Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Feb. 25, 2019 | Jun. 29, 2018 | |
Document and Entity Information | |||
Entity Registrant Name | Primoris Services Corp | ||
Entity Central Index Key | 1,361,538 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2018 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $ 1,180 | ||
Entity Common Stock, Shares Outstanding | 50,715,518 | ||
Document Fiscal Year Focus | 2,018 | ||
Document Fiscal Period Focus | FY | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents ($3,127 and $60,256 related to VIEs. See Note 11) | $ 151,063 | $ 170,385 |
Accounts receivable, net | 372,695 | 291,589 |
Contract assets | 364,245 | 265,902 |
Prepaid expenses and other current assets | 36,444 | 15,338 |
Total current assets | 924,447 | 743,214 |
Property and equipment, net | 375,884 | 311,777 |
Deferred tax assets | 1,457 | |
Intangible assets, net | 81,198 | 44,800 |
Goodwill | 206,159 | 153,374 |
Other long-term assets | 5,002 | 2,575 |
Total assets | 1,594,147 | 1,255,740 |
Current liabilities: | ||
Accounts payable | 249,217 | 140,943 |
Contract liabilities | 189,539 | 169,377 |
Accrued liabilities | 117,527 | 76,027 |
Dividends payable | 3,043 | 3,087 |
Current portion of long-term debt | 62,488 | 65,464 |
Total current liabilities | 621,814 | 454,898 |
Long-term debt, net of current portion | 305,669 | 193,351 |
Deferred tax liabilities | 8,166 | 13,571 |
Other long-term liabilities | 51,515 | 31,737 |
Total liabilities | 987,164 | 693,557 |
Commitments and contingencies (See Note 12) | ||
Stockholders' equity | ||
Common stock—$.0001 par value; 90,000,000 shares authorized; 50,715,518 and 51,448,753 issued and outstanding at December 31, 2018 and December 31, 2017 | 5 | 5 |
Additional paid-in capital | 144,048 | 160,502 |
Retained earnings | 461,075 | 395,961 |
Accumulated other comprehensive loss | (908) | |
Noncontrolling interest | 2,763 | 5,715 |
Total stockholders’ equity | 606,983 | 562,183 |
Total liabilities and stockholders’ equity | $ 1,594,147 | $ 1,255,740 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
VIEs | ||
Cash and cash equivalents | $ 151,063 | $ 170,385 |
Stockholders' equity | ||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 90,000,000 | 90,000,000 |
Common stock, shares issued | 50,715,518 | 51,448,753 |
Common stock, shares outstanding | 50,715,518 | 51,448,753 |
VIEs | ||
VIEs | ||
Cash and cash equivalents | $ 3,127 | $ 60,256 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
CONSOLIDATED STATEMENTS OF INCOME | |||
Revenue | $ 2,939,478 | $ 2,379,995 | $ 1,996,948 |
Cost of revenue | 2,613,741 | 2,101,561 | 1,795,641 |
Gross profit | 325,737 | 278,434 | 201,307 |
Selling, general and administrative expenses | 182,006 | 170,372 | 140,027 |
Merger and related costs | 13,260 | 1,774 | 815 |
Impairment of goodwill | 0 | 0 | 2,716 |
Operating income | 130,471 | 106,288 | 57,749 |
Other income (expense): | |||
Investment income | 5,817 | ||
Foreign exchange gain | 688 | 253 | 202 |
Other income (expense), net | (808) | 484 | (315) |
Interest income | 1,753 | 587 | 149 |
Interest expense | (18,746) | (8,146) | (8,914) |
Income before provision for income taxes | 113,358 | 105,283 | 48,871 |
Provision for income taxes | (25,765) | (28,433) | (21,146) |
Net income | 87,593 | 76,850 | 27,725 |
Less net income attributable to noncontrolling interests | (10,132) | (4,496) | (1,002) |
Net income attributable to Primoris | $ 77,461 | $ 72,354 | $ 26,723 |
Dividends per common share (in dollars per share) | $ 0.240 | $ 0.225 | $ 0.220 |
Earnings per share: | |||
Basic (in dollars per share) | 1.51 | 1.41 | 0.52 |
Diluted (in dollars per share) | $ 1.50 | $ 1.40 | $ 0.51 |
Weighted average common shares outstanding: | |||
Basic (in shares) | 51,350 | 51,481 | 51,762 |
Diluted (in shares) | 51,670 | 51,741 | 51,989 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | |||
Net income | $ 87,593 | $ 76,850 | $ 27,725 |
Other comprehensive loss, net of tax: | |||
Foreign currency translation adjustments, net of tax | (908) | ||
Comprehensive income | 86,685 | 76,850 | 27,725 |
Less net income attributable to noncontrolling interests | (10,132) | (4,496) | (1,002) |
Comprehensive income attributable to Primoris | $ 76,553 | $ 72,354 | $ 26,723 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Non Controlling Interest | Total |
Balance at Dec. 31, 2015 | $ 5 | $ 163,344 | $ 319,899 | $ 217 | $ 483,465 | |
Balance (in shares) at Dec. 31, 2015 | 51,676,140 | |||||
Increase (Decrease) in Stockholders' Equity Roll Forward | ||||||
Net income | 26,723 | 1,002 | 27,725 | |||
Issuance of shares to employees and directors | 2,133 | 2,133 | ||||
Issuance of shares to employees and directors (in shares) | 108,102 | |||||
Amortization of Restricted Stock Units | 1,627 | 1,627 | ||||
Dividend equivalent Units accrued - Restricted Stock Units | 23 | (23) | ||||
Repurchase of stock | (4,999) | (4,999) | ||||
Repurchase of stock (in shares) | (207,800) | |||||
Dividends declared | (11,381) | (11,381) | ||||
Balance at Dec. 31, 2016 | $ 5 | 162,128 | 335,218 | 1,219 | 498,570 | |
Balance (in shares) at Dec. 31, 2016 | 51,576,442 | |||||
Increase (Decrease) in Stockholders' Equity Roll Forward | ||||||
Net income | 72,354 | 4,496 | 76,850 | |||
Issuance of shares to employees and directors | 2,210 | 2,210 | ||||
Issuance of shares to employees and directors (in shares) | 88,661 | |||||
Amortization of Restricted Stock Units | 1,126 | 1,126 | ||||
Dividend equivalent Units accrued - Restricted Stock Units | 37 | (37) | ||||
Repurchase of stock | (4,999) | (4,999) | ||||
Repurchase of stock (in shares) | (216,350) | |||||
Dividends declared | (11,574) | (11,574) | ||||
Balance at Dec. 31, 2017 | $ 5 | 160,502 | 395,961 | 5,715 | 562,183 | |
Balance (in shares) at Dec. 31, 2017 | 51,448,753 | |||||
Increase (Decrease) in Stockholders' Equity Roll Forward | ||||||
Net income | 77,461 | 10,132 | 87,593 | |||
Foreign currency translation adjustments, net of tax | $ (908) | (908) | ||||
Issuance of shares to employees and directors | 2,245 | 2,245 | ||||
Issuance of shares to employees and directors (in shares) | 91,911 | |||||
Amortization of Restricted Stock Units | 1,253 | 1,253 | ||||
Dividend equivalent Units accrued - Restricted Stock Units | 48 | (48) | ||||
Repurchase of stock | (20,000) | (20,000) | ||||
Repurchase of stock (in shares) | (825,146) | |||||
Distribution of non-controlling entities | (13,084) | (13,084) | ||||
Dividends declared | (12,299) | (12,299) | ||||
Balance at Dec. 31, 2018 | $ 5 | $ 144,048 | $ 461,075 | $ (908) | $ 2,763 | $ 606,983 |
Balance (in shares) at Dec. 31, 2018 | 50,715,518 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |
Cash flows from operating activities: | |||
Net income | $ 87,593 | $ 76,850 | $ 27,725 |
Adjustments to reconcile net income to net cash provided by operating activities (net of effect of acquisitions): | |||
Depreciation | 67,948 | 57,614 | 61,433 |
Amortization of intangible assets | 11,302 | 8,689 | 6,597 |
Goodwill and intangible asset impairment | 477 | 2,716 | |
Stock-based compensation expense | 1,253 | 1,126 | 1,627 |
Gain on short-term investments | (5,817) | ||
Gain on sale of property and equipment | (3,556) | (4,434) | (4,677) |
Other non-cash items | 275 | 203 | 174 |
Changes in assets and liabilities: | |||
Accounts receivable | 20,912 | 60,739 | (50,809) |
Contract assets | (67,593) | (32,137) | (18,455) |
Other current assets | (2,278) | 7,507 | 903 |
Net deferred tax liabilities (assets) | 17,155 | 3,741 | 10,905 |
Other long-term assets | 244 | 28 | (1,792) |
Accounts payable | 32,323 | (30,547) | 42,934 |
Contract liabilities | (43,801) | 42,610 | (21,601) |
Accrued liabilities | 5,933 | 1,915 | 8,574 |
Other long-term liabilities | (895) | 378 | (3,677) |
Net cash provided by operating activities | 126,815 | 188,942 | 62,577 |
Cash flows from investing activities: | |||
Purchase of property and equipment | (110,189) | (79,782) | (58,027) |
Issuance of a note receivable | (15,000) | ||
Proceeds from a note receivable | 15,000 | ||
Proceeds from sale of property and equipment | 11,657 | 8,736 | 9,603 |
Purchase of short-term investments | (13,588) | ||
Sale of short-term investments | 19,405 | ||
Cash paid for acquisitions, net of cash and restricted cash acquired | (110,620) | (66,205) | (10,997) |
Net cash used in investing activities | (209,152) | (131,434) | (59,421) |
Cash flows from financing activities: | |||
Borrowings under revolving line of credit | 190,000 | ||
Payments on revolving line of credit | (190,000) | ||
Proceeds from issuance of long-term debt | 255,967 | 55,000 | 45,000 |
Repayment of long-term debt | (145,726) | (61,816) | (57,719) |
Proceeds from issuance of common stock purchased under a long-term incentive plan | 1,498 | 1,148 | 1,440 |
Payment of contingent earnout liability | (1,200) | ||
Cash distribution to non-controlling interest holders | (13,084) | ||
Repurchase of common stock | (20,000) | (4,999) | (4,999) |
Dividends paid | (12,343) | (11,326) | (11,384) |
Other | (1,173) | (953) | (793) |
Net cash provided by (used in) financing activities | 63,939 | (22,946) | (28,455) |
Effect of exchange rate changes on cash and cash equivalents | (924) | ||
Net change in cash and cash equivalents | (19,322) | 34,562 | (25,299) |
Cash and cash equivalents at beginning of the period | 170,385 | 135,823 | 161,122 |
Cash and cash equivalents at end of the period | 151,063 | 170,385 | 135,823 |
Cash paid: | |||
Interest | 16,105 | 7,965 | 8,819 |
Income taxes, net of refunds received | 14,246 | 25,984 | 8,624 |
SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING AND FINANCING ACTIVITIES | |||
Obligations incurred for the acquisition of property | 4,163 | ||
Dividends declared and not yet paid | $ 3,043 | $ 3,087 | $ 2,839 |
Nature of Business
Nature of Business | 12 Months Ended |
Dec. 31, 2018 | |
Nature of Business | |
Nature of Business | Note 1—Nature of Business Organization and operations — Primoris Services Corporation is a holding company of various construction and product engineering subsidiaries. Our underground and directional drilling operations install, replace and repair natural gas, petroleum, telecommunications and water pipeline systems, including large diameter pipeline systems. Our industrial, civil and engineering operations build and provide maintenance services to industrial facilities including power plants, petrochemical facilities, and other processing plants; construct multi-level parking structures; and engage in the construction of highways, bridges and other environmental construction activities. Our transmission and distribution operations install, replace and repair gas and electric utility systems. We are incorporated in the State of Delaware, and our corporate headquarters are located at 2300 Field Street, Suite 1900, Dallas, Texas 75201. Unless specifically noted otherwise, as used throughout these consolidated financial statements, “Primoris”, “the Company”, “we”, “our”, “us” or “its” refers to the business, operations and financial results of the Company and its wholly-owned subsidiaries. Reportable Segments — We segregate our business into five reportable segments: the Power, Industrial and Engineering (“Power”) segment, the Pipeline and Underground (“Pipeline”) segment, the Utilities and Distribution (“Utilities”) segment, the Transmission and Distribution (“Transmission”) segment, which is a new reportable segment created in connection with the acquisition of Willbros Group, Inc. (“Willbros”), and the Civil segment. See Note 13 – “ Reportable Segments ” for a brief description of the reportable segments and their operations. The classification of revenue and gross profit for segment reporting purposes can at times require judgment on the part of management. Our segments may perform services across industries or perform joint services for customers in multiple industries. To determine reportable segment gross profit, certain allocations, including allocations of shared and indirect costs, such as facility costs, equipment costs and indirect operating expenses were made. Acquisition of Willbros Group, Inc. — On June 1, 2018, we completed our acquisition of Willbros for approximately $110.6 million, net of cash and restricted cash acquired. Willbros is a specialty energy infrastructure contractor serving the oil and gas and power industries through its utility transmission and distribution, oil and gas, and Canadian operations, which principally executes industrial and power projects. The utility transmission and distribution operations formed the Transmission segment, the oil and gas operations are included in the Pipeline segment, and the Canadian operations are included in the Power segment. See Note 4 — “ Business Combinations ”. Other Acquisitions — On May 26, 2017, we acquired the net assets of Florida Gas Contractors (“FGC”) for $37.7 million; on May 30, 2017, we acquired certain engineering assets for approximately $2.3 million; and on June 16, 2017, we acquired the net assets of Coastal Field Services (“Coastal”) for $27.5 million. FGC operations are included in the Utilities segment, the engineering assets are included in the Power segment, and Coastal operations are included in the Pipeline segment. On January 29, 2016, we acquired the net assets of Mueller Concrete Construction Company (“Mueller”) for $4.1 million and on November 18, 2016, we acquired the net assets of Northern Energy & Power (“Northern”) for $6.9 million. On June 24, 2016, we purchased property, plant and equipment from Pipe Jacking Unlimited, Inc. (“Pipe Jacking”), consisting of specialty directional drilling and tunneling equipment for $13.4 million. We determined this purchase did not meet the definition of a business as defined under ASC 805, “Business Combinations” . Mueller operations are included in the Utilities segment, Northern operations are included in the Power segment, and Pipe Jacking operations are included in the Pipeline segment. See Note 4 — “ Business Combinations” . Joint Ventures — We own a 50% interest in two separate joint ventures, both formed in 2015. The Carlsbad Power Constructors joint venture (“Carlsbad”) is engineering and constructing a gas-fired power generation facility, and the “ARB Inc. & B&M Engineering Co.” joint venture (“Wilmington”) is also engineering and constructing a gas-fired power generation facility. Both projects are located in Southern California. The joint venture operations are included as part of the Power segment. As a result of determining that we are the primary beneficiary of the two variable interest entities (“VIEs”), the results of the Carlsbad and Wilmington joint ventures are consolidated in our financial statements. The Wilmington project was substantially complete as of December 31, 2017, and the Carlsbad project was substantially complete as of December 31, 2018. Financial information for the joint ventures is presented in Note 11— “Noncontrolling Interests” . Seasonality — Our results of operations are subject to quarterly variations. Some of the variation is the result of weather, particularly rain, ice and snow, which can impact our ability to perform construction services. While the majority of our work is in the southern half of the United States, these seasonal impacts can affect revenue and profitability in all of our businesses since utilities defer routine replacement and repair during their period of peak demand. Any quarter can be affected either negatively or positively by atypical weather patterns in any part of the country. In addition, demand for new projects tends to be lower during the early part of the year due to clients’ internal budget cycles. As a result, we usually experience higher revenue and earnings in the third and fourth quarters of the year as compared to the first two quarters. Variability —In addition to seasonality, we are also dependent on large construction projects which tend not to be seasonal, but can fluctuate from year to year based on general economic conditions. Our business may be affected by declines or delays in new projects or by client project schedules. Because of the cyclical nature of our business, the financial results for any period may fluctuate from prior periods, and our financial condition and operating results may vary from quarter to quarter. Results from one quarter may not be indicative of financial condition or operating results for any other quarter or for an entire year. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2018 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | Note 2—Summary of Significant Accounting Policies Basis of presentation — The accompanying consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and the financial statement rules and regulations of the Securities and Exchange Commission (“SEC”). References for Financial Accounting Standards Board (“FASB”) standards are made to the FASB Accounting Standards Codification (“ASC”). Principles of consolidation — The accompanying Consolidated Financial Statements include the accounts of Primoris, our wholly-owned subsidiaries and the noncontrolling interests of the Carlsbad and Wilmington joint ventures, which are VIEs for which we are the primary beneficiary as determined under the provisions of ASC 810, “Consolidation” . All intercompany balances and transactions have been eliminated in consolidation. Reclassification — Certain previously reported amounts have been reclassified to conform to the current year presentation. Use of estimates — The preparation of our Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting periods. As a construction contractor, we use estimates for costs to complete construction projects and the contract value of certain construction projects. These estimates have a direct effect on gross profit as reported in these consolidated financial statements. Actual results could materially differ from our estimates. Operating cycle — In the accompanying Consolidated Balance Sheets, assets and liabilities relating to long-term construction contracts (e.g. contract assets and contract liabilities) are considered current assets and current liabilities, since they are expected to be realized or liquidated in the normal course of contract completion, although completion may require more than one calendar year. Consequently, we have significant working capital invested in assets that may have a liquidation period extending beyond one year. We have claims receivable and retention due from various customers and others that are currently in dispute, the realization of which is subject to binding arbitration, final negotiation or litigation, all of which may extend beyond one calendar year. Cash and cash equivalents — We consider all highly liquid investments with an original maturity of three months or less when purchased as cash equivalents. Business combinations —Business combinations are accounted for using the acquisition method of accounting. We use the fair value of the assets acquired and liabilities assumed to account for the purchase price of businesses. The determination of fair value requires estimates and judgments of future cash flow expectations to assign fair values to the identifiable tangible and intangible assets. GAAP provides a “measurement period” of up to one year in which to finalize all fair value estimates associated with the acquisition of a business. Most estimates are preliminary until the end of the measurement period. During the measurement period, any material, newly discovered information that existed at the acquisition date would be reflected as an adjustment to the initial valuations and estimates. After the measurement period, any adjustments would be recorded as a current period income or expense. Contingent Earnout Liabilities — As part of certain acquisitions, we agreed to pay cash to certain sellers upon meeting specific operating performance targets for specified periods subsequent to the acquisition date. Each quarter, we evaluate the fair value of the estimated contingency and record a non-operating charge for the change in the fair value. Upon meeting the target, we reflect the full liability on the balance sheet and record a charge to “Other income (expense), net” for the change in the fair value of the liability from the prior period. See Note 3 — “Fair Value Measurements” for further discussion. Goodwill and other intangible assets — We account for goodwill in accordance with ASC 350, “ Intangibles — Goodwill and Other ”. Under ASC 350, goodwill is subject to an annual impairment test, which we perform as of the first day of the fourth quarter of each year, with more frequent testing if indicators of potential impairment exist. The impairment review is performed at the reporting unit level for those units with recorded goodwill. For the majority of our reporting units, we perform a qualitative assessment to determine whether it is more likely than not (that is, a likelihood of more than 50 percent) that the fair value of the reporting unit is less than its carrying value, including goodwill. Factors used in our qualitative assessment include, but are not limited to, macroeconomic conditions, industry and market conditions, cost factors, overall financial performance and Company and reporting unit specific events. For all other reporting units, we use the two-step impairment test outlined in ASC 350. First, we compare the fair value of a reporting unit with its carrying amount. Fair value for the goodwill impairment test is determined utilizing a discounted cash flow analysis based on our financial plan discounted using our weighted average cost of capital and market indicators of terminal year cash flows. Other valuation methods may be used to corroborate the discounted cash flow method. If the carrying amount of a reporting unit is in excess of its fair value, goodwill is considered potentially impaired and further tests are performed to measure the amount of impairment loss. In the second step of the goodwill impairment test, we compare the implied fair value of reporting unit goodwill with the carrying amount of the reporting unit’s goodwill. If the carrying amount of the reporting unit’s goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to the carrying amount of goodwill less its implied fair value. The implied fair value of goodwill is determined in the same manner that the amount of goodwill recognized in a business combination was determined. We allocate the fair value of a reporting unit to all of the assets and liabilities of that unit, including intangible assets, as if the reporting unit had been acquired in a business combination. Any excess of the fair value of a reporting unit over the amounts assigned to its assets and liabilities represents the implied fair value of goodwill. Income tax — Current income tax expense is the amount of income taxes expected to be paid for the financial results of the current year. A deferred tax liability or asset is established for the expected future tax consequences resulting from the differences in financial reporting and tax bases of assets and liabilities between GAAP and the tax codes. A valuation allowance is provided if it is more likely than not that some or all of the deferred tax assets will not be realized. We provide for uncertain tax positions when such tax positions do not meet the recognition thresholds or measurement standards as set forth in ASC 740, “Income Taxes” . The difference between a tax position taken or expected to be taken on our income tax returns and the benefit recognized in our financial statements is referred to as an unrecognized tax benefit. Amounts for uncertain tax positions are adjusted in periods when new information becomes available or when positions are effectively settled. We recognize accrued interest and penalties related to uncertain tax positions, if any, as a component of income tax expense. Staff Accounting Bulletin (“SAB”) 118 provides guidance on accounting for uncertainties of the effects of the Tax Cuts and Jobs Act (the “Tax Act”). Specifically, SAB 118 allowed companies to record provisional estimates of the impact of the Tax Act during a one year “measurement period” from the December 22, 2017 enactment date, similar to that used when accounting for business combinations. As a result of the Tax Act, we remeasured deferred tax assets and liabilities using the newly enacted tax rates and recorded a one-time net tax benefit of $9.4 million as a provisional estimate under SAB 118 in the year ended December 31, 2017. As of December 31, 2018, our accounting for the Tax Act is complete. The provision for income taxes for the year ended December 31, 2018 includes a $1.1 million increase from the completion of our provisional accounting for the effects of the Tax Act under SAB 118. The increase is due to $0.6 million of additional expense associated with foreign tax credits, net of associated valuation allowances, and $0.5 million of additional expense related to the corporate tax rate change impact on return-to-provision adjustments, primarily for depreciation. Comprehensive income — We account for comprehensive income in accordance with ASC 220, “ Comprehensive Income ”, which specifies the computation, presentation and disclosure requirements for comprehensive income (loss). Comprehensive income (loss) consists of net income (loss) and foreign currency translation adjustments, primarily from fluctuations in foreign currency exchange rates of our foreign subsidiaries with a functional currency other than the U.S. dollar. Foreign operations — At December 31, 2018, we had operations in Canada with assets aggregating approximately $45.1 million, compared to $12.7 million at December 31, 2017. The Canadian operations had revenue of $86.4 million and income before tax of $2.4 million for the year ended December 31, 2018; revenue of $8.3 million and a loss before tax of $0.3 million for the year ended December 31, 2017, and revenue of $11.2 million and income before tax of $0.8 million for the year ended December 31, 2016. The increase in total assets and revenue as of and for the year ended December 31, 2018, is due to the Canadian operations acquired as part of the Willbros acquisition. Functional currencies and foreign currency translation — For foreign operations where substantially all monetary transactions are in the local currency, we use the local currency as our functional currency. The effects of translating financial statements of foreign operations into our reporting currency are recognized as a cumulative translation adjustment, net of tax in “Accumulated other comprehensive income (loss)” in the Consolidated Statements of Stockholders’ Equity. For certain foreign operations where substantially all monetary transactions are made in United States dollars, we use the U.S. dollar as our functional currency, with gains or losses on translation recorded in income in the period in which they are incurred. Gains or losses on foreign currency transactions are recorded in income in the period in which they are incurred. Partnerships and joint ventures — We are periodically a member of a partnership or a joint venture. These partnerships or joint ventures are used primarily for the execution of single contracts or projects. Our ownership can vary from a small noncontrolling ownership to a significant ownership interest. We evaluate each partnership or joint venture to determine whether the entity is considered a VIE as defined in ASC 810, “Consolidation” , and if a VIE, whether we are the primary beneficiary of the VIE, which would require us to consolidate the VIE with our financial statements. When consolidation occurs, we account for the interests of the other parties as a noncontrolling interest and disclose the net income attributable to noncontrolling interests. See Note 11 — “Noncontrolling Interests" for further information. Equity method of accounting — We account for our interest in an investment using the equity method of accounting per ASC 323, “Investments — Equity Method and Joint Ventures” if we are not the primary beneficiary of a VIE or do not have a controlling interest. The investment is recorded at cost and the carrying amount is adjusted periodically to recognize our proportionate share of income or loss, additional contributions made and dividends and capital distributions received. We record the effect of any impairment or an other than temporary decrease in the value of its investment. In the event a partially owned equity affiliate were to incur a loss and our cumulative proportionate share of the loss exceeded the carrying amount of the equity method investment, application of the equity method would be suspended and our proportionate share of further losses would not be recognized unless we committed to provide further financial support to the affiliate. We would resume application of the equity method once the affiliate became profitable and our proportionate share of the affiliate’s earnings equals our cumulative proportionate share of losses that were not recognized during the period the application of the equity method was suspended. Cash concentration — We place our cash in demand deposit accounts and short-term U.S. Treasury bonds. At December 31, 2018 and 2017, we had cash balances of $151.1 million and $170.4 million, respectively. Our cash balances are held in high credit quality financial institutions in order to mitigate the risk of holding funds not backed by the federal government or in excess of federally backed limits. Cash balances associated with VIEs, which totaled $3.1 million and $60.3 million as of December 31, 2018 and December 31, 2017, respectively, are not available for general corporate purposes. Collective bargaining agreements — Approximately 46.7% of our hourly employees, primarily consisting of field laborers, were covered by collective bargaining agreements in 2018. Upon renegotiation of such agreements, we could be exposed to increases in hourly costs and work stoppages. Of the 111 collective bargaining agreements to which we are a party to, 93 will require renegotiation during 2019. We have not had a significant work stoppage in more than 20 years. Multiemployer plans — Various subsidiaries are signatories to collective bargaining agreements. These agreements require that we participate in and contribute to a number of multiemployer benefit plans for our union employees at rates determined by the agreements. The trustees for each multiemployer plan determine the eligibility and allocations of contributions and benefit amounts, determine the types of benefits and administer the plan. Federal law requires that if we were to withdraw from an agreement, we would incur a withdrawal obligation. The potential withdrawal obligation may be significant. In accordance with GAAP, any withdrawal liability would be recorded when it is probable that a liability exists and can be reasonably estimated. In November 2011, we withdrew from the Central States Southeast and Southwest Areas Pension Fund multiemployer pension plan, as discussed in Note 12 — “Commitments and Contingencies” . We have no plans to withdraw from any other agreements. Insurance — We self-insure worker’s compensation, general liability, and auto insurance up to $0.25 million per claim. We maintained a self-insurance reserve totaling $42.8 million and $29.4 million at December 31, 2018 and 2017, respectively. Claims administration expenses are charged to current operations as incurred. Our accruals are based on judgment and the probability of losses, with the assistance of third-party actuaries. Actual payments that may be made in the future could materially differ from such reserves. Derivative instruments and hedging activities — We recognize all derivative instruments as either assets or liabilities on the balance sheet at their respective fair values. Our use of derivatives consists of an interest rate swap agreement. The interest rate swap agreement was entered into to improve the predictability of cash flows from interest payments related to variable rate debt for the duration of the term loan. The interest rate swap matures in July 2023 and is not designated as a hedge for accounting purposes. Therefore, the change in the fair value of the derivative asset or liability is reflected in net income in the Consolidated Statements of Income (mark-to-market accounting). Cash flows from derivatives settled are reported as cash flow from operating activities. Accounts receivable —Accounts receivable and contract receivables are primarily with public and private companies and governmental agencies located in the United States. Credit terms for payment of products and services are extended to customers in the normal course of business. Contract receivables are generally progress billings on projects, and as a result, are short term in nature. Generally, we require no collateral from our customers, but file statutory liens or stop notices on any construction projects when collection problems are anticipated. While a project is underway, we estimate the collectability of contract amounts at the same time that we estimate project costs. As discussed in Note 5 — “Revenue” , realization of the eventual cash collection may be recognized as adjustments to the contract revenue and profitability, otherwise, we use the specific identification method of accounting for losses from uncollectible accounts. Under this method an allowance is recorded based upon historical experience and management’s evaluation of outstanding contract receivables at the end of each year. Receivables are written off in the period deemed uncollectible. The allowance for doubtful accounts at December 31, 2018 and 2017 was $1.7 million and $0.5 million, respectively. Significant