What changed in this filing

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Item 1A. Risk Factors

2021-03-03 compared with 2020-03-04 · 250 added, 330 removed, 166 unchanged (78% of the section changed)

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The risks described below highlight some of the factors that have affected, and in the future could affect, our operations.

Additional risks we do not yet know of, or that we currently think are immaterial, may also affect our business operations.

If any of the events or circumstances described in the following risks actually occurs, our business, financial condition or results of operations could be affected and our stock price could decline.

Additional risks we do not yet know of, or that we currently think are immaterial, may also affect our operations.

If any of the events or circumstances described in the following risks actually occurs, our business, financial condition, results of operations and cash flows could be affected and our stock price could decline.

Industry & Market Risks

Our operating results may vary significantly from period to period.

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• cost overruns on fixed-price and unit-price contracts;

the amount of subcontractor and material costs in our projects;

• decreased equipment utilization;

permitting, regulatory or customer-caused delays on projects;

• delays on projects due to permitting, regulatory issues or customer-caused delays;

• disputes with customers relating to payment terms under our contracts and change orders, and our ability to successfully negotiate and obtain payment or reimbursement under our contracts and change orders;

• variations in the margins of projects performed during any particular reporting period;

a change in the demand for our services;

a change in the mix of our customers, contracts and business;

• changes in the demand for our services;

• the loss of a major customer;

• changes in the mix of our customers, contracts and business;

• the amount of subcontractor and material costs in our projects;

• payment risk associated with the financial condition of our customers;

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• regional and general economic conditions and the condition of the financial markets;

• the inability to secure future sufficient funding to finance operations, fund growth or to provide the required financial resources certain large projects may require;

• losses experienced in our operations not otherwise covered by insurance;

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• significant fluctuations in foreign currency exchange rates;

• significant fluctuations in interest rates;

• changes in bonding requirements applicable to existing and new agreements;

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• the availability of equipment;

supply chain interruptions, including as a result of natural disasters, weather, labor disputes, pandemic outbreak of disease, fire or explosions and power outages;

• supply chain interruptions, including as a result of natural disasters, wildfires, weather, labor disputes, pandemic outbreak of disease, fire or explosions and power outages;

• impairment of goodwill or intangible assets;

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Our industry is highly competitive.

Increased competition can place downward pressure on contract prices and profit margins and may limit the number of projects that we are awarded.

Our industry is fragmented and we compete with other companies, ranging from small, independent firms servicing local markets to larger firms servicing regional, national and international markets.

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As a result, any organization that has adequate financial resources and access to technical expertise may become one of our competitors in those areas.

Competition in the industry depends on a number of factors, including price of the construction services and the reputation for safety, quality and reliability of the contractor.

Some of our competitors, including our competitors in the transmission market, may have lower labor and overhead cost structures and, therefore, may be able to provide their services at lower prices than ours.

Competition in the industry depends on many factors, including pricing of the construction services, the reputation for safety and the quality and reliability of the contractor.

Some of our competitors may have lower labor and overhead cost structures and, therefore, may be able to provide their services at lower prices than ours.

In addition, some of our competitors may have greater financial, technological and human resources than we do.

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Similarly, we cannot be certain that we will be able to maintain or enhance our competitive position within the markets we serve or maintain our customer base at current levels.

In addition, we also may face competition from in-house service organizations of our existing or prospective customers.

Electric utility companies often employ personnel to internally perform some of the same types of services we do.

Additionally, we may face competition from in-house service organizations of our existing or prospective customers including electric utility companies and others which often employ personnel to internally perform some of the same types of services we do.

If we are unable to compete successfully in our markets, our operating results could be adversely affected.

Negative economic and market conditions may adversely impact our customers’ future spending and, as a result, our operations and growth.

The demand for infrastructure construction and maintenance services from our customers has been, and will likely continue to be, cyclical in nature and vulnerable to downturns in the industries we serve as well as the economy in general.

Stagnant or declining economic conditions could result in the delay, reduction or cancellation of certain projects and could cause our customers to outsource less work, which could adversely affect us in the future.

Additionally, many of our customers finance their projects through the incurrence of debt or the issuance of equity.

A reduction in cash flow or the lack of availability of debt or equity financing may result in a reduction in our customers’ spending for our services and may also impact the ability of our customers to pay amounts owed to us, which could have a material adverse effect on our operations and our ability to grow at historical levels, or at all.

A prolonged economic downturn or recession could adversely affect our customers and their ability or willingness to fund capital expenditures in the future or pay for past services.

Material fluctuations in energy markets could also have an adverse impact on our customers’ spending patterns.

Consolidation, competition, capital constraints or negative economic conditions in the electric power industry may also result in reduced spending by, or the loss of, one or more of our customers.

Changes to U.S.

policies related to global trade and tariffs, as well as retaliatory trade measures implemented by other countries, have resulted in uncertainty surrounding the future of the global economy.

Increases in the cost of imported raw materials or finished goods as a result of tariffs or trade policies may impact customer spending, and reductions in customer spending could lead to fewer project awards and more competition We cannot predict the outcome of these changing trade policies or other unanticipated political conditions, nor can we predict the timing or strength of any economic recovery or downturn worldwide or its impact on our customers’ markets.

New Project and Growth Risks

We may be unsuccessful in generating internal growth, which could impact the projects available to the Company.

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In addition, if our customers are constrained in their ability to obtain capital, it could reduce the number, timing or size of projects available to us.

Many of the factors affecting our ability to generate internal growth may be beyond our control, and we cannot be certain that our strategies will be successful, or that we will be able to generate cash flow sufficient to fund our operations and to support internal growth.

If we are unsuccessful, we may not be able to achieve internal growth, expand our operations or grow our business.

Negative economic and market conditions, as well as regulatory and environmental requirements, may adversely impact our customers’ future spending and, as a result, our operations and growth.

Stagnant or declining economic conditions have adversely impacted the demand for our services in the past and resulted in the delay, reduction or cancellation of certain projects and

may adversely affect us in the future.

Unfavorable economic conditions could also cause our customers to outsource less work.

Additionally, many of our customers finance their projects through the incurrence of debt or the issuance of equity.

A prolonged economic downturn or recession could adversely affect our customers and their ability or willingness to fund capital expenditures in the future or pay for past services.

Material fluctuations in energy markets could have an adverse impact on our customers’ spending patterns.

Consolidation, competition, capital constraints or negative economic conditions in the electric power industry may also result in reduced spending by, or the loss of, one or more of our customers.

Because the vast majority of our T&D revenue is derived from the electric utility industry, regulatory and environmental requirements affecting that industry could adversely affect our results of operations.

Customers in the electric utility industry we serve face stringent regulatory and environmental requirements, as well as permitting processes, as they implement plans for their projects, which may result in delays, reductions and cancellations of some of their projects.

These regulatory factors have resulted in decreased demand for our services in the past, and they may do so in the future, potentially impacting our operations and our ability to grow at historical levels, or at all.

In addition, recent changes to U.S.

policies related to global trade and tariffs, as well as retaliatory trade measures implemented by other countries, have resulted in uncertainty surrounding the future of the global economy.

Increases in the cost of imported raw materials or finished goods as a result of the tariffs or trade policies may impact customer spending, and reductions in customer spending could lead to fewer project awards and more competition We cannot predict the outcome of these changing trade policies or other unanticipated political conditions, nor can we predict the timing or strength of any economic recovery or downturn worldwide or its impact on our customers’ markets.

If we are unsuccessful, we may not be able to achieve internal growth, expand our operations and grow our business.

Our inability to successfully execute or integrate acquisitions or joint ventures may have an adverse impact on our growth strategy and business.

From time to time, our business strategy may include expanding our presence in the industries we serve through strategic acquisitions of companies or entry into joint ventures that complement or diversify our business.

The number of acquisition targets that meet our criteria may be limited.

We may also face competition for acquisition opportunities, and other potential acquirers may offer more favorable terms or have greater financial resources available for potential acquisitions.

This competition may limit our ability to grow through acquisitions or could raise the prices of acquisitions adversely impacting any accretion that might be achieved.

Failure to consummate future acquisitions could negatively affect our future growth strategies.

Additionally, the acquisitions we pursue may involve significant cash expenditures, the incurrence or assumption of debt or burdensome regulatory requirements.

Any acquisition may ultimately have a negative impact on our business, financial condition, results of operations or cash flows.

We may not realize the anticipated benefits and synergies of an acquisition, and our attempts at integrating an acquired business may not be successful.

Acquisitions or joint ventures may expose us to operational and financial challenges and risks, including the disruption of our ongoing business;

significant diversion of resources and management’s attention from our existing business;

reductions of cash and other resources available for operations and other uses;

exposure to risks specific to the acquired businesses, services, or technologies to which we are not currently exposed;

the failure to retain key personnel or customers of an acquired business;

difficulties integrating new operations and personnel;

failure of acquired companies to achieve the results we expect;

the assumption of unknown liabilities of the acquired business for which there are inadequate reserves and the potential impairment of acquired intangible assets.

