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Document and Entity Information - shares	3 Months Ended
Mar. 31, 2018	Apr. 19, 2018
Document and Entity Information
Entity Registrant Name	COMFORT SYSTEMS USA INC
Entity Central Index Key	0001035983
Document Type	10-Q
Document Period End Date	Mar. 31, 2018
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		37,109,941
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q1

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
CURRENT ASSETS:
Cash and cash equivalents	$ 25,219	$ 36,542
Billed accounts receivable, less allowance for doubtful accounts of $3,516 and $3,400, respectively	392,998	382,867
Unbilled accounts receivable	36,634
Other receivables	17,685	21,235
Inventories	11,029	10,303
Prepaid expenses and other	6,135	8,294
Costs and estimated earnings in excess of billings	2,093	30,116
Total current assets	491,793	489,357
PROPERTY AND EQUIPMENT, NET	88,298	87,591
GOODWILL	203,199	200,584
IDENTIFIABLE INTANGIBLE ASSETS, NET	78,332	76,044
DEFERRED TAX ASSETS	16,890	22,966
OTHER NONCURRENT ASSETS	4,206	4,578
Total assets	882,718	881,120
CURRENT LIABILITIES:
Current maturities of long-term debt	1,113	613
Accounts payable	128,249	132,011
Accrued compensation and benefits	56,199	69,217
Billings in excess of costs and estimated earnings	107,939	106,005
Accrued self-insurance	32,099	32,228
Other current liabilities	40,437	33,654
Total current liabilities	366,036	373,728
LONG-TERM DEBT	64,880	59,926
DEFERRED TAX LIABILITIES	4,835	2,263
OTHER LONG-TERM LIABILITIES	17,829	27,258
Total liabilities	453,580	463,175
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, 4,035,263 and 3,936,291 shares, respectively	(69,322)	(63,519)
Additional paid-in capital	315,907	312,784
Retained earnings	182,142	168,269
Total stockholders’ equity	429,138	417,945
Total liabilities and stockholders’ equity	$ 882,718	$ 881,120

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
CONSOLIDATED STATEMENTS OF OPERATIONS
REVENUE	$ 464,941	$ 380,588
COST OF SERVICES	375,888	304,634
Gross profit	89,053	75,954
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES	70,023	63,247
GOODWILL IMPAIRMENT		1,105
GAIN ON SALE OF ASSETS	(211)	(154)
Operating income	19,241	11,756
OTHER INCOME (EXPENSE):
Interest income	14	11
Interest expense	(713)	(390)
Changes in the fair value of contingent earn-out obligations	153	(26)
Other	38	18
Other income (expense)	(508)	(387)
INCOME BEFORE INCOME TAXES	18,733	11,369
PROVISION FOR INCOME TAXES	2,074	3,892
NET INCOME	$ 16,659	$ 7,477
INCOME PER SHARE:
Basic (in shares)	$ 0.45	$ 0.20
Diluted (in shares)	$ 0.44	$ 0.20
SHARES USED IN COMPUTING INCOME PER SHARE:
Basic (in shares)	37,192	37,225
Diluted (in shares)	37,628	37,724
DIVIDENDS PER SHARE (in dollars per share)	$ 0.075	$ 0.070

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands	Common Stock	Treasury Stock	Additional Paid-In Capital	Retained Earnings	Total
BALANCE at Dec. 31, 2016	$ 411	$ (57,387)	$ 309,625	$ 123,984	$ 376,633
BALANCE (in shares) at Dec. 31, 2016	41,123,365
BALANCE (in shares) at Dec. 31, 2016		(3,914,251)
Increase (Decrease) in Stockholders' Equity
Net income				55,272	55,272
Issuance of Stock:
Issuance of shares for options exercised		$ 2,257	(205)		2,052
Issuance of shares for options exercised (in shares)		145,746
Issuance of restricted stock & performance stock		$ 2,037	(421)		1,616
Issuance of restricted stock & performance stock (in shares)		134,646
Shares received in lieu of tax withholding payment on vested restricted stock		$ (1,419)			(1,419)
Shares received in lieu of tax withholding payment on vested restricted stock (in shares)		(39,335)
Stock-based compensation			3,785		3,785
Dividends				(10,987)	(10,987)
Share repurchase		$ (9,007)			(9,007)
Minimum number of shares of common stock repurchased		(263,097)
BALANCE at Dec. 31, 2017	$ 411	$ (63,519)	312,784	168,269	$ 417,945
BALANCE (in shares) at Dec. 31, 2017	41,123,365				41,123,365
BALANCE (in shares) at Dec. 31, 2017		(3,936,291)			3,936,291
Increase (Decrease) in Stockholders' Equity
Net income				16,659	$ 16,659
Issuance of Stock:
Issuance of shares for options exercised		$ 326	(88)		238
Issuance of shares for options exercised (in shares)		19,124
Issuance of restricted stock & performance stock		$ 892	1,331		2,223
Issuance of restricted stock & performance stock (in shares)		52,306
Shares received in lieu of tax withholding payment on vested restricted stock		$ (846)			(846)
Shares received in lieu of tax withholding payment on vested restricted stock (in shares)		(19,921)
Stock-based compensation			1,880		1,880
Dividends				(2,786)	(2,786)
Share repurchase		$ (6,175)			(6,175)
Minimum number of shares of common stock repurchased		(150,481)
BALANCE at Mar. 31, 2018	$ 411	$ (69,322)	$ 315,907	$ 182,142	$ 429,138
BALANCE (in shares) at Mar. 31, 2018	41,123,365				41,123,365
BALANCE (in shares) at Mar. 31, 2018		(4,035,263)			4,035,263

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$ 16,659	$ 7,477
Adjustments to reconcile net income to net cash provided by operating activities—
Amortization of identifiable intangible assets	3,827	1,562
Depreciation expense	5,413	4,577
Goodwill impairment		1,105
Bad debt expense	261	219
Deferred tax provision (benefit)	8,648	(1,077)
Amortization of debt financing costs	94	94
Gain on sale of assets	(211)	(154)
Changes in the fair value of contingent earn-out obligations	(153)	26
Stock-based compensation	2,793	1,333
(Increase) decrease in-
Receivables, net	(3,542)	24,525
Inventories	(537)	(750)
Prepaid expenses and other current assets	3,388	659
Costs and estimated earnings in excess of billings and unbilled accounts receivable	(8,065)	(6,605)
Other noncurrent assets	296	465
Increase (decrease) in-
Accounts payable and accrued liabilities	(15,663)	(16,299)
Billings in excess of costs and estimated earnings	(293)	(7,151)
Other long-term liabilities	(9,064)	47
Net cash provided by operating activities	3,851	10,053
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment	(5,588)	(5,077)
Proceeds from sales of property and equipment	366	292
Cash paid for acquisitions, net of cash acquired	(6,719)	(313)
Net cash used in investing activities	(11,941)	(5,098)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from revolving line of credit	20,000
Payments on revolving line of credit	(15,000)
Payments on other debt	(546)	(25)
Payments on capital lease obligations		(57)
Payments of dividends to stockholders	(2,786)	(2,608)
Share repurchase	(4,293)	(2,197)
Shares received in lieu of tax withholding	(846)	(632)
Proceeds from exercise of options	238	736
Deferred acquisition payments		(802)
Net cash used in financing activities	(3,233)	(5,585)
NET DECREASE IN CASH AND CASH EQUIVALENTS	(11,323)	(630)
CASH AND CASH EQUIVALENTS, beginning of period	36,542	32,074
CASH AND CASH EQUIVALENTS, end of period	$ 25,219	$ 31,444

Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2018

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

Basis of Presentation

These interim statements should be read in conjunction with the historical Consolidated Financial Statements and related notes of Comfort Systems included in the Annual Report on Form 10-K as filed with the Securities and Exchange Commission (“SEC”) for the year ended December 31, 2017 (the “Form 10-K”).

