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Document and Entity Information - USD ($) $ in Millions	12 Months Ended
Document and Entity Information - USD ($) $ in Millions	Dec. 31, 2011	Feb. 24, 2012	Jun. 30, 2011	Dec. 31, 2010
Document and Entity Information
Entity Registrant Name	COMFORT SYSTEMS USA INC
Entity Central Index Key	0001035983
Document Type	10-K
Document Period End Date	Dec. 31, 2011
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Public Float			$ 400.8
Entity Common Stock, Shares Outstanding		37,417,859
Entity Treasury Stock, Shares	3,714,506	3,705,506		3,221,775
Document Fiscal Year Focus	2011
Document Fiscal Period Focus	FY

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Dec. 31, 2011	Dec. 31, 2010
CURRENT ASSETS:
Cash and cash equivalents	$ 51,237	$ 86,346
Accounts receivable, less allowance for doubtful accounts of $5,341 and $5,096, respectively	267,060	233,893
Other receivables	6,527	6,682
Income tax receivable		9,544
Inventories	10,631	9,365
Prepaid expenses and other	24,664	30,470
Costs and estimated earnings in excess of billings	27,163	26,648
Total current assets	387,282	402,948
PROPERTY AND EQUIPMENT, NET	42,013	43,620
GOODWILL	107,093	147,818
IDENTIFIABLE INTANGIBLE ASSETS, NET	48,349	39,616
OTHER NONCURRENT ASSETS	6,329	6,018
Total assets	591,066	640,020
CURRENT LIABILITIES:
Current maturities of long-term debt	300	300
Current maturities of notes to former owners	332	967
Accounts payable	114,255	101,134
Accrued compensation and benefits	36,474	42,577
Billings in excess of costs and estimated earnings	71,730	63,422
Accrued self-insurance expense	27,408	28,994
Other current liabilities	27,472	30,816
Total current liabilities	277,971	268,210
LONG-TERM DEBT, NET OF CURRENT MATURITIES	2,400	2,700
NOTES TO FORMER OWNERS, NET OF CURRENT MATURITIES	12,349	25,969
DEFERRED INCOME TAX LIABILITIES	4,541	18,871
OTHER LONG-TERM LIABILITIES	10,699	11,486
Total liabilities	307,960	327,236
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Preferred stock, $.01 par, 5,000,000 shares authorized, none issued and outstanding
Common stock, $.01 par, 102,969,912 shares authorized, 41,123,365 and 41,123,365 shares issued, respectively	411	411
Treasury stock, at cost, 3,714,506 and 3,221,775 shares, respectively	(39,437)	(34,714)
Additional paid-in capital	323,608	326,467
Retained earnings (deficit)	(19,991)	20,620
Comfort Systems USA, Inc. stockholders' equity	264,591	312,784
Noncontrolling interests	18,515
Total stockholders' equity	283,106	312,784
Total liabilities and stockholders' equity	$ 591,066	$ 640,020

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Dec. 31, 2011	Dec. 31, 2010
CONSOLIDATED BALANCE SHEETS
Accounts receivable, allowance for doubtful accounts (in dollars)	$ 5,341	$ 5,096
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized	102,969,912	102,969,912
Common stock, shares issued	41,123,365	41,123,365
Treasury stock, shares	3,714,506	3,221,775

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
REVENUE	$ 1,240,020	$ 1,108,282	$ 1,128,907
COST OF SERVICES	1,058,568	919,600	903,357
Gross profit	181,452	188,682	225,550
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES	172,137	163,431	169,023
GOODWILL AND OTHER INTANGIBLE ASSET IMPAIRMENTS	58,922	5,734
GAIN ON SALE OF ASSETS	(239)	(525)	(106)
Operating income (loss)	(49,368)	20,042	56,633
OTHER INCOME (EXPENSE):
Interest income	128	193	585
Interest expense	(1,886)	(1,699)	(1,202)
Changes in the fair value of contingent earn-out obligations	5,528	1,574
Other	934	267	17
Other income (expense)	4,704	335	(600)
INCOME (LOSS) BEFORE INCOME TAXES	(44,664)	20,377	56,033
INCOME TAX EXPENSE (BENEFIT)	(8,172)	6,360	21,437
INCOME (LOSS) FROM CONTINUING OPERATIONS	(36,492)	14,017	34,596
DISCONTINUED OPERATIONS:
Operating loss, net of income tax benefit of $-, $- and $181			(339)
Gain (loss) on disposition of discontinued operation, net of income tax expense of $-, $(166) and $(214)		723	(75)
NET INCOME (LOSS) INCLUDING NONCONTROLLING INTERESTS	(36,492)	14,740	34,182
Less: Net income attributable to noncontrolling interests	338
NET INCOME (LOSS) ATTRIBUTABLE TO COMFORT SYSTEMS USA, INC	$ (36,830)	$ 14,740	$ 34,182
Basic-
Income (loss) from continuing operations (in dollars per share)	$ (0.99)	$ 0.37	$ 0.91
Discontinued operations-
Loss from operations (in dollars per share)			(0.01)
Gain (loss) on disposition (in dollars per share)		0.02
Net income (loss) (in dollars per share)	(0.99)	0.39	0.90
Diluted-
Income (loss) from continuing operations (in dollars per share)	(0.99)	0.37	0.90
Discontinued operations-
Loss from operations (in dollars per share)			(0.01)
Gain (loss) on disposition (in dollars per share)		0.02
Net income (loss) (in dollars per share)	$ (0.99)	$ 0.39	$ 0.89
SHARES USED IN COMPUTING INCOME (LOSS) PER SHARE:
Basic (in shares)	37,389	37,549	38,046
Diluted (in shares)	37,389	37,790	38,451
DIVIDENDS PER SHARE (in dollars per share)	$ 0.200	$ 0.200	$ 0.190

CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2010	Dec. 31, 2009
CONSOLIDATED STATEMENTS OF OPERATIONS
Operating loss, income tax benefit		$ 181
Gain (loss) on disposition of discontinued operation, income tax expense	$ (166)	$ (214)

- Definition

Income tax expense or benefit attributable to Income or Loss from discontinued operations during the phase-out period.

+ References + Details

- Definition

Tax expense or benefit on the gain (loss), not previously recognized and resulting from the sale of a business component, which is recognized at the date of sale. A gain (loss) reflects the amount by which the consideration received exceeds (is exceeded by) the net carrying amount (reflecting previous provisions for loss on disposal, if any) of the disposal group.

+ References + Details

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands	Total	Comprehensive Income (Loss)	Common Stock	Treasury Stock	Additional Paid-In Capital	Accumulated Other Comprehensive Income (Loss)	Retained Earnings (Deficit)	Non-Controlling Interests
BALANCE at Dec. 31, 2008	$ 286,471		$ 411	$ (27,069)	$ 328,621	$ (326)	$ (15,166)
BALANCE (in shares) at Dec. 31, 2008			41,123,365	(2,453,245)
Comprehensive income:
Net income (loss)	34,182	$ 34,182					34,182
Realized gain on marketable securities reclassified into earnings, net of tax	145	145				145
Comprehensive income		34,327
Issuance of Stock:
Issuance of shares for options exercised including tax benefit	2,189			$ 3,815	(1,626)
Issuance of shares for options exercised including tax benefit (in shares)				354,700
Issuance of restricted stock				$ 2,652	(2,652)
Issuance of restricted stock (in shares)				241,857
Shares received in lieu of tax withholding payment on vested restricted stock	(459)			$ (459)
Shares received in lieu of tax withholding payment on vested restricted stock (in shares)				(45,779)
Tax benefit from vesting of restricted stock	(124)				(124)
Forfeiture of unvested restricted stock				$ (165)	165
Forfeiture of unvested restricted stock (in shares)				(15,193)
Stock-based compensation expense	3,454				3,454
Dividends	(7,290)				(1,735)		(5,555)
Share repurchase	(12,584)			$ (12,584)
Share repurchase (in shares)				(1,211,800)
BALANCE at Dec. 31, 2009	305,984		$ 411	$ (33,810)	326,103	(181)	13,461
BALANCE (in shares) at Dec. 31, 2009			41,123,365	(3,129,460)
Comprehensive income:
Net income (loss)	14,740	14,740					14,740
Realized gain on marketable securities reclassified into earnings, net of tax	181	181				$ 181
Comprehensive income		14,921
Issuance of Stock:
Issuance of shares for options exercised including tax benefit	1,107			$ 1,982	(875)
Issuance of shares for options exercised including tax benefit (in shares)				183,686
Issuance of restricted stock	250			$ 2,864	(2,614)
Issuance of restricted stock (in shares)				235,122
Shares received in lieu of tax withholding payment on vested restricted stock	(616)			$ (616)
Shares received in lieu of tax withholding payment on vested restricted stock (in shares)				(50,575)
Tax benefit from vesting of restricted stock	106				106
Forfeiture of unvested restricted stock				$ (60)	60
Forfeiture of unvested restricted stock (in shares)				(5,610)
Stock-based compensation expense	3,687				3,687
Dividends	(7,581)						(7,581)
Share repurchase	(5,074)			$ (5,074)
Share repurchase (in shares)				(454,938)
BALANCE at Dec. 31, 2010	312,784		$ 411	$ (34,714)	326,467		20,620
BALANCE (in shares) at Dec. 31, 2010			41,123,365	(3,221,775)
Comprehensive income:
Net income (loss)	(36,492)	(36,492)					(36,830)	$ 338
Comprehensive income		$ (36,492)
Issuance of Stock:
Issuance of shares for options exercised including tax benefit	449			$ 707	(258)
Issuance of shares for options exercised including tax benefit (in shares)				65,950
Issuance of restricted stock				$ 2,488	(2,488)
Issuance of restricted stock (in shares)				230,702
Shares received in lieu of tax withholding payment on vested restricted stock	(662)			$ (662)
Shares received in lieu of tax withholding payment on vested restricted stock (in shares)				(50,793)
Tax benefit from vesting of restricted stock	54				54
Stock-based compensation expense	3,604				3,604
Dividends	(7,552)				(3,771)		(3,781)
Share repurchase	(7,256)			$ (7,256)
Share repurchase (in shares)				(738,590)
Acquisition of EAS	17,377							17,377
Contribution from noncontrolling interest	800							800
BALANCE at Dec. 31, 2011	$ 283,106		$ 411	$ (39,437)	$ 323,608		$ (19,991)	$ 18,515
BALANCE (in shares) at Dec. 31, 2011			41,123,365	(3,714,506)

