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Document and Entity Information - shares	9 Months Ended
Document and Entity Information - shares	Sep. 30, 2019	Oct. 18, 2019
Document and Entity Information
Document Type	10-Q
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Sep. 30, 2019
Entity Registrant Name	COMFORT SYSTEMS USA, INC.
Entity File Number	1-13011
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	76-0526487
Entity Address, Address Line One	675 Bering Drive
Entity Address, Address Line Two	Suite 400
Entity Address, City or Town	Houston
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	77057
City Area Code	713
Local Phone Number	830-9600
Entity Central Index Key	0001035983
Title of 12(b) Security	Common Stock, $0.01 par value
Trading Symbol	FIX
Security Exchange Name	NYSE
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q3
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		36,675,927

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
CURRENT ASSETS:
Cash and cash equivalents	$ 40,363	$ 45,620
Billed accounts receivable, less allowance for doubtful accounts of $6,526 and $5,898, respectively	607,061	481,366
Unbilled accounts receivable	49,926	37,180
Other receivables	25,476	16,361
Inventories	12,667	12,416
Prepaid expenses and other	8,788	6,544
Costs and estimated earnings in excess of billings	6,121	10,213
Total current assets	750,402	609,700
PROPERTY AND EQUIPMENT, NET	108,129	99,618
LEASE RIGHT-OF-USE ASSET	84,281
GOODWILL	332,200	235,182
IDENTIFIABLE INTANGIBLE ASSETS, NET	166,736	95,275
DEFERRED TAX ASSETS	20,254	17,634
OTHER NONCURRENT ASSETS	5,458	5,155
Total assets	1,467,460	1,062,564
CURRENT LIABILITIES:
Current maturities of long-term debt	13,847	3,279
Accounts payable	176,624	176,167
Accrued compensation and benefits	100,390	87,388
Billings in excess of costs and estimated earnings	167,097	130,986
Accrued self-insurance	40,750	36,386
Other current liabilities	79,024	32,852
Total current liabilities	577,732	467,058
LONG-TERM DEBT	228,167	73,639
LEASE LIABILITIES	73,213
DEFERRED TAX LIABILITIES	1,387	1,387
OTHER LONG-TERM LIABILITIES	29,331	22,433
Total liabilities	909,830	564,517
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, 4,447,438 and 4,229,653 shares, respectively	(101,243)	(87,747)
Additional paid-in capital	320,157	316,479
Retained earnings	338,305	268,904
Total stockholders' equity	557,630	498,047
Total liabilities and stockholders' equity	$ 1,467,460	$ 1,062,564

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
CONSOLIDATED BALANCE SHEETS
Accounts receivable, allowance for doubtful accounts (in dollars)	$ 6,526	$ 5,898
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	4,447,438	4,229,653

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
CONSOLIDATED STATEMENTS OF OPERATIONS
REVENUE	$ 706,918	$ 594,536	$ 1,895,693	$ 1,594,520
COST OF SERVICES	564,216	466,668	1,526,310	1,266,416
Gross profit	142,702	127,868	369,383	328,104
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES	90,006	75,297	253,417	216,528
GAIN ON SALE OF ASSETS	(708)	(219)	(1,119)	(630)
Operating income	53,404	52,790	117,085	112,206
OTHER INCOME (EXPENSE):
Interest income	82	25	174	53
Interest expense	(2,779)	(1,152)	(6,891)	(2,601)
Changes in the fair value of contingent earn-out obligations	(2,004)	434	(3,924)	493
Other	3	39	167	4,062
Other income (expense)	(4,698)	(654)	(10,474)	2,007
INCOME BEFORE INCOME TAXES	48,706	52,136	106,611	114,213
PROVISION FOR INCOME TAXES	12,473	13,595	26,339	26,466
NET INCOME	$ 36,233	$ 38,541	$ 80,272	$ 87,747
INCOME PER SHARE:
Basic (in shares)	$ 0.98	$ 1.03	$ 2.18	$ 2.36
Diluted (in shares)	$ 0.98	$ 1.02	$ 2.16	$ 2.33
SHARES USED IN COMPUTING INCOME PER SHARE:
Basic (in shares)	36,805	37,294	36,891	37,236
Diluted (in shares)	37,051	37,667	37,170	37,634
DIVIDENDS PER SHARE (in dollars per share)	$ 0.100	$ 0.085	$ 0.295	$ 0.240

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands	Common Stock	Treasury Stock	Additional Paid-In Capital	Retained Earnings	Total
BALANCE at Dec. 31, 2017	$ 411	$ (63,519)	$ 312,784	$ 168,269	$ 417,945
BALANCE (in shares) at Dec. 31, 2017	41,123,365
BALANCE (in shares) at Dec. 31, 2017		(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)
Share repurchase (in shares)		(150,481)
BALANCE at Mar. 31, 2018	$ 411	$ (69,323)	315,907	182,142	429,138
BALANCE (in shares) at Mar. 31, 2018	41,123,365
BALANCE (in shares) at Mar. 31, 2018		(4,035,263)
BALANCE at Dec. 31, 2017	$ 411	$ (63,519)	312,784	168,269	417,945
BALANCE (in shares) at Dec. 31, 2017	41,123,365
BALANCE (in shares) at Dec. 31, 2017		(3,936,291)
Increase (Decrease) in Stockholders' Equity
Net income					87,747
BALANCE at Sep. 30, 2018	$ 411	$ (71,084)	316,354	247,086	492,767
BALANCE (in shares) at Sep. 30, 2018	41,123,365
BALANCE (in shares) at Sep. 30, 2018		(3,902,843)
BALANCE at Mar. 31, 2018	$ 411	$ (69,323)	315,907	182,142	429,138
BALANCE (in shares) at Mar. 31, 2018	41,123,365
BALANCE (in shares) at Mar. 31, 2018		(4,035,263)
Increase (Decrease) in Stockholders' Equity
Net income				32,547	32,547
Issuance of Stock:
Issuance of shares for options exercised		$ 1,949	(29)		1,920
Issuance of shares for options exercised (in shares)		112,616
Issuance of restricted stock & performance stock		$ 1,335	(1,335)		0
Issuance of restricted stock & performance stock (in shares)		77,263
Shares received in lieu of tax withholding payment on vested restricted stock		$ (693)			(693)
Shares received in lieu of tax withholding payment on vested restricted stock (in shares)		(17,046)
Stock-based compensation			1,692		1,692
Dividends				(2,974)	(2,974)
Share repurchase		$ (654)			(654)
Share repurchase (in shares)		(15,326)
BALANCE at Jun. 30, 2018	$ 411	$ (67,386)	316,235	211,715	460,975
BALANCE (in shares) at Jun. 30, 2018	41,123,365
BALANCE (in shares) at Jun. 30, 2018		(3,877,756)
Increase (Decrease) in Stockholders' Equity
Net income				38,541	38,541
Issuance of Stock:
Issuance of shares for options exercised		$ 1,046	(305)		741
Issuance of shares for options exercised (in shares)		60,135
Stock-based compensation			424		424
Dividends				(3,170)	(3,170)
Share repurchase		$ (4,744)			(4,744)
Share repurchase (in shares)		(85,222)
BALANCE at Sep. 30, 2018	$ 411	$ (71,084)	316,354	247,086	492,767
BALANCE (in shares) at Sep. 30, 2018	41,123,365
BALANCE (in shares) at Sep. 30, 2018		(3,902,843)
BALANCE at Dec. 31, 2018	$ 411	$ (87,747)	316,479	268,904	$ 498,047
BALANCE (in shares) at Dec. 31, 2018	41,123,365				41,123,365
BALANCE (in shares) at Dec. 31, 2018		(4,229,653)			4,229,653
Increase (Decrease) in Stockholders' Equity
Net income				19,866	$ 19,866
Issuance of Stock:
Issuance of shares for options exercised		$ 861	(61)		800
Issuance of shares for options exercised (in shares)		41,103
Issuance of restricted stock & performance stock		$ 817	1,189		2,006
Issuance of restricted stock & performance stock (in shares)		38,539
Shares received in lieu of tax withholding payment on vested restricted stock		$ (781)			(781)
Shares received in lieu of tax withholding payment on vested restricted stock (in shares)		(15,013)
Stock-based compensation			2,084		2,084
Dividends				(3,506)	(3,506)
Share repurchase		$ (3,321)			(3,321)
Share repurchase (in shares)		(67,394)
BALANCE at Mar. 31, 2019	$ 411	$ (90,171)	319,691	285,264	515,195
BALANCE (in shares) at Mar. 31, 2019	41,123,365
BALANCE (in shares) at Mar. 31, 2019		(4,232,418)
BALANCE at Dec. 31, 2018	$ 411	$ (87,747)	316,479	268,904	$ 498,047
BALANCE (in shares) at Dec. 31, 2018	41,123,365				41,123,365
BALANCE (in shares) at Dec. 31, 2018		(4,229,653)			4,229,653
Increase (Decrease) in Stockholders' Equity
Net income					$ 80,272
BALANCE at Sep. 30, 2019	$ 411	$ (101,243)	320,157	338,305	$ 557,630
BALANCE (in shares) at Sep. 30, 2019	41,123,365				41,123,365
BALANCE (in shares) at Sep. 30, 2019		(4,447,438)			4,447,438
BALANCE at Mar. 31, 2019	$ 411	$ (90,171)	319,691	285,264	$ 515,195
BALANCE (in shares) at Mar. 31, 2019	41,123,365
BALANCE (in shares) at Mar. 31, 2019		(4,232,418)
Increase (Decrease) in Stockholders' Equity
Net income				24,173	24,173
Issuance of Stock:
Issuance of shares for options exercised		$ 31	(11)		20
Issuance of shares for options exercised (in shares)		1,408
Issuance of restricted stock & performance stock		$ 1,486	(1,486)
Issuance of restricted stock & performance stock (in shares)		69,067
Shares received in lieu of tax withholding payment on vested restricted stock		$ (717)			(717)
Shares received in lieu of tax withholding payment on vested restricted stock (in shares)		(13,573)
Stock-based compensation			1,685		1,685
Dividends				(3,692)	(3,692)
Share repurchase		$ (4,576)			(4,576)
Share repurchase (in shares)		(93,468)
BALANCE at Jun. 30, 2019	$ 411	$ (93,947)	319,879	305,745	532,088
BALANCE (in shares) at Jun. 30, 2019	41,123,365
BALANCE (in shares) at Jun. 30, 2019		(4,268,984)
Increase (Decrease) in Stockholders' Equity
Net income				36,233	36,233
Issuance of Stock:
Issuance of shares for options exercised		$ 124	57		181
Issuance of shares for options exercised (in shares)		5,426
Stock-based compensation			221		221
Dividends				(3,673)	(3,673)
Share repurchase		$ (7,420)			(7,420)
Share repurchase (in shares)		(183,880)
BALANCE at Sep. 30, 2019	$ 411	$ (101,243)	$ 320,157	$ 338,305	$ 557,630
BALANCE (in shares) at Sep. 30, 2019	41,123,365				41,123,365
BALANCE (in shares) at Sep. 30, 2019		(4,447,438)			4,447,438