revision in contract estimates — We recognize revenue over time for firm fixed-price contracts. Under this method, the costs incurred to date as a percentage of total estimated costs are used to calculate revenue. Total estimated costs, and thus contract revenue and margin, are impacted by many factors, which can cause significant changes in estimates during the life cycle of a project. For projects that were in process at the end of the prior year, there can be a difference in revenue and profit that would have been recognized in the prior year, had current year estimates of costs to complete been known at the end of the prior year. The following table presents the approximate financial impact of the changes in estimates that would have been reflected in the prior years had the revised estimates been applied to the particular year (in thousands): Net impact of change in estimate for the years ended December 31, 2018 2017 2016 Revised estimates in 2018 that impact 2017 $ (16,242) $ 16,242 $ — Revised estimates in 2017 that impact 2016 — 6,435 (6,435) Revised estimates in 2016 that impact 2015 — — 1,685 Net impact to gross margin $ (16,242) $ 22,677 $ (4,750) EPS impact to year $ (0.16) $ 0.24 $ (0.05) During 2018, we collected a disputed receivable related to a project completed in 2014, which resulted in recognizing revenue of approximately $18.1 million and gross profit of approximately $17.4 million. During the third quarter of 2016, we settled a dispute with a customer on collection of a receivable of $17.9 million, receiving $38.0 million in cash, which resulted in recognizing revenue of approximately $27.5 million and gross profit of approximately $26.7 million in the third quarter of 2016. In October 2016, we announced that we planned to divest our Texas heavy civil business unit, which operates as a division of Primoris Heavy Civil. We engaged a financial advisor to assist in the marketing and sale of the business unit, and planned to continue operating the business unit until completion of a sale. As a result of the planned divestiture, we recorded a charge of $37.3 million during the third quarter of 2016. This charge includes a reduction of the expected profitability of certain projects in the Belton, Texas area for the division and a reduction of costs and estimated earnings in excess of billings and an increase to the reserve for anticipated job losses. In April 2017, the Board of Directors determined that based on the information available, we would attain the best long-term value by withdrawing from the sales process and continuing to operate the business unit. The settlement of the disputed projects and the charge related to the planned divestiture were not included in the table above. Customer concentration — We operate in multiple industry segments encompassing the construction of commercial, industrial and public works infrastructure assets primarily throughout the United States. Typically, the top ten customers in any one calendar year generate revenue in excess of 50.0% of total revenue; however, the group that comprise the top ten customers varies from year to year. See Note 14 — “ Customer Concentrations” for further discussion. Property and equipment — Property and equipment are recorded at cost and are depreciated using the straight-line method over the estimated useful lives of the related assets, usually ranging from three to thirty years. Maintenance and repairs are charged to expense as incurred. Significant renewals and betterments are capitalized. At the time of retirement or other disposition of property and equipment, the cost and accumulated depreciation are removed from the accounts, and any resulting gain or loss is reflected in operating income. We assess the recoverability of property and equipment whenever events or changes in business circumstances indicate that the carrying amount of the asset may not be fully recoverable. We perform an analysis to determine if an impairment exists. The amount of property and equipment impairment, if any, is measured based on fair value and is charged to operations in the period in which the impairment is determined by management. For the years ended December 31, 2018, 2017, and 2016, our management has not identified any material impairment of its property and equipment. Taxes collected from customers — Sales and use taxes collected from our customers are recorded on a net basis. Share-based payments and stock-based compensation — In May 2013, the shareholders approved and we adopted the Primoris Services Corporation 2013 Long-term Incentive Equity Plan (“Equity Plan”). Detailed discussion of shares issued under the Equity Plan are included in Note 17 — “Deferred Compensation Agreements and Stock-Based Compensation” and in Note 21— “Stockholders’ Equity” . Such share issuances include grants of Restricted Stock Units to executives, issuance of stock to certain senior managers and executives and issuances of stock to non-employee members of the Board of Directors. Recently Issued Accounting Pronouncements In May 2014, the FASB issued ASU No. 2014-09, “ Revenue from Contracts with Customers (Topic 606) ”, with several clarifying updates issued during 2016 and 2017. The new standard is effective for reporting periods beginning after December 15, 2017 and supersedes all prior revenue recognition standards including the guidance in ASC 605, “ Revenue Recognition ”. Under Topic 606, revenue recognition occurs when promised goods or services are transferred to customers in amounts that reflect the consideration to which the company expects to be entitled to in exchange for those goods or services. We adopted Topic 606 as of January 1, 2018 using the modified retrospective transition method. See Note 5 — “ Revenue” for further details. In February 2016, the FASB issued ASU 2016-02, “ Leases (Topic 842) ”. In July 2018, the FASB issued two updates to ASU 2016-02, ASU 2018-10, “Codification Improvements to Topic 842, Leases” , and ASU 2018-11, “Leases (Topic 842): Targeted Improvements” . ASU 2016-02 requires recognition of operating leases with lease terms of more than twelve months on the balance sheet as both assets for the rights and liabilities for the obligations created by the leases. The ASU also requires disclosures that provide qualitative and quantitative information for the lease assets and liabilities recorded in the financial statements. The standard is effective for fiscal years beginning after December 15, 2018, and initially required a modified retrospective transition method where a company applies the new lease standard at the beginning of the earliest period presented in the financial statements. ASU 2018-11 added an optional transition method where a company applies the new leases standard at the adoption date and recognizes a cumulative effect adjustment to the opening balance of retained earnings. We adopted the new standard as of January 1, 2019, and elected certain transition practical expedients permitted with the new standard, which among other things, allowed us to carryforward the historical lease classification. In addition, we elected the hindsight practical expedient to determine the reasonably certain lease term for existing leases. We also made an accounting policy election that keeps leases with an initial term of 12 months or less off of the balance sheet and results in recognizing those lease payments in the Consolidated Statements of Income on a straight-line basis over the lease term. The adoption of the ASU resulted in the recognition of right of use assets as of January 1, 2019, of approximately $133.3 million, which includes the reclassification of previously recognized lease impairment and accrued lease liabilities. The adoption of the ASU resulted in the recognition of lease liabilities as of January 1, 2019, of approximately $140.9 million. The reduction to retained earnings was approximately $0.8 million, net of the reversal of previously recognized lease impairment and accrued lease liabilities. We do not believe the ASUs will materially affect our consolidated net income. Additionally, the ASUs will have no impact on our debt covenant compliance as we have already revised our credit agreements to address the impact of the ASUs. In November 2016, the FASB issued ASU 2016-18, “Statement of Cash Flows (Topic 230)” , which requires a reporting entity to include restricted cash and restricted cash equivalents in its cash and cash-equivalent balances presented in the entity’s statement of cash flows. A reconciliation between the statement of financial position and the statement of cash flows must be disclosed when the balance sheet includes more than one line item for cash, cash equivalents, restricted cash and restricted cash equivalents. Transfers between non-restricted and restricted cash should not be presented as cash flow activities in the statement of cash flows. Furthermore, an entity with a material restricted cash balance must disclose information regarding the nature of the restrictions. ASU 2016-18 is effective for annual periods beginning after December 15, 2017, including interim periods within those annual reporting periods. We adopted the ASU as of January 1, 2018, and it did not have a material impact on our Consolidated Statements of Cash Flows. In January 2017, the FASB issued ASU 2017-01, " Business Combinations (Topic 805): Clarifying the Definition of a Business ", which changes the definition of a business to assist entities with evaluating when a set of acquired assets and activities is a business. ASU 2017-01 requires an entity to evaluate if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets; if so, the set of transferred assets and activities is not a business. ASU 2017-01 is effective for interim and annual reporting periods beginning after December 15, 2017. We adopted the ASU as of January 1, 2018, and it did not impact the determination of our business combinations. In January 2017, the FASB issued ASU 2017-04, " Simplifying the Test for Goodwill Impairment ". ASU 2017-04 removes the second step of the goodwill impairment test, which requires a hypothetical purchase price allocation. A goodwill impairment will now be the amount by which a reporting unit's carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. ASU 2017-04 is effective for interim and annual reporting periods beginning after December 15, 2019 and will be applied prospectively. We do not expect the adoption of ASU 2017-04 to have an impact on our financial position, results of operations, or cash flows. In May 2017, the FASB issued ASU 2017-09, “ Compensation — Stock Compensation (Topic 718) — Scope of Modification Accounting ”. The ASU amends the scope of modification accounting for share-based payment arrangements. The amendments in the ASU clarify when to account for a change in the terms or conditions of share-based payment awards as a modification under ASC 718, “Compensation — Stock Compensation” . The ASU is effective for interim and annual reporting periods beginning after December 15, 2017. We adopted the ASU as of January 1, 2018, and it did not have a material impact on our consolidated financial statements. In March 2018, the FASB issued ASU No. 2018-05, “Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118”. The ASU added guidance previously issued by the SEC in SAB 118 to ASC 740, “Income Taxes” . SAB 118 was issued by the SEC in December 2017 to provide guidance for accounting implications of U.S. tax reform under the Tax Cuts and Jobs Act (the “Tax Act”). Specifically, SAB 118 allowed companies to record provisional estimates of the impact of the Tax Act during a one year “measurement period” from the December 22, 2017 enactment date similar to that used when accounting for business combinations. We have evaluated the potential impacts of SAB 118 and have applied this guidance to our consolidated financial statements and related disclosures beginning in the fourth quarter of our fiscal year 2017. See Note 19 — “Income Taxes ” for additional information on SAB 118 and the impacts of the Tax Act. 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 eliminates certain disclosure requirements for recurring and nonrecurring fair value measurements. The ASU eliminates such disclosures as the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, and adds new disclosure requirements for Level 3 measurements. This ASU 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. We are currently evaluating the impact this ASU will have on our disclosures. Other new pronouncements issued but not effective until after December 31, 2018 are not expected to have a material impact on our consolidated results of operations, financial position or cash flows. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Measurements | |
Fair Value Measurements | Note 3—Fair Value Measurements ASC 820, “ Fair Value Measurements and Disclosures ” defines fair value, establishes a framework for measuring fair value in GAAP and requires certain disclosures about fair value measurements. ASC 820 addresses fair value GAAP for financial assets and financial liabilities that are remeasured and reported at fair value at each reporting period and for non-financial assets and liabilities that are remeasured and reported at fair value on a non-recurring basis. In general, fair values determined by Level 1 inputs use quoted prices (unadjusted) in active markets for identical assets or liabilities. Fair values determined by Level 2 inputs use data points that are observable such as quoted prices, interest rates and yield curves. Fair values determined by Level 3 inputs are “unobservable data points” for the asset or liability and include situations where there is little, if any, market activity for the asset or liability. The following table presents, for each of the fair value hierarchy levels identified under ASC 820, our financial assets and certain liabilities that are required to be measured at fair value at December 31, 2018 and 2017 (in thousands): Fair Value Measurements at Reporting Date Significant Quoted Prices Other Significant in Active Markets Observable Unobservable for Identical Assets Inputs Inputs (Level 1) (Level 2) (Level 3) Assets as of December 31, 2018: Cash and cash equivalents $ 151,063 $ — $ — Liabilities as of December 31, 2018: Interest rate swap $ — $ 2,829 $ — Assets as of December 31, 2017: Cash and cash equivalents $ 170,385 $ — $ — Liabilities as of December 31, 2017: Contingent consideration $ — $ — $ 716 Other financial instruments not listed in the table consist of accounts receivable, accounts payable and certain accrued liabilities. These financial instruments generally approximate fair value based on their short-term nature. The carrying value of our long-term debt approximates fair value based on comparison with current prevailing market rates for loans of similar risks and maturities. The interest rate swap is measured at fair value using the income approach, which discounts the future net cash settlements expected under the derivative contracts to a present value. These valuations primarily utilize indirectly observable inputs, including contractual terms, interest rates and yield curves observable at commonly quoted intervals. See Note 10 – “ Derivative Instruments ” for additional information. The following table provides changes to our contingent consideration liability Level 3 fair value measurements during the years ended December 31, 2018 and 2017 (in thousands): Significant Unobservable Inputs (Level 3) Contingent Consideration Liability 2018 2017 Beginning balance, January 1, $ 716 $ — FGC acquisition — 1,200 Change in fair value of contingent consideration liability during year 753 (484) Payment of earn-out liability to FGC sellers (1,469) — Ending balance, December 31, $ — $ 716 On a quarterly basis, we assess the estimated fair value of the contractual obligation to pay the contingent consideration and any changes in estimated fair value are recorded as a non-operating charge in our Statement of Income. Fluctuations in the fair value of contingent consideration are impacted by two unobservable inputs, management’s estimate of the probability (which has ranged from 33% to 100%) of the acquired company meeting the contractual operating performance target and the estimated discount rate (a rate that approximates our cost of capital). Significant changes in either of those inputs in isolation would result in a different fair value measurement. Generally, a change in the assumption of the probability of meeting the performance target is accompanied by a directionally similar change in the fair value of contingent consideration liability, whereas a change in assumption of the estimated discount rate is accompanied by a directionally opposite change in the fair value of contingent consideration liability. Upon meeting the target, we reflect the full liability on the balance sheet and record a charge to “Other income (expense), net” for the change in the fair value of the liability from the prior period. The May 2017 acquisition of Florida Gas Contractors included an earnout of $1.5 million payable in May 2018, contingent upon meeting certain performance targets. The estimated fair value of the contingent consideration on the acquisition date was $1.2 million. Under ASC 805, “Business Combinations” , we are required to estimate the fair value of contingent consideration based on facts and circumstances that existed as of the acquisition date and remeasure to fair value at each reporting date until the contingency is resolved. As a result of that remeasurement, we reduced the fair value of the contingent consideration in the fourth quarter of 2017 related to the FGC performance target contemplated in their purchase agreement, and decreased the liability by $0.5 million with a corresponding increase in Other income (expense), net . During the second quarter of 2018, we increased the fair value of the contingent consideration related to the FGC, and increased the liability by $0.8 million with a corresponding decrease in Other income (expense), net . We paid the full $1.5 million liability in the third quarter of 2018. |
Business Combinations
Business Combinations | 12 Months Ended |
Dec. 31, 2018 | |
Business Combinations | |
Business Combinations | Note 4—Business Combinations 2018 Acquisition Acquisition of Willbros Group, Inc. On June 1, 2018, we acquired all of the outstanding common stock of Willbros, a specialty energy infrastructure contractor serving the oil and gas and power industries for approximately $110.6 million, net of cash and restricted cash acquired. The total purchase price was funded through a combination of existing cash balances and borrowings under our revolving credit facility. The tables below represent the purchase consideration and preliminary estimated fair values of the assets acquired and liabilities assumed. Significant changes since our initial estimates reported in the second quarter of 2018 primarily relate to fair value adjustments to our acquired contracts, which resulted in an increase to contract liabilities of $19.6 million. In addition, fair value adjustments to our acquired insurance liabilities and lease obligations reduced our liabilities assumed by approximately $9.3 million and $8.0 million, respectively. As a result of these and other adjustments to the initial estimated fair values of the assets acquired and liabilities assumed, goodwill increased by approximately $9.1 million since the second quarter of 2018. Adjustments recorded to the estimated fair values of the assets acquired and liabilities assumed are recognized in the period in which the adjustments are determined and calculated as if the accounting had been completed as of the acquisition date. The final determination of fair value for certain assets and liabilities is subject to further change and will be completed as soon as the information necessary to complete the analysis is obtained. These amounts, which may differ materially from these preliminary estimates, will continue to be refined and will be finalized as soon as possible, but no later than one year from the acquisition date. The primary areas of the preliminary estimates that are not yet finalized relate to property, plant and equipment, contract assets and liabilities, leases, deferred income taxes, uncertain tax positions, and the fair value of certain contractual obligations. Purchase consideration (in thousands) Total purchase consideration $ 164,758 Less cash and restricted cash acquired (54,138) Net cash paid 110,620 Preliminary identifiable assets acquired and liabilities assumed (in thousands) Cash and restricted cash $ 54,138 Accounts receivable 102,719 Contract assets 30,762 Other current assets 18,712 Property, plant and equipment 30,522 Intangible assets: Customer relationships 47,500 Tradename 200 Deferred income taxes 24,017 Other non-current assets 2,261 Accounts payable and accrued liabilities (114,088) Contract liabilities (63,902) Other non-current liabilities (20,868) Total identifiable net assets 111,973 Goodwill 52,785 Total purchase consideration $ 164,758 We separated the operations of Willbros among two of our existing segments, and created a new segment for the utility transmission and distribution operations called the Transmission segment. The oil and gas operations are included in the Pipeline segment, and the Canadian operations are included in the Power segment. Goodwill associated with the Willbros acquisition principally consists of expected benefits from the expansion of our services into electric utility-focused offerings and the expansion of our geographic presence. Goodwill also includes the value of the assembled workforce. We allocated $50.5 million of goodwill to the Transmission segment, $1.5 million to the Power segment, and $0.8 million to the Pipeline segment. Based on the current tax treatment, goodwill is not expected to be deductible for income tax purposes. As part of the Willbros acquisition, we acquired approximately $40.2 million of restricted cash that was pledged by Willbros to secure letters of credit. Subsequent to the acquisition, we issued new letters of credit under our Credit Facility to replace the Willbros letters of credit secured by the restricted cash. As of December 31, 2018, substantially all of the restricted cash had been released. For the period June 1, 2018, the acquisition date, to December 31, 2018, Willbros contributed revenue of $400.8 million and gross profit of $39.5 million. For the year ended December 31, 2018, costs related to the acquisition of Willbros were $13.2 million and are included in “Merger and related costs” on the Consolidated Statements of Income. Such costs primarily consisted of severance and retention bonus costs for certain employees of Willbros, professional fees paid to advisors, and exiting or impairing certain duplicate facilities. 2017 Acquisitions Acquisition of Florida Gas Contractors On May 26, 2017, we acquired certain assets of FGC, a utility contractor specializing in underground natural gas infrastructure, for approximately $33.0 million in cash. In addition, the sellers could receive a contingent earnout amount of up to $1.5 million over a one-year period ending May 26, 2018, based on the achievement of certain operating targets. The estimated fair value of the potential contingent consideration on the acquisition date was $1.2 million. FGC operates in the Utilities segment and expands our presence in the Florida and Southeast markets. The purchase was accounted for using the acquisition method of accounting. During the fourth quarter of 2017, we finalized the estimate of fair value of the acquired assets of FGC, which included $4.8 million of fixed assets; $3.3 million of working capital; $9.1 million of intangible assets; and $17.0 million of goodwill. In connection with the FGC acquisition, we also paid $3.5 million to acquire certain land and buildings. Intangible assets primarily consist of customer relationships. Goodwill associated with the FGC acquisition principally consists of expected benefits from providing expertise for our construction efforts in the underground utility business as well as the expansion of our geographic presence. Goodwill also includes the value of the assembled workforce that FGC provides to us. Based on the current tax treatment, goodwill will be deductible for income tax purposes over a fifteen-year period. For the year ended December 31, 2018, FGC contributed revenue of $31.3 million and gross profit of $7.6 million. From the acquisition date through December 31, 2017, FGC contributed revenue of $15.5 million and gross profit of $3.8 million. Acquisition of Engineering Assets On May 30, 2017, we acquired certain engineering assets for approximately $2.3 million in cash which further enhances our ability to provide quality service for engineering and design projects. The purchase was accounted for using the acquisition method of accounting. The identifiable assets acquired consisted of $0.2 million of fixed assets and $2.1 million of intangible assets. Intangible assets primarily consist of customer relationships. The operations of this acquisition were fully integrated into our Power segment operations and no separate financial results were maintained. Therefore, it is impracticable for us to report the amounts of revenue and gross profit included in the Consolidated Statements of Income. Acquisition of Coastal Field Services On June 16, 2017, we acquired certain assets and liabilities of Coastal for approximately $27.5 million in cash. Coastal provides pipeline construction and maintenance, pipe and vessel coating and insulation, and integrity support services for companies in the oil and gas industry. Coastal operates in the Pipeline segment and increases our market share in the Gulf Coast energy market. The purchase was accounted for using the acquisition method of accounting. During the second quarter of 2018, we finalized the estimate of the fair value of the acquired assets, which included $4.0 million of fixed assets; $4.6 million of working capital; $9.9 million of intangible assets; $9.3 million of goodwill; and $0.3 million of long-term capital leases. Intangible assets primarily consist of customer relationships and tradename. Goodwill associated with the Coastal acquisition principally consists of expected benefits from providing expertise for our expansion of services in the pipeline construction and maintenance business. Goodwill also includes the value of the assembled workforce that Coastal provides to us. Based on the current tax treatment, goodwill will be deductible for income tax purposes over a fifteen-year period . For the year ended December 31, 2018, Coastal contributed revenue of $14.1 million and gross profit of $1.4 million. From the acquisition date through December 31, 2017, Coastal contributed revenue of $17.9 million and gross profit of $3.2 million. The following table represents the identifiable assets acquired and liabilities assumed related to the 2017 acquisitions described above (in thousands): Accounts receivable $ 10,721 Contract assets 580 Other current assets 2,352 Property, plant and equipment 12,402 Intangible assets 21,125 Goodwill 26,269 Accounts payable and accrued liabilities (5,476) Contract liabilities (447) Total $ 67,526 2016 Acquisitions On January 29, 2016, we acquired certain assets and liabilities of Mueller Concrete Construction Company for $4.1 million. The purchase was accounted for using the acquisition method of accounting. During the second quarter of 2016, we finalized the estimate of fair value of the acquired assets of Mueller, which included $2.0 million of fixed assets, $2.0 million of goodwill and $0.1 million of inventory. Mueller operates within the Utilities segment. Goodwill largely consists of expected benefits from providing foundation expertise for our construction efforts in underground line work, substations and telecom/fiber. Goodwill also includes the value of the assembled workforce that Mueller provides to our business. Based on the current tax treatment, goodwill will be deductible for income tax purposes over a fifteen-year period. The operations of Mueller were fully integrated into our operations and no separate financial results were maintained. Therefore, it is impracticable for us to report the amounts of revenue and gross profit included in the Consolidated Statements of Income. On November 18, 2016, we acquired certain assets and liabilities of Northern Energy & Power for $6.9 million. Northern operates in the Power segment and serves the renewable energy sector with a specific focus on solar photovoltaic installations in the United States. The purchase was accounted for using the acquisition method of accounting. During the second quarter of 2017, we finalized our estimated fair value of the acquired assets of Northern, which resulted in a $0.1 million reduction in goodwill compared to amounts previously recorded. The allocation of the total purchase price included $3.0 million of intangible assets, $3.7 million of goodwill and $0.1 million of fixed assets. Intangible assets consist of customer relationships. Goodwill is derived from the expected benefits of services in the renewable energy sector with a specific focus on Solar Photovoltaic installations in the United States. Goodwill also includes the value of the assembled workforce that Northern provides to our business. Based on the current tax treatment, goodwill will be deductible for income tax purposes over a fifteen-year period. For the year ended December 31, 2018, Northern contributed revenue of $44.5 million and gross profit of ($1.2) million. For the year ended December 31, 2017, Northern contributed revenue of $19.1 million and gross profit of $1.1 million. From the acquisition date through December 31, 2016, Northern contributed revenue of $2.0 million and gross profit of $0.6 million. The following table represents the identifiable assets acquired and liabilities assumed related to the 2016 acquisitions described above (in thousands): Accounts receivable $ 1,606 Other current assets 64 Property, plant and equipment 2,133 Intangible assets 3,000 Goodwill 5,660 Accounts payable and accrued liabilities (1,587) Total $ 10,876 2016 Asset Acquisition On June 24, 2016, we purchased property, plant and equipment from Pipe Jacking Unlimited, Inc., consisting of specialty directional drilling and tunneling equipment for $13.4 million in cash. We determined this purchase did not meet the definition of a business as defined under ASC 805, “Business Combinations” . The estimated fair value of the equipment was equal to the purchase price. We believe the purchase of the equipment will aid in our pipeline construction projects and enhance the work provided to our utility clients. Pipe Jacking equipment is included in the Pipeline segment. Supplemental Unaudited Pro Forma Information The following pro forma information for the twelve months ended December 31, 2018 and 2017 presents our results of operations as if the Willbros acquisition and the 2017 acquisitions of FGC and Coastal had occurred at the beginning of 2017. The supplemental pro forma information has been adjusted to include: · the pro forma impact of amortization of intangible assets and depreciation of property, plant and equipment; · the pro forma impact of the expense associated with the amortization of the discount for the fair value of the contingent consideration liability associated with the FGC acquisition; · the pro forma impact of nonrecurring merger and related costs directly attributable to the acquisitions; · the pro forma impact of interest expense relating to the acquisitions; and · the pro forma tax effect of both the income before income taxes and the pro forma adjustments, calculated using a tax rate of 28.0% and 40.0% for the years ended December 31, 2018 and 2017, respectively. The pro forma results are presented for illustrative purposes only and are not necessarily indicative of, or intended to represent, the results that would have been achieved had the various acquisitions been completed on January 1, 2017. For example, the pro forma results do not reflect any operating efficiencies and associated cost savings that we might have achieved with respect to the acquisitions (in thousands): Year Ended December 31, 2018 2017 (unaudited) (unaudited) Revenue $ 3,265,690 $ 3,256,045 Income before provision for income taxes $ 107,657 $ 14,813 Net income attributable to Primoris $ 73,356 $ 18,072 Weighted average common shares outstanding: Basic 51,350 51,481 Diluted 51,670 51,741 Earnings per share: Basic $ 1.43 $ 0.35 Diluted $ 1.42 $ 0.35 |
Revenue
Revenue | 12 Months Ended |
Dec. 31, 2018 | |
Revenue | |