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) including noncontrolling interests	$ (36,492)	$ 14,740	$ 34,182
Adjustments to reconcile net income (loss) to net cash provided by operating activities -
(Gain) loss on disposition of discontinued operation		(723)	75
Write-off of debt financing costs		181
Amortization of identifiable intangible assets	7,462	6,217	3,475
Depreciation expense	12,591	11,225	10,024
Goodwill and other intangible asset impairments	58,922	5,734
Bad debt expense	936	364	3,283
Deferred tax expense (benefit)	(9,525)	(3,484)	3,151
Amortization of debt financing costs	226	157	108
Gain on sale of assets	(239)	(525)	(106)
Changes in the fair value of contingent earn-out obligations	(5,528)	(1,574)
Stock-based compensation expense	3,604	3,687	3,454
(Increase) decrease in-
Receivables, net	10,390	13,405	47,738
Inventories	(270)	1,034	1,697
Prepaid expenses and other current assets	977	(1,469)	2,043
Costs and estimated earnings in excess of billings	4,162	3,985	(271)
Other noncurrent assets	917	(813)	(480)
Increase (decrease) in-
Accounts payable and accrued liabilities	(21,477)	47	(22,889)
Billings in excess of costs and estimated earnings	5,426	(12,684)	(32,395)
Taxes paid related to pre-acquisition equity transactions of an acquired company		(7,056)
Other long-term liabilities	(2,402)	(299)	1,162
Net cash provided by operating activities	29,680	32,149	54,251
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment	(8,666)	(7,089)	(9,457)
Proceeds from sales of property and equipment	717	1,381	770
Proceeds from businesses sold	156	1,514	494
Sales of marketable securities	2,000	3,925	4,000
Cash paid for acquisitions, earn-outs and intangible assets, net of cash acquired	(29,957)	(42,732)	(14,629)
Net cash used in investing activities	(35,750)	(43,001)	(18,822)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings on revolving line of credit	0
Payments on other long-term debt	(14,387)	(17,749)	(6,341)
Debt financing costs	(517)	(896)
Payments of dividends to shareholders	(7,520)	(7,530)	(7,271)
Share repurchase program	(7,256)	(5,074)	(12,584)
Shares received in lieu of tax withholding	(662)	(616)	(459)
Excess tax benefit of stock-based compensation	210	740	641
Proceeds from exercise of options	293	473	1,420
Capital contribution from noncontrolling interests	800
Net cash used in financing activities	(29,039)	(30,652)	(24,594)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	(35,109)	(41,504)	10,835
CASH AND CASH EQUIVALENTS, beginning of year-continuing operations and discontinued operations	86,346	127,850	117,015
CASH AND CASH EQUIVALENTS, end of year-continuing operations and discontinued operations	$ 51,237	$ 86,346	$ 127,850

Business and Organization

12 Months Ended

Dec. 31, 2011

Business and Organization

Business and Organization

1. Business and Organization

Comfort Systems USA, Inc., a Delaware corporation, provides comprehensive heating, ventilation and air conditioning ("HVAC") installation, maintenance, repair and replacement services within the mechanical services industry. We operate primarily in the commercial, industrial and institutional HVAC markets and perform most of our services within office buildings, retail centers, apartment complexes, manufacturing plants and healthcare, education and government facilities. In addition to standard HVAC services, we provide specialized applications such as building automation control systems, fire protection, process cooling, electronic monitoring and process piping. Certain locations also perform related activities such as electrical service and plumbing. Approximately 43% of our consolidated 2011 revenues are attributable to installation of systems in newly constructed facilities, with the remaining 57% attributable to maintenance, repair and replacement services. The following service activities account for our consolidated 2011 revenues: HVAC 74%, plumbing 16%, building automation control systems 4% and other 6%. These service activities are within the mechanical services industry which is the single industry segment we serve.

Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2011

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

Principles of Consolidation

These financial statements are prepared in accordance with accounting principles generally accepted in the United States of America. The accompanying consolidated financial statements include our accounts and those of our subsidiaries in which we have a controlling interest. All significant intercompany accounts and transactions have been eliminated.

Reclassifications

Certain reclassifications have been made in prior period financial statements to conform to current period presentation. These reclassifications are of a normal and recurring nature and have not resulted in any changes to previously reported net income for any periods.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires the use of estimates and assumptions by management in determining the reported amounts of assets and liabilities, revenues and expenses and disclosures regarding contingent assets and liabilities. Actual results could differ from those estimates. The most significant estimates used in our financial statements affect revenue and cost recognition for construction contracts, the allowance for doubtful accounts, self-insurance accruals, deferred tax assets, warranty accruals, fair value accounting for acquisitions and the quantification of fair value for reporting units in connection with our goodwill impairment testing.

Cash Flow Information

We consider all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents.

Cash paid (in thousands) for:

	Year Ended December 31,

	2011		2010		2009
Interest	$	1,720	$	1,215	$	1,211
Income taxes for continuing operations		1,621		9,036		39,041
Income taxes for discontinued operations		—		—		17

Total	$	3,341	$	10,251	$	40,269

Revenue Recognition

Approximately 83% of our revenue was earned on a project basis and recognized through the percentage of completion method of accounting. Under this method, contract revenue recognizable at any time during the life of a contract is determined by multiplying expected total contract revenue by the percentage of contract costs incurred at any time to total estimated contract costs. More specifically, as part of the negotiation and bidding process in connection with obtaining installation contracts, we estimate our contract costs, which include all direct materials (exclusive of rebates), labor and subcontract costs and indirect costs related to contract performance, such as indirect labor, supplies, tools, repairs and depreciation costs. These contract costs are included in our results of operations under the caption "Cost of Services." Then, as we perform under those contracts, we measure costs incurred, compare them to total estimated costs to complete the contract and recognize a corresponding proportion of contract revenue. Labor costs are considered to be incurred as the work is performed. Subcontractor labor is recognized as the work is performed, but is generally subjected to approval as to milestones or other evidence of completion. Non-labor project costs consist of purchased equipment, prefabricated materials and other materials. Purchased equipment on our projects is substantially produced to job specifications and is a value added element to our work. The costs are considered to be incurred when title is transferred to us, which typically is upon delivery to the work site. Prefabricated materials, such as ductwork and piping, are generally performed at our shops and recognized as contract costs when fabricated for the unique specifications of the job. Other materials costs are not significant and are generally recorded when delivered to the work site. This measurement and comparison process requires updates to the estimate of total costs to complete the contract, and these updates may include subjective assessments.

We generally do not incur significant costs prior to receiving a contract, and therefore, these costs are expensed as incurred. In limited circumstances, when significant pre-contract costs are incurred, they are deferred if the costs can be directly associated with a specific contract and if their recoverability from the contract is probable. Upon receiving the contract, these costs are included in contract costs. Deferred costs associated with unsuccessful contract bids are written off in the period that we are informed that we will not be awarded the contract.

Project contracts typically provide for a schedule of billings or invoices to the customer based on reaching agreed upon milestones or as we incur costs. The schedules for such billings usually do not precisely match the schedule on which costs are incurred. As a result, contract revenue recognized in the statement of operations can and usually does differ from amounts that can be billed or invoiced to the customer at any point during the contract. Amounts by which cumulative contract revenue recognized on a contract as of a given date exceed cumulative billings to the customer under the contract are reflected as a current asset in our balance sheet under the caption "Costs and estimated earnings in excess of billings." Amounts by which cumulative billings to the customer under a contract as of a given date exceed cumulative contract revenue recognized on the contract are reflected as a current liability in our balance sheet under the caption "Billings in excess of costs and estimated earnings."

The percentage of completion method of accounting is also affected by changes in job performance, job conditions and final contract settlements. These factors may result in revisions to estimated costs and, therefore, revenue. Such revisions are frequently based on further estimates and subjective assessments. The effects of these revisions are recognized in the period in which the revisions are determined. When such revisions lead to a conclusion that a loss will be recognized on a contract, the full amount of the estimated ultimate loss is recognized in the period such a conclusion is reached, regardless of the percentage of completion of the contract.

Revisions to project costs and conditions can give rise to change orders under which the customer agrees to pay additional contract price. Revisions can also result in claims we might make against the customer to recover project variances that have not been satisfactorily addressed through change orders with the customer. Except in certain circumstances, we do not recognize revenues or margin based on change orders or claims until they have been agreed upon with the customer. The amount of revenue associated with unapproved change orders and claims is currently immaterial.

Variations from estimated project costs could have a significant impact on our operating results, depending on project size, and the recoverability of the variation via additional customer payments.

Revenue associated with maintenance, repair and monitoring services and related contracts are recognized as services are performed.

Accounts Receivable

Accounts receivable include amounts billed to customers under retention or retainage provisions in construction contracts. Such provisions are standard in our industry and usually allow for a small portion of progress billings or the contract price to be withheld by the customer until after we have completed work on the project, typically for a period of six months. Based on our experience with similar contracts in recent years, the majority of our billings for such retention balances at each balance sheet date are finalized and collected within the subsequent year. Retention balances at December 31, 2011 and 2010 are $51.7 million and $40.8 million, respectively, and are included in accounts receivable.

The carrying value of our receivables, net of the allowance for doubtful accounts, represents the estimated net realizable value. We estimate our allowance for doubtful accounts based upon the creditworthiness of our customers, prior collection history, ongoing relationships with our customers, the aging of past due balances, our lien rights, if any, in the property where we performed the work and the availability, if any, of payment bonds applicable to the contract. The receivables are written off when they are deemed to be uncollectible.

Inventories

Inventories consist of parts and supplies that we purchase and hold for use in the ordinary course of business and are stated at the lower of cost or market using the first-in, first-out method.

Property and Equipment

Property and equipment are stated at cost, and depreciation is computed using the straight-line method over the estimated useful lives of the assets. Leasehold improvements are capitalized and amortized over the lesser of the expected life of the lease or the estimated useful life of the asset.

Expenditures for repairs and maintenance are charged to expense when incurred. Expenditures for major renewals and betterments, which extend the useful lives of existing equipment, are capitalized and depreciated over the remaining useful life of the equipment. Upon retirement or disposition of property and equipment, the cost and related accumulated depreciation are removed from the accounts and any resulting gain or loss is recognized in "Gain on sale of assets" in the statement of operations.

Recoverability of Goodwill and Identifiable Intangible Assets

Goodwill is the excess of purchase price over the fair value of the net assets of acquired businesses. We assess goodwill for impairment each year, and more frequently if circumstances suggest an impairment may have occurred.

When the carrying value of a given reporting unit exceeds its fair value, an impairment loss is recorded to the extent that the implied fair value of the goodwill of the reporting unit is less than its carrying value. If other reporting units have had increases in fair value, such increases may not be recorded. Accordingly, such increases may not be netted against impairments at other reporting units. The requirements for assessing whether goodwill has been impaired involve market-based information. This information, and its use in assessing goodwill, entails some degree of subjective assessment.

We currently perform our annual impairment testing as of October 1 and any impairment charges resulting from this process are reported in the fourth quarter. We segregate our operations into reporting units based on the degree of operating and financial independence of each unit and our related management of them. We perform our annual goodwill impairment testing at the reporting unit level.

