| Basis of Presentation and Summary of Significant Accounting Policies | Basis of Presentation and Summary of Significant Accounting Policies Basis of Presentation Prior to the Separation, Everus Construction historically operated as a wholly owned subsidiary of Centennial and an indirect, wholly owned subsidiary of MDU Resources and not as a standalone company. For periods prior to the Separation, the accompanying consolidated financial statements and footnotes were prepared on a “carve-out” basis in connection with the Separation and were derived from the audited consolidated financial statements of MDU Resources as if the Company operated on a standalone basis during the periods presented. However, the consolidated financial statements do not necessarily reflect what the Company’s results of operations, financial position and cash flows would have been had it operated as a separate, publicly traded company for those periods presented and may not be indicative of its future performance. The accompanying consolidated financial statements were prepared in conformity with generally accepted accounting principles in the United States (“GAAP”). The consolidated financial statements include all adjustments that are, in the opinion of management, necessary for a fair presentation of the consolidated financial statements and are of a normal recurring nature. The consolidated balance sheet as of December 31, 2023, reflected the assets and liabilities of Centennial that were specifically identifiable as being directly attributable to the Company. All revenues and costs as well as assets and liabilities directly associated with the business activity of the Company are included in the consolidated financial statements. For periods prior to the Separation, the consolidated financial statements included allocated expenses for certain functions provided by MDU Resources and Centennial, including, but not limited to, certain general corporate expenses related to senior management, legal, human resources, finance and accounting, treasury, information technology, internal audit, risk management and other shared services. These general corporate expenses were included in the consolidated statements of income within Cost of sales and Selling, general and administrative expenses. The amounts alloc ated were $30.4 million , $27.1 million and $21.2 million for the years ended December 31, 2024, 2023 and 2022, respectively. These expenses were allocated to the Company on the basis of direct usage where identifiable, with the remainder principally allocated on the basis of percent of total capital invested or other allocation methodologies that were considered to be a reasonable reflection of the utilization of the services provided to the benefits received. The allocations may not, however, reflect the expenses the Company would have incurred as a standalone company for the periods presented. These costs also may not be indicative of the expenses that the Company will incur in the future or would have incurred if the Company had obtained these services from a third party. Refer to Note 15 – Related-Party Transactions for more information on the transition services agreement between the Company and MDU Resources. Earnings per share information has been retrospectively adjusted for periods prior to the Separation on the consolidated statements of income to reflect the Distribution. Refer to Note 9 – Earnings Per Share for more information on the share counts used in the earnings per share calculations. Prior to the Separation, the Company historically participated in MDU Resources’ centralized cash management program through Centennial, including its overall financing arrangements. The Company had related-party agreements in place with Centennial for the financing of its capital needs, which were reflected as related-party notes payable on the consolidated balance sheets for periods prior to the Separation. Interest expense in the audited consolidated statements of income for periods prior to the Separation reflected the allocation of interest on borrowing and funding associated with the related-party agreements. Following the Separation, the Company has implemented its own centralized cash management program and has access to third-party credit facilities to fund day-to-day operations. For additional information related to the Company’s current financing arrangements and related interest expense recognition, refer to Note 7 – Debt and Note 15 – Related-Party Transactions. Prior to the Separation, MDU Resources maintained various benefit and stock-based compensation plans at a corporate level and the Company’s employees participated in these programs. The costs associated with its employees were included in the Company’s consolidated financial statements for the periods prior to the Separation. Following the Separation, the Company has its own employee benefit and stock-based compensation plans at a corporate level that its employees participate in. Refer to Note 10 – Stock-Based Compensation and Note 13 – Employee Benefit Plans for additional information. Principles of Consolidation The consolidated financial statements were prepared in accordance with GAAP and include the accounts of the Company and its wholly owned subsidiaries, as well as entities that the Company controls through