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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2024
OR
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from            to
Commission file number: 1-08325
_____________________________________________________________
MYR GROUP INC.
(Exact name of registrant as specified in its charter)
Delaware36-3158643
(State or other jurisdiction of
incorporation or organization)		(I.R.S. Employer Identification No.)
12121 Grant Street,
Suite 610
Thornton,CO80241
(Address of principal executive offices)(Zip Code)
(303) 286-8000
(Registrant’s telephone number, including area code)

N/A
(Former name, former address and former fiscal year, if changed since last report)
_____________________________________________________________
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.01 par valueMYRGThe Nasdaq Stock Market, LLC
(Nasdaq Global Market)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
x
Accelerated filer ☐
Non-accelerated filer ☐Smaller reporting company ☐
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No x
As of October 25, 2024, there were 16,121,901 outstanding shares of the registrant’s $0.01 par value common stock.



INDEX
Page
Consolidated Balance Sheets as of September 30, 2024 (unaudited) and December 31, 2023
Throughout this report, references to “MYR Group,” the “Company,” “we,” “us” and “our” refer to MYR Group Inc. and its consolidated subsidiaries, except as otherwise indicated or as the context otherwise requires.
1
PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS
MYR GROUP INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)September 30,
2024		December 31,
2023
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents$7,569 $24,899 
Accounts receivable, net of allowances of $977 and $1,987, respectively
571,342 521,893 
Contract assets, net of allowances of $582 and $610, respectively
411,843 420,616 
Current portion of receivable for insurance claims in excess of deductibles9,056 8,267 
Refundable income taxes6,280 4,034 
Prepaid expenses and other current assets25,532 46,535 
Total current assets1,031,622 1,026,244 
Property and equipment, net of accumulated depreciation of $388,180 and $380,465, respectively
279,634 268,978 
Operating lease right-of-use assets40,665 35,012 
Goodwill115,970 116,953 
Intangible assets, net of accumulated amortization of $34,036 and $30,534, respectively
79,077 83,516 
Receivable for insurance claims in excess of deductibles34,925 33,739 
Investment in joint ventures5,835 8,707 
Other assets5,331 5,597 
Total assets$1,593,059 $1,578,746 
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term debt$4,364 $7,053 
Current portion of operating lease obligations11,136 9,237 
Current portion of finance lease obligations1,168 2,039 
Accounts payable329,971 359,363 
Contract liabilities262,557 240,411 
Current portion of accrued self-insurance25,394 28,269 
Accrued income taxes— 237 
Other current liabilities127,846 100,593 
Total current liabilities762,436 747,202 
Deferred income tax liabilities47,722 48,230 
Long-term debt88,822 29,188 
Accrued self-insurance54,262 51,796 
Operating lease obligations, net of current maturities29,529 25,775 
Finance lease obligations, net of current maturities2,312 314 
Other liabilities19,467 25,039 
Total liabilities1,004,550 927,544 
Commitments and contingencies
Shareholders’ equity:
Preferred stock—$0.01 par value per share; 4,000,000 authorized shares; none issued and outstanding at September 30, 2024 and December 31, 2023
— — 
Common stock—$0.01 par value per share; 100,000,000 authorized shares; 16,121,901 and 16,684,492 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively
161 167 
Additional paid-in capital156,799 162,386 
Accumulated other comprehensive loss(6,216)(3,880)
Retained earnings437,765 492,529 
Total shareholders’ equity588,509 651,202 
Total liabilities and shareholders’ equity$1,593,059 $1,578,746 
The accompanying notes are an integral part of these consolidated financial statements.
2
MYR GROUP INC.
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
Three months ended
September 30,		Nine months ended
September 30,
(in thousands, except per share data)2024202320242023
Contract revenues$888,043 $939,476 $2,532,495 $2,639,708 
Contract costs810,755 847,093 2,328,121 2,372,806 
Gross profit77,288 92,383 204,374 266,902 
Selling, general and administrative expenses57,456 59,879 181,528 174,618 
Amortization of intangible assets1,221 1,231 3,666 3,686 
Gain on sale of property and equipment(1,750)(754)(4,745)(3,293)
Income from operations20,361 32,027 23,925 91,891 
Other income (expense):
Interest income73 226 296 740 
Interest expense(2,016)(1,319)(4,311)(3,059)
Other income (expense), net112 (91)(421)(61)
Income before provision for income taxes18,530 30,843 19,489 89,511 
Income tax expense7,881 9,331 5,178 22,563 
Net income$10,649 $21,512 $14,311 $66,948 
Income per common share:
—Basic$0.65 $1.29 $0.86 $4.01 
—Diluted$0.65 $1.28 $0.86 $3.98 
Weighted average number of common shares and potential common shares outstanding:
—Basic16,283 16,710 16,582 16,678 
—Diluted16,324 16,829 16,647 16,821 
Net income$10,649 $21,512 $14,311 $66,948 
Other comprehensive income (loss):
Foreign currency translation adjustment1,309 (2,611)(2,336)(335)
Other comprehensive income (loss)1,309 (2,611)(2,336)(335)
Total comprehensive income$11,958 $18,901 $11,975 $66,613 
The accompanying notes are an integral part of these consolidated financial statements.
3
MYR GROUP INC.