In the evaluation of goodwill for impairment, we have the option to first assess qualitative factors to determine whether the existence of events or circumstances lead to a determination that it is more likely than not that the fair value of one of our reporting units is greater than its carrying value. If, after completing such assessment, we determine it is more likely than not that the fair value of a reporting unit is greater than its carrying amount, then there is no need to perform any further testing. If we conclude otherwise, then we perform the first step of a two-step impairment test by calculating the fair value of the reporting unit and comparing the fair value with the carrying value of the reporting unit.

We estimate the fair value of the reporting unit based on two market approaches and an income approach, which utilizes discounted future cash flows. Assumptions critical to the fair value estimates under the discounted cash flow model include discount rates, cash flow projections, projected long-term growth rates and the determination of terminal values. The market approaches utilized market multiples of invested capital from comparable publicly traded companies ("public company approach") and comparable transactions ("transaction approach"). The market multiples from invested capital include revenue, book equity plus debt and earnings before interest, taxes, depreciation and amortization ("EBITDA").

We amortize identifiable intangible assets with finite lives over their useful lives. Changes in strategy and/or market condition may result in adjustments to recorded intangible asset balances.

Long-Lived Assets

Long-lived assets are comprised principally of goodwill, identifiable intangible assets, property and equipment, and deferred income tax assets. We periodically evaluate whether events and circumstances have occurred that indicate that the remaining balances of these assets may not be recoverable. We use estimates of future income from operations and cash flows, as well as other economic and business factors, to assess the recoverability of these assets.

Acquisitions

We recognize assets acquired and liabilities assumed in business combinations, including contingent assets and liabilities, based on fair value estimates as of the date of acquisition.

Contingent Consideration—In certain acquisitions, we agree to pay additional amounts to sellers contingent upon achievement by the acquired businesses of certain predetermined profitability targets. Beginning in 2009, we have recognized liabilities for these contingent obligations based on their estimated fair value at the date of acquisition with any differences between the acquisition date fair value and the ultimate settlement of the obligations being recognized in income from operations. For acquisitions prior to 2009, these obligations are recognized as incurred and accounted for as an adjustment to the initial purchase price of the acquired assets.

Contingent Assets and Liabilities—Assets and liabilities arising from contingencies are recognized at their acquisition date fair value when their respective fair values can be determined. If the fair values of such contingencies cannot be determined, they are recognized at the acquisition date if the contingencies are probable and an amount can be reasonably estimated. Acquisition date fair value estimates are revised as necessary if, and when, additional information regarding these contingencies becomes available to further define and quantify assets acquired and liabilities assumed.

Self-Insurance Liabilities

We are substantially self-insured for workers' compensation, employer's liability, auto liability, general liability and employee group health claims, in view of the relatively high per-incident deductibles we absorb under our insurance arrangements for these risks. Losses up to deductible amounts are estimated and accrued based upon known facts, historical trends and industry averages. Loss estimates associated with the larger and longer-developing risks—workers' compensation, auto liability and general liability—are reviewed by a third-party actuary quarterly. Our self-insurance arrangements are further discussed in Note 12 "Commitments and Contingencies."

Warranty Costs

We typically warrant labor for the first year after installation on new HVAC systems. We generally warrant labor for thirty days after servicing of existing HVAC systems. A reserve for warranty costs is estimated and recorded based upon the historical level of warranty claims and management's estimate of future costs.

Income Taxes

We are subject to income tax in the United States and Puerto Rico and file a consolidated return for federal income tax purposes. Income taxes are provided for under the liability method, which takes into account differences between financial statement treatment and tax treatment of certain transactions.

Deferred income taxes are based on the difference between the financial reporting and tax basis of assets and liabilities. The deferred income tax provision represents the change during the reporting period in the deferred tax assets and deferred tax liabilities, net of the effect of acquisitions and dispositions. Deferred tax assets include tax loss and credit carry-forwards and are reduced by a valuation allowance if, based on available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized.

We regularly evaluate valuation allowances established for deferred tax assets for which future realization is uncertain. We perform this evaluation quarterly. Estimations of required valuation allowances include estimates of future taxable income. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which the activity underlying these assets becomes deductible. We consider projected future taxable income and tax planning strategies in making this assessment. If actual future taxable income is less than the estimates, we may not realize all or a portion of the recorded deferred tax assets.

Significant judgment is required in assessing the timing and amounts of deductible and taxable items. We establish reserves when, despite our belief that our tax return positions are fully supportable, we believe that certain positions may be challenged and potentially disallowed. When facts and circumstances change, we adjust these reserves through our provision for income taxes.

To the extent interest and penalties may be assessed by taxing authorities on any underpayment of income tax, such amounts have been accrued and are classified as a component of income tax expense in our Consolidated Statements of Operations.

Segment Disclosure

Our activities are within the mechanical services industry, which is the single industry segment we serve. Each operating subsidiary represents an operating segment and these segments have been aggregated, as the operating units meet all of the aggregation criteria.

Concentrations of Credit Risk

We provide services in a broad range of geographic regions. Our credit risk primarily consists of receivables from a variety of customers including general contractors, property owners and developers and commercial and industrial companies. We are subject to potential credit risk related to changes in business and economic factors throughout the United States within the nonresidential construction industry. However, we are entitled to payment for work performed and have certain lien rights in that work. Further, we believe that our contract acceptance, billing and collection policies are adequate to manage potential credit risk. We regularly review our accounts receivable and estimate an allowance for uncollectible amounts. We have a diverse customer base, with no single customer accounting for more than 2% of consolidated 2011 revenues.

Financial Instruments

Our financial instruments consist of cash and cash equivalents, accounts receivable, other receivables, accounts payable, notes to former owners and a revolving credit facility. We believe that the carrying values of these instruments on the accompanying balance sheets approximate their fair values.

Fair Value Measurements

12 Months Ended

Dec. 31, 2011

Fair Value Measurements

Fair Value Measurements

3. Fair Value Measurements

We classify and disclose assets and liabilities carried at fair value in one of the following three categories:

•

Level 1—quoted prices in active markets for identical assets and liabilities;

•

Level 2—observable market based inputs or unobservable inputs that are corroborated by market data; and

•

Level 3—significant unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.

The following table summarizes the fair values, and levels within the fair value hierarchy in which the fair value measurements fall, for assets and liabilities measured on a recurring basis as of December 31, 2011 (in thousands):

			Fair Value Measurements at Reporting Date Using

	Balance December 31, 2011		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash and cash equivalents	$	51,237	$	51,237	$	—	$	—
Contingent earn-out obligations	$	2,488	$	—	$	—	$	2,488

Cash and cash equivalents consist primarily of highly rated money market funds at a variety of well-known institutions with original maturities of three months or less. The original cost of these assets approximates fair value due to their short term maturity.

As of December 31, 2010, our marketable securities consisted of $2.0 million of auction rate securities, which are variable rate debt instruments, having long-term maturities (with final maturities up to June 2032). We sold the entire $2.0 million of these auction rate securities (Level 2) during the first quarter of 2011 at face value.

We value contingent earn-out obligations using a probability weighted discounted cash flow method. This fair value measurement is based on significant unobservable inputs in the market and thus represents a Level 3 measurement within the fair value hierarchy. This analysis reflects the contractual terms of the purchase agreements (e.g., minimum and maximum payments, length of earn-out periods, manner of calculating any amounts due, etc.) and utilizes assumptions with regard to future cash flows, probabilities of achieving such future cash flows and a discount rate. The contingent earn-out obligations are measured at fair value each reporting period and changes in estimates of fair value are recognized in earnings.

The table below presents a reconciliation of the fair value of our contingent earn-out obligations that use significant unobservable inputs (Level 3).

	December 31, 2011			December 31, 2010

Balance at beginning of year	$	7,466		$	2,380
Issuances (See Note 4)		550			6,660
Adjustments to fair value		(5,528	)		(1,574	)

Balance at end of year	$	2,488		$	7,466

We measure certain assets at fair value on a nonrecurring basis. These assets are recognized at fair value when they are deemed to be other-than-temporarily impaired. During the year ended December 31, 2011, we recorded a goodwill impairment charge of $57.3 million and an intangible asset impairment charge of $1.6 million based on Level 3 measurements. See Note 6 "Goodwill and Identifiable Intangible Assets, Net" for further discussion. We did not recognize any other impairments on those assets required to be measured at fair value on a nonrecurring basis.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 133
-Paragraph 44A, 44B
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 107
-Paragraph 15C, 15D
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 3: http://www.xbrl.org/2003/role/presentationRef
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-Name Statement of Financial Accounting Standard (FAS)
-Number 107
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Reference 4: http://www.xbrl.org/2003/role/presentationRef
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Reference 5: http://www.xbrl.org/2003/role/presentationRef
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Reference 6: http://www.xbrl.org/2003/role/presentationRef
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Reference 7: http://www.xbrl.org/2003/role/presentationRef
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+ Details

Acquisitions

12 Months Ended

Dec. 31, 2011

Acquisitions

Acquisitions

4. Acquisitions

Description of Transaction

On November 2, 2011, we acquired a 60% majority interest in Environmental Air Systems, LLC ("EAS"). EAS is a regional mechanical contractor with principal offices in Greensboro and Raleigh, North Carolina. EAS engages in a broad range of mechanical contracting projects, HVAC service and controls, and sophisticated prefabrication of mechanical systems, in North Carolina, South Carolina and throughout the Atlantic region. The Company's consolidated statements of operations since the acquisition date include revenue of $18.2 million and pre-tax income attributable to Comfort Systems of $0.5 million.

Fair Value

The following summarizes the acquisition date fair value of consideration transferred, noncontrolling interest, identifiable assets acquired and liabilities assumed, including an amount for goodwill (in thousands):


Cash and cash equivalents		252
Receivables		32,467
Costs and estimated earnings in excess of billings		4,677
Other current assets		1,252
Property and equipment		2,790
Other non-current assets		2,168
Goodwill		15,672
Identifiable intangible assets		16,200
Accounts payable and other current liabilities		(20,581	)
Billings in excess of costs and estimated earnings		(2,882	)
Other long-term liabilities		(4,228	)
Noncontrolling interest		(17,377	)

Total purchase price	$	30,410

The total purchase price was $30.4 million, including $27.6 million in cash, a $2.3 million future payment to the owners of the noncontrolling interest and a $0.6 million contingent earn-out obligation. The future payment to the owners of the noncontrolling interest is payable two years after the acquisition date.

The contingent earn-out obligation is based upon exceeding specified earnings milestones each year during a three-year period and the range of estimated milestone payments is from zero to $7 million (undiscounted). We determined the initial fair value of the contingent earn-out obligation based on a probability weighted income approach, which represents a Level 3 measurement. The resulting probability-weighted cash flows were discounted using a 10% discount rate, which we believe is appropriate and representative of a market participant assumption. We measure the contingent earn-out obligation at fair value each reporting period and changes in the estimated fair value of the contingent payments are recognized in earnings.