its ownership of a majority voting interest or pursuant to control of a variable interest entity (“VIE”). All significant intercompany accounts and transactions between the businesses comprising the Company have been eliminated in the accompanying consolidated financial statements. The Company holds a minority economic interest in a captive insurance company, which has been determined to be a VIE. The captive insurance is structured with protected cell captives for each insured party (“Captive Cells”) in which participants’ assets and liabilities are held separately from each other. The Company is the primary beneficiary of its individual Captive Cell and has the power to direct the activities that most significantly impact economic performance of its Captive Cell, as well as the obligation to absorb losses of, and receive benefits from the activities of its Captive Cell. Accordingly, the Company has prepared these consolidated financial statements in accordance with Accounting Standards Codification (“ASC”) 810, Consolidation . ASC 810 requires that if an entity is the primary beneficiary of a VIE, the assets, liabilities, and results of operations of the VIE should be included in the consolidated financial statements of such entity. As such, the consolidated financial statements include the consolidation of only the assets and liabilities of the Company’s Captive Cell. Related-party transactions between the Company, MDU Resources, Centennial or other MDU Resources subsidiaries, for general operating activities, the Company’s participation in MDU Resources’ centralized cash management program through Centennial, and intercompany debt were included in the consolidated financial statements for periods prior to the Separation. These related-party transactions were historically settled in cash and were reflected in the consolidated balance sheets prior to the Separation as Due from related-party, Due from related-party – noncurrent, Due to related-party, or Related-party notes payable. The aggregate net effect of general related-party operating activities was reflected in the consolidated statements of cash flows within operating activities for periods prior to the Separation . The effects of the Company’s participation in MDU Resources’ centralized cash management program and intercompany debt arrangements were reflected in the consolidated statements of cash flows within investing and financing activiti es for periods prior to the Separation. Refer to Note 15 – Related-Party Transactions for additional information on related-party transactions. Subsequent Events The Company has evaluated transactions for consideration as recognized subsequent events in these consolidated financial statements through February 28, 2025, the date of issuance of these consolidated financial statements, and determined that no additional events requiring disclosure occurred. Summary of Significant Accounting Policies Revenue Recognition Revenue is recognized when a performance obligation is satisfied by transferring control over a product or service to a customer. Revenue is measured based on consideration specified in a contract with a customer and excludes any sales incentives and amounts collected on behalf of third parties. The Company is considered an agent for certain taxes collected from customers. As such, the Company presents revenues net of these taxes at the time of sale to be remitted to governmental authorities, including sales and use taxes. The Company generates revenue from specialty contracting services which also includes the sale of construction equipment and other supplies. The Company provides specialty contracting services to a customer when a contract has been signed by both the customer and a representative of the Company obligating a service to be provided in exchange for the consideration identified in the contract. The nature of the services the Company provides generally includes multiple promised goods and services in a single project to create a distinct bundle of goods and services, which the Company has determined are single performance obligations. The transaction price includes the fixed consideration required pursuant to the original contract price together with any additional consideration, to which the Company expects to be entitled to, associated with executed change orders plus the estimate of variable consideration to which the Company expects to be entitled, subject to the following constraint. The nature of the Company’s contracts gives rise to several types of variable consideration. Examples of variable consideration include: liquidated damages; performance bonuses or incentives and penalties; claims; unpriced change orders; and index pricing. The variable amounts usually arise upon achievement of certain performance metrics or change in project scope. The Company estimates the amount of revenue to be recognized on variable consideration using one of the two prescribed estimation methods, the expected value method or the most likely amount method, depending on which method best predicts the most likely amount of consideration the Company expects to be entitled to or expects to incur. Assumptions as to the occurrence of future events and the likelihood and amount of variable consideration are made during the contract performance period. Estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on the assessment of anticipated performance and all information (historical, current, and forecasted) that is reasonably available to management. The Company only includes variable consideration in the estimated transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur or when the uncertainty associated with the variable consideration is resolved. Changes in circumstances could impact management’s estimates made in determining the value of variable consideration recorded. When determining if the variable consideration is constrained, the Company considers if factors exist that could increase the likelihood or the magnitude of a potential reversal of revenue. The Company updates its estimate of the transaction price each reporting period and the effect of variable consideration on the transaction price is recognized as an adjustment to revenue on a cumulative catch-up basis. Contract revenue is recognized over time using the input method based on the measurement of progress on a project. This is the preferred method of measuring revenue because the costs incurred have been determined to represent the best indication of the overall progress toward the transfer of such goods or services promised to a customer. Under the cost-to-cost measure of progress, the costs incurred are compared with total estimated costs of a performance obligation. Revenues are recorded proportionately to the costs incurred. The Company also sells construction equipment and other supplies to third parties and internal customers. The contract for these sales is the use of a sales order or invoice, which includes the pricing and payment terms. All such contracts include a single performance obligation for the delivery of a single distinct product or a distinct separately identifiable bundle of products and services. Revenue is recognized at a point in time when the performance obligation has been satisfied with the delivery of the products or services. The warranties associated with the sales are those consistent with a standard warranty that the product meets certain specifications for quality or those required by law. For most contracts, amounts billed to customers are due within 30 days of receipt. There are no material obligations for returns, refunds or other similar obligations. The Company recognizes all other revenues when services are rendered or goods are delivered. Consolidation of Variable Interest Entities The Company has an ownership interest in a captive insurance entity, which has been determined to be a VIE, that holds and acts as the administrator of segregated account protected Captive Cells. The captive insurance company is structured with protected Captive Cells for each insured party and is not exposed to the insurance and investment risks that the Captive Cells are designed to create and distribute on behalf of the insured parties. The Company has a variable interest in the captive insurance company due to its ownership interest. However, as the captive insurance company is not exposed to the variability of the Captive Cells, only the activity of the Captive Cell whose activities are controlled by the Company is recorded in the Company’s consolidated financial statements. Cash deposits held by the Captive Cell are considered restricted cash as they are to remain in the Captive Cell. After consolidation by the Company, the total carrying amount of Cash, cash equivalents and restricted cash, Other accrued liabilities, and Other noncurrent liabilities on the consolidated balance sheet held by the Captive Cell were as follows as of December 31: 2024 (In thousands) Cash, cash equivalents and restricted cash $ 16,057 Other accrued liabilities 1,816 Other noncurrent liabilities $ 9,271 Legal Costs The Company expenses external legal fees as they are incurred. Advertising The Company expenses advertising costs as they are incurred. Advertising costs, which are included in Selling, general and administrative expenses, were $1.1 million, $0.9 million and $0.8 million for the years ended December 31, 2024, 2023 and 2022, respectively. Income Taxes Prior to the Separation, the Company’s operations were historically included in the consolidated federal income tax returns and combined and separate state income tax returns filed by MDU Resources. Pursuant to the tax sharing agreement that existed between MDU Resources and its subsidiaries, federal income taxes paid by MDU Resources, as parent of the consolidated group, were allocated to the individual subsidiaries based on separate company computations of tax. MDU Resources made a similar allocation for state income taxes paid in connection with combined state filings. Following the Separation, Everus and its subsidiaries file consolidated federal income tax returns and combined and separate state income tax returns. Pursuant to the tax sharing agreement that exists between Everus and its subsidiaries, federal income taxes paid by Everus, as parent of the consolidated group, are allocated to the individual subsidiaries based on separate company computations of tax. Everus makes a similar allocation for state income taxes paid in connection with combined state filings. The Company recognizes deferred federal and state income taxes on all temporary differences between the book and tax