UNAUDITED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

PreferredCommon StockAdditional
Paid-In		Accumulated
Other
Comprehensive		Retained
(in thousands)StockSharesAmountCapitalIncome (Loss)EarningsTotal
Balance at December 31, 2022$— 16,564 $165 $161,427 $(6,300)$404,908 $560,200 
Net income— — — — — 23,163 23,163 
Stock issued under compensation plans, net— 211 2 18 — — 20 
Stock-based compensation expense— — — 1,982 — — 1,982 
Shares repurchased related to tax withholding for stock-based compensation— (76)— (7,194)— (742)(7,936)
Other comprehensive income— — — — 136 — 136 
Balance at March 31, 2023— 16,699 167 156,233 (6,164)427,329 577,565 
Net income— — — — — 22,273 22,273 
Stock issued under compensation plans, net— 11 — — — — — 
Stock-based compensation expense — — — 2,322 — — 2,322 
Other comprehensive income— — — — 2,140 — 2,140 
Balance at June 30, 2023— 16,710 167 158,555 (4,024)449,602 604,300 
Net income— — — — — 21,512 21,512 
Stock-based compensation expense— — — 2,258 — — 2,258 
Other comprehensive loss— — — — (2,611)— (2,611)
Balance at September 30, 2023$— 16,710 $167 $160,813 $(6,635)$471,114 $625,459 
Balance at December 31, 2023$— 16,684 $167 $162,386 $(3,880)$492,529 $651,202 
Net income— — — — — 18,939 18,939 
Stock issued under compensation plans, net— 114 1 (1)— — — 
Stock-based compensation expense— — — 1,917 — — 1,917 
Shares repurchased related to tax withholding for stock-based compensation— (36)(1)(5,511)— (354)(5,866)
Other comprehensive loss— — — — (2,472)— (2,472)
Balance at March 31, 2024— 16,762 167 158,791 (6,352)511,114 663,720 
Net loss— — — — — (15,277)(15,277)
Stock issued under compensation plans, net— 3 — — — — — 
Stock-based compensation expense — — — 2,331 — — 2,331 
Share repurchases under share repurchase program— (117)(1)(1,121)— (15,137)(16,259)
Other comprehensive loss— — — — (1,173)— (1,173)
Balance at June 30, 2024— 16,648 166 160,001 (7,525)480,700 633,342 
Net income— — — — — 10,649 10,649 
Stock-based compensation expense— — — 1,950 — — 1,950 
Share repurchases under share repurchase program— (526)(5)(5,152)— (53,584)(58,741)
Other comprehensive income— — — — 1,309 — 1,309 
Balance at September 30, 2024$— 16,122 $161 $156,799 $(6,216)$437,765 $588,509 
The accompanying notes are an integral part of these consolidated financial statements.
4
MYR GROUP INC.
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine months ended
September 30,
(in thousands)20242023
Cash flows from operating activities:
Net income$14,311 $66,948 
Adjustments to reconcile net income to net cash flows provided by operating activities:
Depreciation and amortization of property and equipment45,131 39,848 
Amortization of intangible assets3,666 3,686 
Stock-based compensation expense6,198 6,562 
Deferred income taxes(144)— 
Gain on sale of property and equipment(4,745)(3,293)
Other non-cash items1,044 564 
Changes in operating assets and liabilities:
Accounts receivable, net(50,193)(76,349)
Contract assets, net8,212 (109,803)
Receivable for insurance claims in excess of deductibles(1,975)1,558 
Other assets21,687 21,503 
Accounts payable(20,607)62,276 
Contract liabilities22,294 3,941 
Accrued self-insurance(402)(1,119)
Other liabilities21,519 12,070 
Net cash flows provided by operating activities65,996 28,392 
Cash flows from investing activities:
Proceeds from sale of property and equipment6,815 3,998 
Purchases of property and equipment(63,634)(63,791)
Net cash flows used in investing activities(56,819)(59,793)
Cash flows from financing activities:
Borrowings under revolving lines of credit584,070 354,467 
Repayments under revolving lines of credit(520,076)(328,085)
Payment of principal obligations under equipment notes(7,049)(4,597)
Payment of principal obligations under finance leases(2,083)(872)
Proceeds from exercise of stock options— 20 
Repurchase of common stock(75,000)— 
Debt refinancing costs(34)(2,129)
Payments related to tax withholding for stock-based compensation(5,866)(7,936)
Net cash flows provided by (used in) financing activities(26,038)10,868 
Effect of exchange rate changes on cash(469)(36)
Net decrease in cash and cash equivalents(17,330)(20,569)
Cash and cash equivalents:
Beginning of period24,899 51,040 
End of period$7,569 $30,471 
The accompanying notes are an integral part of these consolidated financial statements.
5
MYR GROUP INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
1. Organization, Business and Basis of Presentation
Organization and Business
MYR Group Inc. (the “Company”) is a holding company of specialty electrical construction service providers conducting operations through wholly owned subsidiaries. The Company performs construction services in two business segments: Transmission and Distribution (“T&D”), and Commercial and Industrial (“C&I”). T&D customers include investor-owned utilities, cooperatives, private developers, government-funded utilities, independent power producers, independent transmission companies, industrial facility owners and other contractors. T&D provides a broad range of services on electric transmission, distribution networks, substation facilities, clean energy projects and electric vehicle charging infrastructure. T&D services include design, engineering, procurement, construction, upgrade, maintenance and repair services. C&I customers include general contractors, commercial and industrial facility owners, government agencies and developers. C&I provides a broad range of services, which include the design, installation, maintenance and repair of commercial and industrial wiring. Typical C&I contracts cover electrical contracting services for airports, hospitals, data centers, hotels, stadiums, commercial and industrial facilities, clean energy projects, manufacturing plants, processing facilities, water/waste-water treatment facilities, mining facilities, intelligent transportation systems, roadway lighting, signalization and electric vehicle charging infrastructure.
Basis of Presentation
Interim Consolidated Financial Information
The accompanying unaudited consolidated financial statements of the Company were prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial reporting pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to the rules and regulations of the SEC. The Company believes that the disclosures made are adequate to make the information presented not misleading. In the opinion of management, all adjustments, consisting only of normal recurring adjustments, necessary to fairly state the financial position, results of operations, comprehensive income (loss), shareholders’ equity and cash flows with respect to the interim consolidated financial statements, have been included. The consolidated balance sheet as of December 31, 2023 has been derived from the audited financial statements as of that date. The results of operations and comprehensive income (loss) are not necessarily indicative of the results for the full year or the results for any future periods. These financial statements should be read in conjunction with the audited financial statements and related notes for the year ended December 31, 2023, included in the Company’s Annual Report on Form 10-K, which was filed with the SEC on February 28, 2024 (the "2023 Annual Report").
Joint Ventures and Noncontrolling Interests
The Company accounts for investments in joint ventures using the proportionate consolidation method for income statement reporting and under the equity method for balance sheet reporting, unless the Company has a controlling interest causing the joint venture to be consolidated with equity owned by other joint venture partners recorded as noncontrolling interests. As of September 30, 2024, the Company did not have a controlling interest in any current joint venture partnerships. Under the proportionate consolidation method, joint venture activity is allocated to the appropriate line items found on the consolidated statements of operations in proportion to the percentage of participation the Company has in the joint venture. Under the equity method the net investment in joint ventures is stated as a single item on the Company’s consolidated balance sheets. If an investment in a joint venture contains a recourse or unfunded commitments to provide additional equity, distributions and/or losses in excess of the investment, a liability is recorded in other current liabilities on the Company’s consolidated balance sheets.