Goodwill represents the future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. All of the goodwill recognized as a result of this transaction is tax deductible.

The acquired intangible assets include the following (in thousands):

	Valuation Method	Estimated Amortization Life	Estimated Value

Backlog	Excess earnings	1 year	$	1,100
Customer relationships	Excess earnings	15 years		9,700
Trade name	Relief-from-royalty	15 - 25 years		5,400

Total acquired intangible assets			$	16,200

In estimating the fair value of the acquired intangible assets, we utilized the valuation methodology determined to be the most appropriate for the individual intangible asset. In order to estimate the fair value of the backlog and customer relationships, we utilized an excess earnings methodology, which consisted of the projected cash flows attributable to these assets discounted to present value using a risk-adjusted discount rate that represented the required rate of return. The trade name value was determined based on the relief-from-royalty method, which applies a royalty rate to the revenue stream attributable to this asset and the resulting royalty payment is tax effected and discounted to present value. Some of the more significant estimates and assumptions inherent in determining the fair value of the identifiable intangible assets are associated with forecasting cash flows and profitability, which represent Level 3 inputs. The primary assumptions used were generally based upon the present value of anticipated cash flows discounted at rates ranging from 11%-18%. Estimated years of projected earnings generally follow the range of estimated remaining useful lives for each intangible asset class.

The fair value of the 40% noncontrolling interest in EAS is estimated to be $17.4 million. The fair value of the noncontrolling interest was estimated using an income approach. The fair value measurement is based on significant inputs that are not observable in the market and thus represents a Level 3 measurement. The fair value estimate is based on a discount rate of approximately 15%, long-term sustainable growth rates of approximately 3% and adjustments for lack of control and lack of marketability that market participants would consider when estimating the fair value of the noncontrolling interest in EAS.

Our consolidated balance sheets include preliminary allocations of the purchase price to the assets acquired and liabilities assumed based on estimates of fair value, pending completion of final valuation and purchase price adjustments.

Acquisition of ColonialWebb

On July 28, 2010, we entered into a stock purchase agreement to purchase all of the issued and outstanding stock of ColonialWebb Contractors Company ("ColonialWebb"). ColonialWebb operates as a comprehensive, single-source construction, service, manufacturing and refrigeration service firm servicing the Mid-Atlantic region. ColonialWebb is headquartered in Richmond, Virginia with seven other locations. The acquisition date fair value of consideration transferred was $110.3 million, of which $49.9 million was allocated to goodwill. See Note 6 "Goodwill and Identifiable Intangible Assets, Net" for discussion of the goodwill impairment of ColonialWebb recorded during 2011.

Other Acquisitions

We completed various acquisitions from 2009 to 2011, which were not material, individually or in the aggregate, and were "tucked-in" with existing operations. Our consolidated balance sheet includes preliminary allocations of the purchase price to the assets acquired and liabilities assumed based on estimates of fair value, pending completion of final valuation and purchase price adjustments. The results of operations of acquisitions are included in our consolidated financial statements from their respective acquisition dates. Additional contingent purchase price ("earn-out") has been or will be paid if certain acquisitions achieve predetermined profitability targets. The total purchase price for these acquisitions, including earn-outs, was $2.9 million in 2011, $4.8 million in 2010 and $20.2 million in 2009.

- Definition

The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable).

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Emerging Issues Task Force (EITF)
-Number 88-16
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
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+ Details

Discontinued Operations

12 Months Ended

Dec. 31, 2011

Discontinued Operations

Discontinued Operations

5. Discontinued Operations

We sold a small operating company in June 2009. This company's after-tax loss of $0.3 million for the year ended December 31, 2009, has been reported in discontinued operations under "Operating loss, net of income tax benefit." We recorded an estimated loss on the sale of this company of $1.0 million in 2009. During 2010, we recorded an income tax benefit of $0.3 million related to the adjustment of certain valuation allowances related to this discontinued operation. In addition, during 2010, we recorded a gain of $0.2 million related to a settlement with the former owner of the company which was offset by income tax expense of $0.2 million. This has been reported in discontinued operations under "Gain (loss) on disposition of discontinued operation, net of income tax expense."

Sale of Companies to Emcor—We sold 19 operations to Emcor Group, Inc. ("Emcor") in 2002. The total purchase price was $186.25 million, including the assumption by Emcor of approximately $22.1 million of subordinated notes to former owners of certain of the divested companies. Of Emcor's purchase price, $5 million was deposited into an escrow account to secure potential obligations on our part to indemnify Emcor for future claims and contingencies arising from events and circumstances prior to closing, all as specified in the transaction documents. Of this escrow, $4 million has been applied in determining our liability to Emcor in connection with the settlement of certain claims. The remaining $1 million of escrow was disbursed to us in March 2010.

There are ongoing open matters relating to this transaction that we continue to address with Emcor. We do not believe these open matters, either individually or in the aggregate, will have a material adverse effect on our financial position when ultimately resolved. During 2009, we recorded a gain of $0.8 million based upon a review of open matters. In connection with the final escrow release in 2010, we recorded an additional gain of $0.5 million (net of income tax expense of $0.3 million) based upon a further review of open matters. These amounts are included in discontinued operations under "Gain (loss) on disposition of discontinued operation, net of income tax expense."

Our consolidated statements of operations and the related earnings per share amounts have been restated to reflect the effects of the discontinued operations. No interest expense is allocated to discontinued operations.

Revenue and pre-tax loss related to discontinued operations are as follows (in thousands):

	Year Ended December 31,

	2011		2010		2009
Revenue	$	—	$	—	$	1,795
Pre-tax loss	$	—	$	—	$	(520	)

- Definition

The entire disclosure for the facts and circumstances leading to the completed or expected disposal, manner and timing of disposal, the gain (loss) recognized in the income statement and the income statement caption that includes that gain (loss), amounts of revenues and pretax profit or loss reported in discontinued operations, the segment in which the disposal group was reported, and the classification (whether sold or classified as held for sale) and carrying value of the assets and liabilities comprising the disposal group. Includes all disposal groups, including those classified as components of the entity (discontinued operations).

+ References

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-Name Statement of Financial Accounting Standard (FAS)
-Number 144
-Paragraph 43-48
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+ Details

Goodwill and Identifiable Intangible Assets, Net

12 Months Ended

Dec. 31, 2011

Goodwill and Identifiable Intangible Assets, Net

Goodwill and Identifiable Intangible Assets, Net

6. Goodwill and Identifiable Intangible Assets, Net

Goodwill

The changes in the carrying amount of goodwill are as follows (in thousands):

	December 31, 2011			December 31, 2010

Balance at beginning of year	$	147,818		$	100,194
Additions (See Note 4)		16,629			53,358
Impairment adjustment		(57,354	)		(5,734	)

Balance at end of year	$	107,093		$	147,818

We perform our annual impairment testing on October 1, or more frequently, if events and circumstances indicate impairment may have occurred. As discussed in Note 2, "Summary of Significant Accounting Policies," we first perform a qualitative assessment to determine whether it is more likely than not that the fair value of the reporting unit is less than the carrying amount. If so, we perform a quantitative assessment and compare the fair value of the reporting unit to the carrying value.

During the third quarter of 2011 and prior to our annual impairment testing on October 1, we concluded that impairment indicators existed at four reporting units serving the Virginia, Maryland and North Carolina markets, including ColonialWebb, based upon year to date results and recent forecasts. Significant declines in year to date revenues and operating margins through the summer months when the demand for new installation and replacement services is generally higher caused us to revise our expectations in our financial models for these reporting units.

The fair value of each reporting unit was estimated using a discounted cash flow model combined with market valuation approaches. We assigned a weighting of 50% to the discounted cash flow analysis and 50% to the public company approach. There was no weighting assigned to the transaction approach due to the lack of comparable market data in 2011. The material assumptions used for the income approach included a weighted average cost of capital of 13% and a long-term growth rate of 2-3%. These reporting units had a total goodwill balance of $75.7 million. The combined implied fair value was less than the combined carrying value of goodwill and we recorded a non-cash goodwill impairment charge of $55.1 million.

We previously disclosed that our assessment of the goodwill impairment charge was preliminary. During the fourth quarter, we adjusted our estimate of the weighted average cost of capital for our Maryland reporting unit to 19%, which resulted in an additional impairment charge for the remaining $2.2 million of goodwill.

Under the income approach which is weighted 50%, a one percentage point increase in the discount rate and a one percentage point decrease in the long-term growth rate would have decreased the fair value of each of these reporting units ranging from $0.1 million to $1.8 million. Under the public company market approach which has a weighting of 50%, a 10% decrease in the market approach multiples would have decreased the fair value of each of these reporting units by $0.2 million to $2.5 million.

During our annual impairment testing on October 1, we performed the qualitative assessment described above for the remaining 21 reporting units that have a goodwill balance. Based on this assessment, we concluded that it was more likely than not that the fair value of each of the reporting units was greater than its carrying amount. Accordingly, no further testing was required. In making this determination, we considered changes in the carrying value of the reporting unit, forecasted operating results, long-term growth rates and discount rates. Additionally, we considered qualitative key events and circumstances (i.e. changes in the competitive environment, cost factors, etc.).

During 2010 and 2009, the fair value of each reporting unit was estimated using a discounted cash flow model combined with market valuation approaches. We assigned a weighting of 50% to the discounted cash flow analysis, 40% to the public company approach and 10% to the transaction approach for the year ended December 31, 2010. We assigned a weighting of 40% to the discounted cash flow analysis and 60% to the public company approach for the year ended December 31, 2009. There was no weighting assigned to the transaction approach due to the lack of comparable market data in 2009. We recorded a goodwill impairment of $5.7 million during 2010 related to our Delaware location. There was no impairment of goodwill as a result of our annual goodwill impairment test in 2009. We also did not encounter any events or changes in circumstances that indicated that an impairment was more likely than not during interim periods in 2009.

There are significant inherent uncertainties and management judgment involved in estimating the fair value of each reporting unit. While we believe we have made reasonable estimates and assumptions to estimate the fair value of our reporting units, it is possible that a material change could occur. If actual results are not consistent with our current estimates and assumptions, or the current economic downturn worsens or the projected recovery is significantly delayed beyond our projections, goodwill impairment charges may be recorded in future periods.

Identifiable Intangible Assets, Net

Identifiable intangible assets consist of the following (dollars in thousands):

		December 31, 2011					December 31, 2010

	Estimated Useful Lives in Years	Gross Book Value		Accumulated Amortization			Gross Book Value		Accumulated Amortization
Customer relationships	2 - 15	$	36,351	$	(9,880	)	$	25,948	$	(5,378	)
Backlog	1 - 2		5,890		(4,999	)		4,740		(4,253	)
Noncompete agreements	2 - 7		2,890		(1,932	)		3,490		(1,710	)
Tradenames	2 - 25		23,370		(3,341	)		19,570		(2,791	)

Total		$	68,501	$	(20,152	)	$	53,748	$	(14,132	)

As discussed in Note 4, we acquired $16.2 million of intangible assets related to the acquisition of EAS.