Our ability to grow and maintain our competitive position may be affected by our ability to successfully integrate any businesses acquired.

Business and Operating Risks

Project performance issues, including those caused by third parties, or certain contractual obligations may result in additional costs to us, reductions or delays in revenues or the payment of penalties, including liquidated damages.

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We may encounter difficulties that impact our ability to complete the project in accordance with the original delivery schedule.

These difficulties may be the result of delays in designs, engineering information or materials provided by the customer or a third party, delays or difficulties in equipment and material delivery, schedule changes, delays from our customer’s failure to timely obtain permits or rights-of-way or meet other regulatory requirements, weather-related delays, delays caused by difficult worksite environments, delays caused by inefficiencies and not achieving expected labor performance, and other factors, some of which are beyond our control.

In addition, for some projects, we contract with third-party subcontractors to assist us with the completion of contracts.

Any delay or failure by suppliers or by subcontractors in the completion of their portion of the project may result in delays in the overall progress of the project or may cause us to incur additional costs, or both.

These difficulties may be the result of delays in designs;

engineering information or materials provided by the customer or a third party;

delays or difficulties in equipment and material delivery;

schedule changes;

delays from our customer’s failure to timely obtain permits, rights-of-way or to meet other regulatory requirements;

weather-related delays;

delays caused by difficult worksite environments;

delays caused by inefficiencies and not achieving expected labor performance and other factors, some of which are beyond our control.

Any delay or failure by suppliers or by third-party subcontractors in the completion of their portion of the project may result in delays in the overall progress of the project or may cause us to incur additional costs, or both.

We also may encounter project delays due to local opposition, which may include injunctive actions as well as public protests, to the siting of electric transmission lines, renewable energy projects, or other facilities.

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Failure to meet any of our schedules or performance requirements could also result in additional costs or penalties, including liquidated damages, and such amounts could exceed expected project profit.

In extreme cases, the above-mentioned factors could cause project cancellations, and we may not be able to replace such projects with similar projects or at all.

Such delays or cancellations may impact our reputation or relationships with customers and adversely affect our ability to secure new contracts.

Larger projects, in particular, present additional performance risks due to the more complex work involved.

In extreme cases, the above-mentioned factors could cause project cancellations.

Delays or cancellations may impact our reputation or relationships with customers and adversely affect our ability to secure new contracts.

Larger projects present additional performance risks due to complexity of the work and duration of the project.

Our customers may change or delay various elements of the project after its commencement.

The design, engineering information, equipment or materials that are to be provided by the customer or other parties may be deficient or delivered later than required by the project schedule, resulting in additional direct or indirect costs.

Under these circumstances, we generally negotiate with the customer with respect to the

amount of additional time required and the compensation to be paid to us.

We are subject to the risk that we may be unable to obtain, through negotiation, arbitration, litigation or otherwise, adequate amounts to compensate us for the additional work or expenses incurred by us due to customer-requested change orders or failure by the customer to timely deliver items, such as engineering drawings or materials.

Litigation or arbitration of claims for compensation may be lengthy and costly, and it is often difficult to predict when and for how much the claims will be resolved.

A failure to obtain adequate compensation for these matters could require us to record a reduction to amounts of revenue and gross profit recognized in prior periods under the percentage-of-completion accounting method.

Any such adjustments could be substantial.

We may also be required to invest significant working capital to fund cost overruns while the resolution of change orders or claims is pending, which could adversely affect our liquidity and financial results.

Our revenues may be exposed to potential risk if a project is terminated or canceled, if our customers encounter financial difficulties or if we encounter disputes with our customers.

Our contracts often require us to satisfy or achieve certain milestones to receive payment for the work performed, or in the case of cost-reimbursable contracts, provide support for billings in advance of receiving payment.

As a result, we may incur significant costs or perform significant amounts of work prior to receipt of payment.

If any of our customers do not proceed with the completion of projects or default on their payment obligations, or if we encounter disputes with our customers with respect to the adequacy of billing support, we may face difficulties in collecting payment of amounts due to us for the costs previously incurred.

In addition, many of our customers for large projects are project-specific entities that do not have significant assets other than their interests in the project and may encounter financial difficulties relating to their businesses.

It may be difficult to collect amounts owed to us by these customers.

If we are unable to collect amounts owed to us, this would have an adverse effect on our financial condition, results of operations and cash flows.

Under these circumstances, we generally negotiate with the customer with respect to the amount of additional time required and the compensation to be paid to us.

We are subject to the risk that we may be unable to obtain, through negotiation, arbitration, litigation or otherwise, adequate amounts to compensate us for the additional work or expenses incurred by us due to change orders or failure by others to timely deliver items, such as engineering drawings or materials.

We have in the past brought, and may in the future bring, claims against our customers related to, among other things, the payment terms of our contracts and change orders relating to our contracts.

These types of claims occur due to, among other things, customer-caused delays or changes in project scope, both of which may result in additional cost, which may not be recovered until the claim is resolved.

In some instances, these claims can be the subject of lengthy legal proceedings, and it is difficult to accurately predict when they will be fully resolved.

A failure to promptly recover on these types of claims could have a negative impact on our financial condition, results of operations and cash flows.

Additionally, if any of our customers do not proceed with the completion of projects or default on their payment obligations, or if we encounter disputes with our customers with respect to the adequacy of billing support, we may face difficulties in collecting payment of amounts due to us for the costs previously incurred.

In some instances, these claims can be the subject of lengthy legal proceedings, and it is difficult to accurately predict when or if they will be fully

A failure to promptly recover on these types of claims could have a negative impact on our business, financial condition, results of operations and cash flows.

Additionally, any such claims may harm our future relationships with our customers.

Our business is labor intensive and we may be unable to attract and retain qualified personnel.

Our ability to maintain our productivity and our operating results may be limited by our ability to employ, train and retain skilled personnel necessary to meet our requirements.

We may not be able to maintain an adequate skilled labor force necessary to operate efficiently and to support our growth strategy.

We may be unable to attract and retain qualified personnel.

Our ability to maintain our productivity and our operating results may be limited by our ability to employ, train and retain qualified personnel necessary to operate efficiently and to support our growth strategy.

We have from time to time experienced shortages of certain types of qualified personnel, such as linemen, field supervisors, project managers and engineers, in certain regions.

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Many linemen are willing to travel to earn premium wages for such work, which from time to time makes it difficult for us to retain these workers for ongoing projects when storm conditions persist.

The supply of experienced linemen, field supervisors, project managers, engineers and other skilled workers may not be sufficient to meet current or expected demand.

The commencement of new, large-scale infrastructure projects or increased demand for infrastructure improvements, as well as the shrinking electric utility workforce, may reduce the pool of skilled workers available to us.

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If we are unable to hire personnel with the requisite skills, we may also be forced to incur significant training expenses.

In addition, the success of our business depends upon the continued efforts and abilities of our executive officers and senior management, including the management at our operating subsidiaries.

The relationships between our executive officers and senior management and our customers are important to obtaining and retaining business.

We are also dependent upon our project managers and field supervisors who are responsible for managing and recruiting personnel for our projects.

There can be no assurance that any individual will continue in his or her capacity for any particular period of time.

Industry-wide competition for managerial talent is high.

Given that level of competition, there could be situations where our overall compensation package may be viewed as less attractive as compared to our competition, and we may experience the loss of key personnel or higher costs to retain and hire key personnel.

The loss of key personnel, or the inability to hire and retain qualified personnel, could negatively impact our ability to manage our business and relationships with our customers.

The timing of new contracts and termination of existing contracts may result in unpredictable fluctuations in our cash flows and financial results.

A substantial portion of our revenues are derived from project-based work that is awarded through a competitive bid process.

It is generally very difficult to predict the timing and geographic distribution of the

projects that we will be awarded.

It is generally difficult to predict the timing and geographic distribution of the projects that we will be awarded.

The selection of, timing of, or failure to obtain projects, delays in awards of projects, the re-bidding or termination of projects due to budget overruns, cancellations of projects or delays in completion of contracts could result in the under-utilization of our assets, including our fleet of construction equipment, which could lower our overall profitability and reduce our cash flows.

Even if we are awarded contracts, we face additional risks that could affect whether, or when, work will begin.

Even if we are awarded contracts, we face additional risks that could affect when, or whether, work will begin.

This can present difficulty in matching workforce size and equipment location with contract needs.

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Finally, the winding down or completion of work on significant projects that were active in previous periods will reduce our revenue and earnings if such significant projects have not been replaced in the current period.

Many of our contracts may be canceled upon short notice, typically 30 to 90 days, even if we are not in default under the contract, and we may be unsuccessful in replacing our contracts if they are canceled.