The accompanying unaudited consolidated financial statements were prepared using generally accepted accounting principles for interim financial information and the instructions to Form 10-Q and applicable rules of Regulation S-X of the SEC. Accordingly, these financial statements do not include all the footnotes required by generally accepted accounting principles for complete financial statements and should be read in conjunction with the Form 10-K. We believe all adjustments necessary for a fair presentation of these interim statements have been included and are of a normal and recurring nature. The results of operations for interim periods are not necessarily indicative of the results for the full fiscal year.

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, revenue 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.

Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers (Topic 606).” Topic 606 supersedes the revenue recognition requirements in “Revenue Recognition (Topic 605)” and requires entities to recognize revenue when control of the promised goods or services is transferred to customers at an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. We adopted Topic 606 as of January 1, 2018.

In accordance with Topic 606, we applied the modified retrospective method to those contracts which were not completed as of January 1, 2018. Under the modified retrospective method, the cumulative effect of applying the standard is recognized at the date of initial application. Results for reporting periods beginning after January 1, 2018 are presented under Topic 606, while prior period amounts are not adjusted and continue to be reported in accordance with our historic accounting under Topic 605.

In implementing Topic 606, we were required to recalculate the revenue earned on any work in process at the implementation date and to restate the revenue and cost of services as if Topic 606 had been followed from the inception of the contract. In recalculating costs and revenue under Topic 606 guidelines, we identified no material difference in the account balances. Since a material difference was not found, no retrospective analysis of account balance changes was required.

In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842)”. The standard requires lessees to recognize assets and liabilities for most leases. ASU 2016-02 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018. Early adoption is permitted. ASU 2016-02’s transition provisions are applied using a modified retrospective approach at the beginning of the earliest comparative period presented in the financial statements. Full retrospective application is prohibited. We are currently evaluating the potential impact of this authoritative guidance on our consolidated financial statements.

In August 2016, the FASB issued ASU No. 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments”. This standard provides guidance on how certain cash receipts and cash payments are presented and classified in the statement of cash flows and is intended to reduce diversity in practice with respect to these items. The standard is applied using a retrospective transition method and is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption is permitted. We adopted this standard on January 1, 2018 and the adoption did not have any impact on our consolidated financial statements.

Revenue Recognition

Revenue is recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods or services. Sales based taxes are excluded from revenue.

We provide comprehensive mechanical contracting services, which principally includes HVAC, plumbing, piping and controls, as well as off‑site construction, electrical, monitoring and fire protection. We install, maintain, repair and replace products and systems throughout the United States. All of our revenue is recognized over time as we deliver goods and services to our customers. Revenue can be earned based on an agreed upon fixed price or based on actual costs incurred marked up at an agreed upon percentage.

For fixed price agreements, we use the percentage of completion method of accounting under which 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 to obtain installation contracts, we estimate our contract costs, which include all direct materials, 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. 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 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 and judgments.

We account for a contract when: (i) it has approval and commitment from both parties, (ii) the rights of the parties are identified, (iii) payment terms are identified, (iv) the contract has commercial substance, and (v) collectability of consideration is probable. We consider the start of a project to be when the above criteria have been met and we either have written authorization from the customer to proceed or an executed contract.

Selling, marketing and estimation costs incurred in relation to selling contracts are expensed as incurred. On rare occasions, we may incur significant expense related to selling a contract that we only incurred because we sold that contract. If this occurs, we capitalize that cost and amortize it on a straight-line basis over the expected life of the job. We do not currently have any capitalized selling, marketing, or estimation costs on our Balance Sheet and did not incur any impairment loss in the current year.

We generally do not incur significant incremental costs related to obtaining or fulfilling a contract prior to the start of a project. On rare occasions, when significant pre‑contract costs are incurred, they are capitalized and amortized on a percentage of completion basis over the life of the contract. We do not currently have any capitalized obtaining or fulfillment costs on our Balance Sheet and did not incur any impairment loss on such costs in the current year.

Project contracts typically provide for a schedule of billings or invoices to the customer based on our job to date percentage of completion of specific tasks inherent in the fulfillment of our performance obligation(s). 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 and unbilled receivables 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” and “Unbilled accounts receivable.” 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.”

We typically invoice our customers with payment terms of net due in 30 days. It is common in the construction industry for a contract to specify specific more lenient payment terms allowing the customer 45 to 60 days to make their payment. It is also common for the contract in the construction industry to specify that a general contractor is not required to submit payments to a subcontractor until it has received those funds from the owner or funding source. In most instances we receive payment of our invoices between 30 to 90 days of the date of the invoice.

A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account in ASC Topic 606. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied.

To determine the proper revenue recognition method for contracts, we evaluate whether two or more contracts should be combined and accounted for as one performance obligation and whether the combined or single contract should be accounted for as more than one performance obligation. This evaluation requires significant judgment and the decision to combine a group of contracts or separate the combined or single contract into multiple performance obligations could change the amount of revenue and profit recorded in a given period. For most of our contracts, the customer contracts with us to provide a significant service of integrating a complex set of tasks and components into a single project or capability (even if that single project results in the delivery of multiple units). Hence, the entire contract is accounted for as one performance obligation. Less commonly, however, we may promise to provide distinct goods or services within a contract in which case we separate the contract into more than one performance obligation. If a contract is separated into more than one performance obligation, we allocate the total transaction price to each performance obligation in an amount based on the estimated relative standalone selling prices of the promised goods or services underlying each performance obligation. We infrequently sell standard products with observable standalone sales. In cases where we do, the observable standalone sales are used to determine the standalone selling price. More frequently, we sell a customized customer specific solution, and in these cases we typically use the expected cost plus a margin approach to estimate the standalone selling price of each performance obligation.

We recognize revenue over time for all of our services as we perform them, because (i) control continuously transfers to that customer as work progresses and (ii) we have the right to bill the customer as costs are incurred. The customer typically controls the work in process as evidenced either by contractual termination clauses or by our rights to payment for work performed to date plus a reasonable profit to deliver products or services that do not have an alternative use to the Company.

Because of control transferring over time, revenue is recognized based on the extent of progress towards completion of the performance obligation. The selection of the method to measure progress towards completion requires judgment and is based on the nature of the products or services to be provided. We generally use the cost to cost measure of progress for our contracts as it best depicts the transfer of assets to the customer that occurs as we incur costs on our contracts. Under the cost to cost measure of progress, the extent of progress towards completion is measured based on the ratio of costs incurred to date to the total estimated costs at completion of the performance obligation. Revenue, including estimated fees or profits, is recorded proportionally as costs are incurred. Costs to fulfill include labor, materials and subcontractors’ costs, other direct costs and an allocation of indirect costs.