6
For joint ventures in which the Company does not have a controlling interest, the Company’s share of any profits and assets and its share of any losses and liabilities are recognized based on the Company’s stated percentage partnership interest in the joint venture and are typically recorded by the Company one month in arrears. The investments in joint ventures are recorded at cost and the carrying amounts are adjusted to recognize the Company’s proportionate share of cumulative income or loss, additional contributions made and dividends and capital distributions received. The Company records the effect of any impairment or any other-than-temporary decrease in the value of the joint venture investment as incurred, which may or may not be one month in arrears, depending on when the Company obtains the joint venture activity information. Additionally, the Company continually assesses the fair value of its investment in unconsolidated joint ventures despite using information that is one month in arrears for regular reporting purposes. The Company includes only its percentage ownership of each joint venture in its backlog.
Foreign Currency
The functional currency for the Company’s Canadian operations is the Canadian dollar. Assets and liabilities denominated in Canadian dollars are translated into U.S. dollars at the end-of-period exchange rate. Revenues and expenses are translated using average exchange rates for the periods reported. Equity accounts are translated at historical rates. Cumulative translation adjustments are included as a separate component of accumulated other comprehensive income (loss) in shareholders’ equity. Foreign currency transaction gains and losses, arising primarily from changes in exchange rates on short-term monetary assets and liabilities, and intercompany loans that are not deemed long-term investment accounts are recorded in the “other income (expense), net” line on the Company’s consolidated statements of operations. Foreign currency losses, recorded in other income (expense), net, for the nine months ended September 30, 2024 and 2023 were not significant. Foreign currency translation gains and losses, arising from intercompany loans that are deemed long-term investment accounts, are recorded in the foreign currency translation adjustment line on the Company’s consolidated statements of comprehensive income.
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the period reported. Actual results could differ from those estimates.
The most significant estimates are related to estimates of costs to complete contracts, pending change orders and claims, shared savings, insurance reserves, income tax reserves, estimates surrounding stock-based compensation, acquisition-related contingent earn-out consideration liabilities, the recoverability of goodwill and intangibles and allowance for doubtful accounts. The Company estimates a cost accrual every quarter that represents costs incurred but not invoiced for services performed or goods delivered during the period, and estimates revenue from the contract cost portion of these accruals based on current gross margin rates to be consistent with its cost method of revenue recognition.
As of September 30, 2024 and December 31, 2023, the Company had recognized revenues of $80.4 million and $76.5 million, respectively, related to large change orders and/or claims that had been included as contract price adjustments on certain contracts, some of which are multi-year projects. These change orders and/or claims are in the process of being negotiated in the normal course of business, and a portion of these recognized revenues had been included in multiple periods.
The cost-to-cost method of accounting requires the Company to make estimates about the expected revenue and gross profit on each of its contracts in process. During the three months ended September 30, 2024, changes in estimates pertaining to certain projects decreased consolidated gross margin by 3.9%, which resulted in decreases in operating income of $34.9 million, net income of $22.3 million and diluted earnings per common share of $1.37. During the nine months ended September 30, 2024, changes in estimates pertaining to certain projects decreased consolidated gross margin by 4.4% and resulted in decreases in operating income of $112.7 million, net income of $70.5 million and diluted earnings per common share of $4.24. Additional discussion on the impact of these estimate changes can be found in Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Consolidated Results of Operations.”
During the three months ended September 30, 2023, changes in estimates pertaining to certain projects decreased consolidated gross margin by 1.3%, which resulted in decreases in operating income of $11.5 million, net income of $8.0 million and diluted earnings per common share of $0.47. During the nine months ended September 30, 2023, changes in estimates pertaining to certain projects decreased consolidated gross margin by 1.2% and resulted in decreases in operating income of $32.2 million, net income of $22.4 million and diluted earnings per common share of $1.33.
7
Recent Accounting Pronouncements
Changes to U.S. GAAP are typically established by the Financial Accounting Standards Board (“FASB”) in the form of accounting standards updates (“ASUs”) to the FASB’s Accounting Standards Codification (“ASC”). The Company considers the applicability and impact of all ASUs. The Company, based on its assessment, determined that any recently issued or proposed ASUs not listed below are either not applicable to the Company or will have minimal impact on its financial statements when adopted.
In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant reportable segment expenses and other disclosure requirements. The update is effective for annual reporting periods beginning after December 15, 2023, with early adoption permitted. The guidance requires application on a retrospective basis. The Company is currently evaluating the impact of the new standard on its consolidated financial statements and disclosures.
In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which is intended to improve the transparency of income tax disclosures by requiring consistent categories and greater disaggregation of information in the rate reconciliation and income taxes paid disaggregated by jurisdiction. The guidance also includes certain other amendments intended to improve the effectiveness of income tax disclosures. The update is effective for annual reporting periods beginning after December 15, 2024, with early adoption permitted. The amendments in this pronouncement should be applied on a prospective basis, with the option to apply them retrospectively. The Company is currently evaluating the impact of the new standard on the Company’s income tax disclosures.
2. Contract Assets and Liabilities
Contracts with customers usually stipulate the timing of payment, which is defined by the terms found within the various contracts under which work was performed during the period. Therefore, contract assets and liabilities are created when the timing of costs incurred on work performed does not coincide with the billing terms. These contracts frequently include retention provisions contained in each contract.
The Company’s consolidated balance sheets present contract assets, which contain unbilled revenue and contract retainages associated with contract work that has been completed and billed but not paid by customers, pursuant to retainage provisions, that are generally due once the job is completed and approved. The allowance for doubtful accounts associated with contract assets was $0.6 million as of September 30, 2024 and December 31, 2023.
Contract assets consisted of the following:
(in thousands)September 30,
2024		December 31,
2023		Change
Unbilled revenue, net$216,515 $217,083 $(568)
Contract retainages, net195,328 203,533 (8,205)
Contract assets, net$411,843 $420,616 $(8,773)
The Company’s consolidated balance sheets present contract liabilities that contain deferred revenue and an accrual for contracts in a loss provision.