We could experience a decrease in our revenue, net income and liquidity if contracts are canceled and if we are unable to replace canceled, completed or expired contracts.

Many of our contracts may be canceled upon short notice, typically 30 to 90 days, even if we are not in default under the contract, and we may be unsuccessful in replacing contracts, resulting in a decrease in our revenue, net income and liquidity.

Certain of our customers assign work to us on a project-by-project basis under MSAs.

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Our operations could decline significantly if the anticipated volume of work is not assigned to us or is canceled.

Many of our contracts, including our MSAs, are open to competitive bid at the expiration of their terms.

Many of our contracts, including our MSAs, are open to competitive bidding at the expiration of their terms.

There can be no assurance that we will be the successful bidder on our existing contracts that come up for re-bid.

During the ordinary course of our business, we may become subject to lawsuits or indemnity claims, which could materially and adversely affect our business and results of operations.

During the ordinary course of our business, we may become subject to lawsuits or indemnity claims.

We have in the past been, and may in the future be, named as a defendant in lawsuits, claims and other legal proceedings that arise in the ordinary course of our business.

These actions may seek, among other things, compensation for alleged personal injury, workers’ compensation, employment discrimination, sexual harassment, workplace misconduct and other employment-related damages, breach of contract, property damage, environmental liabilities, multiemployer pension plan withdrawal liabilities, punitive damages, consequential damages, and civil penalties or other losses or injunctive or declaratory relief.

In addition, we generally indemnify our customers for claims related to the services we provide and actions we take under our contracts, and, in some instances, we may be allocated risk through our contract terms for actions by our customers, subcontractors or other third parties.

subcontractors or other third parties.

Because our services in certain instances may be integral to the operation and performance of our customers’ infrastructure, we have been and may become subject to lawsuits or claims for any failure of the systems that we work on, even if our services are not the cause of such failures, and we could be subject to civil and criminal liabilities to the extent that our services contributed to any property damage, personal injury or system failure.

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The outcome of any of these lawsuits, claims or legal proceedings could result in significant costs and diversion of management’s attention from our business.

Payments of significant amounts, even if reserved, could materially and adversely affect our business, reputation, financial condition, results of operations and cash flows.

We may incur liabilities and suffer negative financial or reputational impacts relating to occupational health and safety matters.

Our operations are subject to extensive laws and regulations relating to the maintenance of safe conditions in the workplace.

While we have invested, and will continue to invest, substantial resources in our occupational health and safety programs, our industry involves a high degree of operational risk, and there can be no assurance that we will avoid significant liability exposure.

Our business is subject to numerous safety risks, including electrocutions, fires, explosions, mechanical failures, weather-related incidents, transportation accidents and damage to equipment.

Furthermore, we perform a significant amount of services for customers that operate electrical power infrastructure assets in locations and climates that are more susceptible to wildfires or other natural disasters.

These hazards can cause personal injury or loss of life, severe damage to or destruction of property and equipment and other consequential damages and could lead

to suspension of operations, large monetary claims and, in extreme cases, criminal liability.

Members of our workforce have suffered serious injuries or fatalities in the past and may suffer additional serious injuries or fatalities in the future.

Monetary claims for damages to persons, including claims for bodily injury or loss of life, could result in substantial costs and liabilities.

In addition, we have in the past, and we may in the future, be subject to criminal penalties relating to occupational health and safety violations, which have resulted in and could in the future result in substantial costs and liabilities.

Any of the foregoing could result in financial loss, which could have a material adverse impact on our business, financial condition, results of operations and cash flows.

Our customers seek to minimize safety risks on their sites, and they frequently review the safety records of outside contractors during the bidding process.

If our safety record were to substantially deteriorate, we could become ineligible to bid on certain work, and our customers could cancel our contracts and not award us future business.

Payments of significant amounts, even if reserved, could materially and adversely affect our business, financial condition, results of operations and cash flows.

Backlog may not be realized or may not result in profits and may not accurately represent future revenue.

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Business — Backlog” for a discussion on how we calculate backlog for our business.

Our business growth could outpace the capability of our internal resources and limit our ability to support growth.

Our internal resources, including our workforce, specialized equipment and financial resources, may not be adequate to support our operations as they expand, particularly if we are awarded a significant number of large projects in a short time period.

A large project may require hiring additional qualified personnel, such as linemen, field supervisors, project managers, engineers and safety personnel, the supply of which may not be sufficient to meet our demands.

Often large transmission projects require specialized equipment.

To the extent that we are unable to buy or build equipment necessary for a project, either due to a lack of available funding or equipment shortages in the marketplace, we may be forced to rent equipment on a short-term basis or to find alternative ways to perform the work without the benefit of equipment ideally suited for the job, which could increase the costs of completing the project.

Furthermore, we may be unable to buy or rent the specialty equipment and tooling we require due to the limited number of manufacturers and distributors in the marketplace.

Larger projects may require substantial financial resources to meet the cash flow, bonding or letter of credit requirements imposed upon contractors by the customer.

Future growth also could impose additional demands and responsibilities on members of our senior management.

Our insurance has limits and exclusions that may not fully indemnify us against certain claims or losses, including claims resulting from wildfires or other natural disasters, and the unavailability or cancellation of third party insurance coverages would increase our overall risk exposure and could disrupt our operations.

We maintain insurance coverages from third party insurers as part of our overall risk management strategy because some of our contracts require us to maintain specific insurance coverage limits.

Although we maintain insurance policies with respect to automobile liability, general liability, workers’ compensation, our employee group health program, and other types of coverages, these policies are subject to high deductibles, and we are self-insured up to the amount of those deductibles.

Insurance losses are accrued based upon our estimates of the ultimate liability for claims reported and an estimate of claims incurred but not yet reported.

Insurance liabilities are difficult to assess and estimate due to unknown factors, including the severity of an injury, the determination of our liability in proportion to other parties, estimates of incidents not reported and the effectiveness of our safety programs, and as a result, our actual losses may exceed our estimates.

Therefore, there can be no assurance that our current or past insurance coverages will be sufficient or effective under all circumstances or against all claims and liabilities to which we may be subject.

We generally renew our insurance policies on an annual basis;

therefore, deductibles and levels of insurance coverages may change in future periods.

There can be no assurance that any of our existing insurance coverages will be renewed upon the expiration of the coverage period or that future coverage will be affordable at the required limits.

In addition, insurers may fail, cancel our coverage, determine to exclude certain items from coverage, or otherwise be unable to provide us with adequate insurance coverage.

We may not be able to obtain certain types of insurance or incremental levels of insurance in scope or amount sufficient to cover liabilities we may incur.

If our risk exposure increases as a result of adverse changes in our insurance coverages, we could be subject to increased liabilities that could negatively affect our business, financial condition, results of operations and cash flow.

In addition, we perform work in hazardous environments and our employees are exposed to a number of hazards.

Incidents can occur, regardless of fault, that may be catastrophic and adversely impact our employees and third parties by causing serious personal injury, loss of life, damage to property or the environment, and interruption of operations.

In locations or environments where claims have been higher than normal, insurance may become difficult or impossible to obtain.

Our contracts may require us to indemnify our customers, project owners and others for injury, damage or loss arising out of our presence at our customers’ location, regardless of fault, or the performance of our work and provide for warranties for materials and workmanship.

We may also be required to name the customer and others as an additional insured under our insurance policies.

We maintain limited insurance coverage against these and other risks associated with our business.

This insurance may not protect us against liability for certain events, including events involving pollution, professional liability, losses resulting from business interruption or acts of terrorism or damages from breach of contract by us.

We cannot guarantee that our insurance will be adequate in risk coverage or policy limits to cover all losses or liabilities that we may incur.

Any future damages caused by our services that are not covered by insurance or are in excess of policy limits could have a material adverse effect on our business, financial position, results of operations and cash flows.

Changes in tax laws or our interpretations of tax laws could materially impact our income tax liabilities.

We have operations in the United States and Canada and are subject to the jurisdiction of multiple federal and state taxing authorities.

The income earned in these various jurisdictions is taxed on different bases which are subject to change by the taxing authorities.

The final determination of our income tax liabilities involves the interpretation of local tax laws, tax treaties and related authorities in each jurisdiction, as well as the significant use of estimates and assumptions regarding the scope of future operations and results achieved and the timing and nature of income earned and expenditures incurred.

Changes in the operating environment, including changes in tax laws, could materially impact our income tax liabilities.

The nature of our business exposes us to potential liability for warranty claims and faulty engineering, which may reduce our profitability.

Our customer contracts typically include a warranty for the services that we provide against certain defects in workmanship and material.

Additionally, materials used in construction are often provided by the customer or are warranted against defects from the supplier.

Certain projects have longer warranty periods and include facility performance warranties that may be broader than the warranties we generally provide.