For a small portion of our business where our services are delivered in the form service maintenance agreements for existing systems to be repaired and maintained, as opposed to constructed, our performance obligation is to maintain the customer’s mechanical system for a specific period of time. Similar to jobs, we recognize revenue over time; however, for service maintenance agreements where the full cost to provide services may not be known, we generally use an output method to recognize revenue, which is based on the amount of time we have provided our services out of the total time we have been contracted to perform those services.

Due to the nature of the work required to be performed on many of our performance obligations, the estimation of total revenue and cost at completion (the process described below in more detail) is complex, subject to many variables and requires significant judgment. On rare occasions, our long-term contracts may contain incentive fees or other provisions that can either increase or decrease the transaction price. These variable amounts generally are awarded upon achievement of certain performance metrics, program milestones or cost of completion date targets and can be based upon customer discretion. Variable amounts can result in additional revenue to us or can be a deduction from contract revenue if we fail to meet stated performance requirements. We include estimated amounts in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. Our estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of our anticipated performance and all information (historical, current and forecasted) that is reasonably available to us.

Contracts are often modified to account for changes in contract specifications and requirements. We consider contract modifications to exist when the modification either creates new or changes the existing enforceable rights and obligations. Most of our contract modifications are for goods or services that are not distinct from the existing performance obligation(s). The effect of a contract modification on the transaction price, and our measure of progress for the performance obligation to which it relates, is recognized as an adjustment to revenue (either as an increase or decrease) on a cumulative catchup basis.

We have a Company-wide policy requiring periodic review of the Estimate at Completion in which management reviews the progress and execution of our performance obligations and estimated remaining obligations. As part of this process, management reviews information including, but not limited to, any outstanding key contract matters, progress towards completion and the related program schedule, identified risks and opportunities and the related changes in estimates of revenue and costs. The risks and opportunities include management's judgment about the ability and cost to achieve the schedule (e.g., the number and type of milestone events), technical requirements (e.g., a newly developed product versus a mature product) and other contract requirements. Management must make assumptions and estimates regarding labor productivity and availability, the complexity of the work to be performed, the availability of materials, the length of time to complete the performance obligation (e.g. to estimate increases in wages and prices for materials and related support cost allocations), execution by our subcontractors, the availability and timing of funding from our customer, and overhead cost rates, among other variables.

Based on this analysis, any adjustments to revenue, cost of services, and the related impact to operating income are recognized as necessary in the quarter they become known. These adjustments may result from positive program performance if we determine we will be successful in mitigating risks surrounding the technical, schedule and cost aspects of those performance obligations or realizing related opportunities and may result in an increase in operating income during the performance of individual performance obligations. Likewise, if we determine we will not be successful in mitigating these risks or realizing related opportunities these adjustments may result in a decrease in operating income. Changes in estimates of revenue, cost of services and the related impact to operating income are recognized quarterly on a cumulative catchup basis, which recognizes in the current period the cumulative effect of the changes on current and prior periods based on a performance obligation's percentage of completion. A significant change in one or more of these estimates could affect the profitability of one or more of our performance obligations. For projects where estimates of total costs to be incurred on a performance obligation exceed total estimates of revenue to be earned, a provision for the entire loss on the performance obligation is recognized in the period the loss is determined.

The Company typically does not incur any returns, refunds, or similar obligations after the completion of the performance obligation since any deficiencies are corrected during the course of the work or are included as a modification to revenue. The Company does offer an industry standard warranty on our work, which is most commonly for a one-year period. The vendors providing the equipment and materials are responsible for any failures in their product unless installed incorrectly. We include an estimated amount to cover estimated warranty expense in our Cost of Services and record a liability on our Balance Sheet to cover our current estimated outstanding warranty obligations.

Prior to implementing ASC 606 on January 1, 2018, our methods for recognizing revenue were very similar to our current method under ASC 606. We used the actual cost as a percent of total expected cost at completion to estimate our percentage complete on fixed price jobs, a mark-up of costs for jobs where revenue was based on time and materials incurred and elapsed time for those service maintenance contracts where the full cost to provide the services cannot be reasonably estimated. Furthermore, our process for allocating transaction price to performance obligations is also substantially similar to prior years where, in most cases, a contract is one performance obligation. In those cases where a contract is determined to have more than one performance obligation, the contract price is allocated to each performance obligation based on its standalone sales price.

In the first quarter of 2018, net revenue recognized from our performance obligations satisfied in previous periods was not material.

Disaggregation of Revenue

We disaggregate our revenue from contracts with customers by activity, customer type and contract type, as we believe it best depicts how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors. Our consolidated 2018 revenue was derived from the following service activities, all of which are in the mechanical services industry, the single industry segment we serve. See details in the following tables (dollars in thousands):


	Three Months Ended March 31,
Revenue by Service Provided	2018				2017
HVAC and Plumbing	$	424,017	91	%	$	338,723	89	%
Building Automation Control Systems		20,045	4	%		22,835	6	%
Other		20,879	5	%		19,030	5	%
Total	$	464,941	100	%	$	380,588	100	%

	Three Months Ended March 31,
Revenue by Type of Customer	2018				2017
Industrial	$	100,100	22	%	$	87,614	23	%
Education		88,203	19	%		61,588	16	%
Office Buildings		69,120	15	%		52,434	14	%
Healthcare		63,183	14	%		51,767	14	%
Government		36,147	8	%		36,236	10	%
Retail, Restaurants and Entertainment		52,787	11	%		45,225	12	%
Multi-Family and Residential		33,052	7	%		26,870	7	%
Other		22,349	4	%		18,854	4	%
Total	$	464,941	100	%	$	380,588	100	%

	Three Months Ended March 31,
Revenue by Activity Type	2018				2017
New Construction	$	183,437	39	%	$	148,511	39	%
Existing Building Construction		155,197	33	%		118,266	31	%
Service Projects		40,175	9	%		42,609	11	%
Service Calls, Maintenance and Monitoring		86,132	19	%		71,202	19	%
Total	$	464,941	100	%	$	380,588	100	%

Accounts Receivables

Accounts Receivable, include amounts billed and billable from work completed in which we have billed or have an unconditional right to bill our customers. The amounts due are stated at their net estimated realizable value. We maintain an allowance for doubtful accounts to provide for the estimated amount of receivables that will not be collected. The allowance is based upon an assessment of customer creditworthiness, historical payment experience, the age of outstanding receivables and collateral to the extent applicable.

Contract Assets and Liabilities

Contract assets include unbilled amounts typically resulting from sales under long term contracts when the cost to cost method of revenue recognition is used and revenue recognized exceeds the amount billed to the customer and right to payment is conditional, subject to completing a milestone, such as a phase of the project. Contract assets are generally classified as current.

Contract liabilities consist of advance payments and billings in excess of revenue recognized. Our contract assets and liabilities are reported in a net position on a contract by contract basis at the end of each reporting period. We classify advance payments and billings in excess of revenue recognized as current. It is very unusual for us to have advanced payments with a term of greater than one year; therefore, our contract assets are usually all current. If we have advanced payments with a term greater than one year, the noncurrent portion of advanced payments would be included in other long-term liabilities in our consolidated balance sheets.