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$ 80,272	$ 87,747
Adjustments to reconcile net income to net cash provided by operating activities-
Amortization of identifiable intangible assets	20,221	14,102
Depreciation expense	18,222	16,630
Change in right-of-use assets	10,552
Bad debt expense	2,093	2,905
Deferred tax provision (benefit)	(2,620)	5,520
Amortization of debt financing costs	287	288
Gain on sale of assets	(1,119)	(630)
Changes in the fair value of contingent earn-out obligations	3,924	(493)
Stock-based compensation	4,861	6,021
(Increase) decrease in-
Receivables, net	(31,647)	(80,726)
Inventories	(248)	(1,917)
Prepaid expenses and other current assets	(4,625)	3,085
Costs and estimated earnings in excess of billings and unbilled accounts receivable	(2,081)	(18,328)
Other noncurrent assets	(544)	(199)
Increase (decrease) in-
Accounts payable and accrued liabilities	6,635	19,537
Billings in excess of costs and estimated earnings	4,555	17,682
Other long-term liabilities	(9,023)	(3,222)
Net cash provided by operating activities	99,715	68,002
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment	(22,641)	(22,059)
Proceeds from sales of property and equipment	1,447	1,077
Proceeds from sale of business	1,611
Cash paid for acquisitions, net of cash acquired	(196,470)	(65,287)
Net cash used in investing activities	(216,053)	(86,269)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from revolving line of credit	320,000	104,000
Payments on revolving line of credit	(177,000)	(79,000)
Payments on other debt	(3,254)	(1,094)
Debt financing costs		(844)
Payments of dividends to stockholders	(10,871)	(8,930)
Share repurchase	(15,317)	(11,573)
Shares received in lieu of tax withholding	(1,498)	(1,540)
Proceeds from exercise of options	1,001	2,899
Deferred acquisition payments	(637)	(750)
Payments for contingent consideration arrangements	(1,343)	(2,195)
Net cash provided by financing activities	111,081	973
NET DECREASE IN CASH AND CASH EQUIVALENTS	(5,257)	(17,294)
CASH AND CASH EQUIVALENTS, beginning of period	45,620	36,542
CASH AND CASH EQUIVALENTS, end of period	$ 40,363	$ 19,248

Business and Organization

9 Months Ended

Sep. 30, 2019

Business and Organization

Business and Organization

1. Business and Organization

Comfort Systems USA, Inc., a Delaware corporation, provides comprehensive mechanical and electrical contracting services, which principally includes heating, ventilation and air conditioning (“HVAC”), plumbing, electrical, piping and controls, as well as off-site construction, monitoring and fire protection. We install, maintain, repair and replace products and systems throughout the United States. 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.

Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2019

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, 2018 (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 February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-02, “Leases (Topic 842)”. The standard requires substantially all leases (with the exception of leases with a term of one year or less) to be recorded on the Balance Sheet using a method referred to as the right-of-use (“ROU”) asset approach. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018 and interim periods within those years. Full retrospective application is prohibited. We adopted ASU No. 2016-02, Leases (Topic 842), on January 1, 2019, using the transition method allowed by ASU No. 2018-11, “Leases (Topic 842) Targeted Improvements” in which lessees apply the new lease standard on the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. We adopted the practical expedient allowing us to not include leases with an initial term of 12 months or less on the Balance Sheet. Furthermore, we elected to apply the practical expedient allowing an entity to forgo reassessing (1) whether expired or existing contracts contain a lease, (2) classification of expired or existing leases, and (3) whether capitalized costs associated with expired or existing leases should be

classified as “initial direct costs” under Topic 842. The adoption of ASU 2016-02 did not have a significant impact to our Statement of Operations or Cash Flows. The adoption of ASU 2016-02 resulted in the recording of right-of-use asset and lease liabilities of $75.9 million on our Balance Sheet as of January 1, 2019 but did not result in a cumulative-effect adjustment to retained earnings.

In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments – Credit Losses (Topic 326).” The standard requires companies to consider historical experiences, current market conditions and reasonable and supportable forecasts in the measurement of expected credit losses. ASU 2016-13 is effective for fiscal years beginning after December 15, 2019 and interim periods within those years. Early adoption is permitted. We are currently evaluating the potential impact of this authoritative guidance on our consolidated financial statements.

In August 2018, the FASB issued ASU No. 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework — Changes to the Disclosure Requirements for Fair Value Measurement.” This standard removes certain disclosure requirements including the valuation processes for Level 3 fair value measurements, the policy for timing of transfers between levels and the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy. The standard requires certain additional disclosures for public entities, including disclosure of the changes in unrealized gains and losses included in Other Comprehensive Income for Level 3 fair value measurements and the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. ASU 2018-13 is effective for fiscal years beginning after December 15, 2019 and interim periods within those years. Certain amendments, including the amendment on changes in unrealized gains and losses and the range and weighted average of significant unobservable inputs, should be applied prospectively while other amendments should be applied retrospectively to all periods presented upon their effective date. We are currently evaluating the potential impact of this authoritative guidance 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 and electrical contracting services, which principally includes HVAC, plumbing, electrical, piping and controls, as well as off-site construction, 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 expenses 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 percentage of completion basis over the life of the contract. 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.” 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 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 such cases, 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.

For the reasons listed above, 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 in which our services are delivered in the form of 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 in which the full cost to provide services may not be known, we generally use an input 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. The consideration to which we are entitled on our long-term contracts may include both fixed and variable amounts. Variable amounts can either increase or decrease the transaction price. A common example of variable amounts that can either increase or decrease contract value are pending change orders that represent contract modifications for which a change in scope has been authorized or acknowledged by our customer, but the final adjustment to contract price is yet to be negotiated. Other examples of positive variable revenue include amounts 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 a deduction from contract revenue if we fail to meet stated performance requirements, such as complying with the construction schedule.

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 in which 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, meaning we recognize 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 in which 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 in which revenue was based on time and materials incurred and elapsed time for those service maintenance contracts in which 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 in which, in most cases, a contract is one performance obligation. In those cases in which 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 nine months of 2018 and 2019, net revenue recognized from our performance obligations satisfied in previous periods was not material.

Disaggregation of Revenue

Our consolidated 2019 revenue was derived from contracts to provide service activities in the mechanical and electrical services segments we serve. Refer to Note 9 – Segment Information for additional information on our reportable segments. 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. See details in the following tables (dollars in thousands):


	Three Months Ended September 30,								Nine Months Ended September 30,
Revenue by Service Provided	2019				2018				2019				2018
HVAC and Plumbing	$	545,088	77.1	%	$	540,733	91.0	%	$	1,531,331	80.8	%	$	1,448,761	90.9	%
Electrical Services		116,902	16.5	%		1,611	0.3	%		218,061	11.5	%		1,611	0.1	%
Building Automation Control Systems		24,540	3.5	%		25,822	4.3	%		73,816	3.9	%		72,128	4.5	%
Other		20,388	2.9	%		26,370	4.4	%		72,485	3.8	%		72,020	4.5	%
Total	$	706,918	100.0	%	$	594,536	100.0	%	$	1,895,693	100.0	%	$	1,594,520	100.0	%

	Three Months Ended September 30,								Nine Months Ended September 30,
Revenue by Type of Customer	2019				2018				2019				2018
Industrial	$	222,156	31.4	%	$	184,174	31.0	%	$	588,818	31.1	%	$	398,351	25.0	%
Education		125,836	17.8	%		115,202	19.4	%		292,799	15.4	%		312,852	19.6	%
Office Buildings		83,271	11.8	%		75,871	12.8	%		254,966	13.5	%		224,300	14.1	%
Healthcare		126,909	18.0	%		79,424	13.3	%		306,810	16.2	%		214,537	13.4	%
Government		41,502	5.9	%		32,633	5.5	%		118,224	6.2	%		106,065	6.6	%
Retail, Restaurants and Entertainment		67,141	9.5	%		60,908	10.2	%		184,618	9.7	%		169,899	10.7	%
Multi-Family and Residential		24,121	3.4	%		33,903	5.7	%		83,417	4.4	%		102,995	6.5	%
Other		15,982	2.2	%		12,421	2.1	%		66,041	3.5	%		65,521	4.1	%
Total	$	706,918	100.0	%	$	594,536	100.0	%	$	1,895,693	100.0	%	$	1,594,520	100.0	%

	Three Months Ended September 30,								Nine Months Ended September 30,
Revenue by Activity Type	2019				2018				2019				2018
New Construction	$	312,279	44.2	%	$	227,715	38.3	%	$	827,718	43.7	%	$	606,208	38.0	%
Existing Building Construction		224,125	31.6	%		216,010	36.3	%		605,819	31.9	%		572,808	35.9	%
Service Projects		62,668	8.9	%		56,557	9.5	%		171,860	9.1	%		150,890	9.5	%
Service Calls, Maintenance and Monitoring		107,846	15.3	%		94,254	15.9	%		290,296	15.3	%		264,614	16.6	%
Total	$	706,918	100.0	%	$	594,536	100.0	%	$	1,895,693	100.0	%	$	1,594,520	100.0	%

Accounts Receivable

Accounts Receivable include amounts 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, 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):


	Nine Months Ended				Year Ended
	September 30, 2019				December 31, 2018
	Contract		Contract		Contract		Contract
	Assets		Liabilities		Assets		Liabilities
Balance at beginning of period	$	10,213	$	130,986	$	30,116	$	106,005
Change due to acquisitions / disposals		6,573		31,556		2,833		8,195
Change due to conditional versus unconditional		(10,665)		—		6,244		—
Reclassified to unbilled accounts receivable		—		—		(28,980)		—
Change in timing for performance obligation to be satisfied		—		4,555		—		16,786
Balance at end of period	$	6,121	$	167,097	$	10,213	$	130,986

In the first nine months of 2019 and 2018, we recognized revenue of $123.3 million and $99.8 million related to our contract liabilities at January 1, 2019 and January 1, 2018, respectively.