If warranty claims occurred, it could require us to re-perform the services or to repair or replace the warranted item, at a cost to us, and could also result in other damages if we are not able to adequately satisfy our warranty obligations.

In addition, we may be required under contractual arrangements with our customers to warrant any defects or failures in materials we provide that we purchase from third parties.

While we generally require suppliers to provide us warranties that are consistent with those we provide to the customers, if any of these suppliers default on their warranty obligations to us, we may incur costs to repair or replace the defective materials for which we are not reimbursed.

Costs incurred because of warranty claims could adversely affect our business, financial condition, results of operations and cash flows.

Our business involves professional judgments regarding the planning, design, development, construction, operations and management of electric power transmission and commercial construction.

Because our projects are often technically complex, our failure to make judgments and recommendations in accordance with applicable professional standards, including engineering standards, could result in damages.

A significantly adverse or catastrophic event at one of our project sites or completed projects resulting from the services we have performed could result in significant warranty, professional liability, or other claims against us as well as reputational harm, especially if public safety is impacted.

These liabilities could exceed our insurance limits or could impact our ability to obtain insurance in the future.

In addition, customers, subcontractors or suppliers who have agreed to indemnify us against any such liabilities or losses might refuse or be unable to pay us.

An uninsured or underinsured claim could have an adverse impact on our business, financial condition, results of operations and cash flows.

Risks associated with operating in the Canadian market could restrict our ability to expand and harm our business and prospects.

There are numerous inherent risks in conducting our business in a different country including, but not limited to, potential instability in markets, political, economic or social conditions, and difficult or additional legal and regulatory requirements applicable to our operations.

Limits on our ability to repatriate earnings, exchange controls, and complex U.S.

and Canadian laws and treaties including laws related to the U.S.

Foreign Corrupt Practices Act (“FCPA”) and similar laws could also adversely impact our operations.

Changes in the value of the Canadian dollar could increase or decrease the U.S.

dollar value of our profits earned or assets held in Canada or potentially limit our ability to reinvest earnings from our operations in Canada to fund the financing requirements of our operations in the United States.

These risks could restrict our ability to provide services to Canadian customers or to operate our Canadian business profitably, and could negatively impact our results.

We also are exposed to currency risks relating to the translation of certain monetary transactions, assets and liabilities.

Third Party Partner Risks

Our dependence on suppliers, subcontractors and equipment manufacturers could expose us to the risk of loss in our operations.

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Although we are not dependent on any single supplier, subcontractor or equipment manufacturer, any substantial limitation on the availability of required suppliers, subcontractors or equipment manufacturers could negatively impact our operations.

The risk of a lack of available suppliers, subcontractors or equipment manufacturers may be heightened as a result of market and economic

In addition, we may experience difficulties in acquiring equipment or materials due to supply chain interruptions, including as a result of natural disasters, weather, labor disputes, pandemic outbreak of disease, fire or explosions and power outages.

The risk of a lack of available suppliers, subcontractors or equipment manufacturers may be heightened as a result of market and economic conditions.

We may experience difficulties in acquiring equipment or materials due to supply chain interruptions, including as a result of natural disasters, weather, labor disputes, pandemic outbreak of disease, fire or explosions and power outages.

To the extent we cannot engage subcontractors or acquire equipment or materials, we could experience losses in the performance of our operations.

Additionally, successful completion of our contracts may depend on whether our subcontractors successfully fulfill their contractual obligations.

If our subcontractors fail to perform their contractual obligations as a result of financial or other difficulties, or if our subcontractors fail to meet the expected completion dates or quality standards, we may be required to incur additional costs or provide additional services in order to make up such shortfall and we may suffer damage to our reputation.

Successful completion of our contracts may depend on whether our subcontractors successfully fulfill their contractual obligations.

If our subcontractors fail to perform their contractual obligations as a result of financial or other difficulties, or if our

subcontractors fail to meet the expected completion dates or quality standards, we may be required to incur additional costs or provide additional services in order to make up such shortfall and we may suffer damage to our reputation.

Our participation in joint ventures and other projects with third parties may expose us to liability for failures of our partners.

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In addition, if we are unable to adequately address our partner’s performance issues, the customer may terminate the project, which could result in legal liability to us, reduce our profit on the project or damage our reputation.

Our inability to successfully execute or integrate acquisitions or joint ventures may have an adverse impact on our growth strategy and business.

The number of acquisition targets that meet our criteria may be limited.

We may also face competition for acquisition opportunities, and other potential acquirers may offer more favorable terms or have greater financial resources available for potential acquisitions.

This competition may further limit our acquisition opportunities and our ability to grow through acquisitions or could raise the prices of acquisitions and make them less accretive, or possibly not accretive, to us.

Failure to consummate future acquisitions could negatively affect our future growth strategies.

Additionally, the acquisitions we pursue may involve significant cash expenditures, the incurrence or assumption of debt or burdensome regulatory requirements, and any acquisition may ultimately have a negative impact on our business, financial condition, results of operations and cash flows.

We may not realize the anticipated benefits and synergies of an acquisition, and our attempts at integrating an acquired business may not be successful.

Acquisitions or joint ventures may expose us to operational and financial challenges and risks, including the disruption of our ongoing business and significant diversion of resources and management’s attention from our existing business;

reductions of cash and other resources available for operations and other uses, exposure to risks specific to the acquired businesses, services, or technologies to which we are not currently exposed;

the failure to retain key personnel or customers of an acquired business;

difficulties integrating new operations and personnel;

failure of acquired companies to achieve the results we expect;

the assumption of unknown liabilities of the acquired business for which there are inadequate reserves and the potential impairment of acquired intangible assets.

Our ability to grow and maintain our competitive position may be affected by our ability to successfully integrate any businesses acquired.

Regulatory and Environmental Risks

Legislative or regulatory actions relating to electricity transmission and renewable energy may impact demand for our services.

Current and potential legislative or regulatory actions may impact demand for our services.

Certain legislation or regulations require utilities to meet reliability standards and encourage installation of new

electric transmission and renewable energy generation facilities.

Current and potential legislative or regulatory actions may impact demand for our services, requiring utilities to meet reliability standards and encourage installation of new electric transmission and renewable energy generation facilities.

However, it is unclear whether these initiatives will create sufficient incentives for projects or result in increased demand for our services.

While many states have mandates in place that require specified percentages of electricity to be generated from renewable sources, states could reduce those mandates or make them optional, which could reduce, delay or eliminate renewable energy development in the affected states.

Because most of our T&D revenue is derived from the electric utility industry, regulatory and environmental requirements affecting that industry could adversely affect our business, financial condition, results of operations and cash flows.

In addition, while many states have mandates in place that require specified percentages of electricity to be generated from renewable sources, states could reduce those mandates or make them optional, which could reduce, delay or eliminate renewable energy development in the affected states.

Additionally, renewable energy is generally more expensive to produce and may require additional power generation sources as backup.

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These factors could result in fewer renewable energy projects and a delay in the construction of these projects and the related infrastructure, which could negatively impact our business.

Our use of percentage-of-completion accounting could result in a reduction or reversal of previously recognized profits.

As discussed in “Item 7.

Management’s Discussion and Analysis of Financial Condition and Results from Operations — Critical Accounting Policies” and in the notes to our Financial Statements, a significant portion of our revenues is recognized over the contract term based on costs incurred under the cost-to-cost method.

We may incur liabilities and suffer negative financial or reputational impacts relating to occupational health and safety matters, including those related to environmental hazards such as wildfires and other natural disasters.

Our operations are subject to extensive laws and regulations relating to the maintenance of safe conditions in the workplace.

Our business is subject to numerous safety risks, including electrocutions, fires, explosions, mechanical failures, weather-related incidents, transportation accidents and damage to equipment.

These hazards can cause personal injury or loss of life, severe damage to or destruction of property and equipment and other consequential damages and could lead to suspension of operations, large monetary claims and, in extreme cases, criminal liability.

Members of our workforce have suffered serious injuries or fatalities in the past and may suffer additional serious injuries or fatalities in the future.

Monetary claims for damages to persons, including claims for bodily injury or loss of life, could result in substantial costs and liabilities.

Any of the foregoing could result in financial loss, which could have a material adverse impact on our business, financial condition, results of operations and cash flows.

Our customers seek to minimize safety risks on their sites, and they frequently review the safety records of outside contractors during the bidding process.

If our safety record were to substantially deteriorate, we could become ineligible to bid on certain work, and our customers could cancel our contracts and not award us future business.

Our failure to comply with environmental and other laws and regulations could result in significant liabilities.

Our past, current and future operations are subject to numerous environmental and other laws and regulations governing our operations, including the use, transport and disposal of non-hazardous and hazardous substances and wastes, as well as emissions and discharges into the environment, including discharges to air, surface water, groundwater and soil.