The following table presents the changes in contract assets and contract liabilities (in thousands):


	Contract		Contract
	Assets		Liabilities
Balance at beginning of period	$	30,116	$	106,005
Change due to acquisitions		546		2,227
Change due to conditional versus unconditional		411		—
Reclassified to unbilled accounts receivable		(28,980)		—
Change in timing for performance obligation to be satisfied		—		(293)
Balance at March 31, 2018	$	2,093	$	107,939

In the first quarters of 2018 and 2017, we recognized revenue of $85.5 million and $69.9 million related to our contract liabilities at January 1, 2018 and January 1, 2017, respectively.

We did not have any impairment losses recognized on our receivables or contract assets in the first quarters of 2018 and 2017.

Remaining Performance Obligations

Remaining construction performance obligations represent the remaining transaction price of firm orders for which work has not been performed and excludes unexercised contract options. As of March 31, 2018, the aggregate amount of the transaction price allocated to remaining performance obligations was $1.08 billion. The Company expects to recognize revenue on approximately 85% of the remaining performance obligations over the next 12 months, with the remaining recognized thereafter. Our service maintenance agreements are generally one-year renewable agreements. We have adopted the practical expedient that allows us to not include service maintenance contracts less than one year, therefore we do not report unfulfilled performance obligations for service maintenance agreements.

Income Taxes

We conduct business throughout the United States. Our effective tax rate changes based upon our relative profitability, or lack thereof, in states with varying tax rates and rules. In addition, discrete items, such as tax law changes, judgments and legal structures can impact our effective tax rate. These items can also include the tax treatment for impairment of goodwill and other intangible assets, changes in fair value of acquisition-related assets and liabilities, tax reserves for uncertain tax positions, accounting for losses associated with underperforming operations and noncontrolling interests.

Our provision for income taxes was reduced by $2.8 million in the first quarter of 2018 due to a decrease in unrecognized tax benefits from the filing of a federal income tax automatic accounting method change application.

Financial Instruments

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

Segment Disclosure

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

Fair Value Measurements

3 Months Ended

Mar. 31, 2018

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 March 31, 2018 and December 31, 2017 (in thousands):


	Fair Value Measurements at March 31, 2018
	Level 1		Level 2		Level 3		Total
Cash and cash equivalents	$	25,219	$	—	$	—	$	25,219
Life insurance—cash surrender value	$	—	$	2,950	$	—	$	2,950
Contingent earn-out obligations	$	—	$	—	$	8,542	$	8,542

	Fair Value Measurements at December 31, 2017
	Level 1		Level 2		Level 3		Total
Cash and cash equivalents	$	36,542	$	—	$	—	$	36,542
Life insurance—cash surrender value	$	—	$	3,128	$	—	$	3,128
Contingent earn-out obligations	$	—	$	—	$	7,993	$	7,993

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. The carrying value of our borrowings associated with the Revolving Credit Facility approximate its fair value due to the variable rate on such debt.

One of our operations has life insurance policies covering 42 employees with a combined face value of $31.3 million. The policy is invested in mutual funds and the fair value measurement of the cash surrender balance associated with these policies is determined using Level 2 inputs within the fair value hierarchy and will vary with investment performance. The cash surrender value of these policies was $3.0 million as of March 31, 2018 and $3.1 million as of December 31, 2017. These assets are included in “Other Noncurrent Assets” in our consolidated balance sheets.

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) (in thousands).


Balance at beginning of year	$	7,993
Issuances		1,000
Settlements		(298)
Adjustments to fair value		(153)
Balance at March 31, 2018	$	8,542

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 first quarter of 2017, we recorded a goodwill impairment charge of $1.1 million based on Level 3 measurements. See Note 5 “Goodwill” for further discussion. We did not recognize any impairments, in the current year, 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 + Details

Debt Obligations

3 Months Ended

Mar. 31, 2018

Debt Obligations

Debt Obligations

6. Debt Obligations

Debt obligations consist of the following (in thousands):


	March 31,		December 31,
	2018		2017
Revolving credit facility	$	50,000	$	45,000
Notes to former owners		15,813		15,325
Other debt		180		214
Total debt		65,993		60,539
Less—current portion		(1,113)		(613)
Total long-term portion of debt	$	64,880	$	59,926

Revolving Credit Facility

We have a $325.0 million senior credit facility (the “Facility”) provided by a syndicate of banks, with a $100 million accordion option. The Facility, which is available for borrowings and letters of credit, expires in February 2021 and is secured by a first lien on substantially all of our personal property except for assets related to projects subject to surety bonds and assets held by certain unrestricted subsidiaries and a second lien on our assets related to projects subject to surety bonds. As of March 31, 2018, we had $50.0 million of outstanding borrowings, $33.6 million in letters of credit outstanding and $241.4 million of credit available.

There are two interest rate options for borrowings under the Facility, the Base Rate Loan Option and the Eurodollar Rate Loan Option. These rates are floating rates determined by the broad financial markets, meaning they can and do move up and down from time to time. Additional margins are then added to these two rates.

The following is a summary of the additional margins:


	Consolidated Total Indebtedness to
	Credit Facility Adjusted EBITDA
	Less than 0.75		0.75 to 1.50		1.50 to 2.25		2.25 or greater
Additional Per Annum Interest Margin Added Under:
Base Rate Loan Option	0.25	%	0.50	%	0.75	%	1.00	%
Eurodollar Rate Loan Option	1.25	%	1.50	%	1.75	%	2.00	%

The weighted average interest rate applicable to the borrowings under the Facility was approximately 3.1% as of March 31, 2018.

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 for a fee. 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 a claim is unlikely in the foreseeable future. The letter of credit fees range from 1.25% to 2.00% per annum, based on the ratio of Consolidated Total Indebtedness to Credit Facility Adjusted EBITDA, as defined in the credit agreement.

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. These fees range from 0.20% to 0.35% per annum, based on the ratio of Consolidated Total Indebtedness to Credit Facility Adjusted EBITDA, as defined in the credit agreement.

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.

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 2.75 to 1.00 as of the end of each fiscal quarter. The leverage ratio as of March 31, 2018 was 0.4.

Fixed Charge Coverage Ratio—The Facility requires that the ratio of (a) Credit Facility Adjusted EBITDA, less non-financed capital expenditures, provision for income taxes, dividends and amounts used to repurchase stock to (b) the sum of interest expense and scheduled principal payments of indebtedness be at least 2.00 to 1.00; 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 1.50 to 1.00. The Facility also allows the fixed charge coverage ratio not to be reduced for stock repurchases through September 30, 2015 in an aggregate amount not to exceed $25 million and for stock repurchases made after February 22, 2016 but on or prior to December 31, 2017 in an aggregate amount not to exceed $25 million, if at the time of and after giving effect to such repurchase the Company’s Net Leverage Ratio was less than or equal to 1.50 to 1.00. Capital expenditures, provision for income taxes, 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 March 31, 2018 was 19.9.

Other Restrictions—The Facility permits acquisitions of up to $30.0 million per transaction, provided that the aggregate purchase price of all such acquisitions in the same fiscal year does not exceed $65.0 million. However, these limitations only apply when the Company’s Total Leverage Ratio is greater than 2.00 to 1.00.

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 were in compliance with all of our financial covenants as of March 31, 2018.