The amounts attributable to customer relationships, noncompete agreements and tradenames are being amortized to "Selling, General and Administrative Expenses" on a pattern of economic benefit or a straight-line method over periods from two to twenty-five years. The amounts attributable to backlog are being amortized to "Cost of Services" on a proportionate method over the remaining backlog period. Amortization expense for the years ended December 31, 2011, 2010 and 2009 was $7.5 million, $6.2 million and $3.5 million, respectively.

At December 31, 2011, future amortization expense of identifiable intangible assets is as follows (in thousands):


Year ended December 31—
2012	$	7,859
2013		6,397
2014		5,457
2015		4,358
2016		3,336
Thereafter		20,942

Total	$	48,349

We recorded an intangible asset impairment of $1.6 million during 2011. This impairment charge resulted from our estimation that the carrying value may not be fully recoverable at our operating location in Delaware.

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

+ References + Details

Property and Equipment

12 Months Ended

Dec. 31, 2011

Property and Equipment

Property and Equipment

7. Property and Equipment

Property and equipment consist of the following (dollars in thousands):

		December 31,

	Estimated Useful Lives in Years	December 31,
	Estimated Useful Lives in Years	2011			2010
Land	—	$	2,282		$	2,282
Transportation equipment	2 - 7		34,991			30,964
Machinery and equipment	2 - 15		21,482			19,550
Computer and telephone equipment	2 - 7		17,587			16,740
Buildings and leasehold improvements	2 - 40		23,612			22,853
Furniture and fixtures	3 - 10		4,913			4,764

			104,867			97,153
Less—Accumulated depreciation			(62,854	)		(53,533	)

Property and equipment, net		$	42,013		$	43,620

Depreciation expense for the years ended December 31, 2011, 2010 and 2009 was $12.6 million, $11.2 million and $10.0 million, respectively.

- Definition

The entire disclosure for long-lived, physical assets that are used in the normal conduct of business to produce goods and services and not intended for resale. Examples include land, buildings, machinery and equipment, and other types of furniture and equipment including, but not limited to, office equipment, furniture and fixtures, and computer equipment and software. This disclosure may include property plant and equipment accounting policies and methodology, a schedule of property, plant and equipment gross, additions, deletions, transfers and other changes, depreciation, depletion and amortization expense, net, accumulated depreciation, depletion and amortization expense and useful lives, income statement disclosures, assets held for sale and public utility disclosures.

+ References + Details

Detail of Certain Balance Sheet Accounts

12 Months Ended

Dec. 31, 2011

Detail of Certain Balance Sheet Accounts

Detail of Certain Balance Sheet Accounts

8. Detail of Certain Balance Sheet Accounts

Activity in our allowance for doubtful accounts consists of the following (in thousands):

	December 31,

	2011			2010			2009
Balance at beginning of year	$	5,096		$	7,253		$	5,250
Additions for bad debt expense		936			364			3,283
Deductions for uncollectible receivables written off, net of recoveries		(833	)		(2,699	)		(1,313	)
Allowance for doubtful accounts of acquired companies at date of acquisition		142			178			33

Balance at end of year	$	5,341		$	5,096		$	7,253

Other current liabilities consist of the following (in thousands):

	December 31,

	2011		2010
Accrued warranty costs	$	8,363	$	9,925
Accrued backcharges		—		6,489
Accrued job losses		2,060		1,670
Accrued rent and lease obligations		2,793		1,158
Accrued sales and use tax		1,498		1,500
Deferred revenue		1,607		1,692
Other current liabilities		11,151		8,382

	$	27,472	$	30,816

Contracts in progress are as follows (in thousands):

	December 31,

	2011			2010
Costs incurred on contracts in progress	$	837,288		$	1,127,688
Estimated earnings, net of losses		54,911			202,295
Less—Billings to date		(936,766	)		(1,366,757	)

	$	(44,567	)	$	(36,774	)

Costs and estimated earnings in excess of billings	$	27,163		$	26,648
Billings in excess of costs and estimated earnings		(71,730	)		(63,422	)

	$	(44,567	)	$	(36,774	)

Long-Term Debt Obligations

12 Months Ended

Dec. 31, 2011

Long-Term Debt Obligations

Long-Term Debt Obligations

9. Long-Term Debt Obligations

Long-term debt obligations consist of the following (in thousands):

	December 31,

	2011			2010
Revolving credit facility	$	—		$	—
Other debt		2,700			3,000
Notes to former owners		12,681			26,936

Total debt		15,381			29,936
Less—current portion		(632	)		(1,267	)

Total long-term portion of debt	$	14,749		$	28,669

At December 31, 2011, future principal payments of long-term debt are as follows (in thousands):


Year ended December 31—
2012	$	632
2013		650
2014		12,299
2015		300
2016		300
Thereafter		1,200

	$	15,381

Interest expense included the following primary elements (in thousands):

	Year Ended December 31,

	2011		2010		2009
Interest expense on notes to former owners	$	795	$	627	$	505
Interest expense on borrowings and unused commitment fees		243		287		127
Letter of credit fees		622		447		462
Amortization of debt financing costs		226		338		108

Total	$	1,886	$	1,699	$	1,202

Revolving Credit Facility

On September 23, 2011, we amended our $125.0 million senior credit facility (the "Facility") provided by a syndicate of banks. The Facility, which is available for borrowings and letters of credit, now expires in September 2016 and is secured by the capital stock of our current and future subsidiaries. As of December 31, 2011, we had no outstanding borrowings, $42.7 million in letters of credit outstanding, and $82.3 million of credit available.

Collateral

A common practice in our industry is the posting of payment and performance bonds with customers. These bonds are offered by financial institutions known as sureties, and provide assurance to the customer that in the event we encounter significant financial or operational difficulties, the surety will arrange for the completion of our contractual obligations and for the payment of our vendors on the projects subject to the bonds. In cooperation with our lenders, we granted our sureties a first lien on assets such as receivables, costs and estimated earnings in excess of billings, and equipment specifically identifiable to projects for which bonds are outstanding, as collateral for potential obligations under bonds. As of December 31, 2011 the amount of these assets was approximately $76.3 million.

Covenants and Restrictions

The Facility contains financial covenants defining various financial measures and the levels of these measures with which we must comply. Covenant compliance is assessed as of each quarter end. Credit Facility Adjusted EBITDA is defined under the Facility for financial covenant purposes as net earnings for the four quarters ending as of any given quarterly covenant compliance measurement date, plus the corresponding amounts for (a) interest expense; (b) income taxes; (c) depreciation and amortization; (d) other non-cash charges and (e) pre-acquisition results of acquired companies. The following is a reconciliation of Credit Facility Adjusted EBITDA to net income (in thousands):


Net loss including noncontrolling interests	$	(36,492	)
Income taxes—continuing operations		(8,172	)
Interest expense, net		1,758
Depreciation and amortization expense		20,053
Stock compensation expense		3,604
Goodwill and other intangible asset impairments		58,922
EBITDA attributable to noncontrolling interests		(647	)
Pre-acquisition results of acquired companies, as defined under the Facility		17,016

Credit Facility Adjusted EBITDA	$	56,042

The Facility's principal financial covenants include:

        Leverage Ratio— The Facility requires that the ratio of our Consolidated Total Indebtedness to our Credit Facility Adjusted EBITDA not exceed 3.00 through December 31, 2013, 2.75 through June 30, 2014 and 2.5 through maturity. The leverage ratio as of December 31, 2011 was 0.27.

        Fixed Charge Coverage Ratio— The Facility requires that the ratio of Credit Facility Adjusted EBITDA, less non-financed capital expenditures, tax provision, dividends and amounts used to repurchase stock to the sum of interest expense and scheduled principal payments of indebtedness be at least 2.00; provided that the calculation of the fixed charge coverage ratio excludes stock repurchases and the payment of dividends at any time that the Company's Net Leverage Ratio does not exceed 2.0 through December 31, 2013, 1.5 through June 30, 2014 and 1.0 through maturity. Capital expenditures, tax provision, dividends and stock repurchase payments are defined under the Facility for purposes of this covenant to be amounts for the four quarters ending as of any given quarterly covenant compliance measurement date. The fixed charge coverage ratio as of December 31, 2011 was 18.78.

        Other Restrictions— The Facility permits acquisitions of up to $15.0 million per transaction, provided that the aggregate purchase price of such an acquisition and of acquisitions in the preceding 12 month period does not exceed $30.0 million. However, these limitations only apply when the Company's Net Leverage Ratio is equal to or greater than 2.0.

While the Facility's financial covenants do not specifically govern capacity under the Facility, if our debt level under the Facility at a quarter-end covenant compliance measurement date were to cause us to violate the Facility's leverage ratio covenant, our borrowing capacity under the Facility and the favorable terms that we currently have could be negatively impacted by the lenders.

We are in compliance with all of our financial covenants as of December 31, 2011.

Interest Rates and Fees

There are two interest rate options for borrowings under the Facility, the Base Rate Loan Option and the Eurodollar Rate Loan Option. Under the Base Rate Loan Option, the interest rate is determined based on the highest of the Federal Funds Rate plus 0.5%, the prime lending rate offered by Wells Fargo Bank, N.A. or the one-month Eurodollar Rate plus 1.00%. Under the Eurodollar Rate Loan Option, the interest rate is determined based on the one- to six-month Eurodollar Rate. The Eurodollar Rate corresponds very closely to rates described in various general business media sources as the London Interbank Offered Rate or "LIBOR." Additional margins are then added to these rates. The additional margins are determined based on the ratio of our Consolidated Total Indebtedness as of a given quarter end to our "Credit Facility Adjusted EBITDA" for the twelve months ending as of that quarter end, as defined in the credit agreement and shown below.

The interest rates under the Facility are floating rates determined by the broad financial markets, meaning they can and do move up and down from time to time. For illustrative purposes, the following are the respective market rates as of December 31, 2011 relating to interest options under the Facility:


Base Rate Loan Option:
Federal Funds Rate plus 0.50%	0.58	%
Wells Fargo Bank, N.A. Prime Rate	3.25	%
One-month LIBOR plus 1.00%	1.30	%
Eurodollar Rate Loan Option:
One-month LIBOR	0.30	%
Six-month LIBOR	0.81	%

Certain of our vendors require letters of credit to ensure reimbursement for amounts they are disbursing on our behalf, such as to beneficiaries under our self-funded insurance programs. We have also occasionally used letters of credit to guarantee performance under our contracts and to ensure payment to our subcontractors and vendors under those contracts. Our lenders issue such letters of credit through the Facility. A letter of credit commits the lenders to pay specified amounts to the holder of the letter of credit if the holder demonstrates that we have failed to perform specified actions. If this were to occur, we would be required to reimburse the lenders for amounts they fund to honor the letter of credit holder's claim. Absent a claim, there is no payment or reserving of funds by us in connection with a letter of credit. However, because a claim on a letter of credit would require immediate reimbursement by us to our lenders, letters of credit are treated as a use of facility capacity just the same as actual borrowings. We have never had a claim made against a letter of credit that resulted in payments by a lender or by us and believe such claim is unlikely in the foreseeable future.

