering and procurement functions. We may also act as a subcontractor on an EPC project to an engineering firm or general contractor. When acting as a subcontractor for an EPC project, we typically provide construction services only, although we may also perform both the construction and procurement functions.
Our T&D segment also provides services under MSAs that 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 our contracts, including MSAs, may be terminated by our customers on short notice, typically 30 to 90 days, even if we are not in default under the contract. Under MSAs, customers generally agree to contract with us for certain services in a specified geographic region. A majority of our MSAs do not include obligations to assign specific volumes of work to us nor do they grant us exclusivity, although in some cases certain work under the MSA may be subject to our right of first refusal. Many of our contracts, including MSAs, are open to public bid at expiration and generally attract numerous bidders.
A portion of the work we perform requires financial assurances in the form of performance and payment bonds, letters of credit or other guarantees at the time of execution of the contract. Many of our contracts include retention provisions of up to 10%, which are generally withheld from each progress payment as retainage until the contract work has been completed and approved.
Materials
In many cases, our T&D customers are responsible for supplying materials on projects; however, under certain contracts, we may agree to provide all or a portion of the required materials. For our C&I contracts, we usually procure the necessary materials and supplies. We are not dependent on specific suppliers for materials or supplies.
Subcontracting
We are the prime contractor for the majority of our T&D projects, however, we occasionally perform work as a subcontractor, and we may elect to do so from time-to-time on larger projects in order to manage our execution risk. We are a subcontractor to a general contractor for the majority of our C&I projects, but may contract directly with facility owners. We may utilize subcontractors to perform portions of our contracts and to manage workflow, particularly for design, engineering, and procurement under both segments.
We often work with subcontractors who are sole proprietorships or small business entities. Subcontractors normally provide their own employees, vehicles, tools and insurance coverages. We are not dependent on any single subcontractor. Our contracts with subcontractors often contain provisions limiting our obligation to pay the subcontractor if our client has not paid us. We hold our subcontractors responsible for their work or delays in their performance. On larger projects, we may require performance and payment bonding from subcontractors, where we deem appropriate, based on the risk involved. When we perform work as a subcontractor we are often only paid after the general or prime contractor is paid.
Competition
Our business is highly competitive in both our T&D and C&I segments. Competition in both of our business segments is primarily based on the price of the construction services and upon the reputation for
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safety, quality and reliability of the contractor. The competition we encounter can vary depending upon the type and location of construction services.
We believe that the principal competitive factors that customers consider in our industry are:
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price and flexible contract terms;
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safety programs and safety performance;
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technical expertise and experience;
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management team experience;
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reputation and relationships with the customer;
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geographic presence and breadth of service offerings;
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willingness to accept risk;
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quality of service execution;
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specialized equipment, tooling and centralized fleet structure;
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the availability of qualified and licensed personnel;
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adequate financial resources and bonding capacity;
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technological capabilities; and
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weather-damage restoration abilities and reputation.
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While we believe our customers consider a number of factors when selecting a service provider, most of their work is awarded through a bid process where price is always a principal factor. See “Risk Factors — Our industry is highly competitive. Increased competition can place downward pressure on contract prices and profit margins and may limit the number of projects that we are awarded.”
T&D Competition
Our T&D segment competes with a number of companies in the local market where we operate, ranging from small local independent companies to large national firms. There are many national or large regional firms that compete with us for T&D contracts including, among others, Asplundh Construction Corp., Davis H. Elliot Company, Inc., Henkels & McCoy, Inc., MasTec, Inc., Michels Corporation, Pike Corporation, Power Line Services, Inc., Primoris Services Corporation and Quanta Services, Inc.
There are a number of barriers to entry into the transmission markets, including the cost of equipment and tooling necessary to perform transmission work, availability of qualified labor, scope of typical transmission projects and technical, managerial and supervisory skills necessary to complete the job. Larger transmission projects generally require specialized heavy duty equipment as well as strong financial resources to meet the cash flow, bonding or letter of credit requirements of these projects. These factors sometimes reduce the number of potential competitors on these projects. The number of firms that generally compete for any one significant transmission infrastructure project varies greatly depending on a number of factors, including the size of the project, its location and the bidder qualification requirements imposed upon contractors by the customer. Some of our competitors restrict their operations to one geographic area while others operate nationally and internationally.
Compared to the transmission markets, there are fewer significant barriers to entry into the distribution markets in which we operate. As a result, any organization that has adequate financial resources and access to technical expertise can compete for distribution projects. Instead of outsourcing, some of our T&D customers also employ personnel internally to perform similar types of distribution services that we provide.
C&I Competition
Our C&I segment predominately competes with a number of regional or local firms and with subsidiaries of national firms. There are few significant barriers to entry in the C&I markets, and there are a number of
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small companies that compete for C&I business. The size, location and technical requirements of the project will impact which competitors we will encounter when bidding on any particular project.
A major competitive factor in our C&I segment is the individual relationships that we and our competitors have developed with general contractors who typically manage the bid process, along with the willingness to be an exclusive partner with the general contractor on pursuits requiring the complete finance, design and construction services for the project. Additionally, the equipment requirements for C&I work are generally not as significant as that of T&D construction. Since C&I construction typically involves the purchase of materials, the financial resources to meet the materials procurement and equipment requirements of a particular project may impact the competition that we encounter. We differentiate ourselves from our competitors by bidding for larger and more technically complex projects, which we believe many of our smaller competitors may not be capable of executing effectively or profitably. We believe that we have a favorable competitive position in the markets that we serve due in part to our strong operating history and strong local market share as well as our reputation and relationships with our customers.
Project Bonding Requirements and Parent Guarantees
Many customers, particularly in connection with new construction, require us to post performance and payment bonds issued by a financial institution known as a surety. These bonds provide a guarantee to the customer that we will perform under the terms of a contract and that we will pay subcontractors and vendors. If we fail to perform under a contract or pay subcontractors and vendors, the customer may demand that the surety make payments or provide services under the bond. We are required to reimburse the surety for its expenses incurred in performing its obligations under the bond. We believe that the strength of our balance sheet, as well as our strong and long-standing relationship with our sureties, enhances our ability to obtain adequate financing and bonds. These bonds are typically issued at the face value of the contract awarded. As of December 31, 2019, we had approximately $270.0 million in original face amount of bonds outstanding for projects in our T&D segment and approximately $632.1 million for projects in our C&I segment. Our estimated remaining cost to complete these bonded projects for both segments was approximately $399.2 million as of December 31, 2019. As of December 31, 2018, we had approximately $221.3 million in original face amount of bonds outstanding for projects in our T&D segment and approximately $393.6 million for projects in our C&I segment. The ability to post bonds provides us with a competitive advantage over smaller or less financially secure competitors.
From time to time we guarantee the obligations of our wholly owned subsidiaries, including obligations under certain contracts with customers, certain lease agreements and, in some states, obligations in connection with obtaining contractors’ licenses. Additionally, from time to time we are required to post letters of credit to guarantee the obligations of our wholly owned subsidiaries, which reduces the borrowing availability under our credit facility.
Backlog
We refer to our estimated revenue on uncompleted contracts, including the amount of revenue on contracts for which work has not begun, less the revenue we have recognized under such contracts, as “backlog.” We calculate backlog differently for different types of contracts. For our fixed-price contracts, we include the full remaining portion of the contract in our calculation of backlog. A customer’s intention to award us work under a fixed-price contract is not included in backlog unless there is an actual award and contract to perform a specific scope of work at specific terms and pricing. For many of our unit-price, time-and-equipment, time-and-materials and cost-plus contracts, we only include projected revenue for a three-month period in the calculation of backlog, although these types of contracts are generally awarded as part of MSAs that typically have a one- to three-year duration from execution. Given the duration of our contracts and MSAs and our method of calculating backlog, our backlog at any point in time may not accurately represent the revenue we expect to realize during any period and our backlog as of the end of a fiscal year may not be indicative of the revenue we expect to generate in the following fiscal year and should not be viewed or relied upon as a stand-alone indicator. Our backlog 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. Additionally, the difference between our backlog and remaining performance obligations is due to the portion of our MSAs that is excluded, under certain contract types, from our
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remaining performance obligations as these contracts can be canceled for convenience at any time by us or the customer without considerable cost incurred by the customer. Our estimated backlog also includes our proportionate share of unconsolidated joint venture contracts. Additional information related to our remaining performance obligations is provided in Note 11 — Revenue Recognition in the accompanying notes to our Consolidated Financial Statements. See also “Item 1A. Risk Factors — Backlog may not be realized or may not result in profits and may not accurately represent future revenue.”
Certain projects that we undertake are not completed in one accounting period. Revenue on construction contracts is recognized over the contract term based on costs incurred under the cost-to-cost method. As the cost-to-cost method is driven by incurred cost, we calculate the percentage of completion by dividing costs incurred to date by the total estimated cost. The percentage of completion is then multiplied by estimated revenues to determine inception-to-date revenue. Revenue recognized for the period is the current inception-to-date recognized revenue less the prior period inception-to-date recognized revenue. If a contract is projected to result in a loss, the entire contract loss is recognized in the period when the loss was first determined and the amount of the loss is updated in subsequent reporting periods. Contract costs incurred to date and expected total contract costs are continuously monitored during the term of the contract. Changes in the job performance, job conditions and final contract settlements are factors that influence management’s assessment of total contract value and the total estimated costs to complete those contracts, and therefore, profit and revenue recognition. While our contracts typically include labor, equipment and indirect costs, the amount of subcontractor and material costs on any individual contract can vary considerably.
There can be no assurance as to the accuracy of our customers’ requirements or of our estimates of existing and future needs under MSAs, or of the values of our cost or time-dependent contracts and, therefore, our current backlog may not be realized as part of our future revenues. Subject to the foregoing discussions, the following table summarizes our estimate of backlog that we believe to be firm as of the dates shown and the backlog that we reasonably estimate will not be recognized within the next twelve months:

​ | ​ | ​ | ​ | ​ | ​ | ​ | Backlog at December 31, 2019 | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | (in thousands) | ​ | ​ | Total | ​ | ​ | Amount estimated to not be recognized within 12 months | ​ | ​ | Total backlog at December 31, 2018 | ​
​ | ​ | ​ | ​ | T&D | ​ | ​ | ​ | $ | 469,898 | ​ | ​ | ​ | ​ | $ | 45,678 | ​ | ​ | ​ | ​ | $ | 494,922 | ​ | ​
​ | ​ | ​ | ​ | C&I | ​ | ​ | ​ | ​ | 1,029,305 | ​ | ​ | ​ | ​ | ​ | 260,837 | ​ | ​ | ​ | ​ | ​ | 651,715 | ​ | ​
​ | ​ | ​ | ​ | Total | ​ | ​ | ​ | $ | 1,499,203 | ​ | ​ | ​ | ​ | $ | 306,515 | ​ | ​ | ​ | ​ | $ | 1,146,637 | ​ | ​

Changes in backlog from period to period are primarily the result of fluctuations in the timing of acquisitions, awards and revenue recognition of contracts. Our backlog as of December 31, 2019 included our proportionate share of unconsolidated joint venture backlog totaling $17.2 million.
Trade Names and Intellectual Property
We operate in the United States under a number of trade names, including: The L. E. Myers Co.; Harlan Electric Company; Great Southwestern Construction, Inc.; Sturgeon Electric Company, Inc.; MYR Transmission Services, Inc.; E.S. Boulos Company; High Country Line Construction, Inc.; Sturgeon Electric California, LLC; GSW Integrated Services, LLC; Huen Electric, Inc.; and CSI Electrical Contractors, Inc. We operate in Canada under the following trade names: MYR Transmission Services Canada, Ltd.; Northern Transmission Services, Ltd and Western Pacific Enterprises Ltd. We do not generally register our trade names, but instead rely on statutory and common law protection. While we consider our trade names to be valuable assets, we do not consider any single trade name to be of such material importance that its absence would cause a material disruption to our business. We also do not materially rely upon any patents, licenses or other intellectual property.
Equipment
Our long history in the T&D industry has allowed us to be instrumental in designing much of the specialty tools and equipment used in the industry, including wire pullers, wire tensioners and aerial devices. We operate a fleet of trucks and trailers, support vehicles, bulldozers, bucket trucks, digger derricks and
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cranes and specialty construction equipment, such as wire pullers and wire tensioning machines. We also rely on specialized tooling, including stringing blocks, wire grips and presses. The standardization of our trucks and trailers allows us to streamline training, maintenance and parts costs. We operate a centralized fleet facility, as well as 21 regional maintenance shops throughout the United States that, are staffed with over 150 mechanics and equipment managers who service our fleet. Our ability to internally service our fleet in various markets often allows us to reduce repair costs and the time equipment is out of service by eliminating both the need to ship equipment long distances for repair and dependence on third party maintenance providers. Our maintenance shops are also able to modify standard construction equipment to meet the specific needs of our specialty applications. We are a final-stage manufacturer for several configurations of our specialty vehicles, and, in the event that a particular piece of equipment is not available to us, we can often build the component on-site, which reduces our reliance on our equipment suppliers.
Our United States based fleet of equipment is managed by our centralized fleet management group. Our fleet is highly mobile, which gives us the ability to shift resources from region-to-region quickly and to effectively respond to customer needs or major weather events. Our centralized fleet management group is designed to enable us to optimize and maintain our equipment to achieve the highest equipment utilization, which helps to maintain a competitive position with respect to our equipment costs. We develop internal equipment rates that provide our business units with appropriate pricing levels to estimate their bids for new projects more accurately. The fleet management group works with our business units in prioritizing the use of our fleet assets. The fleet management group also manages the procurement and disposition of equipment and short-term rentals. All of these factors are critical in allowing us to operate efficiently and meet our customers’ needs. Equipment needs in Canada are managed by our Canadian operating subsidiaries.
Regulation
Our operations are subject to various laws and regulations including:
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licensing, permitting and inspection requirements applicable to electricians and engineers;
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regulations relating to worker safety and environmental protection;
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licensing, permitting and inspection requirements applicable to construction projects;
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building and electrical codes;
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special bidding and procurement requirements on government projects; and
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local laws and government acts regulating work on protected sites.
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We believe that we are in compliance with applicable regulatory requirements and we believe that we have all material licenses required to conduct our operations. Our failure to comply with applicable regulations could result in project delays, cost overruns, remediation costs, substantial fines and revocation of our operating licenses.
Environmental Matters
As a result of our current and past operations, we are subject to numerous environmental laws and regulations governing our operations, including the use, transport and disposal of non-hazardous and hazardous substances and wastes, as well as emissions and discharges into the environment, including discharges to air, surface water, groundwater and soil. We also are subject to laws and regulations that impose liability and cleanup responsibility for releases of hazardous substances into the environment. Under certain of these laws and regulations, such liabilities can be imposed for cleanup of previously owned or operated properties, or properties to which hazardous substances or wastes were discharged by current or former operations at our facilities, regardless of whether we directly caused the contamination or violated any law at the time of discharge or disposal. The presence of contamination from such substances or wastes could interfere with ongoing operations or adversely affect our ability to sell, lease or otherwise use our properties in certain ways such as collateral for possible financing. We could also be held liable for significant penalties and damages under certain environmental laws and regulations, which could materially and adversely affect our financial condition, results of operations and cash flows.
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We believe that we are in substantial compliance with environmental laws and regulations and that any obligations related to environmental matters should not have a material effect on our financial condition, results of operations or cash flows.
Additionally, there are significant environmental regulations under consideration to encourage the use of clean energy technologies and regulate emissions of greenhouse gases to address climate change. We regularly monitor the various proposals in this regard. Although the impact of climate change regulations on our business will depend on the specifics of governmental policies, legislation, and regulation, we believe that we will be well-positioned to adapt our business to meet new regulations. See “Item 1A. Risk Factors — Our failure to comply with environmental and other laws and regulations could result in significant liabilities” and “Item 1A. Risk Factors — We are subject to risks associated with climate change.”
Cyclical Nature of Business and Seasonality
The demand for construction and maintenance services from our customers is cyclical, particularly in our T&D segment, in nature and vulnerable to downturns in the industries we serve as well as the economy in general. As a result, our volume of business could be adversely affected by declines or delays in new projects in various geographic regions.
Although our revenues are primarily driven by spending patterns in our customers’ industries, our revenues and results of operations can be subject to seasonal and other variations. These variations are influenced by weather, daylight hours, availability of system outages from utilities and holidays. For example, during the winter months, demand for our T&D work may be high, but our work can be delayed due to inclement weather. During the summer months, the demand for our T&D work may be affected by fewer available system outages due to peak electrical demands caused by warmer weather which limits our ability to perform electrical line service work. During the spring and fall months, the demand for our T&D work may increase due to improved weather and system availability; however, extended periods of rain and other severe weather can affect the deployment of our crews and the efficiency of our operations.
Employees
We seek to attract and retain highly qualified craft employees by providing a superior work environment through our emphasis on safety, competitive compensation, and high-quality fleet of equipment. The number of individuals we employ varies significantly throughout the year, typically with lower staffing levels at year end and through the winter months when fewer projects are active. The number of craft employees fluctuates depending on the number and size of projects at any particular time. As of December 31, 2019, we had approximately 7,100 employees, consisting of approximately 1,300 salaried employees, including executive officers, district managers, project managers, superintendents, estimators, office managers, administrative staff, clerical personnel and approximately 5,800 craft employees. Approximately 90% of our craft employees are members of unions, with the majority being members of the International Brotherhood of Electrical Workers (“IBEW”), who are represented by many local unions under agreements with generally uniform terms and varying expiration dates. We generally are not direct parties to such local agreements, but instead these agreements are entered into by and between the IBEW local unions and the National Electrical Contractors Association (“NECA”), of which the majority of our subsidiaries are members. On occasion, we also employ individuals who are members of other trade unions pursuant to multi-employer, multi-union project agreements.
Information about our Executive Officers

​ | ​ | ​ | ​ | Name | ​ | ​ | Age on March 4, 2020 | ​ | ​ | Position | ​
​ | ​ | ​ | ​ | Richard S. Swartz. | ​ | ​ | ​ | ​ | 56 | ​ | ​ | ​ | President and Chief Executive Officer | ​
​ | ​ | ​ | ​ | Betty R. Johnson | ​ | ​ | ​ | ​ | 61 | ​ | ​ | ​ | Senior Vice President, Chief Financial Officer and Treasurer | ​
​ | ​ | ​ | ​ | Tod M. Cooper | ​ | ​ | ​ | ​ | 55 | ​ | ​ | ​ | Senior Vice President, Chief Operating Officer T&D | ​
​ | ​ | ​ | ​ | William F. Fry | ​ | ​ | ​ | ​ | 45 | ​ | ​ | ​ | Vice President, Chief Legal Officer and Secretary | ​
​ | ​ | ​ | ​ | Jeffrey J. Waneka | ​ | ​ | ​ | ​ | 58 | ​ | ​ | ​ | Senior Vice President, Chief Operating Officer C&I | ​