Notes to Former Owners

As part of the consideration used to acquire three companies, we have outstanding notes to the former owners. These notes had an outstanding balance of $15.8 million as of March 31, 2018. In conjunction with a small acquisition in the first quarter of 2018, we issued a subordinated note to former owners with an outstanding balance of $1.0 million as of March 31, 2018 that bears interest, payable quarterly, at a weighted average interest rate of 2.5%. The principal is due in equal installments in January 2019 and 2020. In conjunction with the BCH acquisition in the second quarter of 2017, we issued a promissory note to former owners with an outstanding balance of $14.3 million as of March 31, 2018 that bears interest, payable quarterly, at a weighted average interest rate of 3.0%. The principal is due in equal installments in April 2020 and 2021. In conjunction with the Shoffner acquisition in the first quarter of 2016, we issued a subordinated note to former owners with an outstanding balance of $0.5 million as of March 31, 2018 that bears interest, payable quarterly, at a weighted average interest rate of 3.0%. The principal is due in February 2019.

Other Debt

As part of the Shoffner acquisition, we acquired debt with an outstanding balance at the acquisition date of $0.4 million with principal and interest due the last day of every month; ending on the December 30, 2019 maturity date. The interest rate is the one month LIBOR rate plus 2.25%. As of March 31, 2018, $0.2 million of the note was outstanding, of which $0.1 million was considered current.

Summary of Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2018

Summary of Significant Accounting Policies

Basis of Presentation

Use of Estimates

Recent Accounting Pronouncements

Revenue Recognition

In the first quarter of 2018, net revenue recognized from our performance obligations satisfied in previous periods was not material.

Disaggregation of Revenue


	Three Months Ended March 31,
Revenue by Service Provided	2018				2017
HVAC and Plumbing	$	424,017	91	%	$	338,723	89	%
Building Automation Control Systems		20,045	4	%		22,835	6	%
Other		20,879	5	%		19,030	5	%
Total	$	464,941	100	%	$	380,588	100	%

	Three Months Ended March 31,
Revenue by Type of Customer	2018				2017
Industrial	$	100,100	22	%	$	87,614	23	%
Education		88,203	19	%		61,588	16	%
Office Buildings		69,120	15	%		52,434	14	%
Healthcare		63,183	14	%		51,767	14	%
Government		36,147	8	%		36,236	10	%
Retail, Restaurants and Entertainment		52,787	11	%		45,225	12	%
Multi-Family and Residential		33,052	7	%		26,870	7	%
Other		22,349	4	%		18,854	4	%
Total	$	464,941	100	%	$	380,588	100	%

	Three Months Ended March 31,
Revenue by Activity Type	2018				2017
New Construction	$	183,437	39	%	$	148,511	39	%
Existing Building Construction		155,197	33	%		118,266	31	%
Service Projects		40,175	9	%		42,609	11	%
Service Calls, Maintenance and Monitoring		86,132	19	%		71,202	19	%
Total	$	464,941	100	%	$	380,588	100	%

Accounts Receivables

Contract Assets and Liabilities

The following table presents the changes in contract assets and contract liabilities (in thousands):


	Contract		Contract
	Assets		Liabilities
Balance at beginning of period	$	30,116	$	106,005
Change due to acquisitions		546		2,227
Change due to conditional versus unconditional		411		—
Reclassified to unbilled accounts receivable		(28,980)		—
Change in timing for performance obligation to be satisfied		—		(293)
Balance at March 31, 2018	$	2,093	$	107,939

In the first quarters of 2018 and 2017, we recognized revenue of $85.5 million and $69.9 million related to our contract liabilities at January 1, 2018 and January 1, 2017, respectively.

We did not have any impairment losses recognized on our receivables or contract assets in the first quarters of 2018 and 2017.

Remaining Performance Obligations

Income Taxes

Financial Instruments

Segment Disclosure

- Definition

Disclosure of accounting policy for income taxes, which may include its accounting policies for recognizing and measuring deferred tax assets and liabilities and related valuation allowances, recognizing investment tax credits, operating loss carryforwards, tax credit carryforwards, and other carryforwards, methodologies for determining its effective income tax rate and the characterization of interest and penalties in the financial statements.

+ References + Details

Summary of Significant Accounting Policies (Tables)

3 Months Ended

Mar. 31, 2018

Summary of Significant Accounting Policies

Schedule of disaggregation or revenue


	Three Months Ended March 31,
Revenue by Service Provided	2018				2017
HVAC and Plumbing	$	424,017	91	%	$	338,723	89	%
Building Automation Control Systems		20,045	4	%		22,835	6	%
Other		20,879	5	%		19,030	5	%
Total	$	464,941	100	%	$	380,588	100	%

	Three Months Ended March 31,
Revenue by Type of Customer	2018				2017
Industrial	$	100,100	22	%	$	87,614	23	%
Education		88,203	19	%		61,588	16	%
Office Buildings		69,120	15	%		52,434	14	%
Healthcare		63,183	14	%		51,767	14	%
Government		36,147	8	%		36,236	10	%
Retail, Restaurants and Entertainment		52,787	11	%		45,225	12	%
Multi-Family and Residential		33,052	7	%		26,870	7	%
Other		22,349	4	%		18,854	4	%
Total	$	464,941	100	%	$	380,588	100	%

	Three Months Ended March 31,
Revenue by Activity Type	2018				2017
New Construction	$	183,437	39	%	$	148,511	39	%
Existing Building Construction		155,197	33	%		118,266	31	%
Service Projects		40,175	9	%		42,609	11	%
Service Calls, Maintenance and Monitoring		86,132	19	%		71,202	19	%
Total	$	464,941	100	%	$	380,588	100	%

Schedule of contract assets and liabilities

The following table presents the changes in contract assets and contract liabilities (in thousands):


	Contract		Contract
	Assets		Liabilities
Balance at beginning of period	$	30,116	$	106,005
Change due to acquisitions		546		2,227
Change due to conditional versus unconditional		411		—
Reclassified to unbilled accounts receivable		(28,980)		—
Change in timing for performance obligation to be satisfied		—		(293)
Balance at March 31, 2018	$	2,093	$	107,939

Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2018

Fair Value Measurements

Summary of 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


	Fair Value Measurements at March 31, 2018
	Level 1		Level 2		Level 3		Total
Cash and cash equivalents	$	25,219	$	—	$	—	$	25,219
Life insurance—cash surrender value	$	—	$	2,950	$	—	$	2,950
Contingent earn-out obligations	$	—	$	—	$	8,542	$	8,542

	Fair Value Measurements at December 31, 2017
	Level 1		Level 2		Level 3		Total
Cash and cash equivalents	$	36,542	$	—	$	—	$	36,542
Life insurance—cash surrender value	$	—	$	3,128	$	—	$	3,128
Contingent earn-out obligations	$	—	$	—	$	7,993	$	7,993

Schedule of reconciliation of the fair value of contingent earn-out obligations that use significant unobservable inputs (Level 3)

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


Balance at beginning of year	$	7,993
Issuances		1,000
Settlements		(298)
Adjustments to fair value		(153)
Balance at March 31, 2018	$	8,542