Commitment fees are payable on the portion of the revolving loan capacity not in use for borrowings or letters of credit at any given time. Letter of credit fees and commitment fees are based on the ratio of Consolidated Total Indebtedness to Credit Facility Adjusted EBITDA.

	Consolidated Total Indebtedness to Credit Facility Adjusted EBITDA

	Less than 0.75			0.75 to 1.25			1.25 to 2.00			2.00 to 2.50			2.50 or greater
Additional Per Annum Interest Margin Added Under:
Base Rate Loan Option		0.75	%		1.00	%		1.25	%		1.50	%		1.75	%
Eurodollar Rate Loan Option		1.75	%		2.00	%		2.25	%		2.50	%		2.75	%
Letter of credit fees		1.30	%		1.50	%		1.70	%		1.90	%		2.10	%
Commitment fees on any portion of the Revolving Loan capacity not in use for borrowings or letters of credit at any given time		0.25	%		0.30	%		0.35	%		0.45	%		0.50	%

We estimate that the interest rate applicable to the borrowings under the Facility would be approximately 2.6% as of December 31, 2011. We incurred approximately $0.5 million in financing and professional costs in connection with the arrangement of the Facility. These costs are amortized on a straight-line basis as a non-cash charge to interest expense over the term of the Facility.

Notes to Former Owners

We issued subordinated notes to the former owners of acquired companies as part of the consideration used to acquire these companies. These notes had an outstanding balance of $12.7 million as of December 31, 2011, of which $0.3 million is current, and bear interest, payable annually, at a weighted average interest rate of 3.24%.

Other Debt

In conjunction with our acquisition of ColonialWebb, we acquired $3.0 million of long-term debt related to an industrial revenue bond associated with its office building and warehouse. Currently, $2.7 million of this debt is outstanding. We have included both the $0.3 million current portion and the $2.4 million long-term portion on our balance sheet as of December 31, 2011. The weighted average interest rate on this variable rate debt as of December 31, 2011 was approximately 0.25%.

Income Taxes

12 Months Ended

Dec. 31, 2011

Income Taxes

Income Taxes

10. Income Taxes

Provision for Income Taxes

The provision for income taxes relating to continuing operations consists of the following (in thousands):

	December 31,

	2011			2010			2009
Current—
Federal	$	230		$	7,991		$	14,240
State and Puerto Rico		1,123			1,853			4,046

		1,353			9,844			18,286

Deferred—
Federal		(10,307	)		(537	)		4,719
State and Puerto Rico		782			(2,947	)		(1,568	)

		(9,525	)		(3,484	)		3,151

	$	(8,172	)	$	6,360		$	21,437

The difference in income taxes provided for and the amounts determined by applying the federal statutory tax rate to income before income taxes results from the following (in thousands):

	December 31,

	2011			2010			2009
Income tax expense (benefit) at the statutory rate	$	(15,632	)	$	7,132		$	19,612
Changes resulting from—
State income taxes, net of federal tax effect		(2,327	)		260			2,384
Increase (decrease) in valuation allowance		3,431			(846	)		(1,025	)
Increase in contingency reserves		28			95			153
Non-deductible expenses		268			455			500
Production activity deduction		—			(391	)		(699	)
Goodwill impairment		9,223			—			—
Purchase accounting adjustments		(2,992	)		—			—
Other		(171	)		(345	)		512

	$	(8,172	)	$	6,360		$	21,437

Deferred Tax Assets (Liabilities)

Significant components of the net deferred tax assets and net deferred tax liabilities as reflected on the balance sheet are as follows (in thousands):

	Year Ended December 31,

	2011			2010
Deferred income tax assets—
Accounts receivable and allowance for doubtful accounts	$	1,958		$	1,956
Goodwill		4,519			—
Stock compensation		2,583			2,338
Accrued liabilities and expenses		20,902			24,585
State net operating loss carryforwards		4,604			2,976
Other		1,304			1,035

Total deferred income tax assets	$	35,870		$	32,890

Deferred income tax liabilities—
Property and equipment		(5,695	)		(5,501	)
Long-term contracts		(237	)		(389	)
Goodwill		—			(4,136	)
Intangible assets		(4,762	)		(7,424	)
Tax accounting method change (Section 481 adjustments)		(2,978	)		(5,956	)
Other		(671	)		(914	)

Total deferred income tax liabilities		(14,343	)		(24,320	)

Less—Valuation allowance		(3,999	)		(568	)

Net deferred income tax assets	$	17,528		$	8,002

The deferred income tax assets and liabilities reflected above are included in the consolidated balance sheets as follows (in thousands):

	December 31,

	2011		2010
Deferred income tax assets—
Prepaid expenses and other	$	19,771	$	22,975
Other noncurrent assets		2,626		3,987

Total deferred income tax assets	$	22,397	$	26,962

Deferred income tax liabilities—
Other current liabilities	$	328	$	89
Deferred income tax liabilities		4,541		18,871

Total deferred income tax liabilities	$	4,869	$	18,960

As of December 31, 2011, we had $4.6 million of future tax benefits related to $99.6 million of available state net operating loss carryforwards ("NOLs") which expire between 2012 and 2031. A valuation allowance of $4.0 million has been recorded against net deferred tax assets of state NOLs and other state deferred tax assets. We recorded an increase in valuation allowances of $3.4 million for the year ended December 31, 2011. A deferred tax asset for state NOLs, net of related valuation allowance, of $1.7 million reflects our conclusion that it is likely that this asset will be realized based upon expected future earnings in certain subsidiaries. We update this assessment of the realizability of deferred tax assets relating to state net NOLs annually.

As of December 31, 2011 and 2010, approximately $0.5 million and $0.5 million, respectively, of unrecognized tax benefits, if recognized in future periods, would impact our effective tax rate. This liability is included in "Other Long-Term Liabilities" in the consolidated balance sheets. We do not expect that the total amount of unrecognized tax benefits will significantly increase or decrease within the next twelve months.

We recognize potential interest and penalties related to unrecognized tax benefits in income tax expense. We did not recognize any interest or penalties during the years ended December 31, 2011 and 2010. We had accrued approximately $0.3 million and $0.3 million for the payment of interest and penalties at December 31, 2011 and 2010, respectively. Our tax records are subject to review by the Internal Revenue Service for the 2008 tax year forward and by various state authorities for the 2003 tax year forward. We are currently under examination for our U.S. federal income taxes for the 2009 tax year.

Liabilities for Uncertain Tax Positions

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands):

	Year Ended December 31,

	2011		2010			2009
Balance at beginning of year	$	696	$	634		$	621
Additions based on tax positions related to the current year		—		189			—
Additions for tax positions of prior years		—		—			134
Reductions for tax positions of prior years		—		(127	)		(97	)
Settlements		—		—			(24	)

Balance at end of year	$	696	$	696		$	634

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 08
-Paragraph h
-Article 4

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 109
-Paragraph 136, 172
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 109
-Paragraph 43, 44, 45, 46, 47, 48, 49
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 15
-URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 9
-URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08.(h))
-URI http://asc.fasb.org/extlink&oid=6881521&loc=d3e23780-122690

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319

+ Details

Employee Benefit Plans

12 Months Ended

Dec. 31, 2011

Employee Benefit Plans

Employee Benefit Plans

11. Employee Benefit Plans

We and certain of our subsidiaries sponsor various retirement plans for most full-time and some part-time employees. These plans primarily consist of defined contribution plans. The defined contribution plans generally provide for contributions up to 2.5% of covered employees' salaries or wages. These contributions totaled $5.1 million in 2011, $4.3 million in 2010 and $4.5 million in 2009. Of these amounts, approximately $0.5 million and $0.1 million were payable to the plans at December 31, 2011 and 2010, respectively.

Certain of our subsidiaries also participate or have participated in various multi-employer pension plans for the benefit of employees who are union members. As of December 31, 2011 and 2010, we had 7 and 6 employees, respectively, who were union members. We are subject to unfunded pension plan liability related to the withdrawal of one of our operating locations from a multi-employer pension plan. We have accrued $0.2 million in anticipation of these liabilities as of December 31, 2011. There were no contributions made to multi-employer pension plans in 2011, 2010 or 2009. The data available from administrators of other multi-employer pension plans is not sufficient to determine the accumulated benefit obligations, nor the net assets attributable to the multi-employer plans in which our employees participate or previously participated.

Commitments and Contingencies

12 Months Ended

Dec. 31, 2011

Commitments and Contingencies

Commitments and Contingencies

12. Commitments and Contingencies

Leases

We lease certain facilities and equipment under noncancelable operating leases. Rent expense for the years ended December 31, 2011, 2010 and 2009 was $13.0 million, $13.3 million, and $16.2 million, respectively. We recognize escalating rental payments that are quantifiable at the inception of the lease on a straight-line basis over the lease term. Concurrent with the acquisitions of certain companies, we entered into various agreements with previous owners to lease buildings used in our operations. The terms of these leases generally range from three to ten years and certain leases provide for escalations in the rental expenses each year, the majority of which are based on inflation. Included in the 2011, 2010 and 2009 rent expense above are approximately $3.2 million, $2.7 million and $2.8 million of rent paid to these related parties, respectively.

The following represents future minimum rental payments under noncancelable operating leases (in thousands):


Year ended December 31—
2012	$	10,579
2013		9,115
2014		6,460
2015		4,640
2016		3,088
Thereafter		7,264

	$	41,146

Claims and Lawsuits

We are subject to certain legal and regulatory claims, including lawsuits arising in the normal course of business. We maintain various insurance coverages to minimize financial risk associated with these claims. We have estimated and provided accruals for probable losses and related legal fees associated with certain litigation in the accompanying consolidated financial statements. While we cannot predict the outcome of these proceedings, in management's opinion and based on reports of counsel, any liability arising from these matters individually and in the aggregate will not have a material effect on our operating results or financial condition, after giving effect to provisions already recorded.

In December 2011, we received a letter from Ferguson Enterprises, Inc. ("Ferguson"), a distributor of plumbing supplies and pipe, in which Ferguson stated that it had unintentionally supplied us with gaskets that were mislabeled by a former supplier as being non-asbestos. Ferguson currently states that we bought approximately 29,000 gaskets that might have been mislabeled. Ferguson further disclosed that four Ferguson customers had found asbestos in gaskets above the 1% level at which they can be classified as non-asbestos. No reasonable estimate of liability, if any, is possible at this time.

