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Business Segments | 9 Months Ended
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Sep. 30, 2023
Segment Reporting [Abstract] |
Business Segments | Business Segments The Company offers general contracting, pre-construction planning and comprehensive project management services, including planning and scheduling of manpower, equipment, materials and subcontractors required for the timely completion of a project in accordance with the terms and specifications contained in a construction contract. The Company also offers self-performed construction services: site work, concrete forming and placement, steel erection, electrical, mechanical, plumbing, and HVAC (heating, ventilation and air conditioning). As described below, the Company’s business is conducted through three segments: Civil, Building and Specialty Contractors. These segments are determined based on how the Company’s Chairman and Chief Executive Officer (chief operating decision maker) aggregates business units when evaluating performance and allocating resources. The Civil segment specializes in public works construction and the replacement and reconstruction of infrastructure. The contracting services provided by the Civil segment include construction and rehabilitation of highways, bridges, tunnels, mass-transit systems, military facilities, and water management and wastewater treatment facilities. The Building segment has significant experience providing services for private and public works customers in a number of specialized building markets, including: hospitality and gaming, transportation, health care, commercial offices, government facilities, sports and entertainment, education, correctional facilities, biotech, pharmaceutical, industrial and technology. The Specialty Contractors segment specializes in electrical, mechanical, plumbing, HVAC and fire protection systems for a full range of civil and building construction projects in the industrial, commercial, hospitality and gaming, and mass-transit end markets. This segment provides the Company with unique strengths and capabilities that allow the Company to position itself as a full-service contractor with greater control over scheduled work, project delivery, and cost and risk management. To the extent that a contract is co-managed and co-executed among segments, the Company allocates the share of revenues and costs of the contract to each segment to reflect the shared responsibilities in the management and execution of the project. The following tables set forth certain reportable segment information relating to the Company’s operations for the three and nine months ended September 30, 2023 and 2022:
| Reportable Segments |  |  |  |
(in thousands) | Civil | Building | Specialty Contractors | Total |  | Corporate |  | Consolidated Total
Three Months Ended September 30, 2023 |  |  |  |  |  |  |
Total revenue | $ | 543,776 |  | $ | 368,244 |  | $ | 174,933 |  | $ | 1,086,953 |  |  | $ | — |  |  | $ | 1,086,953 |
Elimination of intersegment revenue | (23,282) |  | (2,795) |  | (171) |  | (26,248) |  |  | — |  |  | (26,248) |
Revenue from external customers | $ | 520,494 |  | $ | 365,449 |  | $ | 174,762 |  | $ | 1,060,705 |  |  | $ | — |  |  | $ | 1,060,705 |
Income (loss) from construction operations | $ | 46,889 |  | $ | 123 |  | $ | (38,429) |  | $ | 8,583 |  | (a) | $ | (21,149) |  | (b) | $ | (12,566) |
Capital expenditures | $ | 11,941 |  | $ | 241 |  | $ | 391 |  | $ | 12,573 |  |  | $ | 2,394 |  |  | $ | 14,967 |
Depreciation and amortization(c) | $ | 7,698 |  | $ | 743 |  | $ | 615 |  | $ | 9,056 |  |  | $ | 2,175 |  |  | $ | 11,231 |
Three Months Ended September 30, 2022 |  |  |  |  |  |  |
Total revenue | $ | 564,205 |  | $ | 341,614 |  | $ | 251,974 |  | $ | 1,157,793 |  |  | $ | — |  |  | $ | 1,157,793 |
Elimination of intersegment revenue | (63,300) |  | (23,564) |  | (3) |  | (86,867) |  |  | — |  |  | (86,867) |
Revenue from external customers | $ | 500,905 |  | $ | 318,050 |  | $ | 251,971 |  | $ | 1,070,926 |  |  | $ | — |  |  | $ | 1,070,926 |
Income (loss) from construction operations | $ | 22,786 |  | $ | 56 |  | $ | (11,836) |  | $ | 11,006 |  | (d) | $ | (17,898) |  | (b) | $ | (6,892) |
Capital expenditures | $ | 11,872 |  | $ | 921 |  | $ | 748 |  | $ | 13,541 |  |  | $ | 423 |  |  | $ | 13,964 |
Depreciation and amortization(c) | $ | 12,166 |  | $ | 470 |  | $ | 529 |  | $ | 13,165 |  |  | $ | 2,368 |  |  | $ | 15,533 |
____________________________________________________________________________________________________ (a)During the three months ended September 30, 2023, the Company’s income (loss) from construction operations was adversely impacted by $16.9 million ($12.3 million, or $0.24 per diluted share, after tax) of unfavorable non-cash adjustments due to changes in estimates on the Specialty Contractors segment’s electrical and mechanical scope of a transportation project in the Northeast associated with changes in the expected recovery on certain unapproved change orders resulting from ongoing negotiations, $14.0 million ($10.9 million, or $0.21 per diluted share, after tax) of unfavorable adjustments on the same transportation project in the Northeast, split evenly between the Civil and Building segments, primarily due to the settlement of certain change orders, changes in estimates due to recent negotiations and incremental cost incurred during project closeout, and a $9.4 million ($6.8 million, or $0.13 per diluted share, after tax) unfavorable adjustment due to ongoing negotiations and an anticipated settlement on a completed Specialty Contractors segment mass-transit project in California. During the third quarter of 2023, the Company reached a settlement that impacted multiple components of a Civil segment mass-transit project in California, which included the resolution of certain ongoing disputes and increased the expected profit from work to be performed in the future. The settlement resulted in an unfavorable non-cash adjustment of $23.2 million ($16.8 million, or $0.32 per diluted share, after tax) to one component of the project that is nearing completion, partially offset by a favorable adjustment of $8.8 million ($7.0 million, or $0.13 per diluted share, after tax) on the other component of the project that has substantial scope of work remaining. As a result of the settlement, the net unfavorable impact to the period from these two adjustments is expected to be mitigated by the increased profit generated from future work on the project. (b)Consists primarily of corporate general and administrative expenses. (c)Depreciation and amortization is included in income (loss) from construction operations. (d)During the three months ended September 30, 2022, the Company’s income (loss) from construction operations was adversely impacted by a $14.3 million ($10.2 million, or $0.20 per diluted share, after tax) unfavorable adjustment on a completed Civil segment highway project in the Northeast due to the reversal on appeal of a p reviously favorable lower-court ruling.
| Reportable Segments |  |  |  |
(in thousands) | Civil | Building | Specialty Contractors | Total |  | Corporate |  | Consolidated Total
Nine Months Ended September 30, 2023 |  |  |  |  |  |  |
Total revenue | $ | 1,477,553 |  | $ | 919,468 |  | $ | 508,004 |  | $ | 2,905,025 |  |  | $ | — |  |  | $ | 2,905,025 |
Elimination of intersegment revenue | (53,066) |  | 6,976 |  | (179) |  | (46,269) |  |  | — |  |  | (46,269) |
Revenue from external customers | $ | 1,424,487 |  | $ | 926,444 |  | $ | 507,825 |  | $ | 2,858,756 |  |  | $ | — |  |  | $ | 2,858,756 |
Income (loss) from construction operations | $ | 170,308 |  | $ | (83,917) |  | $ | (120,709) |  | $ | (34,318) |  | (a) | $ | (57,805) |  | (b) | $ | (92,123) |
Capital expenditures | $ | 36,649 |  | $ | 3,716 |  | $ | 1,091 |  | $ | 41,456 |  |  | $ | 4,134 |  |  | $ | 45,590 |
Depreciation and amortization(c) | $ | 21,753 |  | $ | 1,655 |  | $ | 1,856 |  | $ | 25,264 |  |  | $ | 6,721 |  |  | $ | 31,985 |
Nine Months Ended September 30, 2022 |  |  |  |  |  |  |
Total revenue | $ | 1,478,162 |  | $ | 960,148 |  | $ | 673,302 |  | $ | 3,111,612 |  |  | $ | — |  |  | $ | 3,111,612 |
Elimination of intersegment revenue | (182,840) |  | (44,509) |  | (156) |  | (227,505) |  |  | — |  |  | (227,505) |
Revenue from external customers | $ | 1,295,322 |  | $ | 915,639 |  | $ | 673,146 |  | $ | 2,884,107 |  |  | $ | — |  |  | $ | 2,884,107 |
Income (loss) from construction operations | $ | 12,052 |  | $ | 9,453 |  | $ | (82,461) |  | $ | (60,956) |  | (d) | $ | (46,397) |  | (b) | $ | (107,353) |
Capital expenditures | $ | 38,703 |  | $ | 973 |  | $ | 2,202 |  | $ | 41,878 |  |  | $ | 931 |  |  | $ | 42,809 |
Depreciation and amortization(c) | $ | 44,191 |  | $ | 1,261 |  | $ | 1,539 |  | $ | 46,991 |  |  | $ | 7,063 |  |  | $ | 54,054 |
____________________________________________________________________________________________________ (a)During the nine months ended September 30, 2023, the Company’s income (loss) from construction operations was impacted by an adverse legal ruling on a completed mixed-use project in New York, which resulted in a non-cash, pre-tax charge of $83.6 million ($60.1 million, or $1.16 per diluted share, after-tax) in the first quarter, of which $72.2 million impacted the Building segment and $11.4 million impacted the Specialty Contractors segment; $57.0 million ($41.4 million, or $0.80 per diluted share, after tax) of unfavorable non-cash adjustments due to changes in estimates on the Specialty Contractors segment’s electrical and mechanical scope of a transportation project in the Northeast associated with changes in the expected recovery on certain unapproved change orders resulting from ongoing negotiations; $27.5 million ($21.4 million, or $0.41 per diluted share, after tax) of unfavorable adjustments on the same transportation project in the Northeast, split evenly between the Civil and Building segments, primarily due to the settlement of certain change orders, changes in estimates due to recent negotiations and incremental cost incurred during project closeout; net favorable adjustments of $25.6 million ($20.3 million, or $0.39 per diluted share, after tax) for a Civil segment mass-transit project in California that resulted from changes in estimates due to improved performance; a non-cash charge of $25.1 million ($18.2 million, or $0.35 per diluted share, after tax) in the second quarter of 2023 that resulted from an adverse legal ruling on a Specialty Contractors segment educational facilities project in New York; and a $9.4 million ($6.8 million, or $0.13 per diluted share, after tax) unfavorable adjustment due to ongoing negotiations and an anticipated settlement on a completed Specialty Contractors segment mass-transit project in California. During the third quarter of 2023, the Company reached a settlement that impacted multiple components of a Civil segment mass-transit project in California, which included the resolution of certain ongoing disputes and increased the expected profit from work to be performed in the future. The settlement resulted in an unfavorable non-cash adjustment of $23.2 million ($16.8 million, or $0.32 per diluted share, after tax) to one component of the project that is nearing completion, partially offset by a favorable adjustment of $8.8 million ($7.0 million, or $0.14 per diluted share, after tax) on the other component of the project that has substantial scope of work remaining. As a result of the settlement, the net unfavorable impact to the period from these two adjustments is expected to be mitigated by the increased profit generated from future work on the project. (b)Consists primarily of corporate general and administrative expenses. (c)Depreciation and amortization is included in income (loss) from construction operations. (d)During the nine months ended September 30, 2022, the Company’s income (loss) from construction operations was adversely impacted by $36.0 million ($26.0 million, or $0.51 per diluted share, after tax) due to unfavorable adjustments related to the unforeseen cost of project close-out issues, remediation work, extended project supervision and associated labor inefficiencies on the electrical component of a transportation project in the Northeast in the Specialty Contractors segment, and $34.6 million ($27.3 million, or $0.53 per diluted share, after tax) for a Civil segment mass-transit project in California, which resulted from the successful negotiation of significant lower margin (and lower risk) change orders that increased the project’s overall estimated profit but reduced the project’s percentage of completion and overall margin percentage. The Company’s income (loss) from construction operations was also impacted by a non-cash charge of $25.5 million ($18.3 million, or $0.36 per diluted share, after tax) due to an adverse legal ruling on a dispute related to a completed Civil segment bridge project in New York; an $18.0 million ($13.9 million, or $0.27 per diluted share, after tax) unfavorable adjustment split evenly between the Civil and Building segments due to changes in estimates on the same transportation project in the Northeast mentioned above; a non-cash charge of $17.8 million ($12.8 million, or $0.25 per diluted share, after tax) that increased cost of operations associated with the partial reversal by an appellate court of previously awarded legal damages related to a completed electrical project in New York in the Specialty Contractors segment; a $16.2 million ($11.6 million, or $0.23 per diluted share, after tax) unfavorable non-cash impact related to the settlement of a long-disputed, completed Civil segment project in Maryland; a $14.3 million ($10.2 million, or $0.20 per diluted share, after tax) unfavorable adjustment on a completed Civil segment highway project in the Northeast due to the reversal on appeal of a previously favorable lower-court ruling; and $13.1 million ($9.4 million, or $0.18 per diluted share, after tax) of unfavorable adjustments on a Civil segment mass-transit project in California. A reconciliation of segment results to the consolidated loss before income taxes is as follows:
| Three Months Ended September 30, |  | Nine Months Ended September 30,
(in thousands) | 2023 | 2022 |  | 2023 | 2022
Loss from construction operations | $ | (12,566) |  | $ | (6,892) |  |  | $ | (92,123) |  | $ | (107,353) |
Other income, net | 2,967 |  | 397 |  |  | 12,442 |  | 5,114 |
Interest expense | (20,313) |  | (17,015) |  |  | (63,842) |  | (49,711) |
Loss before income taxes | $ | (29,912) |  | $ | (23,510) |  |  | $ | (143,523) |  | $ | (151,950) |
Total assets by segment were as follows:
(in thousands) | As of September 30, 2023 | As of December 31, 2022
Civil | $ | 3,482,496 |  | $ | 3,402,934 |
Building | 935,742 |  | 898,816 |
Specialty Contractors | 331,761 |  | 483,535 |
Corporate and other(a) | (264,272) |  | (242,485) |
Total assets | $ | 4,485,727 |  | $ | 4,542,800 |
____________________________________________________________________________________________________ (a)Consists principally of cash, equipment, tax-related assets and insurance-related assets, offset by the elimination of assets related to intersegment revenue. Major Customer Revenue from a single customer with multiple projects, impacting the Civil, Building and Specialty Contractors segments, represented 13.8% and 16.0% o f the Company’s consolidated revenue for the three and nine months ended September 30, 2023, respectively.

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 22 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-22 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 15 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-15 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 31 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-31 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 32 -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-32 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 42 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-42 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 32 -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-32 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 40 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-40 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//280/tableOfContent Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 26 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-26 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 34 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-34 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 41 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-41 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-21 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-21 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 32 -Subparagraph (e) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-32 + Details
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