Revenue | Note 5—Revenue On January 1, 2018, we adopted ASC 606, “ Revenue from Contracts with Customers” using the modified retrospective method applied to those contracts that were not completed as of January 1, 2018. In adopting ASC 606, we changed our accounting policy for revenue recognition. Results for periods prior to January 1, 2018 are not adjusted and continue to be reported in accordance with our historic accounting under ASC 605, “Revenue Recognition” . The cumulative impact of adopting ASC 606 was immaterial and did not require an adjustment to retained earnings. However, we reclassified prior year balance sheet and cash flow amounts to conform to current year presentation. We generate revenue under a range of contracting types, including fixed-price, unit-price, time and material, and cost reimbursable plus fee contracts. A substantial portion of our revenue is derived from contracts that are fixed-price or unit-price and is recognized over time as work is completed because of the continuous transfer of control to the customer (typically using an input measure such as costs incurred to date relative to total estimated costs at completion to measure progress). For time and material and cost reimbursable plus fee contracts, revenue is recognized primarily on an input basis, based on contract costs incurred as defined within the respective contracts. Costs to obtain contracts are generally not significant and are expensed in the period incurred. We evaluate whether two or more contracts should be combined and accounted for as one single performance obligation and whether a single contract should be accounted for as more than one performance obligation. ASC 606 defines a performance obligation as a contractual promise to transfer a distinct good or service to a customer. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. Our evaluation requires significant judgment and the decision to combine a group of contracts or separate a contract into multiple performance obligations could change the amount of revenue and profit recorded in a given period. The majority of our contracts have a single performance obligation, as the promise to transfer the individual goods or services is not separately identifiable from other promises in the contract and, therefore, is not distinct. However, occasionally we have contracts with multiple performance obligations. For contracts with multiple performance obligations, we allocate the contract’s transaction price to each performance obligation using the observable standalone selling price, if available, or alternatively our best estimate of the standalone selling price of each distinct performance obligation in the contract. The primary method used to estimate standalone selling price is the expected cost plus a margin approach for each performance obligation. As of December 31, 2018, we had $1.58 billion of remaining performance obligations. We expect to recognize approximately 71% of our remaining performance obligations as revenue during the next four quarters and substantially all of the remaining balance in 2020. Accounting for long-term contracts involves the use of various techniques to estimate total transaction price and costs. For long-term contracts, transaction price, estimated cost at completion and total costs incurred to date are used to calculate revenue earned. Unforeseen events and circumstances can alter the estimate of the costs and potential profit associated with a particular contract. Total estimated costs, and thus contract revenue and income, can be impacted by changes in productivity, scheduling, the unit cost of labor, subcontracts, materials and equipment. Additionally, external factors such as weather, client needs, client delays in providing permits and approvals, labor availability, governmental regulation and politics may affect the progress of a project’s completion, and thus the timing of revenue recognition. To the extent that original cost estimates are modified, estimated costs to complete increase, delivery schedules are delayed, or progress under a contract is otherwise impeded, cash flow, revenue recognition and profitability from a particular contract may be adversely affected. The nature of our contracts gives rise to several types of variable consideration, including contract modifications (change orders and claims), liquidated damages, volume discounts, performance bonuses, incentive fees, and other terms that can either increase or decrease the transaction price. We estimate variable consideration as the most likely amount to which we expect to be entitled. We include estimated amounts in the transaction price to the extent we believe we have an enforceable right, and it is probable that a significant reversal of cumulative revenue recognized will not occur. Our estimates of variable consideration and the determination of whether to include estimated amounts in the transaction price are based largely on an assessment of our anticipated performance and all information (historical, current and forecasted) that is reasonably available to us at this time. Contract modifications result from changes in contract specifications or requirements. We consider unapproved change orders to be contract modifications for which customers have not agreed to both scope and price. We consider claims to be contract modifications for which we seek, or will seek, to collect from customers, or others, for customer-caused changes in contract specifications or design, or other customer-related causes of unanticipated additional contract costs on which there is no agreement with customers. Claims can also be caused by non-customer-caused changes, such as rain or other weather delays. Costs associated with contract modifications are included in the estimated costs to complete the contracts and are treated as project costs when incurred. In most instances, contract modifications are for goods or services that are not distinct, and, therefore, are accounted for as part of the existing contract. The effect of a contract modification on the transaction price, and our measure of progress for the performance obligation to which it relates, is recognized as an adjustment to revenue on a cumulative catch-up basis. In some cases, settlement of contract modifications may not occur until after completion of work under the contract. As a significant change in one or more of these estimates could affect the profitability of our contracts, we review and update our contract-related estimates regularly. We recognize adjustments in estimated profit on contracts under the cumulative catch-up method. Under this method, the cumulative impact of the profit adjustment is recognized in the period the adjustment is identified. Revenue and profit in future periods of contract performance are recognized using the adjusted estimate. In the year ended December 31, 2018, revenue recognized from performance obligations satisfied in previous periods was $30.6 million. If at any time the estimate of contract profitability indicates an anticipated loss on a contract, the projected loss is recognized in full, including any previously recognized profit, in the period it is identified and recognized as an “accrued loss provision” which is included in “Contract liabilities” on the Consolidated Balance Sheets. For contract revenue recognized over time, the accrued loss provision is adjusted so that the gross profit for the contract remains zero in future periods. At December 31, 2018, we had approximately $92.8 million of unapproved contract modifications included in the aggregate transaction prices. These unapproved contract modifications were in the process of being negotiated in the normal course of business. Approximately $83.3 million of the unapproved contract modifications had been recognized as revenue on a cumulative catch-up basis through December 31, 2018. In all forms of contracts, we estimate the collectability of contract amounts at the same time that we estimate project costs. If we anticipate that there may be issues associated with the collectability of the full amount calculated as the transaction price, we may reduce the amount recognized as revenue to reflect the uncertainty associated with realization of the eventual cash collection. For example, when a cost reimbursable project exceeds the client’s expected budget amount, the client frequently requests an adjustment to the final amount. Similarly, some utility clients reserve the right to audit costs for significant periods after performance of the work. The timing of when we bill our customers is generally dependent upon agreed-upon contractual terms, milestone billings based on the completion of certain phases of the work, or when services are provided. Sometimes, billing occurs subsequent to revenue recognition, resulting in unbilled revenue, which is a contract asset. Also, we sometimes receive advances or deposits from our customers before revenue is recognized, resulting in deferred revenue, which is a contract liability. The caption “Contract assets” in the Consolidated Balance Sheets represents the following: · unbilled revenue (formerly costs and estimated earnings in excess of billings), which arise when revenue has been recorded but the amount will not be billed until a later date; · retainage amounts for the portion of the contract price earned by us for work performed, but held for payment by the customer as a form of security until we reach certain construction milestones; and · contract materials for certain job specific materials not yet installed, which are valued using the specific identification method relating the cost incurred to a specific project. Contract assets consist of the following (in thousands): December 31, December 31, 2018 2017 Unbilled revenue $ 249,577 $ 160,092 Retention receivable 88,953 66,586 Contract materials (not yet installed) 25,715 39,224 $ 364,245 $ 265,902 Contract assets increased by $98.3 million compared to December 31, 2017 due primarily to a $30.8 million increase from the acquisition of Willbros in the second quarter of 2018 and higher unbilled revenue from our legacy operations. The caption “Contract liabilities” in the Consolidated Balance Sheets represents deferred revenue (formerly billings in excess of costs and estimated earnings) on billings in excess of contract revenue recognized to date, and the accrued loss provision. Contract liabilities consist of the following (in thousands): December 31, December 31, 2018 2017 Deferred revenue $ 182,232 $ 159,310 Accrued loss provision 7,307 10,067 $ 189,539 $ 169,377 Contract liabilities increased by $20.2 million compared to December 31, 2017 primarily due to a $63.9 million increase from the acquisition of Willbros in the second quarter of 2018, partially offset by lower deferred revenue from our legacy operations, including a $17.9 million reduction in deferred revenue from the settlement of the disputed receivable discussed in Note 12 – “ Commitments and Contingencies ”. Revenue recognized for the year ended December 31, 2018, that was included in the contract liability balance at December 31, 2017 was approximately $159.4 million. The following tables present our revenue disaggregated into various categories. Master Service Agreements (“MSA”) and Non-MSA revenue was as follows (in thousands): For the year ended December 31, 2018 Segment MSA Non-MSA Total Power $ 141,193 $ 552,855 $ 694,048 Pipeline 47,143 543,794 590,937 Utilities 699,998 202,774 902,772 Transmission 240,228 46,521 286,749 Civil — 464,972 464,972 Total $ 1,128,562 $ 1,810,916 $ 2,939,478 Revenue by contract type was as follows (in thousands): For the year ended December 31, 2018 Segment Fixed-price Unit-price Cost reimbursable (1) Total Power $ 393,555 $ 45,339 $ 255,154 $ 694,048 Pipeline 107,519 58,651 424,767 590,937 Utilities 184,649 460,122 258,001 902,772 Transmission 48,679 230,077 7,993 286,749 Civil 69,398 345,510 50,064 464,972 Total $ 803,800 $ 1,139,699 $ 995,979 $ 2,939,478 (1) Includes time and material and cost reimbursable plus fee contracts. Each of these contract types has a different risk profile. Typically, we assume more risk with fixed-price contracts. Unforeseen events and circumstances can alter the estimate of the costs and potential profit associated with a particular fixed-price contract. However, these types of contracts offer additional profits when we complete the work for less cost than originally estimated. Unit-price and cost reimbursable contracts generally subject us to lower risk. Accordingly, the associated fees are usually lower than fees earned on fixed-price contracts. Under these contracts, our profit may vary if actual costs vary significantly from the negotiated rates. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2018 | |
Property and Equipment | |
Property and Equipment | Note 6—Property and Equipment The following is a summary of property and equipment at December 31 (in thousands): 2018 2017 Useful Life Land and buildings $ 101,170 $ 82,755 Buildings 30 Years Leasehold improvements 13,438 12,601 Various* Office equipment 9,669 8,888 3 - 5 Years Construction equipment 439,875 392,454 3 - 7 Years Transportation equipment 112,170 101,855 3 - 18 Years Solar equipment 21,304 — 25 years Construction in progress 35,094 16,336 732,720 614,889 Less: accumulated depreciation and amortization (356,836) (303,112) Property and equipment, net $ 375,884 $ 311,777 * Leasehold improvements are depreciated over the shorter of the life of the leasehold improvement or the lease term. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets | |
Goodwill and Intangible Assets | Note 7—Goodwill and Intangible Assets The change in goodwill by segment for 2018 and 2017 was as follows (in thousands): Power Pipeline Utilities Transmission Civil Total Balance at January 1, 2017 $ 24,512 $ 42,252 $ 20,312 $ — $ 40,150 $ 127,226 Goodwill acquired during the year — 9,269 17,000 — — 26,269 Purchase price allocation adjustments (121) — — — — (121) Balance at January 1, 2018 $ 24,391 $ 51,521 $ 37,312 $ — $ 40,150 $ 153,374 Goodwill acquired during the year 1,542 764 — 50,479 — 52,785 Balance at December 31, 2018 $ 25,933 $ 52,285 $ 37,312 $ 50,479 $ 40,150 $ 206,159 During the third quarter of 2016, we made a decision to divest our Texas heavy civil business unit, a division of Primoris Heavy Civil within the Civil segment. We engaged a financial advisor to assist in the marketing and sale of the business unit, and planned to continue operating the business unit until completion of a sale. In April 2017, the Board of Directors determined that based on the information available, we would attain the best long-term value by withdrawing from the sales process and continuing to operate the business unit. We will aggressively pursue claims for five Texas Department of Transportation projects that resulted in significant losses recorded in 2016. However, there can be no assurance as to the final amounts collected. In accordance with ASC 350, "Intangibles—Goodwill and Other” , the planned divestiture triggered an analysis of the goodwill at Primoris Heavy Civil, resulting in a pre-tax, non-cash goodwill impairment charge of approximately $2.7 million in the third quarter of 2016. There were no impairments of goodwill for the years ended December 31, 2018 and 2017. The table below summarizes the intangible asset categories, amounts and the average amortization periods, which are generally on a straight-line basis (in thousands): December 31, 2018 December 31, 2017 Weighted Gross Carrying Accumulated Intangible assets, net Gross Carrying Accumulated Intangible assets, net Tradename 9 years $ 31,390 $ (25,156) $ 6,234 $ 32,175 $ (22,238) $ 9,937 Customer relationships 16 years 97,400 (23,079) 74,321 49,900 (16,338) 33,562 Non-compete agreements 5 years 1,900 (1,387) 513 1,900 (820) 1,080 Other 3 years 275 (145) 130 275 (54) 221 Total 15 years $ 130,965 $ (49,767) $ 81,198 $ 84,250 $ (39,450) $ 44,800 Amortization expense of intangible assets was $11.3 million, $8.7 million and $6.6 million for the years ended December 31, 2018, 2017 and 2016, respectively. In the second quarter of 2017, we recorded a $0.5 million impairment charge related to a tradename intangible asset in our Pipeline segment. The impairment charge is included in “Selling, general and administrative expenses” in the Consolidated Statements of Income. Estimated future amortization expense for intangible assets as of December 31, 2018 is as follows (in thousands): Estimated Intangible Amortization For the Years Ending December 31, Expense 2019 $ 11,559 2020 8,814 2021 7,577 2022 6,416 2023 5,394 Thereafter 41,438 $ 81,198 |
Accounts Payable and Accrued Li
Accounts Payable and Accrued Liabilities | 12 Months Ended |
Dec. 31, 2018 | |
Accounts Payable and Accrued Liabilities | |
Accounts Payable and Accrued Liabilities | Note 8—Accounts Payable and Accrued Liabilities At December 31, 2018 and 2017, accounts payable included retention amounts of approximately $13.2 million and $13.5 million, respectively. These amounts due to subcontractors have been retained pending contract completion and customer acceptance of jobs. The following is a summary of accrued expenses and other current liabilities at December 31 (in thousands): December 31, December 31, 2018 2017 Payroll and related employee benefits $ 60,509 $ 45,708 Insurance, including self-insurance reserves 41,379 21,391 Corporate income taxes and other taxes 5,040 2,843 Other 10,599 6,085 $ 117,527 $ 76,027 |
Credit Arrangements
Credit Arrangements | 12 Months Ended |
Dec. 31, 2018 | |
Credit Arrangements | |
Credit Arrangements | Note 9—Credit Arrangements Long-term debt and credit facilities consist of the following at December 31 (in thousands): Commercial Notes Payable and Mortgage Notes Payable December 31, December 31, 2018 2017 Term loan $ 214,500 $ — Revolving credit facility — — Commercial equipment notes 127,458 165,532 Mortgage notes 27,200 11,242 Senior secured notes — 82,143 Total debt 369,158 258,917 Unamortized debt issuance costs (1,001) (102) Total debt, net $ 368,157 $ 258,815 Less: current portion (62,488) (65,464) Long-term debt, net of current portion $ 305,669 $ 193,351 The weighted average interest rate on total debt outstanding at December 31, 2018 and 2017 was 4.1% and 3.0%, respectively. Scheduled maturities of long-term debt are as follows (in thousands): Year Ending December 31, 2019 $ 62,488 2020 51,995 2021 37,312 2022 31,052 2023 165,067 Thereafter 21,244 $ 369,158 Commercial Notes Payable and Mortgage Notes Payable From time to time, we enter into commercial equipment notes payable with various equipment finance companies and banks. At December 31, 2018, interest rates ranged from 1.83% to 4.40% per annum and maturity dates range from April 29, 2019 to April 30, 2023. The notes are secured by certain construction equipment. During 2015, we entered into two secured mortgage notes payable to a bank totaling $8.0 million, with interest rates of 4.3% per annum and maturity dates of January 1, 2031. The mortgage notes are secured by real estate. During 2017, we acquired three properties from a related party and assumed mortgage notes secured by the properties totaling $4.2 million, with interest rates of 5.0% per annum and maturity dates of October 1, 2038. During 2018, we entered into two secured mortgage notes payable to a bank totaling $16.5 million, with interest rates of 4.5% per annum and maturity dates of November 5, 2028. The mortgage notes are secured by real estate. Credit Agreement On September 29, 2017, we entered into an amended and restated credit agreement (the “Credit Agreement”) with CIBC Bank USA, as administrative agent (the “Administrative Agent”) and co-lead arranger, The Bank of the West, as co-lead arranger, and Branch Banking and Trust Company, IBERIABANK, Bank of America, and Simmons Bank (collectively, the “Lenders”), which increased our borrowing capacity from $125.0 million to $200.0 million. The Credit Agreement consisted of a $200.0 million revolving credit facility (“Revolving Credit Facility”), whereby the Lenders agreed to make loans on a revolving basis from time to time and to issue letters of credit for up to the $200.0 million committed amount, and contains an accordion feature that would allow us to increase the borrowing capacity thereunder from $200.0 million up to $250.0 million, subject to obtaining additional or increased lender commitments. On July 9, 2018, we entered into the First Amendment and Joinder to the Amended and Restated Credit Agreement (the “July Amendment”) with the Administrative Agent and the Lenders. On August 3, 2018, we entered into the Second Amendment to the Amended and Restated Credit Agreement (the “August Amendment”, and together with the July Amendment, the “Amendments”) with the Administrative Agent and the Lenders. The Amendments amend the Credit Agreement. The Amendments, among other things, modify the Credit Agreement to add Capital One, N.A. and Regions Bank as Lenders, to add a $220.0 million term loan (the “Term Loan”), increase the accordion feature that will allow us to increase the Term Loan or borrowing capacity under the Revolving Credit Facility by $75.0 million, and extend the maturity date of the Credit Agreement from September 29, 2022 to July 9, 2023. The Term Loan requires quarterly principal payments beginning in the third quarter of 2018 equal to $2.75 million, or $11.0 million per annum, for the first three years and $4.125 million, or $16.5 million per annum, for years four and five, with the balance due on July 9, 2023. The proceeds from the Term Loan were used to refinance and extinguish all of the Senior Notes (as discussed below), to pay down a significant portion of the borrowings under our Revolving Credit Facility that was used to finance the acquisition of Willbros, and for general corporate purposes. We capitalized $0.6 million of debt issuance costs during the third quarter of 2017 and $1.0 million during the third quarter of 2018 that is being amortized as interest expense over the life of the Credit Agreement. The principal amount of any loans under the Credit Agreement will bear variable interest at either: (i) LIBOR plus an applicable margin as specified in the Credit Agreement (based on our senior debt to EBITDA ratio as defined in the Credit Agreement), or (ii) the Base Rate (which is the greater of (a) the Federal Funds Rate plus 0.50% or (b) the prime rate as announced by the Administrative Agent). Non-use fees, letter of credit fees and administrative agent fees are payable at rates specified in the Credit Agreement. The principal amount of any loan drawn under the Credit Agreement may be prepaid in whole or in part at any time, with a minimum prepayment of $5.0 million. At December 31, 2018, commercial letters of credit outstanding were $53.0 million. Other than commercial letters of credit, there were no outstanding borrowings under the Revolving Credit Facility, and available borrowing capacity was $147.0 million at December 31, 2018. Loans made under the Credit Agreement are secured by our assets, including, among others, our cash, inventory, equipment (excluding equipment subject to permitted liens), and accounts receivable. All of our domestic subsidiaries have issued joint and several guaranties in favor of the Lenders for all amounts under the Credit Agreement. The Credit Agreement contains various restrictive and financial covenants including, among others, a senior debt/EBITDA ratio and debt service coverage requirements. In addition, the Credit Agreement includes restrictions on investments, change of control provisions and provisions in the event we dispose of more than 20% of our total assets. We were in compliance with the covenants for the Credit Agreement at December 31, 2018. On September 13, 2018, we entered into an interest rate swap agreement to manage our exposure to the fluctuations in variable interest rates. The swap effectively exchanged the interest rate on 75% of the debt outstanding under our Term Loan from variable LIBOR to a fixed rate of 2.886% per annum, in each case plus an applicable margin, which was 2.00% at December 31, 2018. See Note 10 – “ Derivative Instruments ”. Senior Secured Notes and Shelf Agreement On December 28, 2012, we entered into a $50.0 million Senior Secured Notes purchase agreement (“Senior Secured Notes”) and a $25.0 million private shelf agreement (the “Notes Agreement”) by and among us, The Prudential Investment Management, Inc. and certain Prudential affiliates (the “Noteholders”). On June 3, 2015, the Notes Agreement was amended to provide for the issuance of additional notes of up to $75.0 million over the three year period ending June 3, 2018 ("Additional Senior Notes" and together with the Senior Secured Notes, the “Senior Notes”). The Senior Notes were funded in three tranches of $50.0 million on December 28, 2012, $25.0 million on July 25, 2013, and $25.0 million on November 9, 2015, and bore interest at annual rates of 3.65%, 3.85%, and 4.60%, respectively, paid quarterly in arrears. On July 9, 2018, we used a portion of the proceeds from the Term Loan to pay off and extinguish all of the Senior Notes, which resulted in a prepayment penalty recognized in the third quarter of 2018 of $2.3 million. Canadian Credit Facility We had a demand credit facility for $8.0 million in Canadian dollars with a Canadian bank for purposes of issuing commercial letters of credit in Canada. During the fourth quarter of 2018, we reduced the amount of the credit facility to $4.0 million. The credit facility has an annual renewal and provides for the issuance of commercial letters of credit for a term of up to five years. The facility provides for an annual fee of 1.0% for any issued and outstanding commercial letters of credit. Letters of credit can be denominated in either Canadian or U.S. dollars. At December 31, 2018, there were no letters of credit outstanding, and the available borrowing capacity was $4.0 million in Canadian dollars. The credit facility contains a working capital restrictive covenant for our Canadian subsidiary, OnQuest Canada, ULC. At December 31, 2018, OnQuest Canada, ULC was in compliance with the covenant. |
Derivative Instruments
Derivative Instruments | 12 Months Ended |
Dec. 31, 2018 | |
Derivative Instruments | |
Derivative Instruments | Note 10 — Derivative Instruments We are exposed to certain market risks related to changes in interest rates. To monitor and manage these market risks, we have established risk management policies and procedures. We do not enter into derivative instruments for any purpose other than hedging interest rate risk. None of our derivative instruments are used for trading purposes. Interest Rate Risk. We are exposed to variable interest rate risk as a result of variable-rate borrowings under our Credit Agreement. To manage fluctuations in cash flows resulting from changes in interest rates on a portion of our variable-rate debt, we entered into an interest rate swap agreement on September 13, 2018 with an initial notional amount of $165.0 million, or 75% of the debt outstanding under our Term Loan, which was not designated as a hedge for accounting purposes. The notional amount of the swap will be adjusted down each quarter by 75% of the required principal payments made on the Term Loan. See Note 9 – “ Credit Arrangements ”. The swap effectively changes the variable-rate cash flow exposure on the debt obligations to fixed rates. The fair value of outstanding interest rate swap derivatives can vary significantly from period to period depending on the total notional amount of swap derivatives outstanding and fluctuations in market interest rates compared to the interest rates fixed by the swaps. As of December 31, 2018, our outstanding interest rate swap agreement contained a notional amount of $160.9 million with a maturity date of July 10, 2023. There were no outstanding interest rate swap agreements at December 31, 2017. Credit Risk. By using derivative instruments to economically hedge exposures to changes in interest rates, we are exposed to counterparty credit risk. Credit risk is the failure of a counterparty to perform under the terms of a derivative contract. When the fair value of a derivative contract is positive, the counterparty owes us, which creates credit risk for us. When the fair value of a derivative contract is negative, we owe the counterparty and, therefore, we do not possess credit risk. We minimize the credit risk in derivative instruments by entering into transactions with high quality counterparties. We have entered into netting agreements, including International Swap Dealers Association (“ISDA”) Agreements, which allow for netting of contract receivables and payables in the event of default by either party. The following table summarizes the fair value of our derivative contracts included in the Consolidated Balance Sheets (in thousands): Liability Derivatives December 31, December 31, Balance Sheet Location 2018 2017 Interest rate swap Other long-term liabilities $ 2,829 $ — Total derivatives $ 2,829 $ — The following table summarizes the amounts recognized with respect to our derivative instruments within the Consolidated Statements of Income (in thousands): Location of Loss Recognized Amount of Loss Recognized in Income on Derivatives on Derivatives December 31, 2018 December 31, 2017 December 31, 2016 Interest rate swap Interest expense 3,131 — — |
Noncontrolling Interests
Noncontrolling Interests | 12 Months Ended |
Dec. 31, 2018 | |
Noncontrolling Interests | |
Noncontrolling Interests | Note 11 — Noncontrolling Interests We are currently participating in two joint ventures, each of which operates in the Power segment. Both joint ventures have been determined to be a VIE and we were determined to be the primary beneficiary as a result of our significant influence over the joint venture operations. Each joint venture is a partnership, and consequently, the tax effect of our share of the income was recognized by us. The net assets of the joint ventures are restricted for use by the specific project and are not available for our general operations. The Carlsbad joint venture operating activities began in 2015 and are included in our Consolidated Statements of Income as follows for the years ended December 31 (in thousands): 2018 2017 2016 Revenue $ 102,868 $ 110,669 $ 7,254 Net income attributable to noncontrolling interests 9,483 1,780 325 The Carlsbad joint venture made distributions of $9.0 million to the noncontrolling interest and $9.0 million to us during the year ended December 31, 2018. The Carlsbad joint venture made no distributions to the partners during the year ending December 31, 2017. In addition, we did not make any capital contributions to the Carlsbad joint venture during the years ended December 31, 2018 and 2017. The project was substantially complete as of December 31, 2018. The carrying value of the assets and liabilities associated with the operations of the Carlsbad joint venture are included in our Consolidated Balance Sheets at December 31 as follows (in thousands): December 31, December 31, 2018 2017 Cash $ 3,117 $ 44,308 Accounts receivable $ 4,451 $ 15,343 Contract assets $ 8,158 $ — Accounts payable $ 2,279 $ 12,352 Contract liabilities $ 5,946 $ 42,743 Due to Primoris $ 1,979 $ — The Wilmington joint venture operating activities began in 2015 and are included in our Consolidated Statements of Income as follows for the years ended December 31 (in thousands): 2018 2017 2016 Revenue $ 2,133 $ 31,638 $ 19,781 Net income attributable to noncontrolling interests 649 2,716 677 The Wilmington joint venture made distributions of $4.1 million to the noncontrolling interest and $4.1 million to us during the year ended December 31, 2018. No distributions were made during the year ended December 31, 2017. In addition, we did not make any capital contributions to the Wilmington joint venture during the years ended December 31, 2018 and 2017. The project is complete, the warranty period expired in October 2018, and dissolution of the joint venture is expected to occur in 2019. The carrying value of the assets and liabilities associated with the operations of the Wilmington joint venture are included in our Consolidated Balance Sheets at December 31 as follows (in thousands): December 31, December 31, 2018 2017 Cash $ 10 $ 15,948 Accounts receivable $ — $ 598 Accounts payable $ — $ 759 Contract liabilities $ — $ 1,480 Due to Primoris $ — $ 7,428 The following table summarizes the total balance sheet amounts for the two joint ventures, which are included in our Consolidated Balance Sheets( in thousands): Joint Venture Consolidated At December 31, 2018 Amounts Amounts Cash $ 3,127 $ 151,063 Accounts receivable $ 4,451 $ 372,695 Contract assets $ 8,158 $ 364,245 Accounts payable $ 2,279 $ 249,217 Contract liabilities $ 5,946 $ 189,539 At December 31, 2017 Cash $ 60,256 $ 170,385 Accounts receivable $ 15,941 $ 291,589 Accounts payable $ 13,111 $ 140,943 Contract liabilities $ 44,223 $ 169,377 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies. | |