We did not have any impairment losses recognized on our receivables or contract assets in the first nine months of 2019 and 2018.

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 September 30, 2019, the aggregate amount of the transaction price allocated to remaining performance obligations was $1.61 billion. The Company expects to recognize revenue on approximately 80-85% 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 one year or less, therefore we do not report unfulfilled performance obligations for service maintenance agreements.

Leases

We lease certain facilities, vehicles and equipment under noncancelable operating leases. The most significant portion of these noncancelable operating leases are for the facilities occupied by our corporate office and our operating locations. Leases with an initial term of 12 months or less are not recorded on the Balance Sheet. We account for lease components separately from the non-lease components. We have certain leases with variable payments based on an index as well as some short-term leases on equipment and facilities. Variable lease expense and short-term lease expense were not material to our financial statements and aggregated to $6.2 million in the first nine months of 2019. Lease right-of-use assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we generally use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The weighted average discount rate as of September 30, 2019 was 4.0%. We recognize lease expense, including escalating lease payments and lease incentives, on a straight-line basis over the lease term. Lease expense for the three months ended September 30, 2019 and 2018 was $6.5 million and $6.1 million, respectively. Lease expense for the nine months ended September 30, 2019 and 2018 was $18.3 million and $17.2 million, respectively.

The lease terms generally range from three to ten years. Some leases include one or more options to renew, with renewal terms that can extend the lease term. Our lease terms may include the exercise of lease renewal options when it is reasonably certain that we will exercise the option and it is at our sole discretion. The weighted average remaining lease term was 8.1 years at September 30, 2019.

A majority of the Company’s real property leases are with individuals or entities with whom we have no other business relationship. However, in certain instances the Company enters into real property leases with current or former employees. Rent paid to related parties for the three months ended September 30, 2019 and 2018 was approximately $0.7 million and $1.3 million, respectively. Rent paid to related parties for the nine months ended September 30, 2019 and 2018 was approximately $2.7 million and $3.5 million, respectively.

If we decide to cancel or terminate a lease before the end of its term, we would typically owe the lessor the remaining lease payments under the term of the lease. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. On rare occasions we rent or sublease certain real estate assets that we no longer use to third parties.

The following table summarizes the lease asset and liabilities included in the consolidated Balance Sheet as follows (in thousands):


	September 30, 2019
Lease right-of-use assets	$	84,281
Lease liabilities:
Other current liabilities		13,549
Long-term lease liabilities		73,213
Total lease liabilities	$	86,762

The maturities of lease liabilities are as follows (in thousands):


Year ending December 31—
2019 (excluding the nine months ended September 30, 2019)	$	4,326
2020		16,288
2021		14,477
2022		12,291
2023		10,328
Thereafter		44,617
Total Lease Payments		102,327
Less—Present Value Discount		(15,565)
Present Value of Lease Liabilities	$	86,762

Supplemental information related to leases was as follows (in thousands):


	Three Months Ended		Nine Months Ended
	September 30, 2019		September 30, 2019
Cash paid for amounts included in the measurement of lease liabilities	$	6,466	$	18,426
Lease right-of-use assets obtained in exchange for lease liabilities	$	7,050	$	10,768

Income Taxes

We conduct business throughout the United States in virtually all fifty 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.

In the third quarter of 2019, we filed an amended federal return for 2015 to claim the credit for increasing research activities (“R&D tax credits”) and recorded a $4.6 million tax benefit that was fully offset by an increase in unrecognized tax benefits. We previously filed an amended federal return for 2014 to claim R&D tax credits during 2018 and recorded a $2.7 million tax benefit that was also fully offset by an increase in unrecognized tax benefits. These tax benefits were fully offset by increases in unrecognized tax benefits due to the uncertainty of the outcome from examinations opened by the Internal Revenue Service (the “IRS”). As a result, the R&D tax credits claimed have had no impact on our effective tax rates.

For the nine months ended September 30, 2019, our provision for income taxes was reduced by $2.0 million due to benefits from the filing, and expected filing, of amended returns to claim the energy efficient commercial buildings deduction (the “179D deduction”) allocated to us.

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.

Other Income

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 recorded a gain of $4.0 million in the second quarter of 2018 as a result of these settlements.

Financial Instruments

Our financial instruments consist of cash and cash equivalents, accounts receivable, other receivables, accounts payable, life insurance policies, notes to former owners, leases 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

9 Months Ended

Sep. 30, 2019

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 September 30, 2019 and December 31, 2018 (in thousands):


	Fair Value Measurements at September 30, 2019
	Level 1		Level 2		Level 3		Total
Cash and cash equivalents	$	40,363	$	—	$	—	$	40,363
Life insurance—cash surrender value	$	—	$	3,758	$	—	$	3,758
Contingent earn-out obligations	$	—	$	—	$	29,430	$	29,430

	Fair Value Measurements at December 31, 2018
	Level 1		Level 2		Level 3		Total
Cash and cash equivalents	$	45,620	$	—	$	—	$	45,620
Life insurance—cash surrender value	$	—	$	3,252	$	—	$	3,252
Contingent earn-out obligations	$	—	$	—	$	7,375	$	7,375

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.

We have life insurance policies covering 66 employees with a combined face value of $51.1 million. The policies are invested in several investment vehicles, 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 $3.8 million as of September 30, 2019 and $3.3 million as of December 31, 2018. 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	$	7,375
Issuances		19,500
Settlements		(1,369)
Adjustments to fair value		3,924
Balance at September 30, 2019	$	29,430

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. We did not recognize any impairments in the current quarter 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

Acquisitions

9 Months Ended

Sep. 30, 2019

Acquisitions

Acquisitions

4. Acquisitions

Walker Acquisition

On April 1, 2019, we acquired all of the issued and outstanding equity interests of Walker TX Holding Company, LLC and each of its wholly owned subsidiaries (collectively “Walker”). Walker is a full-service electrical contracting and network infrastructure engineering business serving commercial and industrial clients with headquarters in Irving, Texas and operations throughout the state of Texas. As a result of the acquisition, Walker is a wholly owned subsidiary of the Company reported in our electrical services segment. Revenue attributable to Walker was $203.1 million for the six months from the acquisition date.

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


Consideration transferred:
Cash paid at closing	$	178,000
Advance to former owners		20,500
Working capital adjustment		(7,594)
Notes issued to former owners		25,000
Tax equalization payment		202
Estimated fair value of contingent earn-out payments		19,500
	$	235,608
Recognized amounts of identifiable assets acquired and liabilities assumed:
Cash and cash equivalents	$	4,850
Billed and unbilled accounts receivable		92,309
Other current assets		8,587
Other long-term assets		53
Property and equipment		4,970
Goodwill		96,439
Identifiable intangible assets		90,200
Lease right-of-use asset		10,495
Accounts payable		(20,220)
Accrued compensation and benefits		(974)
Billings in excess of costs and estimated earnings		(31,553)
Other current liabilities		(11,278)
Long-term lease liabilities		(8,270)
	$	235,608

The allocation of the purchase price to the assets acquired and liabilities assumed is preliminary and, therefore, subject to change pending the completion of the final valuation of intangible assets and accrued liabilities. 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.

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 8.5%-11.5%. Estimated years of projected earnings generally follow the range of estimated remaining useful lives for each intangible asset class.

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


	Valuation Method	Estimated Useful Life		Estimated Fair Value
Backlog	Excess earnings	2 years	$	4,600
Trade Names	Relief-from-royalty	25 years		32,600
Customer Relationships	Excess earnings	10 years		53,000
Total			$	90,200

The contingent earn-out obligation is associated with the achievement of specified earnings milestones over a five year period, and the range of estimated milestone payments is from $1 million to $11 million (undiscounted). We determined the initial fair value of the contingent earn-out obligation based on the Monte Carlo Simulation method, which represents a Level 3 measurement. Cash flows were discounted using a 10.2% discount rate, which we believe is appropriate and representative of a market participant assumption. Subsequent to the acquisition date, we will measure the contingent earn-out obligation at fair value each reporting period. Future changes in the estimated fair value of the contingent payments will be recognized immediately in earnings.

Pro Forma Impact of the Acquisition

The following unaudited pro forma information presents the consolidated results of the Company and Walker for the three and nine months ended September 30, 2019 and 2018, with adjustments to give effect to pro forma events that are directly attributable to the acquisition and have a continuing impact. The unaudited pro forma information is presented for illustrative purposes only and is not necessarily indicative of the results of operations of future periods or the results of operations that actually would have been realized had the entities been a single company during the periods presented or the results that the company will experience after the acquisition. The unaudited pro forma information does not give effect to the potential impact of current financial conditions, regulatory matters or any operating efficiencies that may be associated with the acquisition.