We also are subject to laws and regulations that impose liability and cleanup responsibility for releases of hazardous substances into the environment.

Under certain of these laws and regulations, such liabilities can be imposed for cleanup of previously owned or operated properties, or properties to which hazardous substances or wastes were discharged by current or former operations at our facilities, regardless of whether we directly caused the contamination or violated any law at the time of discharge or disposal.

The presence of contamination from such substances or wastes could interfere with ongoing operations or adversely affect our ability to sell, lease or otherwise use our properties in ways such as collateral for possible financing.

We could also be held liable for significant penalties and damages under certain environmental laws and regulations, which could materially and adversely affect our business, financial condition, results of operations and cash flows.

In addition, new laws and regulations, stricter enforcement of existing laws and regulations, the discovery of previously unknown contamination or leaks, or the imposition of new permitting or cleanup requirements could require us to incur significant costs or become the basis for new or increased liabilities that could harm our business, financial condition, results of operations and cash flows.

In certain instances, we have obtained indemnification or covenants from third parties (including our predecessor owners or lessors) for some or all of such cleanup and other obligations and liabilities.

However, such third-party indemnities or covenants may not cover all of our costs.

Legislative and regulatory proposals to address greenhouse gas emissions could result in a variety of regulatory programs, additional charges to fund energy efficiency activities, or other regulatory actions.

Any of these actions could result in increased costs associated with our operations and impact the prices we charge our customers.

If new regulations are adopted regulating greenhouse gas emissions from mobile sources such as cars and trucks, we could experience a significant increase in environmental compliance costs due to our large fleet.

In addition, if our operations are perceived to result in high greenhouse gas emissions, our reputation could suffer.

We are also subject to laws and regulations protecting endangered species, artifacts and archaeological sites.

We may incur work stoppages to avoid violating these laws and regulations, or we may risk fines or other sanctions for accidentally or willfully violating these laws and regulations.

We are also subject to immigration laws and regulations, for which noncompliance could be material and adversely affect our business, financial condition, results of operations and cash flows.

Furthermore, failure to obtain permitting, right-of-way access and other tactical considerations prior to the commencement of work could delay the commencement of work on projects or cause modifications of work plans, potentially resulting in lower margins.

We generally plan for certain up-front time and other costs to obtain required permitting and right-of-way access and for other tactical challenges prior to the commencement of work on our projects.

Delays in obtaining, or the inability to obtain, permits or right-of-way access, could negatively impact our margins due to additional cost and unabsorbed overhead resulting from under-utilized personnel and equipment.

Additionally, we may encounter unexpected tactical issues on the site which could lead to unanticipated costs and delays, which we may not be able to recover from our customers.

Our business may be affected by seasonal and other variations, including severe weather conditions and the nature of our work environment.

Although our revenues are primarily driven by spending patterns in our customers’ industries, our revenues and results of operations can be subject to seasonal variations, particularly in our T&D segment.

These variations are influenced by weather, hours of daylight, customer spending patterns, available system outages from utilities and holidays, and can have a significant impact on our gross margins.

Our profitability may decrease during the winter months and during severe weather conditions because work performed during these periods may be restricted and more costly to complete.

Additionally, our T&D customers often cannot remove their T&D lines from service during the summer months when consumer demand for electricity is at its peak, delaying the demand for our maintenance and repair services.

Furthermore, our work is performed under a variety of conditions, including but not limited to, difficult terrain, difficult site conditions and large urban centers where delivery of materials and availability of labor may be impacted and sites which may have been exposed to harsh and hazardous conditions.

Working capital needs are also influenced by the seasonality of our business.

We generally experience a need for additional working capital during the spring when we increase outdoor construction in weather-affected regions of the country, and we convert working capital assets to cash during the winter months.

Opportunities associated with government contracts could lead to increased governmental regulation applicable to us.

Most government contracts are awarded through a regulated competitive bidding process.

If we were to be successful in being awarded government contracts, significant costs could be incurred by us before any revenues were realized from these contracts.

Government agencies may review a contractor’s performance, cost structure and compliance with applicable laws, regulations and standards.

If government agencies determine through these reviews that costs were improperly allocated to specific contracts, they will not reimburse the contractor for those costs or may require the contractor to refund previously reimbursed costs.

If government agencies determine that we engaged in improper activity, we may be subject to civil and criminal penalties.

Government contracts are also subject to renegotiation of profit and termination by the government prior to the expiration of the term.

We are subject to risks associated with climate change including financial risks and physical risks such as an increase in extreme weather events (such as floods, wildfires or hurricanes), rising sea levels and limitations on water availability and quality.

Climate change may create physical and financial risk.

Physical risks from climate change could, among other things, include an increase in extreme weather events (such as floods, wildfires or hurricanes), rising sea levels and limitations on water availability and quality.

Such extreme weather conditions may limit the availability of resources, increasing the costs of our projects, or may cause projects to be delayed or cancelled.

Additionally, legislative and regulatory responses related to climate change and new interpretations of existing laws through climate change litigation may also negatively impact our operations.

The cost of additional environmental regulatory requirements could impact the availability of goods and increase our costs.

International treaties or accords could also have an impact on our business to the extent they lead to future governmental regulations.

Compliance with any new laws or regulations regarding the reduction of greenhouse gases could result in significant changes to our operations and a significant increase in our cost of conducting business.

Accounting Risks

Our use of percentage-of-completion accounting could result in a reduction or reversal of previously recognized revenues and profits.

A significant portion of our revenues is recognized over the contract term based on costs incurred under the cost-to-cost method.

This method is used because management believes costs incurred best represent the amount of work completed and remaining on our projects and is the most common basis for computing percentage of completion in our industry.

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Actual results could differ from estimated amounts and could result in a reduction or elimination of previously recognized earnings.

Our insurance has limits and exclusions that may not fully indemnify us against certain claims or losses, and the unavailability or cancellation of third party insurance coverages would increase our overall risk exposure and could disrupt our operations.

We maintain insurance coverages from third party insurers as part of our overall risk management strategy because some of our contracts require us to maintain specific insurance coverage limits.

Insurance losses are accrued based upon our estimates of the ultimate liability for claims reported and an estimate of claims incurred but not yet reported.

Insurance liabilities are difficult to assess and estimate due to unknown factors, including the severity of an injury, the determination of our liability in proportion to other parties, the number of incidents not reported and the effectiveness of our safety programs, and as a result, our actual losses may exceed our estimates.

We generally renew our insurance policies on an annual basis;

therefore, deductibles and levels of insurance coverages may change in future periods.

There can be no assurance that any of our existing insurance coverages will be renewed upon the expiration of the coverage period or that future coverage will be affordable at the required limits.

In addition, insurers may fail, cancel our coverage, determine to exclude certain items from coverage, or otherwise be unable to provide us with adequate insurance coverage.

We may not be able to obtain certain types of insurance or incremental levels of insurance in scope or amount sufficient to cover liabilities we may incur.

If our risk exposure increases as a result of adverse changes in our insurance coverages, we could be subject to increased liabilities that could negatively affect our results of operations and financial condition.

In addition, we perform work in hazardous environments and our employees are exposed to a number of hazards.

In locations or environments where claims have been higher than normal, insurance may become difficult or impossible to obtain.

We may also be required to name the customer and others as an additional insured under our insurance policies.

We maintain limited insurance coverage against these and other risks associated with our business.

We cannot guarantee that our insurance will be adequate in risk coverage or policy limits to cover all losses or liabilities that we may incur.

Any future damages caused by our services that are not covered by insurance or are in excess of policy limits could have a material adverse effect on our results of operations, financial position or cash flows.

Management’s Discussion and Analysis of Financial Condition and Results from Operations — Critical Accounting Policies” and in the notes to our Financial Statements, for a discussion on how percentage-of-completion accounting impacts our business.

Our financial results are based upon estimates and assumptions that may differ from actual results.

In preparing our financial statements in conformity with generally accepted accounting principles in the United States (“GAAP”), estimates and assumptions are used by management in determining the reported amounts of assets and liabilities, revenues and expenses recognized during the periods presented and disclosures of contingent assets and liabilities known to exist as of the date of the financial statements.

These estimates and assumptions must be made because certain information that is used in the preparation of our financial statements is dependent on future events.

These estimates and assumptions cannot be calculated with a high degree of precision from data available or is not capable of being readily calculated.

In some cases, these estimates are particularly difficult to determine, and we must exercise significant judgment.

The most significant estimates we use are related to costs to complete contracts, pending change orders and claims, shared savings, insurance reserves, income tax reserves, estimates surrounding stock-based compensation, the recoverability of goodwill and intangibles, and accounts receivable reserves.

Our business, financial condition, results of operations and cash flows could be adversely affected by impairments to goodwill, other intangible assets, receivables, long-lived assets or investments.