Summary of Significant Accounting Policies - Disaggregation of Revenue (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Disaggregation of Revenue
Receivable payment terms (in days)	30 days
Revenue	$ 464,941
Percentage of revenue from contract with customer (as a percent)	100.00%
Industrial
Disaggregation of Revenue
Revenue	$ 100,100
Percentage of revenue from contract with customer (as a percent)	22.00%
Education
Disaggregation of Revenue
Revenue	$ 88,203
Percentage of revenue from contract with customer (as a percent)	19.00%
Office Buildings
Disaggregation of Revenue
Revenue	$ 69,120
Percentage of revenue from contract with customer (as a percent)	15.00%
Healthcare
Disaggregation of Revenue
Revenue	$ 63,183
Percentage of revenue from contract with customer (as a percent)	14.00%
Government
Disaggregation of Revenue
Revenue	$ 36,147
Percentage of revenue from contract with customer (as a percent)	8.00%
Retail, Restaurants and Entertainment
Disaggregation of Revenue
Revenue	$ 52,787
Percentage of revenue from contract with customer (as a percent)	11.00%
Multi-Family and Residential
Disaggregation of Revenue
Revenue	$ 33,052
Percentage of revenue from contract with customer (as a percent)	7.00%
Other
Disaggregation of Revenue
Revenue	$ 22,349
Percentage of revenue from contract with customer (as a percent)	4.00%
New Construction
Disaggregation of Revenue
Revenue	$ 183,437
Percentage of revenue from contract with customer (as a percent)	39.00%
Existing Building Construction
Disaggregation of Revenue
Revenue	$ 155,197
Percentage of revenue from contract with customer (as a percent)	33.00%
Small Projects
Disaggregation of Revenue
Revenue	$ 40,175
Percentage of revenue from contract with customer (as a percent)	9.00%
Service Calls, Maintenance and Monitoring
Disaggregation of Revenue
Revenue	$ 86,132
Percentage of revenue from contract with customer (as a percent)	19.00%
HVAC and Plumbing
Disaggregation of Revenue
Revenue	$ 424,017
Percentage of revenue from contract with customer (as a percent)	91.00%
Building Automation Control Systems
Disaggregation of Revenue
Revenue	$ 20,045
Percentage of revenue from contract with customer (as a percent)	4.00%
Other
Disaggregation of Revenue
Revenue	$ 20,879
Percentage of revenue from contract with customer (as a percent)	5.00%
Calculated under Revenue Guidance in Effect before Topic 606 [Member]
Disaggregation of Revenue
Revenue		$ 380,588
Percentage of revenue from contract with customer (as a percent)		100.00%
Calculated under Revenue Guidance in Effect before Topic 606 [Member] \| Industrial
Disaggregation of Revenue
Revenue		$ 87,614
Percentage of revenue from contract with customer (as a percent)		23.00%
Calculated under Revenue Guidance in Effect before Topic 606 [Member] \| Education
Disaggregation of Revenue
Revenue		$ 61,588
Percentage of revenue from contract with customer (as a percent)		16.00%
Calculated under Revenue Guidance in Effect before Topic 606 [Member] \| Office Buildings
Disaggregation of Revenue
Revenue		$ 52,434
Percentage of revenue from contract with customer (as a percent)		14.00%
Calculated under Revenue Guidance in Effect before Topic 606 [Member] \| Healthcare
Disaggregation of Revenue
Revenue		$ 51,767
Percentage of revenue from contract with customer (as a percent)		14.00%
Calculated under Revenue Guidance in Effect before Topic 606 [Member] \| Government
Disaggregation of Revenue
Revenue		$ 36,236
Percentage of revenue from contract with customer (as a percent)		10.00%
Calculated under Revenue Guidance in Effect before Topic 606 [Member] \| Retail, Restaurants and Entertainment
Disaggregation of Revenue
Revenue		$ 45,225
Percentage of revenue from contract with customer (as a percent)		12.00%
Calculated under Revenue Guidance in Effect before Topic 606 [Member] \| Multi-Family and Residential
Disaggregation of Revenue
Revenue		$ 26,870
Percentage of revenue from contract with customer (as a percent)		7.00%
Calculated under Revenue Guidance in Effect before Topic 606 [Member] \| Other
Disaggregation of Revenue
Revenue		$ 18,854
Percentage of revenue from contract with customer (as a percent)		4.00%
Calculated under Revenue Guidance in Effect before Topic 606 [Member] \| New Construction
Disaggregation of Revenue
Revenue		$ 148,511
Percentage of revenue from contract with customer (as a percent)		39.00%
Calculated under Revenue Guidance in Effect before Topic 606 [Member] \| Existing Building Construction
Disaggregation of Revenue
Revenue		$ 118,266
Percentage of revenue from contract with customer (as a percent)		31.00%
Calculated under Revenue Guidance in Effect before Topic 606 [Member] \| Small Projects
Disaggregation of Revenue
Revenue		$ 42,609
Percentage of revenue from contract with customer (as a percent)		11.00%
Calculated under Revenue Guidance in Effect before Topic 606 [Member] \| Service Calls, Maintenance and Monitoring
Disaggregation of Revenue
Revenue		$ 71,202
Percentage of revenue from contract with customer (as a percent)		19.00%
Calculated under Revenue Guidance in Effect before Topic 606 [Member] \| HVAC and Plumbing
Disaggregation of Revenue
Revenue		$ 338,723
Percentage of revenue from contract with customer (as a percent)		89.00%
Calculated under Revenue Guidance in Effect before Topic 606 [Member] \| Building Automation Control Systems
Disaggregation of Revenue
Revenue		$ 22,835
Percentage of revenue from contract with customer (as a percent)		6.00%
Calculated under Revenue Guidance in Effect before Topic 606 [Member] \| Other
Disaggregation of Revenue
Revenue		$ 19,030
Percentage of revenue from contract with customer (as a percent)		5.00%
Minimum
Disaggregation of Revenue
Payments received term (in days)	30 days
Maximum
Disaggregation of Revenue
Payments received term (in days)	90 days

Fair Value Measurements (Details) $ in Thousands	3 Months Ended		12 Months Ended
Fair Value Measurements (Details) $ in Thousands	Mar. 31, 2018 USD ($) item	Mar. 31, 2017 USD ($)	Dec. 31, 2017 USD ($)
Fair Value Measurements
Number of employees covered under life insurance policies \| item	42
Combined face value of life insurance policies	$ 31,300
Cash surrender value	3,000		$ 3,100
Reconciliation of the fair value of contingent earn-out obligations that use significant unobservable inputs (Level 3)
Goodwill, Impairment Loss		$ 1,105	1,105
Contingent earn-out obligations
Reconciliation of the fair value of contingent earn-out obligations that use significant unobservable inputs (Level 3)
Balance at beginning of year	7,993
Issuances	1,000
Settlements	(298)
Adjustments to fair value	(153)
Balance at end of period	8,542		7,993
Recurring basis \| Total
Fair Value Measurements
Cash and cash equivalents	25,219		36,542
Life insurance - cash surrender value	2,950		3,128
Contingent earn-out obligations	8,542		7,993
Recurring basis \| Quoted Market Prices In Active Markets for Identical Assets (Level 1)
Fair Value Measurements
Cash and cash equivalents	25,219		36,542
Recurring basis \| Fair Value Measurements at Reporting Date Using Significant Other Observable Inputs (Level 2)
Fair Value Measurements
Life insurance - cash surrender value	2,950		3,128
Recurring basis \| Significant Unobservable Inputs (Level 3)
Fair Value Measurements
Contingent earn-out obligations	$ 8,542		$ 7,993
Non recurring basis \| Significant Unobservable Inputs (Level 3)
Reconciliation of the fair value of contingent earn-out obligations that use significant unobservable inputs (Level 3)
Goodwill, Impairment Loss		$ 1,100