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Richard S. Swartz, has served as a member of our board of directors since April 2019 and was appointed president and chief executive officer on January 1, 2017. Prior to his current role, he served as executive vice president and chief operating officer from September 2016 to December 2016 and as senior vice president and chief operating officer from May 2011 to September 2016. Mr. Swartz served as senior vice president from August 2009 to May 2011, and as a group vice president from 2004 to 2009. Prior to becoming a group vice president, Mr. Swartz served as vice president of our transmission & distribution central division from 2002 to 2004. Mr. Swartz has held a number of additional positions since he joined us in 1982, including project foreman, superintendent, project manager and district manager.
Betty R. Johnson joined us as senior vice president, chief financial officer and treasurer on October 19, 2015. Prior to joining us, Ms. Johnson served as the chief financial officer of Faith Technologies, Inc., a privately held electrical, engineering and technology systems contractor in 2015. From 2009 to 2014, Ms. Johnson served as the vice president of global finance and chief financial officer of Sloan Valve Company. Prior to this, Ms. Johnson was executive vice president and chief financial officer with Block and Company, Inc. from 2003 to 2009. From 1999 to 2003 she served as the vice president-operations/finance with Encompass Services Corporation. Ms. Johnson served as our controller from 1992 to 1998 and vice president and controller from 1998 to 1999. Ms. Johnson served as a member of our board of directors from 2007 until accepting her current position with us in 2015. Ms. Johnson also currently serves on the board of directors of Atkore International Group Inc., a publicly-traded manufacturer of electrical products company.
Tod M. Cooper was appointed senior vice president and chief operating officer T&D on January 1, 2017. Prior to his current role, he served as senior vice president from August 2013. Mr. Cooper served as group vice president, east from 2009 to 2013 and vice president T&D, east from 2006 to 2009. Mr. Cooper has held a number of additional positions since joining us in 1989, including business development manager, regional manager, district manager, and estimator.
William F. Fry joined us as vice president, chief legal officer and secretary on January 21, 2019. Prior to joining us, Mr. Fry served as vice president — legal for Team Inc., a specialty industrial service, engineering and manufacturing company from 2016. Mr. Fry was general counsel, secretary, vice president & chief compliance officer of Furmanite Corporation, a provider of specialized technical services and product solutions, from 2012 to 2016, prior to its merger with Team Inc. Prior to joining Furmanite Corporation, Mr. Fry worked for American Tank & Vessel, Inc., a specialty engineering and construction company, in various roles from 2006 to 2012, ultimately serving as their general counsel.
Jeffrey J. Waneka was appointed senior vice president and chief operating officer C&I on January 1, 2017. Prior to his current role, he served as president of our subsidiary company, Sturgeon Electric Company, Inc., from February 2015 to December 2016. Mr. Waneka served as group vice president, C&I from 2014 to 2015 and vice president, C&I from 2009 to 2014. Mr. Waneka has held a number of additional positions since joining the Company in 1991, including regional manager, director business development and district manager.
Website Access to Company Reports
Our website address is www.myrgroup.com. Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act will be available free of charge through our website as soon as reasonably practicable after they are electronically filed with, or furnished to, the SEC. The information on our website is not a part of this Annual Report on Form 10-K or incorporated into any other filings we make with the SEC.
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Item 1A.
Risk Factors
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You should read the following risk factors carefully in connection with evaluating our business and the forward-looking information contained in this Annual Report on Form 10-K. We operate in a changing environment that involves numerous known and unknown risks and uncertainties that could affect our operations. The risks described below highlight some of the factors that have affected, and in the future could affect, our operations. Additional risks we do not yet know of, or that we currently think are immaterial, may also affect our business operations. If any of the events or circumstances described in the following risks actually occurs, our business, financial condition or results of operations could be affected and our stock price could decline.
Our operating results may vary significantly from period to period.
Our business can be highly cyclical and subject to seasonal and other variations that can result in significant differences in operating results from period to period. Additionally, our results may be materially and adversely affected by:
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the timing and volume of work under contract;
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increased competition and changes in the competitive marketplace for our services;
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the spending patterns of customers and governments;
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safety performance and reputation;
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increased costs of performance of our services caused by adverse weather conditions;
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cost overruns on fixed-price and unit-price contracts;
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the amount of subcontractor and material costs in our projects;
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decreased equipment utilization;
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permitting, regulatory or customer-caused delays on projects;
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disputes with customers relating to payment terms under our contracts and change orders, and our ability to successfully negotiate and obtain payment or reimbursement under our contracts and change orders;
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variations in the margins of projects performed during any particular reporting period;
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a change in the demand for our services;
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a change in the mix of our customers, contracts and business;
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payment risk associated with the financial condition of our customers;
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increases in design and construction costs that we are unable to pass through to our customers;
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the termination or expiration of existing agreements;
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regional and general economic conditions and the condition of the financial markets;
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losses experienced in our operations not otherwise covered by insurance;
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the timing and integration of acquisitions and the magnitude of the related acquisition and integration costs;
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costs we incur to support growth internally or otherwise;
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availability of qualified labor for specific projects;
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liabilities associated with participation in joint ventures related to third party failures;
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significant fluctuations in foreign currency exchange rates;
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changes in bonding requirements applicable to existing and new agreements;
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costs associated with our multi-employer pension plan obligations;
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the availability of equipment;
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​
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supply chain interruptions, including as a result of natural disasters, weather, labor disputes, pandemic outbreak of disease, fire or explosions and power outages;
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impairment of goodwill or intangible assets; and
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warranty claims.
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Accordingly, our operating results in any particular reporting period may not be indicative of the results that can be expected for any other reporting period.
Our industry is highly competitive. Increased competition can place downward pressure on contract prices and profit margins and may limit the number of projects that we are awarded.
Our industry is fragmented and we compete with other companies, ranging from small, independent firms servicing local markets to larger firms servicing regional, national and international markets. Relatively few barriers prevent entry into the C&I market and the distribution market. As a result, any organization that has adequate financial resources and access to technical expertise may become one of our competitors in those areas. Competition in the industry depends on a number of factors, including price of the construction services and the reputation for safety, quality and reliability of the contractor. Some of our competitors, including our competitors in the transmission market, may have lower labor and overhead cost structures and, therefore, may be able to provide their services at lower prices than ours. In addition, some of our competitors may have greater financial, technological and human resources than we do. We cannot be certain that our competitors will not develop the expertise, experience and resources to provide services that are superior in both price and quality to our services. Similarly, we cannot be certain that we will be able to maintain or enhance our competitive position within the markets we serve or maintain our customer base at current levels. In addition, we also may face competition from in-house service organizations of our existing or prospective customers. Electric utility companies often employ personnel to internally perform some of the same types of services we do. If we are unable to compete successfully in our markets, our operating results could be adversely affected.
We may be unsuccessful in generating internal growth, which could impact the projects available to the Company.
Our ability to generate internal growth will be affected by, among other factors, our ability to:
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attract new customers;
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increase the number of projects performed for existing customers;
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hire and retain qualified personnel;
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successfully bid new projects;
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expand geographically; and
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adapt the range of services we offer to customers to address their evolving construction needs.
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In addition, if our customers are constrained in their ability to obtain capital, it could reduce the number, timing or size of projects available to us. Many of the factors affecting our ability to generate internal growth may be beyond our control, and we cannot be certain that our strategies will be successful, or that we will be able to generate cash flow sufficient to fund our operations and to support internal growth. If we are unsuccessful, we may not be able to achieve internal growth, expand our operations or grow our business.
Negative economic and market conditions, as well as regulatory and environmental requirements, may adversely impact our customers’ future spending and, as a result, our operations and growth.
The demand for infrastructure construction and maintenance services from our customers has been, and will likely continue to be, cyclical in nature and vulnerable to downturns in the industries we serve as well as the economy in general. Stagnant or declining economic conditions have adversely impacted the demand for our services in the past and resulted in the delay, reduction or cancellation of certain projects and
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may adversely affect us in the future. Unfavorable economic conditions could also cause our customers to outsource less work. Additionally, many of our customers finance their projects through the incurrence of debt or the issuance of equity. A reduction in cash flow or the lack of availability of debt or equity financing may result in a reduction in our customers’ spending for our services and may also impact the ability of our customers to pay amounts owed to us, which could have a material adverse effect on our operations and our ability to grow at historical levels, or at all. A prolonged economic downturn or recession could adversely affect our customers and their ability or willingness to fund capital expenditures in the future or pay for past services. Material fluctuations in energy markets could have an adverse impact on our customers’ spending patterns. Consolidation, competition, capital constraints or negative economic conditions in the electric power industry may also result in reduced spending by, or the loss of, one or more of our customers.
Because the vast majority of our T&D revenue is derived from the electric utility industry, regulatory and environmental requirements affecting that industry could adversely affect our results of operations. Customers in the electric utility industry we serve face stringent regulatory and environmental requirements, as well as permitting processes, as they implement plans for their projects, which may result in delays, reductions and cancellations of some of their projects. These regulatory factors have resulted in decreased demand for our services in the past, and they may do so in the future, potentially impacting our operations and our ability to grow at historical levels, or at all.
In addition, recent changes to U.S. policies related to global trade and tariffs, as well as retaliatory trade measures implemented by other countries, have resulted in uncertainty surrounding the future of the global economy. Increases in the cost of imported raw materials or finished goods as a result of the tariffs or trade policies may impact customer spending, and reductions in customer spending could lead to fewer project awards and more competition We cannot predict the outcome of these changing trade policies or other unanticipated political conditions, nor can we predict the timing or strength of any economic recovery or downturn worldwide or its impact on our customers’ markets.
Project performance issues, including those caused by third parties, or certain contractual obligations may result in additional costs to us, reductions or delays in revenues or the payment of penalties, including liquidated damages.
Many projects involve challenging engineering, procurement and construction phases that may occur over several years. We may encounter difficulties that impact our ability to complete the project in accordance with the original delivery schedule. These difficulties may be the result of delays in designs, engineering information or materials provided by the customer or a third party, delays or difficulties in equipment and material delivery, schedule changes, delays from our customer’s failure to timely obtain permits or rights-of-way or meet other regulatory requirements, weather-related delays, delays caused by difficult worksite environments, delays caused by inefficiencies and not achieving expected labor performance, and other factors, some of which are beyond our control. In addition, for some projects, we contract with third-party subcontractors to assist us with the completion of contracts. Any delay or failure by suppliers or by subcontractors in the completion of their portion of the project may result in delays in the overall progress of the project or may cause us to incur additional costs, or both. We also may encounter project delays due to local opposition, which may include injunctive actions as well as public protests, to the siting of electric transmission lines, renewable energy projects, or other facilities. We may not be able to recover the costs we incur that are caused by delays. Certain contracts have guarantee or bonus provisions regarding project completion by a scheduled acceptance date or achievement of certain acceptance and performance testing levels. Failure to meet any of our schedules or performance requirements could also result in additional costs or penalties, including liquidated damages, and such amounts could exceed expected project profit. In extreme cases, the above-mentioned factors could cause project cancellations, and we may not be able to replace such projects with similar projects or at all. Such delays or cancellations may impact our reputation or relationships with customers and adversely affect our ability to secure new contracts. Larger projects, in particular, present additional performance risks due to the more complex work involved.
Our customers may change or delay various elements of the project after its commencement. The design, engineering information, equipment or materials that are to be provided by the customer or other parties may be deficient or delivered later than required by the project schedule, resulting in additional direct or indirect costs. Under these circumstances, we generally negotiate with the customer with respect to the
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amount of additional time required and the compensation to be paid to us. We are subject to the risk that we may be unable to obtain, through negotiation, arbitration, litigation or otherwise, adequate amounts to compensate us for the additional work or expenses incurred by us due to customer-requested change orders or failure by the customer to timely deliver items, such as engineering drawings or materials. Litigation or arbitration of claims for compensation may be lengthy and costly, and it is often difficult to predict when and for how much the claims will be resolved. A failure to obtain adequate compensation for these matters could require us to record a reduction to amounts of revenue and gross profit recognized in prior periods under the percentage-of-completion accounting method. Any such adjustments could be substantial. We may also be required to invest significant working capital to fund cost overruns while the resolution of change orders or claims is pending, which could adversely affect our liquidity and financial results.
Our revenues may be exposed to potential risk if a project is terminated or canceled, if our customers encounter financial difficulties or if we encounter disputes with our customers.
Our contracts often require us to satisfy or achieve certain milestones to receive payment for the work performed, or in the case of cost-reimbursable contracts, provide support for billings in advance of receiving payment. As a result, we may incur significant costs or perform significant amounts of work prior to receipt of payment. If any of our customers do not proceed with the completion of projects or default on their payment obligations, or if we encounter disputes with our customers with respect to the adequacy of billing support, we may face difficulties in collecting payment of amounts due to us for the costs previously incurred. In addition, many of our customers for large projects are project-specific entities that do not have significant assets other than their interests in the project and may encounter financial difficulties relating to their businesses. It may be difficult to collect amounts owed to us by these customers. If we are unable to collect amounts owed to us, this would have an adverse effect on our financial condition, results of operations and cash flows.
We have in the past brought, and may in the future bring, claims against our customers related to, among other things, the payment terms of our contracts and change orders relating to our contracts. These types of claims occur due to, among other things, customer-caused delays or changes in project scope, both of which may result in additional cost, which may not be recovered until the claim is resolved. In some instances, these claims can be the subject of lengthy legal proceedings, and it is difficult to accurately predict when they will be fully resolved. A failure to promptly recover on these types of claims could have a negative impact on our financial condition, results of operations and cash flows. Additionally, any such claims may harm our future relationships with our customers.
Our business is labor intensive and we may be unable to attract and retain qualified personnel.
Our ability to maintain our productivity and our operating results may be limited by our ability to employ, train and retain skilled personnel necessary to meet our requirements. We may not be able to maintain an adequate skilled labor force necessary to operate efficiently and to support our growth strategy. We have from time to time experienced shortages of certain types of qualified personnel, such as linemen, field supervisors, project managers and engineers, in certain regions. In addition, our projects are sometimes located in remote areas, which can make recruitment and deployment of our personnel challenging. During periods with large volumes of storm restoration services work, linemen are frequently recruited across geographic regions to satisfy demand. Many linemen are willing to travel to earn premium wages for such work, which from time to time makes it difficult for us to retain these workers for ongoing projects when storm conditions persist. The supply of experienced linemen, field supervisors, project managers, engineers and other skilled workers may not be sufficient to meet current or expected demand. The commencement of new, large-scale infrastructure projects or increased demand for infrastructure improvements, as well as the shrinking electric utility workforce, may reduce the pool of skilled workers available to us. Labor shortages could impair our ability to maintain our business or grow our revenues. If we are unable to hire personnel with the requisite skills, we may also be forced to incur significant training expenses.
The timing of new contracts and termination of existing contracts may result in unpredictable fluctuations in our cash flows and financial results.
A substantial portion of our revenues are derived from project-based work that is awarded through a competitive bid process. It is generally very difficult to predict the timing and geographic distribution of the
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projects that we will be awarded. The selection of, timing of, or failure to obtain projects, delays in awards of projects, the re-bidding or termination of projects due to budget overruns, cancellations of projects or delays in completion of contracts could result in the under-utilization of our assets, including our fleet of construction equipment, which could lower our overall profitability and reduce our cash flows. Even if we are awarded contracts, we face additional risks that could affect whether, or when, work will begin. This can present difficulty in matching workforce size and equipment location with contract needs. In some cases, we may be required to bear the cost of a ready workforce and equipment that is larger than necessary, which could impact our cash flow, expenses and profitability. If an expected contract award or the related work release is delayed or not received, we could incur substantial costs without receipt of any corresponding revenues. Moreover, construction projects for which our services are contracted may require significant expenditures by us prior to receipt of relevant payments from the customer. Finally, the winding down or completion of work on significant projects that were active in previous periods will reduce our revenue and earnings if such significant projects have not been replaced in the current period.
Many of our contracts may be canceled upon short notice, typically 30 to 90 days, even if we are not in default under the contract, and we may be unsuccessful in replacing our contracts if they are canceled. We could experience a decrease in our revenue, net income and liquidity if contracts are canceled and if we are unable to replace canceled, completed or expired contracts. Certain of our customers assign work to us on a project-by-project basis under MSAs. Under these agreements, our customers often have no obligation to assign a specific amount of work to us. Our operations could decline significantly if the anticipated volume of work is not assigned to us or is canceled. Many of our contracts, including our MSAs, are open to competitive bid at the expiration of their terms. There can be no assurance that we will be the successful bidder on our existing contracts that come up for re-bid.
During the ordinary course of our business, we may become subject to lawsuits or indemnity claims, which could materially and adversely affect our business and results of operations.
We have in the past been, and may in the future be, named as a defendant in lawsuits, claims and other legal proceedings that arise in the ordinary course of our business. These actions may seek, among other things, compensation for alleged personal injury, workers’ compensation, employment discrimination, sexual harassment, workplace misconduct and other employment-related damages, breach of contract, property damage, environmental liabilities, multiemployer pension plan withdrawal liabilities, punitive damages, consequential damages, and civil penalties or other losses or injunctive or declaratory relief. In addition, we generally indemnify our customers for claims related to the services we provide and actions we take under our contracts, and, in some instances, we may be allocated risk through our contract terms for actions by our customers, subcontractors or other third parties. Because our services in certain instances may be integral to the operation and performance of our customers’ infrastructure, we have been and may become subject to lawsuits or claims for any failure of the systems that we work on, even if our services are not the cause of such failures, and we could be subject to civil and criminal liabilities to the extent that our services contributed to any property damage, personal injury or system failure. Insurance coverage may not be available or may be insufficient for these lawsuits, claims or legal proceedings. The outcome of any of these lawsuits, claims or legal proceedings could result in significant costs and diversion of management’s attention from our business. Payments of significant amounts, even if reserved, could materially and adversely affect our business, reputation, financial condition, results of operations and cash flows.
We may incur liabilities and suffer negative financial or reputational impacts relating to occupational health and safety matters.
Our operations are subject to extensive laws and regulations relating to the maintenance of safe conditions in the workplace. While we have invested, and will continue to invest, substantial resources in our occupational health and safety programs, our industry involves a high degree of operational risk, and there can be no assurance that we will avoid significant liability exposure. Our business is subject to numerous safety risks, including electrocutions, fires, explosions, mechanical failures, weather-related incidents, transportation accidents and damage to equipment. Furthermore, we perform a significant amount of services for customers that operate electrical power infrastructure assets in locations and climates that are more susceptible to wildfires or other natural disasters. These hazards can cause personal injury or loss of life, severe damage to or destruction of property and equipment and other consequential damages and could lead
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to suspension of operations, large monetary claims and, in extreme cases, criminal liability. Members of our workforce have suffered serious injuries or fatalities in the past and may suffer additional serious injuries or fatalities in the future. Monetary claims for damages to persons, including claims for bodily injury or loss of life, could result in substantial costs and liabilities. In addition, we have in the past, and we may in the future, be subject to criminal penalties relating to occupational health and safety violations, which have resulted in and could in the future result in substantial costs and liabilities. Any of the foregoing could result in financial loss, which could have a material adverse impact on our business, financial condition, results of operations and cash flows.
Our customers seek to minimize safety risks on their sites, and they frequently review the safety records of outside contractors during the bidding process. If our safety record were to substantially deteriorate, we could become ineligible to bid on certain work, and our customers could cancel our contracts and not award us future business.
Backlog may not be realized or may not result in profits and may not accurately represent future revenue.
Backlog is difficult to determine accurately, and companies within our industry may define backlog differently. Reductions in backlog due to cancellation, termination or scope adjustment by a customer or for other reasons could significantly reduce the revenue and profit we actually receive from contracts in backlog. In the event of a project cancellation, termination or scope adjustment, we typically have no contractual right to the total revenues reflected in our backlog. The timing of contract awards, duration of large new contracts and the mix of services, subcontracted work and material in our contracts can significantly affect backlog reporting. Given these factors and our method of calculating backlog, our backlog at any point in time may not accurately represent the revenue that we expect to realize during any period, and our backlog as of the end of a fiscal year may not be indicative of the revenue we expect to earn in the following fiscal year and should not be viewed or relied upon as a stand-alone indicator. Consequently, we cannot provide assurance as to our customers’ requirements or our estimates of backlog. See “Item 1. Business — Backlog” for a discussion on how we calculate backlog for our business.
Our business growth could outpace the capability of our internal resources and limit our ability to support growth.
Our internal resources, including our workforce, specialized equipment and financial resources, may not be adequate to support our operations as they expand, particularly if we are awarded a significant number of large projects in a short time period. A large project may require hiring additional qualified personnel, such as linemen, field supervisors, project managers, engineers and safety personnel, the supply of which may not be sufficient to meet our demands.
Often large transmission projects require specialized equipment. To the extent that we are unable to buy or build equipment necessary for a project, either due to a lack of available funding or equipment shortages in the marketplace, we may be forced to rent equipment on a short-term basis or to find alternative ways to perform the work without the benefit of equipment ideally suited for the job, which could increase the costs of completing the project. Furthermore, we may be unable to buy or rent the specialty equipment and tooling we require due to the limited number of manufacturers and distributors in the marketplace.
Larger projects may require substantial financial resources to meet the cash flow, bonding or letter of credit requirements imposed upon contractors by the customer. Future growth also could impose additional demands and responsibilities on members of our senior management.
Our dependence on suppliers, subcontractors and equipment manufacturers could expose us to the risk of loss in our operations.
On certain projects, we rely on suppliers to obtain the necessary materials and subcontractors to perform portions of our services. We also rely on equipment manufacturers to provide us with the equipment required to conduct our operations. Although we are not dependent on any single supplier, subcontractor or equipment manufacturer, any substantial limitation on the availability of required suppliers, subcontractors or equipment manufacturers could negatively impact our operations. The risk of a lack of available suppliers, subcontractors or equipment manufacturers may be heightened as a result of market and economic
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conditions. In addition, we may experience difficulties in acquiring equipment or materials due to supply chain interruptions, including as a result of natural disasters, weather, labor disputes, pandemic outbreak of disease, fire or explosions and power outages. To the extent we cannot engage subcontractors or acquire equipment or materials, we could experience losses in the performance of our operations. Additionally, successful completion of our contracts may depend on whether our subcontractors successfully fulfill their contractual obligations. If our subcontractors fail to perform their contractual obligations as a result of financial or other difficulties, or if our subcontractors fail to meet the expected completion dates or quality standards, we may be required to incur additional costs or provide additional services in order to make up such shortfall and we may suffer damage to our reputation.
Our participation in joint ventures and other projects with third parties may expose us to liability for failures of our partners.
We may enter into joint venture or other strategic arrangements with other parties as part of our business operations. Success on a jointly performed project depends in large part on whether all parties satisfy their contractual obligations. Joint venture partners are generally jointly and severally liable for all liabilities and obligations of the joint venture. If a joint venture partner fails to perform or is financially unable to bear its portion of required capital contributions or other obligations, including liabilities relating to claims or lawsuits, we could be required to make additional investments, provide additional services or pay more than our proportionate or agreed upon share of a liability to compensate for the partner’s shortfall. In addition, if we are unable to adequately address our partner’s performance issues, the customer may terminate the project, which could result in legal liability to us, reduce our profit on the project or damage our reputation.
Our inability to successfully execute or integrate acquisitions or joint ventures may have an adverse impact on our growth strategy and business.
From time to time, our business strategy may include expanding our presence in the industries we serve through strategic acquisitions of companies or entry into joint ventures that complement or diversify our business. The number of acquisition targets that meet our criteria may be limited. We may also face competition for acquisition opportunities, and other potential acquirers may offer more favorable terms or have greater financial resources available for potential acquisitions. This competition may further limit our acquisition opportunities and our ability to grow through acquisitions or could raise the prices of acquisitions and make them less accretive, or possibly not accretive, to us. Failure to consummate future acquisitions could negatively affect our future growth strategies. Additionally, the acquisitions we pursue may involve significant cash expenditures, the incurrence or assumption of debt or burdensome regulatory requirements, and any acquisition may ultimately have a negative impact on our business, financial condition, results of operations and cash flows.
We may not realize the anticipated benefits and synergies of an acquisition, and our attempts at integrating an acquired business may not be successful. Acquisitions or joint ventures may expose us to operational and financial challenges and risks, including the disruption of our ongoing business and significant diversion of resources and management’s attention from our existing business; reductions of cash and other resources available for operations and other uses, exposure to risks specific to the acquired businesses, services, or technologies to which we are not currently exposed; the failure to retain key personnel or customers of an acquired business; difficulties integrating new operations and personnel; failure of acquired companies to achieve the results we expect; the assumption of unknown liabilities of the acquired business for which there are inadequate reserves and the potential impairment of acquired intangible assets. Our ability to grow and maintain our competitive position may be affected by our ability to successfully integrate any businesses acquired.
Legislative or regulatory actions relating to electricity transmission and renewable energy may impact demand for our services.
Current and potential legislative or regulatory actions may impact demand for our services. Certain legislation or regulations require utilities to meet reliability standards and encourage installation of new
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electric transmission and renewable energy generation facilities. However, it is unclear whether these initiatives will create sufficient incentives for projects or result in increased demand for our services.
While many states have mandates in place that require specified percentages of electricity to be generated from renewable sources, states could reduce those mandates or make them optional, which could reduce, delay or eliminate renewable energy development in the affected states. Additionally, renewable energy is generally more expensive to produce and may require additional power generation sources as backup. The locations of renewable energy projects are often remote and may not be viable unless new or expanded transmission infrastructure to transport the electricity to demand centers is economically feasible. Furthermore, funding for renewable energy initiatives may not be available. These factors could result in fewer renewable energy projects and a delay in the construction of these projects and the related infrastructure, which could negatively impact our business.
Our use of percentage-of-completion accounting could result in a reduction or reversal of previously recognized profits.
As discussed in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results from Operations — Critical Accounting Policies” and in the notes to our Financial Statements, a significant portion of our revenues is recognized over the contract term based on costs incurred under the cost-to-cost method. This method is used because management believes costs incurred best represent the amount of work completed and remaining on our projects and is the most common basis for computing percentage of completion in our industry. The percentage-of-completion accounting practice we use results in our recognizing contract revenues and earnings ratably over the contract term in proportion to our incurrence of contract costs. The earnings or losses recognized on individual contracts are based on estimates of contract revenues, costs and profitability. Contract losses are recognized in full when determined, and contract profit estimates are adjusted based on ongoing reviews of contract profitability. In addition, we record adjustments to estimated costs of contracts when we believe the change in estimate is probable and the amounts can be reasonably estimated. These adjustments could result in both increases and decreases in profit margins. Actual results could differ from estimated amounts and could result in a reduction or elimination of previously recognized earnings.
Our insurance has limits and exclusions that may not fully indemnify us against certain claims or losses, and the unavailability or cancellation of third party insurance coverages would increase our overall risk exposure and could disrupt our operations.
We maintain insurance coverages from third party insurers as part of our overall risk management strategy because some of our contracts require us to maintain specific insurance coverage limits. Although we maintain insurance policies with respect to automobile liability, general liability, workers’ compensation, our employee group health program, and other types of coverages, these policies are subject to high deductibles, and we are self-insured up to the amount of those deductibles. Insurance losses are accrued based upon our estimates of the ultimate liability for claims reported and an estimate of claims incurred but not yet reported. Insurance liabilities are difficult to assess and estimate due to unknown factors, including the severity of an injury, the determination of our liability in proportion to other parties, the number of incidents not reported and the effectiveness of our safety programs, and as a result, our actual losses may exceed our estimates. Therefore, there can be no assurance that our current or past insurance coverages will be sufficient or effective under all circumstances or against all claims and liabilities to which we may be subject.
We generally renew our insurance policies on an annual basis; therefore, deductibles and levels of insurance coverages may change in future periods. There can be no assurance that any of our existing insurance coverages will be renewed upon the expiration of the coverage period or that future coverage will be affordable at the required limits. In addition, insurers may fail, cancel our coverage, determine to exclude certain items from coverage, or otherwise be unable to provide us with adequate insurance coverage. We may not be able to obtain certain types of insurance or incremental levels of insurance in scope or amount sufficient to cover liabilities we may incur. If our risk exposure increases as a result of adverse changes in our insurance coverages, we could be subject to increased liabilities that could negatively affect our results of operations and financial condition.
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In addition, we perform work in hazardous environments and our employees are exposed to a number of hazards. Incidents can occur, regardless of fault, that may be catastrophic and adversely impact our employees and third parties by causing serious personal injury, loss of life, damage to property or the environment, and interruption of operations. Furthermore, we perform a significant amount of services for customers that operate electrical power infrastructure assets in locations and climates that are more susceptible to wildfires or other natural disasters. In locations or environments where claims have been higher than normal, insurance may become difficult or impossible to obtain. Our contracts may require us to indemnify our customers, project owners and others for injury, damage or loss arising out of our presence at our customers’ location, regardless of fault, or the performance of our work and provide for warranties for materials and workmanship. We may also be required to name the customer and others as an additional insured under our insurance policies. We maintain limited insurance coverage against these and other risks associated with our business. This insurance may not protect us against liability for certain events, including events involving pollution, professional liability, losses resulting from business interruption or acts of terrorism or damages from breach of contract by us. We cannot guarantee that our insurance will be adequate in risk coverage or policy limits to cover all losses or liabilities that we may incur. Any future damages caused by our services that are not covered by insurance or are in excess of policy limits could have a material adverse effect on our results of operations, financial position or cash flows.
Our actual costs may be greater than expected in performing our fixed-price and unit-price contracts.
We currently generate, and expect to continue to generate, a significant portion of our revenues and profits under fixed-price and unit-price contracts. We must estimate the costs of completing a particular project when we bid for these types of contracts. The actual cost of labor and materials, however, may vary from the costs we originally estimated and we may not be successful in recouping additional costs from our customers. These variations, along with other risks inherent in performing fixed-price and unit-price contracts, may cause actual revenue and gross profits for a project to differ from those we originally estimated and could result in reduced profitability or losses on projects due to changes in a variety of factors such as:
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failure to properly estimate costs of engineering, material, equipment or labor;
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inefficient labor performance;
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unanticipated technical problems with the materials or services being supplied by us, which may require us to incur additional costs to remedy the problem;
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project modifications that create unanticipated costs;
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changes in the costs of equipment, materials, labor or subcontractors;
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the failure of our suppliers or subcontractors to perform;
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difficulties in our customers obtaining required governmental permits or approvals;
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site conditions that differ from those assumed in the original bid;
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the availability and skill level of workers in the geographic location of the project;
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an increase in the cost of fuel or other resources;
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changes in local laws and regulations;
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delays caused by local weather conditions, third parties or customers; and
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quality issues requiring rework.
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Our financial results are based upon estimates and assumptions that may differ from actual results.
In preparing our financial statements in conformity with generally accepted accounting principles in the United States (“GAAP”), estimates and assumptions are used by management in determining the reported amounts of assets and liabilities, revenues and expenses recognized during the periods presented and disclosures of contingent assets and liabilities known to exist as of the date of the financial statements. These estimates and assumptions must be made because certain information that is used in the preparation of our financial statements is dependent on future events, cannot be calculated with a high degree of precision
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from data available or is not capable of being readily calculated. In some cases, these estimates are particularly difficult to determine, and we must exercise significant judgment.
The most significant estimates we use are related to costs to complete contracts, pending change orders and claims, shared savings, insurance reserves, income tax reserves, estimates surrounding stock-based compensation, the recoverability of goodwill and intangibles, and accounts receivable reserves. We also may use estimates in our assessment of the useful lives of property and equipment, the valuation allowance on deferred taxes and income tax estimates. From time to time, we may publicly provide earnings or other forms of guidance, which reflect our predictions about future revenue, operating costs and capital structure, among other factors. These predictions may be impacted by estimates, as well as other factors that are beyond our control and may not turn out to be correct. Actual results for all estimates could differ materially from the estimates and assumptions that we use.
The loss of a major customer may have an adverse effect on us.
Our customer base is highly concentrated, with our top ten customers accounting for 30.8% of our revenue in 2019. Much of our success depends on developing and maintaining relationships with our major customers. Our revenue could significantly decline if we lose one or more of our significant customers. In addition, revenues generated from contracts with significant customers may vary from period-to-period depending on the timing and volume of work ordered by such customers in a given period and as a result of competition from the in-house service organizations of our customers.
We extend trade credit to customers for purchases of our services, and may have difficulty collecting receivables from them.
We grant trade credit, generally without collateral, to our customers for the purchase of our services. We have in the past, and may in the future, have difficulty collecting receivables from customers, particularly those experiencing financial difficulties. Our customers in the T&D segment include investor-owned utilities, cooperatives, private developers, government-funded utilities, independent power producers, independent transmission companies, industrial facility owners and other contractors. Our customers in the C&I segment include general contractors, commercial and industrial facility owners, governmental agencies and developers located in our regional markets. Our customers also include special purpose entities that own T&D projects which do not have the financial resources of traditional transmission utility operators. Consequently, we are subject to potential credit risk related to changes in business and economic factors. Due to our work on large construction projects, a few customers sometimes may comprise a large portion of our receivable balance at any point in time. If any of our major customers experience financial difficulties, we could experience reduced cash flows and losses in excess of current allowances provided. In addition, material changes in any of our customers’ revenues or cash flows could affect our ability to collect amounts due from them. Slowing economic conditions in the industries we serve, economic downturns or bankruptcies could also impair the financial condition of one or more of our customers and hinder their ability to pay us on a timely basis. Further, to the extent a customer files for bankruptcy protection, certain payments made to us prior to the filing of the bankruptcy petition may be voided and required to be returned to the customer’s bankruptcy estate.
Our failure to comply with environmental and other laws and regulations could result in significant liabilities.
Our past, current and future operations are subject to numerous environmental and other laws and regulations governing our operations, including the use, transport and disposal of non-hazardous and hazardous substances and wastes, as well as emissions and discharges into the environment, including discharges to air, surface water, groundwater and soil. We also are subject to laws and regulations that impose liability and cleanup responsibility for releases of hazardous substances into the environment. Under certain of these laws and regulations, such liabilities can be imposed for cleanup of previously owned or operated properties, or properties to which hazardous substances or wastes were discharged by current or former operations at our facilities, regardless of whether we directly caused the contamination or violated any law at the time of discharge or disposal. The presence of contamination from such substances or wastes could interfere with ongoing operations or adversely affect our ability to sell, lease or otherwise use our properties in ways such as collateral for possible financing. We could also be held liable for significant
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penalties and damages under certain environmental laws and regulations, which could materially and adversely affect our business and results of operations.
In addition, new laws and regulations, stricter enforcement of existing laws and regulations, the discovery of previously unknown contamination or leaks, or the imposition of new permitting or cleanup requirements could require us to incur significant costs or become the basis for new or increased liabilities that could harm our financial condition and results of operations. In certain instances, we have obtained indemnification or covenants from third parties (including our predecessor owners or lessors) for some or all of such cleanup and other obligations and liabilities. However, such third-party indemnities or covenants may not cover all of our costs.
Legislative and regulatory proposals to address greenhouse gas emissions could result in a variety of regulatory programs, additional charges to fund energy efficiency activities, or other regulatory actions. Any of these actions could result in increased costs associated with our operations and impact the prices we charge our customers. If new regulations are adopted regulating greenhouse gas emissions from mobile sources such as cars and trucks, we could experience a significant increase in environmental compliance costs in light of our large fleet. In addition, if our operations are perceived to result in high greenhouse gas emissions, our reputation could suffer.
In addition, we are subject to laws and regulations protecting endangered species. Laws also protect Native American artifacts and archaeological sites and a part of our business is operated in the southwestern United States, where there is a greater chance of discovering those sites. We may incur work stoppages to avoid violating these laws and regulations, or we may risk fines or other sanctions for accidentally or willfully violating these laws and regulations.
We may not be able to compete for, or work on, certain projects if we are not able to obtain necessary bonds, letters of credit, bank guarantees or other financial assurances.
Many of our contracts require that we provide security to our customers for the performance of their projects in the form of bonds, letters of credit, bank guarantees or other financial assurances. Current or future market conditions, including losses incurred in the construction industry or as a result of large corporate bankruptcies, as well as changes in our sureties’ assessment of our operating and financial risk, could cause our surety providers and lenders to decline to issue or renew, or substantially reduce the amount of, bid or performance bonds for our work and could increase our costs associated with collateral. These actions could be taken on short notice. If our surety providers or lenders were to limit or eliminate our access to bonding, letters of credit or guarantees, our alternatives would include seeking capacity from other sureties and lenders, finding more business that does not require bonds or allows for other forms of collateral for project performance, such as cash. We may be unable to secure these alternatives in a timely manner, on acceptable terms, or at all, which could affect our ability to bid for or work on future projects requiring financial assurances.
We have also granted security interests in various assets to collateralize our obligations to our sureties and lenders. Furthermore, under standard terms in the surety market, sureties issue or continue bonds on a project-by-project basis and can decline to issue bonds at any time or require the posting of additional collateral as a condition to issuing or renewing any bonds. If we were to experience an interruption or reduction in the availability of bonding capacity as a result of these or any other reasons, we may be unable to compete for or work on certain projects that would require bonding.
Inability to hire or retain key personnel could disrupt our business.
The success of our business depends upon the continued efforts and abilities of our executive officers and senior management, including the management at our operating subsidiaries. The relationships between our executive officers and senior management and our customers are important to obtaining and retaining business. We are also dependent upon our project managers and field supervisors who are responsible for managing and recruiting personnel for our projects. There can be no assurance that any individual will continue in his or her capacity for any particular period of time. Industry-wide competition for managerial talent is high. Given that level of competition, there could be situations where our overall compensation package may be viewed as less attractive as compared to our competition, and we may experience the loss
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of key personnel. The loss of key personnel, or the inability to hire and retain qualified personnel, could negatively impact our ability to manage our business and relationships with our customers.
Our business may be affected by seasonal and other variations, including severe weather conditions and the nature of our work environment.
Although our revenues are primarily driven by spending patterns in our customers’ industries, our revenues and results of operations can be subject to seasonal variations, particularly in our T&D segment. These variations are influenced by weather, hours of daylight, customer spending patterns, available system outages from utilities and holidays, and can have a significant impact on our gross margins. Our profitability may decrease during the winter months and during severe weather conditions because work performed during these periods may be restricted and more costly to complete. Additionally, our T&D customers often cannot remove their T&D lines from service during the summer months when consumer demand for electricity is at its peak, delaying the demand for our maintenance and repair services. Furthermore, our work is performed under a variety of conditions, including but not limited to, difficult terrain, difficult site conditions and large urban centers where delivery of materials and availability of labor may be impacted and sites which may have been exposed to harsh and hazardous conditions. Working capital needs are also influenced by the seasonality of our business. We generally experience a need for additional working capital during the spring when we increase outdoor construction in weather-affected regions of the country, and we convert working capital assets to cash during the winter months.
Work stoppages or other labor issues with our unionized workforce could adversely affect our business, and we may be subject to unionization attempts.
As of December 31, 2019, approximately 90% of our craft labor employees were covered by collective bargaining agreements. Although the majority of these agreements prohibit strikes and work stoppages, we cannot be certain that strikes or work stoppages will not occur in the future. Strikes or work stoppages could adversely impact our relationships with our customers and could cause us to lose business, resulting in decreased revenues. From time to time, we have experienced attempts to unionize our nonunion businesses. Such efforts often delay work and present the risk of labor unrest. If nonunion employees were to unionize, we could experience higher ongoing labor costs.
Failure to obtain permitting, right-of-way access and other tactical considerations prior to the commencement of work could delay the commencement of work on projects or cause modifications of work plans, potentially resulting in lower margins.
We generally plan for certain up-front time and other costs to obtain required permitting and right-of-way access and for other tactical challenges prior to the commencement of work on our projects. Delays in obtaining, or the inability to obtain, permits or right-of-way access, could negatively impact our margins due to additional cost and unabsorbed overhead resulting from under-utilized personnel and equipment. Additionally, we may encounter unexpected tactical issues on the site which could lead to unanticipated costs and delays, which we may not be able to recover from our customers.
Multi-employer pension plan obligations related to our unionized workforce could adversely impact our earnings.
Our collective bargaining agreements may require us to participate with other companies in various multi-employer pension plans. To the extent that we participate in any multi-employer pension plans that are underfunded, the Employee Retirement Income Security Act of 1974, as amended by the Multi-Employer Pension Plan Amendments Act of 1980, may subject us to substantial liabilities under those plans if we were to withdraw from them, if they were terminated or experience a mass withdrawal. Furthermore, the Pension Protection Act of 2006, as amended by the Consolidated and Further Continuing Appropriations Act of 2015 (the “PPA”) imposes additional funding and operational rules applicable to plan years beginning after 2007 for multi-employer pension plans that are classified as either “endangered,” “seriously endangered” or “critical” status. Plans in these classifications must adopt measures to improve their funded status, which may require additional employer contributions and/or modifications to employee benefits based on future union wages paid.
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Although we are not currently aware of any potential significant liabilities to us as a result of these plans being classified as being in a “critical” or “endangered” status, our future financial results could be impacted by the amended funding rules.
Our results of operations could be adversely affected as a result of asset impairments.
Our results of operations and financial condition could be adversely affected by impairments to goodwill, other intangible assets, receivables, long-lived assets or investments. For example, when we acquire a business, we record goodwill in an amount equal to the amount we paid for the business minus the fair value of the net tangible assets and other intangible assets of the acquired business. Goodwill and other intangible assets that have indefinite useful lives cannot be amortized, but instead must be tested at least annually for impairment. For additional description on this impairment testing, please read Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Policies — “Goodwill and Intangibles”. Any future impairments, including impairments of goodwill, intangible assets, long-lived assets or investments, could have a material adverse effect on our financial condition and results of operations.
We may not have access in the future to sufficient funding to finance desired growth and operations.
If we cannot secure funds in the future, including financing on acceptable terms, we may be unable to support our growth strategy or future operations. Our credit facility contains numerous covenants and requires us to meet and maintain certain financial ratios and other tests. General business and economic conditions may affect our ability to comply with these covenants or meet those financial ratios and other tests, which may limit our ability to borrow under the facility.
Restrictions in the availability of bank credit could cause us to forgo otherwise attractive business opportunities and could require us to modify our business plan. We cannot assure we will be able to obtain necessary or desirable financing either on favorable terms or at all.
We rely on information, communications and data systems in our operations and we or our business partners may be subject to failures, interruptions or breaches of such systems, which could affect our operations or our competitive position, expose sensitive information or damage our reputation.
We and our business partners are heavily reliant on information and communications technology and related systems to conduct our business. We also rely on third-party software and information technology to run certain of our critical accounting, project management and financial information systems. Furthermore, in connection with our business we may collect and retain personally identifiable and other sensitive information of our customers and personnel, all of which expect that we will adequately protect such information. The failure of these systems to operate effectively or problems with transitioning to upgraded or replacement systems could cause delays and reduce the efficiency of our operations, which could have a material adverse effect on our results of operations, and significant costs could be incurred to remediate any problem.
Increased IT security threats and more sophisticated computer crimes, including advanced persistent threats, computer viruses, ransomware, other types of malicious code, hacking, phishing and social engineering schemes designed to provide access to our networks or data, pose a potential risk to the security of our IT systems, networks and services, as well as the confidentiality, availability and integrity of our data. If the IT systems, networks or service providers we rely upon fail to function properly, or if we suffer a loss or disclosure of sensitive information, we may suffer interruptions in our ability to manage operations, be subject to government enforcement actions, litigation, and reputational, competitive and business harm which may adversely impact our results of operations, financial condition, competitive position and reputation.
As techniques used to obtain unauthorized access or sabotage systems change frequently and generally are not recognized until launched against a target, we may be unable to anticipate these techniques or implement adequate preventative measures. As cyber threats continue to evolve, we may be required to expend additional resources to comply with new cyber-related regulations, continue to enhance our information security measures or investigate and remediate any information security vulnerabilities. Our remediation efforts may not be successful and could result in interruptions, delays or cessation of service. This could also impact the cost and availability of cyber insurance to us. Furthermore, our relationships with, and access
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provided to, third parties and their vendors may create difficulties in anticipating and implementing adequate preventative measures or mitigating harms after an attack or breach occurs.
If an actual or perceived breach of our security occurs, the public perception of the effectiveness of our security measures could be harmed and we could lose customers. Any of these disruptions or breaches of security would have a material adverse effect on our business, results of operations and financial condition.
In addition, current and future laws and regulations governing data privacy and the unauthorized disclosure of confidential information may pose complex compliance challenges and/or result in additional costs. A failure to comply with such laws and regulations could result in penalties or fines, legal liabilities and/or harm our reputation. The continuing and evolving threat of cyber-attacks has also resulted in increased regulatory focus on risk management and prevention. New cyber-related regulations or other requirements could cause us to incur significant costs, which could have an adverse effect on our results of operations and cash flows.
Our operations are subject to a number of operational risks which may result in unexpected costs or liabilities.
Unexpected costs or liabilities may arise from lawsuits or indemnity claims related to the services we perform or have performed in the past. We have in the past been, and may in the future be, named as a defendant in lawsuits, claims and other legal proceedings during the ordinary course of our business. These actions may seek, among other things, compensation for alleged personal injury, workers’ compensation, employment discrimination, breach of contract, property damage, environmental remediation, punitive damages, civil penalties or other losses, consequential damages or injunctive or declaratory relief. In addition, pursuant to our service arrangements, we generally indemnify our customers for claims related to the services we provide under those service arrangements. In some instances, our services are integral to the operation and performance of the electric distribution and transmission infrastructure. As a result, we may become subject to lawsuits or claims for any failure of the systems we work on, even if our services are not the cause for such failures. In addition, we may incur civil and criminal liabilities to the extent that our services contributed to any personal injury or property damage. The outcome of any of these lawsuits, claims or legal proceedings could result in significant costs and diversion of managements’ attention to the business.
Opportunities associated with government contracts could lead to increased governmental regulation applicable to us.
Most government contracts are awarded through a regulated competitive bidding process. If we were to be successful in being awarded government contracts, significant costs could be incurred by us before any revenues were realized from these contracts. Government agencies may review a contractor’s performance, cost structure and compliance with applicable laws, regulations and standards. If government agencies determine through these reviews that costs were improperly allocated to specific contracts, they will not reimburse the contractor for those costs or may require the contractor to refund previously reimbursed costs. If government agencies determine that we engaged in improper activity, we may be subject to civil and criminal penalties. Government contracts are also subject to renegotiation of profit and termination by the government prior to the expiration of the term.
Changes in our interpretation of tax laws could impact the determination of our income tax liabilities.
We have operations in the United States and Canada and are subject to the jurisdiction of multiple federal and state taxing authorities. The income earned in these various jurisdictions is taxed on different bases which are subject to change by the taxing authorities. The final determination of our income tax liabilities involves the interpretation of local tax laws, tax treaties and related authorities in each jurisdiction, as well as the significant use of estimates and assumptions regarding the scope of future operations and results achieved and the timing and nature of income earned and expenditures incurred. Changes in the operating environment, including changes in or interpretation of tax laws, could materially impact the determination of our income tax liabilities for the year.
The nature of our business exposes us to potential liability for warranty claims and faulty engineering, which may reduce our profitability.
Under our contracts with customers, we typically provide a warranty for the services we provide, guaranteeing the work performed against defects in workmanship and material. Additionally, materials used
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in construction are often provided by the customer or are warranted against defects from the supplier. However, certain projects may have longer warranty periods and include facility performance warranties that may be broader than the warranties we generally provide. In these circumstances, if warranty claims occurred, it could require us to re-perform the services or to repair or replace the warranted item, at a cost to us, and could also result in other damages if we are not able to adequately satisfy our warranty obligations. In addition, we may be required under contractual arrangements with our customers to warrant any defects or failures in materials we provide that we purchase from third parties. While we generally require suppliers to provide us warranties that are consistent with those we provide to the customers, if any of these suppliers default on their warranty obligations to us, we may incur costs to repair or replace the defective materials for which we are not reimbursed. Costs incurred as a result of warranty claims could adversely affect our operating results, financial condition and cash flows.
Our business involves professional judgments regarding the planning, design, development, construction, operations and management of electric power transmission and commercial construction. Because our projects are often technically complex, our failure to make judgments and recommendations in accordance with applicable professional standards, including engineering standards, could result in damages. A significantly adverse or catastrophic event at one of our project sites or completed projects resulting from the services we have performed could result in significant warranty, professional liability, or other claims against us as well as reputational harm, especially if public safety is impacted. These liabilities could exceed our insurance limits or could impact our ability to obtain insurance in the future. In addition, customers, subcontractors or suppliers who have agreed to indemnify us against any such liabilities or losses might refuse or be unable to pay us. An uninsured or underinsured claim could have an adverse impact on our business, financial condition, results of operations and cash flows.
Our stock may experience significant price and volume fluctuations and future issuances of our common stock could lead to dilution of our issued and outstanding common stock.
From time to time, the price and trading volume of our common stock may experience periods of significant volatility in response to various factors and events beyond our control. Company-specific issues and developments generally in our industry (including the regulatory environment), in the capital markets and in the economy may cause this volatility. We may issue equity securities in the future, including securities that are convertible into or exchangeable for, or that represent the right to receive, shares of our common stock. The issuance of additional shares of our common stock or other equity securities, including sales of shares in connection with any future acquisitions, could be substantially dilutive to our stockholders. In addition numerous factors could have a significant effect on the price of our common stock, including but not limited to:
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announcements of fluctuations in our operating results or the operating results of one of our competitors;
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capital spending plans of our significant customers;
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announcements by us or one of our competitors of new or terminated customers or new, amended or terminated contracts;
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announcements of acquisitions by us or one of our competitors;
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changes in recommendations or earnings estimates by securities analysts;
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future repurchases of our common stock; and
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future sales of our common stock or other securities, including any shares issued in connection with business acquisitions or earn-out obligations for any future acquisitions.
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Risks associated with operating in the Canadian market could restrict our ability to expand and harm our business and prospects.
There are numerous inherent risks in conducting our business in a different country including, but not limited to, potential instability in markets, political, economic or social conditions, and difficult or additional
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legal and regulatory requirements applicable to our operations. Limits on our ability to repatriate earnings, exchange controls, and complex U.S. and Canadian laws and treaties could also adversely impact our operations. Changes in the value of the Canadian dollar could increase or decrease the U.S. dollar value of our profits earned or assets held in Canada or potentially limit our ability to reinvest earnings from our operations in Canada to fund the financing requirements of our operations in the United States. These risks could restrict our ability to provide services to Canadian customers or to operate our Canadian business profitably, and could negatively impact our results. We also are exposed to currency risks relating to the translation of certain monetary transactions, assets and liabilities.
Our failure to comply with the laws applicable to our Canadian activities, including the U.S. Foreign Corrupt Practices Act and similar anti-bribery laws, could have an adverse effect on us.
The U.S. Foreign Corrupt Practices Act (“FCPA”) and similar anti-bribery laws in other jurisdictions prohibit U.S.-based companies and their intermediaries from making improper payments to foreign officials for the purpose of obtaining or retaining business. Our policies mandate compliance with all applicable anti-bribery laws. Although we have policies and procedures designed to ensure that we, our employees, our agents and others who work with us in foreign countries comply with the FCPA and other anti-bribery laws, there is no assurance that such policies or procedures will protect us against liability under the FCPA or other laws for actions taken by our agents, employees and intermediaries. If we are found to be liable for FCPA violations (either due to our own acts or inadvertence, or due to the acts or inadvertence of others), we could suffer from severe criminal or civil penalties or other sanctions, which could have a material adverse effect on our reputation, business, results of operations, financial condition or cash flows. In addition, detecting, investigating and resolving actual or alleged FCPA violations is expensive and could consume significant time and attention of our senior management.
If we fail to maintain effective internal controls, we may not be able to report our financial results accurately or timely or prevent or detect fraud, which could have a material adverse effect on our business or the market price of our common stock.
Effective internal controls are necessary for us to provide reasonable assurance with respect to our financial reports and to effectively prevent or detect fraud. If we cannot provide reasonable assurance with respect to our financial reports and effectively prevent or detect fraud, we may not be able to conclude on an ongoing basis that we have effective internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act of 2002 and our operating results could be harmed. Internal control over financial reporting may not prevent or detect misstatements because of its inherent limitations, including the possibility of human error, the circumvention or overriding of controls, or fraud. In addition, we cannot guarantee that our internal controls will always protect against reckless or criminal acts committed by our personnel, agents or business partners that might violate U.S. or non-U.S. laws, including the laws governing payments to government officials, bribery, fraud, kickbacks and false claims, pricing, sales and marketing practices, conflicts of interest, competition, export and import compliance, money laundering and data privacy. Therefore, even effective internal controls cannot provide absolute assurance with respect to the preparation and fair presentation of financial statements.
While we continue to evaluate our internal controls, we cannot be certain that these measures will ensure that we implement and maintain adequate controls over our financial processes and reporting in the future. Projections of any evaluation of effectiveness of internal control over financial reporting to future periods are subject to the risk that the control may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. If we fail to maintain the adequacy of our internal controls, including any failure to implement required new or improved controls, or if we or our independent registered public accounting firm were to discover material weaknesses in our internal controls, our business and operating results could be harmed and we could fail to meet our reporting obligations, which could reduce the market’s confidence in our financial statements, harm our stock price, and have a material adverse effect on our business.
An increase in the prices of certain materials and commodities used in our business could adversely affect our business.
For certain contracts, we are exposed to market risk of increases in certain commodity prices of materials, such as copper and steel, which are used as components of supplies or materials utilized in all of
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our operations. In addition, our customers’ capital budgets may be impacted by the prices of certain materials, and reduced customer spending could lead to fewer project awards and more competition. These prices could be materially impacted by general market conditions and other factors, including U.S. trade relationships with other countries or the imposition of tariffs. We are also exposed to increases in energy prices, particularly as they relate to gasoline prices for our fleet vehicles. While we believe we can increase our prices to adjust for some price increases in commodities, there can be no assurance that price increases of commodities, if they were to occur, would be recoverable. Additionally, some of our fixed price contracts do not allow us to adjust our prices and, as a result, increases in material or fuel costs could reduce our profitability with respect to such projects.
Our variable rate indebtedness subjects us to interest rate risk, which could cause our debt service obligations to increase significantly.
Borrowings under our credit facility are at variable rates of interest and expose us to interest rate risk. If interest rates increase, our debt service obligations on our variable rate indebtedness will increase even if the amount borrowed remains the same, and our net income and cash flows, including cash available for servicing our indebtedness, will correspondingly decrease.
In addition, borrowing under our revolving credit facility may use London Interbank Offering Rate (“LIBOR”) as a benchmark for establishing the interest rate. LIBOR has been the subject of recent national, international and other regulatory guidance and proposals for reform, and the financial industry is currently transitioning away from LIBOR as a benchmark for the interbank lending market. The consequences of these developments cannot be entirely predicted, but could include an increase in the cost of our variable rate indebtedness. Additionally, to address the future transition in the financial markets away from the LIBOR, our credit agreement includes provisions related to the replacement of LIBOR with an Alternative Rate (as defined in the credit agreement). Changing to an Alternative Rate may lead to additional volatility in interest rates and could cause our debt service obligations to increase significantly.
Certain provisions in our organizational documents and Delaware law could delay or prevent a change in control of our company.
The existence of certain provisions in our organizational documents and Delaware law could delay or prevent an unsolicited change in control of our company, even if a change of control might be beneficial to our stockholders. For example, provisions in our certificate of incorporation and by-laws that could delay or prevent a change in control of our company include: a staggered board of directors, the potential of our board of directors to authorize the issuance of preferred stock, the power of a majority of our board of directors to fix the number of directors, the power of our board of directors to fill a vacancy on the board of directors, including when such vacancy occurs as a result of an increase in the number of directors, the requirement that actions to be taken by our stockholders may be taken only at an annual or special meeting of our stockholders and not by written consent, and advance notice provisions for director nominations or business to be considered at a stockholder meeting. In addition, Delaware law imposes restrictions on mergers and other business combinations between us and an interested stockholder (defined as the holder of 15% or more of our outstanding common stock), and prohibits us from engaging in any of a broad range of business transactions with an interested stockholder, or an interested stockholder’s affiliates and associates, for a period of three years following the date such stockholder became an interested stockholder.
We are subject to risks associated with climate change.
Climate change may create physical and financial risk. Physical risks from climate change could, among other things, include an increase in extreme weather events (such as floods, wildfires or hurricanes), rising sea levels and limitations on water availability and quality. Such extreme weather conditions may limit the availability of resources, increasing the costs of our projects, or may cause projects to be delayed or cancelled.
Additionally, legislative and regulatory responses related to climate change and new interpretations of existing laws through climate change litigation may also negatively impact our operations. The cost of additional environmental regulatory requirements could impact the availability of goods and increase our costs. International treaties or accords could also have an impact on our business to the extent they lead to
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future governmental regulations. Compliance with any new laws or regulations regarding the reduction of greenhouse gases could result in significant changes to our operations and a significant increase in our cost of conducting business.
Item 1B.
Unresolved Staff Comments
​
None.
Item 2.
Properties
​
Our principal executive offices are located at 1701 Golf Road, Suite 3-1012, Rolling Meadows, Illinois 60008, the lease term of which expires on April 30, 2023. In addition to our executive offices, our corporate accounting and finance departments, corporate information technology department and certain legal and other personnel are located at this office. As of December 31, 2019, we owned 16 operating facilities and leased many other properties in various locations throughout our service territory. Most of our properties are used as operational offices or for fleet operations. We believe that our facilities are adequate for our current operating needs. We do not believe that any owned or leased facility is material to our operations and, if necessary, we could obtain replacement facilities for our leased facilities.
Item 3.
Legal Proceedings
​
We are, from time-to-time, party to various lawsuits, claims and other legal proceedings that arise in the ordinary course of business. These actions typically seek, among other things, compensation for alleged personal injury, breach of contract and/or property damages, punitive damages, civil and criminal penalties or other losses, or injunctive or declaratory relief. With respect to all such lawsuits, claims and proceedings, we record reserves when it is probable that a liability has been incurred and the amount of loss can be reasonably estimated. We do not believe that any of these proceedings, separately or in the aggregate, would be expected to have a material adverse effect on our financial position, results of operations, or cash flows.
We are routinely subject to other civil claims, litigation and arbitration, and regulatory investigations arising in the ordinary course of our past and present businesses as well as in respect of our divested businesses. Some of these include claims related to our services and operations, we believe that we have strong defenses to these claims as well as insurance coverage that will contribute to any settlement or liability in the event claims are not resolved in our favor. These claims have not had a material impact on us to date, and we believe the likelihood that a future material adverse outcome will result from these claims is remote. However, if facts and circumstances change in the future, we cannot be certain that an adverse outcome of one or more of these claims would not have a material adverse effect on our financial condition, results of operations, or cash flows.
Item 4.
Mine Safety Disclosures
​
Not Applicable.
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PART II
Item 5.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
​
Our common stock, par value $0.01, is listed on The Nasdaq Global Market under the symbol “MYRG.”
Holders of Record
As of February 28, 2020, we had 8 holders of record of our common stock.
Dividend Policy
We have neither declared nor paid any cash dividend on our common stock since our common stock began trading publicly on August 12, 2008. Any future determination to declare cash dividends will be made at the discretion of our board of directors, subject to compliance with legal requirements and covenants under any existing financing agreements, which may restrict or limit our ability to declare or pay dividends, and will depend on our financial condition, results of operations, capital requirements, general business conditions, and other factors that our board of directors may deem relevant.
Issuances of Common Stock.
On October 24, 2019, a total of 732 unregistered shares of our common stock, valued in the aggregate at $23,958 were issued to directors of the Company who elected to receive a portion of their director retainer fee in stock in lieu of cash. The shares were issued pursuant to the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933 for an issuance not involving a public offering.
Purchases of Common Stock.
We did not purchase any shares of common stock in October, November or December of 2019.
Performance Graph
The following Performance Graph and related information shall be deemed “furnished” and not “filed” for purposes of Section 18 of the Exchange Act, and such information shall not be incorporated by reference into any future filing under the Securities Act or the Exchange Act except to the extent that we specifically incorporate it by reference into such filing.
The following graph compares, for the period from December 31, 2014 to December 31, 2019, the cumulative total stockholder return on our common stock with the cumulative total return on the Standard & Poor’s 500 Index (the “S&P 500 Index”), the Russell 2000 Index, and a peer group index selected by our management that includes twelve publicly traded companies within our industry (the “Peer Group”). The comparison assumes that $100 was invested on December 31, 2014 and further assumes any dividends were reinvested quarterly. The stock price performance reflected on the following graph is not necessarily indicative of future stock price performance.
The companies in the Peer Group were selected because they comprise a broad group of publicly traded companies, each of which has some operations similar to ours. When taken as a whole, the Peer Group more closely resembles our total business than any individual company in the group while reducing the impact of a significant change in any one of the Peer Group company’s stock price. The Peer Group is composed of the following companies:

​ | Aegion Corporation | ​ | ​ | EMCOR Group* | ​ | ​ | Matrix Service Company | ​
​ | Astec Industries, Inc. | ​ | ​ | Granite Construction Incorporated | ​ | ​ | Primoris Services Corporation* | ​
​ | Comfort Systems USA, Inc. | ​ | ​ | IES Holdings, Inc. | ​ | ​ | Quanta Services, Inc.* | ​
​ | Dycom Industries, Inc. | ​ | ​ | MasTec, Inc.* | ​ | ​ | Tetra Tech, Inc. | ​

​
*
Considered our core group of peers with a more significant portion of operations being similar to ours than the overall group. Graph presents entire Peer Group.
​
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​ | ​ | ​ | 12/31/2014 | ​ | ​ | 12/31/2015 | ​ | ​ | 12/31/2016 | ​ | ​ | 12/31/2017 | ​ | ​ | 12/31/2018 | ​ | ​ | 12/31/2019 | ​
MYR Group Inc. | ​ | ​ | ​ | ​ | 100.00 | ​ | ​ | ​ | ​ | ​ | 75.22 | ​ | ​ | ​ | ​ | ​ | 137.52 | ​ | ​ | ​ | ​ | ​ | 130.40 | ​ | ​ | ​ | ​ | ​ | 102.81 | ​ | ​ | ​ | ​ | ​ | 118.94 | ​ | ​
S&P 500 | ​ | ​ | ​ | ​ | 100.00 | ​ | ​ | ​ | ​ | ​ | 101.38 | ​ | ​ | ​ | ​ | ​ | 113.51 | ​ | ​ | ​ | ​ | ​ | 138.29 | ​ | ​ | ​ | ​ | ​ | 132.23 | ​ | ​ | ​ | ​ | ​ | 173.86 | ​ | ​
Russell 2000 | ​ | ​ | ​ | ​ | 100.00 | ​ | ​ | ​ | ​ | ​ | 95.59 | ​ | ​ | ​ | ​ | ​ | 115.95 | ​ | ​ | ​ | ​ | ​ | 132.94 | ​ | ​ | ​ | ​ | ​ | 118.30 | ​ | ​ | ​ | ​ | ​ | 148.49 | ​ | ​
Peer Group | ​ | ​ | ​ | ​ | 100.00 | ​ | ​ | ​ | ​ | ​ | 99.75 | ​ | ​ | ​ | ​ | ​ | 148.99 | ​ | ​ | ​ | ​ | ​ | 173.38 | ​ | ​ | ​ | ​ | ​ | 131.29 | ​ | ​ | ​ | ​ | ​ | 175.16 | ​ | ​

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​
Item 6.
Selected Financial Data
​
The following table sets forth certain summary financial information on a historical basis. The summary statement of operations and the balance sheet data set forth below have been derived from our audited Financial Statements and footnotes thereto included elsewhere in this filing or in prior filings. Our Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Historical results are not necessarily indicative of the results we expect in the future and quarterly results are not necessarily indicative of the results of any future quarter or any full-year period. The information below should be read in conjunction with “Item 7. Management’s Discussion and Analysis of Financial Condition and Results from Operations” and the Financial Statements and notes thereto included in this Annual Report on Form 10-K.
Statement of operations data:

​ | ​ | ​ | For the year ended December 31, | ​
(in thousands, except per share data) | ​ | ​ | 2019 | ​ | ​ | 2018 | ​ | ​ | 2017 | ​ | ​ | 2016 | ​ | ​ | 2015 | ​
Contract revenues | ​ | ​ | ​ | $ | 2,071,159 | ​ | ​ | ​ | ​ | $ | 1,531,169 | ​ | ​ | ​ | ​ | $ | 1,403,317 | ​ | ​ | ​ | ​ | $ | 1,142,487 | ​ | ​ | ​ | ​ | $ | 1,061,681 | ​ | ​
Contract costs | ​ | ​ | ​ | ​ | 1,857,001 | ​ | ​ | ​ | ​ | ​ | 1,364,109 | ​ | ​ | ​ | ​ | ​ | 1,278,313 | ​ | ​ | ​ | ​ | ​ | 1,007,764 | ​ | ​ | ​ | ​ | ​ | 939,340 | ​ | ​
Gross profit | ​ | ​ | ​ | ​ | 214,158 | ​ | ​ | ​ | ​ | ​ | 167,060 | ​ | ​ | ​ | ​ | ​ | 125,004 | ​ | ​ | ​ | ​ | ​ | 134,723 | ​ | ​ | ​ | ​ | ​ | 122,341 | ​ | ​
Selling, general and administrative expenses | ​ | ​ | ​ | ​ | 156,674 | ​ | ​ | ​ | ​ | ​ | 118,737 | ​ | ​ | ​ | ​ | ​ | 98,611 | ​ | ​ | ​ | ​ | ​ | 96,424 | ​ | ​ | ​ | ​ | ​ | 79,186 | ​ | ​
Amortization of intangible assets | ​ | ​ | ​ | ​ | 3,849 | ​ | ​ | ​ | ​ | ​ | 1,843 | ​ | ​ | ​ | ​ | ​ | 499 | ​ | ​ | ​ | ​ | ​ | 886 | ​ | ​ | ​ | ​ | ​ | 571 | ​ | ​
Gain on sale of property and equipment | ​ | ​ | ​ | ​ | (3,543) | ​ | ​ | ​ | ​ | ​ | (3,832) | ​ | ​ | ​ | ​ | ​ | (3,664) | ​ | ​ | ​ | ​ | ​ | (1,341) | ​ | ​ | ​ | ​ | ​ | (2,257) | ​ | ​
Income from operations | ​ | ​ | ​ | ​ | 57,178 | ​ | ​ | ​ | ​ | ​ | 50,312 | ​ | ​ | ​ | ​ | ​ | 29,558 | ​ | ​ | ​ | ​ | ​ | 38,754 | ​ | ​ | ​ | ​ | ​ | 44,841 | ​ | ​
Other income (expense): | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Interest income | ​ | ​ | ​ | ​ | 4 | ​ | ​ | ​ | ​ | ​ | 24 | ​ | ​ | ​ | ​ | ​ | 4 | ​ | ​ | ​ | ​ | ​ | 5 | ​ | ​ | ​ | ​ | ​ | 25 | ​ | ​
Interest expense | ​ | ​ | ​ | ​ | (6,225) | ​ | ​ | ​ | ​ | ​ | (3,652) | ​ | ​ | ​ | ​ | ​ | (2,603) | ​ | ​ | ​ | ​ | ​ | (1,299) | ​ | ​ | ​ | ​ | ​ | (741) | ​ | ​
Other income (expense), net | ​ | ​ | ​ | ​ | (515) | ​ | ​ | ​ | ​ | ​ | (3,616) | ​ | ​ | ​ | ​ | ​ | (2,319) | ​ | ​ | ​ | ​ | ​ | 885 | ​ | ​ | ​ | ​ | ​ | 174 | ​ | ​
Income before income tax expense | ​ | ​ | ​ | ​ | 50,442 | ​ | ​ | ​ | ​ | ​ | 43,068 | ​ | ​ | ​ | ​ | ​ | 24,640 | ​ | ​ | ​ | ​ | ​ | 38,345 | ​ | ​ | ​ | ​ | ​ | 44,299 | ​ | ​
Income tax expense(1) | ​ | ​ | ​ | ​ | 14,228 | ​ | ​ | ​ | ​ | ​ | 11,774 | ​ | ​ | ​ | ​ | ​ | 3,486 | ​ | ​ | ​ | ​ | ​ | 16,914 | ​ | ​ | ​ | ​ | ​ | 16,997 | ​ | ​
Net income | ​ | ​ | ​ | ​ | 36,214 | ​ | ​ | ​ | ​ | ​ | 31,294 | ​ | ​ | ​ | ​ | ​ | 21,154 | ​ | ​ | ​ | ​ | ​ | 21,431 | ​ | ​ | ​ | ​ | ​ | 27,302 | ​ | ​
Less: net income (loss) attributable to noncontrolling interest | ​ | ​ | ​ | ​ | (1,476) | ​ | ​ | ​ | ​ | ​ | 207 | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | — | ​ | ​
Net income attributable to MYR Group Inc. | ​ | ​ | ​ | $ | 37,690 | ​ | ​ | ​ | ​ | $ | 31,087 | ​ | ​ | ​ | ​ | $ | 21,154 | ​ | ​ | ​ | ​ | $ | 21,431 | ​ | ​ | ​ | ​ | $ | 27,302 | ​ | ​
Income per common share attributable to MYR Group Inc.: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
– Basic | ​ | ​ | ​ | $ | 2.27 | ​ | ​ | ​ | ​ | $ | 1.89 | ​ | ​ | ​ | ​ | $ | 1.30 | ​ | ​ | ​ | ​ | $ | 1.25 | ​ | ​ | ​ | ​ | $ | 1.33 | ​ | ​
– Diluted | ​ | ​ | ​ | $ | 2.26 | ​ | ​ | ​ | ​ | $ | 1.87 | ​ | ​ | ​ | ​ | $ | 1.28 | ​ | ​ | ​ | ​ | $ | 1.23 | ​ | ​ | ​ | ​ | $ | 1.30 | ​ | ​
Weighted average number of common shares and potential common shares outstanding: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
– Basic | ​ | ​ | ​ | ​ | 16,587 | ​ | ​ | ​ | ​ | ​ | 16,441 | ​ | ​ | ​ | ​ | ​ | 16,273 | ​ | ​ | ​ | ​ | ​ | 17,109 | ​ | ​ | ​ | ​ | ​ | 20,577 | ​ | ​
– Diluted | ​ | ​ | ​ | ​ | 16,699 | ​ | ​ | ​ | ​ | ​ | 16,585 | ​ | ​ | ​ | ​ | ​ | 16,496 | ​ | ​ | ​ | ​ | ​ | 17,461 | ​ | ​ | ​ | ​ | ​ | 21,038 | ​ | ​

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Balance sheet data:

​ | ​ | ​ | As of December 31, | ​
(in thousands) | ​ | ​ | 2019 | ​ | ​ | 2018 | ​ | ​ | 2017 | ​ | ​ | 2016 | ​ | ​ | 2015 | ​
Cash and cash equivalents | ​ | ​ | ​ | $ | 12,397 | ​ | ​ | ​ | ​ | $ | 7,507 | ​ | ​ | ​ | ​ | $ | 5,343 | ​ | ​ | ​ | ​ | $ | 23,846 | ​ | ​ | ​ | ​ | $ | 39,797 | ​ | ​
Working capital(2) | ​ | ​ | ​ | ​ | 242,370 | ​ | ​ | ​ | ​ | ​ | 191,829 | ​ | ​ | ​ | ​ | ​ | 191,172 | ​ | ​ | ​ | ​ | ​ | 146,677 | ​ | ​ | ​ | ​ | ​ | 123,630 | ​ | ​
Total assets | ​ | ​ | ​ | ​ | 1,007,871 | ​ | ​ | ​ | ​ | ​ | 748,755 | ​ | ​ | ​ | ​ | ​ | 603,788 | ​ | ​ | ​ | ​ | ​ | 573,495 | ​ | ​ | ​ | ​ | ​ | 524,925 | ​ | ​
Total debt | ​ | ​ | ​ | ​ | 165,824 | ​ | ​ | ​ | ​ | ​ | 89,792 | ​ | ​ | ​ | ​ | ​ | 78,960 | ​ | ​ | ​ | ​ | ​ | 59,070 | ​ | ​ | ​ | ​ | ​ | — | ​ | ​
Total liabilities | ​ | ​ | ​ | ​ | 643,396 | ​ | ​ | ​ | ​ | ​ | 424,291 | ​ | ​ | ​ | ​ | ​ | 316,749 | ​ | ​ | ​ | ​ | ​ | 310,321 | ​ | ​ | ​ | ​ | ​ | 195,045 | ​ | ​
Stockholders’ equity attributable to MYR Group Inc. | ​ | ​ | ​ | ​ | 364,471 | ​ | ​ | ​ | ​ | ​ | 322,984 | ​ | ​ | ​ | ​ | ​ | 287,039 | ​ | ​ | ​ | ​ | ​ | 263,174 | ​ | ​ | ​ | ​ | ​ | 329,880 | ​ | ​