For example, when we acquire a business, we record goodwill in an amount equal to the amount we paid for the business minus the fair value of the net tangible assets and other intangible assets of the acquired business.

Goodwill and other intangible assets that have indefinite useful lives cannot be amortized, but instead must be tested at least annually for impairment.

For additional description on this impairment testing, please read Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Policies — “Goodwill and Intangibles”.

Any future impairments, including impairments of goodwill, intangible assets, long-lived assets or investments, could have a material adverse effect on our business, financial condition, results of operations and cash flows.

Pricing and Cost Risks

Our actual costs may be greater than expected in performing our fixed-price and unit-price contracts.

We currently generate, and expect to continue to generate, a significant portion of our revenues and profits under fixed-price and unit-price contracts.

We generate a significant portion of our revenues and profits under fixed-price and unit-price contracts.

We must estimate the costs of completing a particular project when we bid for these types of contracts.

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• quality issues requiring rework.

Our financial results are based upon estimates and assumptions that may differ from actual results.

These estimates and assumptions must be made because certain information that is used in the preparation of our financial statements is dependent on future events, cannot be calculated with a high degree of precision

from data available or is not capable of being readily calculated.

In some cases, these estimates are particularly difficult to determine, and we must exercise significant judgment.

We also may use estimates in our assessment of the useful lives of property and equipment, the valuation allowance on deferred taxes and income tax estimates.

From time to time, we may publicly provide earnings or other forms of guidance, which reflect our predictions about future revenue, operating costs and capital structure, among other factors.

These predictions may be impacted by estimates, as well as other factors that are beyond our control and may not turn out to be correct.

Actual results for all estimates could differ materially from the estimates and assumptions that we use.

The loss of a major customer may have an adverse effect on us.

Our customer base is highly concentrated, with our top ten customers accounting for 30.8% of our revenue in 2019.

Much of our success depends on developing and maintaining relationships with our major customers.

Our revenue could significantly decline if we lose one or more of our significant customers.

In addition, revenues generated from contracts with significant customers may vary from period-to-period depending on the timing and volume of work ordered by such customers in a given period and as a result of competition from the in-house service organizations of our customers.

We extend trade credit to customers for purchases of our services, and may have difficulty collecting receivables from them.

We grant trade credit, generally without collateral, to our customers for the purchase of our services.

We have in the past, and may in the future, have difficulty collecting receivables from customers, particularly those experiencing financial difficulties.

Our customers in the T&D segment include investor-owned utilities, cooperatives, private developers, government-funded utilities, independent power producers, independent transmission companies, industrial facility owners and other contractors.

Our customers in the C&I segment include general contractors, commercial and industrial facility owners, governmental agencies and developers located in our regional markets.

Our customers also include special purpose entities that own T&D projects which do not have the financial resources of traditional transmission utility operators.

Consequently, we are subject to potential credit risk related to changes in business and economic factors.

Due to our work on large construction projects, a few customers sometimes may comprise a large portion of our receivable balance at any point in time.

If any of our major customers experience financial difficulties, we could experience reduced cash flows and losses in excess of current allowances provided.

In addition, material changes in any of our customers’ revenues or cash flows could affect our ability to collect amounts due from them.

Slowing economic conditions in the industries we serve, economic downturns or bankruptcies could also impair the financial condition of one or more of our customers and hinder their ability to pay us on a timely basis.

Further, to the extent a customer files for bankruptcy protection, certain payments made to us prior to the filing of the bankruptcy petition may be voided and required to be returned to the customer’s bankruptcy estate.

Our failure to comply with environmental and other laws and regulations could result in significant liabilities.

We also are subject to laws and regulations that impose liability and cleanup responsibility for releases of hazardous substances into the environment.

We could also be held liable for significant

penalties and damages under certain environmental laws and regulations, which could materially and adversely affect our business and results of operations.

However, such third-party indemnities or covenants may not cover all of our costs.

Any of these actions could result in increased costs associated with our operations and impact the prices we charge our customers.

In addition, if our operations are perceived to result in high greenhouse gas emissions, our reputation could suffer.

In addition, we are subject to laws and regulations protecting endangered species.

Laws also protect Native American artifacts and archaeological sites and a part of our business is operated in the southwestern United States, where there is a greater chance of discovering those sites.

We may incur work stoppages to avoid violating these laws and regulations, or we may risk fines or other sanctions for accidentally or willfully violating these laws and regulations.

An increase in the prices of certain materials and commodities used in our business could adversely affect our business.

For certain contracts, we are exposed to market risk of increases in certain commodity prices of materials, such as copper and steel, which are used as components of supplies or materials utilized in all of our operations.

In addition, our customers’ capital budgets may be impacted by the prices of certain materials, and reduced customer spending could lead to fewer project awards and more competition.

These prices could be materially impacted by general market conditions and other factors, including U.S.

trade relationships with other countries or the imposition of tariffs.

We are also exposed to increases in energy prices, particularly as they relate to gasoline prices for our fleet vehicles.

While we believe we can increase our prices to adjust for some price increases in commodities, there can be no assurance that price increases of commodities, if they were to occur, would be recoverable.

Additionally, some of our fixed price contracts do not allow us to adjust our prices and, as a result, increases in material or fuel costs could reduce our profitability with respect to such projects.

Capital and Credit Risks

We may not be able to compete for, or work on, certain projects if we are not able to obtain necessary bonds, letters of credit, bank guarantees or other financial assurances.

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Current or future market conditions, including losses incurred in the construction industry or as a result of large corporate bankruptcies, as well as changes in our sureties’ assessment of our operating and financial risk, could cause our surety providers and lenders to decline to issue or renew, or substantially reduce the amount of, bid or performance bonds for our work and could increase our costs associated with collateral.

These actions could be taken on short notice.

actions could be taken on short notice.

If our surety providers or lenders were to limit or eliminate our access to bonding, letters of credit or guarantees, our alternatives would include seeking capacity from other sureties and lenders, finding more business that does not require bonds or allows for other forms of collateral for project performance, such as cash.

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If we were to experience an interruption or reduction in the availability of bonding capacity as a result of these or any other reasons, we may be unable to compete for or work on certain projects that would require bonding.

Inability to hire or retain key personnel could disrupt our business.

The success of our business depends upon the continued efforts and abilities of our executive officers and senior management, including the management at our operating subsidiaries.

The relationships between our executive officers and senior management and our customers are important to obtaining and retaining business.

We are also dependent upon our project managers and field supervisors who are responsible for managing and recruiting personnel for our projects.

There can be no assurance that any individual will continue in his or her capacity for any particular period of time.

Industry-wide competition for managerial talent is high.

Given that level of competition, there could be situations where our overall compensation package may be viewed as less attractive as compared to our competition, and we may experience the loss

of key personnel.

The loss of key personnel, or the inability to hire and retain qualified personnel, could negatively impact our ability to manage our business and relationships with our customers.

Our business may be affected by seasonal and other variations, including severe weather conditions and the nature of our work environment.

Our profitability may decrease during the winter months and during severe weather conditions because work performed during these periods may be restricted and more costly to complete.

Working capital needs are also influenced by the seasonality of our business.

COVID-19 Risks

COVID-19 may have an adverse impact on our business, employees, liquidity, financial condition, results of operations and cash flows.

In response to the COVID-19 pandemic and related mitigation measures, we implemented changes in our business in an effort to protect our employees and customers, and to support appropriate health and safety protocols, including implementing remote, alternative and flexible work arrangements, where possible.

In the future these changes and other impacts from COVID-19 could result in higher operating costs and could adversely impact our business, including certain operational, reporting, accounting or other processes.

In addition, an extended period of remote work arrangements could impair our ability to effectively manage our business, and introduce additional operational risks, including but not limited to cybersecurity risks and increased vulnerability to security breaches, cyber-attacks, computer viruses, ransomware, or other similar events and intrusions.

As our response to the pandemic continues to evolve, we may incur additional costs and could experience adverse impacts to our business, each of which may be significant.

We have focused on controlling our costs and capital expenditures to preserve our ability to continue to fund our operations and may need to take additional actions to reduce spending in the future.

Although we are unable to predict the ultimate impact of the COVID-19 pandemic at this time, the pandemic could adversely affect, our business, financial condition, results of operations and cash flows.

Such effects may be material and the potential impacts include, but are not limited to:

• disruptions in our supply chain due to transportation delays, travel restrictions, raw material cost increases and shortages, and closures of businesses or facilities;

• reductions in our operating effectiveness due to workforce disruptions resulting from “shelter-in-place” and “stay-at-home” orders, and the unavailability of key personnel necessary to conduct our business activities;

• volatility in the global financial markets, which could have a negative impact on our ability to access capital and additional sources of financing in the future.

The situation surrounding COVID-19 remains fluid, and given its inherent uncertainty, the pandemic may have an adverse impact on our business in the near term.