Debt Obligations-Other (Details) $ in Thousands	3 Months Ended	12 Months Ended
Debt Obligations-Other (Details) $ in Thousands	Mar. 31, 2018 USD ($) item	Dec. 31, 2017 USD ($) item
Long-Term Debt Obligations
Line of credit borrowing capacity accordion option	$ 100,000
Other disclosures
Number of Businesses Acquired \| item	2	4
Outstanding balance	$ 65,993	$ 60,539
Outstanding balance	64,880	59,926
Shoffner
Other disclosures
Outstanding balance	200
Debt acquired related to coil line duct processing system	400
Current debt	$ 100
London Interbank Offered Rate (LIBOR) \| Shoffner
Additional per annum interest margin added under:
Additional per annum interest margin (as a percent)	2.25%
Revolving credit facility
Long-Term Debt Obligations
Borrowing capacity	$ 325,000
Outstanding borrowings	50,000
Letters of credit amount outstanding	33,600
Credit available	$ 241,400
Principal financial covenants
Number of interest rate options \| item	2
Leverage ratio	0.40
Fixed charge coverage ratio	19.9
Number of quarters of capital expenditures, tax provision, dividends and stock repurchase payments used for calculation of fixed charge coverage ratio \| item	4
Other disclosures
Outstanding balance	$ 50,000	45,000
Weighted average interest rate (as a percent)	3.10%
Revolving credit facility \| Through maturity
Principal financial covenants
Leverage ratio	2.75
Revolving credit facility \| Minimum
Principal financial covenants
Fixed charge coverage ratio	2.00
Additional per annum interest margin added under:
Letter of credit fees (as a percent)	1.25%
Commitment fees payable on unused portion of the facility (as a percent)	0.20%
Revolving credit facility \| Minimum \| Covenant Requirement
Principal financial covenants
Net leverage ratio used as basis for other restrictions	2.00
Revolving credit facility \| Maximum
Principal financial covenants
Net leverage ratio after giving effect to stock repurchases for calculation of the fixed charge coverage ratio	1.50
Permitted amount of acquisitions per transaction	$ 30,000
Aggregate purchase price of current acquisition and acquisitions in the preceding 12 month period for determining permitted amount of acquisition per transaction	$ 65,000
Additional per annum interest margin added under:
Letter of credit fees (as a percent)	2.00%
Commitment fees payable on unused portion of the facility (as a percent)	0.35%
Revolving credit facility \| Maximum \| Covenant Requirement
Principal financial covenants
Net leverage ratio used to determine exclusion of stock repurchases and the payment of dividends for calculation of the fixed charge coverage ratio	1.50
Revolving credit facility \| Maximum \| Stock Repurchases Through September 30, 2015
Principal financial covenants
Amount of stock repurchases to maintain maximum net leverage ratio	$ 25,000
Revolving credit facility \| Maximum \| Stock Repurchases After February 22, 2016 And On Or Before December 31, 2017
Principal financial covenants
Amount of stock repurchases to maintain maximum net leverage ratio	$ 25,000
Revolving credit facility \| Base rate \| Consolidated Total Indebtedness to Credit Facility Adjusted EBITDA: Less than 0.75
Additional per annum interest margin added under:
Additional per annum interest margin (as a percent)	0.25%
Revolving credit facility \| Base rate \| Consolidated Total Indebtedness to Credit Facility Adjusted EBITDA: 0.75 to 1.50
Additional per annum interest margin added under:
Additional per annum interest margin (as a percent)	0.50%
Revolving credit facility \| Base rate \| Consolidated Total Indebtedness to Credit Facility Adjusted EBITDA: 1.50 to 2.25
Additional per annum interest margin added under:
Additional per annum interest margin (as a percent)	0.75%
Revolving credit facility \| Base rate \| Consolidated Total Indebtedness to Credit Facility Adjusted EBITDA: 2.25 or greater
Additional per annum interest margin added under:
Additional per annum interest margin (as a percent)	1.00%
Revolving credit facility \| Eurodollar rate \| Consolidated Total Indebtedness to Credit Facility Adjusted EBITDA: Less than 0.75
Additional per annum interest margin added under:
Additional per annum interest margin (as a percent)	1.25%
Revolving credit facility \| Eurodollar rate \| Consolidated Total Indebtedness to Credit Facility Adjusted EBITDA: 0.75 to 1.50
Additional per annum interest margin added under:
Additional per annum interest margin (as a percent)	1.50%
Revolving credit facility \| Eurodollar rate \| Consolidated Total Indebtedness to Credit Facility Adjusted EBITDA: 1.50 to 2.25
Additional per annum interest margin added under:
Additional per annum interest margin (as a percent)	1.75%
Revolving credit facility \| Eurodollar rate \| Consolidated Total Indebtedness to Credit Facility Adjusted EBITDA: 2.25 or greater
Additional per annum interest margin added under:
Additional per annum interest margin (as a percent)	2.00%
Notes to former owners
Other disclosures
Number of Businesses Acquired \| item	3
Outstanding balance	$ 15,813	15,325
Subordinate note
Other disclosures
Outstanding balance	$ 1,000
Weighted average interest rate (as a percent)	2.50%
Subordinate note \| Shoffner
Other disclosures
Outstanding balance	$ 500
Weighted average interest rate (as a percent)	3.00%
Promissory note \| BCH
Other disclosures
Outstanding balance	$ 14,300
Weighted average interest rate (as a percent)	3.00%
Other debt
Other disclosures
Outstanding balance	$ 180	$ 214

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
CONSOLIDATED BALANCE SHEETS
Accounts receivable, allowance for doubtful accounts (in dollars)	$ 3,516	$ 3,400
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	4,035,263	3,936,291

Business and Organization	3 Months Ended
Business and Organization	Mar. 31, 2018
Business and Organization
Business and Organization	1. Business and Organization Comfort Systems USA, Inc., a Delaware corporation, provides comprehensive mechanical contracting services, which principally includes heating, ventilation and air conditioning (“HVAC”), plumbing, piping and controls, as well as off-site construction, electrical, monitoring and fire protection. We install, maintain, repair and replace products and systems throughout the United States. Approximately 39% of our consolidated 2018 revenue is attributable to installation of systems in newly constructed facilities, with the remaining 61% attributable to maintenance, repair and replacement services. The terms “Comfort Systems,” “we,” “us,” or “the Company,” refer to Comfort Systems USA, Inc. or Comfort Systems USA, Inc. and its consolidated subsidiaries, as appropriate in the context.

Acquisitions	3 Months Ended
Acquisitions	Mar. 31, 2018
Acquisitions
Acquisitions	4. Acquisitions On April 1, 2017, we acquired all of the issued and outstanding stock of BCH Holdings, Inc. and each of its wholly-owned subsidiaries (collectively “BCH”) for $121.3 million of which $97.0 million was allocated to goodwill and identifiable intangible assets. The total purchase price included $95.4 million in cash, $14.3 million in notes payable to former owners and an $11.6 million contingent earn-out obligation. BCH is an integrated, single-source provider of mechanical service, maintenance and construction with headquarters in Tampa, Florida and operations throughout the southeastern region of the United States, which reports as a separate operating location. We completed two acquisitions in the first quarter of 2018 with a total purchase price of $10.6 million for the three months ended March 31, 2018. In addition to the BCH acquisition, we completed four additional acquisitions in 2017. The total purchase price for these acquisitions, including earn-outs, was $9.4 million. These acquisitions were not material and were “tucked-in” with existing operations. The results of operations of acquisitions are included in our consolidated financial statements from their respective acquisition dates. Our consolidated balance sheet includes preliminary allocations of the purchase price to the assets acquired and liabilities assumed for the applicable acquisition pending the completion of the final valuation of intangible assets and accrued liabilities. The acquisitions completed in the current and prior year were not material, individually or in the aggregate. Additional contingent purchase price (“earn-out”) has been or will be paid if certain acquisitions achieve predetermined profitability targets. Such earn-outs are not subject to the continued employment of the sellers.