Other Data: (Unaudited)

​ | ​ | ​ | For the year ended December 31, | ​
(in thousands) | ​ | ​ | 2019 | ​ | ​ | 2018 | ​ | ​ | 2017 | ​ | ​ | 2016 | ​ | ​ | 2015 | ​
Net cash flows provided by (used in) operating activities | ​ | ​ | ​ | $ | 64,899 | ​ | ​ | ​ | ​ | $ | 84,789 | ​ | ​ | ​ | ​ | $ | (9,198) | ​ | ​ | ​ | ​ | $ | 54,490 | ​ | ​ | ​ | ​ | $ | 43,000 | ​ | ​
Net cash flows used in investing activities | ​ | ​ | ​ | ​ | (133,497) | ​ | ​ | ​ | ​ | ​ | (93,203) | ​ | ​ | ​ | ​ | ​ | (26,501) | ​ | ​ | ​ | ​ | ​ | (34,128) | ​ | ​ | ​ | ​ | ​ | (56,928) | ​ | ​
Net cash flows provided by (used in) financing activities | ​ | ​ | ​ | ​ | 73,356 | ​ | ​ | ​ | ​ | ​ | 10,642 | ​ | ​ | ​ | ​ | ​ | 16,889 | ​ | ​ | ​ | ​ | ​ | (35,539) | ​ | ​ | ​ | ​ | ​ | (23,911) | ​ | ​
Depreciation and amortization(3) | ​ | ​ | ​ | ​ | 44,516 | ​ | ​ | ​ | ​ | ​ | 39,913 | ​ | ​ | ​ | ​ | ​ | 38,576 | ​ | ​ | ​ | ​ | ​ | 39,122 | ​ | ​ | ​ | ​ | ​ | 38,029 | ​ | ​
Capital expenditures | ​ | ​ | ​ | ​ | 57,828 | ​ | ​ | ​ | ​ | ​ | 50,704 | ​ | ​ | ​ | ​ | ​ | 30,843 | ​ | ​ | ​ | ​ | ​ | 25,371 | ​ | ​ | ​ | ​ | ​ | 46,599 | ​ | ​
Backlog(4) | ​ | ​ | ​ | ​ | 1,499,203 | ​ | ​ | ​ | ​ | ​ | 1,146,637 | ​ | ​ | ​ | ​ | ​ | 679,139 | ​ | ​ | ​ | ​ | ​ | 688,832 | ​ | ​ | ​ | ​ | ​ | 450,934 | ​ | ​
EBITDA(5) | ​ | ​ | ​ | ​ | 101,179 | ​ | ​ | ​ | ​ | ​ | 86,609 | ​ | ​ | ​ | ​ | ​ | 65,815 | ​ | ​ | ​ | ​ | ​ | 78,761 | ​ | ​ | ​ | ​ | ​ | 83,044 | ​ | ​

​
(1)
The Tax Cuts and Jobs Act of 2017 (“2017 Tax Act”), among its many provisions, reduced the federal statutory tax rate from 35% to 21%. The Company applied the new provisions to its tax assets and liabilities in 2017, which resulted in a net reduction of income tax expense. Income tax expense in the years after 2017 benefited from the lower federal statutory tax rate and other provisions of the 2017 Tax Act. See further discussion in Note 12 — Income Taxes to our Financial Statements.
​
(2)
Working capital is a non-GAAP measure. The Company defines working capital as total current assets less total current liabilities. Certain adjustments were made to working capital beginning in 2016 that are not reflected in the prior period. The following table provides the Company’s calculation of working capital:
​

​ | ​ | ​ | ​ | ​ | ​ | ​ | As of December 31, | ​
​ | ​ | ​ | ​ | (in thousands) | ​ | ​ | 2019 | ​ | ​ | 2018 | ​ | ​ | 2017 | ​ | ​ | 2016 | ​ | ​ | 2015 | ​
​ | ​ | ​ | ​ | Total current assets | ​ | ​ | ​ | $ | 639,184 | ​ | ​ | ​ | ​ | $ | 475,634 | ​ | ​ | ​ | ​ | $ | 379,736 | ​ | ​ | ​ | ​ | $ | 342,899 | ​ | ​ | ​ | ​ | $ | 303,367 | ​ | ​
​ | ​ | ​ | ​ | Less: total current liabilities | ​ | ​ | ​ | ​ | (396,814) | ​ | ​ | ​ | ​ | ​ | (283,805) | ​ | ​ | ​ | ​ | ​ | (188,564) | ​ | ​ | ​ | ​ | ​ | (196,222) | ​ | ​ | ​ | ​ | ​ | (179,737) | ​ | ​
​ | ​ | ​ | ​ | Working capital | ​ | ​ | ​ | $ | 242,370 | ​ | ​ | ​ | ​ | $ | 191,829 | ​ | ​ | ​ | ​ | $ | 191,172 | ​ | ​ | ​ | ​ | $ | 146,677 | ​ | ​ | ​ | ​ | $ | 123,630 | ​ | ​

(3)
Depreciation and amortization includes depreciation on capital assets, amortization of capital lease assets and amortization of finite-lived intangible assets.
​
(4)
Backlog represents our estimated revenue on uncompleted contracts, including the amount of revenue on contracts on which work has not begun, minus the revenue we have recognized under such contracts. See “Item 1. Business — Backlog” for a discussion on how we calculate backlog for our business and “Item 1A. Risk Factors — Backlog may not be realized or may not result in profits and may not accurately represent future revenue.”
​
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​
(5)
We define EBITDA, a performance measure used by management, as net income attributable to MYR Group Inc. plus net income from noncontrolling interests, interest expense net of interest income, income tax expense and depreciation and amortization, as shown in the following table. EBITDA, a non-GAAP financial measure, does not purport to be an alternative to net income attributable to MYR Group Inc. as a measure of operating performance or to net cash flows provided by operating activities as a measure of liquidity. We believe that EBITDA is useful to investors and other external users of our Consolidated Financial Statements in evaluating our operating performance and cash flow because EBITDA is widely used by investors to measure a company’s operating performance without regard to items such as interest expense, taxes, depreciation and amortization, which can vary substantially from company to company depending upon accounting methods, book value of assets, useful lives placed on assets, capital structure and the method by which assets were acquired. Because not all companies use identical calculations, this presentation of EBITDA may not be comparable to other similarly-titled measures of other companies. We use, and we believe investors benefit from, the presentation of EBITDA in evaluating our operating performance because it provides us and our investors with an additional tool to compare our operating performance on a consistent basis by removing the impact of certain items that management believes do not directly reflect our core operations. We believe that EBITDA is useful to investors and other external users of our Financial Statements in evaluating our operating performance and cash flow because EBITDA is widely used by investors to measure a company’s operating performance without regard to items such as interest expense, taxes, depreciation and amortization, which can vary substantially from company to company depending upon accounting methods and book value of assets, useful lives placed on assets, capital structure and the method by which assets were acquired.
​
Using EBITDA as a performance measure has material limitations as compared to net income, or other financial measures as defined under GAAP, as it excludes certain recurring items, which may be meaningful to investors. EBITDA excludes interest expense net of interest income; however, as we have borrowed money to finance transactions and operations, or invested available cash to generate interest income, interest expense and interest income are elements of our cost structure and can affect our ability to generate revenue and returns for our stockholders. Further, EBITDA excludes depreciation and amortization; however, as we use capital and intangible assets to generate revenues, depreciation and amortization are a necessary element of our costs and ability to generate revenue. Finally, EBITDA excludes income taxes; however, as we are organized as a corporation, the payment of taxes is a necessary element of our operations. As a result of these exclusions from EBITDA, any measure that excludes interest expense net of interest income, depreciation and amortization and income taxes has material limitations as compared to net income. When using EBITDA as a performance measure, management compensates for these limitations by comparing EBITDA to net income in each period, to allow for the comparison of the performance of the underlying core operations with the overall performance of the company on a full-cost, after-tax basis. Using both EBITDA and net income to evaluate the business allows management and investors to (a) assess our relative performance against our competitors and (b) monitor our capacity to generate returns for our stockholders.
The following table provides a reconciliation of net income attributable to MYR Group Inc. to EBITDA:

​ | ​ | ​ | ​ | ​ | ​ | ​ | For the year ended December 31, | ​
​ | ​ | ​ | ​ | (in thousands) | ​ | ​ | 2019 | ​ | ​ | 2018 | ​ | ​ | 2017 | ​ | ​ | 2016 | ​ | ​ | 2015 | ​
​ | ​ | ​ | ​ | Net income attributable to MYR Group Inc. | ​ | ​ | ​ | $ | 37,690 | ​ | ​ | ​ | ​ | $ | 31,087 | ​ | ​ | ​ | ​ | $ | 21,154 | ​ | ​ | ​ | ​ | $ | 21,431 | ​ | ​ | ​ | ​ | $ | 27,302 | ​ | ​
​ | ​ | ​ | ​ | Net income – noncontrolling interests | ​ | ​ | ​ | ​ | (1,476) | ​ | ​ | ​ | ​ | ​ | 207 | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | — | ​ | ​
​ | ​ | ​ | ​ | Net income | ​ | ​ | ​ | ​ | 36,214 | ​ | ​ | ​ | ​ | ​ | 31,294 | ​ | ​ | ​ | ​ | ​ | 21,154 | ​ | ​ | ​ | ​ | ​ | 21,431 | ​ | ​ | ​ | ​ | ​ | 27,302 | ​ | ​
​ | ​ | ​ | ​ | Interest expense, net | ​ | ​ | ​ | ​ | 6,221 | ​ | ​ | ​ | ​ | ​ | 3,628 | ​ | ​ | ​ | ​ | ​ | 2,599 | ​ | ​ | ​ | ​ | ​ | 1,294 | ​ | ​ | ​ | ​ | ​ | 716 | ​ | ​
​ | ​ | ​ | ​ | Income tax expense | ​ | ​ | ​ | ​ | 14,228 | ​ | ​ | ​ | ​ | ​ | 11,774 | ​ | ​ | ​ | ​ | ​ | 3,486 | ​ | ​ | ​ | ​ | ​ | 16,914 | ​ | ​ | ​ | ​ | ​ | 16,997 | ​ | ​
​ | ​ | ​ | ​ | Depreciation and amortization | ​ | ​ | ​ | ​ | 44,516 | ​ | ​ | ​ | ​ | ​ | 39,913 | ​ | ​ | ​ | ​ | ​ | 38,576 | ​ | ​ | ​ | ​ | ​ | 39,122 | ​ | ​ | ​ | ​ | ​ | 38,029 | ​ | ​
​ | ​ | ​ | ​ | EBITDA | ​ | ​ | ​ | $ | 101,179 | ​ | ​ | ​ | ​ | $ | 86,609 | ​ | ​ | ​ | ​ | $ | 65,815 | ​ | ​ | ​ | ​ | $ | 78,761 | ​ | ​ | ​ | ​ | $ | 83,044 | ​ | ​

We also use EBITDA as a liquidity measure. Certain material covenants contained within our credit agreement (the “Credit Agreement”) are based on EBITDA with certain additional adjustments as defined
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in the Credit Agreement. Non-compliance with these financial covenants under the Credit Agreement — our interest coverage ratio which is defined in the Credit Agreement as Consolidated EBITDA (as defined in the Credit Agreement) divided by interest expense (as defined in the Credit Agreement) and our leverage ratio, which is defined in the Credit Agreement as Consolidated Total Indebtedness (as defined in the Credit Agreement), divided by Consolidated EBITDA (as defined in the Credit Agreement) — could result in our lenders requiring us to immediately repay all amounts borrowed. If we anticipated a potential covenant violation, we would seek relief from our lenders, likely causing us to incur additional cost, and such relief might not be available, or if available, might not be on terms as favorable as those in the Credit Agreement. In addition, if we cannot satisfy these financial covenants, we would be prohibited under the Credit Agreement from engaging in certain activities, such as incurring additional indebtedness, making certain payments, and acquiring or disposing of assets. Based on the information above, management believes that the presentation of EBITDA as a liquidity measure is useful to investors and relevant to their assessment of our capacity to service or incur debt, fund capital expenditures, finance acquisitions and expand our operations.
The following table provides a reconciliation of net cash flows provided by operating activities to EBITDA:

​ | ​ | ​ | ​ | ​ | ​ | ​ | For the year ended December 31, | ​
​ | ​ | ​ | ​ | (in thousands) | ​ | ​ | 2019 | ​ | ​ | 2018 | ​ | ​ | 2017 | ​ | ​ | 2016 | ​ | ​ | 2015 | ​
​ | ​ | ​ | ​ | Net cash flows provided by (used in) operating | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | activities | ​ | ​ | ​ | $ | 64,899 | ​ | ​ | ​ | ​ | $ | 84,789 | ​ | ​ | ​ | ​ | $ | (9,198) | ​ | ​ | ​ | ​ | $ | 54,490 | ​ | ​ | ​ | ​ | $ | 43,000 | ​ | ​
​ | ​ | ​ | ​ | Add/(subtract) | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | Changes in operating assets and liabilities | ​ | ​ | ​ | ​ | 21,322 | ​ | ​ | ​ | ​ | ​ | (10,363) | ​ | ​ | ​ | ​ | ​ | 65,743 | ​ | ​ | ​ | ​ | ​ | 13,795 | ​ | ​ | ​ | ​ | ​ | 26,669 | ​ | ​
​ | ​ | ​ | ​ | Adjustments to reconcile net income to net cash flows provided by (used in) operating activities | ​ | ​ | ​ | ​ | (50,007) | ​ | ​ | ​ | ​ | ​ | (43,132) | ​ | ​ | ​ | ​ | ​ | (35,391) | ​ | ​ | ​ | ​ | ​ | (46,854) | ​ | ​ | ​ | ​ | ​ | (42,367) | ​ | ​
​ | ​ | ​ | ​ | Depreciation and amortization | ​ | ​ | ​ | ​ | 44,516 | ​ | ​ | ​ | ​ | ​ | 39,913 | ​ | ​ | ​ | ​ | ​ | 38,576 | ​ | ​ | ​ | ​ | ​ | 39,122 | ​ | ​ | ​ | ​ | ​ | 38,029 | ​ | ​
​ | ​ | ​ | ​ | Income tax expense | ​ | ​ | ​ | ​ | 14,228 | ​ | ​ | ​ | ​ | ​ | 11,774 | ​ | ​ | ​ | ​ | ​ | 3,486 | ​ | ​ | ​ | ​ | ​ | 16,914 | ​ | ​ | ​ | ​ | ​ | 16,997 | ​ | ​
​ | ​ | ​ | ​ | Interest expense, net | ​ | ​ | ​ | ​ | 6,221 | ​ | ​ | ​ | ​ | ​ | 3,628 | ​ | ​ | ​ | ​ | ​ | 2,599 | ​ | ​ | ​ | ​ | ​ | 1,294 | ​ | ​ | ​ | ​ | ​ | 716 | ​ | ​
​ | ​ | ​ | ​ | EBITDA | ​ | ​ | ​ | $ | 101,179 | ​ | ​ | ​ | ​ | $ | 86,609 | ​ | ​ | ​ | ​ | $ | 65,815 | ​ | ​ | ​ | ​ | $ | 78,761 | ​ | ​ | ​ | ​ | $ | 83,044 | ​ | ​

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​
Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
​
The following discussion should be read in conjunction with the other sections of this report, including the Financial Statements and related notes contained in Item 8 of this Annual Report on Form 10-K. In addition to historical information, this discussion contains forward-looking statements that involve risks, uncertainties and assumptions that could cause actual results to differ materially from management’s expectations. Factors that could cause such differences are discussed in “Forward-Looking Statements” and “Risk Factors.” We assume no obligation to update any of these forward-looking statements.
Presentation of Information
The discussion that follows includes a comparison of our results of operations and liquidity and capital resources for the fiscal years ended December 31, 2018 and 2019. For a discussion of changes from the fiscal year ended December 31, 2017 to the fiscal year ended December 31, 2018, refer to Management’s Discussion and Analysis of Financial Condition and Results of Operations in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2018 (filed March 6, 2019).
Overview-Introduction
We are a holding company of specialty electrical construction service providers that was established in 1995 through the merger of long-standing specialty contractors. Through our subsidiaries, we serve the electric utility infrastructure, commercial and industrial construction markets. We manage and report our operations through two electrical contracting service segments: Transmission and Distribution (“T&D”) and Commercial and Industrial (“C&I”).
We have operated in the transmission and distribution industry since 1891. We are one of the largest U.S. contractors servicing the T&D sector of the electric utility industry and provide T&D services throughout the United States and western Canada. Our T&D customers include many of the leading companies in the electric utility industry. We have provided electrical contracting services for commercial and industrial construction since 1912. Our C&I segment provides services in the United States and in western Canada. Our C&I customers include facility owners and general contractors.
We believe that we have a number of competitive advantages in both of our segments, including our skilled workforce, extensive centralized fleet, proven safety performance and reputation for timely completion of quality work that allows us to compete favorably in our markets. In addition, we believe that we are better capitalized than some of our competitors, which provides us with valuable flexibility to take on additional and more complex projects.
We had revenues for the year ended December 31, 2019 of  $2.071 billion compared to $1.531 billion for the year ended December 31, 2018. For the year ended December 31, 2019, net income attributable to MYR Group Inc. was $37.7 million compared to $31.1 million for the year ended December 31, 2018.
Overview-Segments
Transmission and Distribution segment. Our T&D segment provides comprehensive solutions to customers in the electric utility industry. Our T&D segment generally serves the electric utility industry as a prime contractor to customers such as investor-owned utilities, cooperatives, private developers, government-funded utilities, independent power producers, independent transmission companies, industrial facility owners and other contractors. We have long-standing relationships with many of our T&D customers who rely on us to construct and maintain reliable electric and other utility infrastructure. Our T&D segment provides a broad range of services on electric transmission and distribution networks and substation facilities, which include design, engineering, procurement, construction, upgrade, maintenance and repair services, with a particular focus on construction, maintenance and repair. Our T&D services include the construction and maintenance of high voltage transmission lines, substations, lower voltage underground and overhead distribution systems, renewable power facilities and limited gas construction services. We also provide many services to our customers under multi-year master service agreements (“MSAs”) and other variable-term service agreements.
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For the year ended December 31, 2019, our T&D revenues were $1.134 billion, or 54.8%, of our revenue, compared to $893.1 million, or 58.3%, of our revenue for the year ended December 31, 2018 and $879.4 million, or 62.7%, of our revenue for the year ended December 31, 2017. Revenues from transmission projects represented 68.1%, 62.6%, and 68.5% of T&D segment revenue for the years ended December 31, 2019, 2018 and 2017, respectively.
Our T&D segment also provides restoration services in response to hurricanes, ice storms or other storm related events, which typically account for less than 5% of our annual revenues in 2019, 2018 and 2017.
Measured by revenues in our T&D segment, we provided 49.7%, 40.5% and 31.4% of our T&D services under fixed-price contracts during the years ended December 31, 2019, 2018 and 2017, respectively. We also provide many services to our customers under multi-year maintenance service agreements and other variable service agreements.
Commercial and Industrial segment. Our C&I segment provides a wide range of services including design, installation, maintenance and repair of commercial and industrial wiring, the installation of traffic networks and the installation of bridge, roadway and tunnel lighting. In our C&I segment, we generally provide our electric construction and maintenance services as a subcontractor to general contractors in the C&I industry as well as directly to facility owners. We have a diverse customer base with many long-standing relationships. We concentrate our efforts on projects where our technical and project management expertise are critical to successful and timely execution. The majority of C&I contracts cover electrical contracting services for airports, hospitals, data centers, hotels, stadiums, convention centers, renewable energy projects, manufacturing plants, processing facilities, waste-water treatment facilities, mining facilities and transportation control and management systems.
For the year ended December 31, 2019, our C&I revenues were $936.7 million, or 45.2%, of our revenue, compared to $638.1 million, or 41.7%, of our revenue for the year ended December 31, 2018 and $523.9 million, or 37.3%, of our revenue for the year ended December 31, 2017.
Measured by revenues in our C&I segment, we provided 75.2%, 71.0% and 63.7% of our services under fixed-price contracts for the years ended December 31, 2019, 2018 and 2017, respectively.
Overview-Revenue and Gross Margins
Revenue Recognition. On January 1, 2018, we adopted accounting standards update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606) using the modified retrospective method for contracts that were not completed as of January 1, 2018. Results for reporting periods beginning after December 31, 2017 are presented under this new pronouncement, while prior period amounts were not adjusted and continue to be reported under the accounting standard Revenue Recognition Topic 605, which was in effect for those periods.
Under Topic 606, we recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration that we expect to be entitled to in exchange for goods or services provided. Revenue associated with contracts with customers is recognized over time as our performance creates or enhances customer controlled assets or creates or enhances an asset with no alternative use, for which we have an enforceable right to receive compensation as defined under the contract. To determine the amount of revenue to recognize over time, we utilized the cost-to-cost method as we believe cost incurred best represents the amount of work completed and remaining on our projects, and is the most common basis for computing percentage of completion in our industry. As the cost-to-cost method is driven by incurred cost, we calculate the percentage of completion by dividing costs incurred to date by the total estimated cost. The percentage of completion is then multiplied by estimated revenues to determine inception-to-date revenue. Revenue recognized for the period is the current inception-to-date recognized revenue less the prior period inception-to-date recognized revenue. If a contract is projected to result in a loss, the entire contract loss is recognized in the period when the loss was first determined and the amount of the loss is updated in subsequent reporting periods. Additionally, contract costs incurred to date and expected total contract costs are continuously monitored during the term of the contract. Changes in the job performance, job
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conditions and final contract settlements are factors that influence management’s assessment of total contract value and the total estimated costs to complete those contracts, and therefore, profit and revenue recognition.
Prior to 2018, under Topic 605, we recognized revenue on the percentage-of-completion method of accounting, which was commonly used in the construction industry. The percentage-of-completion accounting method resulted in recognizing contract revenues and earnings ratably over the contract term in proportion to our incurrence of contract costs. The profits or losses recognized on individual contracts were based on estimates of contract revenues, costs and profitability. Contract losses were recognized in full when determined, and contract profit estimates were adjusted based on ongoing reviews of contract profitability. Changes in job performance, labor costs, equipment costs, job conditions, weather, estimated profitability and final contract settlements sometimes resulted in revisions to costs and income and their effects were recognized in the period in which the revisions were determined. We recorded adjustments to estimated costs of contracts when we believed the change in estimate was probable and the amounts could be reasonably estimated. These adjustments could have resulted in either increases or decreases in profit margins.
Gross Margins. Our gross margin can vary between periods as a result of many factors, some of which are beyond our control. These factors include: the mix of revenue derived from the industries we serve, the size and duration of our projects, the mix of business conducted in different parts of the United States and Canada, the mix in service and maintenance work compared to new construction work, the amount of work that we subcontract, the amount of material we supply, changes in labor, equipment or insurance costs, seasonal weather patterns, changes in fleet utilization, pricing pressures due to competition, efficiency of work performance, fluctuations in commodity prices of materials, delays in the timing of projects and other factors. The gross margins we record in the current period may not be indicative of margins in future periods.
Overview-Economic, Industry and Market Factors
We operate in competitive markets, which can result in pricing pressures for the services we provide. Work is often awarded through a bidding and selection process, where price is always a principal factor. We generally focus on managing our profitability by: selecting projects that we believe will provide attractive margins; actively monitoring the costs of completing our projects; holding customers accountable for costs related to changes to contract specifications; and rewarding our employees for controlling costs.
The demand for construction and maintenance services from our customers has been, and will likely continue to be, cyclical in nature and vulnerable to downturns in the markets we serve as well as the economy in general. The financial condition of our customers and their access to capital, variations in the margins of projects performed during any particular period, and regional and national economic conditions in the United States and Canada may materially affect results. Project schedules, particularly in connection with larger, multi-year projects, can also create fluctuations in our revenues. Other market and industry factors, such as changes to our customers’ capital spending plans or delays in regulatory approvals can affect project schedules. Changes in technology, tax and other incentives and new or changing regulatory requirements affecting the industries we serve can impact demand for our services. While we actively monitor economic, industry and market factors affecting our business, we cannot predict the impact such factors may have on our future results of operations, liquidity and cash flows. As a result of economic, industry and market factors, our operating results in any particular period or year may not be indicative of the results that can be expected for any other period or for any other year.
Overview-Seasonality and Nature of Our Work Environment
Although our revenues are primarily driven by spending patterns in our customers’ industries, our revenues and results of operations, particularly those derived from our T&D segment, can be subject to seasonal variations. These variations are influenced by weather, daylight hours, availability of system outages from utilities, and holidays. During the winter months, demand for our T&D work may be high, but our work can be delayed due to inclement weather. During the summer months, the demand for our T&D work may be affected by fewer available system outages, due to peak electrical demands caused by warmer
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weather, which limits our ability to perform electrical line service work. During the spring and fall months, the demand for our T&D work may increase due to improved weather conditions and system availability; however, extended periods of rain and other severe weather can affect the deployment of our crews and efficiency of operations. Furthermore, our work is performed under a variety of conditions in different locations, including but not limited to, difficult terrain, sites which may have been exposed to harsh and hazardous conditions, and in large urban centers where delivery of materials and availability of labor may be impacted.
We also provide storm restoration services to our T&D customers. These services tend to have a higher profit margin. However, storm restoration service work that is performed under an MSA typically has similar rates to other work under the agreement. In addition, deploying employees on storm restoration work may, at times, delay work on other transmission and distribution work. Storm restoration service work is unpredictable and can affect results of operations.
Outlook
Our business is directly impacted by the level of spending on T&D infrastructure and the level of C&I electrical construction activity across the United States and western Canada. We are optimistic about infrastructure spending and believe that improving industry activity will continue in both our transmission and distribution market segments and the drivers for utility investment will remain intact. We believe that regulatory reform, state renewable portfolio standards, the aging of the electric grid, and the general improvement of the economy will positively impact the level of spending by our customers in all of the markets we serve. Although competition remains strong, we see these trends as positive factors for us in the future.
We continue to expect long-term growth in the transmission market, although the timing of large bids and subsequent construction will likely continue to be highly variable from year to year. The electric grid is aging and requires significant upgrades and maintenance to meet current and future demands for electricity. Over the past several years, many utilities have begun to implement plans to improve reliability of their transmission systems and reduce congestion. These utilities have started or planned new construction, line upgrades and maintenance projects on their transmission systems. We believe that our customers remain committed to the expansion and strengthening of their transmission infrastructure, with planning, engineering and funding for many of their projects already in place.
State renewable portfolio standards, which set required or voluntary standards for how much electricity is to be generated from renewable energy sources, as well as general environmental concerns, continue to drive the development of renewable energy projects. The economic feasibility of renewable energy projects, and therefore the attractiveness of investment in the projects, may depend on the availability of tax incentive programs or the ability of the projects to take advantage of such incentives. Renewable energy-related construction contracts, depending on the type, may benefit both the T&D and C&I business segments.
We believe there is an ongoing need for utilities to sustain investment in their transmission systems to improve reliability, reduce congestion and connect to new sources of renewable generation. The timing of multi-year transmission project awards and substantial construction activity is difficult to predict due to regulatory requirements and the permitting needed to commence construction. Significant construction on any large, multi-year projects awarded in 2020 will not likely occur until 2021. Bidding and construction activity for small to medium-size transmission projects and upgrades remains strong, and we expect this trend to continue, primarily due to reliability and economic drivers. We also believe the need for distribution services will continue to grow.
Because of reduced spending by United States utilities on their distribution systems for several years, we believe there is a need for sustained investment by utilities on their distribution systems to properly maintain or meet reliability requirements. In 2019, we continued to see increased bidding activity in some of our electric distribution markets, as economic conditions improved in those areas. We believe the increased hurricane activity over the past several years and recent destruction caused by wildfires will cause a push to strengthen utility distribution systems against catastrophic damage. Several industry and market trends are also prompting customers in the electric utility industry to seek outsourcing partners rather than performing projects internally. These trends include an aging electric utility workforce, increasing costs and
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staffing constraints. We believe electric utility employee retirements could increase with further economic recovery, which may result in an increase in outsourcing opportunities. We expect to see an incremental increase in distribution opportunities in the United States in 2020, and we believe these opportunities will continue to be bid in a competitive market.
We expect to see continued improvement in bidding opportunities in our C&I segment in 2020. According to FMI, the primary growth sectors in 2020 are expected to include office, educational, public safety, transportation, conservation and development, and manufacturing, all with positive forecasted growth rates. In addition to these growth sectors, we believe that recent state legislation requiring the increased production of energy from renewable sources will increase activity in solar plant and other renewable forms of energy. We believe much of this potential will continue to be driven by advancements in technology, such as artificial intelligence, self-driving vehicles, and robotics. We also believe these technological advancements will continue to offer new opportunities in many of the markets we serve including data centers, manufacturing plants, and higher education.
In addition, the United States has experienced a decade of privately funded economic expansion which has challenged the capacity of public water and transportation infrastructure forcing states and municipalities to seek creative means to fund needed expansion. We believe the need for expanding public infrastructure will offer opportunity in our C&I segment for several years.
We expect the long-term growth in our C&I segment to generally track the economic growth of the regions we serve. We also expect to see increased bidding opportunities in the new C&I markets we recently entered through strategic acquisitions and organic expansions.
In an effort to support our growth strategy and maximize stockholder returns, we seek to efficiently manage our capital. Through 2019, we continued to implement strategies that further expand our capabilities and allow opportunities to provide prudent capital returns. On July 15, 2019, we completed the acquisition of substantially all the assets of CSI Electrical Contractors, Inc. (“CSI”), which expanded our C&I operations in California. The total consideration was approximately $80.7 million, funded through borrowings under our credit facility. On July 2, 2018, we completed the acquisition of substantially all the assets of the Huen Electric, Inc., Huen Electric New Jersey Inc., and Huen New York, Inc. (collectively, the “Huen Companies”), which expanded our C&I operations in Illinois, New York and New Jersey.
On September 13, 2019, the Company entered into a five-year second amended and restated credit agreement (the “Credit Agreement”) with a syndicate of banks led by JPMorgan Chase Bank, N.A. and Bank of America, N.A. The Credit Agreement expands our capacity to borrow and enter into letters of credit, and increases our ability to expand our borrowing capacity under certain circumstances. Borrowings under the Credit Agreement are expected to be used to refinance existing indebtedness and for working capital, capital expenditures, acquisitions and other general corporate purposes.
We continue to invest in developing key management and craft personnel in both our T&D and C&I markets and in procuring the specialty equipment and tooling needed to win and execute projects of all sizes and complexity. In 2019 and 2018, we invested in capital expenditures of approximately $57.8 million and $50.7 million, respectively. Most of our capital expenditures supported opportunities in our T&D business. We plan to continue to evaluate our needs for additional equipment and tooling. Our investment strategy is based on our belief that spending in transmission and distribution projects will continue to remain strong over the next several years as electric utilities, cooperatives and municipalities make up for the lack of infrastructure spending in the past, combined with the overall need to integrate new generation into the electric power grid, and our belief that distribution demand will increase over the next several years.
We believe that our financial position and operational strengths will enable us to manage the current challenges and uncertainties in the markets we serve and give us the flexibility to successfully execute our strategies.
Understanding Backlog
We define backlog as our estimated revenue on uncompleted contracts, including the amount of revenue on contracts for which work has not begun, less the revenue we have recognized under such contracts. Backlog may not accurately represent the revenues that we expect to realize during any particular
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period. Several factors, such as the timing of contract awards, the type and duration of contracts, and the mix of subcontractor and material costs in our projects, can impact our backlog at any point in time. Some of our revenue does not appear in our periodic backlog reporting because the award of the project, as well as the execution of the work, can all take place within the period. For many of our unit-price, time-and-equipment, time-and-materials and cost-plus contracts, we only include projected revenue for a three-month period in the calculation of backlog, although these types of contracts are generally awarded as part of MSAs that typically have a one- to three-year duration from execution. Additionally, the difference between our backlog and remaining performance obligations is due to the exclusion of a portion of our MSAs under certain contract types from our remaining performance obligations as these contracts can be canceled for convenience at any time by us or the customer without considerable cost incurred by the customer. Our backlog 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. Our estimated backlog also includes our proportionate share of our unconsolidated joint venture contracts.
Changes in backlog from period to period are primarily the result of fluctuations in the timing of awards and revenue recognition of contracts. Backlog should not be relied upon as a stand-alone indicator of future events.
Understanding Gross Margins
Our gross margin is gross profit expressed as a percentage of revenues. Gross profit is calculated by subtracting contract costs from revenue. Contract costs consist primarily of salaries, wages and benefits to employees, depreciation, fuel and other equipment expenses, equipment rentals, subcontracted services, insurance, facilities expenses, materials and parts and supplies. Various factors affect our gross margins on a quarterly or annual basis, including those listed below.
Performance Risk. Margins may fluctuate because of the volume of work and the impacts of pricing and job productivity, which can be impacted both favorably and negatively by customer decisions and crew productivity, as well as other factors. When comparing a service contract between periods, factors affecting the gross margins associated with the revenues generated by the contract may include pricing under the contract, the volume of work performed under the contract, the mix of the type of work specifically being performed, the availability of labor resources at expected labor rates and the productivity of the crews performing the work. Productivity can be influenced by many factors including the experience level of the crew, whether the work is on an open or encumbered right of way, weather conditions, geographical conditions, trade stacking, performance of other sub-trades, schedule changes, effects of environmental restrictions and regulatory and permitting delays.
Revenue Mix and Contract Terms. The mix of revenue derived from the industries we serve will impact gross margins. Changes in our customers’ spending patterns in each of the industries we serve can cause an imbalance in supply and demand and, therefore, affect margins and mix of revenue by industry served. Storm restoration services typically command higher profit margins than other maintenance services. Seasonal and weather factors, as noted below, can impact the timing at which customers perform maintenance and repairs, which can cause a shift in the revenue mix. Some of our time-and-equipment, time-and-materials and cost-plus contracts include shared savings clauses, in which the contract includes a target price and we agree to share savings from that target price with our customer. The timing of accounting recognition of such savings can impact our margins. In addition, change orders and claims can impact our margins. Costs related to change orders and claims are recognized in contract costs when incurred, but revenue related to change orders is only recognized when it is probable that the change order will result in an addition to contract value and can be reliably estimated, whereas revenue related to claims is recognized only to the extent that contract costs related to the claim have been incurred and when it is probable that the claim will result in an addition to contract value which can be reliably estimated. Generally, no profit is recognized on a claim until final settlement occurs.
Seasonal, Weather and Geographical. Seasonal patterns, primarily related to weather conditions and the availability of system outages, can have a significant impact on gross margins in a given period. It is typical during the winter months that parts of the country may experience snow or rainfall, which can affect our crews’ ability to work efficiently. Additionally, our T&D customers often cannot remove their T&D
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lines from service during the summer months, when consumer demand for electricity is at its peak, delaying maintenance and repair services. In both cases, projects may be delayed or temporarily placed on hold. Conversely, in periods when weather remains dry and temperatures are moderate, more work can be done, sometimes with less cost, which would have a favorable impact on gross margins. The mix of business conducted in different parts of the country could also affect margins, as some parts of the country offer the opportunity for higher margins than others due to the geographic characteristics associated with the location where the work is being performed. Such characteristics include whether the project is performed in an urban versus a rural setting; in a mountainous area or in open terrain; or in normal soil conditions or rocky terrain. Site conditions, including unforeseen underground conditions, can also impact margins.
Depreciation and Amortization. We include depreciation on equipment and capital lease amortization in contract costs. This is common practice in our industry, but can make comparability to other companies difficult. We spend a significant amount of capital on property, facilities and equipment, with the majority of such expenditures being used to purchase additional specialized equipment to enhance our fleet and to reduce our reliance on lease arrangements and short term equipment rentals. We believe the investment in specialized equipment helps to reduce our costs, improve our margins and provide us with valuable flexibility to take on additional and complex projects.
Service and Maintenance Compared to New Construction. In general, new construction work has a higher gross margin than maintenance and repair work. New construction work is often obtained on a fixed-price basis, which carries a higher risk than other types of pricing arrangements because a contractor can bear the risk of increased expenses. As such, we generally bid fixed-price contracts with higher profit margins. We typically derive approximately 20% to 40% of our revenue from maintenance and repair work that is performed under pre-established or negotiated prices or cost-plus pricing arrangements which generally allow us a set margin above our costs. Thus, the mix between new construction work, at fixed-price, and maintenance and repair work, at cost-plus, in a given period will impact gross margin in that period.
Material and Subcontract Costs. Projects that include a greater amount of material or subcontractor costs can experience lower overall project gross margins as we typically add a lower mark-up to material and subcontractor costs in our bids than what we would to our labor and equipment cost. In addition, successful completion of our contracts may depend on whether our subcontractors successfully fulfill their contractual obligations. If our subcontractors fail to satisfactorily perform their contractual obligations as a result of financial or other difficulties, we may be required to incur additional costs and provide additional services in order to make up such shortfalls.
Insurance. Gross margins could be impacted by fluctuations in insurance accruals related to our deductibles and loss history in the period in which such adjustments are made. We carry insurance policies, which are subject to high deductibles, for workers’ compensation, general liability, automobile liability and other coverages. Losses up to the deductible amounts are accrued based upon estimates of the ultimate liability for claims reported and an estimate of claims incurred but not yet reported.
Fleet Utilization, Estimation, and Bidding. We operate a centrally-managed fleet in the United States in an effort to achieve the highest equipment utilization. We also develop internal equipment rates which provide our business units with appropriate cost information to estimate bids for new projects. Availability of equipment for a particular contract is determined by our internal fleet ordering process which is designed to optimize the use of internal fleet assets and allocate equipment costs to individual contracts. We believe these processes allow us to utilize our equipment efficiently, which leads to improved gross margins. Transmission and distribution projects can require different types of equipment. A significant shift in project mix or timing could impact fleet utilization, causing gross margins to vary.
Cost of Material. On fixed-price contracts where we are required to provide materials, our overall gross margin may be affected if we experience increases in the quantity or costs of materials. Projects that include a greater amount of material cost can experience lower overall project gross margins as we typically add a lower mark-up to material cost in our bids than what we would add to our labor and equipment cost.
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Our team of trained estimators helps us to determine potential costs and revenues and make informed decisions on whether to bid for a project and, if bid, the rates to use in estimating the costs for that bid. The ability to accurately estimate labor, equipment, subcontracting and material costs in connection with a new project may affect the gross margins achieved for the project.
Selling, General and Administrative Expenses
Selling, general and administrative expenses (“SG&A”) consist primarily of compensation, related benefits and employee costs for management and administrative personnel, office rent and utilities, stock compensation, communications, professional fees, depreciation, IT expenses, marketing costs and bad debt expense.
Consolidated Results of Operations
The following table sets forth selected statements of operations data and such data as a percentage of revenues for the years indicated:
Year Ended December 31, 2019 Compared to the Year Ended December 31, 2018

​ | ​ | ​ | For the year ended December 31, | ​
(dollars in thousands) | ​ | ​ | 2019 | ​ | ​ | 2018 | ​
Contract revenues | ​ | ​ | ​ | $ | 2,071,159 | ​ | ​ | ​ | ​ | ​ | 100.0% | ​ | ​ | ​ | ​ | $ | 1,531,169 | ​ | ​ | ​ | ​ | ​ | 100.0% | ​ | ​
Contract costs | ​ | ​ | ​ | ​ | 1,857,001 | ​ | ​ | ​ | ​ | ​ | 89.7 | ​ | ​ | ​ | ​ | ​ | 1,364,109 | ​ | ​ | ​ | ​ | ​ | 89.1 | ​ | ​
Gross profit | ​ | ​ | ​ | ​ | 214,158 | ​ | ​ | ​ | ​ | ​ | 10.3 | ​ | ​ | ​ | ​ | ​ | 167,060 | ​ | ​ | ​ | ​ | ​ | 10.9 | ​ | ​
Selling, general and administrative expenses | ​ | ​ | ​ | ​ | 156,674 | ​ | ​ | ​ | ​ | ​ | 7.6 | ​ | ​ | ​ | ​ | ​ | 118,737 | ​ | ​ | ​ | ​ | ​ | 7.8 | ​ | ​
Amortization of intangible assets | ​ | ​ | ​ | ​ | 3,849 | ​ | ​ | ​ | ​ | ​ | 0.2 | ​ | ​ | ​ | ​ | ​ | 1,843 | ​ | ​ | ​ | ​ | ​ | 0.1 | ​ | ​
Gain on sale of property and equipment | ​ | ​ | ​ | ​ | (3,543) | ​ | ​ | ​ | ​ | ​ | (0.2) | ​ | ​ | ​ | ​ | ​ | (3,832) | ​ | ​ | ​ | ​ | ​ | (0.2) | ​ | ​
Income from operations | ​ | ​ | ​ | ​ | 57,178 | ​ | ​ | ​ | ​ | ​ | 2.7 | ​ | ​ | ​ | ​ | ​ | 50,312 | ​ | ​ | ​ | ​ | ​ | 3.2 | ​ | ​
Other income (expense): | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Interest income | ​ | ​ | ​ | ​ | 4 | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | 24 | ​ | ​ | ​ | ​ | ​ | — | ​ | ​
Interest expense | ​ | ​ | ​ | ​ | (6,225) | ​ | ​ | ​ | ​ | ​ | (0.3) | ​ | ​ | ​ | ​ | ​ | (3,652) | ​ | ​ | ​ | ​ | ​ | (0.2) | ​ | ​
Other income (expense), net | ​ | ​ | ​ | ​ | (515) | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | (3,616) | ​ | ​ | ​ | ​ | ​ | (0.2) | ​ | ​
Income before income tax expense | ​ | ​ | ​ | ​ | 50,442 | ​ | ​ | ​ | ​ | ​ | 2.4 | ​ | ​ | ​ | ​ | ​ | 43,068 | ​ | ​ | ​ | ​ | ​ | 2.8 | ​ | ​
Income tax expense | ​ | ​ | ​ | ​ | 14,228 | ​ | ​ | ​ | ​ | ​ | 0.7 | ​ | ​ | ​ | ​ | ​ | 11,774 | ​ | ​ | ​ | ​ | ​ | 0.8 | ​ | ​
Net income | ​ | ​ | ​ | ​ | 36,214 | ​ | ​ | ​ | ​ | ​ | 1.7 | ​ | ​ | ​ | ​ | ​ | 31,294 | ​ | ​ | ​ | ​ | ​ | 2.0 | ​ | ​
Less: net income (loss) attributable to noncontrolling interest | ​ | ​ | ​ | ​ | (1,476) | ​ | ​ | ​ | ​ | ​ | (0.1) | ​ | ​ | ​ | ​ | ​ | 207 | ​ | ​ | ​ | ​ | ​ | — | ​ | ​
Net income attributable to MYR Group Inc. | ​ | ​ | ​ | $ | 37,690 | ​ | ​ | ​ | ​ | ​ | 1.8% | ​ | ​ | ​ | ​ | $ | 31,087 | ​ | ​ | ​ | ​ | ​ | 2.0% | ​ | ​

Revenues. Revenues increased $540.0 million, or 35.3%, to $2.071 billion for the year ended December 31, 2019 from $1.531 billion for the year ended December 31, 2018. The increase was primarily due to increases in volume across both segments and incremental revenues from the acquisitions of CSI and the Huen Companies, which were acquired in the third quarter of 2019 and 2018, respectively.
Gross margin. Gross margin decreased to 10.3% for the year ended December 31, 2019 from 10.9% for the year ended December 31, 2018. The decrease in gross margin was primarily due to inclement weather on certain projects and material delays associated with a substantially completed joint venture project in which we own the majority controlling interest, which were partially offset by net loss attributable to noncontrolling interest. The joint venture project, along with other acquired projects, are subject to margin guarantees for which an offset is recognized in other income. Gross margin was also negatively impacted by certain projects with changes in estimates relating to inclement weather conditions and labor inefficiencies for which we are in ongoing negotiations to receive reimbursement. These margin decreases were partially
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offset by better than anticipated productivity on certain projects, a favorable claim settlement and successful change order negotiations. Changes in estimates resulted in gross margin decreases of 0.8% and 0.7% for the years ended December 31, 2019 and 2018, respectively.
Gross profit. Gross profit increased $47.1 million, or 28.2%, to $214.2 million for year ended December 31, 2019 from $167.1 million for the year ended December 31, 2018, due to higher revenues, partially offset by lower margins.
Selling, general and administrative expenses. SG&A, was $156.7 million for the year ended December 31, 2019, an increase of  $38.0 million from $118.7 million for the year ended December 31, 2018. The year-over-year increase was primarily due to the acquisitions of CSI and the Huen Companies, along with higher incentive compensation and other employee-related expenses to support the growth in our operations. As a percentage of revenues, SG&A decreased to 7.6% for the year ended December 31, 2019 from 7.8% for the year ended December 31, 2018.
Gain on sale of property and equipment. Gains from the sale of property and equipment in the year ended December 31, 2019 were $3.5 million compared to $3.8 million in the year ended December 31, 2018. Gains from the sale of property and equipment are attributable to routine sales of property and equipment no longer useful or valuable to our ongoing operations.
Interest expense. Interest expense was $6.2 million for the year ended December 31, 2019 compared to $3.7 million for the year ended December 31, 2018. This increase was primarily attributable to increased borrowing related to the acquisition of CSI, an increase in our working capital needs to support higher volume and an increase in our weighted average interest rate during 2019 as compared to 2018.
Other expense. Other expense was $0.5 million for the year ended December 31, 2019 compared to other expense of  $3.6 million for the year ended December 31, 2018. The change was primarily attributable to a reduction in contingent consideration related to margin guarantees on certain contracts associated with the acquisition of the Huen Companies partially offset by margin guarantees on certain contracts associated with the acquisition of CSI.
Income tax expense. Income tax expense was $14.2 million for the year ended December 31, 2019, with an effective tax rate of 28.2%, compared to $11.8 million for the year ended December 31, 2018, with an effective tax rate of 27.3%. The increase in the tax rate for the year ended December 31, 2019 was primarily due to foreign earnings and the associated impact of the global intangible low tax income (“GILTI”).
Net income attributable to MYR Group Inc. Net income attributable to MYR Group Inc. increased to $37.7 million for the year ended December 31, 2019 from $31.1 million for the year ended December 31, 2018. The increase was primarily for the reasons stated above.
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Segment Results
The following table sets forth, for the periods indicated, statements of operations data by segment, segment net sales as a percentage of total net sales and segment operating income as a percentage of segment net sales:

​ | ​ | ​ | For the Year Ended December 31, | ​
​ | ​ | ​ | 2019 | ​ | ​ | 2018 | ​
(dollars in thousands) | ​ | ​ | Amount | ​ | ​ | Percent | ​ | ​ | Amount | ​ | ​ | Percent | ​
Contract revenues: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Transmission & Distribution | ​ | ​ | ​ | $ | 1,134,411 | ​ | ​ | ​ | ​ | ​ | 54.8% | ​ | ​ | ​ | ​ | $ | 893,108 | ​ | ​ | ​ | ​ | ​ | 58.3% | ​ | ​
Commercial & Industrial | ​ | ​ | ​ | ​ | 936,748 | ​ | ​ | ​ | ​ | ​ | 45.2 | ​ | ​ | ​ | ​ | ​ | 638,061 | ​ | ​ | ​ | ​ | ​ | 41.7 | ​ | ​
Total | ​ | ​ | ​ | $ | 2,071,159 | ​ | ​ | ​ | ​ | ​ | 100.0 | ​ | ​ | ​ | ​ | $ | 1,531,169 | ​ | ​ | ​ | ​ | ​ | 100.0 | ​ | ​
Operating income (loss): | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Transmission & Distribution | ​ | ​ | ​ | $ | 73,580 | ​ | ​ | ​ | ​ | ​ | 6.5 | ​ | ​ | ​ | ​ | $ | 57,242 | ​ | ​ | ​ | ​ | ​ | 6.4 | ​ | ​
Commercial & Industrial | ​ | ​ | ​ | ​ | 30,506 | ​ | ​ | ​ | ​ | ​ | 3.3 | ​ | ​ | ​ | ​ | ​ | 34,112 | ​ | ​ | ​ | ​ | ​ | 5.3 | ​ | ​
Total | ​ | ​ | ​ | ​ | 104,086 | ​ | ​ | ​ | ​ | ​ | 5.0 | ​ | ​ | ​ | ​ | ​ | 91,354 | ​ | ​ | ​ | ​ | ​ | 6.0 | ​ | ​
Corporate | ​ | ​ | ​ | ​ | (46,908) | ​ | ​ | ​ | ​ | ​ | (2.2) | ​ | ​ | ​ | ​ | ​ | (41,042) | ​ | ​ | ​ | ​ | ​ | (2.7) | ​ | ​
Consolidated | ​ | ​ | ​ | $ | 57,178 | ​ | ​ | ​ | ​ | ​ | 2.8% | ​ | ​ | ​ | ​ | $ | 50,312 | ​ | ​ | ​ | ​ | ​ | 3.3% | ​ | ​

Transmission & Distribution
Revenues for our T&D segment for the year ended December 31, 2019 were $1.134 billion compared to $893.1 million for the year ended December 31, 2018, an increase of  $241.3 million, or 27.0%. The increase in revenue was primarily due to an increase in revenue on small- to medium-sized transmission and distribution projects.
Revenues from transmission projects represented 68.1% and 62.6% of T&D segment revenue for the years ended December 31, 2019 and 2018, respectively. Additionally, for the year ended December 31, 2019, measured by revenue in our T&D segment, we provided 49.7% of our T&D services under fixed-price contracts, as compared to 40.5% for the year ended December 31, 2018.
Operating income for our T&D segment for the year ended December 31, 2019 was $73.6 million compared to $57.2 million for the year ended December 31, 2018, an increase of  $16.4 million, or 28.5%. The increase in T&D operating income from the prior year was primarily due to higher revenue on transmission and distribution projects, better than anticipated productivity on certain projects, a favorable claim settlement, and successful change order negotiations. This improvement from the prior year was partially offset by lower margins and changes in estimates of gross profit on certain projects. These estimate changes were primarily due to inclement weather on certain projects and an increase in non-reimbursable cost on a project. Operating income, as a percentage of revenues, for our T&D segment increased to 6.5% for the year ended December 31, 2019 from 6.4% for the year ended December 31, 2018.
Commercial & Industrial
Revenues for our C&I segment for the year ended December 31, 2019 were $936.7 million compared to $638.1 million for the year ended December 31, 2018, an increase of  $298.6 million, or 46.8%, primarily due to increases in volume across all project sizes and incremental revenues from the acquisitions of CSI, and the Huen Companies in the second half of 2019 and 2018, respectively.
Measured by revenue in our C&I segment, we provided 75.2% of our services under fixed-price contracts for the year ended December 31, 2019, compared to 71.0% for the year ended December 31, 2018.
Operating income for our C&I segment for the year ended December 31, 2019 was $30.5 million compared to $34.1 million for the year ended December 31, 2018, a decrease of  $3.6 million, or 10.6%. The year-over-year decrease in operating income was primarily due to changes in estimates of gross profit on
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certain projects and an increase in amortization expense of  $2.3 million related to certain intangibles acquired with CSI and the Huen Companies. These estimate changes were primarily due to unanticipated overtime and material delays associated with a substantially completed joint venture project in which we own the majority controlling interest, which were partially offset by net loss attributable to noncontrolling interest. The joint venture project, along with other acquired projects, are subject to margin guarantees for which an offset is recognized in other income. Operating income was also negatively impacted by projects with changes in estimates relating to inclement weather conditions, and labor inefficiencies for which we are in ongoing negotiations to receive reimbursement. The decrease in operating income was also due to a favorable claim settlement in the prior year. These impacts were partially offset by higher revenues. As a percentage of revenues, operating income for our C&I segment was 3.3% and 5.3% for the years ended December 31, 2019 and 2018, respectively.
Corporate
The increase in corporate expenses in 2019 was primarily attributable to higher incentive compensation and other employee-related expenses to support operations.
Liquidity and Capital Resources
As of December 31, 2019 and 2018, we had working capital of  $242.4 million and $191.8 million, respectively. We define working capital, a non-GAAP measure, as current assets less current liabilities. During the year ended December 31, 2019, the operating activities of our business provided cash of $64.9 million, compared to providing cash of  $84.8 million for the year ended December 31, 2018. Cash flow from operations is primarily influenced by demand for our services, operating margins, timing of contract performance and the type of services we provide to our customers. The $19.9 million year-over-year decline in cash provided by operating activities was primarily due to unfavorable net changes in operating assets and liabilities of  $31.7 million, partially offset by increases of  $4.9 million in net income, $4.6 million in depreciation and amortization, and $1.2 million in non-cash stock compensation expense. The unfavorable change in operating assets and liabilities was primarily due to unfavorable changes of  $18.7 million in other liabilities and $12.6 million in other assets and net unfavorable year-over-year changes in various working capital accounts that relate primarily to construction activities (accounts receivable, contract assets, accounts payable and contract liabilities) of  $4.0 million. The decrease in cash provided by other liabilities was primarily due to the payment of net asset adjustments related to the acquisition of the Huen Companies, the timing of tax payments and lower incentive compensation accruals in 2018. The decrease in cash provided by other assets was primarily due to higher prepaid expenses and higher investments on joint ventures. The increase in cash provided by working capital accounts, primarily related to construction activities, was due to the timing of cash payments and receipts related to work on our contracts.
During the years ended December 31, 2019 and 2018, we used net cash of  $133.5 million and $93.2 million, respectively, in investing activities. The $133.5 million of cash used in investing activities in the year ended December 31, 2019 consisted of  $57.8 million for capital expenditures and $79.7 million to acquire CSI, partially offset by $4.0 million of proceeds from the sale of equipment. The $93.2 million of cash used in investing activities in the year ended December 31, 2018 consisted of  $50.7 million for capital expenditures and $47.1 million to acquire the Huen Companies, partially offset by $4.6 million of proceeds from the sale of equipment.
Financing activities provided cash of  $73.4 million and, $10.6 million during the years ended December 31, 2019 and 2018, respectively. The $73.4 million of cash provided by financing activities in the year ended December 31, 2019 consisted primarily of  $45.5 million of net borrowings under our revolving line of credit, primarily to fund the CSI acquisition, $35.1 million of new equipment notes under our master equipment loan agreements and $0.3 million of proceeds from the exercise of stock options, which were partially offset by $4.6 million of repayments of principal obligations under equipment notes, $1.1 million of debt refinancing costs related to the amendment to the Credit Agreement, $1.2 million of repayments of finance lease obligations and share repurchases of  $0.8 million, all of which represented shares surrendered to satisfy tax obligations under our stock compensation programs during the year ended December 31, 2019. The $10.6 million of cash provided in financing activities in the year ended December 31, 2018 consisted primarily of  $31.5 million of borrowings under our Master Loan Agreement with BofA and $1.9 million
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of proceeds from the exercise of stock options, partially offset by $20.7 million of repayments under our revolving lines of credit, $1.1 million of payments under our capital lease obligations and $1.0 million of cash used to purchase shares surrendered by employees to satisfy employee tax obligations under our stock compensation program.
We anticipate that our $260.6 million borrowing availability under our revolving line of credit at December 31, 2019 and future cash flow from operations will provide sufficient cash to enable us to meet our future operating needs, debt service requirements, capital expenditures, acquisition and joint venture opportunities. Although we believe that we have adequate cash and borrowing capacity to meet our liquidity needs, any large projects or acquisitions may require additional capital.
We have not historically paid dividends and currently do not expect to pay dividends.
Debt Instruments
Credit Agreement
On September 13, 2019, we entered into the Credit Agreement with a syndicate of banks led by JPMorgan Chase Bank, N.A. and Bank of America, N.A. The Credit Agreement provides for a facility of $375 million (the “Facility”) that may be used for revolving loans of which $150 million may be used for letters of credit. The Facility also allows for revolving loans and letters of credit in Canadian dollars and other currencies, up to the U.S. dollar equivalent of  $75 million. We have an expansion option to increase the commitments under the Facility or enter into incremental term loans, subject to certain conditions, by up to an additional $200 million upon receipt of additional commitments from new or existing lenders. Subject to certain exceptions, the Facility is secured by substantially all of our assets and the assets of our domestic subsidiaries and by a pledge of substantially all of the capital stock of our domestic subsidiaries and 65% of the capital stock of our direct foreign subsidiaries. Additionally, subject to certain exceptions, our domestic subsidiaries also guarantee the repayment of all amounts due under the Credit Agreement. If an event of default occurs and is continuing, on the terms and subject to the conditions set forth in the Credit Agreement, amounts outstanding under the Facility may be accelerated and may become or be declared immediately due and payable. Borrowings under the Facility are used for refinancing existing debt, working capital, capital expenditures, acquisitions and other general corporate purposes.
Amounts borrowed under the Credit Agreement bear interest, at our option, at a rate equal to either (1) the Alternate Base Rate (as defined in the Credit Agreement), plus an applicable margin ranging from 0.00% to 0.75%; or (2) Adjusted LIBO Rate (as defined in the Credit Agreement) plus an applicable margin ranging from 1.00% to 1.75%. The applicable margin is determined based on our consolidated leverage ratio (“Leverage Ratio”) which is defined in the Credit Agreement as Consolidated Total Indebtedness (as defined in the Credit Agreement) divided by Consolidated EBITDA (as defined in the Credit Agreement). Letters of credit issued under the Facility are subject to a letter of credit fee of 1.00% to 1.75% for non-performance letters of credit or 0.50% to 0.875% for performance letters of credit, based on our consolidated Leverage Ratio. We are subject to a commitment fee of 0.15% to 0.25%, based on our consolidated Leverage Ratio, on any unused portion of the Facility. The Credit Agreement restricts certain types of payments when our consolidated Leverage Ratio exceeds 2.50 or our consolidated Liquidity (as defined in the Credit Agreement) is less than $50 million.
Under the Credit Agreement, we are subject to certain financial covenants and must maintain a maximum consolidated Leverage Ratio of 3.0 and a minimum interest coverage ratio of 3.0. The minimum interest coverage ratio is defined in the Credit Agreement as Consolidated EBITDA (as defined in the Credit Agreement) divided by interest expense (as defined in the Credit Agreement). The Credit Agreement also contains a number of covenants, including limitations on asset sales, investments, indebtedness and liens. We were in compliance with all of the financial covenants under the Credit Agreement as of December 31, 2019.
As of December 31, 2019, we had $103.8 million of debt outstanding under the Facility and letters of credit outstanding of approximately $10.6 million. As of December 31, 2018, we had $58.3 million of debt outstanding under the Facility and letters of credit outstanding of approximately $21.2 million.
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Equipment Notes
We have entered into multiple Master Loan Agreements with multiple banks. The Master Loan Agreements may be used for financing of equipment between us and the lending banks pursuant to one or more equipment notes (“Equipment Notes”). Each Equipment Note constitutes a separate, distinct and independent financing of equipment and contractual obligation.
As of December 31, 2019, we had executed nine Equipment Notes that are collateralized by equipment and vehicles owned by us. The outstanding balance of these Equipment Notes was $62.0 million as of December 31, 2019. As of December 31, 2018, we had executed five Equipment Notes that are collateralized by equipment and vehicles owned by us. The outstanding balance of these Equipment Notes was $31.5 million as of December 31, 2018.
Off-Balance Sheet Arrangements
As is common in our industry, we enter into certain off-balance sheet arrangements in the ordinary course of business that result in risks not directly reflected in our balance sheets. Our significant off-balance sheet transactions include liabilities associated with letter of credit obligations and bond guarantees entered into in the normal course of business. We have not engaged in any off-balance sheet financing arrangements through special purpose entities.
Purchase Commitments for Construction Equipment
As of December 31, 2019, we had approximately $5.4 million in outstanding purchase obligations for certain construction equipment to be paid, with cash outlay scheduled to occur over the first three months of 2020.
Letters of Credit
Some of our vendors require letters of credit to ensure reimbursement for amounts they are disbursing on our behalf, such as to beneficiaries under our insurance programs. In addition, from time-to-time certain customers require us to post letters of credit to ensure payment to our subcontractors and vendors under those contracts and to guarantee performance under our contracts. Such letters of credit are generally issued by a bank or similar financial institution. The letter of credit commits the issuer to pay specified amounts to the holder of the letter of credit if the holder claims that we have failed to perform specified actions in accordance with the terms of the letter of credit. If this were to occur, we would be required to reimburse the issuer of the letter of credit. Depending on the circumstances of such a reimbursement, we may also have to record a charge to earnings for the reimbursement. Currently, we do not believe that it is likely that any claims will be made under any letter of credit.
At December 31, 2019, we had $10.6 million in letters of credit outstanding under our Credit Agreement, including $10.0 million, at an interest rate of 1.125%, related to the Company’s payment obligation under its insurance programs and approximately $0.6 million, at an interest rate of 0.625%, related to contract performance obligations. At December 31, 2018, we had $21.2 million in letters of credit outstanding under our Credit Agreement, including $17.6 million, at an interest rate of 1.125%, related to the Company’s payment obligation under its insurance programs and approximately $3.6 million, at an interest rate of 0.625%, related to contract performance obligations.
Performance and Payment Bonds and Parent Guarantees
Many customers, particularly in connection with new construction, require us to post performance and payment bonds issued by a financial institution known as a surety. These bonds provide a guarantee to the customer that we will perform under the terms of a contract and that we will pay subcontractors and vendors. If we fail to perform under a contract or to pay subcontractors and vendors, the customer may demand that the surety make payments or provide services under the bond. We must reimburse our sureties for any expenses or outlays they incur. Under our continuing indemnity and security agreements with our sureties, with the consent of our lenders under the Credit Agreement, we have granted security interests in certain of our assets to collateralize our obligations to the surety. We may be required to post letters of credit or other
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collateral in favor of the surety or our customers. Posting letters of credit in favor of the surety or our customers reduces the borrowing availability under the Credit Agreement. To date, we have not been required to make any reimbursements to any of our sureties for bond-related costs. We believe that it is unlikely that we will have to fund significant claims under our surety arrangements. As of December 31, 2019, an aggregate of approximately $902.0 million in original face amount of bonds issued by our sureties were outstanding. Our estimated remaining cost to complete these bonded projects was approximately $399.2 million as of December 31, 2019.
From time to time we guarantee the obligations of our wholly owned subsidiaries, including obligations under certain contracts with customers, certain lease agreements, and, in some states, obligations in connection with obtaining contractors’ licenses. Additionally, from time to time we are required to post letters of credit to guarantee the obligations of our wholly owned subsidiaries, which reduces the borrowing availability under our credit facility.
Indemnities
From time to time, pursuant to our service arrangements, we indemnify our customers for claims related to the services we provide under those service arrangements. These indemnification obligations may subject us to indemnity claims, liabilities and related litigation. We are not aware of any material unrecorded liabilities for asserted claims in connection with these indemnification obligations.
Contractual Obligations
As of December 31, 2019, our future contractual obligations are as follows:

(in thousands) | ​ | ​ | Total | ​ | ​ | Less than 1 Year | ​ | ​ | 1 – 3 Years | ​ | ​ | 3 – 5 Years | ​ | ​ | More than 5 Years | ​ | ​ | Other | ​
Short and long term debt(1) | ​ | ​ | ​ | $ | 165,824 | ​ | ​ | ​ | ​ | $ | 8,737 | ​ | ​ | ​ | ​ | $ | 16,994 | ​ | ​ | ​ | ​ | $ | 124,649 | ​ | ​ | ​ | ​ | $ | 15,444 | ​ | ​ | ​ | ​ | $ | — | ​ | ​
Operating lease obligations | ​ | ​ | ​ | ​ | 29,514 | ​ | ​ | ​ | ​ | ​ | 8,431 | ​ | ​ | ​ | ​ | ​ | 13,334 | ​ | ​ | ​ | ​ | ​ | 6,101 | ​ | ​ | ​ | ​ | ​ | 1,648 | ​ | ​ | ​ | ​ | ​ | — | ​ | ​
Finance lease obligations | ​ | ​ | ​ | ​ | 1,508 | ​ | ​ | ​ | ​ | ​ | 1,167 | ​ | ​ | ​ | ​ | ​ | 341 | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | — | ​ | ​
Purchase obligations | ​ | ​ | ​ | ​ | 5,440 | ​ | ​ | ​ | ​ | ​ | 5,440 | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | — | ​ | ​
Income tax contingencies | ​ | ​ | ​ | ​ | 176 | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | 176 | ​ | ​
Total | ​ | ​ | ​ | $ | 202,462 | ​ | ​ | ​ | ​ | $ | 23,775 | ​ | ​ | ​ | ​ | $ | 30,669 | ​ | ​ | ​ | ​ | $ | 130,750 | ​ | ​ | ​ | ​ | $ | 17,092 | ​ | ​ | ​ | ​ | $ | 176 | ​ | ​

​
(1)
Includes obligations under the Facility and obligations under Equipment Notes.
​
Excluded from the above table are interest and fees associated with our short term and long term debt and letters of credit outstanding under our Facility, because the applicable interest rates and fees are variable. We have also excluded our multi-employer pension plan contributions, which are determined annually, based on our union employee payrolls, and which cannot be determined for future periods in advance.
The amount of income tax contingencies has been presented in the “Other” column in the table above due to the fact that the period of future payment cannot be reliably estimated. For further information, refer to Note 12 — Income Taxes to our Financial Statements.
Concentration of Credit Risk
We grant trade credit under contractual payment terms, generally without collateral, to our customers, which include high credit quality electric utilities, governmental entities, general contractors and builders, owners and managers of commercial and industrial properties. Consequently, we are subject to potential credit risk related to changes in business and economic factors. However, we generally have certain statutory lien rights with respect to services provided. Under certain circumstances such as foreclosures or negotiated settlements, we may take title to the underlying assets in lieu of cash in settlement of receivables. As of December 31, 2019 and 2018, none of our customers individually exceeded 10.0% of our accounts receivable.
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Inflation
Inflation did not have a significant effect on our results during the years ended December 31, 2019, 2018 or 2017.
New Accounting Pronouncements
For a discussion of recent accounting pronouncements, see Note 1 — Organization, Business and Significant Accounting Policies in the Notes to our Financial Statements.
Critical Accounting Policies
The discussion and analysis of our financial condition and results of operations are based on our Financial Statements, which have been prepared in accordance with GAAP. The preparation of these Financial Statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities known to exist at the date of the Financial Statements and the reported amounts of revenues and expenses during the reporting period. We evaluate our estimates on an ongoing basis, based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. There can be no assurance that actual results will not differ from those estimates. We believe the following accounting policies affect our more significant judgments and estimates used in the preparation of our Financial Statements:
Revenue Recognition. On January 1, 2018, we adopted ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) using the modified retrospective method for contracts that were not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018 are presented under this new pronouncement, while prior period amounts were not adjusted and continue to be reported under the accounting standard Revenue Recognition Topic 605, which was in effect for those periods. Differences in revenue recognition under Topic 606 were due to accelerated recognition of contract provisions related to variable consideration previously not permitted to be recognized under Topic 605 until no remaining contingency existed related to this consideration.
Under Topic 606, we recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration that we expect to be entitled to in exchange for goods or services provided. Revenue associated with contracts with customers is recognized over time as our performance creates or enhances customer controlled assets or creates or enhances an asset with no alternative use, for which we have an enforceable right to receive compensation as defined under the contract. To determine the amount of revenue to recognize over time, we estimate profit by determining the difference between total estimated revenue and total estimated cost of a contract. In addition, we estimate a cost accrual every quarter that represents unbilled invoicing activity for services performed by subcontractors and suppliers during the quarter, and estimate revenue from the contract cost portion of this accrual based on current gross margin rates to be consistent with our cost method of revenue recognition. The estimated value of unbilled amounts are determined using a regression analysis that estimates value based on our historical experience, and is adjusted for large individual projects. The profit and corresponding revenue is recognized over the contract term based on costs incurred under the cost-to-cost method. We utilized the cost-to-cost method as we believe cost incurred best represents the amount of work completed and remaining on our projects, and is the most common basis for computing percentage of completion in our industry. For purposes of recognizing revenue, we follow the five-step approach outlined in Accounting Standards Codification (“ASC”) 606-10-25.
As the cost-to-cost method is driven by incurred cost, we calculate the percentage of completion by dividing costs incurred to date by the total estimated cost. The percentage of completion is then multiplied by estimated revenues to determine inception-to-date revenue. Revenue recognized for the period is the current inception-to-date recognized revenue less the prior period inception-to-date recognized revenue. If a contract is projected to result in a loss, the entire contract loss is recognized in the period when the loss was first determined and the amount of the loss is updated in subsequent reporting periods. Because our billings are based on contract terms and do not coincide with our progress in a project, revenue recognition also includes an amount related to our contract asset or contract liability. If the recognized revenue is greater than the amount billed to the customer, a contract asset is recorded. Additionally, the contract asset
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includes retainage billed to the customer that cannot be collected until the contract work has been completed and approved. Conversely, if the amount billed to the customer is greater than the recognized revenue, a contract liability is recorded. Additionally, the contract liability includes a liability for the excess of costs over revenues for all contracts that are in a loss position.
Contract costs incurred to date and expected total contract costs are continuously monitored during the term of the contract. Changes in the job performance, job conditions and final contract settlements are factors that influence management’s assessment of total contract value and the total estimated costs to complete those contracts, and therefore, profit and revenue recognition. Additionally, we estimate costs to complete on fixed price contracts which are determined on an individual contract basis by evaluating each project’s status as of the balance sheet date, and using our historical experience with the level of effort required to complete the underlying project. Claims and change orders are also measured based on our historical experience with individual customers and similar contracts, and are evaluated by management individually. A change order is a modification to a contract that changes the provisions of the contract, typically resulting from changes in scope, specifications, design, manner of performance, facilities, equipment, materials, sites, or period of completion of the work under the contract. A claim is an amount in excess of the agreed-upon contract price that we seek to collect from our clients or others for client-caused delays, errors in specifications and designs, contract terminations, change orders that are either in dispute or are unapproved as to both scope and price, or other causes. We include these estimated amounts of variable consideration to the extent that it is probable there will not be a significant reversal of revenue.
Some of our contracts may have contract terms that include variable consideration such as safety or performance bonuses or liquidated damages. In accordance with ASC 606-10-32, we estimate the variable consideration using one of two methods. In contracts in which there is a binary outcome, the most likely amount method is used. In instances in which there is a range of possible outcomes, the expected value method is used. In accordance with ASC 606-10-32-11, we include the estimated amount of variable consideration in the transaction price only to the extent that it is probable that a significant reversal in the amount of cumulative recognized revenue will not occur when the final outcome of the variable consideration is determined. In contracts in which a significant reversal may occur, we use constraint in recognizing revenue on variable consideration. Although we often enter into contracts that contain liquidated damage clauses, we rarely incur them, and as such, we do not include amounts associated with liquidated damage clauses until it is probable that liquidated damages will occur. These items are continually monitored by multiple levels of management throughout the reporting period.
A portion of the work we perform requires financial assurances in the form of performance and payment bonds or letters of credit at the time of execution of the contract. Many of our contracts include retention provisions of up to 10%, which are generally withheld from each progress payment as retainage until the contract work has been completed and approved.
The accuracy of our revenue and profit recognition in a given period is dependent on the accuracy of our estimates of the cost to complete each project. Cost estimates for all of our significant projects use a detailed “bottoms up” approach and we believe our experience typically allows us to provide materially reliable estimates. There are a number of factors that can contribute to changes in estimates of contract cost and profitability. The most significant of these include, among others:
•
the completeness and accuracy of the original bid;
​
•
costs associated with scope changes, change orders or claims;
​
•
costs of labor and/or materials;
​
•
extended overhead due to owner, weather and other delays;
​
•
subcontractor performance issues;
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•
changes in productivity expectations;
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•
site conditions that differ from those assumed in the original bid (to the extent contract remedies are unavailable);
​
•
the availability and skill level of workers in the geographic location of the project; and
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​
•
a change in the availability and proximity of equipment and materials.
​
The foregoing factors as well as the stage of completion of contracts in process and the mix of contracts at different margins may cause fluctuations in gross profit between periods.
We provide warranties to customers on a basis customary to the industry; however, the warranty period does not typically exceed one year. Historically, warranty claims have not been material.
Total revenues do not include sales tax as we consider ourselves a pass-through conduit for collecting and remitting sales taxes. Sales tax and value added tax collected from customers is included in other current liabilities on our consolidated balance sheets.
Prior to January 1, 2018 we reported revenue under the accounting standard Revenue Recognition Topic 605, under which revenues under contracts were accounted for using the percentage-of-completion method of accounting. Under the percentage-of-completion method, we estimated profit as the difference between total estimated revenue and total estimated cost of a contract and recognized that profit over the contract term based on costs incurred under the cost-to-cost method.
Under Topic 605, revenues from our construction services were performed under fixed-price, time-and-equipment, time-and-materials, unit-price, and cost-plus fee contracts. For fixed-price and unit-price contracts, we used the ratio of cost incurred on the contract (excluding uninstalled direct materials) to management’s estimate of the contract’s total cost, to determine the percentage of completion on each contract. This method was used as management considered expended costs to be the best available measure of progression of these contracts. Contract cost included all direct costs on contracts, including labor and material, subcontractor costs and those indirect costs related to contract performance, such as supplies, fuel, tool repairs and depreciation. We recognized revenues from construction services with fees based on time-and-materials, or cost-plus fee as the services were performed and amounts were earned. If contracts included contract incentive or bonus provisions, they were included in estimated contract revenues only when the achievement of such incentive or bonus was reasonably certain.
Under Topic 605, contract costs incurred to date and expected total contract costs were continuously monitored during the term of the contract. Changes in job performance, job conditions and final contract settlements were factors that influenced management’s assessment of total contract value and the total estimated costs to complete those contracts and therefore, our profit recognition. These changes, which included contracts with estimated costs in excess of estimated revenues, were recognized in contract costs in the period in which the revisions were determined. At the point we anticipated a loss on a contract, we estimated the ultimate loss through completion and recognized that loss in the period in which the possible loss was identified.
Insurance. We carry insurance policies, which are subject to certain deductibles, for workers’ compensation, general liability, automobile liability and other coverages. Our deductible for each line of coverage is up to $1.0 million, except for wildfire coverage which has a deductible of  $2.0 million. Certain health benefit plans are subject to a deductible up to $0.2 million, for qualified individuals. Losses up to the deductible amounts are accrued based upon our estimates of the ultimate liability for claims reported and an estimate of claims incurred but not yet reported.
The insurance and claims accruals are based on known facts, actuarial estimates and historical trends. While recorded accruals are based on the ultimate liability, which includes amounts in excess of the deductible, a corresponding receivable for amounts in excess of the deductible is included in current assets on our consolidated balance sheets.
Stock-Based Compensation. We determine compensation expense for stock-based awards based on the estimated fair values at the grant date and recognize the related compensation expense over the vesting period. We use the straight-line amortization method to recognize compensation expense related to stock-based awards, such as restricted stock, restricted stock units and phantom stock units, that have only service conditions. This method recognizes stock compensation expense on a straight-line basis over the requisite service period for the entire award. We recognize compensation expense related to performance awards that vest based on internal performance metrics and service conditions on a straight-line basis over
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the service period, but adjust inception-to-date expense based upon our determination of the expected achievement of the performance target at each reporting date. We recognize compensation expense related to performance awards with market-based performance metrics on a straight-line basis over the requisite service period. Upon adoption of ASU No. 2016-09, Compensation — Stock Compensation (Topic 718) in January of 2017, we elected to discontinue estimating future forfeitures and recognize forfeitures as they occur. Prior to the adoption, we used historical data to estimate the forfeiture rate applied to stock grants. Shares issued under the Company’s stock-based compensation program are taken out of authorized but unissued shares.
Goodwill and Intangibles. Goodwill and intangible assets with indefinite lives are not amortized. Intangible assets with finite lives are amortized on a straight-line basis over their estimated useful lives. We review goodwill and intangible assets with indefinite lives for impairment on an annual basis at the beginning of the fourth quarter, or when circumstances change, such as a significant adverse change in the business climate or the decision to sell a business, both of which would indicate that impairment may have occurred. Intangible assets with finite lives are also reviewed for impairment and tested for recoverability whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. We may perform either a qualitative assessment or a two-step goodwill impairment test. The qualitative assessment considers financial, industry, segment and macroeconomic factors. If the qualitative assessment indicates a potential for impairment, the two-step method is used to determine if impairment exists. The two-step method begins with a comparison of the fair value of the reporting unit with its carrying value. If the carrying amount of the reporting unit exceeds its fair value, the second step of the process involves a comparison of the implied fair value and carrying value of the goodwill of that reporting unit. The company also performs a qualitative assessment on intangible assets with indefinite lives. If the qualitative assessment indicates a potential for impairment, a quantitative impairment test would be performed to compare the fair value of the indefinite-lived intangible asset with its carrying value. If the carrying value of goodwill or other indefinite lived assets exceeds its implied fair value, an impairment charge would be recorded in the statement of operations.
As a result of the annual qualitative review process in 2019 we determined it was not necessary to perform a two-step analysis.
In 2018, we performed a two-step analysis on our goodwill and intangible assets with indefinite lives. The first step involves a comparison of the fair value of the reporting unit with its carrying value. If the carrying amount of the reporting unit exceeds its fair value, the second step of the process involves a comparison of the implied fair value and carrying value of the goodwill of that reporting unit. If the carrying value of goodwill exceeds its implied fair value, an impairment charge is recorded in the statement of operations. The step-one analysis did not indicate that our goodwill or indefinite lived intangible assets were impaired. As a result, no step-two analysis was performed.
Accounts Receivable and Allowance for Doubtful Accounts. We do not generally charge interest to our customers, and we carry our customer receivables at their face amounts, less an allowance for doubtful accounts. Based on our experience in recent years, the majority of customer balances at each balance sheet date are collected within twelve months. As is common practice in the industry, we classify all accounts receivable as current assets.
We grant trade credit, on a non-collateralized basis (with the exception of lien rights against the property in certain cases) to our customers, and we are subject to potential credit risk related to changes in business and overall economic activity. We analyze specific accounts receivable balances, historical bad debts, customer credit-worthiness, current economic trends and changes in customer payment terms when evaluating the adequacy of the allowance for doubtful accounts. In the event that a customer balance is deemed to be uncollectible the account balance is written-off against the allowance for doubtful accounts.
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​
Item 7A.
Quantitative and Qualitative Disclosures About Market Risk
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As of December 31, 2019, we were not parties to any derivative instruments and had no derivative financial instruments during the years ended December 31, 2019, 2018 or 2017.
Borrowings under our Facility are based upon interest rates that will vary depending upon the prime rate, Canadian prime rate, federal funds rate and LIBOR. If the prime rate, Canadian prime rate, federal funds rate or LIBOR rises, our interest payment obligations will increase and have a negative effect on our cash flow and financial condition. We currently do not maintain any hedging contracts that would limit our exposure to variable rates of interest when we have outstanding borrowings. If market rates of interest on all our revolving debt as of December 31, 2019, which is subject to variable rates, permanently increased by 1%, the increase in interest expense on all revolving debt would decrease future income before income tax expense and cash flows by approximately $1.0 million annually. If market rates of interest on all our revolving debt, which is subject to variable rates as of December 31, 2019, permanently decreased by 1%, the decrease in interest expense on all debt would increase future income before income tax expense and cash flows by the same amount.
Borrowings under our Equipment Notes are at fixed rates established on the date the note was executed.
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​
Item 8.
Financial Statements and Supplementary Data
​
INDEX TO FINANCIAL STATEMENTS

​ | Management’s Report on Internal Control Over Financial Reporting | ​ | ​ | ​ | ​ | 56 | ​ | ​
​ | Report of Independent Registered Public Accounting Firm | ​ | ​ | ​ | ​ | 57 | ​ | ​
​ | Consolidated Balance Sheets as of December 31, 2019 and 2018 | ​ | ​ | ​ | ​ | 59 | ​ | ​
​ | Consolidated Statements of Operations and Comprehensive Income for the years ended December 31, 2019, 2018 and 2017 | ​ | ​ | ​ | ​ | 60 | ​ | ​
​ | Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2019, 2018 and 2017 | ​ | ​ | ​ | ​ | 61 | ​ | ​
​ | Consolidated Statements of Cash Flows for the years ended December 31, 2019, 2018 and 2017 | ​ | ​ | ​ | ​ | 62 | ​ | ​
​ | Notes to Financial Statements | ​ | ​ | ​ | ​ | 63 | ​ | ​

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Management’s Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) under the Exchange Act. Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of our Financial Statements for external purposes in accordance with GAAP. Internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.
Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we have conducted an evaluation of the effectiveness of our internal control over financial reporting based upon the criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework). Based on this evaluation, our management has concluded that our internal control over financial reporting was effective as of December 31, 2019 in providing reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external reporting purposes in accordance with GAAP.
Because of its inherent limitations, a system of internal control over financial reporting can provide only reasonable assurances and may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with policies and procedures may deteriorate.
Management’s assessment of and conclusion on the Company’s internal control over financial reporting as of December 31, 2019 excluded the internal control over financial reporting of CSI Electrical Contractors, Inc., which was acquired on July 15, 2019. CSI Electrical Contractors, Inc. represented a total of approximately 14.8% and 20.4% of total assets and net assets, respectively, as of December 31, 2019, and 6.7% and (2.9)% of contract revenues and income before income taxes, respectively, for the year then ended. Such exclusion is in accordance with Securities and Exchange Commission guidance that the assessment of a recently acquired business may be omitted in management’s report on internal controls over financial reporting, provided the acquisition took place during the fiscal year being assessed.
Crowe LLP, an independent registered public accounting firm, who audited and reported on the 2019 Financial Statements included in this Annual Report on Form 10-K, has audited the effectiveness of MYR Group’s internal control over financial reporting as of December 31, 2019 as stated in their report which appears herein.
March 4, 2020
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Report of Independent Registered Public Accounting Firm
To the Stockholders and the Board of Directors of MYR Group Inc.
Rolling Meadows, IL
Opinions on the Financial Statements and Internal Control Over Financial Reporting
We have audited the accompanying consolidated balance sheets of MYR Group Inc. (the “Company”) as of December 31, 2019 and 2018, the related consolidated statements of operations and comprehensive income, stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2019, and the related notes (collectively referred to as the “financial statements”). We also have audited the Company’s internal control over financial reporting as of December 31, 2019, based on criteria established in Internal Control — Integrated Framework: (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2019 and 2018, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2019, in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2019, based on criteria established in Internal Control — Integrated Framework: (2013) issued by COSO.
Basis for Opinions
The Company’s management is responsible for these financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s financial statements and an opinion on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.
Our audits of the financial statements included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. As permitted, the Company has excluded the operations of CSI Electrical Contractors, Inc. acquired during 2019, which is described in Note 2 of the consolidated financial statements, from the scope of management’s report on internal control over financial reporting. As such, it has also been excluded from the scope of our audit of internal control over financial reporting. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external
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purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ Crowe LLP
We have served as the Company’s auditor since 2017.
Oak Brook, Illinois
March 4, 2020
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MYR GROUP INC.
CONSOLIDATED BALANCE SHEETS

​ | ​ | ​ | December 31, | ​
(in thousands, except share and per share data) | ​ | ​ | 2019 | ​ | ​ | 2018 | ​
ASSETS | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Current assets | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Cash and cash equivalents | ​ | ​ | ​ | $ | 12,397 | ​ | ​ | ​ | ​ | $ | 7,507 | ​ | ​
Accounts receivable, net of allowances of  $3,364 and $1,331, respectively | ​ | ​ | ​ | ​ | 388,479 | ​ | ​ | ​ | ​ | ​ | 288,427 | ​ | ​
Contract assets | ​ | ​ | ​ | ​ | 217,109 | ​ | ​ | ​ | ​ | ​ | 160,281 | ​ | ​
Current portion of receivable for insurance claims in excess of deductibles | ​ | ​ | ​ | ​ | 6,415 | ​ | ​ | ​ | ​ | ​ | 10,572 | ​ | ​
Refundable income taxes | ​ | ​ | ​ | ​ | 1,973 | ​ | ​ | ​ | ​ | ​ | — | ​ | ​
Other current assets | ​ | ​ | ​ | ​ | 12,811 | ​ | ​ | ​ | ​ | ​ | 8,847 | ​ | ​
Total current assets | ​ | ​ | ​ | ​ | 639,184 | ​ | ​ | ​ | ​ | ​ | 475,634 | ​ | ​
Property and equipment, net of accumulated depreciation of  $272,865 and $253,495, respectively | ​ | ​ | ​ | ​ | 185,344 | ​ | ​ | ​ | ​ | ​ | 161,892 | ​ | ​
Operating lease right-of-use assets | ​ | ​ | ​ | ​ | 22,958 | ​ | ​ | ​ | ​ | ​ | — | ​ | ​
Goodwill | ​ | ​ | ​ | ​ | 66,060 | ​ | ​ | ​ | ​ | ​ | 56,588 | ​ | ​
Intangible assets, net of accumulated amortization of  $10,880 and $7,031, respectively | ​ | ​ | ​ | ​ | 54,940 | ​ | ​ | ​ | ​ | ​ | 33,266 | ​ | ​
Receivable for insurance claims in excess of deductibles | ​ | ​ | ​ | ​ | 30,976 | ​ | ​ | ​ | ​ | ​ | 17,173 | ​ | ​
Investment in joint venture | ​ | ​ | ​ | ​ | 4,722 | ​ | ​ | ​ | ​ | ​ | 1,324 | ​ | ​
Other assets | ​ | ​ | ​ | ​ | 3,687 | ​ | ​ | ​ | ​ | ​ | 2,878 | ​ | ​
Total assets | ​ | ​ | ​ | $ | 1,007,871 | ​ | ​ | ​ | ​ | $ | 748,755 | ​ | ​
LIABILITIES AND STOCKHOLDERS’ EQUITY | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Current liabilities | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Current portion of long-term debt | ​ | ​ | ​ | $ | 8,737 | ​ | ​ | ​ | ​ | $ | 3,681 | ​ | ​
Current portion of operating lease obligations | ​ | ​ | ​ | ​ | 6,205 | ​ | ​ | ​ | ​ | ​ | — | ​ | ​
Current portion of finance lease obligations | ​ | ​ | ​ | ​ | 1,135 | ​ | ​ | ​ | ​ | ​ | 1,119 | ​ | ​
Accounts payable | ​ | ​ | ​ | ​ | 192,107 | ​ | ​ | ​ | ​ | ​ | 139,480 | ​ | ​
Contract liabilities | ​ | ​ | ​ | ​ | 105,486 | ​ | ​ | ​ | ​ | ​ | 58,534 | ​ | ​
Current portion of accrued self-insurance | ​ | ​ | ​ | ​ | 18,780 | ​ | ​ | ​ | ​ | ​ | 19,633 | ​ | ​
Other current liabilities | ​ | ​ | ​ | ​ | 64,364 | ​ | ​ | ​ | ​ | ​ | 61,358 | ​ | ​
Total current liabilities | ​ | ​ | ​ | ​ | 396,814 | ​ | ​ | ​ | ​ | ​ | 283,805 | ​ | ​
Deferred income tax liabilities | ​ | ​ | ​ | ​ | 20,945 | ​ | ​ | ​ | ​ | ​ | 17,398 | ​ | ​
Long-term debt | ​ | ​ | ​ | ​ | 157,087 | ​ | ​ | ​ | ​ | ​ | 86,111 | ​ | ​
Accrued self-insurance | ​ | ​ | ​ | ​ | 48,024 | ​ | ​ | ​ | ​ | ​ | 34,406 | ​ | ​
Operating lease obligations, net of current maturities | ​ | ​ | ​ | ​ | 16,884 | ​ | ​ | ​ | ​ | ​ | — | ​ | ​
Finance lease obligations, net of current maturities | ​ | ​ | ​ | ​ | 338 | ​ | ​ | ​ | ​ | ​ | 1,514 | ​ | ​
Other liabilities | ​ | ​ | ​ | ​ | 3,304 | ​ | ​ | ​ | ​ | ​ | 1,057 | ​ | ​
Total liabilities | ​ | ​ | ​ | ​ | 643,396 | ​ | ​ | ​ | ​ | ​ | 424,291 | ​ | ​
Commitments and contingencies | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Stockholders’ equity | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Preferred stock – $0.01 par value per share; 4,000,000 authorized shares; none issued and outstanding at December 31, 2019 and December 31, 2018 | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | — | ​ | ​
Common stock – $0.01 par value per share; 100,000,000 authorized shares; 16,648,616 and 16,564,961 shares issued and outstanding at December 31, 2019 and December 31, 2018, respectively | ​ | ​ | ​ | ​ | 166 | ​ | ​ | ​ | ​ | ​ | 165 | ​ | ​
Additional paid-in capital | ​ | ​ | ​ | ​ | 152,532 | ​ | ​ | ​ | ​ | ​ | 148,276 | ​ | ​
Accumulated other comprehensive income (loss) | ​ | ​ | ​ | ​ | (446) | ​ | ​ | ​ | ​ | ​ | (193) | ​ | ​
Retained earnings | ​ | ​ | ​ | ​ | 212,219 | ​ | ​ | ​ | ​ | ​ | 174,736 | ​ | ​
Total stockholders’ equity attributable to MYR Group Inc. | ​ | ​ | ​ | ​ | 364,471 | ​ | ​ | ​ | ​ | ​ | 322,984 | ​ | ​
Noncontrolling interest | ​ | ​ | ​ | ​ | 4 | ​ | ​ | ​ | ​ | ​ | 1,480 | ​ | ​
Total stockholders’ equity | ​ | ​ | ​ | ​ | 364,475 | ​ | ​ | ​ | ​ | ​ | 324,464 | ​ | ​
Total liabilities and stockholders’ equity | ​ | ​ | ​ | $ | 1,007,871 | ​ | ​ | ​ | ​ | $ | 748,755 | ​ | ​

The accompanying notes are an integral part of these Financial Statements.
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MYR GROUP INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

​ | ​ | ​ | Year ended December 31, | ​
(in thousands, except per share data) | ​ | ​ | 2019 | ​ | ​ | 2018 | ​ | ​ | 2017 | ​
Contract revenues | ​ | ​ | ​ | $ | 2,071,159 | ​ | ​ | ​ | ​ | $ | 1,531,169 | ​ | ​ | ​ | ​ | $ | 1,403,317 | ​ | ​
Contract costs | ​ | ​ | ​ | ​ | 1,857,001 | ​ | ​ | ​ | ​ | ​ | 1,364,109 | ​ | ​ | ​ | ​ | ​ | 1,278,313 | ​ | ​
Gross profit | ​ | ​ | ​ | ​ | 214,158 | ​ | ​ | ​ | ​ | ​ | 167,060 | ​ | ​ | ​ | ​ | ​ | 125,004 | ​ | ​
Selling, general and administrative expenses | ​ | ​ | ​ | ​ | 156,674 | ​ | ​ | ​ | ​ | ​ | 118,737 | ​ | ​ | ​ | ​ | ​ | 98,611 | ​ | ​
Amortization of intangible assets | ​ | ​ | ​ | ​ | 3,849 | ​ | ​ | ​ | ​ | ​ | 1,843 | ​ | ​ | ​ | ​ | ​ | 499 | ​ | ​
Gain on sale of property and equipment | ​ | ​ | ​ | ​ | (3,543) | ​ | ​ | ​ | ​ | ​ | (3,832) | ​ | ​ | ​ | ​ | ​ | (3,664) | ​ | ​
Income from operations | ​ | ​ | ​ | ​ | 57,178 | ​ | ​ | ​ | ​ | ​ | 50,312 | ​ | ​ | ​ | ​ | ​ | 29,558 | ​ | ​
Other income (expense): | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Interest income | ​ | ​ | ​ | ​ | 4 | ​ | ​ | ​ | ​ | ​ | 24 | ​ | ​ | ​ | ​ | ​ | 4 | ​ | ​
Interest expense | ​ | ​ | ​ | ​ | (6,225) | ​ | ​ | ​ | ​ | ​ | (3,652) | ​ | ​ | ​ | ​ | ​ | (2,603) | ​ | ​
Other income (expense), net | ​ | ​ | ​ | ​ | (515) | ​ | ​ | ​ | ​ | ​ | (3,616) | ​ | ​ | ​ | ​ | ​ | (2,319) | ​ | ​
Income before income tax expense | ​ | ​ | ​ | ​ | 50,442 | ​ | ​ | ​ | ​ | ​ | 43,068 | ​ | ​ | ​ | ​ | ​ | 24,640 | ​ | ​
Income tax expense | ​ | ​ | ​ | ​ | 14,228 | ​ | ​ | ​ | ​ | ​ | 11,774 | ​ | ​ | ​ | ​ | ​ | 3,486 | ​ | ​
Net income | ​ | ​ | ​ | ​ | 36,214 | ​ | ​ | ​ | ​ | ​ | 31,294 | ​ | ​ | ​ | ​ | ​ | 21,154 | ​ | ​
Less: net income (loss) attributable to noncontrolling interest | ​ | ​ | ​ | ​ | (1,476) | ​ | ​ | ​ | ​ | ​ | 207 | ​ | ​ | ​ | ​ | ​ | — | ​ | ​
Net income attributable to MYR Group Inc. | ​ | ​ | ​ | $ | 37,690 | ​ | ​ | ​ | ​ | $ | 31,087 | ​ | ​ | ​ | ​ | $ | 21,154 | ​ | ​
Income per common share attributable to MYR Group Inc.: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
– Basic | ​ | ​ | ​ | $ | 2.27 | ​ | ​ | ​ | ​ | $ | 1.89 | ​ | ​ | ​ | ​ | $ | 1.30 | ​ | ​
– Diluted | ​ | ​ | ​ | $ | 2.26 | ​ | ​ | ​ | ​ | $ | 1.87 | ​ | ​ | ​ | ​ | $ | 1.28 | ​ | ​
Weighted average number of common shares and potential common shares outstanding: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
– Basic | ​ | ​ | ​ | ​ | 16,587 | ​ | ​ | ​ | ​ | ​ | 16,441 | ​ | ​ | ​ | ​ | ​ | 16,273 | ​ | ​
– Diluted | ​ | ​ | ​ | ​ | 16,699 | ​ | ​ | ​ | ​ | ​ | 16,585 | ​ | ​ | ​ | ​ | ​ | 16,496 | ​ | ​
Net income | ​ | ​ | ​ | $ | 36,214 | ​ | ​ | ​ | ​ | $ | 31,294 | ​ | ​ | ​ | ​ | $ | 21,154 | ​ | ​
Other comprehensive income (loss): | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Foreign currency translation adjustment | ​ | ​ | ​ | ​ | (253) | ​ | ​ | ​ | ​ | ​ | 106 | ​ | ​ | ​ | ​ | ​ | 134 | ​ | ​
Other comprehensive income (loss) | ​ | ​ | ​ | ​ | (253) | ​ | ​ | ​ | ​ | ​ | 106 | ​ | ​ | ​ | ​ | ​ | 134 | ​ | ​
Total comprehensive income | ​ | ​ | ​ | ​ | 35,961 | ​ | ​ | ​ | ​ | ​ | 31,400 | ​ | ​ | ​ | ​ | ​ | 21,288 | ​ | ​
Less: net income (loss) attributable to noncontrolling interest | ​ | ​ | ​ | ​ | (1,476) | ​ | ​ | ​ | ​ | ​ | 207 | ​ | ​ | ​ | ​ | ​ | — | ​ | ​
Total comprehensive income attributable to MYR Group Inc. | ​ | ​ | ​ | $ | 37,437 | ​ | ​ | ​ | ​ | $ | 31,193 | ​ | ​ | ​ | ​ | $ | 21,288 | ​ | ​

The accompanying notes are an integral part of these Financial Statements.
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MYR GROUP INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

​ | ​ | ​ | Preferred Stock | ​ | ​ | Common Stock | ​ | ​ | Additional Paid-In Capital | ​ | ​ | Accumulated Other Comprehensive Income (Loss) | ​ | ​ | Retained Earnings | ​ | ​ | MYR Group Inc. Shareholders’ Equity | ​ | ​ | Noncontrolling Interest | ​ | ​ | Total | ​
(in thousands) | ​ | ​ | Shares | ​ | ​ | Amount | ​
Balance at December 31, 2016 | ​ | ​ | ​ | $ | — | ​ | ​ | ​ | ​ | ​ | 16,333 | ​ | ​ | ​ | ​ | $ | 162 | ​ | ​ | ​ | ​ | $ | 140,100 | ​ | ​ | ​ | ​ | $ | (433) | ​ | ​ | ​ | ​ | $ | 123,345 | ​ | ​ | ​ | ​ | $ | 263,174 | ​ | ​ | ​ | ​ | $ | — | ​ | ​ | ​ | ​ | $ | 263,174 | ​ | ​
Net income | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | 21,154 | ​ | ​ | ​ | ​ | ​ | 21,154 | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | 21,154 | ​ | ​
Adjustment to adopt ASU No. 2016-09 | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | 225 | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | (225) | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | — | ​ | ​
Stock issued under compensation plans, net | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | 224 | ​ | ​ | ​ | ​ | ​ | 2 | ​ | ​ | ​ | ​ | ​ | 1,230 | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | 1,232 | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | 1,232 | ​ | ​
Stock-based compensation expense | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | 4,376 | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | 4,376 | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | 4,376 | ​ | ​
Shares repurchased | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | (93) | ​ | ​ | ​ | ​ | ​ | (1) | ​ | ​ | ​ | ​ | ​ | (2,025) | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | (1,033) | ​ | ​ | ​ | ​ | ​ | (3,059) | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | (3,059) | ​ | ​
Other comprehensive income | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | 134 | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | 134 | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | 134 | ​ | ​
Stock issued – other | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | 1 | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | 28 | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | 28 | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | 28 | ​ | ​
Balance at December 31, 2017 | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | 16,465 | ​ | ​ | ​ | ​ | ​ | 163 | ​ | ​ | ​ | ​ | ​ | 143,934 | ​ | ​ | ​ | ​ | ​ | (299) | ​ | ​ | ​ | ​ | ​ | 143,241 | ​ | ​ | ​ | ​ | ​ | 287,039 | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | 287,039 | ​ | ​
Net income | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | 31,087 | ​ | ​ | ​ | ​ | ​ | 31,087 | ​ | ​ | ​ | ​ | ​ | 207 | ​ | ​ | ​ | ​ | ​ | 31,294 | ​ | ​
Adjustment to adopt ASC 606 | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | 695 | ​ | ​ | ​ | ​ | ​ | 695 | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | 695 | ​ | ​
Stock issued under compensation plans, net | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | 132 | ​ | ​ | ​ | ​ | ​ | 2 | ​ | ​ | ​ | ​ | ​ | 1,895 | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | 1,897 | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | 1,897 | ​ | ​
Stock-based compensation expense | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | 3,165 | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | 3,165 | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | 3,165 | ​ | ​
Shares repurchased | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | (33) | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | (756) | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | (287) | ​ | ​ | ​ | ​ | ​ | (1,043) | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | (1,043) | ​ | ​
Noncontrolling interest acquired | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | 1,273 | ​ | ​ | ​ | ​ | ​ | 1,273 | ​ | ​
Other comprehensive income | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | 106 | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | 106 | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | 106 | ​ | ​
Stock issued – other | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | 1 | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | 38 | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | 38 | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | 38 | ​ | ​
Balance at December 31, 2018 | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | 16,565 | ​ | ​ | ​ | ​ | ​ | 165 | ​ | ​ | ​ | ​ | ​ | 148,276 | ​ | ​ | ​ | ​ | ​ | (193) | ​ | ​ | ​ | ​ | ​ | 174,736 | ​ | ​ | ​ | ​ | ​ | 322,984 | ​ | ​ | ​ | ​ | ​ | 1,480 | ​ | ​ | ​ | ​ | ​ | 324,464 | ​ | ​
Net income | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | 37,690 | ​ | ​ | ​ | ​ | ​ | 37,690 | ​ | ​ | ​ | ​ | ​ | (1,476) | ​ | ​ | ​ | ​ | ​ | 36,214 | ​ | ​
Stock issued under compensation plans, net | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | 105 | ​ | ​ | ​ | ​ | ​ | 1 | ​ | ​ | ​ | ​ | ​ | 340 | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | 341 | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | 341 | ​ | ​
Stock-based compensation expense | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | 4,403 | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | 4,403 | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | 4,403 | ​ | ​
Shares repurchased | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | (23) | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | (571) | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | (207) | ​ | ​ | ​ | ​ | ​ | (778) | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | (778) | ​ | ​
Other comprehensive loss | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | (253) | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | (253) | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | (253) | ​ | ​
Stock issued – other | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | 2 | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | 84 | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | 84 | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | 84 | ​ | ​
Balance at December 31, 2019 | ​ | ​ | ​ | $ | — | ​ | ​ | ​ | ​ | ​ | 16,649 | ​ | ​ | ​ | ​ | $ | 166 | ​ | ​ | ​ | ​ | $ | 152,532 | ​ | ​ | ​ | ​ | $ | (446) | ​ | ​ | ​ | ​ | $ | 212,219 | ​ | ​ | ​ | ​ | $ | 364,471 | ​ | ​ | ​ | ​ | $ | 4 | ​ | ​ | ​ | ​ | $ | 364,475 | ​ | ​
​

The accompanying notes are an integral part of these Financial Statements.
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MYR GROUP INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS

​ | ​ | ​ | Year ended December 31, | ​
(in thousands) | ​ | ​ | 2019 | ​ | ​ | 2018 | ​ | ​ | 2017 | ​
Cash flows from operating activities: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Net income | ​ | ​ | ​ | $ | 36,214 | ​ | ​ | ​ | ​ | $ | 31,294 | ​ | ​ | ​ | ​ | $ | 21,154 | ​ | ​
Adjustments to reconcile net income to net cash flows provided by (used in) operating activities: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Depreciation and amortization of property and equipment | ​ | ​ | ​ | ​ | 40,667 | ​ | ​ | ​ | ​ | ​ | 38,070 | ​ | ​ | ​ | ​ | ​ | 38,077 | ​ | ​
Amortization of intangible assets | ​ | ​ | ​ | ​ | 3,849 | ​ | ​ | ​ | ​ | ​ | 1,843 | ​ | ​ | ​ | ​ | ​ | 499 | ​ | ​
Stock-based compensation expense | ​ | ​ | ​ | ​ | 4,403 | ​ | ​ | ​ | ​ | ​ | 3,165 | ​ | ​ | ​ | ​ | ​ | 4,376 | ​ | ​
Deferred income taxes | ​ | ​ | ​ | ​ | 3,602 | ​ | ​ | ​ | ​ | ​ | 3,649 | ​ | ​ | ​ | ​ | ​ | (5,091) | ​ | ​
Gain on sale of property and equipment | ​ | ​ | ​ | ​ | (3,543) | ​ | ​ | ​ | ​ | ​ | (3,832) | ​ | ​ | ​ | ​ | ​ | (3,664) | ​ | ​
Other non-cash items | ​ | ​ | ​ | ​ | 1,029 | ​ | ​ | ​ | ​ | ​ | 237 | ​ | ​ | ​ | ​ | ​ | 1,194 | ​ | ​
Changes in operating assets and liabilities, net of acquisitions: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Accounts receivable, net | ​ | ​ | ​ | ​ | (39,710) | ​ | ​ | ​ | ​ | ​ | (15,871) | ​ | ​ | ​ | ​ | ​ | (35,944) | ​ | ​
Contract assets | ​ | ​ | ​ | ​ | (16,443) | ​ | ​ | ​ | ​ | ​ | (28,141) | ​ | ​ | ​ | ​ | ​ | (17,857) | ​ | ​
Receivable for insurance claims in excess of deductibles | ​ | ​ | ​ | ​ | (9,646) | ​ | ​ | ​ | ​ | ​ | (9,229) | ​ | ​ | ​ | ​ | ​ | (39) | ​ | ​
Other assets | ​ | ​ | ​ | ​ | (10,327) | ​ | ​ | ​ | ​ | ​ | 2,280 | ​ | ​ | ​ | ​ | ​ | (2,213) | ​ | ​
Accounts payable | ​ | ​ | ​ | ​ | 22,492 | ​ | ​ | ​ | ​ | ​ | 19,953 | ​ | ​ | ​ | ​ | ​ | 8,149 | ​ | ​
Contract liabilities | ​ | ​ | ​ | ​ | 28,163 | ​ | ​ | ​ | ​ | ​ | 22,551 | ​ | ​ | ​ | ​ | ​ | (14,317) | ​ | ​
Accrued self-insurance | ​ | ​ | ​ | ​ | 12,755 | ​ | ​ | ​ | ​ | ​ | 8,701 | ​ | ​ | ​ | ​ | ​ | 2,765 | ​ | ​
Other liabilities | ​ | ​ | ​ | ​ | (8,606) | ​ | ​ | ​ | ​ | ​ | 10,119 | ​ | ​ | ​ | ​ | ​ | (6,287) | ​ | ​
Net cash flows provided by (used in) operating activities | ​ | ​ | ​ | ​ | 64,899 | ​ | ​ | ​ | ​ | ​ | 84,789 | ​ | ​ | ​ | ​ | ​ | (9,198) | ​ | ​
Cash flows from investing activities: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Proceeds from sale of property and equipment | ​ | ​ | ​ | ​ | 4,051 | ​ | ​ | ​ | ​ | ​ | 4,583 | ​ | ​ | ​ | ​ | ​ | 4,342 | ​ | ​
Cash paid for acquisitions, net of cash acquired | ​ | ​ | ​ | ​ | (79,720) | ​ | ​ | ​ | ​ | ​ | (47,082) | ​ | ​ | ​ | ​ | ​ | — | ​ | ​
Purchases of property and equipment | ​ | ​ | ​ | ​ | (57,828) | ​ | ​ | ​ | ​ | ​ | (50,704) | ​ | ​ | ​ | ​ | ​ | (30,843) | ​ | ​
Net cash flows used in investing activities | ​ | ​ | ​ | ​ | (133,497) | ​ | ​ | ​ | ​ | ​ | (93,203) | ​ | ​ | ​ | ​ | ​ | (26,501) | ​ | ​
Cash flows from financing activities: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Net borrowings (repayments) under revolving lines of credit | ​ | ​ | ​ | ​ | 45,514 | ​ | ​ | ​ | ​ | ​ | (20,655) | ​ | ​ | ​ | ​ | ​ | 19,890 | ​ | ​
Payment of principal obligations under equipment notes | ​ | ​ | ​ | ​ | (4,550) | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | — | ​ | ​
Payment of principal obligations under finance leases | ​ | ​ | ​ | ​ | (1,201) | ​ | ​ | ​ | ​ | ​ | (1,081) | ​ | ​ | ​ | ​ | ​ | (1,203) | ​ | ​
Borrowings under equipment notes | ​ | ​ | ​ | ​ | 35,068 | ​ | ​ | ​ | ​ | ​ | 31,486 | ​ | ​ | ​ | ​ | ​ | — | ​ | ​
Proceeds from exercise of stock options | ​ | ​ | ​ | ​ | 341 | ​ | ​ | ​ | ​ | ​ | 1,897 | ​ | ​ | ​ | ​ | ​ | 1,232 | ​ | ​
Debt refinancing costs | ​ | ​ | ​ | ​ | (1,122) | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | — | ​ | ​
Repurchase of common shares | ​ | ​ | ​ | ​ | (778) | ​ | ​ | ​ | ​ | ​ | (1,043) | ​ | ​ | ​ | ​ | ​ | (3,058) | ​ | ​
Other financing activities | ​ | ​ | ​ | ​ | 84 | ​ | ​ | ​ | ​ | ​ | 38 | ​ | ​ | ​ | ​ | ​ | 28 | ​ | ​
Net cash flows provided by financing activities | ​ | ​ | ​ | ​ | 73,356 | ​ | ​ | ​ | ​ | ​ | 10,642 | ​ | ​ | ​ | ​ | ​ | 16,889 | ​ | ​
Effect of exchange rate changes on cash | ​ | ​ | ​ | ​ | 132 | ​ | ​ | ​ | ​ | ​ | (64) | ​ | ​ | ​ | ​ | ​ | 307 | ​ | ​
Net increase (decrease) in cash and cash equivalents | ​ | ​ | ​ | ​ | 4,890 | ​ | ​ | ​ | ​ | ​ | 2,164 | ​ | ​ | ​ | ​ | ​ | (18,503) | ​ | ​
Cash and cash equivalents: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Beginning of period | ​ | ​ | ​ | ​ | 7,507 | ​ | ​ | ​ | ​ | ​ | 5,343 | ​ | ​ | ​ | ​ | ​ | 23,846 | ​ | ​
End of period | ​ | ​ | ​ | $ | 12,397 | ​ | ​ | ​ | ​ | $ | 7,507 | ​ | ​ | ​ | ​ | $ | 5,343 | ​ | ​
Supplemental Cash Flow Information: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Cash paid during the period for: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Income taxes payments | ​ | ​ | ​ | $ | 13,381 | ​ | ​ | ​ | ​ | $ | 7,247 | ​ | ​ | ​ | ​ | $ | 6,597 | ​ | ​
Interest payments | ​ | ​ | ​ | ​ | 5,737 | ​ | ​ | ​ | ​ | ​ | 3,097 | ​ | ​ | ​ | ​ | ​ | 2,259 | ​ | ​
Noncash investing activities: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Acquisition of property and equipment for which payment is pending | ​ | ​ | ​ | ​ | 43 | ​ | ​ | ​ | ​ | ​ | 953 | ​ | ​ | ​ | ​ | ​ | 2,050 | ​ | ​

The accompanying notes are an integral part of these Financial Statements.
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MYR GROUP INC.
NOTES TO FINANCIAL STATEMENTS
1. Organization, Business and Significant Accounting Policies
Organization and Business
MYR Group Inc. (the “Company”) is a holding company of specialty electrical construction service providers and is currently conducting operations through wholly owned subsidiaries including: The L. E. Myers Co., a Delaware corporation; Harlan Electric Company, a Michigan corporation; Great Southwestern Construction, Inc., a Colorado corporation; Sturgeon Electric Company, Inc., a Michigan corporation; MYR Transmission Services, Inc., a Delaware corporation; E.S. Boulos Company, a Delaware corporation; High Country Line Construction, Inc., a Nevada corporation; Sturgeon Electric California, LLC, a Delaware limited liability company; GSW Integrated Services, LLC, a Delaware limited liability company; Huen Electric, Inc., a Delaware corporation; CSI Electrical Contractors, Inc., a Delaware corporation; MYR Transmission Services Canada, Ltd., a British Columbia corporation; Northern Transmission Services, Ltd., a British Columbia corporation and Western Pacific Enterprises Ltd., a British Columbia corporation.
The Company performs construction services in two business segments: Transmission and Distribution (“T&D”) and Commercial and Industrial (“C&I”). T&D customers include investor-owned utilities, cooperatives, private developers, government-funded utilities, independent power producers, independent transmission companies, industrial facility owners and other contractors. T&D provides a broad range of services, which include design, engineering, procurement, construction, upgrade, maintenance and repair services, with a particular focus on construction, maintenance and repair. C&I customers include general contractors, commercial and industrial facility owners, government agencies and developers. C&I provides a broad range of services, which include design, installation, maintenance and repair of commercial and industrial wiring, the installation of traffic networks and the installation of bridge, roadway and tunnel lighting.
Significant Accounting Policies
Consolidation
The accompanying Financial Statements include the results of operations of the Company and its subsidiaries. Significant intercompany transactions and balances have been eliminated. Certain reclassifications were made to prior year amounts to conform to the current year presentation.
Revenue Recognition
On January 1, 2018, the Company adopted accounting standards update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606) using the modified retrospective method for contracts that were not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018 are presented under this new pronouncement, while prior period amounts were not adjusted and continue to be reported under the accounting standard Revenue Recognition (Topic 605), which was in effect for those periods. Differences in revenue recognition under Topic 606 were due to accelerated recognition of contract provisions related to variable consideration previously not permitted to be recognized under Topic 605 until no remaining contingency existed related to this consideration.
Under Topic 606, the Company recognizes revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration the Company expects to be entitled to in exchange for goods or services provided. Revenue associated with contracts with customers is recognized over time as the Company’s performance creates or enhances customer controlled assets or creates or enhances an asset with no alternative use, for which the Company has an enforceable right to receive compensation as defined under the contract. To determine the amount of revenue to recognize over time, the Company estimates profit by determining the difference between total estimated revenue and total estimated cost of a contract. In addition, the Company estimates a cost accrual every quarter that represents unbilled invoicing activity for services performed by subcontractors and suppliers during the quarter, and estimates revenue
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from the contract cost portion of this accrual based on current gross margin rates to be consistent with its cost method of revenue recognition. The estimated value of unbilled amounts are determined using a regression analysis that estimates value based on the Company’s historical experience, and is adjusted for large individual projects. The profit and corresponding revenue is recognized over the contract term based on costs incurred under the cost-to-cost method. The Company utilizes the cost-to-cost method as it believes cost incurred best represents the amount of work completed and remaining on projects, and is the most common basis for computing percentage of completion in the industry. For purposes of recognizing revenue, the Company follows the five-step approach outlined in Accounting Standards Codification (“ASC”) 606-10-25.
As the cost-to-cost method is driven by incurred cost, the Company calculates the percentage of completion by dividing costs incurred to date by the total estimated cost. The percentage of completion is then multiplied by estimated revenues to determine inception-to-date revenue. Revenue recognized for the period is the current inception-to-date recognized revenue less the prior period inception-to-date recognized revenue. If a contract is projected to result in a loss, the entire contract loss is recognized in the period when the loss was first determined and the amount of the loss is updated in subsequent reporting periods. Because the Company’s billings are based on contract terms and do not coincide with our progress in a project, revenue recognition also includes an amount related to a contract asset or contract liability. If the recognized revenue is greater than the amount billed to the customer, a contract asset is recorded. Additionally, the contract asset includes retainage billed to the customer that cannot be collected until the contract work has been completed and approved. Conversely, if the amount billed to the customer is greater than the recognized revenue, a contract liability is recorded. Additionally, the contract liability includes a liability for the excess of costs over revenues for all contracts that are in a loss position.
Contract costs incurred to date and expected total contract costs are continuously monitored during the term of the contract. Changes in the job performance, job conditions and final contract settlements are factors that influence management’s assessment of total contract value and the total estimated costs to complete those contracts, and therefore, profit and revenue recognition. Additionally, the Company estimates costs to complete on fixed price contracts which are determined on an individual contract basis by evaluating each project’s status as of the balance sheet date, and using our historical experience with the level of effort required to complete the underlying project. Claims and change orders are also measured based on our historical experience with individual customers and similar contracts, and are evaluated by management individually. A change order is a modification to a contract that changes the provisions of the contract, typically resulting from changes in scope, specifications, design, manner of performance, facilities, equipment, materials, sites, or period of completion of the work under the contract. A claim is an amount in excess of the agreed-upon contract price that the Company seeks to collect from its clients or others for client-caused delays, errors in specifications and designs, contract terminations, change orders that are either in dispute or are unapproved as to both scope and price, or other causes. The Company includes these estimated amounts of variable consideration to the extent that it is probable there will not be a significant reversal of revenue.
Some of the Company’s contracts may have contract terms that include variable consideration such as safety or performance bonuses or liquidated damages. In accordance with ASC 606-10-32, the Company estimates the variable consideration using one of two methods. In contracts in which there is a binary outcome, the most likely amount method is used. In instances in which there is a range of possible outcomes, the expected value method is used. In accordance with ASC 606-10-32-11, the Company includes the estimated amount of variable consideration in the transaction price only to the extent that it is probable that a significant reversal in the amount of cumulative recognized revenue will not occur when the final outcome of the variable consideration is determined. In contracts in which a significant reversal may occur, the Company uses constraint in recognizing revenue on variable consideration. Although the Company often enters into contracts that contain liquidated damage clauses, the Company rarely incurs them, and as such, the Company does not include amounts associated with liquidated damage clauses until it is probable that liquidated damages will occur. These items are continually monitored by multiple levels of management throughout the reporting period.
A portion of the work the Company performs requires financial assurances in the form of performance and payment bonds or letters of credit at the time of execution of the contract. Many of the Company’s
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contracts include retention provisions of up to 10%, which are generally withheld from each progress payment as retainage until the contract work has been completed and approved.
The Company provides warranties to customers on a basis customary to the industry; however, the warranty period does not typically exceed one year. Historically, warranty claims have not been material to the Company.
Total revenues do not include sales tax as the Company considers itself a pass-through conduit for collecting and remitting sales taxes. Sales tax and value added tax collected from customers is included in other current liabilities on the Company’s consolidated balance sheets.
Prior to January 1, 2018 the Company reported revenue under the accounting standard Revenue Recognition (Topic 605), under which revenues from long-term contracts were accounted for using the percentage-of-completion method of accounting. Under the percentage-of-completion method, the Company estimated profit as the difference between total estimated revenue and total estimated cost of a contract and recognized that profit over the contract term based on costs incurred under the cost-to-cost method.
Under Topic 605, revenues from the Company’s construction services were performed under fixed-price, time-and-equipment, time-and-materials, unit-price, and cost-plus fee contracts. For fixed-price and unit-price contracts, the Company used the ratio of cost incurred to date on the contract to management’s estimate of the contract’s total cost, to determine the percentage of completion on each contract. This method was used as management considered expended costs to be the best available measure of progression of these contracts. Contract cost included all direct costs on contracts, including labor and material, subcontractor costs and those indirect costs related to contract performance, such as supplies, fuel, tool repairs and depreciation. The Company recognized revenues from construction services with fees based on time-and-materials, or cost-plus fee as the services were performed and amounts were earned. If contracts included contract incentive or bonus provisions, they were included in estimated contract revenues only when the achievement of such incentive or bonus was reasonably certain.
Under Topic 605, contract costs incurred to date and expected total contract costs were continuously monitored during the term of the contract. Changes in job performance, job conditions and final contract settlements were factors that influenced management’s assessment of total contract value and the total estimated costs to complete those contracts and therefore, the Company’s profit recognition. These changes, which included contracts with estimated costs in excess of estimated revenues, were recognized in contract costs in the period in which the revisions were determined. At the point the Company anticipated a loss on a contract, the Company estimated the ultimate loss through completion and recognized that loss in the period in which the possible loss was identified.
Joint Ventures and Noncontrolling Interests
The Company accounts for investments in joint ventures using the proportionate consolidation method for income statement reporting and under the equity method for balance sheet reporting, unless the Company has a controlling interest causing the joint venture to be consolidated with equity owned by other joint venture partners recorded as noncontrolling interests. Under the proportionate consolidation method, joint venture activity is allocated to the appropriate line items found on the consolidated statements of operations in proportion to the percentage of participation the Company has in the joint venture. Under the equity method the net investment in joint ventures is stated as a single item on the Company’s consolidated balance sheets. If an investment in a joint venture contains a recourse or unfunded commitments to provide additional equity, distributions and/or losses in excess of the investment a liability is recorded in other current liabilities on the Company’s consolidated balance sheets. For joint ventures which the Company does not have a controlling interest, the Company’s share of any profits and assets and its share of any losses and liabilities are recognized based on the Company’s stated percentage partnership interest in the joint venture, and are normally recorded by the Company one month in arrears. The investments in joint ventures are recorded at cost and the carrying amounts are adjusted to recognize the Company’s proportionate share of cumulative income or loss, additional contributions made and dividends and capital distributions received. The Company records the effect of any impairment or any other-than-temporary decrease in the value of the joint venture investment as incurred, which may or may not be one month in arrears, depending
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on when the Company obtains the joint venture activity information. Additionally, the Company continually assesses the fair value of its investment in unconsolidated joint ventures despite using information that is one month in arrears for regular reporting purposes. The Company includes only its percentage ownership of each joint venture in its backlog. See Note 17–Noncontrolling Interests to the Financial Statements for further information related to joint ventures in which the Company has a majority controlling interest.
Foreign Currency
The functional currency for the Company’s Canadian operations is the Canadian dollar. Assets and liabilities denominated in Canadian dollars are translated into U.S. dollars at the end-of-period exchange rate. Revenues and expenses are translated using average exchange rates for the periods reported. Equity accounts are translated at historical rates. Cumulative translation adjustments are included as a separate component of accumulated other comprehensive income in shareholders’ equity. Foreign currency transaction gains and losses, arising primarily from changes in exchange rates on short-term monetary assets and liabilities, and ineffective long-term monetary assets and liabilities are recorded in the “other income, net” line on the Company’s consolidated statements of operations. For the year ended December 31, 2019, the Company recorded foreign currency gains of approximately $0.1 million. Effective foreign currency transaction gains and losses, arising primarily from long-term assets and liabilities are recorded in the foreign currency translation adjustment line on the Company’s consolidated statements of comprehensive income.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the period reported. Actual results could differ from those estimates.
The most significant estimates are related to estimates of costs to complete on contracts, pending change orders and claims, shared savings, insurance reserves, income tax reserves, estimates surrounding stock-based compensation, the recoverability of goodwill and intangibles and accounts receivable reserves. Actual results could differ from these estimates.
As of December 31, 2019 and 2018, the Company recognized revenues of  $35.9 million and $3.4 million, respectively, related to significant change orders and/or claims that had been included as contract price adjustments on certain contracts which were in the process of being negotiated in the normal course of business. These aggregate amounts, which were included in “Contract assets” in the accompanying consolidated balance sheets, represent the Company’s estimates of additional contract revenues that were earned and probable of collection, however, the amount ultimately realized could be significantly higher or lower than the estimated amount.
The cost-to-cost method of accounting requires the Company to make estimates about the expected revenue and gross profit on each of its contracts in process. During the year ended December 31, 2019, changes in estimates pertaining to certain projects decreased consolidated gross margin by 0.8%, which resulted in decreases in operating income of  $11.7 million, net income attributable to MYR Group Inc. of $7.5 million and diluted earnings per common share attributable to MYR Group Inc. of  $0.45. The estimates are reviewed and revised quarterly, as needed. During the year ended December 31, 2018, changes in estimates pertaining to certain projects decreased consolidated gross margin by 0.7%, which resulted in decreases in operating income of  $10.5 million, net income attributable to MYR Group Inc. of  $8.2 million and diluted earnings per common share attributable to MYR Group Inc. of  $0.49. During the year ended December 31, 2017, changes in estimates pertaining to certain projects decreased consolidated gross margin by 0.7%, which resulted in decreases in operating income of  $10.4 million, net income attributable to MYR Group Inc. of  $6.2 million and diluted earnings per common share attributable to MYR Group Inc. of  $0.38.
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Advertising
Advertising costs are expensed when incurred. Advertising costs, included in selling, general and administrative expenses, were $0.8 million for the year ended December 31, 2019, and $0.7 million for the years ended December 31, 2018 and 2017, respectively.
Income Taxes
The Company follows the liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are recorded for future tax consequences of temporary differences between the financial reporting and tax basis of assets and liabilities, and are measured using the enacted tax rates and laws that are expected to be in effect when the underlying assets or liabilities are recovered or settled. The Company also evaluates whether the recorded deferred tax assets and valuation allowances can be realized and, when necessary, reduces the amounts to what is expected to be realized.
Interest and penalties related to uncertain income tax positions are included in income tax expense on the Company’s consolidated statements of operations. Interest and penalties actually incurred are charged to interest expense and the “other income, net” line, respectively.
Stock-Based Compensation
The Company determines compensation expense for stock-based awards based on the estimated fair values at the grant date and recognize the related compensation expense over the vesting period. The Company uses the straight-line amortization method to recognize compensation expense related to stock-based awards, such as restricted stock, restricted stock units and phantom stock units, that have only service conditions. This method recognizes stock compensation expense on a straight-line basis over the requisite service period for the entire award. The Company recognizes compensation expense related to performance awards that vest based on internal performance metrics and service conditions on a straight-line basis over the service period, but adjust inception-to-date expense based upon our determination of the potential achievement of the performance target at each reporting date. The Company recognizes compensation expense related to performance awards with market-based performance metrics on a straight-line basis over the requisite service period. Upon adoption ASU No. 2016-09, Compensation — Stock Compensation (Topic 718) in January of 2017, the Company elected to discontinue estimating future forfeitures and recognize forfeitures as they occur. Prior to the adoption, the Company used historical data to estimate the forfeiture rate applied to stock grants. Shares issued under the Company’s stock-based compensation program are taken out of authorized but unissued shares.
Earnings Per Share
The Company computes earnings per share using the treasury stock method. Under the treasury stock method, basic earnings per share attributable to MYR Group Inc. are computed by dividing net income attributable to MYR Group Inc. by the weighted average number of common shares outstanding during the period. Diluted earnings per share attributable to MYR Group Inc. are computed by dividing net income attributable to MYR Group Inc. by the weighted average number of common shares outstanding during the period plus all potentially dilutive common stock equivalents, except in cases where the effect of the common stock equivalent would be anti-dilutive.
Cash and Cash Equivalents
The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. As of December 31, 2019 and 2018, the Company held its cash in checking accounts or in highly liquid money market funds. The Company’s banking arrangements allow the Company to fund outstanding checks when presented to financial institutions for payment. The Company funds all intraday bank balances overdrafts during the same business day. Checks issued and outstanding in excess of bank balance are recorded in accounts payable on the Company’s consolidated balance sheets and are reflected as a financing activity on the Company’s Consolidated Statements of Cash Flows.
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Accounts Receivable and Allowance for Doubtful Accounts
The Company does not charge interest to its customers and carries its customer receivables at their face amounts, less an allowance for doubtful accounts. Based on the Company’s experience in recent years, the majority of customer balances at each balance sheet date are collected within twelve months. As is common practice in the industry, the Company classifies all accounts receivable as current assets.
The Company grants trade credit, on a non-collateralized basis (with the exception of lien rights against the property in certain cases), to its customers and is subject to potential credit risk related to changes in business and overall economic activity. The Company analyzes specific accounts receivable balances, historical bad debts, customer credit-worthiness, current economic trends and changes in customer payment terms when evaluating the adequacy of the allowance for doubtful accounts. In the event that a customer balance is deemed to be uncollectible, the account balance is written-off against the allowance for doubtful accounts.
Classification of Contract Assets and Liabilities
The Company recognizes revenue associated with its contracts with customers over time, for which the Company has an enforceable right to receive compensation. Many of our contracts contain specific provisions that determine when the Company can bill for its work performed under these contracts.
Any revenue earned on a contract that has not yet been billed to the customer is recorded as a contract asset on the Company’s consolidated balance sheets. Contract retainages associated with contract work that has been completed and billed but not paid by its customers until the contracts are substantially complete, pursuant to contract retainage provisions under the contract, are also included in contract assets. The allowance for collection of contract retainage was not significant as of December 31, 2019 and 2018.
The Company’s consolidated balance sheets present contract liabilities that contain deferred revenue that represent any costs incurred on contracts in process for which revenue has not yet been recognized. Additionally, accruals for contracts in a loss provision are included in contract liabilities.
Property and Equipment
Property and equipment is carried at cost. Depreciation is computed using the straight-line method over estimated useful lives. Major modifications or refurbishments which extend the useful life of the assets are capitalized and depreciated over the adjusted remaining useful life of the assets. Upon retirement or disposition of property and equipment, the cost and related accumulated depreciation are removed and any resulting gain or loss is recognized in income from operations. The cost of maintenance and repairs is charged to expense as incurred. Property and equipment is reviewed for impairment and tested for recoverability whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If the carrying value of property and equipment exceeds its fair value, an impairment charge would be recorded in the statement of operations.
Leases
On January 1, 2019, the Company adopted ASU No. 2016-02, Leases (Topic 842) using the modified retrospective method. Under this guidance, the net present value of future lease payments are recorded as right-of-use assets and liabilities. In addition, the Company elected the ‘package of practical expedients’ permitted under the transition guidance within the new standard, which among other things, allowed the Company to carry forward the historical lease classification. In addition, the Company elected not to utilize the hindsight practical expedient to determine the lease term for existing leases. The Company elected the short-term lease recognition exemption for all leases that qualify. This means, for those leases that qualify, the Company did not recognize right-of-use assets or lease liabilities, including not recognizing right-of-use assets or lease liabilities for existing short-term leases of those assets in transition. The Company also elected the practical expedient to not separate lease and non-lease components for our real estate and vehicle leases.
The Company enters into non-cancelable leases for some of our facility, vehicle and equipment needs. These leases allow the Company to conserve cash by paying a monthly lease rental fee for the use of facilities, vehicles and equipment rather than purchasing them. The Company’s leases have remaining terms ranging
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from one to seven years, some of which may include options to extend the leases for up to five years, and some of which may include options to terminate the leases within one year. Currently, all the Company’s leases contain fixed payment terms. The Company may decide to cancel or terminate a lease before the end of its term, in which case we are typically liable to the lessor for the remaining lease payments under the term of the lease. Additionally, all of the Company’s month-to-month leases are cancelable, by the Company or the lessor, at any time and are not included in our right-of-use asset or liability. As of December 31, 2019, the Company had several leases with residual value guarantees, due to the acquisition of CSI. The total amount probable of being owed of residual leases guarantees is not significant. Typically, the Company has purchase options on the equipment underlying its long-term leases and many of its short-term rental arrangements. The Company may exercise some of these purchase options when the need for equipment is on-going and the purchase option price is attractive. Nonperformance-related default covenants, cross-default provisions, subjective default provisions and material adverse change clauses contained in material lease agreements, if any, are also evaluated to determine whether those clauses affect lease classification in accordance with ASC Topic 842-10-25. Leases are accounted for as operating or finance leases, depending on the terms of the lease.
Finance Leases. The Company leases some vehicles and certain equipment under finance leases. The economic substance of the leases is a financing transaction for acquisition of the vehicles and equipment. Accordingly, the right-of-use assets for these leases are included on the Company’s consolidated balance sheets in property and equipment, net of accumulated depreciation, with a corresponding amount recorded in current portion of finance lease obligations or finance lease obligations, net of current maturities, as appropriate. The finance lease assets are amortized over the life of the lease or, if shorter, the life of the leased asset, on a straight-line basis and included in depreciation expense. The financing component associated with finance lease obligations is included in interest expense. Generally, for the Company’s finance leases an implicit rate to calculate present value is provided in the lease agreement, however if a rate in not provided the Company determines this rate by estimating the Company’s incremental borrowing rate, utilizing the borrowing rates associated with the Company’s various debt instruments.
Operating Right-of-Use Leases. Operating right-of-use leases are included in operating lease right-of-use assets, current portion of operating lease obligations and operating lease obligations, net of current maturities on the Company’s consolidated balance sheets, as appropriate. Operating lease right-of-use assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As most of the Company’s leases do not provide an implicit rate to calculate present value, the Company determines this rate by estimating the Company’s incremental borrowing rate, utilizing the borrowing rates associated with the Company’s various debt instruments. The operating lease right-of-use asset also includes any lease payments made and initial direct costs incurred and excludes lease incentives. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term.
Prior to January, 2019 the Company accounted for its leases in accordance with Leases (Topic 840). Leases with characteristics of operating leases were expensed on a straight-line basis over the life of the lease on the Company’s consolidated statements of operations. Leases with the characteristics of capital leases were recorded at fair value on the Company’s consolidated balance sheets. The asset portion was included in property and equipment on the Company’s consolidated balance sheets and was amortized as depreciation expense on the Company’s consolidated statements of operations. The liability portion was included on the Company’s consolidated balance sheets as current and long term portions of capital leases. These liabilities were amortized as interest expense and lease expense on the Company’s consolidated statements of operations.
Insurance
The Company carries insurance policies, which are subject to certain deductibles, for workers’ compensation, general liability, automobile liability and other coverages. The deductible for each line of coverage is up to $1.0 million, except for wildfire coverage which has a deductible of  $2.0 million. Certain health benefit plans are subject to a deductible up to $0.2 million, for qualified individuals. Losses up to the deductible amounts are accrued based upon the Company’s estimates of the ultimate liability for claims reported and an estimate of claims incurred but not yet reported.
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The insurance and claims accruals are based on known facts, actuarial estimates and historical trends. While recorded accruals are based on the ultimate liability, which includes amounts in excess of the deductible, a corresponding receivable for amounts in excess of the deductible is included in current assets on the Company’s consolidated balance sheets.
Goodwill and Intangible Assets
Goodwill and intangible assets with indefinite lives are not amortized. Intangible assets with finite lives are amortized on a straight-line basis over their estimated useful lives. The Company reviews goodwill and intangible assets with indefinite lives for impairment on an annual basis at the beginning of the fourth quarter, or when circumstances change, such as a significant adverse change in the business climate or the decision to sell a business, both of which would indicate that impairment may have occurred. Intangible assets with finite lives are also reviewed for impairment and tested for recoverability whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. The Company may perform either a qualitative assessment or a two-step goodwill impairment test. The qualitative assessment considers financial, industry, segment and macroeconomic factors. If the qualitative assessment indicates a potential for impairment, the two-step method is used to determine if impairment exists. The two-step method begins with a comparison of the fair value of the reporting unit with its carrying value. If the carrying amount of the reporting unit exceeds its fair value, the second step of the process involves a comparison of the implied fair value and carrying value of the goodwill of that reporting unit. The company also performs a qualitative assessment on intangible assets with indefinite lives. If the qualitative assessment indicates a potential for impairment, a quantitative impairment test would be performed to compare the fair value of the indefinite-lived intangible asset with its carrying value. If the carrying value of goodwill or other indefinite-lived assets exceeds its implied fair value, an impairment charge would be recorded in the statement of operations.
As a result of the annual qualitative review process in 2019 and 2017, the Company determined it was not necessary to perform a two-step analysis.
In 2018, the Company performed a two-step analysis on goodwill and intangible assets with indefinite lives. The first step involves a comparison of the fair value of the reporting unit with its carrying value. If the carrying amount of the reporting unit exceeds its fair value, the second step of the process involves a comparison of the implied fair value and carrying value of the goodwill of that reporting unit. If the carrying value of goodwill exceeds its implied fair value, an impairment charge is recorded in the statement of operations. The step-one analysis did not indicate that the Company’s goodwill or indefinite-lived intangible assets were impaired. As a result, no step-two analysis was performed.
Concentrations
Financial instruments that potentially subject the Company to a concentration of credit risk consist principally of cash and cash equivalents and accounts receivable. The Company maintains substantially all of its cash and cash equivalent balances with large financial institutions which are believed to be high quality institutions.
The Company is subject to a concentration of risk because it derives a significant portion of its revenues from a few customers. The Company’s top ten customers accounted for approximately 30.8%, 32.9%, and 40.4% of consolidated revenues for the years ended December 31, 2019, 2018 and 2017, respectively. For the years ended December 31, 2019 and 2018, no single customer accounted for more than 10.0% of annual revenues. For the year ended December 31, 2017, one T&D customer accounted for 10.7% of our revenues.
The Company grants trade credit under contractual payment terms, generally without collateral, to its customers, which include high credit quality electric utilities, governmental entities, general contractors and builders, owners and managers of commercial and industrial properties. Consequently, the Company is subject to potential credit risk related to changes in business and economic factors. However, the Company generally has certain statutory lien rights with respect to services provided. Under certain circumstances such as foreclosures or negotiated settlements, the Company may take title to the underlying assets in lieu of cash in settlement of receivables. As of December 31, 2019 and 2018, none of the Company’s customers
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individually exceeded 10.0% of accounts receivable. The Company believes the terms and conditions in its contracts, billing and collection policies are adequate to minimize the potential credit risk.
As of December 31, 2019, approximately 90% of the Company’s craft labor employees were covered by collective bargaining agreements. Although the majority of these agreements prohibit strikes and work stoppages, the Company cannot be certain that strikes or work stoppages will not occur in the future.
Recent Accounting Pronouncements
Changes to GAAP are typically established by the Financial Accounting Standards Board (“FASB”) in the form of accounting standards updates (“ASUs”) to the FASB’s Accounting Standards Codification (“ASC”). The Company considers the applicability and impact of all ASUs. The Company, based on its assessment, determined that any recently issued or proposed ASUs not listed below are either not applicable to the Company or may have minimal impact on its Financial Statements.
Recently Adopted Accounting Pronouncements
In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). The amendments under this pronouncement changed the way all leases with durations in excess of one year are treated. Under this guidance, lessees are required to recognize virtually all leases on the balance sheet as a right-of-use asset and an associated finance lease liability or operating lease liability. The right-of-use asset represents the lessee’s right to use, or control the use of, a specified asset for the specified lease term. The lease liability represents the lessee’s obligation to make lease payments arising from the lease, measured on a discounted basis. Based on certain characteristics, leases are classified as finance leases or operating leases. Finance lease liabilities, which contain provisions similar to capitalized leases under the prior accounting standards, are amortized as amortization expense and interest expense in the statement of operations. Operating lease liabilities and right-of-use assets are adjusted to result in a single straight-line lease expense over the life of the lease. On January 1, 2019, the Company adopted ASU No. 2016-02, Leases (Topic 842) using the modified retrospective method. The modified retrospective basis provides a method for recording existing leases at adoption and in comparative periods that approximates the results of a full retrospective approach using the cumulative-effect approach for recording the transition adjustment as of the effective date. Financial results reported in prior periods are unchanged. See Note 4–Lease Obligations for further information related to the Company’s accounting policy and transition disclosures associated with the adoption of this pronouncement.
Recently Issued Accounting Pronouncements
In January 2017, the FASB issued ASU No. 2017-04, Intangibles — Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment, which simplifies the subsequent measurement of goodwill, through elimination of Step 2 from the goodwill impairment test. Instead, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. The update is effective for any annual or interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The guidance requires application on a prospective basis. The Company does not expect that this pronouncement will have a significant impact on its financial statements.
In June 2016, the FASB issued ASU 2016-13, Financial Instruments — Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments, which introduced an expected credit loss methodology for the measurement and recognition of credit losses on most financial instruments, including trade receivables and off-balance sheet credit exposures. Under this guidance, an entity is required to consider a broader range of information to estimate expected credit losses, which may result in earlier recognition of losses. This ASU also requires disclosure of information regarding how a company developed its allowance, including changes in the factors that influenced management’s estimate of expected credit losses and the reasons for those changes. The ASU and its related clarifying updates are effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years, with early adoption permitted. The adoption of this standard will be through a cumulative-effect adjustment to retained earnings
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as of the effective date. Based on our historical experience, the Company does not expect that this pronouncement will have a significant impact in its financial statements or on the estimate of the allowance for uncollectable accounts.
In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement, which modifies the disclosure requirements for Level 1, Level 2 and Level 3 instruments in the fair value hierarchy. The guidance is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years, with early adoption permitted for any eliminated or modified disclosures. The adoption of this standard is not expected to have a material impact on the Company’s consolidated financial statements or disclosures.
In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes, which simplifies the accounting for income taxes, eliminates certain exceptions within ASC 740, Income Taxes, and clarifies certain aspects of the current guidance to promote consistent application among reporting entities. The guidance is effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years, with early adoption permitted. Upon adoption, the Company must apply certain aspects of this standard retrospectively for all periods presented while other aspects are applied on a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption. The Company is evaluating the impact this update will have on its financial statements.
2. Acquisitions
CSI Electrical Contractors, Inc.
On July 15, 2019, the Company completed the acquisition of substantially all the assets of CSI Electrical Contractors, Inc. (“CSI”), an electrical contracting firm based in California. CSI provides services to a broad array of end markets under the Company’s C&I segment. The total consideration, after net asset adjustments of approximately $1.0 million, was $80.7 million which was funded through borrowings under the Company’s credit facility. The Company has finalized the purchase price accounting relating to the acquisition of CSI.
The purchase agreement also includes contingent consideration provisions for margin guarantee adjustments based upon contract performance subsequent to the acquisition. The contracts were valued at fair value at the acquisition date, causing no margin guarantee estimate or adjustments for fair value. Changes in contract estimates, such as modified costs to complete or change order recognition, will result in changes to these margin guarantee estimates. Changes in contingent consideration, subsequent to the acquisition, related to the margin guarantee adjustments on contracts of approximately $2.0 million were recorded in other expense for the year ended December 31, 2019. Future margin guarantee adjustments, if any, are expected to be recognized through 2020. The Company could also be required to make compensation payments contingent on the successful achievement of certain performance targets and continued employment of certain key executives of CSI. These payments are recognized as compensation expense on the Company’s consolidated statements of operations as incurred. For the year ended December 31, 2019 the Company recognized $0.4 million of compensation expense associated with these contingent payments.
The results of operations for CSI are included on the Company’s consolidated statement of operations and the C&I segment from the date of acquisition. Costs of approximately $0.6 million related to the acquisition were included in selling, general and administrative expenses on the Company’s consolidated statement of operations for the year ended December 31, 2019.
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The following table summarizes the allocation of the opening balance sheet from the date of the CSI acquisition:

(in thousands) | ​ | ​ | (as of acquisition date) July 15, 2019 | ​ | ​ | Measurement Period Adjustments | ​ | ​ | Final Acquisition Allocation | ​
Consideration paid | ​ | ​ | ​ | $ | 79,720 | ​ | ​ | ​ | ​ | $ | — | ​ | ​ | ​ | ​ | $ | 79,720 | ​ | ​
Net asset adjustments | ​ | ​ | ​ | ​ | 633 | ​ | ​ | ​ | ​ | ​ | 354 | ​ | ​ | ​ | ​ | ​ | 987 | ​ | ​
Total consideration, net of net asset adjustments | ​ | ​ | ​ | $ | 80,353 | ​ | ​ | ​ | ​ | $ | 354 | ​ | ​ | ​ | ​ | $ | 80,707 | ​ | ​
Accounts receivable, net | ​ | ​ | ​ | $ | 59,579 | ​ | ​ | ​ | ​ | $ | 186 | ​ | ​ | ​ | ​ | $ | 59,765 | ​ | ​
Contract assets | ​ | ​ | ​ | ​ | 38,970 | ​ | ​ | ​ | ​ | ​ | 994 | ​ | ​ | ​ | ​ | ​ | 39,964 | ​ | ​
Other current assets | ​ | ​ | ​ | ​ | 83 | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | 83 | ​ | ​
Property and equipment | ​ | ​ | ​ | ​ | 7,964 | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | 7,964 | ​ | ​
Operating lease right-of-use assets | ​ | ​ | ​ | ​ | 9,933 | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | 9,933 | ​ | ​
Intangible assets | ​ | ​ | ​ | ​ | 26,000 | ​ | ​ | ​ | ​ | ​ | (500) | ​ | ​ | ​ | ​ | ​ | 25,500 | ​ | ​
Other long term assets | ​ | ​ | ​ | ​ | 149 | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | 149 | ​ | ​
Accounts payable | ​ | ​ | ​ | ​ | (29,533) | ​ | ​ | ​ | ​ | ​ | (1,100) | ​ | ​ | ​ | ​ | ​ | (30,633) | ​ | ​
Accrued salaries and benefits | ​ | ​ | ​ | ​ | (8,091) | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | (8,091) | ​ | ​
Contract liabilities | ​ | ​ | ​ | ​ | (18,934) | ​ | ​ | ​ | ​ | ​ | 200 | ​ | ​ | ​ | ​ | ​ | (18,734) | ​ | ​
Current portion of operating lease obligations | ​ | ​ | ​ | ​ | (2,526) | ​ | ​ | ​ | ​ | ​ | (36) | ​ | ​ | ​ | ​ | ​ | (2,562) | ​ | ​
Other current liabilities | ​ | ​ | ​ | ​ | (4,776) | ​ | ​ | ​ | ​ | ​ | 73 | ​ | ​ | ​ | ​ | ​ | (4,703) | ​ | ​
Operating lease obligations, net of current maturities | ​ | ​ | ​ | ​ | (7,407) | ​ | ​ | ​ | ​ | ​ | 36 | ​ | ​ | ​ | ​ | ​ | (7,371) | ​ | ​
Long-term debt | ​ | ​ | ​ | ​ | (20) | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | (20) | ​ | ​
Net identifiable assets and liabilities | ​ | ​ | ​ | ​ | 71,391 | ​ | ​ | ​ | ​ | ​ | (147) | ​ | ​ | ​ | ​ | ​ | 71,244 | ​ | ​
Goodwill | ​ | ​ | ​ | $ | 8,962 | ​ | ​ | ​ | ​ | $ | 501 | ​ | ​ | ​ | ​ | $ | 9,463 | ​ | ​

The Company has determined the fair value of the assets acquired and liabilities assumed for the purposes of allocating the purchase price. The goodwill to be recognized, which represents the excess of the purchase price over the net amount of the fair values assigned to assets acquired and liabilities assumed, is primarily attributable to the value of an assembled workforce and other non-identifiable assets. No synergies were anticipated in the acquisition as CSI will function as an individual district within the Company’s operating structure. All of the goodwill and identifiable intangible assets are expected to be tax deductible per applicable Internal Revenue Service regulations.
The following unaudited supplemental pro forma results of operations have been provided for illustrative purposes only and do not purport to be indicative of the actual results that would have been achieved by the combined companies for the periods presented or that may be achieved by the combined companies in the future. Future results may vary significantly from the results reflected in the following pro forma financial information because of future events and transactions, as well as other factors:

​ | ​ | ​ | Year ended December 31, | ​
(in thousands, except per share data) | ​ | ​ | 2019 | ​ | ​ | 2018 | ​
​ | ​ | ​ | (unaudited) | ​ | ​ | (unaudited) | ​
Contract revenues | ​ | ​ | ​ | $ | 2,243,224 | ​ | ​ | ​ | ​ | $ | 1,833,645 | ​ | ​
Net income | ​ | ​ | ​ | $ | 39,552 | ​ | ​ | ​ | ​ | $ | 33,165 | ​ | ​
Net income attributable to MYR Group, Inc. | ​ | ​ | ​ | $ | 41,028 | ​ | ​ | ​ | ​ | $ | 32,958 | ​ | ​
Income per common share attributable to MYR Group Inc.: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
– Basic | ​ | ​ | ​ | $ | 2.47 | ​ | ​ | ​ | ​ | $ | 2.00 | ​ | ​
– Diluted | ​ | ​ | ​ | $ | 2.46 | ​ | ​ | ​ | ​ | $ | 1.99 | ​ | ​
Weighted average number of common shares and potential common shares outstanding: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
– Basic | ​ | ​ | ​ | ​ | 16,587 | ​ | ​ | ​ | ​ | ​ | 16,441 | ​ | ​
– Diluted | ​ | ​ | ​ | ​ | 16,699 | ​ | ​ | ​ | ​ | ​ | 16,585 | ​ | ​

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The pro forma combined results of operations for the year ended December 31, 2019 and 2018 were prepared by adjusting the historical results of the Company to include the historical results of CSI, as if the acquisition occurred on January 1, 2018.
These pro forma results were adjusted for the following:
•
additional depreciation associated with the estimated step-up in fair value of the property and equipment acquired;
​
•
transaction costs associated with the acquisition;
​
•
estimated compensation expense related to contingent payments associated with the achievement of certain performance targets and continued employment of certain key executives of CSI;
​
•
the estimated amortization related to the acquired intangible assets discussed above;
​
•
interest expense recorded by CSI and the additional interest expense related to the incremental borrowings of  $79.7 million on the Company’s credit facility as if the borrowing occurred on January 1, 2018; and
​
•
the income tax effect of pro forma adjustments at the statutory tax rate.
​
Revenues of approximately $137.7 million and net loss before income taxes of approximately $1.5 million, net of CSI margin guarantee adjustments on contracts of  $2.0 million and intangible asset amortization of  $1.8 million, were included on the Company’s consolidated results of operations for the year ended December 31, 2019 related to the acquisition of CSI.
Huen Electric, Inc.
On July 2, 2018, the Company completed the acquisition of substantially all the assets of Huen Electric, Inc., an electrical contracting firm based in Illinois, Huen Electric New Jersey Inc., an electrical contracting firm based in New Jersey, and Huen New York, Inc., an electrical contracting firm based in New York (collectively, the “Huen Companies”). The Huen Companies provide a wide range of commercial and industrial electrical construction capabilities under the Company’s C&I segment in Illinois, New Jersey and New York. The total consideration, after net asset adjustments of approximately $10.8 million, was $57.9 million which was funded through borrowings under the Company’s credit facility. The Company has finalized the purchase price accounting relating to the acquisition of the Huen Companies. All goodwill and identifiable intangible assets are expected to be tax deductible per applicable Internal Revenue Service regulations.
The purchase agreement also includes contingent consideration provisions for margin guarantee adjustments based upon performance subsequent to the acquisition on certain contracts. The contracts are valued at fair value at the acquisition date, causing no margin guarantee estimate or adjustments for fair value. Changes in contract estimates, such as modified costs to complete or change order recognition, have resulted and will continue to result in changes to these margin guarantee estimates. Changes in contingent consideration, subsequent to the acquisition, related to the margin guarantee adjustments on certain contracts of approximately $1.5 million were recorded in other expense for the year ended December 31, 2019. Margin guarantee adjustments are expected to be finalized in early 2020. The Company could also be required to make compensation payments contingent on the successful achievement of certain performance targets and continued employment of certain key executives of the Huen Companies. These payments are recognized as compensation expense on the Company’s consolidated statements of operations as incurred. For the year ended December 31, 2019 the Company recognized $1.9 million of compensation expense associated with these contingent payments.
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The following table summarizes the allocation of the opening balance sheet from the date of the Huen acquisition:

(in thousands) | ​ | ​ | (as of acquisition date) July 2, 2018 | ​ | ​ | Measurement Period Adjustments | ​ | ​ | Final Acquisition Allocation | ​
Consideration paid | ​ | ​ | ​ | $ | 47,082 | ​ | ​ | ​ | ​ | $ | — | ​ | ​ | ​ | ​ | $ | 47,082 | ​ | ​
Preliminary estimated net asset adjustments | ​ | ​ | ​ | ​ | 10,749 | ​ | ​ | ​ | ​ | ​ | 85 | ​ | ​ | ​ | ​ | ​ | 10,834 | ​ | ​
Total consideration, net of net asset adjustments | ​ | ​ | ​ | $ | 57,831 | ​ | ​ | ​ | ​ | $ | 85 | ​ | ​ | ​ | ​ | $ | 57,916 | ​ | ​
Accounts receivable, net | ​ | ​ | ​ | $ | 33,903 | ​ | ​ | ​ | ​ | $ | (207) | ​ | ​ | ​ | ​ | $ | 33,696 | ​ | ​
Contract assets | ​ | ​ | ​ | ​ | 10,570 | ​ | ​ | ​ | ​ | ​ | 1,010 | ​ | ​ | ​ | ​ | ​ | 11,580 | ​ | ​
Other current and long term assets | ​ | ​ | ​ | ​ | 88 | ​ | ​ | ​ | ​ | ​ | (11) | ​ | ​ | ​ | ​ | ​ | 77 | ​ | ​
Property and equipment | ​ | ​ | ​ | ​ | 3,188 | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | 3,188 | ​ | ​
Intangible assets | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | 24,300 | ​ | ​ | ​ | ​ | ​ | 24,300 | ​ | ​
Accounts payable | ​ | ​ | ​ | ​ | (9,592) | ​ | ​ | ​ | ​ | ​ | (1,274) | ​ | ​ | ​ | ​ | ​ | (10,866) | ​ | ​
Contract liabilities | ​ | ​ | ​ | ​ | (6,394) | ​ | ​ | ​ | ​ | ​ | 525 | ​ | ​ | ​ | ​ | ​ | (5,869) | ​ | ​
Other current liabilities | ​ | ​ | ​ | ​ | (6,570) | ​ | ​ | ​ | ​ | ​ | 49 | ​ | ​ | ​ | ​ | ​ | (6,521) | ​ | ​
Net identifiable assets and liabilites | ​ | ​ | ​ | ​ | 25,193 | ​ | ​ | ​ | ​ | ​ | 24,392 | ​ | ​ | ​ | ​ | ​ | 49,585 | ​ | ​
Unallocated intangible assets | ​ | ​ | ​ | ​ | 9,800 | ​ | ​ | ​ | ​ | ​ | (9,800) | ​ | ​ | ​ | ​ | ​ | — | ​ | ​
Total aquired assets and liabilites | ​ | ​ | ​ | ​ | 34,993 | ​ | ​ | ​ | ​ | ​ | 14,592 | ​ | ​ | ​ | ​ | ​ | 49,585 | ​ | ​
Fair value of aquired noncontrolling interests | ​ | ​ | ​ | ​ | (1,273) | ​ | ​ | ​ | ​ | ​ | (7) | ​ | ​ | ​ | ​ | ​ | (1,280) | ​ | ​
Goodwill | ​ | ​ | ​ | $ | 24,111 | ​ | ​ | ​ | ​ | $ | (14,500) | ​ | ​ | ​ | ​ | $ | 9,611 | ​ | ​

3. Contract Assets and Liabilities
Contracts with customers usually stipulate the timing of payment, which is defined by the terms found within the various contracts under which work was performed during the period. Therefore, contract assets and liabilities are created when the timing of costs incurred on work performed does not coincide with the billing terms, which frequently include retention provisions contained in each contract.
The Company’s consolidated balance sheets present contract assets which contains unbilled revenue (previously identified as costs and estimated earnings in excess of billings) and contract retainages associated with contract work that has been completed and billed but not paid by customers, pursuant to retainage provisions, that are generally due once the job is completed and approved. The allowance for collection of contract retainage was not significant as of December 31, 2019 and 2018.
Contract assets consisted of the following at December 31:

​ | ​ | ​ | ​ | (in thousands) | ​ | ​ | 2019 | ​ | ​ | 2018 | ​ | ​ | Change | ​
​ | ​ | ​ | ​ | Unbilled revenue | ​ | ​ | ​ | $ | 126,087 | ​ | ​ | ​ | ​ | $ | 111,153 | ​ | ​ | ​ | ​ | $ | 14,934 | ​ | ​
​ | ​ | ​ | ​ | Contract retainages, net | ​ | ​ | ​ | ​ | 91,022 | ​ | ​ | ​ | ​ | ​ | 49,128 | ​ | ​ | ​ | ​ | ​ | 41,894 | ​ | ​
​ | ​ | ​ | ​ | Contract assets | ​ | ​ | ​ | $ | 217,109 | ​ | ​ | ​ | ​ | $ | 160,281 | ​ | ​ | ​ | ​ | $ | 56,828 | ​ | ​

The Company’s consolidated balance sheets present contract liabilities which contains deferred revenue (previously identified as billings in excess of costs and estimated earnings on uncompleted contracts) and an accrual for contracts in a loss provision.
Contract liabilities consisted of the following at December 31:

​ | ​ | ​ | ​ | (in thousands) | ​ | ​ | 2019 | ​ | ​ | 2018 | ​ | ​ | Change | ​
​ | ​ | ​ | ​ | Deferred revenue | ​ | ​ | ​ | $ | 102,673 | ​ | ​ | ​ | ​ | $ | 57,051 | ​ | ​ | ​ | ​ | $ | 45,622 | ​ | ​
​ | ​ | ​ | ​ | Accrued loss provision | ​ | ​ | ​ | ​ | 2,813 | ​ | ​ | ​ | ​ | ​ | 1,483 | ​ | ​ | ​ | ​ | ​ | 1,330 | ​ | ​
​ | ​ | ​ | ​ | Contract liabilities | ​ | ​ | ​ | $ | 105,486 | ​ | ​ | ​ | ​ | $ | 58,534 | ​ | ​ | ​ | ​ | $ | 46,952 | ​ | ​
​

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The following table provides information about contract assets and contract liabilities from contracts with customers:

​ | ​ | ​ | ​ | (in thousands) | ​ | ​ | 2019 | ​ | ​ | 2018 | ​ | ​ | Change | ​
​ | ​ | ​ | ​ | Contract assets | ​ | ​ | ​ | $ | 217,109 | ​ | ​ | ​ | ​ | $ | 160,281 | ​ | ​ | ​ | ​ | $ | 56,828 | ​ | ​
​ | ​ | ​ | ​ | Contract liabilities | ​ | ​ | ​ | ​ | (105,486) | ​ | ​ | ​ | ​ | ​ | (58,534) | ​ | ​ | ​ | ​ | ​ | (46,952) | ​ | ​
​ | ​ | ​ | ​ | Net contract assets (liabilities) | ​ | ​ | ​ | $ | 111,623 | ​ | ​ | ​ | ​ | $ | 101,747 | ​ | ​ | ​ | ​ | $ | 9,876 | ​ | ​

The difference between the opening and closing balances of the Company’s contract assets and contract liabilities primarily results from the timing of the Company’s billings in relation to its performance of work along with contract assets and contract liabilities acquired in the CSI acquisition. The amounts of revenues recognized in the period that were included in the opening contract liability balances were $39.2 million and $21.3 million for the year ended December 31, 2019 and 2018, respectively. This revenue consists primarily of work performed on previous billings to customers.
The net asset position for contracts in process consisted of the following at December 31:

​ | ​ | ​ | ​ | (in thousands) | ​ | ​ | 2019 | ​ | ​ | 2018 | ​
​ | ​ | ​ | ​ | Costs and estimated earnings on uncompleted contracts | ​ | ​ | ​ | $ | 3,532,886 | ​ | ​ | ​ | ​ | $ | 2,718,713 | ​ | ​
​ | ​ | ​ | ​ | Less: billings to date | ​ | ​ | ​ | ​ | 3,509,472 | ​ | ​ | ​ | ​ | ​ | 2,664,611 | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | $ | 23,414 | ​ | ​ | ​ | ​ | $ | 54,102 | ​ | ​

The net asset position for contracts in process is included within the contract asset and contract liability in the accompanying consolidated balance sheets as follows at December 31:

​ | ​ | ​ | ​ | (in thousands) | ​ | ​ | 2019 | ​ | ​ | 2018 | ​
​ | ​ | ​ | ​ | Unbilled revenue | ​ | ​ | ​ | $ | 126,087 | ​ | ​ | ​ | ​ | $ | 111,153 | ​ | ​
​ | ​ | ​ | ​ | Deferred revenue | ​ | ​ | ​ | ​ | (102,673) | ​ | ​ | ​ | ​ | ​ | (57,051) | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | $ | 23,414 | ​ | ​ | ​ | ​ | $ | 54,102 | ​ | ​

4. Lease Obligations
Change in Accounting Policy
On January 1, 2019, the Company adopted ASU No. 2016-02, Leases (Topic 842) using the modified retrospective method. Under this guidance, the net present value of future lease payments are recorded as right-of-use assets and liabilities. In addition, the Company elected the ‘package of practical expedients’ permitted under the transition guidance within the new standard, which among other things, allowed the Company to carry forward the historical lease classification. In addition, the Company elected not to utilize the hindsight practical expedient to determine the lease term for existing leases. The Company elected the short-term lease recognition exemption for all leases that qualify. This means, for those leases that qualify, the Company did not recognize right-of-use assets or lease liabilities, including not recognizing right-of-use assets or lease liabilities for existing short-term leases of those assets in transition. The Company also elected the practical expedient to not separate lease and non-lease components for our real estate and vehicle leases. Adoption of the new standard resulted in the recording of additional operating right-of-use assets and operating lease liabilities of approximately $15.1 million, as of January 1, 2019. The adoption of Topic 842 did not impact the Company’s retained earnings, consolidated net earnings or cash flows.
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The following is a summary of the lease-related assets and liabilities recorded as of December 31, 2019:

(in thousands) | ​ | ​ | Classification on the Consolidated Balance Sheet | ​ | ​ | ​ | ​ | ​ | ​ | ​
Assets | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Operating lease right-of-use assets | ​ | ​ | Operating lease right-of-use assets | ​ | ​ | ​ | $ | 22,958 | ​ | ​
Finance lease right-of-use assets | ​ | ​ | Property and equipment, net of accumulated depreciation | ​ | ​ | ​ | ​ | 1,478 | ​ | ​
Total right-of-use lease assets | ​ | ​ | ​ | ​ | ​ | ​ | $ | 24,436 | ​ | ​
Liabilities | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Current | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Operating lease obligations | ​ | ​ | Current portion of operating lease obligations | ​ | ​ | ​ | $ | 6,205 | ​ | ​
Finance lease obligations | ​ | ​ | Current portion of finance lease obligations | ​ | ​ | ​ | ​ | 1,135 | ​ | ​
Total current obligations | ​ | ​ | ​ | ​ | ​ | ​ | ​ | 7,340 | ​ | ​
Non-current | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Operating lease obligations | ​ | ​ | Operating lease obligations, net of current maturities | ​ | ​ | ​ | ​ | 16,884 | ​ | ​
Finance lease obligations | ​ | ​ | Finance lease obligations, net of current maturities | ​ | ​ | ​ | ​ | 338 | ​ | ​
Total non-current obligations | ​ | ​ | ​ | ​ | ​ | ​ | ​ | 17,222 | ​ | ​
Total lease obligations | ​ | ​ | ​ | ​ | ​ | ​ | $ | 24,562 | ​ | ​

The following is a summary of the lease terms and discount rates as of December 31, 2019:

​ | ​ | ​ | ​ | Weighted-average remaining lease term – finance leases | ​ | ​ | 1.4 years​ | ​
​ | ​ | ​ | ​ | Weighted-average remaining lease term – operating leases | ​ | ​ | 3.9 years​ | ​
​ | ​ | ​ | ​ | Weighted-average discount rate – finance leases | ​ | ​ | 2.5%​ | ​
​ | ​ | ​ | ​ | Weighted-average discount rate – operating leases | ​ | ​ | 3.8%​ | ​

The following is a summary of certain information related to the lease costs for finance and operating leases for the year ended December 31, 2019:

​ | ​ | ​ | ​ | ​ | ​ | ​ | Year ended December 31, | ​
​ | ​ | ​ | ​ | (in thousands) | ​ | ​ | 2019 | ​
​ | ​ | ​ | ​ | Lease cost: | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | Finance lease cost: | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | Amortization of right-of-use assets | ​ | ​ | ​ | $ | 820 | ​ | ​
​ | ​ | ​ | ​ | Interest on lease liabilities | ​ | ​ | ​ | ​ | 66 | ​ | ​
​ | ​ | ​ | ​ | Operating lease cost | ​ | ​ | ​ | ​ | 7,282 | ​ | ​
​ | ​ | ​ | ​ | Short-term lease cost | ​ | ​ | ​ | ​ | 8 | ​ | ​
​ | ​ | ​ | ​ | Variable lease costs | ​ | ​ | ​ | ​ | 284 | ​ | ​
​ | ​ | ​ | ​ | Total lease cost | ​ | ​ | ​ | $ | 8,460 | ​ | ​

The following is a summary of other information and supplemental cash flow information related to finance and operating leases for the year ended December 31, 2019:

​ | ​ | ​ | ​ | (in thousands) | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | Other information: | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | Cash paid for amounts included in the measurement of lease liabilities | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | Operating cash flows from operating leases | ​ | ​ | ​ | $ | 7,337 | ​ | ​
​ | ​ | ​ | ​ | Right-of-use asset obtained in exchange for new operating lease obligations | ​ | ​ | ​ | $ | 13,301 | ​ | ​

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The future undiscounted minimum lease payments, as reconciled to the discounted minimum lease obligation indicated on the Company’s consolidated balance sheets, under current portion of operating lease obligations, current portion of finance lease obligations, and operating lease obligations, net of current maturities, as of December 31, 2019 were as follows:

(in thousands) | ​ | ​ | Finance Lease Obligations | ​ | ​ | Operating Lease Obligations | ​ | ​ | Total Lease Obligations | ​
2020 | ​ | ​ | ​ | $ | 1,167 | ​ | ​ | ​ | ​ | $ | 8,431 | ​ | ​ | ​ | ​ | $ | 9,598 | ​ | ​
2021 | ​ | ​ | ​ | ​ | 341 | ​ | ​ | ​ | ​ | ​ | 7,335 | ​ | ​ | ​ | ​ | ​ | 7,676 | ​ | ​
2022 | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | 5,999 | ​ | ​ | ​ | ​ | ​ | 5,999 | ​ | ​
2023 | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | 4,123 | ​ | ​ | ​ | ​ | ​ | 4,123 | ​ | ​
2024 | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | 1,978 | ​ | ​ | ​ | ​ | ​ | 1,978 | ​ | ​
Thereafter | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | 1,648 | ​ | ​ | ​ | ​ | ​ | 1,648 | ​ | ​
Total minimum lease payments | ​ | ​ | ​ | ​ | 1,508 | ​ | ​ | ​ | ​ | ​ | 29,514 | ​ | ​ | ​ | ​ | ​ | 31,022 | ​ | ​
Financing component | ​ | ​ | ​ | ​ | (35) | ​ | ​ | ​ | ​ | ​ | (6,425) | ​ | ​ | ​ | ​ | ​ | (6,460) | ​ | ​
Net present value of minimum lease payments | ​ | ​ | ​ | ​ | 1,473 | ​ | ​ | ​ | ​ | ​ | 23,089 | ​ | ​ | ​ | ​ | ​ | 24,562 | ​ | ​
Less: current portion of finance and operating lease obligations | ​ | ​ | ​ | ​ | (1,135) | ​ | ​ | ​ | ​ | ​ | (6,205) | ​ | ​ | ​ | ​ | ​ | (7,340) | ​ | ​
Long-term finance and operating lease obligations | ​ | ​ | ​ | $ | 338 | ​ | ​ | ​ | ​ | $ | 16,884 | ​ | ​ | ​ | ​ | $ | 17,222 | ​ | ​

The financing component for finance lease obligations represents the interest component of capital leases that will be recognized as interest expense in future periods. The financing component for operating lease obligations represents the effect of discounting the lease payments to their present value.
Certain subsidiaries of the Company have operating leases for facilities from third party companies that are owned, in whole or part, by employees of the subsidiaries. The terms and rental rates of these leases are at market rental rates. As of December 31, 2019, the minimum lease payments required under these leases totaled $4.5 million, which is to be paid over the next 4.5 years.
The future minimum lease payments required under operating leases as of December 31, 2018 as reported in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 under previous ASC 840 guidance were as follows:

​ | ​ | ​ | ​ | (in thousands) | ​ | ​ | Operating Lease Obligations | ​
​ | ​ | ​ | ​ | 2019 | ​ | ​ | ​ | $ | 4,829 | ​ | ​
​ | ​ | ​ | ​ | 2020 | ​ | ​ | ​ | ​ | 3,754 | ​ | ​
​ | ​ | ​ | ​ | 2021 | ​ | ​ | ​ | ​ | 2,971 | ​ | ​
​ | ​ | ​ | ​ | 2022 | ​ | ​ | ​ | ​ | 2,379 | ​ | ​
​ | ​ | ​ | ​ | 2023 | ​ | ​ | ​ | ​ | 1,335 | ​ | ​
​ | ​ | ​ | ​ | Thereafter | ​ | ​ | ​ | ​ | 2,127 | ​ | ​
​ | ​ | ​ | ​ | Total minimum lease payments | ​ | ​ | ​ | $ | 17,395 | ​ | ​

Capital Leases
Prior to the adoption of ASU No. 2016-02, Leases (Topic 842), certain of the Company’s leased vehicles and equipment leases met the characteristics of capital leases. The economic substance of these leases was a financing transaction for acquisition of the vehicles and equipment and, accordingly, the leases were included in the balance sheets in property and equipment, net of accumulated depreciation, with a corresponding amount recorded in current portion of lease obligations or lease obligations, net of current maturities, as appropriate. The capital lease assets were amortized on a straight-line basis over the life of the lease or, if shorter, the life of the leased asset, and were included in depreciation expense in the statements of operations. The interest associated with capital leases was included in interest expense in the statements of operations.
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As of December 31, 2018, the Company had $2.7 million of capital lease obligations outstanding, $1.1 million of which was classified as a current liability.
As of December 31, 2018, $2.6 million of leased assets were capitalized in property and equipment, net of accumulated depreciation.
5. Fair Value Measurements
The Company uses the three-tier hierarchy of fair value measurement, which prioritizes the inputs used in measuring fair value based upon their degree of availability in external active markets. These tiers include: Level 1 (the highest priority), defined as observable inputs, such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3 (the lowest priority), defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.
As of December 31, 2019 and 2018, the Company determined that the carrying value of cash and cash equivalents approximated fair value based on Level 1 inputs. As of December 31, 2019 and 2018, the fair value of the Company’s long-term debt and capital lease obligations, were based on Level 2 inputs. The Company’s long-term debt was based on variable and fixed interest rates at December 31, 2019 and 2018. Long-term debt with variable interest rates was based on rates for new issues with similar remaining maturities and approximated carrying value. In addition, based on borrowing rates currently available to the Company for borrowings with similar terms, the carrying values of the Company’s capital lease obligations and long term debt with fixed interest rates also approximated fair value.
6. Accounts Receivable
Accounts receivable consisted of the following at December 31:

​ | ​ | ​ | ​ | (in thousands) | ​ | ​ | 2019 | ​ | ​ | 2018 | ​
​ | ​ | ​ | ​ | Contract receivables | ​ | ​ | ​ | $ | 385,744 | ​ | ​ | ​ | ​ | $ | 282,283 | ​ | ​
​ | ​ | ​ | ​ | Other | ​ | ​ | ​ | ​ | 6,099 | ​ | ​ | ​ | ​ | ​ | 7,475 | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | 391,843 | ​ | ​ | ​ | ​ | ​ | 289,758 | ​ | ​
​ | ​ | ​ | ​ | Less: allowance for doubtful accounts | ​ | ​ | ​ | ​ | (3,364) | ​ | ​ | ​ | ​ | ​ | (1,331) | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | $ | 388,479 | ​ | ​ | ​ | ​ | $ | 288,427 | ​ | ​

The roll-forward of activity in the allowance for doubtful accounts was as follows for the years ended December 31:

​ | ​ | ​ | ​ | (in thousands) | ​ | ​ | 2019 | ​ | ​ | 2018 | ​ | ​ | 2017 | ​
​ | ​ | ​ | ​ | Balance at beginning of period | ​ | ​ | ​ | $ | 1,331 | ​ | ​ | ​ | ​ | $ | 605 | ​ | ​ | ​ | ​ | $ | 432 | ​ | ​
​ | ​ | ​ | ​ | Less: reduction in (provision for) allowances | ​ | ​ | ​ | ​ | (2,532) | ​ | ​ | ​ | ​ | ​ | (860) | ​ | ​ | ​ | ​ | ​ | (263) | ​ | ​
​ | ​ | ​ | ​ | Less: write offs, net of recoveries | ​ | ​ | ​ | ​ | 501 | ​ | ​ | ​ | ​ | ​ | 123 | ​ | ​ | ​ | ​ | ​ | 92 | ​ | ​
​ | ​ | ​ | ​ | Change in foreign currency translation | ​ | ​ | ​ | ​ | (2) | ​ | ​ | ​ | ​ | ​ | 11 | ​ | ​ | ​ | ​ | ​ | (2) | ​ | ​
​ | ​ | ​ | ​ | Balance at end of period | ​ | ​ | ​ | $ | 3,364 | ​ | ​ | ​ | ​ | $ | 1,331 | ​ | ​ | ​ | ​ | $ | 605 | ​ | ​

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7. Property and Equipment
Property and equipment consisted of the following at December 31:

​ | ​ | ​ | ​ | (dollars in thousands) | ​ | ​ | Estimated Useful Life in Years | ​ | ​ | 2019 | ​ | ​ | 2018 | ​
​ | ​ | ​ | ​ | Land | ​ | ​ | — | ​ | ​ | ​ | $ | 9,301 | ​ | ​ | ​ | ​ | $ | 8,475 | ​ | ​
​ | ​ | ​ | ​ | Buildings and improvements | ​ | ​ | 3 to 39 | ​ | ​ | ​ | ​ | 29,747 | ​ | ​ | ​ | ​ | ​ | 23,228 | ​ | ​
​ | ​ | ​ | ​ | Construction equipment | ​ | ​ | 3 to 12 | ​ | ​ | ​ | ​ | 403,217 | ​ | ​ | ​ | ​ | ​ | 371,941 | ​ | ​
​ | ​ | ​ | ​ | Office equipment | ​ | ​ | 3 to 10 | ​ | ​ | ​ | ​ | 15,944 | ​ | ​ | ​ | ​ | ​ | 11,743 | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | 458,209 | ​ | ​ | ​ | ​ | ​ | 415,387 | ​ | ​
​ | ​ | ​ | ​ | Less: accumulated depreciation and amortization | ​ | ​ | ​ | ​ | ​ | ​ | ​ | (272,865) | ​ | ​ | ​ | ​ | ​ | (253,495) | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | $ | 185,344 | ​ | ​ | ​ | ​ | $ | 161,892 | ​ | ​

Construction equipment includes assets under finance leases — see additional information provided in Note 4 — Lease Obligations to the Financial Statements.
Depreciation and amortization expense of property and equipment for the years ended December 31, 2019, 2018 and 2017 was $40.7 million, $38.1 million and $38.1 million, respectively.
8. Goodwill and Intangible Assets
Goodwill and intangible assets consisted of the following at December 31:

​ | ​ | ​ | 2019 | ​ | ​ | 2018 | ​
(in thousands) | ​ | ​ | Gross Carrying Amount | ​ | ​ | Accumulated Amortization | ​ | ​ | Net Carrying Amount | ​ | ​ | Gross Carrying Amount | ​ | ​ | Accumulated Amortization | ​ | ​ | Net Carrying Amount | ​
Goodwill | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
T&D | ​ | ​ | ​ | $ | 40,224 | ​ | ​ | ​ | ​ | $ | — | ​ | ​ | ​ | ​ | $ | 40,224 | ​ | ​ | ​ | ​ | $ | 40,224 | ​ | ​ | ​ | ​ | $ | — | ​ | ​ | ​ | ​ | $ | 40,224 | ​ | ​
C&I | ​ | ​ | ​ | ​ | 25,836 | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | 25,836 | ​ | ​ | ​ | ​ | ​ | 16,364 | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | 16,364 | ​ | ​
Total goodwill | ​ | ​ | ​ | $ | 66,060 | ​ | ​ | ​ | ​ | $ | — | ​ | ​ | ​ | ​ | $ | 66,060 | ​ | ​ | ​ | ​ | $ | 56,588 | ​ | ​ | ​ | ​ | $ | — | ​ | ​ | ​ | ​ | $ | 56,588 | ​ | ​
Amortizable Intangible Assets | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Backlog | ​ | ​ | ​ | $ | 5,289 | ​ | ​ | ​ | ​ | $ | 4,039 | ​ | ​ | ​ | ​ | $ | 1,250 | ​ | ​ | ​ | ​ | $ | 2,789 | ​ | ​ | ​ | ​ | $ | 1,889 | ​ | ​ | ​ | ​ | $ | 900 | ​ | ​
Customer relationships | ​ | ​ | ​ | ​ | 31,381 | ​ | ​ | ​ | ​ | ​ | 6,623 | ​ | ​ | ​ | ​ | ​ | 24,758 | ​ | ​ | ​ | ​ | ​ | 17,280 | ​ | ​ | ​ | ​ | ​ | 4,970 | ​ | ​ | ​ | ​ | ​ | 12,310 | ​ | ​
Trade names | ​ | ​ | ​ | ​ | 695 | ​ | ​ | ​ | ​ | ​ | 218 | ​ | ​ | ​ | ​ | ​ | 477 | ​ | ​ | ​ | ​ | ​ | 695 | ​ | ​ | ​ | ​ | ​ | 172 | ​ | ​ | ​ | ​ | ​ | 523 | ​ | ​
Indefinite-lived Intangible Assets | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Trade names | ​ | ​ | ​ | ​ | 28,455 | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | 28,455 | ​ | ​ | ​ | ​ | ​ | 19,533 | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | 19,533 | ​ | ​
Total intangible assets | ​ | ​ | ​ | $ | 65,820 | ​ | ​ | ​ | ​ | $ | 10,880 | ​ | ​ | ​ | ​ | $ | 54,940 | ​ | ​ | ​ | ​ | $ | 40,297 | ​ | ​ | ​ | ​ | $ | 7,031 | ​ | ​ | ​ | ​ | $ | 33,266 | ​ | ​

The increase in goodwill as of December 31, 2019 compared to December 31, 2018 was primarily due to the allocation of  $9.5 million of goodwill related to the acquisition of CSI identified during the ongoing analysis of the purchase accounting. The increase in intangible assets also related to the acquisition of CSI and are being amortized on a straight-line basis over periods ranging up to 12 years. Additional financial information related to this acquisition is provided in Note 2–Acquisitions to the Financial Statements. Immaterial foreign currency translation adjustments related to goodwill and intangible assets are netted with the amounts indicated above.
Customer relationships and backlog are being amortized on a straight-line method over an estimated useful life ranging up to 12.5 years and the remaining life of the contract, respectively, and have been determined to have no residual value. Amortizable trade names are being amortized on a straight-line basis over an estimated useful life of approximately 15 years. Certain trade names have indefinite lives and, therefore,
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are not being amortized. Intangible asset amortization expense was $3.8 million, $1.8 million and $0.5 million for the years ended December 31, 2019, 2018 and 2017, respectively.
As of December 31, 2019, estimated future intangible asset amortization expense for the each of the next five years and thereafter was as follows:

​ | ​ | ​ | ​ | (in thousands) | ​ | ​ | Future Amortization Expense | ​
​ | ​ | ​ | ​ | 2020 | ​ | ​ | ​ | $ | 3,587 | ​ | ​
​ | ​ | ​ | ​ | 2021 | ​ | ​ | ​ | ​ | 2,312 | ​ | ​
​ | ​ | ​ | ​ | 2022 | ​ | ​ | ​ | ​ | 2,312 | ​ | ​
​ | ​ | ​ | ​ | 2023 | ​ | ​ | ​ | ​ | 2,312 | ​ | ​
​ | ​ | ​ | ​ | 2024 | ​ | ​ | ​ | ​ | 2,312 | ​ | ​
​ | ​ | ​ | ​ | Thereafter | ​ | ​ | ​ | ​ | 13,650 | ​ | ​
​ | ​ | ​ | ​ | Total | ​ | ​ | ​ | $ | 26,485 | ​ | ​

9. Accrued Liabilities
Other current liabilities consisted of the following at December 31:

​ | ​ | ​ | ​ | (in thousands) | ​ | ​ | 2019 | ​ | ​ | 2018 | ​
​ | ​ | ​ | ​ | Payroll and incentive compensation | ​ | ​ | ​ | $ | 22,645 | ​ | ​ | ​ | ​ | $ | 21,641 | ​ | ​
​ | ​ | ​ | ​ | Union dues and benefits | ​ | ​ | ​ | ​ | 18,747 | ​ | ​ | ​ | ​ | ​ | 11,465 | ​ | ​
​ | ​ | ​ | ​ | Taxes | ​ | ​ | ​ | ​ | 6,790 | ​ | ​ | ​ | ​ | ​ | 7,999 | ​ | ​
​ | ​ | ​ | ​ | Profit sharing and thrift plan | ​ | ​ | ​ | ​ | 5,325 | ​ | ​ | ​ | ​ | ​ | 1,215 | ​ | ​
​ | ​ | ​ | ​ | Net asset adjustments | ​ | ​ | ​ | ​ | 987 | ​ | ​ | ​ | ​ | ​ | 11,210 | ​ | ​
​ | ​ | ​ | ​ | Joint venture liability | ​ | ​ | ​ | ​ | 652 | ​ | ​ | ​ | ​ | ​ | — | ​ | ​
​ | ​ | ​ | ​ | Other | ​ | ​ | ​ | ​ | 9,218 | ​ | ​ | ​ | ​ | ​ | 7,828 | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | $ | 64,364 | ​ | ​ | ​ | ​ | $ | 61,358 | ​ | ​

See additional information on net asset adjustments provided in Note 2–Acquisitions to the Financial Statements.
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10. Debt
The table below reflects the Company’s total debt, including borrowings under its credit agreement and master loan agreement for equipment notes:

(dollars in thousands) | ​ | ​ | Inception Date | ​ | ​ | Stated Interest Rate (per annum) | ​ | ​ | Payment Frequency | ​ | ​ | Term (years) | ​ | ​ | Outstanding Balance as of December 31, 2019 | ​ | ​ | Outstanding Balance as of December 31, 2018 | ​
Credit Agreement | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Revolving loans | ​ | ​ | 9/13/2019 | ​ | ​ | Variable | ​ | ​ | Variable | ​ | ​ | 5 | ​ | ​ | ​ | $ | 103,820 | ​ | ​ | ​ | ​ | $ | 58,306 | ​ | ​
Equipment Notes | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Equipment Note 1 | ​ | ​ | 9/28/2018 | ​ | ​ | 4.16% | ​ | ​ | Semi-annual | ​ | ​ | 5 | ​ | ​ | ​ | ​ | 10,643 | ​ | ​ | ​ | ​ | ​ | 12,655 | ​ | ​
Equipment Note 2 | ​ | ​ | 9/28/2018 | ​ | ​ | 4.23% | ​ | ​ | Semi-annual | ​ | ​ | 7 | ​ | ​ | ​ | ​ | 11,200 | ​ | ​ | ​ | ​ | ​ | 12,279 | ​ | ​
Equipment Note 3 | ​ | ​ | 12/31/2018 | ​ | ​ | 3.97% | ​ | ​ | Semi-annual | ​ | ​ | 5 | ​ | ​ | ​ | ​ | 1,953 | ​ | ​ | ​ | ​ | ​ | 2,291 | ​ | ​
Equipment Note 4 | ​ | ​ | 12/31/2018 | ​ | ​ | 4.02% | ​ | ​ | Semi-annual | ​ | ​ | 7 | ​ | ​ | ​ | ​ | 2,108 | ​ | ​ | ​ | ​ | ​ | 2,313 | ​ | ​
Equipment Note 5 | ​ | ​ | 12/31/2018 | ​ | ​ | 4.01% | ​ | ​ | Semi-annual | ​ | ​ | 7 | ​ | ​ | ​ | ​ | 1,751 | ​ | ​ | ​ | ​ | ​ | 1,948 | ​ | ​
Equipment Note 6 | ​ | ​ | 6/25/2019 | ​ | ​ | 2.89% | ​ | ​ | Semi-annual | ​ | ​ | 7 | ​ | ​ | ​ | ​ | 14,286 | ​ | ​ | ​ | ​ | ​ | — | ​ | ​
Equipment Note 7 | ​ | ​ | 6/24/2019 | ​ | ​ | 3.09% | ​ | ​ | Semi-annual | ​ | ​ | 5 | ​ | ​ | ​ | ​ | 9,033 | ​ | ​ | ​ | ​ | ​ | — | ​ | ​
Equipment Note 8 | ​ | ​ | 12/27/2019 | ​ | ​ | 2.75% | ​ | ​ | Semi-annual | ​ | ​ | 5 | ​ | ​ | ​ | ​ | 6,496 | ​ | ​ | ​ | ​ | ​ | — | ​ | ​
Equipment Note 9 | ​ | ​ | 12/24/2019 | ​ | ​ | 3.01% | ​ | ​ | Semi-annual | ​ | ​ | 7 | ​ | ​ | ​ | ​ | 4,534 | ​ | ​ | ​ | ​ | ​ | — | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | 62,004 | ​ | ​ | ​ | ​ | ​ | 31,486 | ​ | ​
Total debt | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | 165,824 | ​ | ​ | ​ | ​ | ​ | 89,792 | ​ | ​
Less: current portion of long-term debt | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | (8,737) | ​ | ​ | ​ | ​ | ​ | (3,681) | ​ | ​
Long-term debt | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | $ | 157,087 | ​ | ​ | ​ | ​ | $ | 86,111 | ​ | ​