Should these conditions persist for a prolonged period, the COVID-19 pandemic, including any of the above factors and others that are currently unknown, may have a material adverse effect on our business, financial condition, results of operations and cash flows.

In addition, we cannot predict the impact that COVID-19 will have on our customers and suppliers, and any adverse impacts on these parties may have a material adverse impact on our business.

Employee Risks

Work stoppages or other labor issues with our unionized workforce could adversely affect our business, and we may be subject to unionization attempts.

As of December 31, 2020, approximately 88% of our craft labor employees were covered by collective bargaining agreements.

Although the majority of these agreements prohibit strikes and work stoppages, we cannot be certain that strikes or work stoppages will not occur in the future.

Although most of these agreements prohibit strikes and work stoppages, we cannot be certain that strikes or work stoppages will not occur in the future.

Strikes or work stoppages could adversely impact our relationships with our customers and could cause us to lose business, resulting in decreased revenues.

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If nonunion employees were to unionize, we could experience higher ongoing labor costs.

Failure to obtain permitting, right-of-way access and other tactical considerations prior to the commencement of work could delay the commencement of work on projects or cause modifications of work plans, potentially resulting in lower margins.

We generally plan for certain up-front time and other costs to obtain required permitting and right-of-way access and for other tactical challenges prior to the commencement of work on our projects.

Additionally, we may encounter unexpected tactical issues on the site which could lead to unanticipated costs and delays, which we may not be able to recover from our customers.

Multi-employer pension plan obligations related to our unionized workforce could adversely impact our earnings.

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To the extent that we participate in any multi-employer pension plans that are underfunded, the Employee Retirement Income Security Act of 1974, as amended by the Multi-Employer Pension Plan Amendments Act of 1980, may subject us to substantial liabilities under those plans if we were to withdraw from them, if they were terminated or experience a mass withdrawal.

Furthermore, the Pension Protection Act of 2006, as amended by the Consolidated and Further Continuing Appropriations Act of 2015 (the “PPA”) imposes additional funding and operational rules applicable to plan years beginning after 2007 for multi-employer pension plans that are classified as either “endangered,” “seriously endangered” or “critical” status.

Furthermore, the Pension Protection Act of 2006, as amended, imposes additional funding and operational rules applicable to plan years beginning after 2007 for multi-employer pension plans that are classified as either “endangered,” “seriously endangered” or “critical” status.

Plans in these classifications must adopt measures to improve their funded status, which may require additional employer contributions and/or modifications to employee benefits based on future union wages paid.

Although we are not currently aware of any potential significant liabilities to us as a result of these plans being classified as being in a “critical” or “endangered” status, our future financial results could be impacted by the amended funding rules.

Our results of operations could be adversely affected as a result of asset impairments.

Our results of operations and financial condition could be adversely affected by impairments to goodwill, other intangible assets, receivables, long-lived assets or investments.

Goodwill and other intangible assets that have indefinite useful lives cannot be amortized, but instead must be tested at least annually for impairment.

For additional description on this impairment testing, please read Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Policies — “Goodwill and Intangibles”.

Any future impairments, including impairments of goodwill, intangible assets, long-lived assets or investments, could have a material adverse effect on our financial condition and results of operations.

We may not have access in the future to sufficient funding to finance desired growth and operations.

If we cannot secure funds in the future, including financing on acceptable terms, we may be unable to support our growth strategy or future operations.

Our credit facility contains numerous covenants and requires us to meet and maintain certain financial ratios and other tests.

General business and economic conditions may affect our ability to comply with these covenants or meet those financial ratios and other tests, which may limit our ability to borrow under the facility.

Restrictions in the availability of bank credit could cause us to forgo otherwise attractive business opportunities and could require us to modify our business plan.

We cannot assure we will be able to obtain necessary or desirable financing either on favorable terms or at all.

Cybersecurity and Information Technology Risks

We rely on information, communications and data systems in our operations and we or our business partners may be subject to failures, interruptions or breaches of such systems, which could affect our operations or our competitive position, expose sensitive information or damage our reputation.

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Furthermore, in connection with our business we may collect and retain personally identifiable and other sensitive information of our customers and personnel, all of which expect that we will adequately protect such information.

The failure of these systems to operate effectively or problems with transitioning to upgraded or replacement systems could cause delays and reduce the efficiency of our operations, which could have a material adverse effect on our results of operations, and significant costs could be incurred to remediate any problem.

The failure of these systems to operate effectively or problems with transitioning to upgraded or replacement systems could cause delays and reduce the efficiency of our operations, which could have a material adverse effect on our business, financial position, results of operations and cash flows, and significant costs could be incurred to remediate any problem.

Increased IT security threats and more sophisticated computer crimes, including advanced persistent threats, computer viruses, ransomware, other types of malicious code, hacking, phishing and social engineering schemes designed to provide access to our networks or data, pose a potential risk to the security of our IT systems, networks and services, as well as the confidentiality, availability and integrity of our data.

If the IT systems, networks or service providers we rely upon fail to function properly, or if we suffer a loss or disclosure of sensitive information, we may suffer interruptions in our ability to manage operations, be subject to government enforcement actions, litigation, and reputational, competitive and business harm which may adversely impact our results of operations, financial condition, competitive position and reputation.

If the IT systems, networks or service providers we rely upon fail to function properly, or if we suffer a loss or disclosure of sensitive information, we may suffer interruptions in our ability to manage operations, be subject to government enforcement actions, litigation, and reputational, competitive and business harm which may adversely impact our business, financial position, results of operations and cash flows, competitive position and reputation.

As techniques used to obtain unauthorized access or sabotage systems change frequently and generally are not recognized until launched against a target, we may be unable to anticipate these techniques or implement adequate preventative measures.

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This could also impact the cost and availability of cyber insurance to us.

Furthermore, our relationships with, and access

provided to, third parties and their vendors may create difficulties in anticipating and implementing adequate preventative measures or mitigating harms after an attack or breach occurs.

Furthermore, our relationships with, and access provided to, third parties and their vendors may create difficulties in anticipating and implementing adequate preventative measures or mitigating harms after an attack or breach occurs.

If an actual or perceived breach of our security occurs, the public perception of the effectiveness of our security measures could be harmed and we could lose customers.

Any of these disruptions or breaches of security would have a material adverse effect on our business, results of operations and financial condition.

Any of these disruptions or breaches of security would have a material adverse effect on our business, financial position, results of operations and cash flows.

In addition, current and future laws and regulations governing data privacy and the unauthorized disclosure of confidential information may pose complex compliance challenges and/or result in additional costs.

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The continuing and evolving threat of cyber-attacks has also resulted in increased regulatory focus on risk management and prevention.

New cyber-related regulations or other requirements could cause us to incur significant costs, which could have an adverse effect on our results of operations and cash flows.

Our operations are subject to a number of operational risks which may result in unexpected costs or liabilities.

Unexpected costs or liabilities may arise from lawsuits or indemnity claims related to the services we perform or have performed in the past.

We have in the past been, and may in the future be, named as a defendant in lawsuits, claims and other legal proceedings during the ordinary course of our business.

These actions may seek, among other things, compensation for alleged personal injury, workers’ compensation, employment discrimination, breach of contract, property damage, environmental remediation, punitive damages, civil penalties or other losses, consequential damages or injunctive or declaratory relief.

In addition, pursuant to our service arrangements, we generally indemnify our customers for claims related to the services we provide under those service arrangements.

In some instances, our services are integral to the operation and performance of the electric distribution and transmission infrastructure.

As a result, we may become subject to lawsuits or claims for any failure of the systems we work on, even if our services are not the cause for such failures.

In addition, we may incur civil and criminal liabilities to the extent that our services contributed to any personal injury or property damage.

The outcome of any of these lawsuits, claims or legal proceedings could result in significant costs and diversion of managements’ attention to the business.

Opportunities associated with government contracts could lead to increased governmental regulation applicable to us.

Most government contracts are awarded through a regulated competitive bidding process.

If we were to be successful in being awarded government contracts, significant costs could be incurred by us before any revenues were realized from these contracts.

Government agencies may review a contractor’s performance, cost structure and compliance with applicable laws, regulations and standards.

If government agencies determine that we engaged in improper activity, we may be subject to civil and criminal penalties.

Government contracts are also subject to renegotiation of profit and termination by the government prior to the expiration of the term.

Changes in our interpretation of tax laws could impact the determination of our income tax liabilities.

We have operations in the United States and Canada and are subject to the jurisdiction of multiple federal and state taxing authorities.

The income earned in these various jurisdictions is taxed on different bases which are subject to change by the taxing authorities.

Changes in the operating environment, including changes in or interpretation of tax laws, could materially impact the determination of our income tax liabilities for the year.

The nature of our business exposes us to potential liability for warranty claims and faulty engineering, which may reduce our profitability.