The unaudited pro forma consolidated results of operations, assuming the acquisition had occurred on January 1, 2018, are as follows (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
Revenue	$	706,918	$	707,199	$	1,984,054	$	1,885,757
Pre-tax income	$	49,718	$	51,374	$	106,223	$	116,754

Other Acquisitions

In addition to the Walker acquisition, we completed one acquisition in the first quarter of 2019 and one acquisition in the second quarter of 2019 with a total purchase price of $2.6 million for the nine months ended September 30, 2019. We completed two acquisitions in the first quarter of 2018, three acquisitions in the second quarter of 2018 and two acquisitions in the third quarter of 2018. One acquisition completed in the third quarter of 2018 reports as a separate operating location and the remainder were “tucked-in” with existing operations. Our consolidated Balance Sheet includes preliminary allocations of the purchase price to the assets acquired and liabilities assumed pending the completion of the final valuation of intangible assets and accrued liabilities.

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 acquisitions pending the completion of the final valuation of intangible assets and accrued liabilities. Excluding the Walker acquisition, 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, which are not subject to the continued employment of the sellers, are estimated as of the purchase date and included as part of the consideration paid for the acquisition. If we have an earn-out for which continued employment is a condition to receive payment, then the earn-out is recorded as compensation expense over the period earned.

Goodwill and Identifiable Intangible Assets, Net

9 Months Ended

Sep. 30, 2019

Goodwill and Identifiable Intangible Assets, Net

Goodwill and Identifiable Intangible Assets, Net

5. Goodwill and Identifiable Intangible Assets, Net

Goodwill

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


	Mechanical Services		Electrical Services
	Segment		Segment		Total
Balance at December 31, 2017	$	200,584	$	—	$	200,584
Additions (See Note 4)		34,598		—		34,598
Impairment adjustment		—		—		—
Balance at December 31, 2018		235,182		—		235,182
Additions (See Note 4)		579		96,439		97,018
Impact of segment reorganization		(1,101)		1,101		—
Impairment adjustment		—		—		—
Balance at September 30, 2019	$	234,660	$	97,540	$	332,200

Identifiable Intangible Assets, Net

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


	Estimated	September 30, 2019				December 31, 2018
	Useful Lives	Gross Book		Accumulated		Gross Book		Accumulated
	in Years	Value		Amortization		Value		Amortization
Customer relationships	1 - 15	$	182,963	$	(75,455)	$	128,480	$	(60,731)
Backlog	1 - 2		13,700		(11,906)		9,100		(8,260)
Tradenames	2 - 25		71,995		(14,561)		39,395		(12,709)
Total		$	268,658	$	(101,922)	$	176,975	$	(81,700)

The amounts attributable to customer relationships and tradenames are amortized to “Selling, General and Administrative Expenses” based upon the estimated consumption of their economic benefits, or a straight-line method over periods from one to twenty-five years if the pattern of economic benefit cannot otherwise be reliably estimated. 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 three- and nine-months ended September 30, 2019 was $7.2 million and $20.2 million, respectively. Amortization expense for the three- and nine-months ended September 30, 2018 was $5.3 million and $14.1 million, respectively.

At September 30, 2019, future amortization expense of identifiable intangible assets is as follows (in thousands):


Year ended December 31—
2019 (remainder of the year)	$	6,844
2020		23,213
2021		19,158
2022		16,536
2023		15,082
Thereafter		85,903
Total	$	166,736

Debt Obligations

9 Months Ended

Sep. 30, 2019

Debt Obligations

Debt Obligations

6. Debt Obligations

Debt obligations consist of the following (in thousands):


	September 30,		December 31,
	2019		2018
Revolving credit facility	$	193,000	$	50,000
Notes to former owners		48,983		26,813
Other debt		31		105
Total debt		242,014		76,918
Less—current portion		(13,847)		(3,279)
Total long-term portion of debt	$	228,167	$	73,639

Revolving Credit Facility

In April 2018, we amended our senior credit facility (the “Facility”) provided by a syndicate of banks, increasing our borrowing capacity from $325.0 million to $400.0 million, with a $100 million accordion option. The Facility, which is available for borrowings and letters of credit, expires in April 2023 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 September 30, 2019, we had $193.0 million of outstanding borrowings, $33.6 million in letters of credit outstanding and $173.4 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 1.00		1.00 to 1.75		1.75 to 2.50		2.50 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 3.6% as of September 30, 2019.

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. 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:

Total Leverage Ratio—The Facility requires that the ratio of our Consolidated Total Indebtedness to our Credit Facility Adjusted EBITDA not exceed 3.00 to 1.00 as of the end of each fiscal quarter. The total leverage ratio as of September 30, 2019 was 1.2.

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, as defined in the credit agreement, does not exceed 1.75 to 1.00. The Facility also allows the fixed charge coverage ratio not to be reduced for stock repurchases made after the effective date of the Facility in an aggregate amount not to exceed $30 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 1.75 to 1.00. Credit Facility Adjusted EBITDA, capital expenditures, provision for income taxes, dividends, stock repurchase payments, interest expense and scheduled principal 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 September 30, 2019 was 13.1.

Other Restrictions—The Facility permits acquisitions of up to $40.0 million per transaction, provided that the aggregate purchase price of all such acquisitions in the same fiscal year does not exceed $80.0 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 September 30, 2019.

Notes to Former Owners

As part of the consideration used to acquire seven companies, we have outstanding notes to the former owners. These notes had an outstanding balance of $49.0 million as of September 30, 2019. In conjunction with the Walker acquisition in the second quarter of 2019, we issued a promissory note to former owners with an outstanding balance of $25.0 million as of September 30, 2019 that bears interest, payable quarterly, at a stated interest rate of 4.0%. The principal is due in equal installments in April 2022 and April 2023. 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 September 30, 2019 that bears interest, payable quarterly, at a stated interest rate of 3.0%. The principal is due in equal installments in April 2020 and 2021. In conjunction with five immaterial acquisitions in 2018 and 2019, we issued notes to former owners with an outstanding balance of $9.7 million as of September 30, 2019 that bear interest, payable quarterly, at stated interest rates ranging from 2.5% - 3.5%. The principals are due between January 2020 – July 2021.

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 September 30, 2019, less than $0.1 million of the note was outstanding, all of which was considered current.

Commitments and Contingencies

9 Months Ended

Sep. 30, 2019

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.

Current market conditions for surety markets and bonding capacity are adequate 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.

Stockholders' Equity

9 Months Ended

Sep. 30, 2019

Stockholders' Equity

Stockholders' Equity.

8. Stockholders’ Equity

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, restricted stock, restricted stock units and performance stock units. The vesting of unvested, contingently issuable performance stock units is based on the achievement of certain earnings per share targets and total shareholder return. 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, restricted stock units and performance stock units are included in diluted earnings per share, weighted outstanding until the shares and units vest. Upon vesting, the vested restricted stock, restricted stock units and performance stock units are included in basic earnings per share weighted outstanding from the vesting date.

There were less than 0.1 million anti-dilutive stock options excluded from the calculation of diluted EPS for the three and nine months ended September 30, 2019 and 2018, 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):


	Three Months Ended		Nine Months Ended
	September 30,		September 30,
	2019	2018	2019	2018
Common shares outstanding, end of period	36,676	37,221	36,676	37,221
Effect of using weighted average common shares outstanding	129	73	215	15
Shares used in computing earnings per share—basic	36,805	37,294	36,891	37,236
Effect of shares issuable under stock option plans based on the treasury stock method	181	280	211	294
Effect of restricted and contingently issuable shares	65	93	68	104
Shares used in computing earnings per share—diluted	37,051	37,667	37,170	37,634

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. Subsequently, the Board has from time to time increased the number of shares that may be acquired under the program and approved extensions of the program. On August 10, 2018, the Board approved an extension to the program by increasing the shares authorized for repurchase by 0.7 million shares. Since the inception of the repurchase program, the Board has approved 8.8 million shares to be repurchased. As of September 30, 2019, we have repurchased a cumulative total of 8.5 million shares at an average price of $17.38 per share under the repurchase program.

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. During the nine months ended September 30, 2019, we repurchased 0.3 million shares for approximately $15.3 million at an average price of $44.43 per share.

Segment Information

9 Months Ended

Sep. 30, 2019

Segment Information

Segment Information

9. Segment Information

Our activities are within the mechanical services industry and the electrical services industry, which represent our two reportable segments. Each of our 35 operating locations represents an operating segment, and these segments have been aggregated into two reportable segments, as the operating locations meet all of the aggregation criteria. The following table presents information about our reportable segments (in thousands):


	Three Months Ended September 30, 2019
	Mechanical Services		Electrical Services		Corporate & Eliminations		Consolidated
Revenue	$	590,016	$	116,902	$	—	$	706,918
Gross Profit	$	128,501	$	14,201	$	—	$	142,702

	Three Months Ended September 30, 2018
	Mechanical Services		Electrical Services		Corporate & Eliminations		Consolidated
Revenue	$	592,925	$	1,611	$	—	$	594,536
Gross Profit	$	127,669	$	199	$	—	$	127,868

	Nine Months Ended September 30, 2019
	Mechanical Services		Electrical Services		Corporate & Eliminations		Consolidated
Revenue	$	1,677,632	$	218,061	$	—	$	1,895,693
Gross Profit	$	344,632	$	24,751	$	—	$	369,383

	Nine Months Ended September 30, 2018
	Mechanical Services		Electrical Services		Corporate & Eliminations		Consolidated
Revenue	$	1,592,909	$	1,611	$	—	$	1,594,520
Gross Profit	$	327,905	$	199	$	—	$	328,104

Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2019

Summary of Significant Accounting Policies

Basis of Presentation

Use of Estimates

Recent Accounting Pronouncements

Revenue Recognition

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.