Contract liabilities consisted of the following:
(in thousands)September 30,
2024		December 31,
2023		Change
Deferred revenue$250,615 $231,604 $19,011 
Accrued loss provision11,942 8,807 3,135 
Contract liabilities$262,557 $240,411 $22,146 
8
The following table provides information about contract assets and contract liabilities from contracts with customers:
(in thousands)September 30,
2024		December 31,
2023		Change
Contract assets, net$411,843 $420,616 $(8,773)
Contract liabilities(262,557)(240,411)(22,146)
Net contract assets$149,286 $180,205 $(30,919)
The difference between the opening and closing balances of the Company’s contract assets and contract liabilities primarily results from the timing of the Company’s billings in relation to its performance of work. The amounts of revenue recognized in the period that were included in the opening contract liability balances were $60.4 million and $137.0 million for the three and nine months ended September 30, 2024. The amounts of revenue recognized in the period that were included in the opening contract liability balances were $16.3 million and $114.0 million for the three and nine months ended September 30, 2023, respectively. This revenue consists primarily of work performed on previous billings to customers.
The net asset position for contracts in process consisted of the following:
(in thousands)September 30,
2024		December 31,
2023
Costs and estimated earnings on uncompleted contracts$7,301,084 $6,716,990 
Less: billings to date7,335,184 6,731,511 
$(34,100)$(14,521)
The net asset position for contracts in process is included within the contract asset and contract liability in the accompanying consolidated balance sheets as follows:
(in thousands)September 30,
2024		December 31,
2023
Unbilled revenue $216,515 $217,083 
Deferred revenue (250,615)(231,604)
$(34,100)$(14,521)

3. Lease Obligations
From time to time, the Company enters into non-cancelable leases for some of our facility, vehicle and equipment needs. These leases allow the Company to conserve cash by paying a monthly lease rental fee for the use of facilities, vehicles and equipment rather than purchasing them. The Company’s leases have remaining terms ranging from one to nine years, some of which may include options to extend the leases for up to ten years, and some of which may include options to terminate the leases within one year. Currently, all the Company’s leases contain fixed payment terms. The Company may decide to cancel or terminate a lease before the end of its term, in which case we are typically liable to the lessor for the remaining lease payments under the term of the lease. Additionally, all of the Company's month-to-month leases are cancelable, by the Company or the lessor, at any time and are not included in our right-of-use asset or liability. At September 30, 2024, the Company had several leases with residual value guarantees. Typically, the Company has purchase options on the equipment underlying its long-term leases and many of its short-term rental arrangements. The Company may exercise some of these purchase options when the need for equipment is ongoing and the purchase option price is attractive. Leases are accounted for as operating or finance leases, depending on the terms of the lease.
9
The following is a summary of the lease-related assets and liabilities recorded:
September 30,
2024		December 31,
2023
(in thousands)Classification on the Consolidated Balance Sheet
Assets
Operating lease right-of-use assetsOperating lease right-of-use assets$40,665 $35,012 
Finance lease right-of-use assetsProperty and equipment, net of accumulated depreciation3,730 2,363 
Total right-of-use lease assets$44,395 $37,375 
Liabilities
Current
Operating lease obligationsCurrent portion of operating lease obligations$11,136 $9,237 
Finance lease obligationsCurrent portion of finance lease obligations1,168 2,039 
Total current obligations12,304 11,276 
Non-current
Operating lease obligationsOperating lease obligations, net of current maturities29,529 25,775 
Finance lease obligationsFinance lease obligations, net of current maturities2,312 314 
Total non-current obligations31,841 26,089 
Total lease obligations$44,145 $37,365 
The following is a summary of the lease terms and discount rates:
September 30,
2024		December 31,
2023
Weighted-average remaining lease term - finance leases3.4 years0.9 years
Weighted-average remaining lease term - operating leases3.8 years4.0 years
Weighted-average discount rate - finance leases3.9 %3.1 %
Weighted-average discount rate - operating leases4.0 %4.0 %
The following is a summary of certain information related to the lease costs for finance and operating leases:
(in thousands)Three months ended
September 30,		Nine months ended
September 30,
2024202320242023
Lease cost:
Finance lease cost:
Amortization of right-of-use assets$335 $199 $653 $595 
Interest on lease liabilities30 20 69 65 
Operating lease cost3,956 3,638 11,446 10,764 
Variable lease costs95 89 279 262 
Total lease cost$4,416 $3,946 $12,447 $11,686 
10
The following is a summary of other information and supplemental cash flow information related to finance and operating leases:
Nine months ended September 30,
(in thousands)20242023
Other information:
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases$10,969 $10,989 
Right-of-use asset obtained in exchange for new operating lease obligations$13,458 $7,763 
Right-of-use asset obtained in exchange for new finance lease obligations$3,595 $— 
The future undiscounted minimum lease payments, as reconciled to the discounted minimum lease obligation indicated on the Company’s consolidated balance sheets, under financial leases, less interest, and under operating leases, less imputed interest, as of September 30, 2024 were as follows:
(in thousands)Finance
Lease Obligations		Operating Lease
Obligations		Total
Lease
Obligations
Remainder of 2024
$367 $3,964 $4,331 
20251,195 14,771 15,966 
2026881 12,048 12,929 
2027881 7,098 7,979 
2028393 5,550 5,943 
2029— 3,291 3,291 
Thereafter— 894 894 
Total minimum lease payments3,717 47,616 51,333 
Financing component(237)(6,951)(7,188)
Net present value of minimum lease payments3,480 40,665 44,145 
Less: current portion of finance and operating lease obligations(1,168)(11,136)(12,304)
Long-term finance and operating lease obligations$2,312 $29,529 $31,841 
The financing component for finance lease obligations represents the interest component of finance leases that will be recognized as interest expense in future periods. The financing component for operating lease obligations represents the effect of discounting the lease payments to their present value.
Certain subsidiaries of the Company have operating leases for facilities from third party companies that are owned, in whole or part, by employees of the subsidiaries. The terms and rental rates of these leases are at or below market rental rates. Lease expense associated with these leases was $0.6 million and $1.9 million for the three and nine months ended September 30, 2024 and $0.6 million and $1.8 million for the three and nine months ended 2023. As of September 30, 2024, the minimum lease payments required under these leases totaled $10.9 million, which are due over the next 4.9 years.
4. Fair Value Measurements
The Company uses the three-tier hierarchy of fair value measurement, which prioritizes the inputs used in measuring fair value based upon their degree of availability in external active markets. These tiers include: Level 1 (the highest priority), defined as observable inputs, such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3 (the lowest priority), defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.