basis of the Company’s assets and liabilities by using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized as income in the period that includes the enactment date. The Company records uncertain tax positions in accordance with accounting guidance on accounting for income taxes on the basis of a two-step process in which (i) the Company determines whether it is more-likely-than-not that the tax position will be sustained on the basis of the technical merits of the position and (ii) for those tax positions that meet the more-likely-than-not recognition threshold, the Company recognizes the largest amount of the tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. Tax positions that do not meet the more-likely-than-not criteria are reflected as a tax liability. The Company recognizes interest and penalties accrued related to unrecognized tax benefits in income taxes in the consolidated statements of income. Joint Ventures The Company accounts for unconsolidated joint ventures using either the equity method or proportionate consolidation. For the years ended December 31, 2024, 2023 and 2022, the Company held interests between 25 percent and 50 percent in joint ventures formed primarily for the purpose of pooling resources on construction contracts. Proportionate consolidation is used for joint ventures that include unincorporated legal entities when we hold an undivided interest in each asset and are proportionately liable for our share of liabilities and the activities of the joint ventures that are construction related. For those joint ventures accounted for under proportionate consolidation, only the Company’s pro rata share of assets, liabilities, revenues and expenses are included in the Company’s consolidated financial statements. For those joint ventures accounted for using proportionate consolidation, the Company recorded operating revenues of $0.6 million, $7.8 million and $14.8 million for the years ended December 31, 2024, 2023 and 2022, respectively, and $0.2 million, $2.1 million and $3.0 million of operating income for the years ended December 31, 2024, 2023 and 2022, respectively, in the consolidated statements of income. As of December 31, 2024, the Company did not have any remaining interest in assets from these joint ventures. However, as of December 31, 2023, the Company had interest in assets from these joint ventures of $1.8 million. For those joint ventures accounted for under the equity method, the Company’s investment balances for the joint ventures are included in Investments in the consolidated balance sheets and the Company’s pro rata share of net income is included in Income from equity method investments in the consolidated statements of income. The Company’s investments in equity method joint ventures as of December 31, 2024 and 2023, were a net asset of $14.3 million and $6.2 million, respectively. For the years ended December 31, 2024, 2023 and 2022, the Company recognized income from equity method joint ventures of $12.2 million, $5.0 million and $5.9 million, respectively. Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities, at the date of the consolidated financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Estimates are used for items such as long-lived assets and goodwill; fair values of acquired assets and liabilities under the acquisition method of accounting; property depreciable lives; tax provisions; revenue recognized using the cost-to-cost measure of progress for contracts; expected credit losses; loss contingencies; costs on construction contracts; unbilled revenues; actuarially determined benefit costs; lease classification; present value of right-of-use assets and lease liabilities; and the valuation of stock-based compensation. As additional information becomes available, or actual amounts are determinable, the recorded estimates are revised. Consequently, operating results can be affected by revisions to prior accounting estimates. Stock-Based Compensation Prior to the Separation, eligible employees of the Company participated in MDU Resources’ stock-based compensation plans. The Company recorded compensation expense on awards granted by MDU Resources to its employees, including post-Separation compensation expense for certain Company employees who transferred from MDU Resources. At the time of Separation, all outstanding MDU Resources restricted stock units held by Company employees were converted into Everus restricted stock units. The converted awards will continue to vest over the original vesting periods of three years from the respective grant dates. Refer to Note 10 – Stock-Based Compensation for additional information related to the conversion to Everus restricted stock unit awards. Stock-based compensation awards are accounted for based on the estimated fair values at the grant date and compensation expense is recognized over the vesting period. The Company uses the straight-line amortization method to recognize compensation expense related to restricted stock units, which only have a service condition. This method recognizes stock compensation expense on a straight-line basis over the requisite service period for the entire award. Prior to the Separation, the Company applied a forfeiture rate estimate, consistent with MDU Resources’ accounting policy, and adjusted compensation expense