In the first nine months of 2018 and 2019, net revenue recognized from our performance obligations satisfied in previous periods was not material.

Disaggregation of Revenue


	Three Months Ended September 30,								Nine Months Ended September 30,
Revenue by Service Provided	2019				2018				2019				2018
HVAC and Plumbing	$	545,088	77.1	%	$	540,733	91.0	%	$	1,531,331	80.8	%	$	1,448,761	90.9	%
Electrical Services		116,902	16.5	%		1,611	0.3	%		218,061	11.5	%		1,611	0.1	%
Building Automation Control Systems		24,540	3.5	%		25,822	4.3	%		73,816	3.9	%		72,128	4.5	%
Other		20,388	2.9	%		26,370	4.4	%		72,485	3.8	%		72,020	4.5	%
Total	$	706,918	100.0	%	$	594,536	100.0	%	$	1,895,693	100.0	%	$	1,594,520	100.0	%

	Three Months Ended September 30,								Nine Months Ended September 30,
Revenue by Type of Customer	2019				2018				2019				2018
Industrial	$	222,156	31.4	%	$	184,174	31.0	%	$	588,818	31.1	%	$	398,351	25.0	%
Education		125,836	17.8	%		115,202	19.4	%		292,799	15.4	%		312,852	19.6	%
Office Buildings		83,271	11.8	%		75,871	12.8	%		254,966	13.5	%		224,300	14.1	%
Healthcare		126,909	18.0	%		79,424	13.3	%		306,810	16.2	%		214,537	13.4	%
Government		41,502	5.9	%		32,633	5.5	%		118,224	6.2	%		106,065	6.6	%
Retail, Restaurants and Entertainment		67,141	9.5	%		60,908	10.2	%		184,618	9.7	%		169,899	10.7	%
Multi-Family and Residential		24,121	3.4	%		33,903	5.7	%		83,417	4.4	%		102,995	6.5	%
Other		15,982	2.2	%		12,421	2.1	%		66,041	3.5	%		65,521	4.1	%
Total	$	706,918	100.0	%	$	594,536	100.0	%	$	1,895,693	100.0	%	$	1,594,520	100.0	%

	Three Months Ended September 30,								Nine Months Ended September 30,
Revenue by Activity Type	2019				2018				2019				2018
New Construction	$	312,279	44.2	%	$	227,715	38.3	%	$	827,718	43.7	%	$	606,208	38.0	%
Existing Building Construction		224,125	31.6	%		216,010	36.3	%		605,819	31.9	%		572,808	35.9	%
Service Projects		62,668	8.9	%		56,557	9.5	%		171,860	9.1	%		150,890	9.5	%
Service Calls, Maintenance and Monitoring		107,846	15.3	%		94,254	15.9	%		290,296	15.3	%		264,614	16.6	%
Total	$	706,918	100.0	%	$	594,536	100.0	%	$	1,895,693	100.0	%	$	1,594,520	100.0	%

Contract Assets and Liabilities

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


	Nine Months Ended				Year Ended
	September 30, 2019				December 31, 2018
	Contract		Contract		Contract		Contract
	Assets		Liabilities		Assets		Liabilities
Balance at beginning of period	$	10,213	$	130,986	$	30,116	$	106,005
Change due to acquisitions / disposals		6,573		31,556		2,833		8,195
Change due to conditional versus unconditional		(10,665)		—		6,244		—
Reclassified to unbilled accounts receivable		—		—		(28,980)		—
Change in timing for performance obligation to be satisfied		—		4,555		—		16,786
Balance at end of period	$	6,121	$	167,097	$	10,213	$	130,986

In the first nine months of 2019 and 2018, we recognized revenue of $123.3 million and $99.8 million related to our contract liabilities at January 1, 2019 and January 1, 2018, respectively.

We did not have any impairment losses recognized on our receivables or contract assets in the first nine months of 2019 and 2018.

Remaining Performance Obligations

Leases

The following table summarizes the lease asset and liabilities included in the consolidated Balance Sheet as follows (in thousands):


	September 30, 2019
Lease right-of-use assets	$	84,281
Lease liabilities:
Other current liabilities		13,549
Long-term lease liabilities		73,213
Total lease liabilities	$	86,762

The maturities of lease liabilities are as follows (in thousands):


Year ending December 31—
2019 (excluding the nine months ended September 30, 2019)	$	4,326
2020		16,288
2021		14,477
2022		12,291
2023		10,328
Thereafter		44,617
Total Lease Payments		102,327
Less—Present Value Discount		(15,565)
Present Value of Lease Liabilities	$	86,762

Supplemental information related to leases was as follows (in thousands):


	Three Months Ended		Nine Months Ended
	September 30, 2019		September 30, 2019
Cash paid for amounts included in the measurement of lease liabilities	$	6,466	$	18,426
Lease right-of-use assets obtained in exchange for lease liabilities	$	7,050	$	10,768

Accounts Receivable

Income Taxes

Other Income

Financial Instruments

Summary of Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2019

Summary of Significant Accounting Policies

Schedule of disaggregation or revenue


	Three Months Ended September 30,								Nine Months Ended September 30,
Revenue by Service Provided	2019				2018				2019				2018
HVAC and Plumbing	$	545,088	77.1	%	$	540,733	91.0	%	$	1,531,331	80.8	%	$	1,448,761	90.9	%
Electrical Services		116,902	16.5	%		1,611	0.3	%		218,061	11.5	%		1,611	0.1	%
Building Automation Control Systems		24,540	3.5	%		25,822	4.3	%		73,816	3.9	%		72,128	4.5	%
Other		20,388	2.9	%		26,370	4.4	%		72,485	3.8	%		72,020	4.5	%
Total	$	706,918	100.0	%	$	594,536	100.0	%	$	1,895,693	100.0	%	$	1,594,520	100.0	%

	Three Months Ended September 30,								Nine Months Ended September 30,
Revenue by Type of Customer	2019				2018				2019				2018
Industrial	$	222,156	31.4	%	$	184,174	31.0	%	$	588,818	31.1	%	$	398,351	25.0	%
Education		125,836	17.8	%		115,202	19.4	%		292,799	15.4	%		312,852	19.6	%
Office Buildings		83,271	11.8	%		75,871	12.8	%		254,966	13.5	%		224,300	14.1	%
Healthcare		126,909	18.0	%		79,424	13.3	%		306,810	16.2	%		214,537	13.4	%
Government		41,502	5.9	%		32,633	5.5	%		118,224	6.2	%		106,065	6.6	%
Retail, Restaurants and Entertainment		67,141	9.5	%		60,908	10.2	%		184,618	9.7	%		169,899	10.7	%
Multi-Family and Residential		24,121	3.4	%		33,903	5.7	%		83,417	4.4	%		102,995	6.5	%
Other		15,982	2.2	%		12,421	2.1	%		66,041	3.5	%		65,521	4.1	%
Total	$	706,918	100.0	%	$	594,536	100.0	%	$	1,895,693	100.0	%	$	1,594,520	100.0	%

	Three Months Ended September 30,								Nine Months Ended September 30,
Revenue by Activity Type	2019				2018				2019				2018
New Construction	$	312,279	44.2	%	$	227,715	38.3	%	$	827,718	43.7	%	$	606,208	38.0	%
Existing Building Construction		224,125	31.6	%		216,010	36.3	%		605,819	31.9	%		572,808	35.9	%
Service Projects		62,668	8.9	%		56,557	9.5	%		171,860	9.1	%		150,890	9.5	%
Service Calls, Maintenance and Monitoring		107,846	15.3	%		94,254	15.9	%		290,296	15.3	%		264,614	16.6	%
Total	$	706,918	100.0	%	$	594,536	100.0	%	$	1,895,693	100.0	%	$	1,594,520	100.0	%

Schedule of contract assets and liabilities

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


	Nine Months Ended				Year Ended
	September 30, 2019				December 31, 2018
	Contract		Contract		Contract		Contract
	Assets		Liabilities		Assets		Liabilities
Balance at beginning of period	$	10,213	$	130,986	$	30,116	$	106,005
Change due to acquisitions / disposals		6,573		31,556		2,833		8,195
Change due to conditional versus unconditional		(10,665)		—		6,244		—
Reclassified to unbilled accounts receivable		—		—		(28,980)		—
Change in timing for performance obligation to be satisfied		—		4,555		—		16,786
Balance at end of period	$	6,121	$	167,097	$	10,213	$	130,986

Schedule of lease asset and liabilities

The following table summarizes the lease asset and liabilities included in the consolidated Balance Sheet as follows (in thousands):


	September 30, 2019
Lease right-of-use assets	$	84,281
Lease liabilities:
Other current liabilities		13,549
Long-term lease liabilities		73,213
Total lease liabilities	$	86,762

Schedule of maturities of lease liabilities

The maturities of lease liabilities are as follows (in thousands):


Year ending December 31—
2019 (excluding the nine months ended September 30, 2019)	$	4,326
2020		16,288
2021		14,477
2022		12,291
2023		10,328
Thereafter		44,617
Total Lease Payments		102,327
Less—Present Value Discount		(15,565)
Present Value of Lease Liabilities	$	86,762

Schedule of supplemental information related to leases

Supplemental information related to leases was as follows (in thousands):


	Three Months Ended		Nine Months Ended
	September 30, 2019		September 30, 2019
Cash paid for amounts included in the measurement of lease liabilities	$	6,466	$	18,426
Lease right-of-use assets obtained in exchange for lease liabilities	$	7,050	$	10,768

Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2019

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 September 30, 2019
	Level 1		Level 2		Level 3		Total
Cash and cash equivalents	$	40,363	$	—	$	—	$	40,363
Life insurance—cash surrender value	$	—	$	3,758	$	—	$	3,758
Contingent earn-out obligations	$	—	$	—	$	29,430	$	29,430