11
As of September 30, 2024 and December 31, 2023, the Company determined that the carrying value of cash and cash equivalents approximated fair value based on Level 1 inputs. As of September 30, 2024 and December 31, 2023, the fair value of the Company’s long-term debt and finance lease obligations was based on Level 2 inputs. The Company’s long-term debt was based on variable and fixed interest rates at September 30, 2024 and December 31, 2023, for new issues with similar remaining maturities, and approximated carrying value. In addition, based on borrowing rates currently available to the Company for borrowings with similar terms, the carrying value of the Company’s finance lease obligations also approximated fair value.
As of September 30, 2024, the fair value of the Company’s contingent earn-out consideration liability associated with the acquisition of Powerline Plus Ltd. and its affiliate PLP Redimix Ltd. (collectively, the “Powerline Plus Companies") on January 4, 2022, was based on Level 3 inputs. The contingent earn-out consideration recorded represents the estimated fair value of future amounts potentially payable to the former owners of the acquired Powerline Plus Companies, if the Powerline Plus Companies achieve certain performance targets over a three-year post-acquisition period. The fair value was initially determined using a Monte Carlo simulation valuation methodology based on probability-weighted performance projections and other inputs, including a discount rate and an expected volatility factor. The fair value of this contingent earn-out consideration liability will be evaluated on an ongoing basis by management. Accordingly, the level of inputs used for these fair value measurements is the lowest level (Level 3). Significant changes in any of these assumptions could result in a significantly higher or lower potential liability. As of the acquisition date, the fair value of the contingent earn-out consideration was $0.9 million. As of September 30, 2024 and December 31, 2023, the fair value of the contingent earn-out consideration was zero. The future payout of the contingent earn-out consideration, if any, is unlimited and could be significantly higher than the acquisition date fair value. If the minimum thresholds of the performance targets are achieved the contingent earn-out consideration payment will be approximately $16.6 million. There were no changes in contingent earn-out consideration during the three and nine months ended September 30, 2024 and 2023. Any changes in contingent earn-out consideration are recorded in other income.
5. Debt
The table below reflects the Company’s total debt, including borrowings under its credit agreement and master loan agreements for equipment notes:
(dollar amounts in thousands)Inception DateStated Interest
Rate (per annum)		Payment
Frequency		Term
(years)
Outstanding
Balance as of
September 30, 2024
Outstanding
Balance as of
December 31, 2023
Credit Agreement
Revolving loans5/31/2023VariableVariable5$77,195 $13,201 
Equipment Notes
Equipment Note 812/27/20192.75%Semi-annual5— 2,871 
Equipment Note 108/26/20224.32%Semi-annual515,957 20,125 
Other equipment note4/11/20224.55%Monthly534 44 
15,991 23,040 
Total debt93,186 36,241 
Less: current portion of long-term debt(4,364)(7,053)
Long-term debt$88,822 $29,188 
12
Credit Agreement
On May 31, 2023, the Company entered into a five-year third amended and restated credit agreement (the “Credit Agreement”) with a syndicate of banks led by JPMorgan Chase Bank, N.A. and Bank of America, N.A. that provides for a $490 million revolving credit facility (the “Facility”), subject to certain financial covenants as defined in the Credit Agreement. The Facility allows for revolving loans in Canadian dollars and other non-US currencies, up to the U.S. dollar equivalent of $150 million. Up to $75 million of the Facility may be used for letters of credit, with an additional $75 million available for letters of credit, subject to the sole discretion of each issuing bank. The Facility also allows for $15 million to be used for swingline loans. The Company has an expansion option to increase the commitments under the Facility or enter into incremental term loans, subject to certain conditions, by up to an additional $200 million upon receipt of additional commitments from new or existing lenders. Subject to certain exceptions, the Facility is secured by substantially all of the assets of the Company and its domestic subsidiaries, and by a pledge of substantially all of the capital stock of the Company’s domestic subsidiaries and 65% of the capital stock of the direct foreign subsidiaries of the Company. Additionally, subject to certain exceptions, the Company’s domestic subsidiaries also guarantee the repayment of all amounts due under the Credit Agreement. The Credit Agreement provides for customary events of default. If an event of default occurs and is continuing, on the terms and subject to the conditions set forth in the Credit Agreement, amounts outstanding under the Facility may be accelerated and may become or be declared immediately due and payable. Borrowings under the Credit Agreement are used to refinance existing indebtedness, and to provide for future working capital, capital expenditures, acquisitions and other general corporate purposes.
Amounts borrowed under the Credit Agreement bear interest, at the Company’s option, at a rate equal to either (1) the Alternate Base Rate (as defined in the Credit Agreement), plus an applicable margin ranging from 0.25% to 1.00%; or (2) the Term Benchmark Rate (as defined in the Credit Agreement) plus an applicable margin ranging from 1.25% to 2.00%. The applicable margin is determined based on the Company’s Net Leverage Ratio (as defined in the Credit Agreement). Letters of credit issued under the Facility are subject to a letter of credit fee of 1.25% to 2.00% for non-performance letters of credit or 0.625% to 1.00% for performance letters of credit, based on the Company’s Net Leverage Ratio. The Company is subject to a commitment fee of 0.20% to 0.30%, based on the Company’s Net Leverage Ratio, on any unused portion of the Facility. The Credit Agreement restricts certain types of payments when the Company’s Net Leverage Ratio, after giving pro forma effect thereto, exceeds 2.75. The weighted average interest rate on borrowings outstanding on the Facility was 7.03% and 6.96%, per annum, for the nine months ended September 30, 2024 and 2023, respectively.
Under the Credit Agreement, the Company is subject to certain financial covenants including a maximum Net Leverage Ratio of 3.0 and a minimum Interest Coverage Ratio (as defined in the Credit Agreement) of 3.0. The Credit Agreement also contains covenants including limitations on asset sales, investments, indebtedness and liens. The Company was in compliance with all of its financial covenants under the Credit Agreement as of September 30, 2024.
As of September 30, 2024, the Company had $77.2 million of borrowings outstanding under the Facility and letters of credit outstanding under the Facility of $37.3 million, including $32.6 million related to the Company's payment obligation under its insurance programs and $4.7 million related to contract performance obligations.
As of December 31, 2023, the Company had $13.2 million of borrowings outstanding under the Facility and letters of credit outstanding under the Facility of $34.4 million, including $27.1 million related to the Company's payment obligation under its insurance programs and $7.3 million related to contract performance obligations.