Commitments and Contingencies	3 Months Ended
Commitments and Contingencies	Mar. 31, 2018
Commitments and Contingencies
Commitments and Contingencies	7. Commitments and Contingencies 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, cash flows or financial condition, after giving effect to provisions already recorded. 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 have seen some strengthening as the commercial construction markets have started to rebound. Bonding capacity remains adequate in the current market conditions along with acceptable terms and conditions. Historically, approximately 20% to 30% of our business has required bonds. While we currently have strong surety relationships to support our bonding needs, future market conditions or 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 would enable us to ultimately respond effectively to an interruption in the availability of bonding capacity, such an interruption would likely cause our revenue 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 are estimated and accrued based upon known facts, historical trends and industry averages. Estimated losses in excess of our deductible, which have not already been paid, are included in our accrual with a corresponding receivable from our insurance carrier. 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.

Subsequent Events	3 Months Ended
Subsequent Events	Mar. 31, 2018
Subsequent Events
Subsequent Events	9. Subsequent Events On April 18, 2018, the Company entered into Amendment No. 5 to Second Amended and Restated Credit Agreement and Amendment to Other Loan Documents (the “Fifth Amendment” and, together with the Facility, the “Amended Facility”) with a syndicate of banks. The Amended Facility is secured by a first lien on substantially all of the Company’s personal property except for assets related to projects subject to surety bonds and assets held by certain unrestricted subsidiaries and a second lien on the Company’s assets related to projects subject to surety bonds. The Amended Facility provides an increased line of credit to the Company from $325 million to $400 million, with a $100 million accordion option. The line of credit includes up to $125 million issuable in the form of letters of credit. The Amended Facility will expire in April 2023. In April 2018, we entered into settlement agreements with British Petroleum (“BP”) related to two claims from one of our subsidiaries regarding the April 2010 BP Deepwater Horizon oil spill. We expect to record a gain of $3.5 million to $4.0 million in the second quarter of 2018 in “Other Income” as a result of these settlements. We do not have any remaining subsidiaries with outstanding claims against BP related to this matter.

Business and Organization (Details)	3 Months Ended
Business and Organization (Details)	Mar. 31, 2018
Installation of systems in newly constructed facilities
Business and Organization
Percentage of revenue attributable to services	39.00%
Maintenance, repair and replacement services
Business and Organization
Percentage of revenue attributable to services	61.00%

Summary of Significant Accounting Policies - Contract Assets and Liabilities (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Contract Assets
Balance at beginning of period	$ 30,116
Change due to acquisitions	546
Change due to conditional versus unconditional	411
Reclassified to unbilled accounts receivable	(28,980)
Balance at March 31, 2018	2,093
Contract Liabilities
Balance at beginning of period	106,005
Change due to acquisitions	2,227
Change in timing for performance obligation to be satisfied	(293)
Balance at March 31, 2018	107,939
Increase (Decrease) In Income Taxes Abstract
Decrease in the provision for income taxes	2,800
Revenue related to our contract liabilities	$ 85,500
Practical Expedient	true
Calculated under Revenue Guidance in Effect before Topic 606 [Member]
Increase (Decrease) In Income Taxes Abstract
Revenue related to our contract liabilities		$ 69,900

Summary of Significant Accounting Policies - Remaining Performance Obligations (Details) - Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2018-04-01 $ in Millions	3 Months Ended
	Mar. 31, 2018 USD ($)
Remaining Performance Obligations
Remaining performance obligations	$ 1,080
Expected timing of performance obligations	12 months
Expected percentage of remaining performance obligations	85.00%

Acquisitions (Details) $ in Millions		3 Months Ended	12 Months Ended
Acquisitions (Details) $ in Millions	Apr. 01, 2017 USD ($)	Mar. 31, 2018 USD ($) item	Dec. 31, 2017 USD ($) item
Acquisitions
Total purchase price		$ 10.6	$ 9.4
Number of acquisitions \| item		2	4
Notes to former owners
Acquisitions
Number of acquisitions \| item		3
BCH
Acquisitions
Total purchase price	$ 121.3
Amount allocated to goodwill and identifiable intangible assets for acquisitions		$ 97.0
Purchase price paid in cash	95.4
Promissory note payable	14.3
Contingent earn-out obligation	$ 11.6

Goodwill (Details) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
Goodwill (Details) - USD ($) $ in Thousands	Mar. 31, 2018	Mar. 31, 2017	Dec. 31, 2017
Changes in the carrying amount of goodwill
Balance at beginning of year	$ 200,584	$ 149,208	$ 149,208
Additions (See Note 4)	2,615		52,481
Impairment adjustment		$ (1,105)	(1,105)
Balance at end of period	$ 203,199		$ 200,584

Commitments and Contingencies - Bonds (Details) - Surety	3 Months Ended
	Mar. 31, 2018
Minimum
Surety
Percentage of business which has required bonds	20.00%
Maximum
Surety
Percentage of business which has required bonds	30.00%

Stockholders' Equity - Anti-dilutive stock options (Details) - shares shares in Millions	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Stock Options \| Maximum
Earnings Per Share
Anti-dilutive securities excluded from computation of earnings per share amount (in shares)	0.1	0.1

Stockholders' Equity - Number of Shares (Details) - shares shares in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Reconciliation of the number of shares outstanding with the number of shares used in computing basic and diluted earnings per share
Common shares outstanding, end of period	37,088	37,226
Effect of using weighted average common shares outstanding	104	(1)
Shares used in computing earnings per share—basic	37,192	37,225
Effect of shares issuable under stock option plans based on the treasury stock method	317	335
Effect of restricted and contingently issuable shares	119	164
Shares used in computing earnings per share—diluted	37,628	37,724

Subsequent Events (Details) $ in Millions	1 Months Ended	3 Months Ended
Subsequent Events (Details) $ in Millions	Apr. 30, 2018 item	Jun. 30, 2018 USD ($)	Apr. 18, 2018 USD ($)	Mar. 31, 2018 USD ($)
Subsequent Events
Line of credit accordion option				$ 100.0
Revolving credit facility
Subsequent Events
Borrowing capacity				$ 325.0
Subsequent events.
Subsequent Events
Line of credit accordion option			$ 100.0
Subsequent events. \| Revolving credit facility
Subsequent Events
Borrowing capacity			400.0
Subsequent events. \| Letter of Credit
Subsequent Events
Borrowing capacity			$ 125.0
Subsequent events. \| Maximum \| Forecast
Subsequent Events
Gain on the claim settlement		$ 4.0
Subsequent events. \| Minimum \| Forecast
Subsequent Events
Gain on the claim settlement		$ 3.5
British Petroleum \| Subsequent events.
Subsequent Events
Number of claims \| item	2