In addition to the matters described above, we had accrued $6.5 million as of December 31, 2010 for potential and asserted backcharges from several customers of our multi-family operation based in Texas. During the third quarter of 2011, the Company reached an agreement related to certain backcharges, and this resulted in a $4.8 million payment and a $0.2 million recovery. The additions and reductions to the accrual were included in "Cost of Services."

The following table summarizes the backcharge activity for the years ended December 31, 2011, 2010 and 2009 (in thousands):

	December 31,

	2011			2010		2009
Balance at beginning of year	$	6,489		$	6,489	$	5,838
Additions		600			—		2,350
Cash payments, net of recovery		(4,593	)		—		(650	)
Non-cash reduction		(2,496	)		—		(1,049	)

Balance at end of year	$	—		$	6,489	$	6,489

Surety

Many customers, particularly in connection with new construction, require us to post performance and payment bonds issued by a financial institution known as a surety. If we fail to perform under the terms of a contract or to pay subcontractors and vendors who provided goods or services under a contract, the customer may demand that the surety make payments or provide services under the bond. We must reimburse the surety for any expenses or outlays it incurs. To date, we are not aware of any losses to our sureties in connection with bonds the sureties have posted on our behalf, and do not expect such losses to be incurred in the foreseeable future.

Surety market conditions are currently challenging as a result of significant losses incurred by many sureties in recent periods, both in the construction industry as well as in certain larger corporate bankruptcies. As a result, less bonding capacity is available in the market and terms have become more restrictive. Further, under standard terms in the surety market, sureties issue bonds on a project-by-project basis, and can decline to issue bonds at any time. Historically, approximately 25% to 35% of our business has required bonds. While we have strong surety relationships to support our bonding needs, current market conditions as well as changes in the sureties' assessment of our operating and financial risk could cause the sureties to decline to issue bonds for our work. If that were to occur, the alternatives include doing more business that does not require bonds, posting other forms of collateral for project performance such as letters of credit or cash, and seeking bonding capacity from other sureties. We would likely also encounter concerns from customers, suppliers and other market participants as to our creditworthiness. While we believe our general operating and financial characteristics, including a significant amount of cash on our balance sheet, would enable us to ultimately respond effectively to an interruption in the availability of bonding capacity, such an interruption would likely cause our revenues and profits to decline in the near term.

Self-Insurance

We are substantially self-insured for workers' compensation, employer's liability, auto liability, general liability and employee group health claims, in view of the relatively high per-incident deductibles we absorb under our insurance arrangements for these risks. Losses up to deductible amounts are estimated and accrued based upon known facts, historical trends and industry averages. Loss estimates associated with the larger and longer-developing risks, such as workers' compensation, auto liability and general liability, are reviewed by a third-party actuary quarterly.

Our self-insurance arrangements currently are as follows:

        Workers' Compensation—The per-incident deductible for workers' compensation is $500,000. Losses above $500,000 are determined by statutory rules on a state-by-state basis, and are fully covered by excess workers' compensation insurance.

        Employer's Liability—For employer's liability, the per incident deductible is $500,000. We are fully insured for the next $500,000 of each loss, and then have several layers of excess loss insurance policies that cover losses up to $100 million in aggregate across this risk area (as well as general liability and auto liability noted below).

        General Liability—For general liability, the per incident deductible is $500,000. We are fully insured for the next $1.5 million of each loss, and then have several layers of excess loss insurance policies that cover losses up to $100 million in aggregate across this risk area (as well as employer's liability and auto liability noted below).

        Auto Liability—For auto liability, the per incident deductible is $500,000. We are fully insured for the next $1.5 million of each loss, and then have several layers of excess loss insurance policies that cover losses up to $100 million in aggregate across this risk area (as well as employer's liability and general liability noted above).

        Employee Medical—We have two medical plans. The deductible for employee group health claims is $300,000 per person, per policy (calendar) year for one plan and $200,000 per person, per policy (calendar) year for the other plan. Insurance then covers any responsibility for medical claims in excess of the deductible amount.

        Our $100 million of aggregate excess loss coverage above applicable per-incident deductibles represents one policy limit that applies to all lines of risk; we do not have a separate $100 million of excess loss coverage for each of general liability, employer's liability and auto liability.

Companies acquired may have a self-insurance plan in place on the date of acquisition. Generally, the acquired company will remain on a separate policy until the end of the coverage period upon which the acquired company will join the aforementioned self-insurance policy.

- Definition

The entire disclosure for commitments and contingencies.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name FASB Interpretation (FIN)
-Number 14
-Paragraph 3
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Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 5
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+ Details

Stockholders' Equity

12 Months Ended

Dec. 31, 2011

Stockholders' Equity

Stockholders' Equity

13. Stockholders' Equity

Long-Term Incentive Plan for Employees

In May 2006, our stockholders approved the 2006 Equity Incentive Plan (the "2006 Plan") which provides for the granting of incentive or non-qualified stock options, stock appreciation rights, restricted or deferred stock, dividend equivalents or other incentive awards to directors, employees and consultants. The number of shares authorized and reserved for issuance under the 2006 Plan is 3,200,000 shares. As of December 31, 2011, there were 1.0 million shares available for issuance under this plan. The 2006 Plan will expire in May 2016.

Non-Employee Directors' Stock Plan

In May 2008, our stockholders approved our Amended and Restated 2006 Equity Compensation Plan for Non-Employee Directors (the "2006 Directors Plan"), which provides for the granting of restricted stock to non-employee directors. The number of shares authorized and reserved for issuance under the 2006 Directors Plan is 300,000 shares. As of December 31, 2011, there were 0.1 million shares available for issuance under this plan. The 2006 Directors Plan will expire in May 2016.

Under the 2006 Directors Plan, each participant who has served since at least the previous annual meeting and is continuing in office and each newly elected non-employee director will be awarded an award covering 10,000 shares (which will be the maximum number of shares of Common Stock subject to awards that may be granted to any participant in the aggregate in any calendar year).

Stock options were granted under the 2006 Directors Plan before it was amended in 2008. We have never altered the price of any option after its grant.

Share Repurchase Program

On March 29, 2007, our Board of Directors (the "Board") approved a stock repurchase program to acquire up to 1.0 million shares of our outstanding common stock. During the fourth quarter of 2011, the Board approved an extension of the program to acquire up to an additional 1.0 million shares. Since the inception of the repurchase program, the Board has approved 6.6 million shares to be repurchased.

The share repurchases will be made from time to time at our discretion in the open market or privately negotiated transactions as permitted by securities laws and other legal requirements, and subject to market conditions and other factors. The Board may modify, suspend, extend or terminate the program at any time. We repurchased 0.7 million shares for the year ended December 31, 2011, at an average price of $9.83 per share. Since the inception of the program in 2007 and as of December 31, 2011, we have repurchased a cumulative total of 5.6 million shares at an average price of $10.97 per share.

Earnings Per Share

Basic earnings per share ("EPS") is computed by dividing net income by the weighted average number of shares of common stock outstanding during the year. Diluted EPS is computed considering the dilutive effect of stock options and contingently issuable restricted stock. The vesting of unvested contingently issuable restricted stock is based on the achievement of certain earnings per share targets. These shares are considered contingently issuable shares for purposes of calculating diluted earnings per share. These shares are not included in the diluted earnings per share denominator until the performance criteria are met, if it is assumed that the end of the reporting period was the end of the contingency period.

Unvested restricted stock is included in diluted earnings per share, weighted outstanding until the shares vest. Upon vesting, the vested restricted stock is included in basic earnings per share weighted outstanding from the vesting date.

The effect of 0.2 million of common stock equivalents have been excluded from the calculation of diluted EPS for the year ended December 31, 2011, due to our net loss position in this period. Assuming dilution, there were approximately 0.7 million, 0.5 million and 0.5 million anti-dilutive stock options excluded from the calculation of diluted EPS for the years ended December 31, 2011, 2010 and 2009, respectively.

The following table reconciles the number of shares outstanding with the number of shares used in computing basic and diluted earnings per share for each of the periods presented (in thousands):

	Year Ended December 31,

	2011		2010		2009
Common shares outstanding, end of period(a)		37,050		37,532		37,625
Effect of using weighted average common shares outstanding		339		17		421

Shares used in computing earnings per share—basic		37,389		37,549		38,046
Effect of shares issuable under stock option plans based on the treasury stock method		—		241		360
Effect of contingently issuable restricted shares		—		—		45

Shares used in computing earnings per share—diluted		37,389		37,790		38,451

(a): Excludes 0.4 million shares of unvested contingently issuable restricted stock outstanding for each of the years ended December 31, 2011, 2010 and 2009 (see Note 14 "Stock-Based Compensation").

- Definition

The entire disclosure for shareholders' equity, comprised of portions attributable to the parent entity and noncontrolling interest, if any, including other comprehensive income (as applicable). Including, but not limited to: (1) balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings; (2) accumulated balance for each classification of other comprehensive income and total amount of comprehensive income; (3) amount and nature of changes in separate accounts, including the number of shares authorized and outstanding, number of shares issued upon exercise and conversion, and for other comprehensive income, the adjustments for reclassifications to net income; (4) rights and privileges of each class of stock authorized; (5) basis of treasury stock, if other than cost, and amounts paid and accounting treatment for treasury stock purchased significantly in excess of market; (6) dividends paid or payable per share and in the aggregate for each class of stock for each period presented; (7) dividend restrictions and accumulated preferred dividends in arrears (in aggregate and per share amount); (8) retained earnings appropriations or restrictions, such as dividend restrictions; (9) impact of change in accounting principle, initial adoption of new accounting principle and correction of an error in previously issued financial statements; (10) shares held in trust for Employee Stock Ownership Plan (ESOP); (11) deferred compensation related to issuance of capital stock; (12) note received for issuance of stock; (13) unamortized discount on shares; (14) description, terms, and number of warrants or rights outstanding; (15) shares under subscription and subscription receivables, effective date of new retained earnings after quasi-reorganization and deficit eliminated by quasi-reorganization and, for a period of at least ten years after the effective date, the point in time from which the new retained dates; and (16) retroactive effective of subsequent change in capital structure.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Accounting Principles Board Opinion (APB)
-Number 12
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-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 2: http://www.xbrl.org/2003/role/presentationRef
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Reference 4: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Research Bulletin (ARB)
-Number 43
-Chapter 1
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-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 5: http://www.xbrl.org/2003/role/presentationRef
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-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 6: http://www.xbrl.org/2003/role/presentationRef
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Reference 7: http://www.xbrl.org/2003/role/presentationRef
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-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 8: http://www.xbrl.org/2003/role/presentationRef
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-Paragraph 29, 30, 31
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Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
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Reference 10: http://www.xbrl.org/2003/role/presentationRef
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Reference 11: http://www.xbrl.org/2003/role/presentationRef
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+ Details

Stock-Based Compensation

12 Months Ended

Dec. 31, 2011

Stock-Based Compensation

Stock-Based Compensation

14. Stock-Based Compensation

We have various stock-based compensation plans which are administered by the compensation committee of the Board of Directors. Total stock-based compensation expense was $3.6 million, $3.7 million and $3.5 million for the years ended December 31, 2011, 2010 and 2009, respectively. Total income tax benefit recognized for stock-based compensation arrangements was $1.3 million for each of the years ended December 31, 2011, 2010 and 2009. We present the benefits of tax deductions in excess of recognized compensation costs ("excess tax benefits") as financing cash flows in the consolidated statements of cash flows.