accordingly. Following the Separation, the Company implemented a change in accounting policy pertaining to forfeitures and is now recognizing forfeitures when they occur and recognizes the related true-up to expense on a cumulative catch-up basis at the time of the forfeitures. Cash, Cash Equivalents and Restricted Cash The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Restricted cash represents deposits held by the Company’s Captive Cell that are to be used solely for Captive Cell’s purposes. As of December 31, 2024, the Company had $86.0 million of cash, cash equivalents, and restricted cash, including $16.1 million of restricted cash held by the Captive Cell. As of December 31, 2023, the Company had $1.6 million of cash and cash equivalents, with no restricted cash. The cash presented on the consolidated balance sheet as of December 31, 2023, represented the amounts not subjected to MDU Resources’ centralized cash management program. Receivables and Allowance for Expected Credit Losses Receivables consist primarily of trade receivables from the sale of goods and services, net of expected credit losses. The Company’s trade receivables are all due in 12 months or less. Receivables, net was summarized as follows as of December 31: 2024 2023 (In thousands) Trade receivables: Completed contracts $ 42,462 $ 42,467 Contracts in progress 546,543 409,872 Other 8,120 5,254 Receivables, gross 597,125 457,593 Less expected credit losses 7,097 7,967 Receivables, net $ 590,028 $ 449,626 The following table presents the opening and closing balances of Receivables, net, as of December 31: 2024 2023 (In thousands) Balance at beginning of period $ 449,626 $ 484,772 Change during period 140,402 (35,146) Balance at end of period $ 590,028 $ 449,626 The Company’s expected credit losses are determined using historical credit loss experience, changes in asset-specific characteristics, current conditions, and reasonable and supportable future forecasts, among other specific account data. A review of the Company’s expected credit losses is performed at least quarterly. The Company develops and documents its methodology to determine its allowance for expected credit losses. Risk characteristics used by the Company may include customer mix, knowledge of customers and general economic conditions of the various local economies, among others. Specific account balances are written off when management determines the amounts to be uncollectible. The year-to-date change in the credit loss provisions were due to outstanding receivable balances being collected that had been reserved for due to changes in economic factors related to certain customer accounts. Details of the Company’s expected credit losses were as follows: 2024 2023 2022 (In thousands) Balance at beginning of year $ 7,967 $ 2,161 $ 2,533 Current expected credit loss provision (56) 6,202 186 Less: write-offs charged against the allowance 870 455 626 Credit loss recoveries collected 56 59 68 Balance at end of year $ 7,097 $ 7,967 $ 2,161 Inventories As of December 31, 2024 and 2023, inventories consisted primarily of manufactured equipment held for resale and/or rental of $36.9 million and $37.2 million, respectively, and materials and supplies of $6.8 million and $5.5 million, respectively. These inventories are stated at the lower of average cost or net realizable value. The value of inventory may decrease due to obsolescence, physical deterioration, damage, costs to repair or other causes. Inventory valuation write-downs are determined based on specific facts and circumstances and were immaterial as a whole as of December 31, 2024 and 2023. Property, Plant and Equipment Additions to property, plant and equipment are recorded at cost. Gains or losses resulting from the retirement or disposal of assets are recognized as a component of operating income. The Company capitalizes interest, when applicable, on certain property, plant and equipment. There was no interest capitalized in 2024 or 2023. Property, plant and equipment are depreciated on a straight-line basis over the average useful lives of the assets. Goodwill Goodwill represents the excess of the purchase price over the fair value of identifiable net tangible and intangible assets acquired in a business combination. Goodwill is required to be tested for impairment annually, which the Company completes in the fourth quarter, or more frequently if events or changes in circumstances indicate that goodwill may be impaired. The Company performed its annual goodwill impairment test in the fourth quarter of 2024. The Company determined that the reporting units for its goodwill impairment test were its operating segments, or components of an operating segment, that constitute a business for which discrete financial information is available and for which management regularly reviews the operating results. As such, the Company’s reporting units are Electrical & Mechanical, Transmission & Distribution, and Wagner Smith Equipment (“WSE”). For more information on the Company’s reporting units, refer to Note 5 – Goodwill and Other Intangible Assets. Goodwill impairment, if any, is measured by comparing the fair value of each reporting unit to its carrying value. If the fair value exceeds carrying value, the goodwill of the reporting unit is not impaired. If the carrying value exceeds fair