Under our contracts with customers, we typically provide a warranty for the services we provide, guaranteeing the work performed against defects in workmanship and material.

Additionally, materials used

in construction are often provided by the customer or are warranted against defects from the supplier.

However, certain projects may have longer warranty periods and include facility performance warranties that may be broader than the warranties we generally provide.

In these circumstances, if warranty claims occurred, it could require us to re-perform the services or to repair or replace the warranted item, at a cost to us, and could also result in other damages if we are not able to adequately satisfy our warranty obligations.

In addition, we may be required under contractual arrangements with our customers to warrant any defects or failures in materials we provide that we purchase from third parties.

Costs incurred as a result of warranty claims could adversely affect our operating results, financial condition and cash flows.

Our business involves professional judgments regarding the planning, design, development, construction, operations and management of electric power transmission and commercial construction.

These liabilities could exceed our insurance limits or could impact our ability to obtain insurance in the future.

In addition, customers, subcontractors or suppliers who have agreed to indemnify us against any such liabilities or losses might refuse or be unable to pay us.

An uninsured or underinsured claim could have an adverse impact on our business, financial condition, results of operations and cash flows.

Our stock may experience significant price and volume fluctuations and future issuances of our common stock could lead to dilution of our issued and outstanding common stock.

From time to time, the price and trading volume of our common stock may experience periods of significant volatility in response to various factors and events beyond our control.

Company-specific issues and developments generally in our industry (including the regulatory environment), in the capital markets and in the economy may cause this volatility.

We may issue equity securities in the future, including securities that are convertible into or exchangeable for, or that represent the right to receive, shares of our common stock.

The issuance of additional shares of our common stock or other equity securities, including sales of shares in connection with any future acquisitions, could be substantially dilutive to our stockholders.

In addition numerous factors could have a significant effect on the price of our common stock, including but not limited to:

announcements of fluctuations in our operating results or the operating results of one of our competitors;

market conditions in our customers’ industries;

capital spending plans of our significant customers;

announcements by us or one of our competitors of new or terminated customers or new, amended or terminated contracts;

announcements of acquisitions by us or one of our competitors;

changes in recommendations or earnings estimates by securities analysts;

future repurchases of our common stock;

future sales of our common stock or other securities, including any shares issued in connection with business acquisitions or earn-out obligations for any future acquisitions.

Risks associated with operating in the Canadian market could restrict our ability to expand and harm our business and prospects.

legal and regulatory requirements applicable to our operations.

Limits on our ability to repatriate earnings, exchange controls, and complex U.S.

and Canadian laws and treaties could also adversely impact our operations.

Changes in the value of the Canadian dollar could increase or decrease the U.S.

These risks could restrict our ability to provide services to Canadian customers or to operate our Canadian business profitably, and could negatively impact our results.

We also are exposed to currency risks relating to the translation of certain monetary transactions, assets and liabilities.

Our failure to comply with the laws applicable to our Canadian activities, including the U.S.

Foreign Corrupt Practices Act and similar anti-bribery laws, could have an adverse effect on us.

Foreign Corrupt Practices Act (“FCPA”) and similar anti-bribery laws in other jurisdictions prohibit U.S.-based companies and their intermediaries from making improper payments to foreign officials for the purpose of obtaining or retaining business.

Our policies mandate compliance with all applicable anti-bribery laws.

Although we have policies and procedures designed to ensure that we, our employees, our agents and others who work with us in foreign countries comply with the FCPA and other anti-bribery laws, there is no assurance that such policies or procedures will protect us against liability under the FCPA or other laws for actions taken by our agents, employees and intermediaries.

If we are found to be liable for FCPA violations (either due to our own acts or inadvertence, or due to the acts or inadvertence of others), we could suffer from severe criminal or civil penalties or other sanctions, which could have a material adverse effect on our reputation, business, results of operations, financial condition or cash flows.

In addition, detecting, investigating and resolving actual or alleged FCPA violations is expensive and could consume significant time and attention of our senior management.

If we fail to maintain effective internal controls, we may not be able to report our financial results accurately or timely or prevent or detect fraud, which could have a material adverse effect on our business or the market price of our common stock.

Effective internal controls are necessary for us to provide reasonable assurance with respect to our financial reports and to effectively prevent or detect fraud.

If we cannot provide reasonable assurance with respect to our financial reports and effectively prevent or detect fraud, we may not be able to conclude on an ongoing basis that we have effective internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act of 2002 and our operating results could be harmed.

Internal control over financial reporting may not prevent or detect misstatements because of its inherent limitations, including the possibility of human error, the circumvention or overriding of controls, or fraud.

In addition, we cannot guarantee that our internal controls will always protect against reckless or criminal acts committed by our personnel, agents or business partners that might violate U.S.

laws, including the laws governing payments to government officials, bribery, fraud, kickbacks and false claims, pricing, sales and marketing practices, conflicts of interest, competition, export and import compliance, money laundering and data privacy.

Therefore, even effective internal controls cannot provide absolute assurance with respect to the preparation and fair presentation of financial statements.

While we continue to evaluate our internal controls, we cannot be certain that these measures will ensure that we implement and maintain adequate controls over our financial processes and reporting in the future.

Projections of any evaluation of effectiveness of internal control over financial reporting to future periods are subject to the risk that the control may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

If we fail to maintain the adequacy of our internal controls, including any failure to implement required new or improved controls, or if we or our independent registered public accounting firm were to discover material weaknesses in our internal controls, our business and operating results could be harmed and we could fail to meet our reporting obligations, which could reduce the market’s confidence in our financial statements, harm our stock price, and have a material adverse effect on our business.

An increase in the prices of certain materials and commodities used in our business could adversely affect our business.

our operations.

In addition, our customers’ capital budgets may be impacted by the prices of certain materials, and reduced customer spending could lead to fewer project awards and more competition.

These prices could be materially impacted by general market conditions and other factors, including U.S.

trade relationships with other countries or the imposition of tariffs.

We are also exposed to increases in energy prices, particularly as they relate to gasoline prices for our fleet vehicles.

Our variable rate indebtedness subjects us to interest rate risk, which could cause our debt service obligations to increase significantly.

Borrowings under our credit facility are at variable rates of interest and expose us to interest rate risk.

If interest rates increase, our debt service obligations on our variable rate indebtedness will increase even if the amount borrowed remains the same, and our net income and cash flows, including cash available for servicing our indebtedness, will correspondingly decrease.

In addition, borrowing under our revolving credit facility may use London Interbank Offering Rate (“LIBOR”) as a benchmark for establishing the interest rate.

LIBOR has been the subject of recent national, international and other regulatory guidance and proposals for reform, and the financial industry is currently transitioning away from LIBOR as a benchmark for the interbank lending market.

The consequences of these developments cannot be entirely predicted, but could include an increase in the cost of our variable rate indebtedness.

Additionally, to address the future transition in the financial markets away from the LIBOR, our credit agreement includes provisions related to the replacement of LIBOR with an Alternative Rate (as defined in the credit agreement).

Changing to an Alternative Rate may lead to additional volatility in interest rates and could cause our debt service obligations to increase significantly.

Certain provisions in our organizational documents and Delaware law could delay or prevent a change in control of our company.

The existence of certain provisions in our organizational documents and Delaware law could delay or prevent an unsolicited change in control of our company, even if a change of control might be beneficial to our stockholders.

For example, provisions in our certificate of incorporation and by-laws that could delay or prevent a change in control of our company include:

a staggered board of directors, the potential of our board of directors to authorize the issuance of preferred stock, the power of a majority of our board of directors to fix the number of directors, the power of our board of directors to fill a vacancy on the board of directors, including when such vacancy occurs as a result of an increase in the number of directors, the requirement that actions to be taken by our stockholders may be taken only at an annual or special meeting of our stockholders and not by written consent, and advance notice provisions for director nominations or business to be considered at a stockholder meeting.

In addition, Delaware law imposes restrictions on mergers and other business combinations between us and an interested stockholder (defined as the holder of 15% or more of our outstanding common stock), and prohibits us from engaging in any of a broad range of business transactions with an interested stockholder, or an interested stockholder’s affiliates and associates, for a period of three years following the date such stockholder became an interested stockholder.

We are subject to risks associated with climate change.

Climate change may create physical and financial risk.

Such extreme weather conditions may limit the availability of resources, increasing the costs of our projects, or may cause projects to be delayed or cancelled.

Additionally, legislative and regulatory responses related to climate change and new interpretations of existing laws through climate change litigation may also negatively impact our operations.

The cost of additional environmental regulatory requirements could impact the availability of goods and increase our costs.

International treaties or accords could also have an impact on our business to the extent they lead to

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future governmental regulations.

New cyber-related regulations or other requirements could cause us to incur significant costs, which could have an adverse effect on our business, financial position, results of operations and cash flows.

Unresolved Staff Comments

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors