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Business Segments | 6 Months Ended
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Jun. 30, 2024
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, healthcare, commercial offices, government facilities, sports and entertainment, education, correctional and detention 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 six months ended June 30, 2024 and 2023:
| Reportable Segments |  |  |  |
(in thousands) | Civil | Building | Specialty Contractors | Total |  | Corporate |  | Consolidated Total
Three Months Ended June 30, 2024 |  |  |  |  |  |  |
Total revenue | $ | 577,519 |  | $ | 433,797 |  | $ | 163,066 |  | $ | 1,174,382 |  |  | $ | — |  |  | $ | 1,174,382 |
Elimination of intersegment revenue | (31,031) |  | (15,931) |  | 50 |  | (46,912) |  |  | — |  |  | (46,912) |
Revenue from external customers | $ | 546,488 |  | $ | 417,866 |  | $ | 163,116 |  | $ | 1,127,470 |  |  | $ | — |  |  | $ | 1,127,470 |
Income (loss) from construction operations | $ | 75,587 |  | $ | 5,047 |  | $ | (7,846) |  | $ | 72,788 |  | (a) | $ | (32,295) |  | (b) | $ | 40,493 |
Capital expenditures | $ | 9,479 |  | $ | 68 |  | $ | (30) |  | $ | 9,517 |  |  | $ | 1,401 |  |  | $ | 10,918 |
Depreciation and amortization(c) | $ | 10,727 |  | $ | 585 |  | $ | 574 |  | $ | 11,886 |  |  | $ | 2,120 |  |  | $ | 14,006 |
Three Months Ended June 30, 2023 |  |  |  |  |  |  |
Total revenue | $ | 555,553 |  | $ | 321,933 |  | $ | 136,323 |  | $ | 1,013,809 |  |  | $ | — |  |  | $ | 1,013,809 |
Elimination of intersegment revenue | (1,430) |  | 9,409 |  | (37) |  | 7,942 |  |  | — |  |  | 7,942 |
Revenue from external customers | $ | 554,123 |  | $ | 331,342 |  | $ | 136,286 |  | $ | 1,021,751 |  |  | $ | — |  |  | $ | 1,021,751 |
Income (loss) from construction operations | $ | 105,407 |  | $ | (13,831) |  | $ | (69,832) |  | $ | 21,744 |  | (d) | $ | (19,356) |  | (b) | $ | 2,388 |
Capital expenditures | $ | 9,643 |  | $ | 1,458 |  | $ | 256 |  | $ | 11,357 |  |  | $ | 1,470 |  |  | $ | 12,827 |
Depreciation and amortization(c) | $ | 7,074 |  | $ | 455 |  | $ | 622 |  | $ | 8,151 |  |  | $ | 2,195 |  |  | $ | 10,346 |
____________________________________________________________________________________________________ (a)During the three months ended June 30, 2024, the Company’s income (loss) from construction operations was impacted by an unfavorable adjustment of $12.4 million ($9.1 million, or $0.17 per diluted share, after tax) due to the impact of a settlement on two completed Civil segment highway projects in the Northeast. (b)Consists primarily of corporate general and administrative expenses. Corporate general and administrative expenses for the three months ended June 30, 2024 and 2023 included share-based compensation expense of $16.9 million ($12.4 million, or $0.23 per diluted share, after tax) and $2.6 million ($1.9 million, or $0.04 per diluted share, after tax), respectively. The increase in share-based compensation expense in the second quarter of 2024 was primarily due to a substantial increase in the Company’s stock price during the period, which impacted the fair value of liability-classified awards. These awards are remeasured at fair value at the end of each reporting period with the change in fair value recognized in earnings. (c)Depreciation and amortization is included in income (loss) from construction operations. (d)During the three months ended June 30, 2023, the Company’s income (loss) from construction operations was impacted by favorable adjustments totaling $58.1 million ($46.1 million, or $0.89 per diluted share, after tax) resulting from changes in estimates due to improved performance on a Civil segment mass-transit project in California; $35.8 million ($26.0 million, or $0.50 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 a change in the expected recovery on certain unapproved change orders; a non-cash charge of $24.7 million ($18.0 million, or $0.35 per diluted share, after tax) that resulted from an adverse legal ruling on a Specialty Contractors segment educational facilities project in New York; and a $13.1 million ($10.2 million, or $0.20 per diluted share, after tax) unfavorable adjustment on a transportation project in the Northeast, split evenly between the Civil and Building segments, due to the settlement of certain change orders during project closeout.