	Fair Value Measurements at December 31, 2018
	Level 1		Level 2		Level 3		Total
Cash and cash equivalents	$	45,620	$	—	$	—	$	45,620
Life insurance—cash surrender value	$	—	$	3,252	$	—	$	3,252
Contingent earn-out obligations	$	—	$	—	$	7,375	$	7,375

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	$	7,375
Issuances		19,500
Settlements		(1,369)
Adjustments to fair value		3,924
Balance at September 30, 2019	$	29,430

Acquisitions (Tables)

9 Months Ended

Sep. 30, 2019

Acquisitions

Schedule of acquisition date fair value of consideration transferred and the acquisition date fair value of the identifiable assets acquired and liabilities assumed, including an amount for goodwill


Consideration transferred:
Cash paid at closing	$	178,000
Advance to former owners		20,500
Working capital adjustment		(7,594)
Notes issued to former owners		25,000
Tax equalization payment		202
Estimated fair value of contingent earn-out payments		19,500
	$	235,608
Recognized amounts of identifiable assets acquired and liabilities assumed:
Cash and cash equivalents	$	4,850
Billed and unbilled accounts receivable		92,309
Other current assets		8,587
Other long-term assets		53
Property and equipment		4,970
Goodwill		96,439
Identifiable intangible assets		90,200
Lease right-of-use asset		10,495
Accounts payable		(20,220)
Accrued compensation and benefits		(974)
Billings in excess of costs and estimated earnings		(31,553)
Other current liabilities		(11,278)
Long-term lease liabilities		(8,270)
	$	235,608

Schedule of acquired intangible assets

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


	Valuation Method	Estimated Useful Life		Estimated Fair Value
Backlog	Excess earnings	2 years	$	4,600
Trade Names	Relief-from-royalty	25 years		32,600
Customer Relationships	Excess earnings	10 years		53,000
Total			$	90,200

Schedule of unaudited pro forma consolidated results of operations

The unaudited pro forma consolidated results of operations, assuming the acquisition had occurred on January 1, 2018, are as follows (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
Revenue	$	706,918	$	707,199	$	1,984,054	$	1,885,757
Pre-tax income	$	49,718	$	51,374	$	106,223	$	116,754

Goodwill and Identifiable Intangible Assets, Net (Tables)

9 Months Ended

Sep. 30, 2019

Goodwill and Identifiable Intangible Assets, Net

Schedule of changes in the carrying amount of goodwill

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


	Mechanical Services		Electrical Services
	Segment		Segment		Total
Balance at December 31, 2017	$	200,584	$	—	$	200,584
Additions (See Note 4)		34,598		—		34,598
Impairment adjustment		—		—		—
Balance at December 31, 2018		235,182		—		235,182
Additions (See Note 4)		579		96,439		97,018
Impact of segment reorganization		(1,101)		1,101		—
Impairment adjustment		—		—		—
Balance at September 30, 2019	$	234,660	$	97,540	$	332,200

Schedule of components of identifiable intangible assets

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


	Estimated	September 30, 2019				December 31, 2018
	Useful Lives	Gross Book		Accumulated		Gross Book		Accumulated
	in Years	Value		Amortization		Value		Amortization
Customer relationships	1 - 15	$	182,963	$	(75,455)	$	128,480	$	(60,731)
Backlog	1 - 2		13,700		(11,906)		9,100		(8,260)
Tradenames	2 - 25		71,995		(14,561)		39,395		(12,709)
Total		$	268,658	$	(101,922)	$	176,975	$	(81,700)

Schedule of future amortization expense of identifiable intangible assets

At September 30, 2019, future amortization expense of identifiable intangible assets is as follows (in thousands):


Year ended December 31—
2019 (remainder of the year)	$	6,844
2020		23,213
2021		19,158
2022		16,536
2023		15,082
Thereafter		85,903
Total	$	166,736

Debt Obligations (Tables)

9 Months Ended

Sep. 30, 2019

Debt Obligations

Schedule of components of debt obligations

Debt obligations consist of the following (in thousands):


	September 30,		December 31,
	2019		2018
Revolving credit facility	$	193,000	$	50,000
Notes to former owners		48,983		26,813
Other debt		31		105
Total debt		242,014		76,918
Less—current portion		(13,847)		(3,279)
Total long-term portion of debt	$	228,167	$	73,639

Summary of additional margins


	Consolidated Total Indebtedness to
	Credit Facility Adjusted EBITDA
	Less than 1.00		1.00 to 1.75		1.75 to 2.50		2.50 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	%

Stockholders' Equity (Tables)

9 Months Ended

Sep. 30, 2019

Stockholders' Equity

Reconciliation of number of shares outstanding with the number of shares used in computing basic and diluted earnings per share

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):


	Three Months Ended		Nine Months Ended
	September 30,		September 30,
	2019	2018	2019	2018
Common shares outstanding, end of period	36,676	37,221	36,676	37,221
Effect of using weighted average common shares outstanding	129	73	215	15
Shares used in computing earnings per share—basic	36,805	37,294	36,891	37,236
Effect of shares issuable under stock option plans based on the treasury stock method	181	280	211	294
Effect of restricted and contingently issuable shares	65	93	68	104
Shares used in computing earnings per share—diluted	37,051	37,667	37,170	37,634

Segment Information (Tables)

9 Months Ended

Sep. 30, 2019

Segment Information

Summary of information about reportable segments


	Three Months Ended September 30, 2019
	Mechanical Services		Electrical Services		Corporate & Eliminations		Consolidated
Revenue	$	590,016	$	116,902	$	—	$	706,918
Gross Profit	$	128,501	$	14,201	$	—	$	142,702

	Three Months Ended September 30, 2018
	Mechanical Services		Electrical Services		Corporate & Eliminations		Consolidated
Revenue	$	592,925	$	1,611	$	—	$	594,536
Gross Profit	$	127,669	$	199	$	—	$	127,868

	Nine Months Ended September 30, 2019
	Mechanical Services		Electrical Services		Corporate & Eliminations		Consolidated
Revenue	$	1,677,632	$	218,061	$	—	$	1,895,693
Gross Profit	$	344,632	$	24,751	$	—	$	369,383

	Nine Months Ended September 30, 2018
	Mechanical Services		Electrical Services		Corporate & Eliminations		Consolidated
Revenue	$	1,592,909	$	1,611	$	—	$	1,594,520
Gross Profit	$	327,905	$	199	$	—	$	328,104

Summary of Significant Accounting Policies - Recent Accounting Pronouncements (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Jan. 01, 2019
New Accounting Pronouncements or Change in Accounting Principle
Lease right-of-use assets	$ 84,281
Operating lease liability	$ 86,762
ASU 2016-02
New Accounting Pronouncements or Change in Accounting Principle
Lease right-of-use assets		$ 75,900
Operating lease liability		$ 75,900

Summary of Significant Accounting Policies - Disaggregation of Revenue (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Disaggregation of Revenue
Revenue, Performance Obligation, Description of Payment Terms			We typically invoice our customers with payment terms of net due in 30 days
Receivable payment terms (in days)			30 days
Revenue	$ 706,918	$ 594,536	$ 1,895,693	$ 1,594,520
Percentage of revenue from contract with customer (as a percent)	100.00%	100.00%	100.00%	100.00%
Industrial
Disaggregation of Revenue
Revenue	$ 222,156	$ 184,174	$ 588,818	$ 398,351
Percentage of revenue from contract with customer (as a percent)	31.40%	31.00%	31.10%	25.00%
Education
Disaggregation of Revenue
Revenue	$ 125,836	$ 115,202	$ 292,799	$ 312,852
Percentage of revenue from contract with customer (as a percent)	17.80%	19.40%	15.40%	19.60%
Office Buildings
Disaggregation of Revenue
Revenue	$ 83,271	$ 75,871	$ 254,966	$ 224,300
Percentage of revenue from contract with customer (as a percent)	11.80%	12.80%	13.50%	14.10%
Healthcare
Disaggregation of Revenue
Revenue	$ 126,909	$ 79,424	$ 306,810	$ 214,537
Percentage of revenue from contract with customer (as a percent)	18.00%	13.30%	16.20%	13.40%
Government
Disaggregation of Revenue
Revenue	$ 41,502	$ 32,633	$ 118,224	$ 106,065
Percentage of revenue from contract with customer (as a percent)	5.90%	5.50%	6.20%	6.60%
Retail, Restaurants and Entertainment
Disaggregation of Revenue
Revenue	$ 67,141	$ 60,908	$ 184,618	$ 169,899
Percentage of revenue from contract with customer (as a percent)	9.50%	10.20%	9.70%	10.70%
Multi-Family and Residential
Disaggregation of Revenue
Revenue	$ 24,121	$ 33,903	$ 83,417	$ 102,995
Percentage of revenue from contract with customer (as a percent)	3.40%	5.70%	4.40%	6.50%
Other
Disaggregation of Revenue
Revenue	$ 15,982	$ 12,421	$ 66,041	$ 65,521
Percentage of revenue from contract with customer (as a percent)	2.20%	2.10%	3.50%	4.10%
New Construction
Disaggregation of Revenue
Revenue	$ 312,279	$ 227,715	$ 827,718	$ 606,208
Percentage of revenue from contract with customer (as a percent)	44.20%	38.30%	43.70%	38.00%
Existing Building Construction
Disaggregation of Revenue
Revenue	$ 224,125	$ 216,010	$ 605,819	$ 572,808
Percentage of revenue from contract with customer (as a percent)	31.60%	36.30%	31.90%	35.90%
Service Projects
Disaggregation of Revenue
Revenue	$ 62,668	$ 56,557	$ 171,860	$ 150,890
Percentage of revenue from contract with customer (as a percent)	8.90%	9.50%	9.10%	9.50%
Service Calls, Maintenance and Monitoring
Disaggregation of Revenue
Revenue	$ 107,846	$ 94,254	$ 290,296	$ 264,614
Percentage of revenue from contract with customer (as a percent)	15.30%	15.90%	15.30%	16.60%
HVAC and Plumbing
Disaggregation of Revenue
Revenue	$ 545,088	$ 540,733	$ 1,531,331	$ 1,448,761
Percentage of revenue from contract with customer (as a percent)	77.10%	91.00%	80.80%	90.90%
Electrical Services
Disaggregation of Revenue
Revenue	$ 116,902	$ 1,611	$ 218,061	$ 1,611
Percentage of revenue from contract with customer (as a percent)	16.50%	0.30%	11.50%	0.10%
Building Automation Control Systems
Disaggregation of Revenue
Revenue	$ 24,540	$ 25,822	$ 73,816	$ 72,128
Percentage of revenue from contract with customer (as a percent)	3.50%	4.30%	3.90%	4.50%
Other.
Disaggregation of Revenue
Revenue	$ 20,388	$ 26,370	$ 72,485	$ 72,020
Percentage of revenue from contract with customer (as a percent)	2.90%	4.40%	3.80%	4.50%
Minimum
Disaggregation of Revenue
Payments received term (in days)			30 days
Maximum
Disaggregation of Revenue
Payments received term (in days)			90 days

Summary of Significant Accounting Policies - Contract Assets and Liabilities (Details) - USD ($) $ in Thousands	9 Months Ended		12 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018
Contract Assets
Balance at beginning of period	$ 10,213	$ 30,116	$ 30,116
Change due to acquisitions / disposals	6,573		2,833
Change due to conditional versus unconditional	(10,665)		6,244
Reclassified to unbilled accounts receivable			(28,980)
Balance at end of period	6,121		10,213
Contract Liabilities
Balance at beginning of period	130,986	106,005	106,005
Change due to acquisitions / disposals	31,556		8,195
Change in timing for performance obligation to be satisfied	4,555		16,786
Balance at end of period	167,097		$ 130,986
Revenue related to our contract liabilities	123,300
Impairment losses	$ 0	0
Calculated under Revenue Guidance in Effect before Topic 606 [Member]
Contract Liabilities
Revenue related to our contract liabilities		$ 99,800

Summary of Significant Accounting Policies - Remaining Performance Obligations (Details) - Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-04-01 $ in Millions	Sep. 30, 2019 USD ($)
Remaining Performance Obligations
Remaining performance obligations	$ 1,610
Expected timing of performance obligations	12 months
Minimum
Remaining Performance Obligations
Expected percentage of remaining performance obligations	80.00%
Maximum
Remaining Performance Obligations
Expected percentage of remaining performance obligations	85.00%

Summary of Significant Accounting Policies - Service Maintenance Agreements (Details)	9 Months Ended
	Sep. 30, 2019
Summary of Significant Accounting Policies
The term of the renewable service maintenance agreements (in years)	1 year

Summary of Significant Accounting Policies - Leases (Details) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019 USD ($)	Sep. 30, 2018 USD ($)	Sep. 30, 2019 USD ($) Option	Sep. 30, 2018 USD ($)
Lessee, Lease, Description [Line Items]
Variable lease expense and short-term lease expenses			$ 6,200
Weighted average discount rate	4.00%		4.00%
Lease expense	$ 6,500	$ 6,100	$ 18,300	$ 17,200
Weighted average remaining lease term	8 years 1 month 6 days		8 years 1 month 6 days
Rent paid to related parties	$ 700	$ 1,300	$ 2,700	$ 3,500
Existence of option to extend			true
Summary of lease asset and liabilities
Lease right-of-use assets	84,281		$ 84,281
Lease Liabilities
Other current liabilities	$ 13,549		$ 13,549
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List]	Other Liabilities, Current		Other Liabilities, Current
Long-term lease liabilities	$ 73,213		$ 73,213
Present Value of Lease Liabilities	$ 86,762		$ 86,762
Minimum
Lessee, Lease, Description [Line Items]
Lease term	3 years		3 years
Number of options to renew \| Option			1
Maximum
Lessee, Lease, Description [Line Items]
Lease term	10 years		10 years

Summary of Significant Accounting Policies - Maturities of Lease Liabilities (Details) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2019 USD ($)	Sep. 30, 2019 USD ($)
Maturities of lease liabilities:
2019 (excluding the nine months ended September 30, 2019)	$ 4,326	$ 4,326
2020	16,288	16,288
2021	14,477	14,477
2022	12,291	12,291
2023	10,328	10,328
Thereafter	44,617	44,617
Total Lease Payments	102,327	102,327
Less-Present Value Discount	(15,565)	(15,565)
Present Value of Lease Liabilities	86,762	86,762
Supplemental information related to leases:
Cash paid for amounts included in the measurement of lease liabilities	6,466	18,426
Lease right-of-use assets obtained in exchange for lease liabilities	$ 7,050	$ 10,768

Summary of Significant Accounting Policies - Income Taxes (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended	12 Months Ended
	Sep. 30, 2019	Mar. 31, 2018	Sep. 30, 2019	Dec. 31, 2018
Summary of Significant Accounting Policies
Provision for income taxes		$ (2.8)	$ (2.0)
Additions based on tax positions related to prior years	$ 4.6			$ 2.7

Summary of Significant Accounting Policies - Other Income (Details) - British Petroleum $ in Millions	1 Months Ended	3 Months Ended
	Apr. 30, 2018 claim	Jun. 30, 2018 USD ($)
Loss Contingencies [Line Items]
Number of claims settled \| claim	2
Gain related to settlement agreements \| $		$ 4.0

Fair Value Measurements (Details) $ in Thousands	9 Months Ended
Fair Value Measurements (Details) $ in Thousands	Sep. 30, 2019 USD ($) item	Dec. 31, 2018 USD ($)
Fair Value Measurements
Number of employees covered under life insurance policies \| item	66
Combined face value of life insurance policies	$ 51,100
Cash surrender value	3,800	$ 3,300
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	7,375
Issuances	19,500
Settlements	(1,369)
Adjustments to fair value	3,924
Balance at end of period	29,430
Recurring basis \| Total
Fair Value Measurements
Cash and cash equivalents	40,363	45,620
Life insurance-cash surrender value	3,758	3,252
Contingent earn-out obligations	29,430	7,375
Recurring basis \| Quoted Market Prices In Active Markets for Identical Assets (Level 1)
Fair Value Measurements
Cash and cash equivalents	40,363	45,620
Recurring basis \| Fair Value Measurements at Reporting Date Using Significant Other Observable Inputs (Level 2)
Fair Value Measurements
Life insurance-cash surrender value	3,758	3,252
Recurring basis \| Significant Unobservable Inputs (Level 3)
Fair Value Measurements
Contingent earn-out obligations	$ 29,430	$ 7,375

Acquisitions (Details) - USD ($) $ in Thousands		3 Months Ended		6 Months Ended	9 Months Ended
Acquisitions (Details) - USD ($) $ in Thousands	Apr. 01, 2019	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018	Dec. 31, 2017
Acquisitions
Revenues		$ 706,918	$ 594,536		$ 1,895,693	$ 1,594,520
Consideration transferred:
Total consideration transferred					2,600
Recognized amounts of identifiable assets acquired and liabilities assumed:
Goodwill		$ 332,200		$ 332,200	$ 332,200		$ 235,182	$ 200,584
Walker
Acquisitions
Revenues				$ 203,100
Consideration transferred:
Cash paid at closing	$ 178,000
Advance to former owners	20,500
Working capital adjustment	(7,594)
Notes issued to former owners	25,000
Tax equalization payment	202
Estimated fair value of contingent earn-out payments	19,500
Total consideration transferred	235,608
Recognized amounts of identifiable assets acquired and liabilities assumed:
Cash and cash equivalents	4,850
Billed and unbilled accounts receivable	92,309
Other current assets	8,587
Other long-term assets	53
Property and equipment	4,970
Goodwill	96,439
Identifiable intangible assets	90,200
Lease right-of-use asset	(10,495)
Accounts payable	(20,220)
Accrued compensation and benefits	(974)
Billings in excess of costs and estimated earnings	(31,553)
Other current liabilities	(11,278)
Long-term lease liabilities	(8,270)
Total assets acquired and liabilities assumed	$ 235,608
Cash flow discount rate	10.20%
Walker \| Minimum
Recognized amounts of identifiable assets acquired and liabilities assumed:
Cash flow discount rate	8.50%
Walker \| Maximum
Recognized amounts of identifiable assets acquired and liabilities assumed:
Cash flow discount rate	11.50%

Acquisitions - Acquired Intangible Assets (Details) - Walker $ in Thousands	Apr. 01, 2019 USD ($)
Acquired Finite-Lived Intangible Assets [Line Items]
Estimated Fair Value	$ 90,200
Backlog
Acquired Finite-Lived Intangible Assets [Line Items]
Estimated Useful Life	2 years
Estimated Fair Value	$ 4,600
Trade Names
Acquired Finite-Lived Intangible Assets [Line Items]
Estimated Useful Life	25 years
Estimated Fair Value	$ 32,600
Customer Relationships
Acquired Finite-Lived Intangible Assets [Line Items]
Estimated Useful Life	10 years
Estimated Fair Value	$ 53,000

Acquisitions - Contingent Earn-out Obligation (Details) - Walker $ in Millions	Apr. 01, 2019 USD ($)
Business Acquisition [Line Items]
Contingent earn-out period	5 years
Contingent earn-out estimated milestone payment, minimum	$ 1
Contingent earn-out estimated milestone payment, maximum	$ 11
Cash flow discount rate	10.20%

Acquisitions - Pro Forma (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
Acquisitions - Pro Forma (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Acquisitions
Revenue	$ 706,918	$ 707,199	$ 1,984,054	$ 1,885,757
Pre-tax income	$ 49,718	$ 51,374	$ 106,223	$ 116,754