value, the Company must record a goodwill impairment loss for the amount that the carrying value of the reporting unit, including goodwill, exceeds the fair value of the reporting unit. For the years ended December 31, 2024, 2023 and 2022, there were no goodwill impairment losses recorded. As of October 31, 2024, the fair value substantially exceeded the carrying value for all reporting units. Determining the fair value of a reporting unit requires judgment and the use of significant estimates which include assumptions about the Company’s future revenue, profitability and cash flows, amount and timing of estimated capital expenditures, inflation rates, risk-adjusted cost of capital, operational plans, and current and future economic conditions, among others. Prior to the Separation under MDU Resources, for 2023 and 2022, the fair value of each reporting unit was determined using a weighted combination of income and market approaches. Following the Separation as a standalone company, for 2024, the fair value of each reporting unit was determined using an income approach. The Company believed that the estimates and assumptions used in its goodwill impairment assessments were reasonable and based on available market information. Impairment of Long-Lived Assets, Excluding Goodwill The Company reviews the carrying values of its long-lived assets, excluding goodwill, whenever events or changes in circumstances indicate that such carrying values may not be recoverable. The Company tests long-lived assets for impairment at a lower level than that of goodwill impairment testing. Long-lived assets or groups of assets are evaluated for impairment at the lowest level of independently identifiable cash flows for an individual operation or group of operations collectively serving a local market. The determination of whether a long-lived asset impairment has occurred is based on an estimate of undiscounted future cash flows attributable to the assets, compared to the carrying value of the assets. If impairment has occurred, the amount of the long-lived asset impairment recognized is determined by estimating the fair value of the assets and recording a loss if the carrying value is greater than the fair value. No long-lived asset impairment losses were recorded in 2024, 2023 or 2022. Unforeseen events and changes in circumstances could require the recognition of long-lived asset impairment losses in the future. Leases The Company determines if an arrangement contains a lease at inception of a contract and accounts for all leases in accordance with ASC 842 - Leases . The recognition of leases requires the Company to make estimates and assumptions that affect the lease classification, and the assets and liabilities recorded. The accuracy of lease assets and liabilities reported on the consolidated balance sheets depends on, among other things, management’s estimates of interest rates used to discount the lease assets and liabilities to their present value, as well as the lease terms based on the unique facts and circumstances of each lease. Lease liabilities and their corresponding right-of-use assets are recorded based on the present value of lease payments over the expected lease term. The Company recognizes leases with an original lease term of 12 months or less in net income on a straight-line basis over the term of the lease and does not recognize a corresponding right-of-use asset or lease liability. The Company’s lease agreements may contain variable lease payments based on inflation adjustments, property taxes and common area maintenance, all of which are expensed as incurred. The Company determines the lease term based on the non-cancellable and cancellable periods in each contract. The non-cancellable period consists of the term of the contract that is legally enforceable and cannot be cancelled by either party without incurring a significant penalty. The cancellable period is determined by various factors that are based on who has the right to cancel a contract. If only the lessor has the right to cancel the contract, the Company will assume the contract will continue. If the lessee is the only party that has the right to cancel the contract, the Company looks to asset, entity and market-based factors. If both the lessor and the lessee have the right to cancel the contract, the Company assumes the contract will not continue. The discount rate used to calculate the present value of the lease liabilities is based upon the implied rate within each contract. If the rate is unknown or cannot be determined, the Company uses an incremental borrowing rate, which is determined by the length of the contract, asset class and the Company’s borrowing rates, as of the commencement date of the contract. Insurance The Company entered into an insurance arrangement in anticipation of the Separation. The insurance arrangement is subject to applicable insurance rules and regulations, and insures the Company’s exposure related to workers’ compensation, general liability and automobile liability on a primary basis. These policies are subject to certain self-insured limits up to $5.0 million. The insurance arrangement establishes a reserve for estimated ultimate losses on reported claims and those incurred but not yet reported utilizing actuarial projections. The reserves are classified w |