Credit Agreement
On September 13, 2019, the Company entered into a five-year amended and restated credit agreement (the “Credit Agreement”) with a syndicate of banks led by JPMorgan Chase Bank, N.A. and Bank of America, N.A, that provides for a $375 million facility (the “Facility”), which can be used for revolving loans and up to $150 million may be used for letters of credit. The Facility also allows for revolving loans and letters of credit in Canadian dollars and other currencies, up to the U.S. dollar equivalent of  $75 million. The Company has an expansion option to increase the commitments under the Facility or enter into incremental term loans, subject to certain conditions, by up to an additional $200 million upon receipt of additional commitments from new or existing lenders. Subject to certain exceptions, the Facility is secured by substantially all of the assets of the Company and its domestic subsidiaries, and by a pledge of substantially all of the capital stock of the Company’s domestic subsidiaries and 65% of the capital stock of the direct foreign subsidiaries of the Company. Additionally, subject to certain exceptions, the Company’s domestic subsidiaries also guarantee the repayment of all amounts due under the Credit Agreement. If an event of default occurs and is continuing, on the terms and subject to the conditions set forth in the Credit Agreement, amounts outstanding under the Facility may be accelerated and may become or be declared immediately due and payable. Borrowings under the Credit Agreement are used for refinancing existing indebtedness, working capital, capital expenditures, acquisitions and other general corporate purposes.
Amounts borrowed under the Credit Agreement bear interest, at the Company’s option, at a rate equal to either (1) the Alternate Base Rate (as defined in the Credit Agreement), plus an applicable margin ranging from 0.00% to 0.75%; or (2) Adjusted LIBO Rate (as defined in the Credit Agreement) plus an applicable margin ranging from 1.00% to 1.75%. The applicable margin is determined based on the Company’s consolidated leverage ratio (the “Leverage Ratio”) which is defined in the Credit Agreement as Consolidated Total Indebtedness (as defined in the Credit Agreement) divided by Consolidated EBITDA (as defined in the Credit Agreement). Letters of credit issued under the Facility are subject to a letter of credit
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fee of 1.00% to 1.75% for non-performance letters of credit or 0.50% to 0.875% for performance letters of credit, based on the Company’s consolidated Leverage Ratio. The Company is subject to a commitment fee of 0.15% to 0.25%, based on the Company’s consolidated Leverage Ratio, on any unused portion of the Facility. The Credit Agreement restricts certain types of payments when the Company’s consolidated Leverage Ratio exceeds 2.50 or the Company’s consolidated Liquidity (as defined in the Credit Agreement) is less than $50 million. The weighted average interest rate on borrowings outstanding on the Facility for the year ended December 31, 2019 was 3.34% per annum.
Under the Credit Agreement, the Company is subject to certain financial covenants and must maintain a maximum consolidated Leverage Ratio of 3.0 and a minimum interest coverage ratio of 3.0, which is defined in the Credit Agreement as Consolidated EBITDA (as defined in the Credit Agreement) divided by interest expense (as defined in the Credit Agreement). The Credit Agreement also contains covenants including limitations on asset sales, investments, indebtedness and liens. The Company was in compliance with all of its financial covenants under the Credit Agreement as of December 31, 2019.
As of December 31, 2019, the Company had letters of credit outstanding under the Facility of approximately $10.6 million, including $10.0 million related to the Company’s payment obligation under its insurance programs and approximately $0.6 million related to contract performance obligations.
As of December 31, 2018, the Company had letters of credit outstanding under the Facility of approximately $21.2 million, including $17.6 million related to the Company’s payment obligation under its insurance programs and approximately $3.6 million related to contract performance obligations.
The Company had remaining deferred debt issuance costs totaling $1.4 million as of December 31, 2019, related to the line of credit. As permitted under ASU No. 2015-15, debt issuance costs have been deferred and are presented as an asset within other assets, which is amortized as interest expense over the term of the line of credit. Unamortized deferred debt issuance costs totaling $0.4 million relating to our previous credit agreement will be amortized over the life of the Credit Agreement.
Equipment Notes
The Company has entered into a Master Equipment Loan and Security Agreement (the “Master Loan Agreement”) with multiple lending banks. The Master Loan Agreement may be used for the financing of equipment between the Company and lending banks pursuant to one or more “Equipment Notes”. Each Equipment Note executed under the Master Loan Agreement constitutes a separate, distinct and independent financing of equipment and a contractual obligation of the Company, which may contain prepayment clauses.
As of December 31, 2019, the Company had nine Equipment Notes outstanding under the Master Loan Agreement that are collateralized by equipment and vehicles owned by the Company. The following table sets forth our remaining principal payments for the Company’s outstanding Equipment Notes as of December 31, 2019:

​ | ​ | ​ | ​ | (in thousands) | ​ | ​ | Future Equipment Notes Principal Payments | ​
​ | ​ | ​ | ​ | 2020 | ​ | ​ | ​ | $ | 8,737 | ​ | ​
​ | ​ | ​ | ​ | 2021 | ​ | ​ | ​ | ​ | 8,349 | ​ | ​
​ | ​ | ​ | ​ | 2022 | ​ | ​ | ​ | ​ | 8,645 | ​ | ​
​ | ​ | ​ | ​ | 2023 | ​ | ​ | ​ | ​ | 11,906 | ​ | ​
​ | ​ | ​ | ​ | 2024 | ​ | ​ | ​ | ​ | 8,923 | ​ | ​
​ | ​ | ​ | ​ | Thereafter | ​ | ​ | ​ | ​ | 15,444 | ​ | ​
​ | ​ | ​ | ​ | Total future principal payments | ​ | ​ | ​ | $ | 62,004 | ​ | ​
​ | ​ | ​ | ​ | Less: current portion of equipment notes | ​ | ​ | ​ | ​ | (8,737) | ​ | ​
​ | ​ | ​ | ​ | Long-term principal obligations | ​ | ​ | ​ | $ | 53,267 | ​ | ​
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11. 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 perform a defined scope of a 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 16–Segment Information to the Financial Statements.
The components of the Company’s revenue by contract type were as follows for the year ended December 31:

​ | ​ | ​ | 2019 | ​
​ | ​ | ​ | T&D | ​ | ​ | C&I | ​ | ​ | Total | ​
(dollars in thousands) | ​ | ​ | Amount | ​ | ​ | Percent | ​ | ​ | Amount | ​ | ​ | Percent | ​ | ​ | Amount | ​ | ​ | Percent | ​
Fixed price | ​ | ​ | ​ | $ | 564,251 | ​ | ​ | ​ | ​ | ​ | 49.7% | ​ | ​ | ​ | ​ | $ | 704,743 | ​ | ​ | ​ | ​ | ​ | 75.2% | ​ | ​ | ​ | ​ | $ | 1,268,994 | ​ | ​ | ​ | ​ | ​ | 61.3% | ​ | ​
Unit price | ​ | ​ | ​ | ​ | 228,223 | ​ | ​ | ​ | ​ | ​ | 20.1 | ​ | ​ | ​ | ​ | ​ | 54,433 | ​ | ​ | ​ | ​ | ​ | 5.8 | ​ | ​ | ​ | ​ | ​ | 282,656 | ​ | ​ | ​ | ​ | ​ | 13.6 | ​ | ​
T&E | ​ | ​ | ​ | ​ | 316,943 | ​ | ​ | ​ | ​ | ​ | 27.9 | ​ | ​ | ​ | ​ | ​ | 101,770 | ​ | ​ | ​ | ​ | ​ | 10.9 | ​ | ​ | ​ | ​ | ​ | 418,713 | ​ | ​ | ​ | ​ | ​ | 20.2 | ​ | ​
Other | ​ | ​ | ​ | ​ | 24,994 | ​ | ​ | ​ | ​ | ​ | 2.3 | ​ | ​ | ​ | ​ | ​ | 75,802 | ​ | ​ | ​ | ​ | ​ | 8.1 | ​ | ​ | ​ | ​ | ​ | 100,796 | ​ | ​ | ​ | ​ | ​ | 4.9 | ​ | ​
​ | ​ | ​ | ​ | $ | 1,134,411 | ​ | ​ | ​ | ​ | ​ | 100.0% | ​ | ​ | ​ | ​ | $ | 936,748 | ​ | ​ | ​ | ​ | ​ | 100.0% | ​ | ​ | ​ | ​ | $ | 2,071,159 | ​ | ​ | ​ | ​ | ​ | 100.0% | ​ | ​
​

​ | ​ | ​ | 2018 | ​
​ | ​ | ​ | T&D | ​ | ​ | C&I | ​ | ​ | Total | ​
(dollars in thousands) | ​ | ​ | Amount | ​ | ​ | Percent | ​ | ​ | Amount | ​ | ​ | Percent | ​ | ​ | Amount | ​ | ​ | Percent | ​
Fixed price | ​ | ​ | ​ | $ | 361,699 | ​ | ​ | ​ | ​ | ​ | 40.5% | ​ | ​ | ​ | ​ | $ | 452,732 | ​ | ​ | ​ | ​ | ​ | 71.0% | ​ | ​ | ​ | ​ | $ | 814,431 | ​ | ​ | ​ | ​ | ​ | 53.2% | ​ | ​
Unit Price | ​ | ​ | ​ | ​ | 181,179 | ​ | ​ | ​ | ​ | ​ | 20.3 | ​ | ​ | ​ | ​ | ​ | 51,590 | ​ | ​ | ​ | ​ | ​ | 8.1 | ​ | ​ | ​ | ​ | ​ | 232,769 | ​ | ​ | ​ | ​ | ​ | 15.2 | ​ | ​
T&E | ​ | ​ | ​ | ​ | 305,581 | ​ | ​ | ​ | ​ | ​ | 34.2 | ​ | ​ | ​ | ​ | ​ | 34,938 | ​ | ​ | ​ | ​ | ​ | 5.4 | ​ | ​ | ​ | ​ | ​ | 340,519 | ​ | ​ | ​ | ​ | ​ | 22.2 | ​ | ​
Other | ​ | ​ | ​ | ​ | 44,649 | ​ | ​ | ​ | ​ | ​ | 5.0 | ​ | ​ | ​ | ​ | ​ | 98,801 | ​ | ​ | ​ | ​ | ​ | 15.5 | ​ | ​ | ​ | ​ | ​ | 143,450 | ​ | ​ | ​ | ​ | ​ | 9.4 | ​ | ​
​ | ​ | ​ | ​ | $ | 893,108 | ​ | ​ | ​ | ​ | ​ | 100.0% | ​ | ​ | ​ | ​ | $ | 638,061 | ​ | ​ | ​ | ​ | ​ | 100.0% | ​ | ​ | ​ | ​ | $ | 1,531,169 | ​ | ​ | ​ | ​ | ​ | 100.0% | ​ | ​
​

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The components of the Company’s revenue by market type were as follows for the year ended December 31:

​ | ​ | ​ | 2019 | ​ | ​ | 2018 | ​
(dollars in thousands) | ​ | ​ | Amount | ​ | ​ | Percent | ​ | ​ | Segment | ​ | ​ | Amount | ​ | ​ | Percent | ​ | ​ | Segment | ​
Transmission | ​ | ​ | ​ | $ | 772,609 | ​ | ​ | ​ | ​ | ​ | 37.3% | ​ | ​ | ​ | T&D | ​ | ​ | ​ | $ | 559,467 | ​ | ​ | ​ | ​ | ​ | 36.5% | ​ | ​ | ​ | T&D | ​
Distribution | ​ | ​ | ​ | ​ | 361,802 | ​ | ​ | ​ | ​ | ​ | 17.5 | ​ | ​ | ​ | T&D | ​ | ​ | ​ | ​ | 333,641 | ​ | ​ | ​ | ​ | ​ | 21.8 | ​ | ​ | ​ | T&D | ​
Electrical construction | ​ | ​ | ​ | ​ | 936,748 | ​ | ​ | ​ | ​ | ​ | 45.2 | ​ | ​ | ​ | C&I | ​ | ​ | ​ | ​ | 638,061 | ​ | ​ | ​ | ​ | ​ | 41.7 | ​ | ​ | ​ | C&I | ​
Total revenue | ​ | ​ | ​ | $ | 2,071,159 | ​ | ​ | ​ | ​ | ​ | 100.0% | ​ | ​ | ​ | ​ | ​ | ​ | ​ | $ | 1,531,169 | ​ | ​ | ​ | ​ | ​ | 100.0% | ​ | ​ | ​ | ​ | ​

Remaining Performance Obligations
On December 31, 2019, the Company had $1.41 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 that amount of remaining performance obligations as of December 31, 2019 that the Company expects to be realized 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 December 31, 2019 | ​
​ | ​ | ​ | ​ | (in thousands) | ​ | ​ | Total | ​ | ​ | Amount estimated to not be recognized within 12 months | ​
​ | ​ | ​ | ​ | T&D | ​ | ​ | ​ | $ | 381,850 | ​ | ​ | ​ | ​ | $ | 45,678 | ​ | ​
​ | ​ | ​ | ​ | C&I | ​ | ​ | ​ | ​ | 1,027,193 | ​ | ​ | ​ | ​ | ​ | 260,837 | ​ | ​
​ | ​ | ​ | ​ | Total | ​ | ​ | ​ | $ | 1,409,043 | ​ | ​ | ​ | ​ | $ | 306,515 | ​ | ​

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 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Annual Report.
12. Income Taxes
Income before income taxes by geographic area was, for the years ended December 31:

​ | ​ | ​ | ​ | (in thousands) | ​ | ​ | 2019 | ​ | ​ | 2018 | ​ | ​ | 2017 | ​
​ | ​ | ​ | ​ | Federal | ​ | ​ | ​ | $ | 46,445 | ​ | ​ | ​ | ​ | $ | 48,393 | ​ | ​ | ​ | ​ | $ | 33,830 | ​ | ​
​ | ​ | ​ | ​ | Foreign | ​ | ​ | ​ | ​ | 3,997 | ​ | ​ | ​ | ​ | ​ | (5,325) | ​ | ​ | ​ | ​ | ​ | (9,190) | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | $ | 50,442 | ​ | ​ | ​ | ​ | $ | 43,068 | ​ | ​ | ​ | ​ | $ | 24,640 | ​ | ​

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Income tax expense consisted of the following for the years ended December 31:

​ | ​ | ​ | ​ | (in thousands) | ​ | ​ | 2019 | ​ | ​ | 2018 | ​ | ​ | 2017 | ​
​ | ​ | ​ | ​ | Current | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | Federal | ​ | ​ | ​ | $ | 6,976 | ​ | ​ | ​ | ​ | $ | 5,155 | ​ | ​ | ​ | ​ | $ | 7,020 | ​ | ​
​ | ​ | ​ | ​ | State | ​ | ​ | ​ | ​ | 3,562 | ​ | ​ | ​ | ​ | ​ | 3,310 | ​ | ​ | ​ | ​ | ​ | 1,557 | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | 10,538 | ​ | ​ | ​ | ​ | ​ | 8,465 | ​ | ​ | ​ | ​ | ​ | 8,577 | ​ | ​
​ | ​ | ​ | ​ | Deferred | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | Federal | ​ | ​ | ​ | ​ | 3,010 | ​ | ​ | ​ | ​ | ​ | 4,936 | ​ | ​ | ​ | ​ | ​ | (1,453) | ​ | ​
​ | ​ | ​ | ​ | Foreign | ​ | ​ | ​ | ​ | 874 | ​ | ​ | ​ | ​ | ​ | (822) | ​ | ​ | ​ | ​ | ​ | (875) | ​ | ​
​ | ​ | ​ | ​ | State | ​ | ​ | ​ | ​ | (194) | ​ | ​ | ​ | ​ | ​ | (805) | ​ | ​ | ​ | ​ | ​ | (2,763) | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | 3,690 | ​ | ​ | ​ | ​ | ​ | 3,309 | ​ | ​ | ​ | ​ | ​ | (5,091) | ​ | ​
​ | ​ | ​ | ​ | Income tax expense | ​ | ​ | ​ | $ | 14,228 | ​ | ​ | ​ | ​ | $ | 11,774 | ​ | ​ | ​ | ​ | $ | 3,486 | ​ | ​

The differences between the U.S. federal statutory tax rate and the Company’s effective tax rate for operations were as follows for the years ended December 31:

​ | ​ | ​ | ​ | ​ | ​ | ​ | 2019 | ​ | ​ | 2018 | ​ | ​ | 2017 | ​
​ | ​ | ​ | ​ | U.S federal statutory rate | ​ | ​ | ​ | ​ | 21.0% | ​ | ​ | ​ | ​ | ​ | 21.0% | ​ | ​ | ​ | ​ | ​ | 35.0% | ​ | ​
​ | ​ | ​ | ​ | Deferred balance adjustments due to Tax Act, net | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | (31.6) | ​ | ​
​ | ​ | ​ | ​ | State income taxes, net of U.S. federal income tax expense | ​ | ​ | ​ | ​ | 4.7 | ​ | ​ | ​ | ​ | ​ | 5.2 | ​ | ​ | ​ | ​ | ​ | 5.3 | ​ | ​
​ | ​ | ​ | ​ | Change in valuation allowance | ​ | ​ | ​ | ​ | (0.3) | ​ | ​ | ​ | ​ | ​ | 1.2 | ​ | ​ | ​ | ​ | ​ | 6.4 | ​ | ​
​ | ​ | ​ | ​ | Domestic production/manufacturing deduction | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | (1.6) | ​ | ​
​ | ​ | ​ | ​ | Tax differential on foreign earnings | ​ | ​ | ​ | ​ | 0.4 | ​ | ​ | ​ | ​ | ​ | (0.5) | ​ | ​ | ​ | ​ | ​ | 3.2 | ​ | ​
​ | ​ | ​ | ​ | Deferred state tax adjustments, net | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | (2.4) | ​ | ​
​ | ​ | ​ | ​ | Non-deductible meals and entertainment | ​ | ​ | ​ | ​ | 0.8 | ​ | ​ | ​ | ​ | ​ | 0.8 | ​ | ​ | ​ | ​ | ​ | 1.7 | ​ | ​
​ | ​ | ​ | ​ | Stock compensation excess tax benefits | ​ | ​ | ​ | ​ | 0.1 | ​ | ​ | ​ | ​ | ​ | (0.1) | ​ | ​ | ​ | ​ | ​ | (3.1) | ​ | ​
​ | ​ | ​ | ​ | Uncertain tax positions | ​ | ​ | ​ | ​ | (0.4) | ​ | ​ | ​ | ​ | ​ | 0.1 | ​ | ​ | ​ | ​ | ​ | 2.0 | ​ | ​
​ | ​ | ​ | ​ | Provision to return adjustments, net | ​ | ​ | ​ | ​ | 0.2 | ​ | ​ | ​ | ​ | ​ | (0.2) | ​ | ​ | ​ | ​ | ​ | (0.3) | ​ | ​
​ | ​ | ​ | ​ | Global intangible low tax income | ​ | ​ | ​ | ​ | 0.3 | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | — | ​ | ​
​ | ​ | ​ | ​ | Non-controlling interest | ​ | ​ | ​ | ​ | 0.9 | ​ | ​ | ​ | ​ | ​ | (0.5) | ​ | ​ | ​ | ​ | ​ | — | ​ | ​
​ | ​ | ​ | ​ | Other income, net | ​ | ​ | ​ | ​ | 0.5 | ​ | ​ | ​ | ​ | ​ | 0.3 | ​ | ​ | ​ | ​ | ​ | (0.5) | ​ | ​
​ | ​ | ​ | ​ | Effective rate | ​ | ​ | ​ | ​ | 28.2% | ​ | ​ | ​ | ​ | ​ | 27.3% | ​ | ​ | ​ | ​ | ​ | 14.1% | ​ | ​
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The net deferred tax assets and (liabilities) arising from temporary differences was as follows at December 31:

​ | ​ | ​ | ​ | (in thousands) | ​ | ​ | 2019 | ​ | ​ | 2018 | ​
​ | ​ | ​ | ​ | Deferred income tax assets: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | Self insurance reserves | ​ | ​ | ​ | $ | 4,458 | ​ | ​ | ​ | ​ | $ | 4,299 | ​ | ​
​ | ​ | ​ | ​ | Contract loss reserves | ​ | ​ | ​ | ​ | 642 | ​ | ​ | ​ | ​ | ​ | 350 | ​ | ​
​ | ​ | ​ | ​ | Stock-based awards | ​ | ​ | ​ | ​ | 1,164 | ​ | ​ | ​ | ​ | ​ | 1,143 | ​ | ​
​ | ​ | ​ | ​ | Bonus | ​ | ​ | ​ | ​ | 4,904 | ​ | ​ | ​ | ​ | ​ | 3,271 | ​ | ​
​ | ​ | ​ | ​ | Operating lease liabilities | ​ | ​ | ​ | ​ | 5,850 | ​ | ​ | ​ | ​ | ​ | — | ​ | ​
​ | ​ | ​ | ​ | Non-U.S. operating loss | ​ | ​ | ​ | ​ | 5,499 | ​ | ​ | ​ | ​ | ​ | 5,641 | ​ | ​
​ | ​ | ​ | ​ | Other | ​ | ​ | ​ | ​ | 3,439 | ​ | ​ | ​ | ​ | ​ | 1,958 | ​ | ​
​ | ​ | ​ | ​ | Total deferred income tax assets before valuation allowances | ​ | ​ | ​ | ​ | 25,956 | ​ | ​ | ​ | ​ | ​ | 16,662 | ​ | ​
​ | ​ | ​ | ​ | Less: valuation allowances | ​ | ​ | ​ | ​ | (2,508) | ​ | ​ | ​ | ​ | ​ | (2,672) | ​ | ​
​ | ​ | ​ | ​ | Total deferred income tax assets | ​ | ​ | ​ | ​ | 23,448 | ​ | ​ | ​ | ​ | ​ | 13,990 | ​ | ​
​ | ​ | ​ | ​ | Deferred income tax liabilities: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | Property and equipment — tax over book depreciation | ​ | ​ | ​ | ​ | (32,220) | ​ | ​ | ​ | ​ | ​ | (26,030) | ​ | ​
​ | ​ | ​ | ​ | Intangible assets — tax over book amortization | ​ | ​ | ​ | ​ | (1,856) | ​ | ​ | ​ | ​ | ​ | (1,890) | ​ | ​
​ | ​ | ​ | ​ | Right-of-use operating lease assets | ​ | ​ | ​ | ​ | (5,850) | ​ | ​ | ​ | ​ | ​ | — | ​ | ​
​ | ​ | ​ | ​ | Non-U.S. deferred income tax liabilities | ​ | ​ | ​ | ​ | (2,280) | ​ | ​ | ​ | ​ | ​ | (1,443) | ​ | ​
​ | ​ | ​ | ​ | Other | ​ | ​ | ​ | ​ | (2,187) | ​ | ​ | ​ | ​ | ​ | (2,025) | ​ | ​
​ | ​ | ​ | ​ | Total deferred income tax liabilities | ​ | ​ | ​ | ​ | (44,393) | ​ | ​ | ​ | ​ | ​ | (31,388) | ​ | ​
​ | ​ | ​ | ​ | Net deferred income taxes | ​ | ​ | ​ | $ | (20,945) | ​ | ​ | ​ | ​ | $ | (17,398) | ​ | ​

The Company determined that it is more-likely-than-not that it will not realize the deferred tax assets on certain Canadian subsidiaries and recorded a valuation allowance against the entire related deferred tax assets for those entities.
As of December 31, 2019, the Company had no undistributed earnings of our Canadian subsidiaries. We expect future earnings to be reinvested. Accordingly, as of December 31, 2019 no expense for U.S. income taxes or foreign withholding taxes was recorded.
The Company is subject to taxation in various jurisdictions. The Company’s 2017 and 2018 tax returns are subject to examination by U. S. federal authorities. The Company’s tax returns are subject to examination by various state authorities for the years 2015 through 2018.
The Company has recorded a liability for unrecognized tax benefits related to tax positions taken on its various income tax returns. If recognized, the entire amount of unrecognized tax benefits would favorably impact the effective tax rate that is reported in future periods. The decrease in the unrecognized tax benefits as of December 31, 2019 was primarily due to the settlement of an Internal Revenue Service audit for the 2016 tax year and the lapses in the applicable status of limitations. The total unrecognized tax benefits is expected to be reduced by less than $0.1 million within the next 12 months. Interest and penalties related to uncertain income tax positions are included as a component of income tax expense in the Financial Statements.
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The following is a reconciliation of the beginning and ending liability for unrecognized tax benefits at December 31:

​ | ​ | ​ | ​ | (in thousands) | ​ | ​ | 2019 | ​ | ​ | 2018 | ​
​ | ​ | ​ | ​ | Balance at beginning of period | ​ | ​ | ​ | $ | 327 | ​ | ​ | ​ | ​ | $ | 751 | ​ | ​
​ | ​ | ​ | ​ | Gross increases in current period tax positions | ​ | ​ | ​ | ​ | 31 | ​ | ​ | ​ | ​ | ​ | 25 | ​ | ​
​ | ​ | ​ | ​ | Settlements with taxing authorities | ​ | ​ | ​ | ​ | (88) | ​ | ​ | ​ | ​ | ​ | — | ​ | ​
​ | ​ | ​ | ​ | Reductions in tax positions due to lapse of statutory limitations | ​ | ​ | ​ | ​ | (118) | ​ | ​ | ​ | ​ | ​ | (8) | ​ | ​
​ | ​ | ​ | ​ | Reclass from unrecognized tax benefits to deferred tax liability | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | (441) | ​ | ​
​ | ​ | ​ | ​ | Balance at end of period | ​ | ​ | ​ | ​ | 152 | ​ | ​ | ​ | ​ | ​ | 327 | ​ | ​
​ | ​ | ​ | ​ | Accrued interest and penalties at end of period | ​ | ​ | ​ | ​ | 24 | ​ | ​ | ​ | ​ | ​ | 48 | ​ | ​
​ | ​ | ​ | ​ | Total liability for unrecognized tax benefits | ​ | ​ | ​ | $ | 176 | ​ | ​ | ​ | ​ | $ | 375 | ​ | ​

The liability for unrecognized tax benefits, including accrued interest and penalties, was included in other liabilities on the accompanying consolidated balance sheets. The amount of interest and penalties charged or credited to income tax expense as a result of the unrecognized tax benefits was not significant in the years ended December 31, 2019, 2018 and 2017.
13. Commitments and Contingencies
Purchase Commitments
As of December 31, 2019, the Company had approximately $5.4 million in outstanding purchase orders for certain construction equipment, with cash outlay scheduled to occur over the next three months.
Insurance and Claims Accruals
The Company carries insurance policies, which are subject to certain deductibles, for workers’ compensation, general liability, automobile liability and other coverages. The deductible per occurrence for each line of coverage is up to $1.0 million, except for wildfire coverage which has a deductible of  $2.0 million. The Company’s health benefit plans are subject to deductibles of up to $0.2 million for qualified individuals. Losses up to the deductible amounts are accrued based upon the Company’s estimates of the ultimate liability for claims reported and an estimate of claims incurred but not yet reported.
The insurance and claims accruals are based on known facts, actuarial estimates and historical trends. While recorded accruals are based on the ultimate liability, which includes amounts in excess of the deductible, a corresponding receivable for amounts in excess of the deductible is included in total assets on the Company’s consolidated balance sheets. The following table includes the Company’s accrued short- and long-term insurance liabilities at December 31:

​ | ​ | ​ | ​ | (in thousands) | ​ | ​ | 2019 | ​ | ​ | 2018 | ​ | ​ | 2017 | ​
​ | ​ | ​ | ​ | Balance at beginning of period | ​ | ​ | ​ | $ | 54,039 | ​ | ​ | ​ | ​ | $ | 45,363 | ​ | ​ | ​ | ​ | $ | 42,584 | ​ | ​
​ | ​ | ​ | ​ | Net increases in reserves | ​ | ​ | ​ | ​ | 45,419 | ​ | ​ | ​ | ​ | ​ | 31,193 | ​ | ​ | ​ | ​ | ​ | 22,938 | ​ | ​
​ | ​ | ​ | ​ | Net payments made | ​ | ​ | ​ | ​ | (32,654) | ​ | ​ | ​ | ​ | ​ | (22,517) | ​ | ​ | ​ | ​ | ​ | (20,159) | ​ | ​
​ | ​ | ​ | ​ | Balance at end of period | ​ | ​ | ​ | $ | 66,804 | ​ | ​ | ​ | ​ | $ | 54,039 | ​ | ​ | ​ | ​ | $ | 45,363 | ​ | ​

Insurance expense, including premiums, for workers’ compensation, general liability, automobile liability, employee health benefits, and other coverages for the years ended December 31, 2019, 2018 and 2017 was $48.5 million, $30.4 million and $29.5 million, respectively.
Performance and Payment Bonds and Parent Guarantees
In certain circumstances, the Company is required to provide performance and payment bonds in connection with its future performance on certain contractual commitments. The Company has indemnified its sureties for any expenses paid out under these bonds. As of December 31, 2019, an aggregate of
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approximately $902.0 million in original face amount of bonds issued by the Company’s sureties were outstanding. Our estimated remaining cost to complete these bonded projects was approximately $399.2 million as of December 31, 2019.
From time to time the Company guarantees the obligations of wholly owned subsidiaries, including obligations under certain contracts with customers, certain lease agreements, and obligations in connection with obtaining contractors’ licenses. Additionally, from time to time the Company is required to post letters of credit to guarantee the obligations of its wholly owned subsidiaries, which reduces the borrowing availability under our Facility.
Indemnities
From time to time, pursuant to its service arrangements, the Company indemnifies its customers for claims related to the services it provides under those service arrangements. These indemnification obligations may subject the Company to indemnity claims, liabilities and related litigation. The Company is not aware of any material unrecorded liabilities for asserted claims in connection with these indemnification obligations.
Collective Bargaining Agreements
Most of the Company’s subsidiaries’ craft labor employees are covered by collective bargaining agreements. The agreements require the subsidiaries to pay specified wages, provide certain benefits and contribute certain amounts to multi-employer pension plans. If a subsidiary withdraws from any of the multi-employer pension plans or if the plans were to otherwise become underfunded, the subsidiary could incur liabilities for additional contributions related to these plans. Although the Company has been informed that the status of some multi-employer pension plans to which its subsidiaries contribute have been classified as “critical” the Company is not currently aware of any potential liabilities related to this issue. See Note 15 — Employee Benefit Plans to the Financial Statements for further information related to the Company’s participation in multi-employer plans.
Litigation and Other Legal Matters
The Company is from time-to-time party to various lawsuits, claims, and other legal proceedings that arise in the ordinary course of business. These actions typically seek, among other things, compensation for alleged personal injury, breach of contract, property damages, punitive damages, civil penalties or other losses, or injunctive or declaratory relief. With respect to all such lawsuits, claims and proceedings, the Company records reserves when it is probable that a liability has been incurred and the amount of loss can be reasonably estimated. The Company does not believe that any of these proceedings, separately or in the aggregate, would be expected to have a material adverse effect on the Company’s financial position, results of operation or cash flows.
The Company is routinely subject to other civil claims, litigation and arbitration, and regulatory investigations arising in the ordinary course of our present business as well as in respect of our divested businesses. Some of these claims and litigations include claims related to the Company’s current services and operations, the Company believes that it has strong defenses to these claims as well as insurance coverages that could contribute to any settlement or liability in the event claims are not resolved in our favor. These claims have not had a material impact on the Company to date, and the Company believes that the likelihood that a future material adverse outcome will result from these claims is remote. However, if facts and circumstances change in the future, the Company cannot be certain that an adverse outcome of one or more of these claims would not have a material adverse effect on the Company’s financial condition, results of operations or cash flows.
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14. Stock-Based Compensation
The Company maintains two equity compensation plans under which stock-based compensation has been granted, the 2017 Long-Term Incentive Plan, (the “LTIP”) and the 2007 Long-Term Incentive Plan (Amended and Restated as of May 1, 2014) (the “2007 LTIP” and, collectively with the LTIP, the “Long-Term Incentive Plans”). Upon the adoption of the LTIP, awards were no longer granted under the 2007 LTIP. The LTIP was approved by our stockholders and provides for grants of  (a) incentive stock options qualified as such under U.S. federal income tax laws, (b) stock options that do not qualify as incentive stock options, (c) stock appreciation rights, (d) restricted stock awards, (e) restricted stock units, (f) performance awards, (g) phantom stock, (h) stock bonuses, (i) dividend equivalents, or (j) any combination of such awards. The LTIP permits the granting of up to 900,000 shares to directors, officers and other employees of the Company. Grants of awards to employees are approved by the Compensation Committee of the Board of Directors and grants to independent members of the Board of Directors are approved by the Board of Directors. All awards are made with an exercise price or base price, as the case may be, that is not less than the full fair market value per share on the date of grant. No stock option or stock appreciation right may be exercised more than 10 years from the date of grant.
Shares issued as a result of stock option exercises or stock grants are made available from authorized unissued shares of common stock or treasury stock.
Stock Options
The Company has not awarded any stock options since 2013. Stock options granted to the Company’s employees or directors were granted with an exercise price equal to the market price of the Company’s stock on the date of grant. The Company used the Black-Scholes-Merton option-pricing model to estimate the fair value of options as of the date of grant. All stock options were fully expensed as of December 31, 2016.
Following is a summary of stock option activity for the three-year period ending December 31, 2019:

​ | ​ | ​ | Options | ​ | ​ | Weighted- Average Exercise Price | ​ | ​ | Weighted- Average Remaining Contractual Term | ​ | ​ | Aggregate Intrinsic Value (in thousands) | ​
Outstanding at January 1, 2017 | ​ | ​ | ​ | ​ | 245,717 | ​ | ​ | ​ | ​ | $ | 19.82 | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Exercised | ​ | ​ | ​ | ​ | (79,797) | ​ | ​ | ​ | ​ | $ | 15.43 | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Outstanding and Exercisable at December 31, 2017 | ​ | ​ | ​ | ​ | 165,920 | ​ | ​ | ​ | ​ | $ | 21.92 | ​ | ​ | ​ | 4.2 years | ​ | ​ | ​ | $ | 2,292 | ​ | ​
Exercised | ​ | ​ | ​ | ​ | (88,053) | ​ | ​ | ​ | ​ | $ | 21.54 | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Expired | ​ | ​ | ​ | ​ | (1,103) | ​ | ​ | ​ | ​ | $ | 21.16 | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Outstanding and Exercisable at December 31, 2018 | ​ | ​ | ​ | ​ | 76,764 | ​ | ​ | ​ | ​ | $ | 22.33 | ​ | ​ | ​ | 2.9 years | ​ | ​ | ​ | $ | 446 | ​ | ​
Exercised | ​ | ​ | ​ | ​ | (14,743) | ​ | ​ | ​ | ​ | $ | 23.16 | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Expired | ​ | ​ | ​ | ​ | (2,435) | ​ | ​ | ​ | ​ | $ | 19.86 | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Outstanding and Exercisable at December 31, 2019 | ​ | ​ | ​ | ​ | 59,586 | ​ | ​ | ​ | ​ | $ | 22.26 | ​ | ​ | ​ | 2.2 years | ​ | ​ | ​ | $ | 352 | ​ | ​

During the years ended December 31, 2019, 2018 and 2017, the intrinsic value of stock options exercised was $0.2 million, $1.3 million and $1.7 million, respectively.
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The following table summarizes information with respect to stock options outstanding and exercisable under the Company’s plans at December 31, 2019:

​ | ​ | ​ | ​ | ​ | ​ | ​ | Options Outstanding and Exercisable | ​
​ | ​ | ​ | ​ | Exercise Price | ​ | ​ | Number Of Options | ​ | ​ | Weighted- Average Exercise Price | ​ | ​ | Weighted- Average Remaining Contractual Term | ​
​ | ​ | ​ | ​ | $17.18 – $17.18 | ​ | ​ | ​ | ​ | 4,435 | ​ | ​ | ​ | ​ | $ | 17.18 | ​ | ​ | ​ | 0.2 years | ​
​ | ​ | ​ | ​ | $17.48 – $17.48 | ​ | ​ | ​ | ​ | 14,232 | ​ | ​ | ​ | ​ | $ | 17.48 | ​ | ​ | ​ | 2.2 years | ​
​ | ​ | ​ | ​ | $24.18 – $24.18 | ​ | ​ | ​ | ​ | 17,318 | ​ | ​ | ​ | ​ | $ | 24.18 | ​ | ​ | ​ | 1.2 years | ​
​ | ​ | ​ | ​ | $24.68 – $24.68 | ​ | ​ | ​ | ​ | 23,601 | ​ | ​ | ​ | ​ | $ | 24.68 | ​ | ​ | ​ | 3.2 years | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | 59,586 | ​ | ​ | ​ | ​ | $ | 22.26 | ​ | ​ | ​ | 2.2 years | ​

Time-Vested Stock Awards
The company grants time-vested stock awards under the LTIP in the form of restricted stock awards, restricted stock units or equity-settled phantom stock. The grant date fair value of the time-vested stock awards is equal to the closing market price of the Company’s common stock on the date of grant. Time-vested stock awards granted under the LTIP to eligible employees in 2019 generally vest ratably, on an annual basis, over three years. Time-vested stock awards granted under the LTIP to non-employee directors in 2019 vest over a one year period.
The Company recognizes stock-based compensation expense related to restricted stock awards, phantom stock awards and restricted stock units based on the grant date fair value, which was the closing price of the Company’s stock on the date of grant. The fair value is expensed over the service period, which is generally three years for time-vested stock awards granted to eligible employees and one year for non-employee directors.
During the years ended December 31, 2019, 2018 and 2017, time-vested stock vesting activity settled in common stock had an intrinsic value, at the time of vesting, of  $3.4 million, $3.0 million and $3.8 million, respectively.
Following is a summary of time-vested stock awards activity for the three-year period ending December 31, 2019:

​ | ​ | ​ | ​ | ​ | ​ | ​ | Shares | ​ | ​ | Per Share Weighted- Average Grant Date Fair Value | ​
​ | ​ | ​ | ​ | Outstanding unvested at January 1, 2017 | ​ | ​ | ​ | ​ | 223,416 | ​ | ​ | ​ | ​ | $ | 25.26 | ​ | ​
​ | ​ | ​ | ​ | Granted | ​ | ​ | ​ | ​ | 66,352 | ​ | ​ | ​ | ​ | $ | 37.49 | ​ | ​
​ | ​ | ​ | ​ | Vested | ​ | ​ | ​ | ​ | (99,774) | ​ | ​ | ​ | ​ | $ | 25.19 | ​ | ​
​ | ​ | ​ | ​ | Forfeited | ​ | ​ | ​ | ​ | (1,346) | ​ | ​ | ​ | ​ | $ | 31.22 | ​ | ​
​ | ​ | ​ | ​ | Outstanding unvested at December 31, 2017 | ​ | ​ | ​ | ​ | 188,648 | ​ | ​ | ​ | ​ | $ | 29.55 | ​ | ​
​ | ​ | ​ | ​ | Granted | ​ | ​ | ​ | ​ | 93,280 | ​ | ​ | ​ | ​ | $ | 30.22 | ​ | ​
​ | ​ | ​ | ​ | Vested | ​ | ​ | ​ | ​ | (96,840) | ​ | ​ | ​ | ​ | $ | 28.91 | ​ | ​
​ | ​ | ​ | ​ | Forfeited | ​ | ​ | ​ | ​ | (9,657) | ​ | ​ | ​ | ​ | $ | 27.02 | ​ | ​
​ | ​ | ​ | ​ | Outstanding unvested at December 31, 2018 | ​ | ​ | ​ | ​ | 175,431 | ​ | ​ | ​ | ​ | $ | 30.40 | ​ | ​
​ | ​ | ​ | ​ | Granted | ​ | ​ | ​ | ​ | 85,640 | ​ | ​ | ​ | ​ | $ | 34.22 | ​ | ​
​ | ​ | ​ | ​ | Vested | ​ | ​ | ​ | ​ | (99,655) | ​ | ​ | ​ | ​ | $ | 30.51 | ​ | ​
​ | ​ | ​ | ​ | Forfeited | ​ | ​ | ​ | ​ | (3,034) | ​ | ​ | ​ | ​ | $ | 35.88 | ​ | ​
​ | ​ | ​ | ​ | Outstanding unvested at December 31, 2019 | ​ | ​ | ​ | ​ | 158,382 | ​ | ​ | ​ | ​ | $ | 32.29 | ​ | ​
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Performance Awards
The Company grants performance awards under the LTIP. Under these awards, shares of the Company’s common stock may be earned based on the Company’s performance compared to defined metrics. The number of shares earned under a performance award may vary from zero to 200% of the target shares awarded, based upon the Company’s performance compared to the metrics. The metrics used for the grant are determined by the Compensation Committee of the Board of Directors and may be either based on internal measures such as the Company’s financial performance compared to target or on a market-based metric such as the Company’s stock performance compared to a peer group. Performance awards cliff vest upon attainment of at least the minimum stated performance targets and minimum service requirements and are paid in the Company’s common stock. During 2018, management concluded that it was probable that the minimum performance threshold would not be met for certain performance shares that were granted during 2017 and 2016. As a result, in the year ended December 31, 2018, the Company reversed $0.7 million in stock compensation from previous accruals.
For performance awards, the Company recognizes stock-based compensation expense based on the grant date fair value of the award. The fair value of internal metric-based performance awards is determined by the closing stock price of the Company’s common stock on the date of the grant. The fair value of market-based performance awards is computed using a Monte Carlo simulation. Performance awards are expensed over the service period of approximately 2.8 years. The Company adjusts the stock-based compensation expense related to internal metric-based performance awards according to its determination of the shares expected to vest at each reporting date. Stock-based compensation expense related to market metric-based performance awards is expensed at their grant date fair value regardless of performance.
During the years ended December 31, 2019, 2018 and 2017, performance award vesting activity settled in common stock had an intrinsic value, at the time of vesting, of  $0.2 million, $1.0 million and $1.3 million, respectively.
Following is a summary of performance share award activity for the three-year period ending December 31, 2019:

​ | ​ | ​ | ​ | ​ | ​ | ​ | Shares | ​ | ​ | Per Share Weighted- Average Grant Date Fair Value | ​
​ | ​ | ​ | ​ | Outstanding at January 1, 2017 | ​ | ​ | ​ | ​ | 144,023 | ​ | ​ | ​ | ​ | $ | 32.92 | ​ | ​
​ | ​ | ​ | ​ | Granted at target | ​ | ​ | ​ | ​ | 47,454 | ​ | ​ | ​ | ​ | $ | 47.12 | ​ | ​
​ | ​ | ​ | ​ | Forfeited for performance below target | ​ | ​ | ​ | ​ | (24,873) | ​ | ​ | ​ | ​ | $ | 36.40 | ​ | ​
​ | ​ | ​ | ​ | Vested | ​ | ​ | ​ | ​ | (39,407) | ​ | ​ | ​ | ​ | $ | 40.15 | ​ | ​
​ | ​ | ​ | ​ | Forfeited | ​ | ​ | ​ | ​ | (222) | ​ | ​ | ​ | ​ | $ | 37.22 | ​ | ​
​ | ​ | ​ | ​ | Outstanding at December 31, 2017 | ​ | ​ | ​ | ​ | 126,975 | ​ | ​ | ​ | ​ | $ | 35.29 | ​ | ​
​ | ​ | ​ | ​ | Granted at target | ​ | ​ | ​ | ​ | 66,764 | ​ | ​ | ​ | ​ | $ | 34.52 | ​ | ​
​ | ​ | ​ | ​ | Forfeited for performance below target | ​ | ​ | ​ | ​ | (42,584) | ​ | ​ | ​ | ​ | $ | 29.73 | ​ | ​
​ | ​ | ​ | ​ | Vested | ​ | ​ | ​ | ​ | (29,655) | ​ | ​ | ​ | ​ | $ | 33.35 | ​ | ​
​ | ​ | ​ | ​ | Forfeited | ​ | ​ | ​ | ​ | (9,247) | ​ | ​ | ​ | ​ | $ | 30.85 | ​ | ​
​ | ​ | ​ | ​ | Outstanding at December 31, 2018 | ​ | ​ | ​ | ​ | 112,253 | ​ | ​ | ​ | ​ | $ | 39.73 | ​ | ​
​ | ​ | ​ | ​ | Granted at target | ​ | ​ | ​ | ​ | 72,932 | ​ | ​ | ​ | ​ | $ | 39.26 | ​ | ​
​ | ​ | ​ | ​ | Forfeited for performance below target | ​ | ​ | ​ | ​ | (36,581) | ​ | ​ | ​ | ​ | $ | 48.94 | ​ | ​
​ | ​ | ​ | ​ | Vested | ​ | ​ | ​ | ​ | (8,854) | ​ | ​ | ​ | ​ | $ | 58.34 | ​ | ​
​ | ​ | ​ | ​ | Forfeited | ​ | ​ | ​ | ​ | (1,505) | ​ | ​ | ​ | ​ | $ | 43.43 | ​ | ​
​ | ​ | ​ | ​ | Outstanding at December 31, 2019 | ​ | ​ | ​ | ​ | 138,245 | ​ | ​ | ​ | ​ | $ | 37.02 | ​ | ​
​

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Stock-based Compensation Expense
The Company recognized stock-based compensation expense of approximately $4.4 million, $3.2 million and $4.4 million for the years ended December 31, 2019, 2018 and 2017, respectively, in selling, general and administrative expenses on the Company’s consolidated statements of operations. As of December 31, 2019, there was approximately $5.4 million of unrecognized stock-based compensation expense related to awards granted under the Plans. This included $2.8 million of unrecognized compensation cost related to unvested time-vested stock awards expected to be recognized over a remaining weighted average vesting period of approximately 1.6 years and $2.6 million of unrecognized compensation cost related to unvested performance awards, expected to be recognized over a remaining weighted average vesting period of approximately 1.5 years. Time-vested stock awards granted to non-employee directors in 2019 and 2018 vest at the end of a one year period and those granted prior to 2018 vest over a period of three years. The grant provision of the time-vested stock awards granted to non-employee directors prior to 2018 contained provisions that call for the vesting of all shares awarded upon a change in control or resignation from the board for any reason except breach of fiduciary duty. As a result of these provisions, the fair value of time-vested stock awards granted to all directors in 2017, was expensed on the date of the grant.
15. Employee Benefit Plans
The Company sponsors multiple defined contribution plans for eligible employees not covered by collective bargaining agreements. The plans include various features such as voluntary employee pre-tax and Roth-based contributions and matching contributions made by the Company. In addition, at the discretion of our Board of Directors, we may make additional profit sharing contributions to the plans. Company contributions under these defined contribution plans are based upon a percentage of income with limitations as defined by each plan. Total contributions for the years ended December 31, 2019, 2018 and 2017 amounted to $10.9 million, $5.8 million, and $4.1 million, respectively. The increase in contributions for the year ended December 31, 2019 was due to an increase in profit sharing and the acquisition of CSI.
The Company contributes to a number of multiemployer defined benefit pension plans under the terms of collective-bargaining agreements that cover its union-represented employees, who are represented by more than 100 local unions. The related collective-bargaining agreements between those organizations and the Company, which specify the rate at which the Company must contribute to the multi-employer defined pension plan, expire at different times between 2020 and 2022.
The risks of participating in these multiemployer defined benefit pension plans are different from single-employer plans in the following aspects:
1)
Assets contributed to the multiemployer plan by one employer may be used to provide benefits to employees of other participating employers.
​
2)
If a participating employer stops contributing to a plan, the unfunded obligations of the plan may be borne by the remaining participating employers.
​
3)
If the Company chooses to stop participating in a multiemployer plan, it may be required to pay the plan an amount based on the underfunded status of the plan, referred to as a withdrawal liability.
​
The amount of additional funds, if any, that the Company may be obligated to contribute to these plans in the future cannot be estimated due to uncertainty of the future levels of work that require the specific use of union employees covered by these plans, as well as the future contribution levels and possible surcharges on contributions applicable to these plans.
The following table summarizes plan information relating to the Company’s participation in multi-employer defined benefit pension plans, including company contributions for the last three years, the status under the Pension Protection Act of 2006, as amended by the Consolidated and Further Continuing Appropriations Act of 2015 (“PPA”) of the plans and whether the plans are subject to a funding improvement or rehabilitation plan, or contribution surcharges. The most recent zone status is for the plan’s year-end indicated in the table. The zone status is based on information that the Company received from the plan, as well as from publicly available information on the U.S. Department of Labor website. The PPA zone status for the plan year ended on December 31, 2019 has not been listed because Forms 5500 were not yet
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available. Among other factors, plans in the red “critical” zone are generally less than 65 percent funded, plans in the yellow “endangered” zone are between 65 and 80 percent funded, and plans in the green zone are at least 80 percent funded. Also listed in the table below are the Company’s contributions to defined contribution plans. Information in the table has been presented separately for individually significant plans and in the aggregate for all other plans.

Pension Fund | ​ | ​ | EIN/Pension Plan Number | ​ | ​ | Pension Protection Act Zone Status | ​ | ​ | Contributions to Plan for the Year Ended December 31, | ​ | ​ | Funding Plan | ​ | ​ | Surcharge Imposed | ​
​ | ​ | ​ | ​ | ​ | ​ | Status | ​ | ​ | Plan Year End | ​ | ​ | Status | ​ | ​ | Plan Year End | ​ | ​ | 2019 | ​ | ​ | 2018 | ​ | ​ | 2017 | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | (in thousands) | ​ | ​ | ​ | ​ | ​ | ​ | ​
Defined Benefit Plans: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Southern California IBEW-NECA Pension Trust Fund | ​ | ​ | 95-6392774 001 | ​ | ​ | Yellow | ​ | ​ | 6/30/2018 | ​ | ​ | Yellow | ​ | ​ | 6/30/2017 | ​ | ​ | ​ | $ | 14,268 | ​ | ​ | ​ | ​ | $ | 767 | ​ | ​ | ​ | ​ | $ | 435 | ​ | ​ | ​ | Yes | ​ | ​ | Yes | ​
National Electrical Benefit Fund | ​ | ​ | 53-0181657 001 | ​ | ​ | Green | ​ | ​ | 12/31/2018 | ​ | ​ | Green | ​ | ​ | 12/31/2017 | ​ | ​ | ​ | ​ | 11,050 | ​ | ​ | ​ | ​ | ​ | 9,840 | ​ | ​ | ​ | ​ | ​ | 9,542 | ​ | ​ | ​ | No | ​ | ​ | No | ​
Eighth District Electrical Pension Fund | ​ | ​ | 84-6100393 001 | ​ | ​ | Green | ​ | ​ | 3/31/2019 | ​ | ​ | Green | ​ | ​ | 3/31/2018 | ​ | ​ | ​ | ​ | 11,199 | ​ | ​ | ​ | ​ | ​ | 9,707 | ​ | ​ | ​ | ​ | ​ | 7,908 | ​ | ​ | ​ | No | ​ | ​ | No | ​
IBEW Local 769 Management Pension Plan A | ​ | ​ | 86-6049763 001 | ​ | ​ | Green | ​ | ​ | 6/30/2018 | ​ | ​ | Green | ​ | ​ | 6/30/2017 | ​ | ​ | ​ | ​ | 2,689 | ​ | ​ | ​ | ​ | ​ | 2,587 | ​ | ​ | ​ | ​ | ​ | 2,115 | ​ | ​ | ​ | No | ​ | ​ | No | ​
IBEW Local No. 640 and Arizona NECA Defined Benefit Pension Plan | ​ | ​ | 86-0323980 001 | ​ | ​ | Green | ​ | ​ | 12/31/2018 | ​ | ​ | Green | ​ | ​ | 12/31/2017 | ​ | ​ | ​ | ​ | 2,397 | ​ | ​ | ​ | ​ | ​ | 1,629 | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | No | ​ | ​ | No | ​
Indiana/Kentucky/Ohio Regional Council of Carpenters Pension Fund | ​ | ​ | 51-6123713 001 | ​ | ​ | Green | ​ | ​ | 6/30/2018 | ​ | ​ | Green | ​ | ​ | 6/30/2017 | ​ | ​ | ​ | ​ | 1,742 | ​ | ​ | ​ | ​ | ​ | 1,157 | ​ | ​ | ​ | ​ | ​ | 2,515 | ​ | ​ | ​ | No | ​ | ​ | No | ​
Alaska Electrical Pension Plan | ​ | ​ | 92-6005171 001 | ​ | ​ | Green | ​ | ​ | 12/31/2018 | ​ | ​ | Green | ​ | ​ | 12/31/2017 | ​ | ​ | ​ | ​ | 1,408 | ​ | ​ | ​ | ​ | ​ | 2,723 | ​ | ​ | ​ | ​ | ​ | 1,951 | ​ | ​ | ​ | No | ​ | ​ | No | ​
Defined Contribution Plans: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
National Electrical Annuity Plan | ​ | ​ | 52-6132372 001 | ​ | ​ | ​ | ​ | ​ | n/a | ​ | ​ | ​ | ​ | ​ | n/a | ​ | ​ | ​ | ​ | 28,822 | ​ | ​ | ​ | ​ | ​ | 26,559 | ​ | ​ | ​ | ​ | ​ | 27,633 | ​ | ​ | ​ | n/a | ​ | ​ | n/a | ​
Eighth District Electrical Pension Fund Annuity Plan | ​ | ​ | 84-6100393 002 | ​ | ​ | ​ | ​ | ​ | n/a | ​ | ​ | ​ | ​ | ​ | n/a | ​ | ​ | ​ | ​ | 5,339 | ​ | ​ | ​ | ​ | ​ | 4,785 | ​ | ​ | ​ | ​ | ​ | 4,109 | ​ | ​ | ​ | n/a | ​ | ​ | n/a | ​
All other plans: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | 23,295 | ​ | ​ | ​ | ​ | ​ | 10,666 | ​ | ​ | ​ | ​ | ​ | 8,680 | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Total contributions: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | $ | 102,209 | ​ | ​ | ​ | ​ | $ | 70,420 | ​ | ​ | ​ | ​ | $ | 64,888 | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​

Total contributions to these plans, at any given time, correspond to the number of union employees employed and the plans in which they participate, which varies depending upon location, the number of ongoing projects and the need for union resources in connection with such projects at a given time. The PPA data presented in the table above represents data available to us for the two most recent plan years.
One of the Company’s subsidiaries was also in the Eighth District Electrical Pension Fund’s Form 5500 as providing more than five percent of the total contributions to that plan for the plan years ended March 31, 2019, 2018 and 2017, in the IBEW local 769 Management Pension Plan A’s Form 5500 as providing more than five percent of the total contributions to that plan for the plan years ended June 30, 2018 and 2017 and in the IBEW Local No. 640 and Arizona NECA Defined Benefit Pension Plan’s Form 5500 as providing more than five percent of the total contributions to that plan for the plan years ended December 31, 2018 and 2017.
16. Segment Information
MYR Group is a holding company of specialty contractors serving electrical utility infrastructure and commercial construction markets in the United States and western Canada. The Company has two reporting segments, each a separate operating segment, which are referred to as T&D and C&I. Performance measurement and resource allocation for the reporting segments are based on many factors. The primary financial measures used to evaluate the segment information are contract revenues and income from operations, excluding general corporate expenses. General corporate expenses include corporate facility and staffing costs, which includes safety costs, professional fees, IT expenses and management fees.
Transmission and Distribution: The T&D segment provides a broad range of services on electric transmission and distribution networks and substation facilities which include design, engineering, procurement, construction, upgrade, maintenance and repair services with a particular focus on construction,
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maintenance and repair. T&D services include the construction and maintenance of high voltage transmission lines, substations and lower voltage underground and overhead distribution systems. The T&D segment also provides emergency restoration services in response to hurricane, ice or other storm-related damage. T&D customers include investor-owned utilities, cooperatives, private developers, government-funded utilities, independent power producers, independent transmission companies, industrial facility owners and other contractors.
Commercial and Industrial: The C&I segment provides services including the design, installation, maintenance and repair of commercial and industrial wiring, installation of traffic networks and the installation of bridge, roadway and tunnel lighting. Typical C&I contracts cover electrical contracting services for airports, hospitals, data centers, hotels, stadiums, convention centers, renewable energy projects, manufacturing plants, processing facilities, waste-water treatment facilities, mining facilities and transportation control and management systems. The C&I segment generally provides electric construction and maintenance services as a subcontractor to general contractors in the C&I industry, but also contracts directly with facility owners.
The information in the following table is derived from the segment’s internal financial reports used for corporate management purposes:

​ | ​ | ​ | ​ | ​ | ​ | ​ | For the Year Ended December 31, | ​
​ | ​ | ​ | ​ | (in thousands) | ​ | ​ | 2019 | ​ | ​ | 2018 | ​ | ​ | 2017 | ​
​ | ​ | ​ | ​ | Contract revenues: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | T&D | ​ | ​ | ​ | $ | 1,134,411 | ​ | ​ | ​ | ​ | $ | 893,108 | ​ | ​ | ​ | ​ | $ | 879,372 | ​ | ​
​ | ​ | ​ | ​ | C&I | ​ | ​ | ​ | ​ | 936,748 | ​ | ​ | ​ | ​ | ​ | 638,061 | ​ | ​ | ​ | ​ | ​ | 523,945 | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | $ | 2,071,159 | ​ | ​ | ​ | ​ | $ | 1,531,169 | ​ | ​ | ​ | ​ | $ | 1,403,317 | ​ | ​
​ | ​ | ​ | ​ | Income from operations: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | T&D | ​ | ​ | ​ | $ | 73,580 | ​ | ​ | ​ | ​ | $ | 57,242 | ​ | ​ | ​ | ​ | $ | 39,631 | ​ | ​
​ | ​ | ​ | ​ | C&I | ​ | ​ | ​ | ​ | 30,506 | ​ | ​ | ​ | ​ | ​ | 34,112 | ​ | ​ | ​ | ​ | ​ | 25,048 | ​ | ​
​ | ​ | ​ | ​ | General Corporate | ​ | ​ | ​ | ​ | (46,908) | ​ | ​ | ​ | ​ | ​ | (41,042) | ​ | ​ | ​ | ​ | ​ | (35,121) | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | $ | 57,178 | ​ | ​ | ​ | ​ | $ | 50,312 | ​ | ​ | ​ | ​ | $ | 29,558 | ​ | ​

The Company does not identify capital expenditures and total assets by segment in its internal financial reports due in part to the shared use of a centralized fleet of vehicles and specialized equipment. Identifiable assets, consisting of contract receivables, contract assets, construction materials inventory, goodwill and intangibles for each segment are as follows as of December 31:

​ | ​ | ​ | ​ | (in thousands) | ​ | ​ | 2019 | ​ | ​ | 2018 | ​
​ | ​ | ​ | ​ | T&D | ​ | ​ | ​ | $ | 306,226 | ​ | ​ | ​ | ​ | $ | 274,038 | ​ | ​
​ | ​ | ​ | ​ | C&I | ​ | ​ | ​ | ​ | 414,264 | ​ | ​ | ​ | ​ | ​ | 257,049 | ​ | ​
​ | ​ | ​ | ​ | General Corporate | ​ | ​ | ​ | ​ | 287,381 | ​ | ​ | ​ | ​ | ​ | 217,668 | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | $ | 1,007,871 | ​ | ​ | ​ | ​ | $ | 748,755 | ​ | ​

An allocation of total depreciation, including depreciation of shared construction equipment, and amortization to each segment is as follows:

​ | ​ | ​ | ​ | ​ | ​ | ​ | For the Year Ended December 31, | ​
​ | ​ | ​ | ​ | (in thousands) | ​ | ​ | 2019 | ​ | ​ | 2018 | ​ | ​ | 2017 | ​
​ | ​ | ​ | ​ | Depreciation and amortization | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | T&D | ​ | ​ | ​ | $ | 35,711 | ​ | ​ | ​ | ​ | $ | 33,977 | ​ | ​ | ​ | ​ | $ | 34,990 | ​ | ​
​ | ​ | ​ | ​ | C&I | ​ | ​ | ​ | ​ | 8,805 | ​ | ​ | ​ | ​ | ​ | 5,936 | ​ | ​ | ​ | ​ | ​ | 3,586 | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | $ | 44,516 | ​ | ​ | ​ | ​ | $ | 39,913 | ​ | ​ | ​ | ​ | $ | 38,576 | ​ | ​
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For the years ended December 31, 2019, 2018 and 2017 the Company had Canadian contract revenues of  $79.5 million, $53.8 million and $84.1 million, respectively. Canadian contract revenues for the years ended December 31, 2019, 2018 and 2017 were predominantly in the C&I segment. As of December 31, 2019 and 2018, there were $24.8 million and $20.5 million, respectively, of identifiable assets attributable to Canadian operations.
17. Noncontrolling Interests
On July 2, 2018, through the acquisition of certain assets of the Huen Companies, the Company became the majority controlling interest in a joint venture. As a result, the Company has consolidated the carrying value of the joint ventures’ assets and liabilities and results of operations on the Company’s consolidated financial statements. The Company records the equity owned by the other joint venture partners as noncontrolling interests on the Company’s consolidated balance sheets, consolidated statements of stockholders’ equity, and their portions, if material, of net income (loss) and other comprehensive income (loss) is shown as net income (loss) or other comprehensive income (loss) attributable to noncontrolling interests on the Company’s consolidated statements of operations and other comprehensive income (loss). Additionally the joint venture associated with the Company’s noncontrolling interests is a partnership, and consequently, the tax effect of only the Company’s share of the joint venture income (loss) is recognized by the Company.
The acquired joint venture made no distributions to its partners, and the Company made no capital contributions to the joint venture during the year ended December 31, 2019. Additionally, there have been no changes in ownership during the year ended December 31, 2019, and the underlying project was substantially completed in 2019. The balance of the Company’s noncontrolling interest consists of the preliminary fair value of noncontrolling interest acquired on July 2, 2018 with the Huen Companies. Net loss attributable to the noncontrolling interest, subsequent to the acquisition through December 31, 2019, was $1.5 million.
18. Earnings Per Share
The Company computes earnings per share using the treasury stock method. Under the treasury stock method, basic earnings per share attributable to MYR Group Inc. are computed by dividing net income attributable to MYR Group Inc. by the weighted average number of common shares outstanding during the period. Diluted earnings per share attributable to MYR Group Inc. are computed by dividing net income attributable to MYR Group Inc. by the weighted average number of common shares outstanding during the period plus all potentially dilutive common stock equivalents, except in cases where the effect of the common stock equivalent would be anti-dilutive.
Net income attributable to MYR Group Inc. and the weighted average number of common shares used to compute basic and diluted earnings per share was as follows:

​ | ​ | ​ | For the Year Ended December 31, | ​
(in thousands, except per share data) | ​ | ​ | 2019 | ​ | ​ | 2018 | ​ | ​ | 2017 | ​
Numerator: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Net income | ​ | ​ | ​ | $ | 36,214 | ​ | ​ | ​ | ​ | $ | 31,294 | ​ | ​ | ​ | ​ | $ | 21,154 | ​ | ​
Less: net income (loss) attributable to noncontrolling interest | ​ | ​ | ​ | ​ | (1,476) | ​ | ​ | ​ | ​ | ​ | 207 | ​ | ​ | ​ | ​ | ​ | — | ​ | ​
Net income attributable to MYR Group Inc. | ​ | ​ | ​ | $ | 37,690 | ​ | ​ | ​ | ​ | $ | 31,087 | ​ | ​ | ​ | ​ | $ | 21,154 | ​ | ​
Denominator: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Weighted average common shares outstanding | ​ | ​ | ​ | ​ | 16,587 | ​ | ​ | ​ | ​ | ​ | 16,441 | ​ | ​ | ​ | ​ | ​ | 16,273 | ​ | ​
Weighted average dilutive securities | ​ | ​ | ​ | ​ | 112 | ​ | ​ | ​ | ​ | ​ | 144 | ​ | ​ | ​ | ​ | ​ | 223 | ​ | ​
Weighted average common shares outstanding, diluted | ​ | ​ | ​ | ​ | 16,699 | ​ | ​ | ​ | ​ | ​ | 16,585 | ​ | ​ | ​ | ​ | ​ | 16,496 | ​ | ​
Net income per share attributable to MYR Group Inc.: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Basic | ​ | ​ | ​ | $ | 2.27 | ​ | ​ | ​ | ​ | $ | 1.89 | ​ | ​ | ​ | ​ | $ | 1.30 | ​ | ​
Diluted | ​ | ​ | ​ | $ | 2.26 | ​ | ​ | ​ | ​ | $ | 1.87 | ​ | ​ | ​ | ​ | $ | 1.28 | ​ | ​

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For the years ended December 31, 2019, 2018 and 2017, certain common stock equivalents were excluded from the calculation of dilutive securities because their inclusion would either have been anti-dilutive or, for stock options, the exercise prices of those stock options were greater than the average market price of the Company’s common stock for the period. All of the Company’s non-participating unvested restricted shares were included in the computation of weighted average dilutive securities. The following table summarizes the shares of common stock underlying the Company’s unvested time-vested and performance awards that were excluded from the calculation of dilutive securities:

​ | ​ | ​ | ​ | (in thousands) | ​ | ​ | 2019 | ​ | ​ | 2018 | ​ | ​ | 2017 | ​
​ | ​ | ​ | ​ | Time-vested stock awards | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | 1 | ​ | ​ | ​ | ​ | ​ | 44 | ​ | ​
​ | ​ | ​ | ​ | Performance awards | ​ | ​ | ​ | ​ | 73 | ​ | ​ | ​ | ​ | ​ | 67 | ​ | ​ | ​ | ​ | ​ | 97 | ​ | ​

Share Repurchase Program
During 2019 and 2018, the Company repurchased 23,103 and 32,857 shares of stock, respectively, for approximately $0.8 million and $1.0 million, respectively, from its employees to satisfy tax obligations on shares vested under the Plans. All of the shares repurchased were retired and returned to authorized but unissued stock.
19. Quarterly Financial Data (Unaudited)
The following table presents the unaudited consolidated operating results by quarter for the years ended December 31, 2019 and 2018:

​ | ​ | ​ | For the Three Months Ended | ​
(in thousands, except per share data) | ​ | ​ | March 31, | ​ | ​ | June 30, | ​ | ​ | September 30, | ​ | ​ | December 31, | ​
2019: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Revenues | ​ | ​ | ​ | $ | 468,094 | ​ | ​ | ​ | ​ | $ | 448,776 | ​ | ​ | ​ | ​ | $ | 583,214 | ​ | ​ | ​ | ​ | $ | 571,075 | ​ | ​
Gross profit | ​ | ​ | ​ | ​ | 42,876 | ​ | ​ | ​ | ​ | ​ | 43,163 | ​ | ​ | ​ | ​ | ​ | 59,197 | ​ | ​ | ​ | ​ | ​ | 68,922 | ​ | ​
Net income attributable to MYR Group | ​ | ​ | ​ | ​ | 7,353 | ​ | ​ | ​ | ​ | ​ | 7,207 | ​ | ​ | ​ | ​ | ​ | 10,355 | ​ | ​ | ​ | ​ | ​ | 12,775 | ​ | ​
Basic earnings per share attributable to MYR Group﻿(1) | ​ | ​ | ​ | $ | 0.45 | ​ | ​ | ​ | ​ | $ | 0.43 | ​ | ​ | ​ | ​ | $ | 0.62 | ​ | ​ | ​ | ​ | $ | 0.77 | ​ | ​
Diluted earnings per share attributable to MYR Group﻿(1) | ​ | ​ | ​ | $ | 0.44 | ​ | ​ | ​ | ​ | $ | 0.43 | ​ | ​ | ​ | ​ | $ | 0.62 | ​ | ​ | ​ | ​ | $ | 0.76 | ​ | ​
2018: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Revenues | ​ | ​ | ​ | $ | 345,611 | ​ | ​ | ​ | ​ | $ | 339,676 | ​ | ​ | ​ | ​ | $ | 399,537 | ​ | ​ | ​ | ​ | $ | 446,345 | ​ | ​
Gross profit | ​ | ​ | ​ | ​ | 35,753 | ​ | ​ | ​ | ​ | ​ | 38,630 | ​ | ​ | ​ | ​ | ​ | 45,286 | ​ | ​ | ​ | ​ | ​ | 47,391 | ​ | ​
Net income attributable to MYR Group | ​ | ​ | ​ | ​ | 5,644 | ​ | ​ | ​ | ​ | ​ | 6,835 | ​ | ​ | ​ | ​ | ​ | 7,957 | ​ | ​ | ​ | ​ | ​ | 10,651 | ​ | ​
Basic earnings per share attributable to MYR Group﻿(1) | ​ | ​ | ​ | $ | 0.35 | ​ | ​ | ​ | ​ | $ | 0.42 | ​ | ​ | ​ | ​ | $ | 0.48 | ​ | ​ | ​ | ​ | $ | 0.65 | ​ | ​
Diluted earnings per share attributable to MYR Group﻿(1) | ​ | ​ | ​ | $ | 0.34 | ​ | ​ | ​ | ​ | $ | 0.41 | ​ | ​ | ​ | ​ | $ | 0.48 | ​ | ​ | ​ | ​ | $ | 0.64 | ​ | ​

​
(1)
Earnings per share amounts for each quarter are required to be computed independently using the weighted average number of shares outstanding during the period. As a result, the sum of the individual quarterly earnings per share amounts may not agree to the earnings per share calculated for the year.
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​
Item 9.
Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
​
None.
Item 9A.
Controls and Procedures
​
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures designed to provide reasonable assurance that information required to be disclosed in the reports we file or submit pursuant to the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
Management, together with our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this Annual Report on Form 10-K. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective and provided reasonable assurance related to the matters stated in the above paragraph as of December 31, 2019.
Evaluation of Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework set forth in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, our management has concluded that our internal control over financial reporting was effective, as of December 31, 2019, in providing reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external reporting purposes in accordance with GAAP. Management’s annual report on internal control over financial reporting is included in “Item 8. Financial Statements and Supplementary Data” of this Annual Report on Form 10-K.
In addition, Crowe LLP, an independent registered public accounting firm, audited and reported on the 2019 Financial Statements included in this Annual Report on Form 10-K, has issued an attestation report on our internal control over financial reporting. The report is included in “Item 8. Financial Statements and Supplementary Data” of this Annual Report on Form 10-K.
For the year ended December 31, 2019, management’s assessment of our internal control over financial reporting excluded the internal control over financial reporting of CSI Electrical Contractors, Inc., which was acquired on July 15, 2019. Pursuant to the SEC’s general guidance that a recently acquired business may be omitted from the scope of an assessment in the year of the acquisition, the scope of our assessment does not include CSI Electrical Contractors, Inc. As of December 31, 2019, CSI Electrical Contractors, Inc. represented a total of approximately 14.8% and 20.4% of total assets and net assets, respectively, and 6.7.% and (2.9)% of contract revenues and income before income taxes, respectively, for the year then ended.
Changes in Internal Control Over Financial Reporting
There have been no changes in our internal control over financial reporting during the fourth quarter ended December 31, 2019 that have materially affected, or that are reasonably likely to materially affect, our internal control over financial reporting.
Limitations on the Effectiveness of Controls
Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures or our internal control over financial reporting will detect or
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prevent all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.
Item 9B.
Other Information
​
None.
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PART III
Item 10.
Directors, Executive Officers and Corporate Governance
​
Information required by this Item 10 related to our directors is incorporated by reference to the information to be included under “Proposal No. 1. Election of Directors” of our definitive Proxy Statement for our Annual Meeting of Stockholders scheduled to be held April 23, 2020 (our “2020 Proxy Statement”). Information regarding the procedures by which our stockholders may recommend nominees to our board of directors is incorporated by reference to the information to be included under the heading “Nominating and Corporate Governance Committee Matters — Criteria for Nomination to the Board of Directors and Diversity” in our 2020 Proxy Statement. Information about our Audit Committee, including its members, and our Audit Committee financial experts, is incorporated by reference to the information to be included under the headings “Audit Committee Matters” in our 2020 Proxy Statement. The balance of the information required by this item is contained in the discussion entitled “Information about our Executive Officers” in Part I of this Annual Report on Form 10-K.
We have a code of ethics that applies to all of our directors, officers and other employees, including our principal executive officer, principal financial officer and principal accounting officer. This code is publicly available on our website at www.myrgroup.com. Amendments to the code of ethics or any grant of a waiver from a provision of the code that applies to our principal executive officer, principal financial officer and principal accounting officer requiring disclosure under applicable SEC and Nasdaq Global Market rules will be disclosed on our website. The information on our website is not a part of this Annual Report on Form 10-K or incorporated into any other filings we make with the SEC.
Item 11.
Executive Compensation
​
The information required by this Item 11 is incorporated by reference to the information to be included in our 2020 Proxy Statement under the headings “Director Compensation,” “Compensation Discussion and Analysis,” “Executive Compensation Tables” and “Compensation Committee Matters–Compensation Committee Report for the Year Ended December 31, 2019.”
Item 12.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
​
Equity Compensation Plan Information
The following table sets forth certain information regarding our 2007 Long-Term Incentive Plan (Amended and Restated as of May 1, 2014) (the “2007 Plan”) and our 2017 Long-Term Incentive Plan (the “LTIP”) as of December 31, 2019. At December 31, 2019, our only active equity compensation plan was the LTIP.

Plan Category | ​ | ​ | Number of securities to be issued upon exercise of outstanding options,warrants and rights (a) | ​ | ​ | Weighted-average exercise price of outstanding options, warrants and rights (b) | ​ | ​ | Number of securities remaining available for future issuance under equity compensation plans (excluding shares reflected in column(a)) (c) | ​
Equity compensation plans approved by security holders | ​ | ​ | ​ | ​ | 483,332(1) | ​ | ​ | ​ | ​ | $ | 22.26(2) | ​ | ​ | ​ | ​ | ​ | 426,925(3) | ​ | ​
Equity compensation plans not approved by security holders | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | — | ​ | ​

​
(1)
Includes (i) 17,708 shares committed to be issued for performance awards granted in 2017 under the 2007 Plan (assumes actual performance for performance awards granted in 2017), (ii) 59,586 shares subject to outstanding option awards granted under the 2007 Plan, (iii) 276,490 shares committed to be
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issued for performance awards granted in 2018 and 2019 under the LTIP (assumes maximum performance) and (iv) 129,548 shares subject to outstanding restricted stock units granted under the LTIP.
(2)
The calculation in this column includes only option awards because the shares underlying other outstanding awards will be issued upon vesting or satisfaction of relevant performance criteria without any cash consideration payable for those shares.
​
(3)
Reflects securities remaining available for future issuance under our LTIP. No further awards will be granted under the 2007 Plan.
​
Other information required by this Item 12 is incorporated by reference to the information to be included in our 2020 Proxy Statement under the headings “Ownership of Equity Securities” and “Compensation Discussion and Analysis.”
Item 13.
Certain Relationships and Related Transactions, and Director Independence
​
The information required by this Item 13 is incorporated by reference to the information to be included in our 2020 Proxy Statement under the headings “Certain Relationships and Related Person Transactions” and “Corporate Governance — Director Independence.”
Item 14.
Principal Accounting Fees and Services
​
The information required by this Item 14 is incorporated by reference to the information to be included in our 2020 Proxy Statement under the heading “Audit Committee Matters — Independent Auditors’ Fees.”
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PART IV
Item 15.
Exhibits and Financial Statement Schedules
​
i)
Documents filed as part of this Report
​
(1)
The following Financial Statements are filed herewith in Item 8 of Part II above.
​
(a)
Report of Management
​
(b)
Reports of Independent Registered Public Accounting Firms
​
(c)
Consolidated Balance Sheets
​
(d)
Consolidated Statements of Operations
​
(e)
Consolidated Statements of Comprehensive Income
​
(f)
Consolidated Statements of Stockholders’ Equity
​
(g)
Consolidated Statements of Cash Flows
​
(h)
Notes to Financial Statements
​
ii)
Financial Statement Schedules
​
All other supplemental schedules are omitted because of the absence of conditions under which they are required, or the required information is shown in the notes to the Financial Statements.
Item 16.
Form 10-K Summary
​
Registrants may voluntarily include a summary of information required by Form 10-K under the Item.16. The Company has elected not to included such summary information.
iii)
Exhibit List
​

Number | ​ | ​ | Description | ​
3.1 | ​ | ​ | Restated Certificate of Incorporation, incorporated by reference to exhibit 3.1 of the Company’s Form 8-K (File No. 001-08325), filed with the SEC on May 7, 2014 | ​
3.2 | ​ | ​ | Amended and Restated By-Laws, incorporated by reference to exhibit 3.1 of the Company’s Form 8-K (File No. 001-08325), filed with the SEC on December 22, 2015 | ​
4.1 | ​ | ​ | Specimen Common Stock Certificate, incorporated by reference to exhibit 4.2 of the Company’s Registration Statement on Form S-1/A (File No. 333-148864), filed with the SEC on July 14, 2008 | ​
4.2 | ​ | ​ | Description of Securities† | ​
10.1 | ​ | ​ | MYR Group Inc. 2007 Long-Term Incentive Plan (Amended and Restated as of May 1, 2014), incorporated by reference to exhibit 10.1 of the Company’s Form 8-K (File No. 001-08325), filed with the SEC on May 7, 2014+ | ​
10.2 | ​ | ​ | Form of Named Executive Officer Nonqualified Stock Option Award under the 2007 Long-Term Incentive Plan, incorporated by reference to exhibit 10.1 of the Company’s Form 10-Q for the quarter ended March 31, 2010 (File No. 001-08325), filed with the SEC on May 10, 2010+ | ​
10.3 | ​ | ​ | Form of Employment Agreement, dated March 11, 2010, between the Registrant and Executive Officer, incorporated by reference to exhibit 10.5 of the Company’s Form 10-Q for the quarter ended March 31, 2010 (File No. 001-08325), filed with the SEC on May 10, 2010+ | ​
10.4 | ​ | ​ | Form of Indemnification Agreement for Directors and Officers, incorporated by reference to exhibit 10.1 of the Company’s Form 8-K (File No. 001-08325), filed with the SEC on May 11, 2011+ | ​

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Number | ​ | ​ | Description | ​
10.5 | ​ | ​ | MYR Group Senior Management Incentive Plan, Amended and Restated as of May 1, 2014, incorporated by reference to exhibit 10.2 of the Company’s Current Report on Form 8-K (File No. 001-08325), filed with the SEC on May 7, 2014+ | ​
10.6 | ​ | ​ | Form of Named Executive Officer Restricted Stock Award under 2007 Long-Term Incentive Plan, incorporated by reference to exhibit 10.15 of the Company’s Form 10-K for the year ended December 31, 2013 (File No. 001-08325), filed with the SEC on March 5, 2014+ | ​
10.7 | ​ | ​ | Form of Named Executive Officer Performance Share Award under 2007 Long-Term Incentive Plan, incorporated by reference to exhibit 10.16 of the Company’s Form 10-K for the year ended December 31, 2013 (File No. 001-08325), filed with the SEC on March 5, 2014+ | ​
10.8 | ​ | ​ | Form of Independent Director Restricted Stock Award under 2007 Long-Term Incentive Plan, incorporated by reference to exhibit 10.17 of the Company’s Form 10-K for the year ended December 31, 2013 (File No. 001-08325), filed with the SEC on March 5, 2014+ | ​
10.9 | ​ | ​ | Form of Independent Director Phantom Stock and Dividend Equivalents Award under the 2007 Long-Term Incentive Plan, incorporated by reference to exhibit 10.1 of the Company’s Form 10-Q for the quarter ended June 30, 2015 (File No. 001-08325), filed with the SEC on August 5, 2015+ | ​
10.10 | ​ | ​ | Employment agreement with Betty R. Johnson, incorporated by reference to exhibit 10.1 of the Company’s Form 10-Q for the quarter ended September 30, 2015 (File No. 001-08325), filed with the SEC on November 4, 2015+ | ​
10.11 | ​ | ​ | Employment Agreement, dated April 29, 2015 between the Company and Tod Cooper, incorporated by reference to exhibit 10.21 of the Company’s Form 10-K for the year ended December 31, 2015 (File No. 001- 08325), filed with the SEC on March 3, 2016+ | ​
10.12 | ​ | ​ | Agreement, dated March 22, 2016, by and among MYR Group Inc., Engine Capital Management, LLC, Engine Capital, L.P., Engine Jet Capital, L.P., Engine Airflow Capital, L.P., Engine Investments, LLC, Engine Investments II, LLC, Arnaud Ajdler and John P. Schauerman, incorporated by reference to exhibit 10.1 of the Company’s Current Report on Form 8-K (File No. 001-08325), filed with the SEC on March 23, 2016 | ​
10.13 | ​ | ​ | Amended and Restated Employment Agreement, dated January 1, 2017, between the Company and William A. Koertner, incorporated by reference to exhibit 10.24 of the Company’s Form 10-K for the year ended December 31, 2016 (File No. 001-08325), filed with the SEC on March 9, 2017+ | ​
10.14 | ​ | ​ | Amendment to the Employment Agreement, dated January 1, 2017, between the Company and Richard S. Swartz, Jr., incorporated by reference to exhibit 10.25 of the Company’s Form 10-K for the year ended December 31, 2016 (File No. 001-08325), filed with the SEC on March 9, 2017+ | ​
10.15 | ​ | ​ | Amendment to the Employment Agreement, dated January 1, 2017, between the Company and Tod M. Cooper, incorporated by reference to exhibit 10.26 of the Company’s Form 10-K for the year ended December 31, 2016 (File No. 001-08325), filed with the SEC on March 9, 2017+ | ​
10.16 | ​ | ​ | Employment Agreement, dated January 1, 2017, between the Company and Jeffrey J. Waneka, incorporated by reference to exhibit 10.27 of the Company’s Form 10-K for the year ended December 31, 2016 (File No. 001-08325), filed with the SEC on March 9, 2017+ | ​
10.17 | ​ | ​ | Agreement, dated January 30, 2017, by and among MYR Group Inc., Engine Capital Management, LLC, Engine Capital, L.P., Engine Jet Capital, L.P., Engine Airflow Capital, L.P., Engine Investments, LLC, Engine Investments II, LLC and Bradley Favreau, incorporated by reference to exhibit 10.28 of the Company’s Form 10-K for the year ended December 31, 2016 (File No. 001-08325), filed with the SEC on March 9, 2017 | ​
10.18 | ​ | ​ | Form of Restricted Stock Award Agreement (Named Executive Officer), incorporated by reference to exhibit 10.1 of the Company’s Current Report on Form 8-K (File No. 001-08325) under the 2007 Long-Term Incentive Plan, filed with the SEC on April 28, 2017+ | ​
10.19 | ​ | ​ | Form of Performance Shares Award Agreement (Named Executive Officer) under the 2007 Long-Term Incentive Plan, incorporated by reference to exhibit 10.2 of the Company’s Current Report on Form 8-K (File No. 001-08325), filed with the SEC on April 28, 2017+ | ​

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Number | ​ | ​ | Description | ​
10.20 | ​ | ​ | Form of Restricted Stock Units Award Agreement (Non-Employee Director) under the 2017 Long-Term Incentive Plan, incorporated by reference to exhibit 10.3 of the Company’s Current Report on Form 8-K (File No. 001-08325), filed with the SEC on April 28, 2017+ | ​
10.21 | ​ | ​ | Form of Restricted Stock Units Award Agreement (Director) under the 2017 Long-Term Incentive Plan, incorporated by reference to exhibit 10.4 of the Company’s Current Report on Form 8-K (File No. 001-08325), filed with the SEC on April 28, 2017+ | ​
10.22 | ​ | ​ | Amendment to the Amended and Restated Employment Agreement, dated April 11, 2017, between the Company and Richard S. Swartz, Jr., incorporated by reference to exhibit 10.1 of the Company’s Current Report on Form 10-Q (File No. 001-08325), filed with the SEC on May 3, 2017+ | ​
10.23 | ​ | ​ | Form of Restricted Stock Unit Award Agreement (Named Executive Officer) under the 2017 Long-Term Incentive Plan, incorporated by reference to exhibit 10.1 of the Company’s Current Report on Form 10-Q (File No. 001-08325), filed with the SEC on May 2, 2018+ | ​
10.24 | ​ | ​ | Form of Performance Shares Award Agreement (Named Executive Officer) under the 2017 Long-Term Incentive Plan, incorporated by reference to exhibit 10.2 of the Company’s Current Report on Form 10-Q (File No. 001-08325), filed with the SEC on May 2, 2018+ | ​
10.25 | ​ | ​ | Asset Purchase Agreement, dated as of July 2, 2018, by and among MYR Group, Inc., certain subsidiaries of MYR Group, Inc., as purchasers, and Huen Electric, Inc., incorporated by reference to exhibit 10.1 of the Company’s Current Report on Form 10-Q (File No. 001-08325), filed with the SEC on August 1, 2018 | ​
10.26 | ​ | ​ | Employment Agreement, dated January 21, 2019, between the Company and William F. Fry, incorporated by reference to exhibit 10.33 of the Company’s Annual Report on Form 10-K (File No. 001-08325), filed with the SEC on March 6, 2019+ | ​
10.27 | ​ | ​ | Form of Performance Shares Award Agreement (Named Executive Officer) under the 2017 Long-Term Incentive Plan, incorporated by reference to exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q (File No. 001-08325), filed with the SEC on May 1, 2019+ | ​
10.28 | ​ | ​ | Form of Non-Employee Directors Restricted Stock Unit Award Agreement under the 2017 Long-Term Incentive Plan, incorporated by reference to exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q (File No. 001-08325), filed with the SEC on July 31, 2019+ | ​
10.29 | ​ | ​ | Amendment No. 2 to Amended and Restated Credit Agreement, dated June 7, 2019, incorporated by reference to exhibit 10.2 of the Company’s Quarterly Report on Form 10-Q (File No. 001-08325), filed with the SEC on July 31, 2019 | ​
10.30 | ​ | ​ | Asset Purchase Agreement, dated as of July 15, 2019, by and among MYR Group, Inc., certain subsidiaries of MYR Group, Inc., as purchasers, and CSI Electrical Contractors, Inc., incorporated by reference to exhibit 10.3 of the Company’s Quarterly Report on Form 10-Q (File No. 001-08325), filed with the SEC on July 31, 2019 | ​
10.31 | ​ | ​ | Second Amended and Restated Credit Agreement, dated September 13, 2019, by and among MYR Group Inc., the lenders party thereto, Bank of Montreal and Wells Fargo Bank, National Association, as Co-Documentation Agents, Bank of America, N.A., as Syndication Agent and JPMorgan Chase Bank, N.A., as Administrative Agent, incorporated by reference to exhibit 10.1 of the Company’s Current Report on Form 10-Q (File No. 001-08325), filed with the SEC on October 30, 2019 | ​
21.1 | ​ | ​ | List of Subsidiaries† | ​
23.1 | ​ | ​ | Consent of Crowe LLP† | ​
24.1 | ​ | ​ | Power of Attorney† | ​
31.1 | ​ | ​ | Certification of Chief Executive Officer pursuant to SEC Rule 13a-14(a)/15d-14(a)† | ​
31.2 | ​ | ​ | Certification of Chief Financial Officer pursuant to SEC Rule 13a-14(a)/15d-14(a)† | ​
32.1 | ​ | ​ | Certification of Chief Executive Officer pursuant to 18 U.S.C. §1350† | ​
32.2 | ​ | ​ | Certification of Chief Financial Officer pursuant to 18 U.S.C. §1350† | ​
101.INS | ​ | ​ | XBRL Instance Document* | ​

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Number | ​ | ​ | Description | ​
101.SCH | ​ | ​ | XBRL Taxonomy Extension Schema Document* | ​
101.CAL | ​ | ​ | XBRL Taxonomy Extension Calculation Linkbase Document* | ​
101.DEF | ​ | ​ | XBRL Taxonomy Extension Definition Linkbase Document* | ​
101.LAB | ​ | ​ | XBRL Taxonomy Extension Label Linkbase Document* | ​
101.PRE | ​ | ​ | XBRL Taxonomy Extension Presentation Linkbase Document* | ​

​
†
Filed herewith.
​
+
Indicates management contract or compensatory plan or arrangement.
​
*
Electronically filed.
​
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

​ | ​ | ​ | ​ | MYR GROUP INC. (Registrant) | ​
​ | March 4, 2020 | ​ | ​ | /s/ BETTY R. JOHNSON ​ Name: Betty R. Johnson | ​
​ | ​ | ​ | ​ | ​ Title: Senior Vice President, Chief Financial Officer and Treasurer ​ | ​

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

​ | Signature | ​ | ​ | Title | ​ | ​ | Date | ​
​ | * ​ Richard S. Swartz | ​ | ​ | President, Chief Executive Officer and Director (Principal Executive Officer) | ​ | ​ | March 4, 2020 | ​
​ | /s/ BETTY R. JOHNSON ​ Betty R. Johnson | ​ | ​ | Senior Vice President, Chief Financial Officer and Treasurer (Principal Financial Officer and Principal Accounting Officer) | ​ | ​ | March 4, 2020 | ​
​ | * ​ Kenneth M. Hartwick | ​ | ​ | Chairman of the Board of Directors | ​ | ​ | March 4, 2020 | ​
​ | * ​ Larry F. Altenbaumer | ​ | ​ | Director | ​ | ​ | March 4, 2020 | ​
​ | * ​ Bradley T. Favreau | ​ | ​ | Director | ​ | ​ | March 4, 2020 | ​
​ | * ​ William A. Koertner | ​ | ​ | Director | ​ | ​ | March 4, 2020 | ​
​ | * ​ Jennifer E. Lowry | ​ | ​ | Director | ​ | ​ | March 4, 2020 | ​
​ | * ​ Donald C.I. Lucky | ​ | ​ | Director | ​ | ​ | March 4, 2020 | ​
​ | * ​ Maurice E. Moore | ​ | ​ | Director | ​ | ​ | March 4, 2020 | ​
​ | * ​ William D. Patterson | ​ | ​ | Director | ​ | ​ | March 4, 2020 | ​
​ | ​ *By: /s/ BETTY R. JOHNSON ​ ​ (Betty R. Johnson) (Attorney-in-fact) | ​ | ​ | ​ | ​ | ​ | March 4, 2020 | ​

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