Commitments and Contingencies | Note 12—Commitments and Contingencies Leases — We lease certain property and equipment under non-cancelable operating leases, which expire at various dates through 2024. The leases require us to pay all taxes, insurance, maintenance, and utilities and are classified as operating leases in accordance with ASC 840 “Leases” . The future minimum lease payments required under non-cancelable operating leases are as follows (in thousands): Total For the Years Ending December 31, Commitments 2019 $ 56,693 2020 41,733 2021 26,607 2022 12,753 2023 6,530 Thereafter 8,229 $ 152,545 Total lease expense during the years ended December 31, 2018, 2017 and 2016 was $53.4 million, $25.5 and $22.5 million, respectively. Withdrawal liability for multiemployer pension plan — In November 2011, members of the Pipe Line Contractors Association “PLCA” including ARB, Rockford and Q3C (prior to our acquisition in 2012), withdrew from the Central States Southeast and Southwest Areas Pension Fund multiemployer pension plan (“Plan”). These withdrawals were made in order to mitigate additional liability in connection with the significantly underfunded Plan. We recorded a withdrawal liability of $7.5 million, which was increased to $7.6 million after the acquisition of Q3C. During the first quarter of 2016, we received a final payment schedule. As a result of payments made and based on this schedule, the liability recorded at December 31, 2017 was $4.7 million. We paid the remaining liability balance during 2018, and have no plans to withdraw from any other labor agreements. NTTA settlement — On February 7, 2012, we were sued in an action entitled North Texas Tollway Authority (“NTTA”), Plaintiff v. James Construction Group, LLC, and KBR, Inc., Defendants, v. Reinforced Earth Company, Third-Party Defendant (the “Lawsuit”). On February 25, 2015 the Lawsuit was settled, and we recorded a liability for $17.0 million. A second defendant agreed to provide up to $5.4 million to pay for the total expected remediation cost of approximately $22.4 million. We will use our settlement obligation to pay for a third-party contractor approved by the NTTA. In the event that the total remediation costs exceed the $22.4 million, the second defendant would pay 20% of the excess amount and we would pay for 80% of the excess amount. During 2018, we increased our forecasted remediation costs based on bids received by the NTTA from third-party contractors, and increased our liability by $3.8 million. As of December 31, 2018, we have spent $4.2 million for remediation. While we continue to monitor the progress toward remediation and the total remediation costs, at this time we cannot determine the eventual remediation cost. At December 31, 2018, our remaining accrual balance was $18.5 million. Litigation — We had been engaged in dispute resolution to collect money we believe we are owed for a construction project completed in 2014. Because of uncertainties associated with the project, including uncertainty of the amounts that would be collected, we used a zero profit margin approach to recording revenue during the construction period for the project. For the project, a cost reimbursable contract, we had a receivable of $32.9 million with a reserve of approximately $17.9 million included in “ Contract liabilities ” at December 31, 2017 The dispute resolution for the receivable initially required international arbitration; however, in the first half of 2016, the owner sought bankruptcy protection in U.S. bankruptcy court. We initiated litigation against the sureties who had provided lien and stop payment release bonds for the total amount owed. During 2018, we settled with the sureties and collected the $32.9 million receivable, which resulted in recognizing revenue of approximately $18.1 million and gross profit of approximately $17.4 million. We had been engaged in dispute resolution to collect money we believed was owed to us for another construction project completed in 2014. During 2016, we settled the dispute with an exchange of general releases and receipt of $38.0 million in cash, which resulted in recognizing revenue of approximately $27.5 million and gross profit of approximately $26.7 million in the third quarter of 2016. We are subject to other claims and legal proceedings arising out of our business. We provide for costs related to contingencies when a loss from such claims is probable and the amount is reasonably estimable. In determining whether it is possible to provide an estimate of loss, or range of possible loss, we review and evaluate our litigation and regulatory matters on a quarterly basis in light of potentially relevant factual and legal developments. If we determine an unfavorable outcome is not probable or reasonably estimable, we do not accrue for a potential litigation loss. Management is unable to ascertain the ultimate outcome of other claims and legal proceedings; however, after review and consultation with counsel and taking into consideration relevant insurance coverage and related deductibles/self-insurance retention, management believes that it has meritorious defense to the claims and believes that the reasonably possible outcome of such claims will not, individually or in the aggregate, have a materially adverse effect on our consolidated results of operations, financial condition or cash flow. SEC Inquiry — During the fourth quarter of 2014, the staff of the SEC began inquiring about certain contract revenue recognition practices of the Company during 2013 and 2014. Since that time, we cooperated and responded to the staff’s inquiries in connection with this matter. We settled this matter and the inquiry was closed during the third quarter of 2018. Litigation matters from the acquisition of Willbros — In the fourth quarter of 2014, Willbros announced a restatement of its Condensed Consolidated Financial Statements for the March 2014 and June 2014 quarters. Shareholder derivative lawsuits were filed and shareholder demands were made purportedly on behalf of Willbros in connection with the restatement. All such lawsuits and demands have been resolved either through voluntary dismissal by the plaintiffs, or through settlement funded by Willbros’ insurance carriers. Bonding — As of December 31, 2018 and 2017, we had bid and completion bonds issued and outstanding totaling approximately $554.9 million and $705.7 million, respectively. |
Reportable Segments
Reportable Segments | 12 Months Ended |
Dec. 31, 2018 | |
Reportable Segments | |
Reportable Segments | Note 13—Reportable Segments We segregate our business into five reportable segments: the Power segment, the Pipeline segment, the Utilities segment, the Transmission segment, which is a new reportable segment created in connection with the acquisition of Willbros, and the Civil segment. Each of our reportable segments is comprised of similar business units that specialize in services unique to the segment. Driving the end-user focused segments are differences in the economic characteristics of each segment, the nature of the services provided by each segment; the production processes of each segment; the type or class of customer using the segment’s services; the methods used by the segment to provide the services; and the regulatory environment of each segment’s customers. The classification of revenue and gross profit for segment reporting purposes can at times require judgment on the part of management. Our segments may perform services across industries or perform joint services for customers in multiple industries. To determine reportable segment gross profit, certain allocations, including allocations of shared and indirect costs, such as facility costs, equipment costs and indirect operating expenses, were made. The following is a brief description of the reportable segments: The Power segment operates throughout the United States and in Canada and specializes in a range of services that include full EPC project delivery, turnkey construction, retrofits, upgrades, repairs, outages, and maintenance for entities in the petroleum, petrochemical, water, and other industries. The Pipeline segment operates throughout the United States and specializes in a range of services, including pipeline construction, pipeline maintenance, pipeline facility work, compressor stations, pump stations, metering facilities, and other pipeline related services for entities in the petroleum and petrochemical industries. The Utilities segment operates primarily in California, the Midwest, and the Southeast regions of the United States and specializes in a range of services, including utility line installation and maintenance, gas and electric distribution, streetlight construction, substation work, and fiber optic cable installation. The Transmission segment operates primarily in the Southeastern and Gulf Coast regions of the United States and specializes in a range of services in electric and gas transmission and distribution, including comprehensive engineering, procurement, maintenance and construction, repair, and restoration of utility infrastructure. The Civil segment operates primarily in the Southeastern and Gulf Coast regions of the United States and specializes in highway and bridge construction, airport runway and taxiway construction, demolition, heavy earthwork, soil stabilization, mass excavation, and drainage projects. All intersegment revenue and gross profit, which was immaterial, has been eliminated in the following tables. Segment Revenue Revenue by segment for the years ended December 31, 2018, 2017 and 2016 was as follows (in thousands): 2018 2017 2016 % of % of % of Total Total Total Segment Revenue Revenue Revenue Revenue Revenue Revenue Power $ 694,048 $ 606,125 $ 478,653 Pipeline 590,937 465,570 401,931 Utilities 902,772 806,523 637,212 Transmission (1) 286,749 — — — — Civil 464,972 501,777 479,152 Total $ 2,939,478 $ 2,379,995 $ 1,996,948 (1) Represents results from the June 1, 2018 acquisition date of Willbros to December 31, 2018 . Segment Gross Profit Gross profit by segment for the years ended December 31, 2018, 2017 and 2016 was as follows (in thousands): 2018 2017 2016 % of % of % of Segment Segment Segment Gross Profit Revenue Gross Profit Revenue Gross Profit Revenue Power $ 109,789 $ 65,675 $ 49,807 Pipeline 66,602 92,087 68,100 Utilities 111,825 113,037 100,071 Transmission (1) 31,904 — — — — Civil 5,617 7,635 (16,671) Total $ 325,737 $ 278,434 $ 201,307 (1) Represents results from the June 1, 2018 acquisition date of Willbros to December 31, 2018 . Geographic Region — Revenue and Total Assets The majority of our revenue is derived from customers in the United States with approximately 2.9%, 0.3% and 0.6% generated from sources outside of the United States for the years ended December 31, 2018, 2017, and 2016, respectively. At December 31, 2018 and 2017, approximately 2.8% and 1.0%, respectively of total assets were located outside of the United States. |
Customer Concentrations
Customer Concentrations | 12 Months Ended |
Dec. 31, 2018 | |
Customer Concentrations | |
Customer Concentrations | Note 14—Customer Concentrations We operate in multiple industry segments encompassing the construction of commercial, industrial, and public works infrastructure assets primarily throughout the United States. During the years ended December 31, 2018, 2017 and 2016, we generated 35.3%, 38.4% and 45.6%, of our revenue, respectively, from the following customers (in thousands): 2018 2017 2016 Description of Customer's Business Segment Amount Percentage Amount Percentage Amount Percentage Public gas and electric utility Utilities/Power $ 250,286 $ 210,747 $ 184,002 Private gas and electric utility Utilities 232,162 190,659 201,443 State DOT Civil 202,452 222,142 193,049 Pipeline operator Pipeline 198,198 * * * * Pipeline operator Pipeline/Power 155,280 * * * * Chemical/Energy producer Power/Civil * * 160,995 208,458 Pipeline operator Pipeline * * 128,182 * * Pipeline operator Pipeline * * * * 123,055 $ 1,038,378 $ 912,725 $ 910,007 (*) Indicates a customer with less than 5.0% of revenue during such period. Typically, the top ten customers in any one calendar year generate revenue in excess of 50.0% of total revenue and consist of a different group of customers in each year. For the years ended December 31, 2018, 2017 and 2016, approximately 52.2%, 56.4% and 60.4%, respectively, of total revenue were generated from our top ten customers in that year. In each of the years, a different group of customers comprised the top ten customers by revenue. At December 31, 2018, approximately 9.3% of our accounts receivable were due from one customer, and that customer provided 5.3% of our revenue for the year ended December 31, 2018. At December 31, 2017, approximately 4.3% of our accounts receivable were due from one customer, and that customer provided 8.9% of our revenue for the year ended December 31, 2017. On January 29, 2019, one of our utility customers filed for reorganization under Chapter 11 of the U.S. Bankruptcy Code. As of December 31, 2018, the utility customer comprised approximately 1.9% of our total accounts receivable. In addition to accounts receivable, there is approximately $36.0 million in unbilled revenue, net as of December 31, 2018. For the year ended December 31, 2018, the customer accounted for approximately 8.5% of our total revenue. Our exposure to diverse end markets limits the potential for any one client or job to have a material adverse impact on our operations. Although we do not currently expect a material impact to our financial performance as a result of this customer’s recent announcement, the failure to recover amounts due to us from this customer or any customer who enters bankruptcy could have a negative impact on our results of operations and cash flows, and the loss of a customer due to bankruptcy could have a negative impact on our financial condition, results of operations and cash flows. We do not believe a reserve for the accounts receivable and unbilled revenue is appropriate at this time. However, we will closely monitor our current and future potential exposure. |
Multiemployer Plans
Multiemployer Plans | 12 Months Ended |
Dec. 31, 2018 | |
Multiemployer Plans | |
Multiemployer Plans | Note 15 — Multiemployer Plans Union Plans — Various subsidiaries are signatories to collective bargaining agreements. These agreements require that we participate in and contribute to a number of multiemployer benefit plans for our union employees at rates determined by the agreements. The trustees for each multiemployer plan determine the eligibility and allocations of contributions and benefit amounts, determine the types of benefits and administer the plan. We contributed $48.8 million, $46.9 million, and $34.2 million, to multiemployer pension plans for the years ended December 31, 2018, 2017 and 2016, respectively. These costs were charged to the related construction contracts in process. Contributions during 2017 increased from 2016 as a result of an increase in the number of man-hours worked by our union labor. The financial risks of participating in multiemployer plans are different from single-employer plans in the following respects: · Assets contributed to the multiemployer plan by one employer may be used to provide benefits to employees of other participating employers. · If a participating employer stops contributing to the plan, the unfunded obligations of the plan may be borne by the remaining participating employers. · If a participating employer chooses to stop participating in the plan, a withdrawal liability may be created based on the unfunded vested benefits for all employees in the plan. Under U.S. legislation regarding multiemployer pension plans, an employer is required to pay an amount that represents its proportionate share of a plan’s unfunded vested benefits in the event of withdrawal from a plan or upon plan termination. We participate in a number of multiemployer pension plans, and our potential withdrawal obligation may be significant. Any withdrawal liability would be recorded when it is probable that a liability exists and can be reasonably estimated, in accordance with GAAP. As discussed in Note 12—“ Commitments and Contingencies ,” in 2011 we withdrew from the Central States Southeast and Southwest Areas Pension Fund multiemployer pension plan. We have no plans to withdraw from any other labor agreements. During the last three years, we made annual contributions to 38 pension plans. Based upon the most recent and available plan financial information, none of the significant pension plans we contributed to below listed us in the plan’s Form 5500 as providing more than 5.0% of the plan’s total contributions during the years ended December 31, 2018, 2017, and 2016. Our participation in significant plans for the years ended December 31, 2018, 2017 and 2016 is outlined in the table below. The “EIN/Pension Plan Number” column provides the Employer Identification Number (“EIN”) and the three digit plan number. The “Zone Status” is based on the latest information that we received from the plan and is certified by the plan’s actuary. Among other factors, plans in the red zone are generally less than 65 percent funded, plans in the yellow zone are less than 80 percent funded, and plans in the green zone are at least 80 percent funded. The “FIP/RP Status Pending/Implemented” column indicates plans for which a financial improvement plan (“FIP”) or a rehabilitation plan (“RP”) is either pending or has been implemented. The “Surcharge Imposed” column includes plans in a red zone status that require a payment of a surcharge in excess of regular contributions. The next column lists the expiration date of our collective bargaining agreement related to the plan. The table follows: Collective FIP/RP Bargaining EIN / Pension Protection Act Status Agreement Pension Plan Zone Status Pending / Surcharge Expiration Contributions of the Company Pension Fund Name Number 2018 2017 Implemented Imposed Date 2018 2017 2016 Central Pension Fund of the International Union of Operating Engineers and Participating Employers 36-6052390/001 Green as of February 1, 2017 Green as of No No 5/31/2020 $ 6,643 $ 7,562 $ 5,373 Southern California Pipetrades Trust Funds 51-6108443/001 Green as of January 1, 2017 Green as of January 1, 2016 No No 9/30/2022 5,122 3,219 2,614 Laborers International Union of North America National (Industrial) Pension Fund 52-6074345/001 Red as of January 1, 2017 Red as of January 1, 2016 No No 5/31/2020 3,967 4,658 2,415 Laborers Pension Trust Fund for Northern California 94-6277608/001 Green as of June 1, 2017 Yellow as of June 1, 2016 No No 6/30/2019 3,793 2,945 3,598 Plumbers & Pipefitters National Pension Fund 52-6152779 Yellow as of July 1 2017 Yellow as of July 1 2017 No No 9/30/2022 3,686 2,548 2,161 Construction Laborers Pension Trust for Southern California 43-6159056/001 Green as of January 1, 2017 Green as of January 1, 2016 No No 6/30/2022 2,873 2,393 2,742 Minnesota laborers Pension Fund 41-6159599/001 Green as of January 1, 2017 Green as of January 1, 2016 No No 6/01/2019 2,565 2,137 2,018 Operating Engineer Trust Funds 95-6032478/001 Yellow as of July 1, 2017 Yellow as of July 1, 2016 No No 6/30/2019 2,363 2,448 1,643 Pipeline Industry Benefit Fund 73-6146433/001 Green as of January 1, 2017 Green as of January 1, 2016 No No 5/31/2020 1,988 6,050 2,740 Contributions to significant plans 33,000 33,960 25,304 Contributions to other multiemployer plans 15,790 12,975 8,879 Total contributions made $ 48,790 $ 46,935 $ 34,183 |
Company Retirement Plans
Company Retirement Plans | 12 Months Ended |
Dec. 31, 2018 | |
Company Retirement Plans | |
Company Retirement Plans | Note 16—Company Retirement Plans Defined Contribution Plans — We sponsor multiple defined contribution plans for eligible employees not covered by collective bargaining agreements. Our plans include various features such as voluntary employee pre-tax and Roth-based contributions and matching contributions made by us. In addition, at the discretion of our Board of Directors, we may make additional profit share contributions to the plans. No such additional contributions were made during 2016 through 2018. Matching contributions to all defined contribution plans for the years ended December 31, 2018, 2017 and 2016 were $4.6 million, $4.2 million, and $4.0 million, respectively. The increase in contributions in 2018 is primarily due to the acquisition of Willbros. We have no other post-retirement benefits. |
Deferred Compensation Agreement
Deferred Compensation Agreements and Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2018 | |
Deferred Compensation Agreements and Stock-Based Compensation | |
Deferred Compensation Agreements and Stock-Based Compensation | Note 17—Deferred Compensation Agreements and Stock-Based Compensation Primoris Long-Term Retention Plan (“LTR Plan”) — We adopted a long-term retention plan for certain senior managers and executives. The voluntary plan provides for the deferral of one half of the participant’s annual earned bonus for one year. Generally, except in the case of death, disability or involuntary separation from service, the deferred compensation is vested to the participant only if actively employed by us on the payment date of bonus amounts the following year. The amount of compensation deferred under this plan is calculated each year. Total deferred compensation liability under this plan as of December 31, 2018 and 2017 was $7.3 million and $5.7 million, respectively. Participants in the long term retention plan may elect to purchase our common stock at a discounted price. For bonuses earned in 2018 and 2017, the participants could use up to one sixth of their bonus amount to purchase shares of stock. The purchase price was calculated as 75% of the average market closing price for the month of December 2018 and December 2017, respectively. The discount is treated as compensation to the participant. Stock-based compensation — In May 2013, the shareholders approved and we adopted the Primoris Services Corporation 2013 Long-term Incentive Equity Plan (“Equity Plan”). Our Board of Directors has granted 403,985 Restricted Stock Units (“Units”) to executives under the Equity Plan. The grants were documented in RSU Award Agreements which provide for a vesting schedule and require continuing employment of the executive. The Units are subject to earlier acceleration, termination, cancellation or forfeiture as provided in the underlying RSU Award Agreement. The table below presents the activity for 2018: Nonvested RSUs Units Weighted Average Grant Date Fair Value per Unit Balance at December 31, 2017 85,415 $ 23.76 Granted 144,920 25.53 Vested 23.76 Balance at December 31, 2018 25.03 During 2017, 10,000 Units were granted with a weighted-average grant date fair value per unit of $22.90. During 2016, 100,553 Units were granted with a weighted-average grant-date fair value per unit of $23.87. The total fair value of Units that vested during 2018, 2017 and 2016 was $0.7 million, $1.7 million and $0.6 million, respectively. At December 31, 2018, a total of 202,121 Units were vested. The vesting schedule for the remaining Units is as follows: Number of Units For the Years Ending December 31, to Vest 2019 57,227 2020 11,067 2021 128,889 2022 2,340 2023 2,341 201,864 Under guidance of ASC 718, “ Compensation — Stock Compensation ”, stock-based compensation cost is measured at the date of grant, based on the calculated fair value of the stock-based award, and is recognized as expense over the employee’s requisite service period (generally the vesting period of the award). The fair value of the Units was based on the closing market price of our common stock on the day prior to the date of the grant. Stock compensation expense for the Units is being amortized using the straight-line method over the service period. For the years ended December 31, 2018, 2017, and 2016, we recognized $1.3 million, $1.1 million, and $1.6 million respectively, in compensation expense. At December 31, 2018, approximately $3.7 million of unrecognized compensation expense remains for the Units, which will be recognized over a weighted average period of 2.6 years. Vested Units accrue “Dividend Equivalents” (as defined in the Equity Plan) which are accrued as additional Units. At December 31, 2018, a total of 5,121 Dividend Equivalent Units were accrued. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2018 | |
Related Party Transactions | |
Related Party Transactions | Note 18—Related Party Transactions Prior to March 2017, we leased three properties in California from Stockdale Investment Group, Inc. (“SIGI”). Our Chairman of the Board of Directors, who is our largest stockholder, and his family hold a majority interest of SIGI. In March 2017, we exercised a right of first refusal and purchased the SIGI properties. The purchase was approved by our Board of Directors for $12.8 million. We assumed three mortgage notes totaling $4.2 million with the remainder paid in cash. During the years ended December 31, 2017 and 2016, we paid $0.2 million and $0.8 million, respectively, in lease payments to SIGI for the use of these properties. We lease properties from other individuals that are current employees. The amounts leased are not material and each arrangement was approved by the Board of Directors. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2018 | |
Income Taxes | |
Income Taxes | Note 19—Income Taxes Income before provision for income taxes consists of the following (in thousands): Year Ended December 31, 2018 2017 2016 United States $ 111,002 $ 105,555 $ 48,097 Foreign 2,356 (272) 774 Total 113,358 105,283 48,871 The components of the provision for income taxes are as follows (in thousands): Year Ended December 31, 2018 2017 2016 Current provision (benefit) Federal $ 3,405 $ 21,509 $ 4,726 State 4,536 3,371 5,423 Foreign 674 (188) 92 8,615 24,692 10,241 Deferred provision (benefit) Federal 14,535 1,958 11,560 State 2,120 1,219 (727) Foreign (139) (36) 72 16,516 3,141 10,905 Change in valuation allowance 634 600 — Total $ 25,765 $ 28,433 $ 21,146 A reconciliation of income tax expense compared to the amount of income tax expense that would result by applying the U.S. federal statutory income tax rate to pre-tax income is as follows: Year Ended December 31, 2018 2017 2016 U.S. federal statutory income tax rate % % % Impact of U.S tax reform — State taxes, net of federal income tax impact Tax credits — Income taxed at rates greater than U.S. 0.4 Domestic production activities deduction — Nondeductible meals & entertainment Other items Effective tax rate excluding income attributable to noncontrolling interests Impact of income from noncontrolling interests on effective tax rate Effective tax rate % % % The provision for income taxes has been determined based upon the tax laws and rates in the countries in which we operate. The Company and its subsidiaries operating in the United States are subject to federal income tax rates of 21.0% and varying state income tax rates. Our principal international operations are in Canada. Our subsidiaries in Canada are subject to a corporate income tax rate of 27.0%. We did not have any non-taxable foreign earnings from tax holidays for taxable years 2016 through 2018. Deferred taxes are recognized for temporary differences between the financial reporting bases and tax bases of assets and liabilities based on enacted tax rates expected to be in effect when such amounts are realized or settled. However, deferred tax assets are recognized only to the extent that it is more likely than not that they will be realized based upon consideration of available evidence, including future reversals of existing taxable temporary differences, future projected taxable income, the length of the tax asset carryforward periods, and tax planning strategies. SAB 118 provides guidance on accounting for uncertainties of the effects of the Tax Act. Specifically, SAB 118 allowed companies to record provisional estimates of the impact of the Tax Act during a one year “measurement period” from the December 22, 2017 enactment date, similar to that used when accounting for business combinations. As a result of the Tax Act, we remeasured deferred tax assets and liabilities using the newly enacted tax rates and recorded a one-time net tax benefit of $9.4 million in the year ended December 31, 2017. As of December 31, 2018, our accounting for the Tax Act is complete. The provision for income taxes for the year ended December 31, 2018 includes a $1.1 million increase from the completion of our provisional accounting for the effects of the Tax Act under SAB 118. The increase is due to $0.6 million of additional expense associated with foreign tax credits, net of associated valuation allowances, and $0.5 million of additional expense related to the corporate tax rate change impact on return-to-provision adjustments, primarily for depreciation. The tax effect of temporary differences that give rise to deferred income taxes are as follows (in thousands): December 31, 2018 2017 Deferred tax assets: Accrued compensation $ 4,999 $ 4,280 Accrued workers compensation 10,309 7,980 Net operating losses 34,615 982 Disallowed interest 1,908 — Capital loss carryforward 10,796 — Deferred rent 1,552 57 Insurance reserves 3,737 3,276 Loss reserves 2,064 2,852 Tax credit 1,505 2,364 State income taxes 1,045 463 Other 1,600 182 Total deferred tax assets 74,130 22,436 Deferred tax liabilities Depreciation and amortization (56,670) (34,652) Prepaid expenses and other (231) (755) Total deferred tax liabilities (56,901) (35,407) Valuation allowance (23,938) (600) Net deferred tax liabilities $ (6,709) $ (13,571) As of December 31, 2018, we have remaining U.S. federal and state net operating loss carryforwards of $20.1 million and $10.5 million, respectively. In addition, we have net operating loss carryforwards for Australia and Canada of $2.6 million and $1.4 million, respectively. Our U.S. federal net operating losses expire beginning in 2031, and our state net operating losses generally expire 20 years after the period in which the net operating loss was incurred. As of December 31, 2018, our U.S. capital loss and tax credit carryforwards totaled $10.8 million and $1.5 million, respectively. The U.S. capital losses expire in 2023. The unused tax credits are primarily comprised of $1.2 million of foreign tax credits. The foreign tax credit carryforwards begin expiring in 2019. We claimed $6.1 million of solar investment tax credits (“ITC”) in 2018. We made an accounting policy election to use the flow through income statement method under which we recognized the benefit of the ITC and the related detriment of tax basis reductions in 2018. Valuation allowances on U.S. capital losses, on U.S. state net operating losses, and on Australian net operating losses acquired from Willbros were $22.7 million as of December 31, 2018. The $0.6 million valuation allowance related to foreign tax credits as of December 31, 2017, was increased to $1.2 million in 2018 in connection with completion of the accounting for the Tax Act. A reconciliation of the beginning and ending and aggregate changes in the gross balances of unrecognized tax benefits is as follows (in thousands): December 31, 2018 2017 2016 Beginning balance $ 592 $ — $ — Increases in balances for tax positions taken during the current year 146 592 — Increases in balances for tax positions taken during prior years 2,666 — — Settlements and effective settlements with tax authorities (1,979) — — Lapse of statute of limitations (95) — — Total $ 1,330 $ 592 $ — We recognize accrued interest and penalties related to uncertain tax positions in income tax expense, which were not material for the three years presented. The $2.7 million increase in balances for tax positions taken during prior years and the $2.0 million settlements and effective settlements with tax authorities are related to our acquisition of Willbros and did not impact net income for the year ended December 31, 2018. We believe it is reasonably possible that decreases up to $0.1 million of unrecognized tax benefits could occur in the next twelve months due to the expiration of statutes of limitation. Our federal income tax returns are generally no longer subject to examination for tax years before 2015. The statutes of limitation of state and foreign jurisdictions generally vary between 3 to 5 years. Accordingly, our state and foreign income tax returns are generally no longer subject to examination for tax years before 2013. |
Dividends and Earnings Per Shar
Dividends and Earnings Per Share | 12 Months Ended |
Dec. 31, 2018 | |
Dividends and Earnings Per Share | |
Dividends and Earnings Per Share | Note 20—Dividends and Earnings Per Share We have paid or declared cash dividends during 2016, 2017 and 2018 as follows: Declaration Date Record Date Payable Date Amount Per Share February 22, 2016 March 31, 2016 April 15, 2016 $ May 2, 2016 June 30, 2016 July 15, 2016 $ August 3, 2016 September 30, 2016 October 14, 2016 $ November 2, 2016 December 31, 2016 January 16, 2017 $ February 21, 2017 March 31, 2017 April 15, 2017 $ May 5, 2017 June 30, 2017 July 14, 2017 $ August 2, 2017 September 29, 2017 October 14, 2017 $ November 2, 2017 December 29, 2017 January 15, 2018 $ February 21, 2018 March 30, 2018 April 13, 2018 $ May 4, 2018 June 29, 2018 July 13, 2018 $ August 2, 2018 September 28, 2018 October 15, 2018 $ November 2, 2018 December 31, 2018 January 15, 2019 $ The payment of future dividends is contingent upon our revenue and earnings, capital requirements and our general financial condition, as well as contractual restrictions and other considerations deemed relevant by the Board of Directors. The table below presents the computation of basic and diluted earnings per share for the years ended December 31, 2018, 2017 and 2016 (in thousands, except per share amounts): 2018 2017 2016 Numerator: Net income attributable to Primoris $ 77,461 $ 72,354 $ 26,723 Denominator: Weighted average shares for computation of basic earnings per share 51,350 51,481 51,762 Dilutive effect of shares issued to independent directors 3 3 3 Dilutive effect of restricted stock units (1) 317 257 224 Weighted average shares for computation of diluted earnings per share 51,670 51,741 51,989 Earnings per share attributable to Primoris: Basic $ 1.51 $ 1.41 $ 0.52 Diluted $ 1.50 $ 1.40 $ 0.51 (1) Represents the effect of the grant of 403,985 shares of Restricted Stock Units and 5,121 vested Dividend Equivalent Units. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2018 | |
Stockholders' Equity | |