The Company had remaining deferred debt issuance costs related to the Facility totaling $1.9 million and $2.4 million as of September 30, 2024 and 2023, respectively. As permitted, debt issuance costs have been deferred and are presented as an asset within other assets, which is amortized as interest expense over the term of the Facility.
Equipment Notes
The Company has entered into Master Equipment Loan and Security Agreements (the “Master Loan Agreements”) with multiple finance companies. The Master Loan Agreements may be used for the financing of equipment between the Company and the lenders pursuant to one or more equipment notes ("Equipment Note"). Each Equipment Note executed under the Master Loan Agreements constitutes a separate, distinct and independent financing of equipment and a contractual obligation of the Company, which may contain prepayment clauses.
13
As of September 30, 2024, the Company had one Equipment Note outstanding under the Master Loan Agreements that is collateralized by equipment and vehicles owned by the Company. As of September 30, 2024, the Company had one other equipment note outstanding that is collateralized by a vehicle owned by the Company. The following table sets forth our remaining principal payments for all of the Company’s outstanding equipment notes as of September 30, 2024:
(in thousands)Future
Equipment Notes
Principal Payments
Remainder of 2024
$3 
20254,364 
20264,555 
20277,069 
2028— 
2029— 
Total future principal payments15,991 
Less: current portion of equipment notes(4,364)
Long-term principal obligations$11,627 
6. Revenue Recognition
Disaggregation of Revenue
A majority of the Company’s revenues are earned through contracts with customers that normally provide for payment upon completion of specified work or units of work as identified in the contract. Although there is considerable variation in the terms of these contracts, they are primarily structured as fixed-price contracts, under which the Company agrees to perform a defined scope of a project for a fixed amount, or unit-price contracts, under which the Company agrees to do the work at a fixed price per unit of work as specified in the contract. The Company also enters into time-and-equipment and time-and-materials contracts under which the Company is paid for labor and equipment at negotiated hourly billing rates and for other expenses, including materials, as incurred at rates agreed to in the contract. Finally, the Company sometimes enters into cost-plus contracts, where the Company is paid for costs plus a negotiated margin. On occasion, time-and-equipment, time-and-materials and cost-plus contracts require the Company to include a guarantee not-to-exceed a maximum price.
Historically, fixed-price and unit-price contracts have had the highest potential margins; however, they have had a greater risk in terms of profitability because cost overruns may not be recoverable. Time-and-equipment, time-and-materials and cost-plus contracts have historically had less margin upside, but generally have had a lower risk of cost overruns. The Company also provides services under master service agreements (“MSAs”) and other variable-term service agreements. MSAs normally cover maintenance, upgrade and extension services, as well as new construction. Work performed under MSAs is typically billed on a unit-price, time-and-materials or time-and-equipment basis. MSAs are typically one to three years in duration; however, most of the Company’s contracts, including MSAs, may be terminated by the customer on short notice, typically 30 to 90 days, even if the Company is not in default under the contract. Under MSAs, customers generally agree to use the Company for certain services in a specified geographic region. Most MSAs include no obligation for the contract counterparty to assign specific volumes of work to the Company and do not require the counterparty to use the Company exclusively, although in some cases the MSA contract gives the Company a right of first refusal for certain work. Additional information related to the Company’s market types is provided in Note 10–Segment Information.
14
The components of the Company’s revenue by contract type for the three months ended September 30, 2024 and 2023 were as follows:
Three months ended September 30, 2024
T&DC&ITotal
(dollars in thousands)AmountPercentAmountPercentAmountPercent
Fixed price$197,087 40.9 %$331,103 81.5 %$528,190 59.5 %
Unit price169,337 35.1 23,849 5.9 193,186 21.7 
T&E115,452 24.0 51,215 12.6 166,667 18.8 
$481,876 100.0 %$406,167 100.0 %$888,043 100.0 %
Three months ended September 30, 2023
T&DC&ITotal
(dollars in thousands)AmountPercentAmountPercentAmountPercent
Fixed price$283,440 51.7 %$319,546 81.7 %$602,986 64.2 %
Unit price143,218 26.1 26,899 6.9 170,117 18.1 
T&E121,937 22.2 44,436 11.4 166,373 17.7 
$548,595 100.0 %$390,881 100.0 %$939,476 100.0 %
The components of the Company’s revenue by contract type for the nine months ended September 30, 2024 and 2023 were as follows:
Nine months ended September 30, 2024
T&DC&ITotal
(dollars in thousands)AmountPercentAmountPercentAmountPercent
Fixed price$654,969 45.8 %$902,582 81.9 %$1,557,551 61.5 %
Unit price443,589 31.0 58,988 5.4 502,577 19.8 
T&E331,922 23.2 140,445 12.7 472,367 18.7 
$1,430,480 100.0 %$1,102,015 100.0 %$2,532,495 100.0 %
Nine months ended September 30, 2023
T&DC&ITotal
(dollars in thousands)AmountPercentAmountPercentAmountPercent
Fixed price$774,022 51.7 %$938,576 82.2 %$1,712,598 64.9 %
Unit price396,855 26.5 68,099 6.0 464,954 17.6 
T&E326,778 21.8 135,378 11.8 462,156 17.5 
$1,497,655 100.0 %$1,142,053 100.0 %$2,639,708 100.0 %
The components of the Company’s revenue by market type for the three months ended September 30, 2024 and 2023 were as follows:
Three months ended September 30, 2024Three months ended September 30, 2023
(dollars in thousands)AmountPercentSegmentAmountPercentSegment
Transmission
$276,663 31.2 %T&D$357,708 38.1 %T&D
Distribution
205,213 23.1 T&D190,887 20.3 T&D
Electrical construction
406,167 45.7 C&I390,881 41.6 C&I
Total revenue$888,043 100.0 %$939,476 100.0 %
15
The components of the Company’s revenue by market type for the nine months ended September 30, 2024 and 2023 were as follows:
Nine months ended September 30, 2024Nine months ended September 30, 2023
(dollars in thousands)AmountPercentSegmentAmountPercentSegment
Transmission$873,077 34.5 %T&D$978,078 37.0 %T&D
Distribution557,403 22.0 T&D519,577 19.7 T&D
Electrical construction1,102,015 43.5 C&I1,142,053 43.3 C&I
Total revenue$2,532,495 100.0 %$2,639,708 100.0 %
Remaining Performance Obligations
As of September 30, 2024, the Company had $2.36 billion of remaining performance obligations. The Company’s remaining performance obligations include projects that have a written award, a letter of intent, a notice to proceed or an agreed upon work order to perform work on mutually accepted terms and conditions. The timing of when remaining performance obligations are recognized is evaluated quarterly and is largely driven by the estimated start date and duration of the underlying projects.
The following table summarizes the amount of remaining performance obligations as of September 30, 2024 that the Company expects to be realized and the amount of the remaining performance obligations that the Company reasonably estimates will be recognized within the next twelve months, and the amount estimated to be recognized after the next twelve months.
Remaining Performance Obligations at September 30, 2024
(in thousands)TotalAmount estimated to be recognized within 12 monthsAmount estimated to be recognized after 12 months
T&D$582,030 $576,179 $5,851 
C&I1,776,724 1,263,534 513,190 
Total$2,358,754 $1,839,713 $519,041 
The Company estimates approximately 95% or more of the remaining performance obligations will be recognized within twenty-four months, including approximately 80% of the remaining performance obligations estimated to be recognized within twelve months, although the timing of the Company’s performance is not always under its control. The timing of when remaining performance obligations are recognized by the Company can vary considerably and is impacted by multiple variables including, but not limited to: changes in the estimated versus actual start time of a project; the availability of labor, equipment and materials; changes in project workflow; weather; project delays and accelerations; and the timing of final contract settlements. Additionally, the difference between the remaining performance obligations and backlog is due to the exclusion of a portion of the Company’s MSAs under certain contract types from the Company’s remaining performance obligations as these contracts can be canceled for convenience at any time by the Company or the customer without considerable cost incurred by the customer. Additional information related to backlog is provided in Item 2. “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
7. Income Taxes
The U.S. federal statutory tax rate was 21% for each of the three and nine months ended September 30, 2024 and 2023. The Company’s effective tax rate for the three and nine months ended September 30, 2024 was 42.5% and 26.6%, respectively, of pretax income compared to the effective tax rate for the three and nine months ended September 30, 2023 of 30.3% and 25.2%, respectively.
The difference between the U.S. federal statutory tax rate and the Company’s effective tax rates for the three months ended September 30, 2024, was primarily due to permanent difference items, largely related to deductibility limits of certain compensation including contingent compensation associated with a prior acquisition and U.S. taxes on Canadian income, as well as state income taxes.
The difference between the U.S. federal statutory tax rate and the Company’s effective tax rates for the three months ended September 30, 2023, was primarily due to state income taxes, Canadian taxes and other permanent difference items.
16
The difference between the U.S. federal statutory tax rate and the Company’s effective tax rate for the nine months ended September 30, 2024, was primarily due to permanent difference items, largely related to deductibility limits of certain compensation including contingent compensation associated with a prior acquisition and U.S. taxes on Canadian income, as well as state income taxes, partially offset by a favorable impact from stock compensation excess tax benefits.
The difference between the U.S. federal statutory tax rate and the Company’s effective tax rate for the nine months ended September 30, 2023, was primarily due to state income taxes, Canadian taxes and other permanent difference items partially offset by a favorable impact from stock compensation excess tax benefits.
The Company has recorded a liability for unrecognized tax benefits of approximately $0.4 million and $0.5 million as of September 30, 2024 and December 31, 2023, respectively, which were included in other liabilities in the accompanying consolidated balance sheets.
The Company’s policy is to recognize interest and penalties related to income tax liabilities as a component of income tax expense in the consolidated statements of operations. The amount of interest and penalties charged to income tax expense related to unrecognized tax benefits was not significant for the three and nine months ended September 30, 2024 and 2023.
The Company is subject to taxation in various jurisdictions. The Company’s 2020 through 2022 tax returns are subject to examination by U.S. federal authorities. The Company’s tax returns are subject to examination by various state authorities for the years 2019 through 2022.
8. Commitments and Contingencies
Purchase Commitments
As of September 30, 2024, the Company had approximately $5.5 million in outstanding purchase orders for certain construction equipment, with cash payments scheduled to occur in 2024 and 2025.
Insurance and Claims Accruals
The Company carries insurance policies, which are subject to certain deductibles and limits, for workers’ compensation, general liability, automobile liability and other insurance coverage. The deductible per occurrence for each line of coverage is up to $1.0 million. The Company’s health benefit plans are subject to stop-loss limits of up to $0.2 million for qualified individuals. Losses up to the deductible and stop-loss amounts are accrued based upon the Company’s estimates of the ultimate liability for claims reported and an estimate of claims incurred but not yet reported.
The insurance and claims accruals are based on known facts, actuarial estimates and historical trends. While recorded accruals are based on the ultimate liability, which includes amounts in excess of the deductible, a corresponding receivable for amounts in excess of the deductible is included in current and long-term assets in the Company’s consolidated balance sheets.
Performance and Payment Bonds and Parent Guarantees
In certain circumstances, the Company is required to provide performance and payment bonds in connection with its future performance on certain contractual commitments. The Company has indemnified its sureties for any expenses paid out under these bonds. As of September 30, 2024, an aggregate of approximately $2.83 billion in original face amount of bonds issued by the Company’s sureties were outstanding. The Company estimated the remaining cost to complete these bonded projects was approximately $741.6 million as of September 30, 2024.
From time to time, the Company guarantees the obligations of wholly owned subsidiaries, including obligations under certain contracts with customers, certain lease agreements, and, in some states, obligations in connection with obtaining contractors’ licenses. Additionally, from time to time the Company is required to post letters of credit to guarantee the obligations of wholly owned subsidiaries, which reduces the borrowing availability under the Facility.
17
Indemnities
From time to time, pursuant to its service arrangements, the Company indemnifies its customers for claims related to the services it provides under those service arrangements. These indemnification obligations may subject the Company to indemnity claims, liabilities and related litigation. The Company is not aware of any material unrecorded liabilities for asserted claims in connection with these indemnification obligations.
Collective Bargaining Agreements
Most of the Company’s subsidiaries’ craft labor employees are covered by collective bargaining agreements. The agreements require the subsidiaries to pay specified wages, provide certain benefits and contribute certain amounts to multi-employer pension plans. If a subsidiary withdraws from any of the multi-employer pension plans or if the plans were to otherwise become underfunded, the subsidiary could incur liabilities for additional contributions related to these plans. Although the Company has been informed that the status of some multi-employer pension plans to which its subsidiaries contribute have been classified as “critical”, the Company is not currently aware of any potential liabilities related to this issue.