Acquisitions - Other Acquisitions (Details) $ in Millions	3 Months Ended					9 Months Ended
Acquisitions - Other Acquisitions (Details) $ in Millions	Jun. 30, 2019 item	Mar. 31, 2019 item	Sep. 30, 2018 item	Jun. 30, 2018 item	Mar. 31, 2018 item	Sep. 30, 2019 USD ($)
Acquisitions
Number of acquisitions	1	1	2	3	2
Total purchase price \| $						$ 2.6
Number of acquisitions reported as separate operating location			1

Goodwill and Identifiable Intangible Assets, Net - Changes in Carrying Amount of Goodwill (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2019	Dec. 31, 2018
Changes in the carrying amount of goodwill
Balance at beginning of year	$ 235,182	$ 200,584
Additions (See Note 4)	97,018	34,598
Balance at end of period	332,200	235,182
Mechanical Services
Changes in the carrying amount of goodwill
Balance at beginning of year	235,182	200,584
Additions (See Note 4)	579	34,598
Impact of segment reorganization	(1,101)
Balance at end of period	234,660	$ 235,182
Electrical Services
Changes in the carrying amount of goodwill
Additions (See Note 4)	96,439
Impact of segment reorganization	1,101
Balance at end of period	$ 97,540

Goodwill and Identifiable Intangible Assets, Net - Identifiable Intangible Assets, Net (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018
Identifiable Intangible Assets, Net
Gross Book Value	$ 268,658		$ 268,658		$ 176,975
Accumulated Amortization	(101,922)		(101,922)		(81,700)
Amortization of identifiable intangible assets	7,200	$ 5,300	20,221	$ 14,102
Future amortization expense of identifiable intangible assets
2019 (remainder of the year)	6,844		6,844
2020	23,213		23,213
2021	19,158		19,158
2022	16,536		16,536
2023	15,082		15,082
Thereafter	85,903		85,903
Total	166,736		166,736
Customer Relationships
Identifiable Intangible Assets, Net
Gross Book Value	182,963		182,963		128,480
Accumulated Amortization	(75,455)		$ (75,455)		(60,731)
Customer Relationships \| Minimum
Identifiable Intangible Assets, Net
Estimated Useful Lives in Years			1 year
Customer Relationships \| Maximum
Identifiable Intangible Assets, Net
Estimated Useful Lives in Years			15 years
Backlog
Identifiable Intangible Assets, Net
Gross Book Value	13,700		$ 13,700		9,100
Accumulated Amortization	(11,906)		$ (11,906)		(8,260)
Backlog \| Minimum
Identifiable Intangible Assets, Net
Estimated Useful Lives in Years			1 year
Backlog \| Maximum
Identifiable Intangible Assets, Net
Estimated Useful Lives in Years			2 years
Trade Names
Identifiable Intangible Assets, Net
Gross Book Value	71,995		$ 71,995		39,395
Accumulated Amortization	$ (14,561)		$ (14,561)		$ (12,709)
Trade Names \| Minimum
Identifiable Intangible Assets, Net
Estimated Useful Lives in Years			2 years
Trade Names \| Maximum
Identifiable Intangible Assets, Net
Estimated Useful Lives in Years			25 years
Customer Relationships Noncompete Agreements and Tradenames \| Minimum
Identifiable Intangible Assets, Net
Estimated Useful Lives in Years			1 year
Customer Relationships Noncompete Agreements and Tradenames \| Maximum
Identifiable Intangible Assets, Net
Estimated Useful Lives in Years			25 years

Debt Obligations (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Debt Obligations
Total debt	$ 242,014	$ 76,918
Less-current portion	(13,847)	(3,279)
Total long-term portion of debt	228,167	73,639
Revolving credit facility
Debt Obligations
Total debt	193,000	50,000
Notes to former owners
Debt Obligations
Outstanding balance	48,983	26,813
Other debt
Debt Obligations
Total debt	$ 31	$ 105

Debt Obligations - Other (Details) $ in Thousands	3 Months Ended						9 Months Ended		12 Months Ended
Debt Obligations - Other (Details) $ in Thousands	Sep. 30, 2019 USD ($) item	Jun. 30, 2019 USD ($) item	Mar. 31, 2019 USD ($) item	Sep. 30, 2018 USD ($) item	Jun. 30, 2018 USD ($) item	Mar. 31, 2018 USD ($) item	Sep. 30, 2019 USD ($) item	Sep. 30, 2018 USD ($)	Dec. 31, 2018 USD ($) item	Apr. 30, 2018 USD ($)
Reconciliation of Credit Facility Adjusted EBITDA to net income
Net income	$ 36,233	$ 24,173	$ 19,866	$ 38,541	$ 32,547	$ 16,659	$ 80,272	$ 87,747
Provision for income taxes	12,473			$ 13,595			26,339	26,466
Stock-based compensation							4,861	$ 6,021
Other disclosures
Number of acquisitions \| item		1	1	2	3	2
Outstanding balance	228,167						228,167		$ 73,639
Shoffner
Other disclosures
Acquired debt	400						400
Maximum \| Shoffner
Other disclosures
Outstanding balance	100						$ 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
Debt Obligations
Outstanding borrowings	193,000						$ 193,000
Letters of credit amount outstanding	33,600						33,600
Credit available	$ 173,400						$ 173,400
Principal financial covenants
Number of interest rate options \| item							2
Leverage ratio	1.2						1.2
Fixed charge coverage ratio	13.1						13.1
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
Weighted average interest rate (as a percent)	3.60%						3.60%
Revolving credit facility \| Through maturity
Principal financial covenants
Leverage ratio	3.00						3.00
Revolving credit facility \| Minimum
Principal financial covenants
Fixed charge coverage ratio	2.00						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						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	1.75						1.75
Permitted amount of acquisitions per transaction	$ 40,000						$ 40,000
Aggregate purchase price of current acquisition and acquisitions in the preceding 12 month period for determining permitted amount of acquisition per transaction	$ 80,000						$ 80,000
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	1.75						1.75
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							$ 30,000
Revolving credit facility \| Base Rate \| Consolidated Total Indebtedness to Credit Facility Adjusted EBITDA: Less than 1.00
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: 1.00 to 1.75
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: 1.75 to 2.50
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: 2.50 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 1.00
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: 1.00 to 1.75
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: 1.75 to 2.50
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: 2.50 or greater
Additional per annum interest margin added under:
Additional per annum interest margin (as a percent)							2.00%
Amended senior revolving credit facility
Debt Obligations
Borrowing capacity						$ 325,000				$ 400,000
Line of credit borrowing capacity accordion option	$ 100,000						$ 100,000
Notes to former owners
Other disclosures
Cumulative number of companies acquired \| item	7						7
Outstanding balance	$ 48,983						$ 48,983		$ 26,813
Promissory note \| Walker
Other disclosures
Outstanding balance	$ 25,000						$ 25,000
Weighted average interest rate (as a percent)	4.00%						4.00%
Promissory note \| BCH
Other disclosures
Outstanding balance	$ 14,300						$ 14,300
Weighted average interest rate (as a percent)	3.00%						3.00%
Promissory note \| Five Immaterial Acquisition
Other disclosures
Number of acquisitions \| item							5		5
Outstanding balance	$ 9,700						$ 9,700
Promissory note \| Minimum \| Five Immaterial Acquisition
Other disclosures
Weighted average interest rate (as a percent)	2.50%						2.50%
Promissory note \| Maximum \| Five Immaterial Acquisition
Other disclosures
Weighted average interest rate (as a percent)	3.50%						3.50%

Commitments and Contingencies - Other and Bonds (Details) - Surety	9 Months Ended
	Sep. 30, 2019
Minimum
Surety
Percentage of business which has required bonds	20.00%
Maximum
Surety
Percentage of business which has required bonds	30.00%

Stockholders' Equity - Incentive and Other (Details) - USD ($) $ / shares in Units, $ in Thousands, shares in Millions	9 Months Ended		150 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Aug. 10, 2018	Mar. 29, 2007
Share Repurchase Program
Share repurchase	$ 15,317	$ 11,573
Stock Repurchase Program 2007
Share Repurchase Program
Number of shares of outstanding common stock authorized to be acquired under a stock repurchase program	8.8		8.8	0.7	1.0
Share repurchase (in shares)	0.3		8.5
Average price (in dollars per share)	$ 44.43		$ 17.38
Share repurchase	$ 15,300

Stockholders' Equity - Anti-Dilutive Stock Options (Details) - shares shares in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Stock Options \| Maximum
Earnings Per Share
Anti-dilutive securities excluded from computation of earnings per share amount (in shares)	0.1	0.1	0.1	0.1

Stockholders' Equity - Number of Shares (Details) - shares shares in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
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	36,676	37,221	36,676	37,221
Effect of using weighted average common shares outstanding	129	73	215	15
Shares used in computing earnings per share-basic	36,805	37,294	36,891	37,236
Effect of shares issuable under stock option plans based on the treasury stock method	181	280	211	294
Effect of restricted and contingently issuable shares	65	93	68	104
Shares used in computing earnings per share-diluted	37,051	37,667	37,170	37,634

Segment Information (Details) $ in Thousands	3 Months Ended		9 Months Ended
Segment Information (Details) $ in Thousands	Sep. 30, 2019 USD ($)	Sep. 30, 2018 USD ($)	Sep. 30, 2019 USD ($) location segment	Sep. 30, 2018 USD ($)
Segment Information
Number of reportable segments \| segment			2
Number or operating locations \| location			35
Revenues	$ 706,918	$ 594,536	$ 1,895,693	$ 1,594,520
Gross profit	142,702	127,868	369,383	328,104
Operating \| Mechanical Services
Segment Information
Revenues	590,016	592,925	1,677,632	1,592,909
Gross profit	128,501	127,669	344,632	327,905
Operating \| Electrical Services
Segment Information
Revenues	116,902	1,611	218,061	1,611
Gross profit	$ 14,201	$ 199	$ 24,751	$ 199