Stockholders' Equity | Note 21—Stockholders’ Equity Common Stock We are authorized to issue 90,000,000 shares of $0.0001 par value common stock, of which 50,715,518 and 51,448,753 shares were issued and outstanding as of December 31, 2018 and 2017, respectively. As of December 31, 2018, there were 369 holders of record of our common stock. We issued 71,757 shares of common stock in 2018, 65,429 shares of common stock in 2017, and 85,907 shares of common stock in 2016 under our LTR Plan. The shares were purchased by the participants in the LTR Plan with payments made to us of $1.5 million in 2018, $1.1 million in 2017, and $1.4 million in 2016. Our LTR Plan for managers and executives allows participants to use a portion of their annual bonus amount to purchase our common stock at a discount from the market price. The shares purchased in February 2018 were for bonus amounts earned in 2017, and the number of shares was calculated at 75% of the average closing price for December 2017. The shares purchased in February 2017 were for bonus amounts earned in 2016, and the number of shares was calculated at 75% of the average closing price for January 2017. The shares purchased in March 2016 were for bonus amounts earned in 2015, and the number of shares was calculated at 75% of the average market price for December 2015. The shares purchased have a six month trading restriction. We issued shares of common stock under the Equity Plan to the non-employee members of the Board of Directors as part of our quarterly compensation provided to the Directors. Shares issued were as follows: · 10,092 shares in August 2018, · 10,062 shares in February 2018, · 11,448 shares in August 2017, · 11,784 shares in February 2017, · 11,745 shares in August 2016, and · 10,450 shares in February 2016. The shares were fully vested upon issuance and have a one-year trading restriction. As discussed in Note 17—“ Deferred Compensation Agreements and Stock-Based Compensation ”, the Board of Directors has granted a total of 403,985 shares of Units under the Equity Plan. At December 31, 2018, there were 1,614,639 shares of common stock reserved to provide for the grant and exercise of all future stock option grants, SARS, Units and grants of restricted shares under the Equity Plan. Other than the Units discussed above, there were no stock options, SARS or restricted shares of stock issued or outstanding at December 31, 2018. Share Repurchase Plan In May 2018, our Board of Directors authorized a $5.0 million share repurchase program. In August 2018, our Board of Directors approved an increase to the share repurchase program to $20.0 million. Under the share repurchase program, we can, depending on market conditions, share price and other factors, acquire shares of our common stock on the open market or in privately negotiated transactions. During the period from August 2018 to December 2018, we purchased and cancelled 825,146 shares of common stock, which in the aggregate equaled $20.0 million, at an average price of $24.24 per share. In February 2017, our Board of Directors authorized a $5.0 million share repurchase program under which we could, depending on market conditions, share price and other factors, acquire shares of our common stock on the open market or in privately negotiated transactions. During the month of March 2017, we purchased and cancelled 216,350 shares of stock for $5.0 million at an average cost of $23.10 per share. In August 2016, our Board of Directors authorized a share repurchase program under which we, from time to time and depending on market conditions, share price and other factors, could acquire shares of our common stock on the open market or in privately negotiated transactions up to an aggregate purchase price of $5.0 million. During the month of December 2016, we purchased and cancelled 207,800 shares of stock for $5.0 million at an average cost of $24.02 per share. Preferred Stock We are authorized to issue 1,000,000 shares of $0.0001 par value preferred stock. No shares of Preferred Stock were outstanding at December 31, 2018, 2017, and 2016. |
Selected Quarterly Financial In
Selected Quarterly Financial Information (Unaudited) | 12 Months Ended |
Dec. 31, 2018 | |
Selected Quarterly Financial Information (Unaudited) | |
Selected Quarterly Financial Information (Unaudited) | Note 22—Selected Quarterly Financial Information (Unaudited) Selected unaudited quarterly consolidated financial information is presented in the following tables (in thousands, except per share amounts): Year Ended December 31, 2018 1st 2nd 3rd 4th Quarter Quarter Quarter Quarter Revenue $ 504,119 $ 648,787 $ 908,902 $ 877,670 Gross profit $ 44,560 $ 71,419 $ 106,505 $ 103,253 Net income $ 4,216 $ 14,191 $ 34,805 $ 34,381 Net income attributable to Primoris $ 688 $ 11,715 $ 32,691 $ 32,367 Earnings per share: Basic earnings per share $ 0.01 $ 0.23 $ 0.64 $ 0.63 Diluted earnings per share $ 0.01 $ 0.23 $ 0.63 $ 0.63 Weighted average shares outstanding Basic 51,479 51,531 51,403 50,993 Diluted 51,747 51,793 51,735 51,397 Year Ended December 31, 2017 1st 2nd 3rd 4th Quarter Quarter Quarter Quarter Revenue $ 561,502 $ 631,165 $ 608,311 $ 579,017 Gross profit $ 55,053 $ 84,483 $ 70,421 $ 68,477 Net income $ 8,512 $ 22,396 $ 22,134 $ 23,808 Net income attributable to Primoris $ 7,691 $ 21,545 $ 20,597 $ 22,521 Earnings per share: Basic earnings per share $ 0.15 $ 0.42 $ 0.40 $ 0.44 Diluted earnings per share $ 0.15 $ 0.42 $ 0.40 $ 0.44 Weighted average shares outstanding Basic 51,594 51,437 51,441 51,449 Diluted 51,851 51,688 51,707 51,711 |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2018 | |
Subsequent Events. | |
Subsequent Events | Note 23—Subsequent Event On February 26, 2019, the Board of Directors declared a cash dividend of $0.06 per common share for stockholders of record as of March 29, 2019, payable on or about April 15, 2019. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Summary of Significant Accounting Policies | |
Basis of presentation | Basis of presentation — The accompanying consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and the financial statement rules and regulations of the Securities and Exchange Commission (“SEC”). References for Financial Accounting Standards Board (“FASB”) standards are made to the FASB Accounting Standards Codification (“ASC”). |
Principles of consolidation | Principles of consolidation — The accompanying Consolidated Financial Statements include the accounts of Primoris, our wholly-owned subsidiaries and the noncontrolling interests of the Carlsbad and Wilmington joint ventures, which are VIEs for which we are the primary beneficiary as determined under the provisions of ASC 810, “Consolidation” . All intercompany balances and transactions have been eliminated in consolidation. |
Reclassification | Reclassification — Certain previously reported amounts have been reclassified to conform to the current year presentation. |
Use of estimates | Use of estimates — The preparation of our Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting periods. As a construction contractor, we use estimates for costs to complete construction projects and the contract value of certain construction projects. These estimates have a direct effect on gross profit as reported in these consolidated financial statements. Actual results could materially differ from our estimates. |
Operating cycle | Operating cycle — In the accompanying Consolidated Balance Sheets, assets and liabilities relating to long-term construction contracts (e.g. contract assets and contract liabilities) are considered current assets and current liabilities, since they are expected to be realized or liquidated in the normal course of contract completion, although completion may require more than one calendar year. Consequently, we have significant working capital invested in assets that may have a liquidation period extending beyond one year. We have claims receivable and retention due from various customers and others that are currently in dispute, the realization of which is subject to binding arbitration, final negotiation or litigation, all of which may extend beyond one calendar year. |
Cash and cash equivalents | Cash and cash equivalents — We consider all highly liquid investments with an original maturity of three months or less when purchased as cash equivalents. |
Business combinations | Business combinations —Business combinations are accounted for using the acquisition method of accounting. We use the fair value of the assets acquired and liabilities assumed to account for the purchase price of businesses. The determination of fair value requires estimates and judgments of future cash flow expectations to assign fair values to the identifiable tangible and intangible assets. GAAP provides a “measurement period” of up to one year in which to finalize all fair value estimates associated with the acquisition of a business. Most estimates are preliminary until the end of the measurement period. During the measurement period, any material, newly discovered information that existed at the acquisition date would be reflected as an adjustment to the initial valuations and estimates. After the measurement period, any adjustments would be recorded as a current period income or expense. |
Contingent Earnout Liabilities | Contingent Earnout Liabilities — As part of certain acquisitions, we agreed to pay cash to certain sellers upon meeting specific operating performance targets for specified periods subsequent to the acquisition date. Each quarter, we evaluate the fair value of the estimated contingency and record a non-operating charge for the change in the fair value. Upon meeting the target, we reflect the full liability on the balance sheet and record a charge to “Other income (expense), net” for the change in the fair value of the liability from the prior period. See Note 3 — “Fair Value Measurements” for further discussion. |
Goodwill and other intangible assets | Goodwill and other intangible assets — We account for goodwill in accordance with ASC 350, “ Intangibles — Goodwill and Other ”. Under ASC 350, goodwill is subject to an annual impairment test, which we perform as of the first day of the fourth quarter of each year, with more frequent testing if indicators of potential impairment exist. The impairment review is performed at the reporting unit level for those units with recorded goodwill. For the majority of our reporting units, we perform a qualitative assessment to determine whether it is more likely than not (that is, a likelihood of more than 50 percent) that the fair value of the reporting unit is less than its carrying value, including goodwill. Factors used in our qualitative assessment include, but are not limited to, macroeconomic conditions, industry and market conditions, cost factors, overall financial performance and Company and reporting unit specific events. For all other reporting units, we use the two-step impairment test outlined in ASC 350. First, we compare the fair value of a reporting unit with its carrying amount. Fair value for the goodwill impairment test is determined utilizing a discounted cash flow analysis based on our financial plan discounted using our weighted average cost of capital and market indicators of terminal year cash flows. Other valuation methods may be used to corroborate the discounted cash flow method. If the carrying amount of a reporting unit is in excess of its fair value, goodwill is considered potentially impaired and further tests are performed to measure the amount of impairment loss. In the second step of the goodwill impairment test, we compare the implied fair value of reporting unit goodwill with the carrying amount of the reporting unit’s goodwill. If the carrying amount of the reporting unit’s goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to the carrying amount of goodwill less its implied fair value. The implied fair value of goodwill is determined in the same manner that the amount of goodwill recognized in a business combination was determined. We allocate the fair value of a reporting unit to all of the assets and liabilities of that unit, including intangible assets, as if the reporting unit had been acquired in a business combination. Any excess of the fair value of a reporting unit over the amounts assigned to its assets and liabilities represents the implied fair value of goodwill. |
Income tax | Income tax — Current income tax expense is the amount of income taxes expected to be paid for the financial results of the current year. A deferred tax liability or asset is established for the expected future tax consequences resulting from the differences in financial reporting and tax bases of assets and liabilities between GAAP and the tax codes. A valuation allowance is provided if it is more likely than not that some or all of the deferred tax assets will not be realized. We provide for uncertain tax positions when such tax positions do not meet the recognition thresholds or measurement standards as set forth in ASC 740, “Income Taxes” . The difference between a tax position taken or expected to be taken on our income tax returns and the benefit recognized in our financial statements is referred to as an unrecognized tax benefit. Amounts for uncertain tax positions are adjusted in periods when new information becomes available or when positions are effectively settled. We recognize accrued interest and penalties related to uncertain tax positions, if any, as a component of income tax expense. Staff Accounting Bulletin (“SAB”) 118 provides guidance on accounting for uncertainties of the effects of the Tax Cuts and Jobs Act (the “Tax Act”). Specifically, SAB 118 allowed companies to record provisional estimates of the impact of the Tax Act during a one year “measurement period” from the December 22, 2017 enactment date, similar to that used when accounting for business combinations. As a result of the Tax Act, we remeasured deferred tax assets and liabilities using the newly enacted tax rates and recorded a one-time net tax benefit of $9.4 million as a provisional estimate under SAB 118 in the year ended December 31, 2017. As of December 31, 2018, our accounting for the Tax Act is complete. The provision for income taxes for the year ended December 31, 2018 includes a $1.1 million increase from the completion of our provisional accounting for the effects of the Tax Act under SAB 118. The increase is due to $0.6 million of additional expense associated with foreign tax credits, net of associated valuation allowances, and $0.5 million of additional expense related to the corporate tax rate change impact on return-to-provision adjustments, primarily for depreciation. |
Comprehensive income | Comprehensive income — We account for comprehensive income in accordance with ASC 220, “ Comprehensive Income ”, which specifies the computation, presentation and disclosure requirements for comprehensive income (loss). Comprehensive income (loss) consists of net income (loss) and foreign currency translation adjustments, primarily from fluctuations in foreign currency exchange rates of our foreign subsidiaries with a functional currency other than the U.S. dollar. |
Foreign operations | Foreign operations — At December 31, 2018, we had operations in Canada with assets aggregating approximately $45.1 million, compared to $12.7 million at December 31, 2017. The Canadian operations had revenue of $86.4 million and income before tax of $2.4 million for the year ended December 31, 2018; revenue of $8.3 million and a loss before tax of $0.3 million for the year ended December 31, 2017, and revenue of $11.2 million and income before tax of $0.8 million for the year ended December 31, 2016. The increase in total assets and revenue as of and for the year ended December 31, 2018, is due to the Canadian operations acquired as part of the Willbros acquisition. |
Functional currencies and foreign currency translation | Functional currencies and foreign currency translation — For foreign operations where substantially all monetary transactions are in the local currency, we use the local currency as our functional currency. The effects of translating financial statements of foreign operations into our reporting currency are recognized as a cumulative translation adjustment, net of tax in “Accumulated other comprehensive income (loss)” in the Consolidated Statements of Stockholders’ Equity. For certain foreign operations where substantially all monetary transactions are made in United States dollars, we use the U.S. dollar as our functional currency, with gains or losses on translation recorded in income in the period in which they are incurred. Gains or losses on foreign currency transactions are recorded in income in the period in which they are incurred. |
Partnerships and joint ventures | Partnerships and joint ventures — We are periodically a member of a partnership or a joint venture. These partnerships or joint ventures are used primarily for the execution of single contracts or projects. Our ownership can vary from a small noncontrolling ownership to a significant ownership interest. We evaluate each partnership or joint venture to determine whether the entity is considered a VIE as defined in ASC 810, “Consolidation” , and if a VIE, whether we are the primary beneficiary of the VIE, which would require us to consolidate the VIE with our financial statements. When consolidation occurs, we account for the interests of the other parties as a noncontrolling interest and disclose the net income attributable to noncontrolling interests. See Note 11 — “Noncontrolling Interests" for further information. |
Equity method of accounting | Equity method of accounting — We account for our interest in an investment using the equity method of accounting per ASC 323, “Investments — Equity Method and Joint Ventures” if we are not the primary beneficiary of a VIE or do not have a controlling interest. The investment is recorded at cost and the carrying amount is adjusted periodically to recognize our proportionate share of income or loss, additional contributions made and dividends and capital distributions received. We record the effect of any impairment or an other than temporary decrease in the value of its investment. In the event a partially owned equity affiliate were to incur a loss and our cumulative proportionate share of the loss exceeded the carrying amount of the equity method investment, application of the equity method would be suspended and our proportionate share of further losses would not be recognized unless we committed to provide further financial support to the affiliate. We would resume application of the equity method once the affiliate became profitable and our proportionate share of the affiliate’s earnings equals our cumulative proportionate share of losses that were not recognized during the period the application of the equity method was suspended. |
Cash concentration | Cash concentration — We place our cash in demand deposit accounts and short-term U.S. Treasury bonds. At December 31, 2018 and 2017, we had cash balances of $151.1 million and $170.4 million, respectively. Our cash balances are held in high credit quality financial institutions in order to mitigate the risk of holding funds not backed by the federal government or in excess of federally backed limits. Cash balances associated with VIEs, which totaled $3.1 million and $60.3 million as of December 31, 2018 and December 31, 2017, respectively, are not available for general corporate purposes. |
Collective bargaining agreements | Collective bargaining agreements — Approximately 46.7% of our hourly employees, primarily consisting of field laborers, were covered by collective bargaining agreements in 2018. Upon renegotiation of such agreements, we could be exposed to increases in hourly costs and work stoppages. Of the 111 collective bargaining agreements to which we are a party to, 93 will require renegotiation during 2019. We have not had a significant work stoppage in more than 20 years. |
Multiemployer plans | Multiemployer plans — Various subsidiaries are signatories to collective bargaining agreements. These agreements require that we participate in and contribute to a number of multiemployer benefit plans for our union employees at rates determined by the agreements. The trustees for each multiemployer plan determine the eligibility and allocations of contributions and benefit amounts, determine the types of benefits and administer the plan. Federal law requires that if we were to withdraw from an agreement, we would incur a withdrawal obligation. The potential withdrawal obligation may be significant. In accordance with GAAP, any withdrawal liability would be recorded when it is probable that a liability exists and can be reasonably estimated. In November 2011, we withdrew from the Central States Southeast and Southwest Areas Pension Fund multiemployer pension plan, as discussed in Note 12 — “Commitments and Contingencies” . We have no plans to withdraw from any other agreements. |
Insurance | Insurance — We self-insure worker’s compensation, general liability, and auto insurance up to $0.25 million per claim. We maintained a self-insurance reserve totaling $42.8 million and $29.4 million at December 31, 2018 and 2017, respectively. Claims administration expenses are charged to current operations as incurred. Our accruals are based on judgment and the probability of losses, with the assistance of third-party actuaries. Actual payments that may be made in the future could materially differ from such reserves. |
Derivative instruments and hedging activities | Derivative instruments and hedging activities — We recognize all derivative instruments as either assets or liabilities on the balance sheet at their respective fair values. Our use of derivatives consists of an interest rate swap agreement. The interest rate swap agreement was entered into to improve the predictability of cash flows from interest payments related to variable rate debt for the duration of the term loan. The interest rate swap matures in July 2023 and is not designated as a hedge for accounting purposes. Therefore, the change in the fair value of the derivative asset or liability is reflected in net income in the Consolidated Statements of Income (mark-to-market accounting). Cash flows from derivatives settled are reported as cash flow from operating activities. |
Accounts receivable | Accounts receivable —Accounts receivable and contract receivables are primarily with public and private companies and governmental agencies located in the United States. Credit terms for payment of products and services are extended to customers in the normal course of business. Contract receivables are generally progress billings on projects, and as a result, are short term in nature. Generally, we require no collateral from our customers, but file statutory liens or stop notices on any construction projects when collection problems are anticipated. While a project is underway, we estimate the collectability of contract amounts at the same time that we estimate project costs. As discussed in Note 5 — “Revenue” , realization of the eventual cash collection may be recognized as adjustments to the contract revenue and profitability, otherwise, we use the specific identification method of accounting for losses from uncollectible accounts. Under this method an allowance is recorded based upon historical experience and management’s evaluation of outstanding contract receivables at the end of each year. Receivables are written off in the period deemed uncollectible. The allowance for doubtful accounts at December 31, 2018 and 2017 was $1.7 million and $0.5 million, respectively. |
Significant revision in contract estimates | Significant revision in contract estimates — We recognize revenue over time for firm fixed-price contracts. Under this method, the costs incurred to date as a percentage of total estimated costs are used to calculate revenue. Total estimated costs, and thus contract revenue and margin, are impacted by many factors, which can cause significant changes in estimates during the life cycle of a project. For projects that were in process at the end of the prior year, there can be a difference in revenue and profit that would have been recognized in the prior year, had current year estimates of costs to complete been known at the end of the prior year. The following table presents the approximate financial impact of the changes in estimates that would have been reflected in the prior years had the revised estimates been applied to the particular year (in thousands): Net impact of change in estimate for the years ended December 31, 2018 2017 2016 Revised estimates in 2018 that impact 2017 $ (16,242) $ 16,242 $ — Revised estimates in 2017 that impact 2016 — 6,435 (6,435) Revised estimates in 2016 that impact 2015 — — 1,685 Net impact to gross margin $ (16,242) $ 22,677 $ (4,750) EPS impact to year $ (0.16) $ 0.24 $ (0.05) During 2018, we collected a disputed receivable related to a project completed in 2014, which resulted in recognizing revenue of approximately $18.1 million and gross profit of approximately $17.4 million. During the third quarter of 2016, we settled a dispute with a customer on collection of a receivable of $17.9 million, receiving $38.0 million in cash, which resulted in recognizing revenue of approximately $27.5 million and gross profit of approximately $26.7 million in the third quarter of 2016. In October 2016, we announced that we planned to divest our Texas heavy civil business unit, which operates as a division of Primoris Heavy Civil. We engaged a financial advisor to assist in the marketing and sale of the business unit, and planned to continue operating the business unit until completion of a sale. As a result of the planned divestiture, we recorded a charge of $37.3 million during the third quarter of 2016. This charge includes a reduction of the expected profitability of certain projects in the Belton, Texas area for the division and a reduction of costs and estimated earnings in excess of billings and an increase to the reserve for anticipated job losses. In April 2017, the Board of Directors determined that based on the information available, we would attain the best long-term value by withdrawing from the sales process and continuing to operate the business unit. The settlement of the disputed projects and the charge related to the planned divestiture were not included in the table above. |
Customer concentration | Customer concentration — We operate in multiple industry segments encompassing the construction of commercial, industrial and public works infrastructure assets primarily throughout the United States. Typically, the top ten customers in any one calendar year generate revenue in excess of 50.0% of total revenue; however, the group that comprise the top ten customers varies from year to year. See Note 14 — “ Customer Concentrations” for further discussion. |
Property and equipment | Property and equipment — Property and equipment are recorded at cost and are depreciated using the straight-line method over the estimated useful lives of the related assets, usually ranging from three to thirty years. Maintenance and repairs are charged to expense as incurred. Significant renewals and betterments are capitalized. At the time of retirement or other disposition of property and equipment, the cost and accumulated depreciation are removed from the accounts, and any resulting gain or loss is reflected in operating income. We assess the recoverability of property and equipment whenever events or changes in business circumstances indicate that the carrying amount of the asset may not be fully recoverable. We perform an analysis to determine if an impairment exists. The amount of property and equipment impairment, if any, is measured based on fair value and is charged to operations in the period in which the impairment is determined by management. For the years ended December 31, 2018, 2017, and 2016, our management has not identified any material impairment of its property and equipment. |
Taxes collected from customers | Taxes collected from customers — Sales and use taxes collected from our customers are recorded on a net basis. |
Share-based payments and stock-based compensation | Share-based payments and stock-based compensation — In May 2013, the shareholders approved and we adopted the Primoris Services Corporation 2013 Long-term Incentive Equity Plan (“Equity Plan”). Detailed discussion of shares issued under the Equity Plan are included in Note 17 — “Deferred Compensation Agreements and Stock-Based Compensation” and in Note 21— “Stockholders’ Equity” . Such share issuances include grants of Restricted Stock Units to executives, issuance of stock to certain senior managers and executives and issuances of stock to non-employee members of the Board of Directors. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In May 2014, the FASB issued ASU No. 2014-09, “ Revenue from Contracts with Customers (Topic 606) ”, with several clarifying updates issued during 2016 and 2017. The new standard is effective for reporting periods beginning after December 15, 2017 and supersedes all prior revenue recognition standards including the guidance in ASC 605, “ Revenue Recognition ”. Under Topic 606, revenue recognition occurs when promised goods or services are transferred to customers in amounts that reflect the consideration to which the company expects to be entitled to in exchange for those goods or services. We adopted Topic 606 as of January 1, 2018 using the modified retrospective transition method. See Note 5 — “ Revenue” for further details. In February 2016, the FASB issued ASU 2016-02, “ Leases (Topic 842) ”. In July 2018, the FASB issued two updates to ASU 2016-02, ASU 2018-10, “Codification Improvements to Topic 842, Leases” , and ASU 2018-11, “Leases (Topic 842): Targeted Improvements” . ASU 2016-02 requires recognition of operating leases with lease terms of more than twelve months on the balance sheet as both assets for the rights and liabilities for the obligations created by the leases. The ASU also requires disclosures that provide qualitative and quantitative information for the lease assets and liabilities recorded in the financial statements. The standard is effective for fiscal years beginning after December 15, 2018, and initially required a modified retrospective transition method where a company applies the new lease standard at the beginning of the earliest period presented in the financial statements. ASU 2018-11 added an optional transition method where a company applies the new leases standard at the adoption date and recognizes a cumulative effect adjustment to the opening balance of retained earnings. We adopted the new standard as of January 1, 2019, and elected certain transition practical expedients permitted with the new standard, which among other things, allowed us to carryforward the historical lease classification. In addition, we elected the hindsight practical expedient to determine the reasonably certain lease term for existing leases. We also made an accounting policy election that keeps leases with an initial term of 12 months or less off of the balance sheet and results in recognizing those lease payments in the Consolidated Statements of Income on a straight-line basis over the lease term. The adoption of the ASU resulted in the recognition of right of use assets as of January 1, 2019, of approximately $133.3 million, which includes the reclassification of previously recognized lease impairment and accrued lease liabilities. The adoption of the ASU resulted in the recognition of lease liabilities as of January 1, 2019, of approximately $140.9 million. The reduction to retained earnings was approximately $0.8 million, net of the reversal of previously recognized lease impairment and accrued lease liabilities. We do not believe the ASUs will materially affect our consolidated net income. Additionally, the ASUs will have no impact on our debt covenant compliance as we have already revised our credit agreements to address the impact of the ASUs. In November 2016, the FASB issued ASU 2016-18, “Statement of Cash Flows (Topic 230)” , which requires a reporting entity to include restricted cash and restricted cash equivalents in its cash and cash-equivalent balances presented in the entity’s statement of cash flows. A reconciliation between the statement of financial position and the statement of cash flows must be disclosed when the balance sheet includes more than one line item for cash, cash equivalents, restricted cash and restricted cash equivalents. Transfers between non-restricted and restricted cash should not be presented as cash flow activities in the statement of cash flows. Furthermore, an entity with a material restricted cash balance must disclose information regarding the nature of the restrictions. ASU 2016-18 is effective for annual periods beginning after December 15, 2017, including interim periods within those annual reporting periods. We adopted the ASU as of January 1, 2018, and it did not have a material impact on our Consolidated Statements of Cash Flows. In January 2017, the FASB issued ASU 2017-01, " Business Combinations (Topic 805): Clarifying the Definition of a Business ", which changes the definition of a business to assist entities with evaluating when a set of acquired assets and activities is a business. ASU 2017-01 requires an entity to evaluate if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets; if so, the set of transferred assets and activities is not a business. ASU 2017-01 is effective for interim and annual reporting periods beginning after December 15, 2017. We adopted the ASU as of January 1, 2018, and it did not impact the determination of our business combinations. In January 2017, the FASB issued ASU 2017-04, " Simplifying the Test for Goodwill Impairment ". ASU 2017-04 removes the second step of the goodwill impairment test, which requires a hypothetical purchase price allocation. A goodwill impairment will now be the amount by which a reporting unit's carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. ASU 2017-04 is effective for interim and annual reporting periods beginning after December 15, 2019 and will be applied prospectively. We do not expect the adoption of ASU 2017-04 to have an impact on our financial position, results of operations, or cash flows. In May 2017, the FASB issued ASU 2017-09, “ Compensation — Stock Compensation (Topic 718) — Scope of Modification Accounting ”. The ASU amends the scope of modification accounting for share-based payment arrangements. The amendments in the ASU clarify when to account for a change in the terms or conditions of share-based payment awards as a modification under ASC 718, “Compensation — Stock Compensation” . The ASU is effective for interim and annual reporting periods beginning after December 15, 2017. We adopted the ASU as of January 1, 2018, and it did not have a material impact on our consolidated financial statements. In March 2018, the FASB issued ASU No. 2018-05, “Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118”. The ASU added guidance previously issued by the SEC in SAB 118 to ASC 740, “Income Taxes” . SAB 118 was issued by the SEC in December 2017 to provide guidance for accounting implications of U.S. tax reform under the Tax Cuts and Jobs Act (the “Tax Act”). Specifically, SAB 118 allowed companies to record provisional estimates of the impact of the Tax Act during a one year “measurement period” from the December 22, 2017 enactment date similar to that used when accounting for business combinations. We have evaluated the potential impacts of SAB 118 and have applied this guidance to our consolidated financial statements and related disclosures beginning in the fourth quarter of our fiscal year 2017. See Note 19 — “Income Taxes ” for additional information on SAB 118 and the impacts of the Tax Act. 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 eliminates certain disclosure requirements for recurring and nonrecurring fair value measurements. The ASU eliminates such disclosures as the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, and adds new disclosure requirements for Level 3 measurements. This ASU 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. We are currently evaluating the impact this ASU will have on our disclosures. Other new pronouncements issued but not effective until after December 31, 2018 are not expected to have a material impact on our consolidated results of operations, financial position or cash flows. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Summary of Significant Accounting Policies | |
Schedule of the financial impact of the changes in estimates that would have been reflected in the prior years had the revised estimates been applied to the particular year | The following table presents the approximate financial impact of the changes in estimates that would have been reflected in the prior years had the revised estimates been applied to the particular year (in thousands): Net impact of change in estimate for the years ended December 31, 2018 2017 2016 Revised estimates in 2018 that impact 2017 $ (16,242) $ 16,242 $ — Revised estimates in 2017 that impact 2016 — 6,435 (6,435) Revised estimates in 2016 that impact 2015 — — 1,685 Net impact to gross margin $ (16,242) $ 22,677 $ (4,750) EPS impact to year $ (0.16) $ 0.24 $ (0.05) |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Measurements | |
Schedule of financial assets and liabilities which are required to be measured at fair value | The following table presents, for each of the fair value hierarchy levels identified under ASC 820, our financial assets and certain liabilities that are required to be measured at fair value at December 31, 2018 and 2017 (in thousands): Fair Value Measurements at Reporting Date Significant Quoted Prices Other Significant in Active Markets Observable Unobservable for Identical Assets Inputs Inputs (Level 1) (Level 2) (Level 3) Assets as of December 31, 2018: Cash and cash equivalents $ 151,063 $ — $ — Liabilities as of December 31, 2018: Interest rate swap $ — $ 2,829 $ — Assets as of December 31, 2017: Cash and cash equivalents $ 170,385 $ — $ — Liabilities as of December 31, 2017: Contingent consideration $ — $ — $ 716 |
Schedule of changes to the Company's contingent consideration liability Level 3 fair value measurements | The following table provides changes to our contingent consideration liability Level 3 fair value measurements during the years ended December 31, 2018 and 2017 (in thousands): Significant Unobservable Inputs (Level 3) Contingent Consideration Liability 2018 2017 Beginning balance, January 1, $ 716 $ — FGC acquisition — 1,200 Change in fair value of contingent consideration liability during year 753 (484) Payment of earn-out liability to FGC sellers (1,469) — Ending balance, December 31, $ — $ 716 |
Business Combinations (Tables)
Business Combinations (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Business combinations | |
Schedule of pro forma results | For example, the pro forma results do not reflect any operating efficiencies and associated cost savings that we might have achieved with respect to the acquisitions (in thousands): Year Ended December 31, 2018 2017 (unaudited) (unaudited) Revenue $ 3,265,690 $ 3,256,045 Income before provision for income taxes $ 107,657 $ 14,813 Net income attributable to Primoris $ 73,356 $ 18,072 Weighted average common shares outstanding: Basic 51,350 51,481 Diluted 51,670 51,741 Earnings per share: Basic $ 1.43 $ 0.35 Diluted $ 1.42 $ 0.35 |
Willbros Group, Inc | |
Business combinations | |
Summary of the cash paid for acquisitions | Purchase consideration (in thousands) Total purchase consideration $ 164,758 Less cash and restricted cash acquired (54,138) Net cash paid 110,620 |
Summary of the identifiable assets acquired and liabilities assumed | Preliminary identifiable assets acquired and liabilities assumed (in thousands) Cash and restricted cash $ 54,138 Accounts receivable 102,719 Contract assets 30,762 Other current assets 18,712 Property, plant and equipment 30,522 Intangible assets: Customer relationships 47,500 Tradename 200 Deferred income taxes 24,017 Other non-current assets 2,261 Accounts payable and accrued liabilities (114,088) Contract liabilities (63,902) Other non-current liabilities (20,868) Total identifiable net assets 111,973 Goodwill 52,785 Total purchase consideration $ 164,758 |
2017 Acquisitions | |
Business combinations | |
Summary of the identifiable assets acquired and liabilities assumed | The following table represents the identifiable assets acquired and liabilities assumed related to the 2017 acquisitions described above (in thousands): Accounts receivable $ 10,721 Contract assets 580 Other current assets 2,352 Property, plant and equipment 12,402 Intangible assets 21,125 Goodwill 26,269 Accounts payable and accrued liabilities (5,476) Contract liabilities (447) Total $ 67,526 |
2016 Acquisitions | |
Business combinations | |
Summary of the identifiable assets acquired and liabilities assumed | The following table represents the identifiable assets acquired and liabilities assumed related to the 2016 acquisitions described above (in thousands): Accounts receivable $ 1,606 Other current assets 64 Property, plant and equipment 2,133 Intangible assets 3,000 Goodwill 5,660 Accounts payable and accrued liabilities (1,587) Total $ 10,876 |
Revenue (Tables)
Revenue (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Revenue | |
Schedule of contract assets | Contract assets consist of the following (in thousands): December 31, December 31, 2018 2017 Unbilled revenue $ 249,577 $ 160,092 Retention receivable 88,953 66,586 Contract materials (not yet installed) 25,715 39,224 $ 364,245 $ 265,902 |
Schedule of contract liabilities | Contract liabilities consist of the following (in thousands): December 31, December 31, 2018 2017 Deferred revenue $ 182,232 $ 159,310 Accrued loss provision 7,307 10,067 $ 189,539 $ 169,377 |
Schedule of revenue disaggregation by various categories | Master Service Agreements (“MSA”) and Non-MSA revenue was as follows (in thousands): For the year ended December 31, 2018 Segment MSA Non-MSA Total Power $ 141,193 $ 552,855 $ 694,048 Pipeline 47,143 543,794 590,937 Utilities 699,998 202,774 902,772 Transmission 240,228 46,521 286,749 Civil — 464,972 464,972 Total $ 1,128,562 $ 1,810,916 $ 2,939,478 Revenue by contract type was as follows (in thousands): For the year ended December 31, 2018 Segment Fixed-price Unit-price Cost reimbursable (1) Total Power $ 393,555 $ 45,339 $ 255,154 $ 694,048 Pipeline 107,519 58,651 424,767 590,937 Utilities 184,649 460,122 258,001 902,772 Transmission 48,679 230,077 7,993 286,749 Civil 69,398 345,510 50,064 464,972 Total $ 803,800 $ 1,139,699 $ 995,979 $ 2,939,478 (1) Includes time and material and cost reimbursable plus fee contracts. |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Property and Equipment | |
Summary of property and equipment | The following is a summary of property and equipment at December 31 (in thousands): 2018 2017 Useful Life Land and buildings $ 101,170 $ 82,755 Buildings 30 Years Leasehold improvements 13,438 12,601 Various* Office equipment 9,669 8,888 3 - 5 Years Construction equipment 439,875 392,454 3 - 7 Years Transportation equipment 112,170 101,855 3 - 18 Years Solar equipment 21,304 — 25 years Construction in progress 35,094 16,336 732,720 614,889 Less: accumulated depreciation and amortization (356,836) (303,112) Property and equipment, net $ 375,884 $ 311,777 * Leasehold improvements are depreciated over the shorter of the life of the leasehold improvement or the lease term |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets | |
Schedule of goodwill by reporting unit | The change in goodwill by segment for 2018 and 2017 was as follows (in thousands): Power Pipeline Utilities Transmission Civil Total Balance at January 1, 2017 $ 24,512 $ 42,252 $ 20,312 $ — $ 40,150 $ 127,226 Goodwill acquired during the year — 9,269 17,000 — — 26,269 Purchase price allocation adjustments (121) — — — — (121) Balance at January 1, 2018 $ 24,391 $ 51,521 $ 37,312 $ — $ 40,150 $ 153,374 Goodwill acquired during the year 1,542 764 — 50,479 — 52,785 Balance at December 31, 2018 $ 25,933 $ 52,285 $ 37,312 $ 50,479 $ 40,150 $ 206,159 |
Summary of intangible asset categories, amounts and the average amortization periods | The table below summarizes the intangible asset categories, amounts and the average amortization periods, which are generally on a straight-line basis (in thousands): December 31, 2018 December 31, 2017 Weighted Gross Carrying Accumulated Intangible assets, net Gross Carrying Accumulated Intangible assets, net Tradename 9 years $ 31,390 $ (25,156) $ 6,234 $ 32,175 $ (22,238) $ 9,937 Customer relationships 16 years 97,400 (23,079) 74,321 49,900 (16,338) 33,562 Non-compete agreements 5 years 1,900 (1,387) 513 1,900 (820) 1,080 Other 3 years 275 (145) 130 275 (54) 221 Total 15 years $ 130,965 $ (49,767) $ 81,198 $ 84,250 $ (39,450) $ 44,800 |
Schedule of estimated future amortization expense for intangible assets | In the second quarter of 2017, we recorded a $0.5 million impairment charge related to a tradename intangible asset in our Pipeline segment. The impairment charge is included in “Selling, general and administrative expenses” in the Consolidated Statements of Income. Estimated future amortization expense for intangible assets as of December 31, 2018 is as follows (in thousands): Estimated Intangible Amortization For the Years Ending December 31, Expense 2019 $ 11,559 2020 8,814 2021 7,577 2022 6,416 2023 5,394 Thereafter 41,438 $ 81,198 |
Accounts Payable and Accrued _2
Accounts Payable and Accrued Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accounts Payable and Accrued Liabilities | |
Summary of accrued expenses and other current liabilities | The following is a summary of accrued expenses and other current liabilities at December 31 (in thousands): December 31, December 31, 2018 2017 Payroll and related employee benefits $ 60,509 $ 45,708 Insurance, including self-insurance reserves 41,379 21,391 Corporate income taxes and other taxes 5,040 2,843 Other 10,599 6,085 $ 117,527 $ 76,027 |
Credit Arrangements (Tables)
Credit Arrangements (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Credit Arrangements | |
Schedule of long-term debt and credit facilities | Long-term debt and credit facilities consist of the following at December 31 (in thousands): Commercial Notes Payable and Mortgage Notes Payable December 31, December 31, 2018 2017 Term loan $ 214,500 $ — Revolving credit facility — — Commercial equipment notes 127,458 165,532 Mortgage notes 27,200 11,242 Senior secured notes — 82,143 Total debt 369,158 258,917 Unamortized debt issuance costs (1,001) (102) Total debt, net $ 368,157 $ 258,815 Less: current portion (62,488) (65,464) Long-term debt, net of current portion $ 305,669 $ 193,351 |
Schedule of maturities of long-term debt | Scheduled maturities of long-term debt are as follows (in thousands): Year Ending December 31, 2019 $ 62,488 2020 51,995 2021 37,312 2022 31,052 2023 165,067 Thereafter 21,244 $ 369,158 |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Derivative Instruments | |
Schedule of fair values of our derivative contracts included in the Condensed Consolidated Balance Sheets | The following table summarizes the fair value of our derivative contracts included in the Consolidated Balance Sheets (in thousands): Liability Derivatives December 31, December 31, Balance Sheet Location 2018 2017 Interest rate swap Other long-term liabilities $ 2,829 $ — Total derivatives $ 2,829 $ — |
Schedule of derivative instruments within the Condensed Consolidated Statements of Income | The following table summarizes the amounts recognized with respect to our derivative instruments within the Consolidated Statements of Income (in thousands): Location of Loss Recognized Amount of Loss Recognized in Income on Derivatives on Derivatives December 31, 2018 December 31, 2017 December 31, 2016 Interest rate swap Interest expense 3,131 — — |
Noncontrolling Interests (Table
Noncontrolling Interests (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Balance sheet amounts for the two joint ventures | The following table summarizes the total balance sheet amounts for the two joint ventures, which are included in our Consolidated Balance Sheets( in thousands): Joint Venture Consolidated At December 31, 2018 Amounts Amounts Cash $ 3,127 $ 151,063 Accounts receivable $ 4,451 $ 372,695 Contract assets $ 8,158 $ 364,245 Accounts payable $ 2,279 $ 249,217 Contract liabilities $ 5,946 $ 189,539 At December 31, 2017 Cash $ 60,256 $ 170,385 Accounts receivable $ 15,941 $ 291,589 Accounts payable $ 13,111 $ 140,943 Contract liabilities $ 44,223 $ 169,377 |
Carlsbad | |
Schedule of joint venture operating activities included in the Company's consolidated statements of income | The Carlsbad joint venture operating activities began in 2015 and are included in our Consolidated Statements of Income as follows for the years ended December 31 (in thousands): 2018 2017 2016 Revenue $ 102,868 $ 110,669 $ 7,254 Net income attributable to noncontrolling interests 9,483 1,780 325 |
Schedule of the carrying value of the assets and liabilities included in the Company's consolidated balance sheets | The carrying value of the assets and liabilities associated with the operations of the Carlsbad joint venture are included in our Consolidated Balance Sheets at December 31 as follows (in thousands): December 31, December 31, 2018 2017 Cash $ 3,117 $ 44,308 Accounts receivable $ 4,451 $ 15,343 Contract assets $ 8,158 $ — Accounts payable $ 2,279 $ 12,352 Contract liabilities $ 5,946 $ 42,743 Due to Primoris $ 1,979 $ — |
Wilmington | |
Schedule of joint venture operating activities included in the Company's consolidated statements of income | The Wilmington joint venture operating activities began in 2015 and are included in our Consolidated Statements of Income as follows for the years ended December 31 (in thousands): 2018 2017 2016 Revenue $ 2,133 $ 31,638 $ 19,781 Net income attributable to noncontrolling interests 649 2,716 677 |
Schedule of the carrying value of the assets and liabilities included in the Company's consolidated balance sheets | The carrying value of the assets and liabilities associated with the operations of the Wilmington joint venture are included in our Consolidated Balance Sheets at December 31 as follows (in thousands): December 31, December 31, 2018 2017 Cash $ 10 $ 15,948 Accounts receivable $ — $ 598 Accounts payable $ — $ 759 Contract liabilities $ — $ 1,480 Due to Primoris $ — $ 7,428 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies. | |
Schedule of future minimum lease payments required under non-cancelable operating leases | The future minimum lease payments required under non-cancelable operating leases are as follows (in thousands): Total For the Years Ending December 31, Commitments 2019 $ 56,693 2020 41,733 2021 26,607 2022 12,753 2023 6,530 Thereafter 8,229 $ 152,545 |
Reportable Segments (Tables)
Reportable Segments (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Reportable Segments | |
Schedule of revenue by segment | Revenue by segment for the years ended December 31, 2018, 2017 and 2016 was as follows (in thousands): 2018 2017 2016 % of % of % of Total Total Total Segment Revenue Revenue Revenue Revenue Revenue Revenue Power $ 694,048 $ 606,125 $ 478,653 Pipeline 590,937 465,570 401,931 Utilities 902,772 806,523 637,212 Transmission (1) 286,749 — — — — Civil 464,972 501,777 479,152 Total $ 2,939,478 $ 2,379,995 $ 1,996,948 (1) Represents results from the June 1, 2018 acquisition date of Willbros to December 31, 2018 . |
Schedule of gross profit by segment | Gross profit by segment for the years ended December 31, 2018, 2017 and 2016 was as follows (in thousands): 2018 2017 2016 % of % of % of Segment Segment Segment Gross Profit Revenue Gross Profit Revenue Gross Profit Revenue Power $ 109,789 $ 65,675 $ 49,807 Pipeline 66,602 92,087 68,100 Utilities 111,825 113,037 100,071 Transmission (1) 31,904 — — — — Civil 5,617 7,635 (16,671) Total $ 325,737 $ 278,434 $ 201,307 (1) Represents results from the June 1, 2018 acquisition date of Willbros to December 31, 2018 . |
Customer Concentrations (Tables
Customer Concentrations (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Customer Concentrations | |
Schedule of revenue from customers | During the years ended December 31, 2018, 2017 and 2016, we generated 35.3%, 38.4% and 45.6%, of our revenue, respectively, from the following customers (in thousands): 2018 2017 2016 Description of Customer's Business Segment Amount Percentage Amount Percentage Amount Percentage Public gas and electric utility Utilities/Power $ 250,286 $ 210,747 $ 184,002 Private gas and electric utility Utilities 232,162 190,659 201,443 State DOT Civil 202,452 222,142 193,049 Pipeline operator Pipeline 198,198 * * * * Pipeline operator Pipeline/Power 155,280 * * * * Chemical/Energy producer Power/Civil * * 160,995 208,458 Pipeline operator Pipeline * * 128,182 * * Pipeline operator Pipeline * * * * 123,055 $ 1,038,378 $ 912,725 $ 910,007 (*) Indicates a customer with less than 5.0% of revenue during such period. |
Multiemployer Plans (Tables)
Multiemployer Plans (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Multiemployer Plans | |
Schedule of the entity's contributions to different pension funds | Collective FIP/RP Bargaining EIN / Pension Protection Act Status Agreement Pension Plan Zone Status Pending / Surcharge Expiration Contributions of the Company Pension Fund Name Number 2018 2017 Implemented Imposed Date 2018 2017 2016 Central Pension Fund of the International Union of Operating Engineers and Participating Employers 36-6052390/001 Green as of February 1, 2017 Green as of No No 5/31/2020 $ 6,643 $ 7,562 $ 5,373 Southern California Pipetrades Trust Funds 51-6108443/001 Green as of January 1, 2017 Green as of January 1, 2016 No No 9/30/2022 5,122 3,219 2,614 Laborers International Union of North America National (Industrial) Pension Fund 52-6074345/001 Red as of January 1, 2017 Red as of January 1, 2016 No No 5/31/2020 3,967 4,658 2,415 Laborers Pension Trust Fund for Northern California 94-6277608/001 Green as of June 1, 2017 Yellow as of June 1, 2016 No No 6/30/2019 3,793 2,945 3,598 Plumbers & Pipefitters National Pension Fund 52-6152779 Yellow as of July 1 2017 Yellow as of July 1 2017 No No 9/30/2022 3,686 2,548 2,161 Construction Laborers Pension Trust for Southern California 43-6159056/001 Green as of January 1, 2017 Green as of January 1, 2016 No No 6/30/2022 2,873 2,393 2,742 Minnesota laborers Pension Fund 41-6159599/001 Green as of January 1, 2017 Green as of January 1, 2016 No No 6/01/2019 2,565 2,137 2,018 Operating Engineer Trust Funds 95-6032478/001 Yellow as of July 1, 2017 Yellow as of July 1, 2016 No No 6/30/2019 2,363 2,448 1,643 Pipeline Industry Benefit Fund 73-6146433/001 Green as of January 1, 2017 Green as of January 1, 2016 No No 5/31/2020 1,988 6,050 2,740 Contributions to significant plans 33,000 33,960 25,304 Contributions to other multiemployer plans 15,790 12,975 8,879 Total contributions made $ 48,790 $ 46,935 $ 34,183 |
Deferred Compensation Agreeme_2
Deferred Compensation Agreements and Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Deferred Compensation Agreements and Stock-Based Compensation | |
Schedule of units activity | Nonvested RSUs Units Weighted Average Grant Date Fair Value per Unit Balance at December 31, 2017 85,415 $ 23.76 Granted 144,920 25.53 Vested 23.76 Balance at December 31, 2018 25.03 |
Schedule of units to vest for remaining restricted stock units | Number of Units For the Years Ending December 31, to Vest 2019 57,227 2020 11,067 2021 128,889 2022 2,340 2023 2,341 201,864 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Taxes | |
Schedule of domestic and foreign components of income before income taxes | Income before provision for income taxes consists of the following (in thousands): Year Ended December 31, 2018 2017 2016 United States $ 111,002 $ 105,555 $ 48,097 Foreign 2,356 (272) 774 Total 113,358 105,283 48,871 |
Schedule of components of the provision for income taxes | The components of the provision for income taxes are as follows (in thousands): Year Ended December 31, 2018 2017 2016 Current provision (benefit) Federal $ 3,405 $ 21,509 $ 4,726 State 4,536 3,371 5,423 Foreign 674 (188) 92 8,615 24,692 10,241 Deferred provision (benefit) Federal 14,535 1,958 11,560 State 2,120 1,219 (727) Foreign (139) (36) 72 16,516 3,141 10,905 Change in valuation allowance 634 600 — Total $ 25,765 $ 28,433 $ 21,146 |
Schedule of reconciliation of income tax expense compared to the amount of income tax expense that would result by applying U.S. federal statutory income tax rate to pre-tax income | Year Ended December 31, 2018 2017 2016 U.S. federal statutory income tax rate % % % Impact of U.S tax reform — State taxes, net of federal income tax impact Tax credits — Income taxed at rates greater than U.S. 0.4 Domestic production activities deduction — Nondeductible meals & entertainment Other items Effective tax rate excluding income attributable to noncontrolling interests Impact of income from noncontrolling interests on effective tax rate Effective tax rate % % % |
Schedule of tax effect of temporary differences that give rise to deferred income taxes | The tax effect of temporary differences that give rise to deferred income taxes are as follows (in thousands): December 31, 2018 2017 Deferred tax assets: Accrued compensation $ 4,999 $ 4,280 Accrued workers compensation 10,309 7,980 Net operating losses 34,615 982 Disallowed interest 1,908 — Capital loss carryforward 10,796 — Deferred rent 1,552 57 Insurance reserves 3,737 3,276 Loss reserves 2,064 2,852 Tax credit 1,505 2,364 State income taxes 1,045 463 Other 1,600 182 Total deferred tax assets 74,130 22,436 Deferred tax liabilities Depreciation and amortization (56,670) (34,652) Prepaid expenses and other (231) (755) Total deferred tax liabilities (56,901) (35,407) Valuation allowance (23,938) (600) Net deferred tax liabilities $ (6,709) $ (13,571) |
Schedule of reconciliation of the beginning and ending amounts and aggregate changes in the balance of unrecognized tax benefits | A reconciliation of the beginning and ending and aggregate changes in the gross balances of unrecognized tax benefits is as follows (in thousands): December 31, 2018 2017 2016 Beginning balance $ 592 $ — $ — Increases in balances for tax positions taken during the current year 146 592 — Increases in balances for tax positions taken during prior years 2,666 — — Settlements and effective settlements with tax authorities (1,979) — — Lapse of statute of limitations (95) — — Total $ 1,330 $ 592 $ — |
Dividends and Earnings Per Sh_2
Dividends and Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Dividends and Earnings Per Share | |
Schedule of cash dividends paid or declared | We have paid or declared cash dividends during 2016, 2017 and 2018 as follows: Declaration Date Record Date Payable Date Amount Per Share February 22, 2016 March 31, 2016 April 15, 2016 $ May 2, 2016 June 30, 2016 July 15, 2016 $ August 3, 2016 September 30, 2016 October 14, 2016 $ November 2, 2016 December 31, 2016 January 16, 2017 $ February 21, 2017 March 31, 2017 April 15, 2017 $ May 5, 2017 June 30, 2017 July 14, 2017 $ August 2, 2017 September 29, 2017 October 14, 2017 $ November 2, 2017 December 29, 2017 January 15, 2018 $ February 21, 2018 March 30, 2018 April 13, 2018 $ May 4, 2018 June 29, 2018 July 13, 2018 $ August 2, 2018 September 28, 2018 October 15, 2018 $ November 2, 2018 December 31, 2018 January 15, 2019 $ |
Schedule of computation of basic and diluted earnings per share | The table below presents the computation of basic and diluted earnings per share for the years ended December 31, 2018, 2017 and 2016 (in thousands, except per share amounts): 2018 2017 2016 Numerator: Net income attributable to Primoris $ 77,461 $ 72,354 $ 26,723 Denominator: Weighted average shares for computation of basic earnings per share 51,350 51,481 51,762 Dilutive effect of shares issued to independent directors 3 3 3 Dilutive effect of restricted stock units (1) 317 257 224 Weighted average shares for computation of diluted earnings per share 51,670 51,741 51,989 Earnings per share attributable to Primoris: Basic $ 1.51 $ 1.41 $ 0.52 Diluted $ 1.50 $ 1.40 $ 0.51 (1) Represents the effect of the grant of 403,985 shares of Restricted Stock Units and 5,121 vested Dividend Equivalent Units. |
Selected Quarterly Financial _2
Selected Quarterly Financial Information (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Selected Quarterly Financial Information (Unaudited) | |
Schedule of selected unaudited quarterly consolidated financial information | Selected unaudited quarterly consolidated financial information is presented in the following tables (in thousands, except per share amounts): Year Ended December 31, 2018 1st 2nd 3rd 4th Quarter Quarter Quarter Quarter Revenue $ 504,119 $ 648,787 $ 908,902 $ 877,670 Gross profit $ 44,560 $ 71,419 $ 106,505 $ 103,253 Net income $ 4,216 $ 14,191 $ 34,805 $ 34,381 Net income attributable to Primoris $ 688 $ 11,715 $ 32,691 $ 32,367 Earnings per share: Basic earnings per share $ 0.01 $ 0.23 $ 0.64 $ 0.63 Diluted earnings per share $ 0.01 $ 0.23 $ 0.63 $ 0.63 Weighted average shares outstanding Basic 51,479 51,531 51,403 50,993 Diluted 51,747 51,793 51,735 51,397 Year Ended December 31, 2017 1st 2nd 3rd 4th Quarter Quarter Quarter Quarter Revenue $ 561,502 $ 631,165 $ 608,311 $ 579,017 Gross profit $ 55,053 $ 84,483 $ 70,421 $ 68,477 Net income $ 8,512 $ 22,396 $ 22,134 $ 23,808 Net income attributable to Primoris $ 7,691 $ 21,545 $ 20,597 $ 22,521 Earnings per share: Basic earnings per share $ 0.15 $ 0.42 $ 0.40 $ 0.44 Diluted earnings per share $ 0.15 $ 0.42 $ 0.40 $ 0.44 Weighted average shares outstanding Basic 51,594 51,437 51,441 51,449 Diluted 51,851 51,688 51,707 51,711 |
Nature of Business (Details)
Nature of Business (Details) $ in Thousands | Jul. 01, 2018USD ($) | Jun. 01, 2018USD ($)segment | Jun. 16, 2017USD ($) | May 30, 2017USD ($) | May 26, 2017USD ($) | Nov. 18, 2016USD ($) | Jan. 29, 2016USD ($) | Dec. 31, 2018USD ($)segmentitem | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) |
Nature of Business | ||||||||||
Number of reportable segments | segment | 5 | |||||||||
Number of joint ventures | item | 2 | |||||||||
Number of variable interest entities | item | 2 | |||||||||
Purchase consideration, net of cash acquired | $ 110,620 | $ 66,205 | $ 10,997 | |||||||
Capitalized property, plant and equipment | $ 732,720 | $ 614,889 | ||||||||
Northern | ||||||||||
Nature of Business | ||||||||||
Total purchase consideration | $ 6,900 | |||||||||
Mueller | ||||||||||
Nature of Business | ||||||||||
Total purchase consideration | $ 4,100 | |||||||||
Willbros Group, Inc | ||||||||||
Nature of Business | ||||||||||
Number of reportable segments | segment | 2 | |||||||||
Purchase consideration, net of cash acquired | $ 110,600 | $ 110,620 | ||||||||
Total purchase consideration | 164,758 | |||||||||
Transmission | Willbros Group, Inc | ||||||||||
Nature of Business | ||||||||||
Purchase consideration, net of cash acquired | $ 110,600 | |||||||||
Utilities | Mueller | ||||||||||
Nature of Business | ||||||||||
Total purchase consideration | $ 4,100 | |||||||||
Utilities | FGC | ||||||||||
Nature of Business | ||||||||||
Total purchase consideration | $ 37,700 | |||||||||
Pipeline | Coastal | ||||||||||
Nature of Business | ||||||||||
Total purchase consideration | $ 27,500 | |||||||||
Power | ||||||||||
Nature of Business | ||||||||||
Number of joint ventures | item | 2 | |||||||||
Power | Northern | ||||||||||
Nature of Business | ||||||||||
Total purchase consideration | $ 6,900 | |||||||||
Power | Engineering Assets | ||||||||||
Nature of Business | ||||||||||
Total purchase consideration | $ 2,300 | |||||||||
Carlsbad | ||||||||||
Nature of Business | ||||||||||
Ownership percentage | 50.00% | |||||||||
Wilmington | ||||||||||
Nature of Business | ||||||||||
Ownership percentage | 50.00% |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Short-term investments (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Sep. 30, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Operating cycle | ||||
Minimum liquidation period of assets in which significant working capital has been invested | 1 year | |||
Goodwill impairment | $ 2,700 | $ 0 | $ 0 | $ 2,716 |
Income tax | ||||
Estimated net tax benefit of Tax Act | $ 9,400 | |||
Additional income tax related to complete accounting of Tax Act | 1,100 | |||
Additional income tax related to foreign tax credits | 600 | |||
Additional income tax related to depreciation | $ 500 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Foreign Operations (Details) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2018USD ($)$ / shares | Sep. 30, 2018USD ($) | Jun. 30, 2018USD ($) | Mar. 31, 2018USD ($) | Dec. 31, 2017USD ($)$ / shares | Sep. 30, 2017USD ($) | Jun. 30, 2017USD ($) | Mar. 31, 2017USD ($) | Sep. 30, 2016USD ($) | Dec. 31, 2018USD ($)item$ / shares | Dec. 31, 2017USD ($)$ / shares | Dec. 31, 2016USD ($)$ / shares | |
Foreign operations | ||||||||||||
Assets | $ 1,594,147 | $ 1,255,740 | $ 1,594,147 | $ 1,255,740 | ||||||||
Revenue | 877,670 | $ 908,902 | $ 648,787 | $ 504,119 | 579,017 | $ 608,311 | $ 631,165 | $ 561,502 | 2,939,478 | 2,379,995 | $ 1,996,948 | |
Income (loss) before tax of Canadian operations | 2,356 | (272) | 774 | |||||||||
Cash concentration | ||||||||||||
Cash and cash equivalents | 151,063 | 170,385 | $ 151,063 | 170,385 | ||||||||
Collective bargaining agreements | ||||||||||||
Percentage of labor force subject to collective bargaining agreements | 46.70% | |||||||||||
Number of collective bargaining agreements | item | 111 | |||||||||||
Number of collective bargaining agreements requiring renegotiation during the year | item | 93 | |||||||||||
Number of years without work stoppages | 20 years | |||||||||||
Insurance | ||||||||||||
Self- insurance amount per claim | $ 250 | 250 | ||||||||||
Self-insurance reserve | 42,800 | 29,400 | 42,800 | 29,400 | ||||||||
Accounts receivable | ||||||||||||
Allowance for doubtful accounts | 1,700 | 500 | 1,700 | 500 | ||||||||
Estimated net impact of change in estimate | ||||||||||||
Revised estimates in current year that impact prior period | (16,242) | 6,435 | (16,242) | 6,435 | 1,685 | |||||||
Revised estimates in current year that impact prior period | 16,242 | 16,242 | (6,435) | |||||||||
Net impact to gross margin | $ (16,242) | $ 22,677 | $ (16,242) | $ 22,677 | $ (4,750) | |||||||
EPS impact to year | $ / shares | $ (0.16) | $ 0.24 | $ (0.16) | $ 0.24 | $ (0.05) | |||||||
Gross profit | $ 103,253 | $ 106,505 | $ 71,419 | $ 44,560 | $ 68,477 | $ 70,421 | $ 84,483 | $ 55,053 | $ 325,737 | $ 278,434 | $ 201,307 | |
Texas Heavy Civil Business unit | JCG | East | ||||||||||||
Estimated net impact of change in estimate | ||||||||||||
Charge against income | $ 37,300 | |||||||||||
Disputed Receivables. | ||||||||||||
Foreign operations | ||||||||||||
Revenue | 27,500 | 18,100 | ||||||||||
Estimated net impact of change in estimate | ||||||||||||
Receivable related to a dispute with a customer | 17,900 | |||||||||||
Receipts related to disputed receivable | 38,000 | |||||||||||
Gross profit | $ 26,700 | 17,400 | ||||||||||
Canada | ||||||||||||
Foreign operations | ||||||||||||
Assets | $ 45,100 | $ 12,700 | 45,100 | 12,700 | ||||||||
Revenue | 86,400 | 8,300 | 11,200 | |||||||||
Income (loss) before tax of Canadian operations | $ 2,400 | $ (300) | $ 800 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Customer Concentration (Details) - Revenues - Customer concentration - Top ten customers | 12 Months Ended |
Dec. 31, 2018customeritem | |
Customer concentration | |
Number of top customers | customer | 10 |
Number of calendar years in which top customers typically generate minimum specified percentage of revenue | item | 1 |
Minimum percentage of revenues generated by top ten customers | 50.00% |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Property and Equipment (Details) | 12 Months Ended |
Dec. 31, 2018 | |
Minimum | |
Property and equipment | |
Estimated useful lives of the related assets | 3 years |
Maximum | |
Property and equipment | |
Estimated useful lives of the related assets | 30 years |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Recently Issued Accounting Pronouncements (Details) - USD ($) $ in Thousands | Jan. 01, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Recently Issued Accounting Pronouncements | |||
Reduction to retained earnings | $ 461,075 | $ 395,961 | |
Forecast Adjustment | ASU 2016-02 | |||
Recently Issued Accounting Pronouncements | |||
Leased assets | $ 133,300 | ||
Lease liabilities | 140,900 | ||
Reduction to retained earnings | $ (800) |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - Recurring - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Assets | ||
Cash and cash equivalents | $ 151,063 | $ 170,385 |
Significant Unobservable Inputs (Level 3) | ||
Liabilities | ||
Fair value of the contingent consideration | $ 716 | |
Interest rate swap | Significant Other Observable Inputs (Level2) | ||
Liabilities | ||
Derivative liability | $ 2,829 |
Fair Value Measurements - Conti
Fair Value Measurements - Contingent Consideration Liability (Details) $ in Thousands | May 26, 2017USD ($) | Sep. 30, 2018USD ($) | Jun. 30, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2018USD ($)item | Dec. 31, 2017USD ($) | May 31, 2017USD ($) |
FGC | |||||||
Additional information | |||||||
Potential contingent consideration | $ 1,500 | $ 1,500 | |||||
Fair value of the contingent consideration | 1,200 | $ 1,200 | |||||
Contingent consideration credited to other operating income (expense) | $ 500 | ||||||
Contingent consideration debited to other operating income (expense) | $ 800 | ||||||
Cash payment made | $ 33,000 | $ 1,500 | |||||
Significant Unobservable Inputs (Level 3) | |||||||
Rollforward of contingent consideration liability level three fair value measurements | |||||||
Payment of earn out liability to FGC sellers | $ (1,469) | ||||||
Contingent Consideration Liability | Significant Unobservable Inputs (Level 3) | |||||||
Rollforward of contingent consideration liability level three fair value measurements | |||||||
Beginning balance | 716 | ||||||
FGC acquisition | $ 1,200 | ||||||
Change in fair value of contingent consideration liability during year | $ 753 | (484) | |||||
Ending balance | $ 716 | $ 716 | |||||
Additional information | |||||||
Number of unobservable inputs | item | 2 | ||||||
Minimum probability of acquired entity meeting contractual operating performance target (as a percent) | 33.00% | ||||||
Maximum probability of acquired entity meeting contractual operating performance target (as a percent) | 100.00% |
Business Combinations - 2018 Ac
Business Combinations - 2018 Acquisitions (Details) $ in Thousands | Jul. 01, 2018USD ($) | Jun. 01, 2018USD ($)segment | Dec. 31, 2018USD ($) | Sep. 30, 2018USD ($) | Jun. 30, 2018USD ($) | Mar. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Sep. 30, 2017USD ($) | Jun. 30, 2017USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2018USD ($)segment | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) |
Business combinations | ||||||||||||||
Increase in goodwill | $ 121 | |||||||||||||
Net cash paid | $ 110,620 | 66,205 | $ 10,997 | |||||||||||
Fair value of net assets acquired | ||||||||||||||
Goodwill | $ 206,159 | $ 153,374 | $ 206,159 | $ 206,159 | 153,374 | 127,226 | ||||||||
Number of reportable segments | segment | 5 | |||||||||||||
Revenue | 877,670 | $ 908,902 | $ 648,787 | $ 504,119 | 579,017 | $ 608,311 | $ 631,165 | $ 561,502 | $ 2,939,478 | 2,379,995 | 1,996,948 | |||
Gross profit | 103,253 | $ 106,505 | $ 71,419 | $ 44,560 | 68,477 | $ 70,421 | $ 84,483 | $ 55,053 | 325,737 | 278,434 | 201,307 | |||
Merger and related costs | 13,260 | 1,774 | 815 | |||||||||||
Power | ||||||||||||||
Business combinations | ||||||||||||||
Increase in goodwill | 121 | |||||||||||||
Fair value of net assets acquired | ||||||||||||||
Goodwill | 25,933 | 24,391 | 25,933 | 25,933 | 24,391 | 24,512 | ||||||||
Revenue | 694,048 | 606,125 | 478,653 | |||||||||||
Gross profit | 109,789 | 65,675 | 49,807 | |||||||||||
Pipeline | ||||||||||||||
Fair value of net assets acquired | ||||||||||||||
Goodwill | 52,285 | $ 51,521 | 52,285 | 52,285 | 51,521 | 42,252 | ||||||||
Revenue | 590,937 | 465,570 | 401,931 | |||||||||||
Gross profit | 66,602 | $ 92,087 | $ 68,100 | |||||||||||
Transmission | ||||||||||||||
Fair value of net assets acquired | ||||||||||||||
Goodwill | $ 50,479 | 50,479 | 50,479 | |||||||||||
Revenue | 286,749 | 286,749 | ||||||||||||
Gross profit | 31,904 | |||||||||||||
Willbros Group, Inc | ||||||||||||||
Business combinations | ||||||||||||||
Increase in contract liabilities | 19,600 | |||||||||||||
Decrease in insurance liabilities | (9,300) | |||||||||||||
Decrease in lease obligations | (8,000) | |||||||||||||
Increase in goodwill | 9,100 | |||||||||||||
Total purchase consideration | $ 164,758 | |||||||||||||
Less cash and restricted cash acquired | (54,138) | |||||||||||||
Net cash paid | $ 110,600 | 110,620 | ||||||||||||
Fair value of net assets acquired | ||||||||||||||
Cash and restricted cash | 54,138 | |||||||||||||
Accounts receivable | 102,719 | |||||||||||||
Contract assets | 30,762 | |||||||||||||
Other current assets | 18,712 | |||||||||||||
Property, plant and equipment | 30,522 | |||||||||||||
Deferred income taxes | 24,017 | |||||||||||||
Other non-current assets | 2,261 | |||||||||||||
Accounts payable and accrued liabilities | (114,088) | |||||||||||||
Contract liabilities | (63,902) | |||||||||||||
Other non-current liabilities | (20,868) | |||||||||||||
Total identifiable net assets | 111,973 | |||||||||||||
Goodwill | $ 52,785 | |||||||||||||
Number of reportable segments | segment | 2 | |||||||||||||
Restricted cash | $ 40,200 | |||||||||||||
Revenue since acquisition | 400,800 | |||||||||||||
Gross profit since acquisition | $ 39,500 | |||||||||||||
Merger and related costs | $ 13,200 | |||||||||||||
Willbros Group, Inc | Power | ||||||||||||||
Fair value of net assets acquired | ||||||||||||||
Goodwill | 1,500 | |||||||||||||
Willbros Group, Inc | Pipeline | ||||||||||||||
Fair value of net assets acquired | ||||||||||||||
Goodwill | 800 | |||||||||||||
Willbros Group, Inc | Transmission | ||||||||||||||
Business combinations | ||||||||||||||
Net cash paid | 110,600 | |||||||||||||
Fair value of net assets acquired | ||||||||||||||
Goodwill | 50,500 | |||||||||||||
Willbros Group, Inc | Customer relationships | ||||||||||||||
Fair value of net assets acquired | ||||||||||||||
Intangibles assets | 47,500 | |||||||||||||
Willbros Group, Inc | Tradename | ||||||||||||||
Fair value of net assets acquired | ||||||||||||||
Intangibles assets | $ 200 |
Business Combinations - 2017 Ac
Business Combinations - 2017 Acquisitions (Details) - USD ($) $ in Thousands | Jun. 16, 2017 | May 30, 2017 | May 26, 2017 | Jun. 24, 2016 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | May 31, 2017 |
Business combinations | |||||||||||||||||||
Goodwill | $ 206,159 | $ 153,374 | $ 206,159 | $ 153,374 | $ 153,374 | $ 206,159 | $ 153,374 | $ 127,226 | |||||||||||
Revenue | 877,670 | $ 908,902 | $ 648,787 | $ 504,119 | 579,017 | $ 608,311 | $ 631,165 | $ 561,502 | 2,939,478 | 2,379,995 | 1,996,948 | ||||||||
Gross profit | 103,253 | 106,505 | 71,419 | $ 44,560 | 68,477 | $ 70,421 | $ 84,483 | $ 55,053 | 325,737 | 278,434 | 201,307 | ||||||||
Purchase price allocation adjustments | 121 | ||||||||||||||||||
Increase in goodwill | 121 | ||||||||||||||||||
Fair value of net assets acquired | |||||||||||||||||||
Goodwill | 206,159 | 153,374 | 206,159 | 153,374 | 153,374 | 206,159 | 153,374 | 127,226 | |||||||||||
2017 Acquisitions | |||||||||||||||||||
Business combinations | |||||||||||||||||||
Fixed assets | 12,402 | 12,402 | 12,402 | 12,402 | |||||||||||||||
Intangibles assets | 21,125 | 21,125 | 21,125 | 21,125 | |||||||||||||||
Goodwill | 26,269 | 26,269 | 26,269 | 26,269 | |||||||||||||||
Fair value of net assets acquired | |||||||||||||||||||
Accounts receivable | 10,721 | 10,721 | 10,721 | 10,721 | |||||||||||||||
Contract assets | 580 | 580 | 580 | 580 | |||||||||||||||
Other current assets | 2,352 | 2,352 | 2,352 | 2,352 | |||||||||||||||
Property, plant and equipment | 12,402 | 12,402 | 12,402 | 12,402 | |||||||||||||||
Intangibles assets | 21,125 | 21,125 | 21,125 | 21,125 | |||||||||||||||
Goodwill | 26,269 | 26,269 | 26,269 | 26,269 | |||||||||||||||
Accounts payable and accrued liabilities | (5,476) | (5,476) | (5,476) | (5,476) | |||||||||||||||
Contract liabilities | (447) | (447) | (447) | (447) | |||||||||||||||
Total | 67,526 | 67,526 | 67,526 | 67,526 | |||||||||||||||
FGC | |||||||||||||||||||
Business combinations | |||||||||||||||||||
Cash payment made | $ 33,000 | $ 1,500 | |||||||||||||||||
Potential contingent consideration | $ 1,500 | $ 1,500 | |||||||||||||||||
Contingent earnout period (in years) | 1 year | ||||||||||||||||||
Fair value of the contingent consideration | $ 1,200 | $ 1,200 | |||||||||||||||||
Fixed assets | 4,800 | 4,800 | 4,800 | 4,800 | |||||||||||||||
Working capital | 3,300 | 3,300 | 3,300 | 3,300 | |||||||||||||||
Intangibles assets | 9,100 | 9,100 | 9,100 | 9,100 | |||||||||||||||
Goodwill | 17,000 | 17,000 | 17,000 | 17,000 | |||||||||||||||
Land and buildings | $ 3,500 | ||||||||||||||||||
The period of time goodwill is deductible for income tax purposes | 15 years | ||||||||||||||||||
Revenue | 31,300 | ||||||||||||||||||
Gross profit | 7,600 | ||||||||||||||||||
Revenue since acquisition | 15,500 | ||||||||||||||||||
Gross profit since acquisition | 3,800 | ||||||||||||||||||
Fair value of net assets acquired | |||||||||||||||||||
Property, plant and equipment | 4,800 | 4,800 | 4,800 | 4,800 | |||||||||||||||
Intangibles assets | 9,100 | 9,100 | 9,100 | 9,100 | |||||||||||||||
Goodwill | 17,000 | 17,000 | 17,000 | 17,000 | |||||||||||||||
Engineering Assets | |||||||||||||||||||
Business combinations | |||||||||||||||||||
Fixed assets | $ 200 | ||||||||||||||||||
Fair value of net assets acquired | |||||||||||||||||||
Property, plant and equipment | 200 | ||||||||||||||||||
Engineering Assets | Customer relationships | |||||||||||||||||||
Business combinations | |||||||||||||||||||
Intangibles assets | 2,100 | ||||||||||||||||||
Fair value of net assets acquired | |||||||||||||||||||
Intangibles assets | 2,100 | ||||||||||||||||||
Coastal | |||||||||||||||||||
Business combinations | |||||||||||||||||||
Fixed assets | 4,000 | ||||||||||||||||||
Working capital | 4,600 | ||||||||||||||||||
Goodwill | 9,300 | ||||||||||||||||||
Long-term capital leases | 300 | ||||||||||||||||||
The period of time goodwill is deductible for income tax purposes | 15 years | ||||||||||||||||||
Revenue | 14,100 | ||||||||||||||||||
Gross profit | 1,400 | ||||||||||||||||||
Revenue since acquisition | 17,900 | ||||||||||||||||||
Gross profit since acquisition | 3,200 | ||||||||||||||||||
Fair value of net assets acquired | |||||||||||||||||||
Property, plant and equipment | 4,000 | ||||||||||||||||||
Goodwill | 9,300 | ||||||||||||||||||
Coastal | Customer relationships and tradename | |||||||||||||||||||
Business combinations | |||||||||||||||||||
Intangibles assets | 9,900 | ||||||||||||||||||
Fair value of net assets acquired | |||||||||||||||||||
Intangibles assets | $ 9,900 | ||||||||||||||||||
Pipe Jacking | |||||||||||||||||||
Business combinations | |||||||||||||||||||
Purchase of properties | $ 13,400 | ||||||||||||||||||
Power | |||||||||||||||||||
Business combinations | |||||||||||||||||||
Goodwill | 25,933 | 24,391 | 25,933 | 24,391 | 24,391 | 25,933 | 24,391 | 24,512 | |||||||||||
Revenue | 694,048 | 606,125 | 478,653 | ||||||||||||||||
Gross profit | 109,789 | 65,675 | 49,807 | ||||||||||||||||
Purchase price allocation adjustments | 121 | ||||||||||||||||||
Increase in goodwill | 121 | ||||||||||||||||||
Fair value of net assets acquired | |||||||||||||||||||
Goodwill | 25,933 | 24,391 | 25,933 | 24,391 | 24,391 | 25,933 | 24,391 | 24,512 | |||||||||||
Power | Engineering Assets | |||||||||||||||||||
Business combinations | |||||||||||||||||||
Cash payment made | 2,300 | ||||||||||||||||||
Fair value of net assets acquired | |||||||||||||||||||
Total purchase consideration | $ 2,300 | ||||||||||||||||||
Pipeline | |||||||||||||||||||
Business combinations | |||||||||||||||||||
Goodwill | 52,285 | 51,521 | 52,285 | 51,521 | 51,521 | 52,285 | 51,521 | 42,252 | |||||||||||
Revenue | 590,937 | 465,570 | 401,931 | ||||||||||||||||
Gross profit | 66,602 | 92,087 | 68,100 | ||||||||||||||||
Fair value of net assets acquired | |||||||||||||||||||
Goodwill | 52,285 | $ 51,521 | 52,285 | $ 51,521 | $ 51,521 | 52,285 | $ 51,521 | $ 42,252 | |||||||||||
Pipeline | Coastal | |||||||||||||||||||
Business combinations | |||||||||||||||||||
Cash payment made | $ 27,500 | ||||||||||||||||||
Fair value of net assets acquired | |||||||||||||||||||
Total purchase consideration | $ 27,500 | ||||||||||||||||||
Pipeline | Pipe Jacking | |||||||||||||||||||
Business combinations | |||||||||||||||||||
Purchase of properties | $ 13,400 | ||||||||||||||||||
Transmission | |||||||||||||||||||
Business combinations | |||||||||||||||||||
Goodwill | 50,479 | 50,479 | 50,479 | ||||||||||||||||
Revenue | 286,749 | 286,749 | |||||||||||||||||
Gross profit | 31,904 | ||||||||||||||||||
Fair value of net assets acquired | |||||||||||||||||||
Goodwill | $ 50,479 | $ 50,479 | $ 50,479 |
Business Combinations - 2016 Ac
Business Combinations - 2016 Acquisitions (Details) - USD ($) $ in Thousands | Nov. 18, 2016 | Jun. 24, 2016 | Jan. 29, 2016 | Dec. 31, 2016 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Jun. 30, 2016 |
Business combinations | ||||||||||||||||
Goodwill | $ 127,226 | $ 206,159 | $ 153,374 | $ 206,159 | $ 153,374 | $ 127,226 | ||||||||||
Purchase price allocation adjustments | 121 | |||||||||||||||
Revenue | 877,670 | $ 908,902 | $ 648,787 | $ 504,119 | 579,017 | $ 608,311 | $ 631,165 | $ 561,502 | 2,939,478 | 2,379,995 | 1,996,948 | |||||
Gross profit | 103,253 | $ 106,505 | $ 71,419 | $ 44,560 | 68,477 | $ 70,421 | 84,483 | $ 55,053 | 325,737 | 278,434 | 201,307 | |||||
Fair value of net assets acquired | ||||||||||||||||
Goodwill | 127,226 | $ 206,159 | $ 153,374 | 206,159 | 153,374 | 127,226 | ||||||||||
Pipe Jacking | ||||||||||||||||
Business combinations | ||||||||||||||||
Purchase of property, plant and equipment | $ 13,400 | |||||||||||||||
2016 Acquisitions | ||||||||||||||||
Business combinations | ||||||||||||||||
Fixed assets | 2,133 | 2,133 | ||||||||||||||
Goodwill | 5,660 | 5,660 | ||||||||||||||
Intangibles assets | 3,000 | 3,000 | ||||||||||||||
Fair value of net assets acquired | ||||||||||||||||
Accounts receivable | 1,606 | 1,606 | ||||||||||||||
Other current assets | 64 | 64 | ||||||||||||||
Property, plant and equipment | 2,133 | 2,133 | ||||||||||||||
Intangibles assets | 3,000 | 3,000 | ||||||||||||||
Goodwill | 5,660 | 5,660 | ||||||||||||||
Accounts payable and accrued liabilities | (1,587) | (1,587) | ||||||||||||||
Total | 10,876 | $ 10,876 | ||||||||||||||
Mueller | ||||||||||||||||
Business combinations | ||||||||||||||||
Purchase price | $ 4,100 | |||||||||||||||
Fixed assets | $ 2,000 | |||||||||||||||
Goodwill | 2,000 | |||||||||||||||
Fair value of inventory acquired | 100 | |||||||||||||||
The period of time goodwill is deductible for income tax purposes | 15 years | |||||||||||||||
Fair value of net assets acquired | ||||||||||||||||
Property, plant and equipment | 2,000 | |||||||||||||||
Goodwill | $ 2,000 | |||||||||||||||
Northern | ||||||||||||||||
Business combinations | ||||||||||||||||
Purchase price | $ 6,900 | |||||||||||||||
Goodwill | 3,700 | |||||||||||||||
The period of time goodwill is deductible for income tax purposes | 15 years | |||||||||||||||
Purchase price allocation adjustments | (100) | |||||||||||||||
Intangibles assets | 3,000 | |||||||||||||||
Working capital | 100 | |||||||||||||||
Revenue | 44,500 | 19,100 | ||||||||||||||
Gross profit | $ (1,200) | $ 1,100 | ||||||||||||||
Revenue since acquisition | 2,000 | |||||||||||||||
Gross profit since acquisition | $ 600 | |||||||||||||||
Fair value of net assets acquired | ||||||||||||||||
Intangibles assets | 3,000 | |||||||||||||||
Goodwill | $ 3,700 |
Business Combinations - Pro For
Business Combinations - Pro Forma Information (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Pro forma results | ||
Pro forma tax rate used in calculating taxes on income from continuing operations (as a percent) | 28.00% | 40.00% |
Revenues | $ 3,265,690 | $ 3,256,045 |
Income before provision for income taxes | 107,657 | 14,813 |
Net income (loss) attributable to Primoris | $ 73,356 | $ 18,072 |
Weighted average common shares outstanding: | ||
Basic (in shares) | 51,350 | 51,481 |
Diluted (in shares) | 51,670 | 51,741 |
Earnings per share: | ||
Basic (in dollars per share) | $ 1.43 | $ 0.35 |
Diluted (in dollars per share) | $ 1.42 | $ 0.35 |
Revenue - Performance obligatio
Revenue - Performance obligations (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Revenue | |
Remaining performance obligations | $ 1,580 |
Revenue recognized from performance obligations satisfied in previous periods | 30.6 |
Amount of contract modifications included in the expected contract value. | 92.8 |
Amount of unapproved contract modifications recognized as revenue on a cumulative catch-up basis | $ 83.3 |
Revenue - Performance obligat_2
Revenue - Performance obligations - 2019-01-01 (Details) - Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-01-01 | Dec. 31, 2018 |
Revenue expected timing | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | 12 months |
Percentage of remaining performance obligation expected to be recognized in period | 71.00% |
Revenue - Contract assets (Deta
Revenue - Contract assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Jun. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
Unbilled revenue | $ 249,577 | $ 160,092 | |
Retention receivable | 88,953 | 66,586 | |
Contract materials (not yet installed) | 25,715 | 39,224 | |
Contract assets | 364,245 | $ 265,902 | |
Increase in contract assets | $ 98,300 | ||
Willbros Group, Inc | |||
Increase in contract assets | $ 30,800 |
Revenue - Contract liabilities
Revenue - Contract liabilities (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Jun. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
Deferred revenue | $ 182,232 | $ 159,310 | |
Accrued loss provision | 7,307 | 10,067 | |
Contract liabilities | 189,539 | $ 169,377 | |
Increase in contract liabilities | 20,200 | ||
Decrease in accrued loss provision | 17,900 | ||
Revenue recognized included in contract liability at beginning of period | $ 159,400 | ||
Willbros Group, Inc | |||
Increase in contract liabilities | $ 63,900 |
Revenue - Disaggregation of rev
Revenue - Disaggregation of revenue by customer type and contract type (Details) - USD ($) $ in Thousands | 3 Months Ended | 7 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Disaggregation of Revenue | ||||||||||||
Revenue | $ 877,670 | $ 908,902 | $ 648,787 | $ 504,119 | $ 579,017 | $ 608,311 | $ 631,165 | $ 561,502 | $ 2,939,478 | $ 2,379,995 | $ 1,996,948 | |
Fixed price | ||||||||||||
Disaggregation of Revenue | ||||||||||||
Revenue | 803,800 | |||||||||||
Unit price | ||||||||||||
Disaggregation of Revenue | ||||||||||||
Revenue | 1,139,699 | |||||||||||
Cost reimbursable | ||||||||||||
Disaggregation of Revenue | ||||||||||||
Revenue | 995,979 | |||||||||||
MSA | ||||||||||||
Disaggregation of Revenue | ||||||||||||
Revenue | 1,128,562 | |||||||||||
Non-MSA | ||||||||||||
Disaggregation of Revenue | ||||||||||||
Revenue | 1,810,916 | |||||||||||
Power | ||||||||||||
Disaggregation of Revenue | ||||||||||||
Revenue | 694,048 | 606,125 | 478,653 | |||||||||
Power | Fixed price | ||||||||||||
Disaggregation of Revenue | ||||||||||||
Revenue | 393,555 | |||||||||||
Power | Unit price | ||||||||||||
Disaggregation of Revenue | ||||||||||||
Revenue | 45,339 | |||||||||||
Power | Cost reimbursable | ||||||||||||
Disaggregation of Revenue | ||||||||||||
Revenue | 255,154 | |||||||||||
Power | MSA | ||||||||||||
Disaggregation of Revenue | ||||||||||||
Revenue | 141,193 | |||||||||||
Power | Non-MSA | ||||||||||||
Disaggregation of Revenue | ||||||||||||
Revenue | 552,855 | |||||||||||
Pipeline | ||||||||||||
Disaggregation of Revenue | ||||||||||||
Revenue | 590,937 | 465,570 | 401,931 | |||||||||
Pipeline | Fixed price | ||||||||||||
Disaggregation of Revenue | ||||||||||||
Revenue | 107,519 | |||||||||||
Pipeline | Unit price | ||||||||||||
Disaggregation of Revenue | ||||||||||||
Revenue | 58,651 | |||||||||||
Pipeline | Cost reimbursable | ||||||||||||
Disaggregation of Revenue | ||||||||||||
Revenue | 424,767 | |||||||||||
Pipeline | MSA | ||||||||||||
Disaggregation of Revenue | ||||||||||||
Revenue | 47,143 | |||||||||||
Pipeline | Non-MSA | ||||||||||||
Disaggregation of Revenue | ||||||||||||
Revenue | 543,794 | |||||||||||
Utilities | ||||||||||||
Disaggregation of Revenue | ||||||||||||
Revenue | 902,772 | 806,523 | 637,212 | |||||||||
Utilities | Fixed price | ||||||||||||
Disaggregation of Revenue | ||||||||||||
Revenue | 184,649 | |||||||||||
Utilities | Unit price | ||||||||||||
Disaggregation of Revenue | ||||||||||||
Revenue | 460,122 | |||||||||||
Utilities | Cost reimbursable | ||||||||||||
Disaggregation of Revenue | ||||||||||||
Revenue | 258,001 | |||||||||||
Utilities | MSA | ||||||||||||
Disaggregation of Revenue | ||||||||||||
Revenue | 699,998 | |||||||||||
Utilities | Non-MSA | ||||||||||||
Disaggregation of Revenue | ||||||||||||
Revenue | 202,774 | |||||||||||
Transmission | ||||||||||||
Disaggregation of Revenue | ||||||||||||
Revenue | $ 286,749 | 286,749 | ||||||||||
Transmission | Fixed price | ||||||||||||
Disaggregation of Revenue | ||||||||||||
Revenue | 48,679 | |||||||||||
Transmission | Unit price | ||||||||||||
Disaggregation of Revenue | ||||||||||||
Revenue | 230,077 | |||||||||||
Transmission | Cost reimbursable | ||||||||||||
Disaggregation of Revenue | ||||||||||||
Revenue | 7,993 | |||||||||||
Transmission | MSA | ||||||||||||
Disaggregation of Revenue | ||||||||||||
Revenue | 240,228 | |||||||||||
Transmission | Non-MSA | ||||||||||||
Disaggregation of Revenue | ||||||||||||
Revenue | 46,521 | |||||||||||
Civil | ||||||||||||
Disaggregation of Revenue | ||||||||||||
Revenue | 464,972 | $ 501,777 | $ 479,152 | |||||||||
Civil | Fixed price | ||||||||||||
Disaggregation of Revenue | ||||||||||||
Revenue | 69,398 | |||||||||||
Civil | Unit price | ||||||||||||
Disaggregation of Revenue | ||||||||||||
Revenue | 345,510 | |||||||||||
Civil | Cost reimbursable | ||||||||||||
Disaggregation of Revenue | ||||||||||||
Revenue | 50,064 | |||||||||||
Civil | Non-MSA | ||||||||||||
Disaggregation of Revenue | ||||||||||||
Revenue | $ 464,972 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Property and equipment | ||
Gross property and equipment | $ 732,720 | $ 614,889 |
Less: accumulated depreciation and amortization | (356,836) | (303,112) |
Property and equipment, net | $ 375,884 | 311,777 |
Minimum | ||
Property and equipment | ||
Useful Life | 3 years | |
Maximum | ||
Property and equipment | ||
Useful Life | 30 years | |
Land and buildings | ||
Property and equipment | ||
Gross property and equipment | $ 101,170 | 82,755 |
Useful Life | 30 years | |
Leasehold improvements | ||
Property and equipment | ||
Gross property and equipment | $ 13,438 | 12,601 |
Office equipment | ||
Property and equipment | ||
Gross property and equipment | $ 9,669 | 8,888 |
Office equipment | Minimum | ||
Property and equipment | ||
Useful Life | 3 years | |
Office equipment | Maximum | ||
Property and equipment | ||
Useful Life | 5 years | |
Construction equipment | ||
Property and equipment | ||
Gross property and equipment | $ 439,875 | 392,454 |
Construction equipment | Minimum | ||
Property and equipment | ||
Useful Life | 3 years | |
Construction equipment | Maximum | ||
Property and equipment | ||
Useful Life | 7 years | |
Transportation equipment | ||
Property and equipment | ||
Gross property and equipment | $ 112,170 | 101,855 |
Transportation equipment | Minimum | ||
Property and equipment | ||
Useful Life | 3 years | |
Transportation equipment | Maximum | ||
Property and equipment | ||
Useful Life | 18 years | |
Solar equipment | ||
Property and equipment | ||
Gross property and equipment | $ 21,304 | |
Useful Life | 25 years | |
Construction in progress | ||
Property and equipment | ||
Gross property and equipment | $ 35,094 | $ 16,336 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Goodwill (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Sep. 30, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Goodwill | ||||
Goodwill, Beginning Balance | $ 153,374 | $ 127,226 | ||
Goodwill acquired during the year | 52,785 | 26,269 | ||
Goodwill impairment | $ (2,700) | 0 | 0 | $ (2,716) |
Purchase price allocation adjustments | 121 | |||
Goodwill, Ending Balance | 206,159 | 153,374 | 127,226 | |
Power | ||||
Goodwill | ||||
Goodwill, Beginning Balance | 24,391 | 24,512 | ||
Goodwill acquired during the year | 1,542 | |||
Purchase price allocation adjustments | 121 | |||
Goodwill, Ending Balance | 25,933 | 24,391 | 24,512 | |
Pipeline | ||||
Goodwill | ||||
Goodwill, Beginning Balance | 51,521 | 42,252 | ||
Goodwill acquired during the year | 764 | 9,269 | ||
Goodwill, Ending Balance | 52,285 | 51,521 | 42,252 | |
Utilities | ||||
Goodwill | ||||
Goodwill, Beginning Balance | 37,312 | 20,312 | ||
Goodwill acquired during the year | 17,000 | |||
Goodwill, Ending Balance | 37,312 | 37,312 | 20,312 | |
Transmission | ||||
Goodwill | ||||
Goodwill acquired during the year | 50,479 | |||
Goodwill, Ending Balance | 50,479 | |||
Civil | ||||
Goodwill | ||||
Goodwill, Beginning Balance | 40,150 | 40,150 | ||
Goodwill, Ending Balance | $ 40,150 | $ 40,150 | $ 40,150 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Jun. 30, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Intangible assets | ||||
Weighted Average Life | 15 years | |||
Gross Carrying Amount | $ 130,965 | $ 84,250 | ||
Accumulated Amortization | (49,767) | (39,450) | ||
Amortization expense of intangible assets | 11,302 | 8,689 | $ 6,597 | |
Estimated future amortization expense for intangible assets | ||||
2,019 | 11,559 | |||
2,020 | 8,814 | |||
2,021 | 7,577 | |||
2,022 | 6,416 | |||
2,023 | 5,394 | |||
Thereafter | 41,438 | |||
Total | $ 81,198 | 44,800 | ||
Tradename | ||||
Intangible assets | ||||
Weighted Average Life | 9 years | |||
Gross Carrying Amount | $ 31,390 | 32,175 | ||
Accumulated Amortization | (25,156) | (22,238) | ||
Estimated future amortization expense for intangible assets | ||||
Total | $ 6,234 | 9,937 | ||
Tradename | Pipeline | Selling, general and administrative expenses | ||||
Intangible assets | ||||
Impairment of intangible asset | $ 500 | |||
Customer relationships | ||||
Intangible assets | ||||
Weighted Average Life | 16 years | |||
Gross Carrying Amount | $ 97,400 | 49,900 | ||
Accumulated Amortization | (23,079) | (16,338) | ||
Estimated future amortization expense for intangible assets | ||||
Total | $ 74,321 | 33,562 | ||
Non-compete agreements | ||||
Intangible assets | ||||
Weighted Average Life | 5 years | |||
Gross Carrying Amount | $ 1,900 | 1,900 | ||
Accumulated Amortization | (1,387) | (820) | ||
Estimated future amortization expense for intangible assets | ||||
Total | $ 513 | 1,080 | ||
Other | ||||
Intangible assets | ||||
Weighted Average Life | 3 years | |||
Gross Carrying Amount | $ 275 | 275 | ||
Accumulated Amortization | (145) | (54) | ||
Estimated future amortization expense for intangible assets | ||||
Total | $ 130 | $ 221 |
Accounts Payable and Accrued _3
Accounts Payable and Accrued Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Accounts Payable and Accrued Liabilities | ||
Accounts payable | $ 249,217 | $ 140,943 |
Retention amounts included in accounts payable | 13,200 | 13,500 |
Accrued expenses and other current liabilities | ||
Payroll and related employee benefits | 60,509 | 45,708 |
Insurance, including self-insurance reserves | 41,379 | 21,391 |
Corporate income taxes and other taxes | 5,040 | 2,843 |
Other | 10,599 | 6,085 |
Total accrued expenses and other current liabilities | $ 117,527 | $ 76,027 |
Credit Arrangements (Details)
Credit Arrangements (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Credit arrangements | ||
Total debt | $ 369,158 | $ 258,917 |
Unamortized debt issuance costs | (1,001) | (102) |
Total debt, net | 368,157 | 258,815 |
Less: current portion | (62,488) | (65,464) |
Long-term debt, net of current portion | 305,669 | 193,351 |
Scheduled maturities of long-term debt | ||
2,019 | 62,488 | |
2,020 | 51,995 | |
2,021 | 37,312 | |
2,022 | 31,052 | |
2,023 | 165,067 | |
Thereafter | 21,244 | |
Term Loan | ||
Credit arrangements | ||
Total debt, net | 214,500 | |
Commercial equipment notes | ||
Credit arrangements | ||
Total debt, net | 127,458 | 165,532 |
Mortgages | ||
Credit arrangements | ||
Total debt, net | $ 27,200 | 11,242 |
Senior secured notes | ||
Credit arrangements | ||
Total debt, net | $ 82,143 |
Credit Arrangements - Narrative
Credit Arrangements - Narrative (Details) $ in Thousands, $ in Millions | Aug. 03, 2018USD ($) | Jun. 03, 2015USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2018USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($)building | Nov. 09, 2015USD ($)item | Dec. 31, 2018CAD ($)loan | Dec. 31, 2018USD ($)loan | Sep. 30, 2017USD ($) | Sep. 29, 2017USD ($) | Sep. 28, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015loan | Jul. 25, 2013USD ($) | Dec. 28, 2012USD ($) |
Credit arrangements | ||||||||||||||||
Weighted average interest rate (as a percent) | 3.00% | 4.10% | 4.10% | |||||||||||||
Mortgages | ||||||||||||||||
Credit arrangements | ||||||||||||||||
Interest rate (as a percent) | 5.00% | 4.50% | 4.50% | |||||||||||||
Principal amount | $ 16,500 | |||||||||||||||
Number Of Mortgages | loan | 2 | 2 | ||||||||||||||
Number of assets secured | building | 3 | |||||||||||||||
Assumed notes | $ 4,200 | |||||||||||||||
Secured mortgage notes, maturing on January 1, 2031 | ||||||||||||||||
Credit arrangements | ||||||||||||||||
Interest rate (as a percent) | 4.30% | |||||||||||||||
Principal amount | $ 8,000 | |||||||||||||||
Number Of Mortgages | loan | 2 | |||||||||||||||
Senior secured notes | ||||||||||||||||
Credit arrangements | ||||||||||||||||
Interest rate (as a percent) | 4.60% | 3.85% | 3.65% | |||||||||||||
Principal amount | $ 25,000 | $ 25,000 | $ 50,000 | |||||||||||||
Number of tranches | item | 3 | |||||||||||||||
Prepayment penalty | $ 2,300 | |||||||||||||||
Notes Agreement | ||||||||||||||||
Credit arrangements | ||||||||||||||||
Principal amount | $ 25,000 | |||||||||||||||
Notes Agreement | Minimum | ||||||||||||||||
Credit arrangements | ||||||||||||||||
Restrictions on investments, change of control provisions and provisions as a percentage of total assets to be disposed off | 20.00% | |||||||||||||||
Notes Agreement | Maximum | ||||||||||||||||
Credit arrangements | ||||||||||||||||
Principal amount | $ 75,000 | |||||||||||||||
Commercial Equipment Notes | Minimum | ||||||||||||||||
Credit arrangements | ||||||||||||||||
Interest rate (as a percent) | 1.83% | 1.83% | ||||||||||||||
Commercial Equipment Notes | Maximum | ||||||||||||||||
Credit arrangements | ||||||||||||||||
Interest rate (as a percent) | 4.40% | 4.40% | ||||||||||||||
Credit Agreement | ||||||||||||||||
Credit arrangements | ||||||||||||||||
Maximum borrowing capacity | $ 200,000 | $ 125,000 | ||||||||||||||
Potential increase per the accordion feature | $ 75,000 | |||||||||||||||
Debt issuance costs | $ 1,000 | $ 1,000 | $ 600 | |||||||||||||
Additional Period to Issue Notes | 3 years | |||||||||||||||
Available borrowing capacity | $ 147,000 | |||||||||||||||
Credit Agreement | Federal funds rate | ||||||||||||||||
Credit arrangements | ||||||||||||||||
Basis spread on variable rate (as a percent) | 0.50% | |||||||||||||||
Credit Agreement | Minimum | ||||||||||||||||
Credit arrangements | ||||||||||||||||
Prepayment to be paid on debt | $ 5,000 | |||||||||||||||
Restrictions on investments, change of control provisions and provisions as a percentage of total assets to be disposed off | 20.00% | |||||||||||||||
Credit Agreement | Credit Agreement | ||||||||||||||||
Credit arrangements | ||||||||||||||||
Maximum borrowing capacity | 200,000 | |||||||||||||||
Maximum borrowing capacity with accordion feature | 250,000 | |||||||||||||||
Credit Agreement | Commercial letters of credit | ||||||||||||||||
Credit arrangements | ||||||||||||||||
Commercial letters of credit outstanding | 53,000 | |||||||||||||||
Term Loan | ||||||||||||||||
Credit arrangements | ||||||||||||||||
Principal amount | 220,000 | |||||||||||||||
Interest rate swap agreement | 75.00% | |||||||||||||||
Derivative fixed interest rate (as a percent) | 2.886% | 2.886% | ||||||||||||||
Term Loan | LIBOR | ||||||||||||||||
Credit arrangements | ||||||||||||||||
Basis spread on variable rate (as a percent) | 2.00% | |||||||||||||||
Term Loan | First Three Years | ||||||||||||||||
Credit arrangements | ||||||||||||||||
Quarterly principal payment | 2,750 | |||||||||||||||
Annual principal payments | $ 11,000 | |||||||||||||||
Number of years payments are to be made | 3 years | |||||||||||||||
Term Loan | Next Two Years | ||||||||||||||||
Credit arrangements | ||||||||||||||||
Quarterly principal payment | $ 4,125 | |||||||||||||||
Annual principal payments | $ 16,500 | |||||||||||||||
Canadian Credit Facility | ||||||||||||||||
Credit arrangements | ||||||||||||||||
Available borrowing capacity | $ 4 | |||||||||||||||