| Reportable Segments |  |  |  |
(in thousands) | Civil | Building | Specialty Contractors | Total |  | Corporate |  | Consolidated Total
Six Months Ended June 30, 2024 |  |  |  |  |  |  |
Total revenue | $ | 1,080,341 |  | $ | 855,973 |  | $ | 327,946 |  | $ | 2,264,260 |  |  | $ | — |  |  | $ | 2,264,260 |
Elimination of intersegment revenue | (61,688) |  | (26,165) |  | 50 |  | (87,803) |  |  | — |  |  | (87,803) |
Revenue from external customers | $ | 1,018,653 |  | $ | 829,808 |  | $ | 327,996 |  | $ | 2,176,457 |  |  | $ | — |  |  | $ | 2,176,457 |
Income (loss) from construction operations | $ | 146,330 |  | $ | 21,167 |  | $ | (26,158) |  | $ | 141,339 |  | (a) | $ | (52,040) |  | (b) | $ | 89,299 |
Capital expenditures | $ | 17,610 |  | $ | 285 |  | $ | 273 |  | $ | 18,168 |  |  | $ | 3,184 |  |  | $ | 21,352 |
Depreciation and amortization(c) | $ | 20,981 |  | $ | 1,170 |  | $ | 1,172 |  | $ | 23,323 |  |  | $ | 4,265 |  |  | $ | 27,588 |
Six Months Ended June 30, 2023 |  |  |  |  |  |  |
Total revenue | $ | 933,777 |  | $ | 551,224 |  | $ | 333,071 |  | $ | 1,818,072 |  |  | $ | — |  |  | $ | 1,818,072 |
Elimination of intersegment revenue | (29,784) |  | 9,771 |  | (8) |  | (20,021) |  |  | — |  |  | (20,021) |
Revenue from external customers | $ | 903,993 |  | $ | 560,995 |  | $ | 333,063 |  | $ | 1,798,051 |  |  | $ | — |  |  | $ | 1,798,051 |
Income (loss) from construction operations | $ | 123,419 |  | $ | (84,040) |  | $ | (82,280) |  | $ | (42,901) |  | (d) | $ | (36,656) |  | (b) | $ | (79,557) |
Capital expenditures | $ | 24,708 |  | $ | 3,475 |  | $ | 700 |  | $ | 28,883 |  |  | $ | 1,740 |  |  | $ | 30,623 |
Depreciation and amortization(c) | $ | 14,055 |  | $ | 912 |  | $ | 1,241 |  | $ | 16,208 |  |  | $ | 4,546 |  |  | $ | 20,754 |
____________________________________________________________________________________________________ (a)During the six months ended June 30, 2024, the Company’s income (loss) from construction operations was impacted by unfavorable adjustments of $12.4 million ($9.1 million, or $0.17 per diluted share, after tax) due to the impact of a settlement on two completed Civil segment highway projects in the Northeast and $12.0 million ($8.8 million, or $0.17 per diluted share, after tax) due to an arbitration ruling that only provided a partial award to the Company pertaining to a completed Specialty Contractors segment electrical project in New York. The period was also impacted by a favorable adjustment of $10.2 million ($7.5 million, or $0.14 per diluted share, after tax) on a Civil segment mass-transit project in California related to a dispute resolution and associated expected cost savings. (b)Consists primarily of corporate general and administrative expenses. Corporate general and administrative expenses for the six months ended June 30, 2024 and 2023 included share-based compensation expense of $22.4 million ($16.5 million, or $0.31 per diluted share, after tax) and $5.6 million ($4.1 million, or $0.08 per diluted share, after tax), respectively. The increase in share-based compensation expense in the current-year period was primarily due to a substantial increase in the Company’s stock price during the period, which impacted the fair value of liability-classified awards. These awards are remeasured at fair value at the end of each reporting period with the change in fair value recognized in earnings. (c)Depreciation and amortization is included in income (loss) from construction operations. (d)During the six months ended June 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), of which $72.2 million impacted the Building segment and $11.4 million impacted the Specialty Contractors segment; $35.8 million ($26.0 million, or $0.50 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 a change in the expected recovery on certain unapproved change orders; net favorable adjustments of $30.1 million ($23.9 million, or $0.46 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 $24.7 million ($18.0 million, or $0.35 per diluted share, after tax) that resulted from an adverse legal ruling on a Specialty Contractors segment educational facilities project in New York; and a $13.1 million ($10.2 million, or $0.20 per diluted share, after tax) unfavorable adjustment on a transportation project in the Northeast, split evenly between the Civil and Building segments, due to the settlement of certain change orders during project closeout. A reconciliation of segment results to the consolidated income (loss) before income taxes is as follows:
| Three Months Ended June 30, |  | Six Months Ended June 30,
(in thousands) | 2024 | 2023 |  | 2024 | 2023
Income (loss) from construction operations | $ | 40,493 |  | $ | 2,388 |  |  | $ | 89,299 |  | $ | (79,557) |
Other income, net | 5,838 |  | 3,058 |  |  | 11,149 |  | 9,475 |
Interest expense | (23,084) |  | (22,016) |  |  | (42,391) |  | (43,529) |
Income (loss) before income taxes | $ | 23,247 |  | $ | (16,570) |  |  | $ | 58,057 |  | $ | (113,611) |
Total assets by segment were as follows:
(in thousands) | As of June 30, 2024 | As of December 31, 2023
Civil | $ | 3,520,109 |  | $ | 3,539,608 |
Building | 1,028,958 |  | 898,902 |
Specialty Contractors | 246,128 |  | 307,171 |
Corporate and other(a) | (501,447) |  | (315,825) |
Total assets | $ | 4,293,748 |  | $ | 4,429,856 |
____________________________________________________________________________________________________ (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 19.0% and 18.9% of the Company’s consolidated revenue for the three and six months ended June 30, 2024, respectively. Revenue from the same customer with multiple projects, impacting the Civil, Building and Specialty Contractors segments, represented 15.8% and 17.4% of the Company’s consolidated revenue for the three and six months ended June 30, 2023, respectively

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