Upon the vesting of restricted shares, we have allowed the holder to elect to surrender an amount of shares to meet their minimum statutory tax withholding requirements. These shares are accounted for as treasury stock based upon the value of the stock on the date of vesting.

Stock Options

The following table summarizes activity under our stock option plans (shares in thousands):

	Year Ended December 31,

	2011					2010					2009
Stock Options	Shares			Weighted- Average Exercise Price		Shares			Weighted- Average Exercise Price		Shares			Weighted- Average Exercise Price
Outstanding at beginning of year		1,061		$	9.58		1,180		$	7.77		1,365		$	6.39
Granted		142		$	13.87		146		$	12.46		177		$	11.00
Exercised		(66	)	$	4.46		(184	)	$	2.58		(355	)	$	4.00
Forfeited		—		$	—		(12	)	$	12.32		(7	)	$	11.00
Expired		(81	)	$	4.82		(69	)	$	2.88		—		$	—

Outstanding at end of year		1,056		$	10.84		1,061		$	9.58		1,180		$	7.77

Options exercisable at end of year		762					756					879

The total intrinsic value of options exercised during the years ended December 31, 2011, 2010 and 2009 was $0.5 million, $1.8 million and $2.6 million, respectively. Stock options outstanding as of December 31, 2011 have a weighted-average remaining contractual term of 6.0 years and an aggregate intrinsic value of $1.4 million. Stock options exercisable as of December 31, 2011 have a weighted-average remaining contractual term of 5.0 years and an aggregate intrinsic value of $1.4 million. As of December 31, 2011, we have 1.0 million options that are vested or expected to vest; these options have a weighted average exercise price of $10.81 per share, have a weighted-average remaining contractual term of 6.0 years and an aggregate intrinsic value of $1.4 million.

The following table summarizes information about stock options outstanding at December 31, 2011 (shares in thousands):

	Options Outstanding						Options Exercisable

Range of Exercise Prices	Number Outstanding at 12/31/11		Weighted- Average Remaining Contractual Life		Weighted- Average Exercise Price		Number Exercisable at 12/31/11		Weighted- Average Exercise Price
$1.90 - $2.875		66		1.32	$	1.97		66	$	1.97
$3.39 - $4.77		23		1.42	$	3.83		23	$	3.83
$6.38 - $7.94		148		3.19	$	6.51		148	$	6.51
$11.00 - $12.90		488		6.74	$	11.85		337	$	11.82
$13.15 - $15.03		331		7.44	$	13.54		188	$	13.30

$1.90 - $15.03		1,056		6.01	$	10.84		762	$	10.06

The fair value of each option award is estimated, based on several assumptions, on the date of grant using the Black-Scholes option valuation model. The fair values and the assumptions used for the 2011 to 2009 grants are shown in the table below:

	Year Ended December 31,

	2011			2010			2009
Weighted-average fair value per share of options granted	$	5.04		$	4.61		$	4.06
Fair value assumptions:
Expected dividend yield		1.70	%		1.73	%		1.53	%
Expected stock price volatility		44.2	%		44.4	%		45.0	%
Risk-free interest rate		2.24	%		2.65	%		1.80	%
Expected term		5.3 years			5.3 years			5.3 years

Stock options are accounted for as equity instruments, and compensation cost is recognized using the straight-line method over the vesting period. Stock options generally vest over a three-year vesting period. Certain stock option and restricted stock awards provide for accelerated vesting if the employee retires at any time when the sum of their age and years of service is at least 75. As of December 31, 2011, the unrecognized compensation cost related to stock options was $0.4 million, which is expected to be recognized over a weighted-average period of 1.8 years. The total fair value of options vested during the year ended December 31, 2011 was $0.7 million.

The following table summarizes information about nonvested stock option awards as of December 31, 2011 and changes for the year ended December 31, 2011 (shares in thousands):

Stock Options			Weighted-Average Grant Date Fair Value

Nonvested at December 31, 2010	305		$	4.51
Granted	142		$	5.04
Vested	(153	)	$	4.60
Forfeited	—		$	—

Nonvested at December 31, 2011	294		$	4.71

We generally issue treasury shares for stock options and restricted stock, unless treasury shares are not available.

Restricted Stock

The following table summarizes activity under our restricted stock plans (shares in thousands):

	Shares

Restricted Stock	2011			2010			2009
Unvested at beginning of year		312			300			284
Granted		231			245			217
Vested		(241	)		(228	)		(198	)
Forfeited		—			(5	)		(3	)

Unvested at end of year		302			312			300

Approximately $1.6 million of compensation expense related to restricted stock will be recognized over a weighted-average period of 0.9 years. The total fair value of shares vested during year ended December 31, 2011 was $2.9 million. The weighted-average fair value per share of restricted stock shares awarded during 2011, 2010 and 2009 was $11.29, $12.26 and $11.40, respectively. The aggregate intrinsic value of restricted stock vested during the years ended December 31, 2011, 2010 and 2009 was $2.6 million, $3.0 million and $1.9 million, respectively.

- Definition

The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 123R
-Paragraph 64, 65, A240
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Statement of Position (SOP)
-Number 93-6
-Paragraph 53
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Staff Accounting Bulletin (SAB)
-Number Topic 14

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 50
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6406099&loc=d3e25284-112666

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 718
-SubTopic 10
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5047-113901

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 718
-SubTopic 10
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5070-113901

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 718
-SubTopic 10
-Section 50
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5444-113901

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 718
-SubTopic 40
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6418621&loc=d3e17540-113929

+ Details

Quarterly Results of Operations (Unaudited)

12 Months Ended

Dec. 31, 2011

Quarterly Results of Operations (Unaudited)

Quarterly Results of Operations (Unaudited)

15. Quarterly Results of Operations (Unaudited)

Quarterly financial information for the years ended December 31, 2011 and 2010 is summarized as follows (in thousands, except per share data):

	2011

	Q1			Q2			Q3(a)			Q4(a)
Revenue	$	282,059		$	312,148		$	328,113		$	317,700
Gross profit	$	34,209		$	47,510		$	49,108		$	50,625
Operating income (loss)	$	(8,328	)	$	5,601		$	(47,461	)	$	820
Income (loss) from continuing operations	$	(5,170	)	$	3,162		$	(36,569	)	$	2,085
Discontinued operations:
Operating loss, net of tax	$	—		$	—		$	—		$	—
Gain (loss) on disposition, net of tax	$	—		$	—		$	—		$	—
Net income (loss) including noncontrolling interests	$	(5,170	)	$	3,162		$	(36,569	)	$	2,085
Less: Net income attributable to noncontrolling interests	$	—		$	—		$	—		$	338
Net income (loss) attributable to Comfort Systems USA, Inc.	$	(5,170	)	$	3,162		$	(36,569	)	$	1,747
INCOME (LOSS) PER SHARE ATTRIBUTABLE TO COMFORT SYSTEMS USA, INC.:
Basic—
Income (loss) from continuing operations	$	(0.14	)	$	0.08		$	(0.98	)	$	0.05
Discontinued operations—
Loss from operations		—			—			—			—
Gain (loss) on disposition		—			—			—			—

Net income (loss)	$	(0.14	)	$	0.08		$	(0.98	)	$	0.05

Diluted—
Income (loss) from continuing operations	$	(0.14	)	$	0.08		$	(0.98	)	$	0.05
Discontinued operations—
Loss from operations		—			—			—			—
Gain (loss) on disposition		—			—			—			—

Net income (loss)	$	(0.14	)	$	0.08		$	(0.98	)	$	0.05

Net cash provided by (used in) operating activities	$	(19,066	)	$	(4,377	)	$	1,478		$	51,645

(a): Included in income are goodwill and other intangible asset impairment charges of $55.1 million in the third quarter and $3.8 million in the fourth quarter of 2011.

	2010

	Q1			Q2(a)		Q3			Q4(a)
Revenue	$	236,475		$	249,588	$	307,648		$	314,571
Gross profit	$	39,508		$	41,965	$	50,309		$	56,900
Operating income (loss)	$	2,104		$	2,376	$	8,453		$	7,109
Income (loss) from continuing operations	$	1,165		$	1,646	$	5,410		$	5,796
Discontinued operations:
Operating loss, net of tax	$	—		$	—	$	—		$	—
Gain (loss) on disposition, net of tax	$	762		$	—	$	(39	)	$	—
Net income (loss) including noncontrolling interests	$	1,927		$	1,646	$	5,371		$	5,796
Less: Net income attributable to noncontrolling interests	$	—		$	—	$	—		$	—
Net income (loss) attributable to Comfort Systems USA, Inc.	$	1,927		$	1,646	$	5,371		$	5,796
INCOME (LOSS) PER SHARE ATTRIBUTABLE TO COMFORT SYSTEMS USA, INC.:
Basic—
Income (loss) from continuing operations	$	0.03		$	0.04	$	0.14		$	0.15
Discontinued operations—
Loss from operations		—			—		—			—
Gain (loss) on disposition		0.02			—		—			—

Net income (loss)	$	0.05		$	0.04	$	0.14		$	0.15

Diluted—
Income (loss) from continuing operations	$	0.03		$	0.04	$	0.14		$	0.15
Discontinued operations—
Loss from operations		—			—		—			—
Gain (loss) on disposition		0.02			—		—			—

Net income (loss)	$	0.05		$	0.04	$	0.14		$	0.15

Net cash provided by (used in) operating activities	$	(11,461	)	$	762	$	(3,772	)	$	46,620

(a): Included in income are goodwill impairment charges of $4.4 million in the second quarter and $1.3 million in the fourth quarter of 2010.

The sums of the individual quarterly earnings per share amounts do not necessarily agree with year-to-date earnings per share as each quarter's computation is based on the weighted average number of shares outstanding during the quarter, the weighted average stock price during the quarter and the dilutive effects of options and contingently issuable restricted stock in each quarter.

- Definition

The entire disclosure for the quarterly financial data in the annual financial statements. The disclosure may include a tabular presentation of financial information for each fiscal quarter for the current and previous year, including revenues, gross profit, income or loss before extraordinary items and earnings per share data. It also includes an indication if the information in the note is unaudited, comments on the aggregate effect of year-end adjustments, and an explanation of matters or transactions that affect comparability or are pertinent to an understanding of the information furnished.

+ References + Details