Canadian Credit Facility | Commercial letters of credit | ||||||||||||||||
Credit arrangements | ||||||||||||||||
Maximum borrowing capacity | $ 8 | $ 4,000 | ||||||||||||||
Annual fee (as a percent) | 1.00% | |||||||||||||||
Canadian Credit Facility | Commercial letters of credit | Maximum | ||||||||||||||||
Credit arrangements | ||||||||||||||||
Term of credit facility | 5 years |
Derivative Instruments (Details
Derivative Instruments (Details) $ in Millions | Sep. 13, 2018USD ($) | Dec. 31, 2018USD ($)instrument | Dec. 31, 2017agreement |
Derivative Instruments | |||
Number of Instruments used for trading | instrument | 0 | ||
Interest rate swap | |||
Derivative Instruments | |||
Notional Amount | $ | $ 165 | $ 160.9 | |
Notional amount interest rate | 75.00% | ||
Notional amount adjustment | 75.00% | ||
Interest rate swap agreements outstanding | agreement | 0 |
Derivative Instruments - Deriva
Derivative Instruments - Derivative contract and instruments (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Derivative Instruments | |
Liability Derivatives | $ 2,829 |
Interest rate swap | Interest expense | |
Derivative Instruments | |
Amount of Loss Recognized on Derivatives | 3,131 |
Interest rate swap | Other long-term liabilities | |
Derivative Instruments | |
Liability Derivatives | $ 2,829 |
Noncontrolling Interests (Detai
Noncontrolling Interests (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018USD ($)item | Sep. 30, 2018USD ($) | Jun. 30, 2018USD ($) | Mar. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Sep. 30, 2017USD ($) | Jun. 30, 2017USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2018USD ($)item | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |
Noncontrolling Interests | |||||||||||
Number of joint ventures | item | 2 | 2 | |||||||||
Revenue | $ 877,670 | $ 908,902 | $ 648,787 | $ 504,119 | $ 579,017 | $ 608,311 | $ 631,165 | $ 561,502 | $ 2,939,478 | $ 2,379,995 | $ 1,996,948 |
Net income attributable to noncontrolling interests | 10,132 | 4,496 | 1,002 | ||||||||
Distributions to non-controlling interests | 13,084 | ||||||||||
Cash | 151,063 | 170,385 | 151,063 | 170,385 | |||||||
Accounts receivable | 372,695 | 291,589 | 372,695 | 291,589 | |||||||
Contract assets | 364,245 | 265,902 | 364,245 | 265,902 | |||||||
Accounts payable | 249,217 | 140,943 | 249,217 | 140,943 | |||||||
Contract liabilities | 189,539 | 169,377 | 189,539 | 169,377 | |||||||
Non Controlling Interest | |||||||||||
Noncontrolling Interests | |||||||||||
Distributions to non-controlling interests | 13,084 | ||||||||||
Carlsbad | |||||||||||
Noncontrolling Interests | |||||||||||
Revenue | 102,868 | 110,669 | 7,254 | ||||||||
Net income attributable to noncontrolling interests | 9,483 | 1,780 | 325 | ||||||||
Distributions to partners | 9,000 | 0 | |||||||||
Cash | 3,117 | 44,308 | 3,117 | 44,308 | |||||||
Accounts receivable | 4,451 | 15,343 | 4,451 | 15,343 | |||||||
Contract assets | 8,158 | 8,158 | |||||||||
Accounts payable | 2,279 | 12,352 | 2,279 | 12,352 | |||||||
Contract liabilities | 5,946 | 42,743 | 5,946 | 42,743 | |||||||
Due to Primoris | 1,979 | 1,979 | |||||||||
Carlsbad | Non Controlling Interest | |||||||||||
Noncontrolling Interests | |||||||||||
Distributions to partners | 9,000 | ||||||||||
Wilmington | |||||||||||
Noncontrolling Interests | |||||||||||
Revenue | 2,133 | 31,638 | 19,781 | ||||||||
Net income attributable to noncontrolling interests | 649 | 2,716 | $ 677 | ||||||||
Distributions to partners | 4,100 | ||||||||||
Non-controlling interest distribution | 0 | ||||||||||
Cash | 10 | 15,948 | 10 | 15,948 | |||||||
Accounts receivable | 598 | 598 | |||||||||
Accounts payable | 759 | 759 | |||||||||
Contract liabilities | 1,480 | 1,480 | |||||||||
Due to Primoris | 7,428 | 7,428 | |||||||||
Wilmington | Non Controlling Interest | |||||||||||
Noncontrolling Interests | |||||||||||
Distributions to partners | 4,100 | ||||||||||
Carlsbad and Wilmington | |||||||||||
Noncontrolling Interests | |||||||||||
Cash | 3,127 | 60,256 | 3,127 | 60,256 | |||||||
Accounts receivable | 4,451 | 15,941 | 4,451 | 15,941 | |||||||
Contract assets | 8,158 | 8,158 | |||||||||
Accounts payable | 2,279 | 13,111 | 2,279 | 13,111 | |||||||
Contract liabilities | $ 5,946 | $ 44,223 | $ 5,946 | $ 44,223 |
Commitments and Contingencies -
Commitments and Contingencies - Leases (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Future minimum lease payments required under non-cancelable operating leases | |||
2,019 | $ 56,693 | ||
2,020 | 41,733 | ||
2,021 | 26,607 | ||
2,022 | 12,753 | ||
2,023 | 6,530 | ||
Thereafter | 8,229 | ||
Total | 152,545 | ||
Leases | |||
Total lease expense | $ 53,400 | $ 25,500 | $ 22,500 |
Commitments and Contingencies_2
Commitments and Contingencies - Legal (Details) - USD ($) $ in Thousands | Feb. 25, 2015 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Sep. 30, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Nov. 30, 2012 | Nov. 30, 2011 |
Commitments and contingencies | |||||||||||||||
Revenue | $ 877,670 | $ 908,902 | $ 648,787 | $ 504,119 | $ 579,017 | $ 608,311 | $ 631,165 | $ 561,502 | $ 2,939,478 | $ 2,379,995 | $ 1,996,948 | ||||
Gross profit | $ 103,253 | $ 106,505 | $ 71,419 | $ 44,560 | 68,477 | $ 70,421 | $ 84,483 | $ 55,053 | 325,737 | 278,434 | 201,307 | ||||
Disputed Receivables. | |||||||||||||||
Commitments and contingencies | |||||||||||||||
Receivable recorded relating to the project | $ 17,900 | ||||||||||||||
Revenue | 27,500 | 18,100 | |||||||||||||
Gross profit | 26,700 | 17,400 | |||||||||||||
Receipts related to disputed receivable | 38,000 | ||||||||||||||
Construction Project One | |||||||||||||||
Commitments and contingencies | |||||||||||||||
Receivable recorded relating to the project | 32,900 | 32,900 | |||||||||||||
Revenue | 18,100 | ||||||||||||||
Gross profit | 17,400 | ||||||||||||||
Reserve | 17,900 | 17,900 | |||||||||||||
Receipts related to disputed receivable | $ 32,900 | ||||||||||||||
Construction Project Two | Disputed Receivables. | |||||||||||||||
Commitments and contingencies | |||||||||||||||
Gross profit | $ 26,700 | ||||||||||||||
Receipts related to disputed receivable | $ 38,000 | ||||||||||||||
JCG | North Texas Tollway Authority v. James Construction Group, LLC | |||||||||||||||
Commitments and contingencies | |||||||||||||||
Expected remediation cost on settlement | $ 17,000 | ||||||||||||||
Percentage of expected costs second defendant would pay | 20.00% | 20.00% | |||||||||||||
Percentage of expected costs Company would pay | 80.00% | 80.00% | |||||||||||||
Remaining accrual balance | $ 18,500 | $ 18,500 | |||||||||||||
Expected remediation cost | 22,400 | ||||||||||||||
Increase in liability | 3,800 | ||||||||||||||
Remediation costs | 4,200 | ||||||||||||||
JCG | North Texas Tollway Authority v. James Construction Group, LLC | Maximum | |||||||||||||||
Commitments and contingencies | |||||||||||||||
Agreed payments by second defendant in expected remediation costs toward settlement | $ 5,400 | ||||||||||||||
Withdrawal liability for multiemployer pension plan | |||||||||||||||
Commitments and contingencies | |||||||||||||||
Withdrawal liability recorded | 4,700 | 4,700 | $ 7,600 | $ 7,500 | |||||||||||
Bonding | |||||||||||||||
Commitments and contingencies | |||||||||||||||
Bid and completion bonds issued and outstanding | $ 554,900 | $ 705,700 | $ 554,900 | $ 705,700 |
Reportable Segments (Details)
Reportable Segments (Details) $ in Thousands | 3 Months Ended | 7 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018USD ($) | Sep. 30, 2018USD ($) | Jun. 30, 2018USD ($) | Mar. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Sep. 30, 2017USD ($) | Jun. 30, 2017USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2018USD ($)segment | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |
Segment reporting information | ||||||||||||
Number of reportable segments | segment | 5 | |||||||||||
Revenue | $ 877,670 | $ 908,902 | $ 648,787 | $ 504,119 | $ 579,017 | $ 608,311 | $ 631,165 | $ 561,502 | $ 2,939,478 | $ 2,379,995 | $ 1,996,948 | |
% of Total Revenue | 100.00% | 100.00% | 100.00% | |||||||||
Gross Profit | $ 103,253 | $ 106,505 | $ 71,419 | $ 44,560 | $ 68,477 | $ 70,421 | $ 84,483 | $ 55,053 | $ 325,737 | $ 278,434 | $ 201,307 | |
% of Revenue | 11.10% | 11.70% | 10.10% | |||||||||
Power | ||||||||||||
Segment reporting information | ||||||||||||
Revenue | $ 694,048 | $ 606,125 | $ 478,653 | |||||||||
% of Total Revenue | 23.60% | 25.50% | 24.00% | |||||||||
Gross Profit | $ 109,789 | $ 65,675 | $ 49,807 | |||||||||
% of Revenue | 15.80% | 10.80% | 10.40% | |||||||||
Pipeline | ||||||||||||
Segment reporting information | ||||||||||||
Revenue | $ 590,937 | $ 465,570 | $ 401,931 | |||||||||
% of Total Revenue | 20.10% | 19.50% | 20.10% | |||||||||
Gross Profit | $ 66,602 | $ 92,087 | $ 68,100 | |||||||||
% of Revenue | 11.30% | 19.80% | 16.90% | |||||||||
Utilities | ||||||||||||
Segment reporting information | ||||||||||||
Revenue | $ 902,772 | $ 806,523 | $ 637,212 | |||||||||
% of Total Revenue | 30.70% | 33.90% | 31.90% | |||||||||
Gross Profit | $ 111,825 | $ 113,037 | $ 100,071 | |||||||||
% of Revenue | 12.40% | 14.00% | 15.70% | |||||||||
Transmission | ||||||||||||
Segment reporting information | ||||||||||||
Revenue | $ 286,749 | $ 286,749 | ||||||||||
% of Total Revenue | 9.80% | |||||||||||
Gross Profit | $ 31,904 | |||||||||||
% of Revenue | 11.10% | |||||||||||
Civil | ||||||||||||
Segment reporting information | ||||||||||||
Revenue | $ 464,972 | $ 501,777 | $ 479,152 | |||||||||
% of Total Revenue | 15.80% | 21.10% | 24.00% | |||||||||
Gross Profit | $ 5,617 | $ 7,635 | $ (16,671) | |||||||||
% of Revenue | 1.20% | 1.50% | (3.50%) |
Reportable Segments - Revenue a
Reportable Segments - Revenue and Total Assets by Geographic Area (Details) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenues and total assets by geographic area | |||
% of Revenue | 100.00% | 100.00% | 100.00% |
Non-United States | |||
Revenues and total assets by geographic area | |||
% of Revenue | 2.90% | 0.30% | 0.60% |
% of total assets | 2.80% | 1.00% |
Customer Concentrations (Detail
Customer Concentrations (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018USD ($) | Sep. 30, 2018USD ($) | Jun. 30, 2018USD ($) | Mar. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Sep. 30, 2017USD ($) | Jun. 30, 2017USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2018USD ($)customeritem | Dec. 31, 2017USD ($)customer | Dec. 31, 2016USD ($) | |
Customer concentrations | |||||||||||
Amount | $ 877,670 | $ 908,902 | $ 648,787 | $ 504,119 | $ 579,017 | $ 608,311 | $ 631,165 | $ 561,502 | $ 2,939,478 | $ 2,379,995 | $ 1,996,948 |
Unbilled revenue | 249,577 | $ 160,092 | 249,577 | 160,092 | |||||||
Utilities | |||||||||||
Customer concentrations | |||||||||||
Amount | 902,772 | 806,523 | 637,212 | ||||||||
Civil | |||||||||||
Customer concentrations | |||||||||||
Amount | 464,972 | 501,777 | 479,152 | ||||||||
Pipeline | |||||||||||
Customer concentrations | |||||||||||
Amount | 590,937 | 465,570 | 401,931 | ||||||||
Power | |||||||||||
Customer concentrations | |||||||||||
Amount | 694,048 | 606,125 | 478,653 | ||||||||
Utility Company under Chapter 11 | |||||||||||
Customer concentrations | |||||||||||
Unbilled revenue | $ 36,000 | 36,000 | |||||||||
Revenues | Customer concentration | |||||||||||
Customer concentrations | |||||||||||
Amount | $ 1,038,378 | $ 912,725 | $ 910,007 | ||||||||
Percentage | 35.30% | 38.40% | 45.60% | ||||||||
Revenues | Customer concentration | Public gas and electric utility | Utilities/Power | |||||||||||
Customer concentrations | |||||||||||
Amount | $ 250,286 | $ 210,747 | $ 184,002 | ||||||||
Percentage | 8.50% | 8.90% | 9.20% | ||||||||
Revenues | Customer concentration | Private gas and electric utility | Utilities | |||||||||||
Customer concentrations | |||||||||||
Amount | $ 232,162 | $ 190,659 | $ 201,443 | ||||||||
Percentage | 7.90% | 8.00% | 10.10% | ||||||||
Revenues | Customer concentration | State DOT | Civil | |||||||||||
Customer concentrations | |||||||||||
Amount | $ 202,452 | $ 222,142 | $ 193,049 | ||||||||
Percentage | 6.90% | 9.30% | 9.70% | ||||||||
Revenues | Customer concentration | Pipeline Operator | Pipeline | |||||||||||
Customer concentrations | |||||||||||
Amount | $ 198,198 | ||||||||||
Percentage | 6.70% | ||||||||||
Revenues | Customer concentration | Pipeline Operator | Maximum | Pipeline | |||||||||||
Customer concentrations | |||||||||||
Percentage | 5.00% | 5.00% | |||||||||
Revenues | Customer concentration | Pipeline Operator | Pipeline/Power | |||||||||||
Customer concentrations | |||||||||||
Amount | $ 155,280 | ||||||||||
Percentage | 5.30% | 5.00% | |||||||||
Revenues | Customer concentration | Pipeline Operator | Maximum | Pipeline/Power | |||||||||||
Customer concentrations | |||||||||||
Percentage | 5.00% | ||||||||||
Revenues | Customer concentration | Chemical/Energy Producer | Power/Civil | |||||||||||
Customer concentrations | |||||||||||
Amount | $ 160,995 | $ 208,458 | |||||||||
Percentage | 6.80% | 10.40% | |||||||||
Revenues | Customer concentration | Chemical/Energy Producer | Maximum | Power/Civil | |||||||||||
Customer concentrations | |||||||||||
Percentage | 5.00% | ||||||||||
Revenues | Customer concentration | Pipeline Operator | Pipeline | |||||||||||
Customer concentrations | |||||||||||
Amount | $ 128,182 | ||||||||||
Revenues | Customer concentration | Pipeline Operator | Maximum | Pipeline | |||||||||||
Customer concentrations | |||||||||||
Percentage | 5.00% | 5.40% | 5.00% | ||||||||
Revenues | Customer concentration | Pipeline Operator | Pipeline | |||||||||||
Customer concentrations | |||||||||||
Amount | $ 123,055 | ||||||||||
Percentage | 6.20% | ||||||||||
Revenues | Customer concentration | Pipeline Operator | Maximum | Pipeline | |||||||||||
Customer concentrations | |||||||||||
Percentage | 5.00% | 5.00% | |||||||||
Revenues | Customer concentration | Utility Company under Chapter 11 | |||||||||||
Customer concentrations | |||||||||||
Percentage | 8.50% | ||||||||||
Revenues | Customer concentration | Top ten customers | |||||||||||
Customer concentrations | |||||||||||
Percentage | 52.20% | 56.40% | 60.40% | ||||||||
Number of top customers | customer | 10 | ||||||||||
Number of calendar years in which top customers typically generate minimum specified percentage of revenue | item | 1 | ||||||||||
Minimum percentage of revenues generated by top ten customers | 50.00% | ||||||||||
Revenues | Customer concentration | One customer | |||||||||||
Customer concentrations | |||||||||||
Percentage | 5.30% | 8.90% | |||||||||
Accounts receivable | Customer concentration | Utility Company under Chapter 11 | |||||||||||
Customer concentrations | |||||||||||
Percentage | 1.90% | ||||||||||
Accounts receivable | Customer concentration | One customer | |||||||||||
Customer concentrations | |||||||||||
Percentage | 9.30% | 4.30% | |||||||||
Number of customers | customer | 1 | 1 |
Multiemployer Plans (Details)
Multiemployer Plans (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018USD ($)item | Dec. 31, 2017USD ($)item | Dec. 31, 2016USD ($)item | |
Multiemployer plans | |||
Number of pension plans in which annual contribution was made by the entity during last three years | item | 38 | 38 | 38 |
Number of pension plans in which the entity contributed | item | 0 | 0 | 0 |
Contributions for significant plans | $ 33,000 | $ 33,960 | $ 25,304 |
Contributions to other multiemployer plans | 15,790 | 12,975 | 8,879 |
Total contributions made | 48,790 | 46,935 | 34,183 |
Central Pension Fund of the International Union of Operating Engineers and Participating Employers | |||
Multiemployer plans | |||
Contributions for significant plans | 6,643 | 7,562 | 5,373 |
Southern California Pipetrades Trust Funds | |||
Multiemployer plans | |||
Contributions for significant plans | 5,122 | 3,219 | 2,614 |
Laborers International Union of North America National (Industrial) Pension Fund | |||
Multiemployer plans | |||
Contributions for significant plans | 3,967 | 4,658 | 2,415 |
Laborers Pension Trust Fund for Northern California | |||
Multiemployer plans | |||
Contributions for significant plans | 3,793 | 2,945 | 3,598 |
Plumbers & Pipefitters National Pension Fund | |||
Multiemployer plans | |||
Contributions for significant plans | 3,686 | 2,548 | 2,161 |
Construction Laborers Pension Trust for Southern California | |||
Multiemployer plans | |||
Contributions for significant plans | 2,873 | 2,393 | 2,742 |
Minnesota laborers Pension Fund [Member] | |||
Multiemployer plans | |||
Contributions for significant plans | 2,565 | 2,137 | 2,018 |
Operating Engineer Trust Funds | |||
Multiemployer plans | |||
Contributions for significant plans | 2,363 | 2,448 | 1,643 |
Pipeline Industry Benefit Fund | |||
Multiemployer plans | |||
Contributions for significant plans | $ 1,988 | $ 6,050 | $ 2,740 |
Company Retirement Plans (Detai
Company Retirement Plans (Details) - United States - 401(k) Plan - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Company retirement plans | |||
Employer discretionary contributions | $ 0 | $ 0 | $ 0 |
Employer's contribution | $ 4,600 | $ 4,200 | $ 4,000 |
Deferred Compensation Agreeme_3
Deferred Compensation Agreements and Stock-Based Compensation (Details) - LTR Plan - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Deferred compensation agreements | |||
Percentage of participant's annual earned bonus deferred | 50.00% | ||
Period of deferral of annual earned bonus | 1 year | ||
Total deferred compensation liability | $ 7,300 | $ 5,700 | |
Maximum percentage of participant's earned bonus amount up to which common stock can be purchased in a stock purchase plan | 16.67% | 16.67% | |
Percentage of average market closing prices used in determining number of common stock that could be purchased by participants | 75.00% | 75.00% | 75.00% |
Deferred Compensation Agreeme_4
Deferred Compensation Agreements and Stock-Based Compensation - Restricted Stock Units (Details) - Restricted Stock Units (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | 68 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2018 | |
Weighted Average Grant Date Fair Value per Unit | ||||
Accrued dividend equivalent units | 5,121 | 5,121 | ||
Restricted Stock Units | ||||
Weighted Average Grant Date Fair Value per Unit | ||||
Units granted | 403,985 | |||
Number of Units to Vest | 201,864 | 201,864 | ||
Restricted Stock Units | 2019 | ||||
Weighted Average Grant Date Fair Value per Unit | ||||
Number of Units to Vest | 57,227 | 57,227 | ||
Restricted Stock Units | 2020 | ||||
Weighted Average Grant Date Fair Value per Unit | ||||
Number of Units to Vest | 11,067 | 11,067 | ||
Restricted Stock Units | 2021 | ||||
Weighted Average Grant Date Fair Value per Unit | ||||
Number of Units to Vest | 128,889 | 128,889 | ||
Restricted Stock Units | 2022 | ||||
Weighted Average Grant Date Fair Value per Unit | ||||
Number of Units to Vest | 2,340 | 2,340 | ||
Restricted Stock Units | 2023 | ||||
Weighted Average Grant Date Fair Value per Unit | ||||
Number of Units to Vest | 2,341 | 2,341 | ||
Equity Plan | Restricted Stock Units | ||||
Weighted Average Grant Date Fair Value per Unit | ||||
Beginning Balance, Weighted Average Grant Date Fair Value per Unit | $ 23.76 | |||
Granted, Weighted Average Grant Date Fair Value per Unit | 25.53 | $ 22.90 | $ 23.87 | |
Vested, Weighted Average Grant Date Fair Value per Unit | 23.76 | |||
Ending Balance, Weighted Average Grant Date Fair Value per Unit | $ 25.03 | $ 23.76 | $ 25.03 | |
Total fair value of Units vested | $ 700 | $ 1,700 | $ 600 | |
Units granted | 144,920 | 10,000 | 100,553 | 403,985 |
Number of units issued | 28,471 | |||
Number of vested units | 202,121 | 202,121 | ||
Number of unvested units | 201,864 | 85,415 | 201,864 | |
Compensation expense recognized | $ 1,300 | $ 1,100 | $ 1,600 | |
Unrecognized compensation expense | $ 3,700 | $ 3,700 | ||
Period to recognize unrecognized compensation expense | 2 years 7 months 6 days | |||
Accrued dividend equivalent units | 5,121 | 5,121 | ||
Executives | Equity Plan | Restricted Stock Units | ||||
Weighted Average Grant Date Fair Value per Unit | ||||
Units granted | 403,985 |
Related Party Transactions (Det
Related Party Transactions (Details) $ in Millions | 1 Months Ended | 12 Months Ended | ||
Mar. 31, 2017USD ($)loan | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Feb. 28, 2017item | |
Related party transactions | ||||
Number of leased properties | item | 3 | |||
Mortgages | ||||
Related party transactions | ||||
Assumed notes | $ 4.2 | |||
SIGI | ||||
Related party transactions | ||||
Purchase of properties | $ 12.8 | |||
Lease payments to related party | $ 0.2 | $ 0.8 | ||
SIGI | Mortgages | ||||
Related party transactions | ||||
Number of mortgages assumed | loan | 3 | |||
Assumed notes | $ 4.2 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Domestic and foreign components of income before income taxes | |||
United States | $ 111,002 | $ 105,555 | $ 48,097 |
Foreign | 2,356 | (272) | 774 |
Income before provision for income taxes | 113,358 | 105,283 | 48,871 |
Current provision (benefit) | |||
Federal | 3,405 | 21,509 | 4,726 |
State | 4,536 | 3,371 | 5,423 |
Foreign | 674 | (188) | 92 |
Total | 8,615 | 24,692 | 10,241 |
Deferred provision (benefit) | |||
Federal | 14,535 | 1,958 | 11,560 |
State | 2,120 | 1,219 | (727) |
Foreign | (139) | (36) | 72 |
Total | 16,516 | 3,141 | 10,905 |
Change in valuation allowance | 634 | 600 | |
Total | $ 25,765 | $ 28,433 | $ 21,146 |
Reconciliation of income tax expense compared to the amount of income tax expense that would result by applying U.S. federal statutory income tax rate to pre-tax income | |||
Federal statutory income tax rate (as a percent) | 21.00% | 35.00% | 35.00% |
Impact of U.S tax reform | 1.10% | (9.30%) | |
State taxes, net of federal income tax impact (as a percent) | 5.10% | 2.90% | 6.40% |
Tax credits | (5.30%) | (0.40%) | |
Income taxed at rates greater than U.S. | 0.40% | (0.20%) | 0.40% |
Domestic production activities deduction (as a percent) | (2.30%) | (1.10%) | |
Nondeductible meals & entertainment (as a percent) | 2.90% | 2.80% | 5.40% |
Other items (as a percent) | (0.20%) | (0.70%) | (1.50%) |
Effective tax rate excluding the impact of the Tax Act and income attributable to noncontrolling interests (as a percent) | 25.00% | 28.20% | 44.20% |
Impact of income from noncontrolling interests on effective tax rate (as a percent) | (2.30%) | (1.20%) | (0.90%) |
Effective tax rate (as a percent) | 22.70% | 27.00% | 43.30% |
Estimated net tax benefit of Tax Act | $ 9,400 | ||
Additional income tax related to complete accounting of Tax Act | $ 1,100 | ||
Additional income tax related to foreign tax credits | 600 | ||
Additional income tax related to depreciation | 500 | ||
Deferred tax assets: | |||
Accrued compensation | 4,999 | 4,280 | |
Accrued workers compensation | 10,309 | 7,980 | |
Net operating losses | 34,615 | 982 | |
Disallowed interest | 1,908 | ||
Capital loss carryforward | 10,796 | ||
Deferred rent | 1,552 | 57 | |
Insurance reserves | 3,737 | 3,276 | |
Loss reserves | 2,064 | 2,852 | |
Tax credit | 1,505 | 2,364 | |
State income taxes | 1,045 | 463 | |
Other | 1,600 | 182 | |
Total deferred tax assets | 74,130 | 22,436 | |
Deferred tax liabilities | |||
Depreciation and amortization | (56,670) | (34,652) | |
Prepaid expense and other | (231) | (755) | |
Total deferred tax liabilities | (56,901) | (35,407) | |
Valuation allowance | (23,938) | (600) | |
Net deferred tax liabilities | $ (6,709) | (13,571) | |
Expiration period for state net operating loss carryforwards (in years) | 20 years | ||
Valuation allowance excluding foreign tax credit | $ 22,700 | ||
Minimum period of statute of limitations of state and foreign jurisdictions | 3 years | ||
Maximum period of statute of limitations of state and foreign jurisdictions | 5 years | ||
Reconciliation and aggregate changes for unrecognized tax benefits | |||
Beginning balance | $ 592 | ||
Increases in balances for tax positions taken during the current year | 146 | 592 | |
Increases in balances for tax positions taken during prior years | 2,666 | ||
Settlements and effective settlements with tax authorities | (1,979) | ||
Lapse of statute of limitations | (95) | ||
Total | 1,330 | 592 | |
Capital loss carryforward | |||
Deferred tax liabilities | |||
Tax credit carryforward | 10,800 | ||
General tax credit carryforward | |||
Deferred tax liabilities | |||
Tax credit carryforward | 1,500 | ||
ITC | |||
Deferred tax assets: | |||
Claimed tax credits | 6,100 | ||
Foreign tax credits | |||
Deferred tax liabilities | |||
Tax credit carryforward | 1,200 | ||
Federal | |||
Deferred tax liabilities | |||
Net operating loss carryforward | 20,100 | ||
State | |||
Deferred tax liabilities | |||
Net operating loss carryforward | 10,500 | ||
AUSTRALIA | Foreign | |||
Deferred tax liabilities | |||
Net operating loss carryforward | 2,600 | ||
Canada | |||
Domestic and foreign components of income before income taxes | |||
Foreign | $ 2,400 | $ (300) | $ 800 |
Reconciliation of income tax expense compared to the amount of income tax expense that would result by applying U.S. federal statutory income tax rate to pre-tax income | |||
Federal statutory income tax rate (as a percent) | 27.00% | 27.00% | 27.00% |
Canada | Foreign | |||
Deferred tax liabilities | |||
Net operating loss carryforward | $ 1,400 | ||
Maximum | |||
Deferred tax liabilities | |||
Reasonably possible decrease in unrecognized tax benefits | $ 100 |
Dividends and Earnings Per Sh_3
Dividends and Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | Nov. 02, 2018 | Aug. 02, 2018 | May 04, 2018 | Feb. 21, 2018 | Nov. 02, 2017 | Aug. 02, 2017 | May 05, 2017 | Feb. 21, 2017 | Nov. 02, 2016 | Aug. 03, 2016 | May 02, 2016 | Feb. 22, 2016 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Earnings Per Share | |||||||||||||||||||||||
Cash dividend declared (in dollars per share) | $ 0.060 | $ 0.060 | $ 0.060 | $ 0.060 | $ 0.060 | $ 0.055 | $ 0.055 | $ 0.055 | $ 0.055 | $ 0.055 | $ 0.055 | $ 0.055 | $ 0.240 | $ 0.225 | $ 0.220 | ||||||||
Numerator: | |||||||||||||||||||||||
Net income | $ 34,381 | $ 34,805 | $ 14,191 | $ 4,216 | $ 23,808 | $ 22,134 | $ 22,396 | $ 8,512 | $ 87,593 | $ 76,850 | $ 27,725 | ||||||||||||
Net income attributable to noncontrolling interests | (10,132) | (4,496) | (1,002) | ||||||||||||||||||||
Net income attributable to Primoris | $ 32,367 | $ 32,691 | $ 11,715 | $ 688 | $ 22,521 | $ 20,597 | $ 21,545 | $ 7,691 | $ 77,461 | $ 72,354 | $ 26,723 | ||||||||||||
Denominator: | |||||||||||||||||||||||
Weighted average shares for computation of basic earnings per share | 50,993 | 51,403 | 51,531 | 51,479 | 51,449 | 51,441 | 51,437 | 51,594 | 51,350 | 51,481 | 51,762 | ||||||||||||
Dilutive effect of shares issued to independent directors | 3 | 3 | 3 | ||||||||||||||||||||
Dilutive effect of restricted stock units | 317 | 257 | 224 | ||||||||||||||||||||
Weighted average shares for computation of diluted earnings per share | 51,397 | 51,735 | 51,793 | 51,747 | 51,711 | 51,707 | 51,688 | 51,851 | 51,670 | 51,741 | 51,989 | ||||||||||||
Earnings per share attributable to Primoris: | |||||||||||||||||||||||
Basic earnings per share (in dollars per share) | $ 0.63 | $ 0.64 | $ 0.23 | $ 0.01 | $ 0.44 | $ 0.40 | $ 0.42 | $ 0.15 | $ 1.51 | $ 1.41 | $ 0.52 | ||||||||||||
Diluted earnings per share (in dollars per share) | $ 0.63 | $ 0.63 | $ 0.23 | $ 0.01 | $ 0.44 | $ 0.40 | $ 0.42 | $ 0.15 | $ 1.50 | $ 1.40 | $ 0.51 |
Dividends and Earnings Per Sh_4
Dividends and Earnings Per Share - Dilutive Effect (Details) - shares | 12 Months Ended | 68 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2018 | |
Earnings per share | ||||
Accrued Dividend Equivalent Units | 5,121 | 5,121 | ||
Restricted Stock Units | ||||
Earnings per share | ||||
Granted, Units | 403,985 | |||
Equity Plan | Restricted Stock Units | ||||
Earnings per share | ||||
Granted, Units | 144,920 | 10,000 | 100,553 | 403,985 |
Accrued Dividend Equivalent Units | 5,121 | 5,121 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) $ / shares in Units, $ in Millions | 1 Months Ended | 5 Months Ended | 12 Months Ended | 68 Months Ended | ||||||||||
Aug. 31, 2018USD ($)shares | Feb. 28, 2018shares | Aug. 31, 2017shares | Mar. 31, 2017USD ($)$ / sharesshares | Feb. 28, 2017USD ($)shares | Dec. 31, 2016USD ($)$ / sharesshares | Aug. 31, 2016USD ($)shares | Feb. 29, 2016shares | Dec. 31, 2018USD ($)$ / sharesshares | Dec. 31, 2018USD ($)item$ / sharesshares | Dec. 31, 2017USD ($)$ / sharesshares | Dec. 31, 2016USD ($)$ / sharesshares | Dec. 31, 2018$ / sharesshares | May 31, 2018USD ($) | |
Common Stock | ||||||||||||||
Common stock, shares authorized | 90,000,000 | 90,000,000 | 90,000,000 | 90,000,000 | 90,000,000 | 90,000,000 | ||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||||||
Common stock, shares issued | 50,715,518 | 50,715,518 | 51,448,753 | 50,715,518 | ||||||||||
Common stock, shares outstanding | 50,715,518 | 50,715,518 | 51,448,753 | 50,715,518 | ||||||||||
Number of holders of common stock | item | 369 | |||||||||||||
Shares of common stock issued as a part of quarterly compensation of non-employee members of the Board of Directors | 10,092 | 10,062 | 11,448 | 11,784 | 11,745 | 10,450 | ||||||||
Period of restriction on trade for shares issued to non-employee members of the board of directors under the Primoris Long-term Retention Plan | 1 year | |||||||||||||
Aggregate purchase price up to which shares can be acquired under share repurchase program | $ | $ 20 | $ 5 | $ 5 | $ 5 | ||||||||||
Number of shares purchased and cancelled under the share repurchase program | 216,350 | 207,800 | 825,146 | |||||||||||
Amount paid for shares purchased and cancelled under share repurchase program | $ | $ 5 | $ 5 | $ 20 | |||||||||||
Average cost of repurchased shares of stock (in dollars per share) | $ / shares | $ 23.10 | $ 24.02 | $ 24.24 | |||||||||||
Preferred Stock | ||||||||||||||
Preferred stock, authorized (in shares) | 1,000,000 | 1,000,000 | 1,000,000 | 1,000,000 | 1,000,000 | 1,000,000 | ||||||||
Par value of preferred stock (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||||||
Preferred stock, shares outstanding | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||
Restricted Stock Units | ||||||||||||||
Common Stock | ||||||||||||||
Granted, Units | 403,985 | |||||||||||||
LTR Plan | ||||||||||||||
Common Stock | ||||||||||||||
Shares of common stock issued under the long-term incentive plan | 71,757 | 65,429 | 85,907 | |||||||||||
Amount received in exchange for shares of common stock under a long term incentive plan | $ | $ 1.5 | $ 1.1 | $ 1.4 | |||||||||||
Percentage of average market closing prices used in determining number of common stock that could be purchased by participants | 75.00% | 75.00% | 75.00% | |||||||||||
Trading restriction | 6 months | |||||||||||||
Equity Plan | ||||||||||||||
Common Stock | ||||||||||||||
Shares of common stock reserved for issuance upon exercise of all future stock option grants, SARS and grants of restricted shares under the 2013 Equity Plan | 1,614,639 | 1,614,639 | 1,614,639 | |||||||||||
Equity Plan | Restricted Stock Units | ||||||||||||||
Common Stock | ||||||||||||||
Granted, Units | 144,920 | 10,000 | 100,553 | 403,985 |
Selected Quarterly Financial _3
Selected Quarterly Financial Information (Unaudited) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Selected Quarterly Financial Information | |||||||||||
Revenue | $ 877,670 | $ 908,902 | $ 648,787 | $ 504,119 | $ 579,017 | $ 608,311 | $ 631,165 | $ 561,502 | $ 2,939,478 | $ 2,379,995 | $ 1,996,948 |
Gross Profit | 103,253 | 106,505 | 71,419 | 44,560 | 68,477 | 70,421 | 84,483 | 55,053 | 325,737 | 278,434 | 201,307 |
Net income | 34,381 | 34,805 | 14,191 | 4,216 | 23,808 | 22,134 | 22,396 | 8,512 | 87,593 | 76,850 | 27,725 |
Net income attributable to Primoris | $ 32,367 | $ 32,691 | $ 11,715 | $ 688 | $ 22,521 | $ 20,597 | $ 21,545 | $ 7,691 | $ 77,461 | $ 72,354 | $ 26,723 |
Earnings per share: | |||||||||||
Basic earnings per share (in dollars per share) | $ 0.63 | $ 0.64 | $ 0.23 | $ 0.01 | $ 0.44 | $ 0.40 | $ 0.42 | $ 0.15 | $ 1.51 | $ 1.41 | $ 0.52 |
Diluted earnings per share (in dollars per share) | $ 0.63 | $ 0.63 | $ 0.23 | $ 0.01 | $ 0.44 | $ 0.40 | $ 0.42 | $ 0.15 | $ 1.50 | $ 1.40 | $ 0.51 |
Weighted average common shares outstanding: | |||||||||||
Basic (in shares) | 50,993 | 51,403 | 51,531 | 51,479 | 51,449 | 51,441 | 51,437 | 51,594 | 51,350 | 51,481 | 51,762 |
Diluted (in shares) | 51,397 | 51,735 | 51,793 | 51,747 | 51,711 | 51,707 | 51,688 | 51,851 | 51,670 | 51,741 | 51,989 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ / shares in Units, $ in Millions | Feb. 26, 2019 | Nov. 02, 2018 | Aug. 03, 2018 | Aug. 02, 2018 | May 04, 2018 | Feb. 21, 2018 | Nov. 02, 2017 | Aug. 02, 2017 | May 05, 2017 | Feb. 21, 2017 | Nov. 02, 2016 | Aug. 03, 2016 | May 02, 2016 | Feb. 22, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Cash Dividend | |||||||||||||||||
Cash dividend declared (in dollars per share) | $ 0.060 | $ 0.060 | $ 0.060 | $ 0.060 | $ 0.060 | $ 0.055 | $ 0.055 | $ 0.055 | $ 0.055 | $ 0.055 | $ 0.055 | $ 0.055 | $ 0.240 | $ 0.225 | $ 0.220 | ||
Credit Agreement | |||||||||||||||||
Credit Agreement | |||||||||||||||||
Potential increase per the accordion feature | $ 75 | ||||||||||||||||
Term Loan | |||||||||||||||||
Credit Agreement | |||||||||||||||||
Principal amount | $ 220 | ||||||||||||||||
Term Loan | First Three Years | |||||||||||||||||
Credit Agreement | |||||||||||||||||
Number of years payments are to be made | 3 years | ||||||||||||||||
Subsequent Events | |||||||||||||||||
Cash Dividend | |||||||||||||||||
Cash dividend declared (in dollars per share) | $ 0.06 |