Litigation and Other Legal Matters
The Company is from time to time party to various lawsuits, claims and other legal proceedings that arise in the ordinary course of business. These actions typically seek, among other things, compensation for alleged personal injury, breach of contract, property damages, punitive damages, civil penalties or other losses, or injunctive or declaratory relief.
The Company is routinely subject to other civil claims, litigation and arbitration, and regulatory investigations arising in the ordinary course of business. These claims, lawsuits and other proceedings include claims related to the Company’s current services and operations, as well as our historic operations.
With respect to all such lawsuits, claims and proceedings, the Company records reserves when it is probable that a liability has been incurred and the amount of loss can be reasonably estimated. The Company does not believe that any of these proceedings, separately or in the aggregate, would be expected to have a material adverse effect on the Company’s financial condition, results of operations or cash flows.
9. Stock-Based Compensation
The Company maintains an equity compensation plan under which stock-based compensation has been granted: the 2017 Long-Term Incentive Plan (Amended and Restated as of April 24, 2024) (the “LTIP”). The LTIP was approved by our shareholders and provides for grants of (a) incentive stock options qualified as such under U.S. federal income tax laws, (b) stock options that do not qualify as incentive stock options, (c) stock appreciation rights, (d) restricted stock awards, (e) restricted stock units, (f) performance awards, (g) phantom stock, (h) stock bonuses, (i) dividend equivalents, or (j) any combination of such grants. The Company has outstanding grants of time-vested stock awards in the form of restricted stock units and internal metric-based and market-based performance stock units.
During the nine months ended September 30, 2024, the Company granted time-vested stock awards covering 40,723 shares of common stock under the LTIP, which vest ratably over three years for employee awards and after one year for non-employee director awards, at a weighted average grant date fair value of $171.55. During the nine months ended September 30, 2024, time-vested stock awards covering 42,554 shares of common stock vested at a weighted average grant date fair value of $99.52.
During the nine months ended September 30, 2024, the Company granted 29,566 performance share awards under the LTIP at target, which will cliff vest, if earned, on December 31, 2026, at a weighted average grant date fair value of $197.89. The number of shares ultimately earned under a performance award may vary from zero to 200% of the target shares granted, based upon the Company’s performance compared to certain financial and other metrics. The metrics used were determined at the time of the grant by the Compensation Committee of the Board of Directors and were either based on internal measures, such as the Company’s financial performance compared to targets, or on a market-based metric, such as the Company’s stock performance compared to a peer group. Performance awards granted cliff vest following the performance period if the stated performance targets and minimum service requirements are attained and are paid in shares of the Company’s common stock.
18
The Company recognizes stock-based compensation expense related to restricted stock units based on the grant date fair value, which was the closing price of the Company’s stock on the date of grant. The fair value is expensed over the service period, which is generally three years.
For performance awards, the Company recognizes stock-based compensation expense based on the grant date fair value of the award. The fair value of internal metric-based performance awards is determined by the closing stock price of the Company’s common stock on the date of the grant. The fair value of market-based performance awards is computed using a Monte Carlo simulation. Performance awards are expensed over the service period of approximately 2.8 years, and the Company adjusts the stock-based compensation expense related to internal metric-based performance awards according to its determination of the shares expected to vest at each reporting date.
10. Segment Information
MYR Group is a holding company of specialty contractors serving electrical utility infrastructure and commercial construction markets in the United States and Canada. The Company has two reporting segments, each a separate operating segment, which are referred to as T&D and C&I. Performance measurement and resource allocation for the reporting segments are based on many factors. The primary financial measures used to evaluate the segment information are contract revenues and income from operations, excluding general corporate expenses. General corporate expenses include corporate facility and staffing costs, which include safety costs, professional fees, IT expenses and management fees. The accounting policies of the segments are the same as those described in the Note 1–Organization, Business and Significant Accounting Policies to the 2023 Annual Report.
Transmission and Distribution: The T&D segment provides a broad range of services on electric transmission and distribution networks and substation facilities which include design, engineering, procurement, construction, upgrade, maintenance and repair services with a particular focus on construction, maintenance and repair. T&D services include the construction and maintenance of high voltage transmission lines, substations and lower voltage underground and overhead distribution systems, clean energy projects and electric vehicle charging infrastructure. The T&D segment also provides emergency restoration services. T&D customers include investor-owned utilities, cooperatives, private developers, government-funded utilities, independent power producers, independent transmission companies, industrial facility owners and other contractors.
Commercial and Industrial: The C&I segment provides services such as the design, installation, maintenance and repair of commercial and industrial wiring, the installation of intelligent transportation systems, roadway lighting, signalization and electric vehicle charging infrastructure. Typical C&I contracts cover electrical contracting services for airports, hospitals, data centers, hotels, stadiums, commercial and industrial facilities, clean energy projects, manufacturing plants, processing facilities, water/waste-water treatment facilities, mining facilities, and transportation control and management systems. The C&I segment generally provides electric construction and maintenance services as a subcontractor to general contractors in the C&I industry, but also contracts directly with facility owners. The C&I segment has a diverse customer base with many long-standing relationships.
The information in the following table is derived from the segment’s internal financial reports used for corporate management purposes:
Three months ended
September 30,		Nine months ended
September 30,
(in thousands)2024202320242023
Contract revenues:
T&D$481,876 $548,595 $1,430,480 $1,497,655 
C&I406,167390,8811,102,0151,142,053
$888,043 $939,476 $2,532,495 $2,639,708 
Income from operations:
T&D$17,568 $36,262 $39,104 $106,817 
C&I20,309 13,932 33,340 37,182 
General Corporate(17,516)(18,167)(48,519)(52,108)
$20,361 $32,027 $23,925 $91,891 
19
11. Earnings Per Share
The Company computes earnings per share using the treasury stock method. Under the treasury stock method, basic earnings per share are computed by dividing net income by the weighted average number of common shares outstanding during the period, and diluted earnings per share are computed by dividing net income by the weighted average number of common shares outstanding during the period plus all potentially dilutive common stock equivalents, except in cases where the effect of the common stock equivalent would be anti-dilutive.
Net income and the weighted average number of common shares used to compute basic and diluted earnings per share were as follows:
<
Three months ended
September 30,		Nine months ended
September 30,
(in thousands, except per share data)2024202320242023
Numerator: