What changed in this filing

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Item 1. Financial Statements

2023-10-25 compared with 2023-07-26 · 116 added, 92 removed, 537 unchanged (28% of the section changed)

2 unchanged sentences

CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share data) June 30,

(in thousands, except share and per share data) September 30,

2023 December 31,

27 unchanged sentences

Current portion of accrued self-insurance 28,534 28,752

Accrued income taxes 1,557 —

Other current liabilities 85,176 79,918

11 unchanged sentences

4,000,000 authorized shares;

none issued and outstanding at June 30, 2023 and December 31, 2022

none issued and outstanding at September 30, 2023 and December 31, 2022

Common stock—$ 0.01 par value per share;

100,000,000 authorized shares;

16,709,534 and 16,563,767 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively

16,709,534 and 16,563,767 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively

Additional paid-in capital 160,813 161,427

7 unchanged sentences

Three months ended

June 30, Six months ended

September 30, Nine months ended

September 30,

(in thousands, except per share data) 2023 2022 2023 2022

9 unchanged sentences

Interest expense ( 1,319 ) ( 1,134 ) ( 3,059 ) ( 2,235 )

Other income, net 120 2,277 30 2,262

Other income (expense), net ( 91 ) 223 ( 61 ) 2,485

Income before provision for income taxes 30,843 26,108 89,511 78,430

8 unchanged sentences

Net income $ 21,512 $ 18,436 $ 66,948 $ 58,808

Other comprehensive income (loss):

Other comprehensive loss:

Foreign currency translation adjustment ( 2,611 ) ( 5,946 ) ( 335 ) ( 7,772 )

Other comprehensive income (loss) 2,140 ( 3,477 ) 2,276 ( 1,826 )

Other comprehensive loss ( 2,611 ) ( 5,946 ) ( 335 ) ( 7,772 )

Total comprehensive income $ 18,901 $ 12,490 $ 66,613 $ 51,036

16 unchanged sentences

Stock-based compensation expense — — — 2,064 — — 2,064

Shares repurchased related to tax withholding for stock-based compensation — ( 280 ) ( 3 ) ( 2,629 ) — ( 20,835 ) ( 23,467 )

Settlement of stock repurchase program — ( 280 ) ( 3 ) ( 2,629 ) — ( 20,835 ) ( 23,467 )

Other comprehensive loss — — — — ( 3,477 ) — ( 3,477 )

Balance at June 30, 2022 — 16,724 167 158,691 ( 1,653 ) 373,877 531,082

Net income — — — — — 18,436 18,436

Stock issued under compensation plans, net — — — 26 — — 26

Stock-based compensation expense — — — 2,178 — — 2,178

Settlement of stock repurchase program — ( 117 ) ( 1 ) ( 1,111 ) — ( 8,787 ) ( 9,899 )

Other comprehensive loss — — — — ( 5,946 ) — ( 5,946 )

Balance at September 30, 2022 $ — 16,607 $ 166 $ 159,784 $ ( 7,599 ) $ 383,526 $ 535,877

Balance at December 31, 2022 $ — 16,564 $ 165 $ 161,427 $ ( 6,300 ) $ 404,908 $ 560,200

10 unchanged sentences

Balance at June 30, 2023 — 16,710 167 158,555 ( 4,024 ) 449,602 604,300

Net income — — — — — 21,512 21,512

Stock-based compensation expense — — — 2,258 — — 2,258

Other comprehensive loss — — — — ( 2,611 ) — ( 2,611 )

Balance at September 30, 2023 $ — 16,710 $ 167 $ 160,813 $ ( 6,635 ) $ 471,114 $ 625,459

The accompanying notes are an integral part of these consolidated financial statements.

1 unchanged sentence

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

Six months ended

Nine months ended

September 30,

(in thousands) 2023 2022

26 unchanged sentences

Repayments under revolving lines of credit ( 328,085 ) ( 115,502 )

Borrowings under equipment notes — 24,187

Payment of principal obligations under equipment notes ( 4,597 ) ( 522 )

4 unchanged sentences

Payments related to tax withholding for stock-based compensation ( 7,936 ) ( 6,791 )

Other financing activities — 607

Net cash flows provided by (used in) financing activities ( 6,049 ) 20,352

Net cash flows provided by financing activities 10,868 41,726

Effect of exchange rate changes on cash ( 36 ) ( 4,244 )

3 unchanged sentences

End of period $ 30,471 $ 35,767

Supplemental cash flow information:

Noncash financing activities:

Share repurchases not settled $ — $ 1,712

The accompanying notes are an integral part of these consolidated financial statements.

4 unchanged sentences

MYR Group Inc.

(the “Company”) is a holding company of specialty electrical construction service providers and is currently conducting operations through wholly owned subsidiaries.

(the “Company”) is a holding company of specialty electrical construction service providers conducting operations through wholly owned subsidiaries.

The Company performs construction services in two business segments:

20 unchanged sentences

The Company accounts for investments in joint ventures using the proportionate consolidation method for income statement reporting and under the equity method for balance sheet reporting, unless the Company has a controlling interest causing the joint venture to be consolidated with equity owned by other joint venture partners recorded as noncontrolling interests.

As of June 30, 2023, the Company did not have a controlling interest in any current joint venture partnerships.

As of September 30, 2023, the Company did not have a controlling interest in any current joint venture partnerships.

Under the proportionate consolidation method, joint venture activity is allocated to the appropriate line items found on the consolidated statements of operations in proportion to the percentage of participation the Company has in the joint venture.

13 unchanged sentences

Cumulative translation adjustments are included as a separate component of accumulated other comprehensive income (loss) in shareholders’ equity.

Foreign currency transaction gains and losses, arising primarily from changes in exchange rates on short-term monetary assets and liabilities, and intercompany loans that are not deemed long-term investment accounts are recorded in the “other income, net” line on the Company’s consolidated statements of operations.

Foreign currency gains, recorded in other income, net, for the six months ended June 30, 2023 and 2022 were no t significant.

Foreign currency transaction gains and losses, arising primarily from changes in exchange rates on short-term monetary assets and liabilities, and intercompany loans that are not deemed long-term investment accounts are recorded in the “other income (expense), net” line on the Company’s consolidated statements of operations.

Foreign currency losses, recorded in other income (expense), net, for the nine months ended September 30, 2023 and 2022 were no t significant.

Foreign currency translation gains and losses, arising from intercompany loans that are deemed long-term investment accounts, are recorded in the foreign currency translation adjustment line on the Company’s consolidated statements of comprehensive income.

5 unchanged sentences

The Company estimates a cost accrual every quarter that represents costs incurred but not invoiced for services performed or goods delivered during the period, and estimates revenue from the contract cost portion of these accruals based on current gross margin rates to be consistent with its cost method of revenue recognition.

As of June 30, 2023 and December 31, 2022, the Company had recognized revenues of $ 38.1 million and $ 19.6 million, respectively, related to large change orders and/or claims that had been included as contract price adjustments on certain contracts, some of which are multi-year projects.

As of September 30, 2023 and December 31, 2022, the Company had recognized revenues of $ 57.1 million and $ 19.6 million, respectively, related to large change orders and/or claims that had been included as contract price adjustments on certain contracts, some of which are multi-year projects.

These change orders and/or claims are in the process of being negotiated in the normal course of business, and a portion of these recognized revenues had been included in multiple periods.

The cost-to-cost method of accounting requires the Company to make estimates about the expected revenue and gross profit on each of its contracts in process.

During the three months ended June 30, 2023, changes in estimates pertaining to certain projects decreased consolidated gross margin by 1.3 %, which resulted in decreases in operating income of $ 11.5 million, net income of $ 8.0 million and diluted earnings per common share of $ 0.48 .

During the six months ended June 30, 2023, changes in estimates pertaining to certain projects decreased consolidated gross margin by 1.0 % and resulted in decreases in operating income of $ 17.8 million, net income of $ 12.4 million and diluted earnings per common share of $ 0.74 .

During the three months ended September 30, 2023, changes in estimates pertaining to certain projects decreased consolidated gross margin by 1.3 %, which resulted in decreases in operating income of $ 11.5 million, net income of $ 8.0 million and diluted earnings per common share of $ 0.47 .

During the nine months ended September 30, 2023, changes in estimates pertaining to certain projects decreased consolidated gross margin by 1.2 % and resulted in decreases in operating income of $ 32.2 million, net income of $ 22.4 million and diluted earnings per common share of $ 1.33 .

Additional discussion on the impact of these estimate changes can be found in Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Consolidated Results of Operations.”

During the three months ended June 30, 2022, changes in estimates pertaining to certain projects decreased consolidated gross margin by 0.1 %, which resulted in decreases in operating income of $ 0.5 million, net income of $ 0.3 million and diluted earnings per common share of $ 0.02 .

During the six months ended June 30, 2022, changes in estimates pertaining to certain projects increased consolidated gross margin by 0.3 %, which resulted in increases in operating income of $ 3.7 million, net income of $ 2.5 million and diluted earnings per common share of $ 0.15 .

During the three months ended September 30, 2022, changes in estimates pertaining to certain projects decreased consolidated gross margin by 0.3 %, which resulted in decreases in operating income of $ 2.4 million, net income of $ 1.7 million and diluted earnings per common share of $ 0.10 .

During the nine months ended September 30, 2022, changes in estimates pertaining to certain projects did no t have a significant impact on gross margin and resulted in increases in operating income of $ 0.3 million, net income of $ 0.1 million and diluted earnings per common share of $ 0.01 .

Recent Accounting Pronouncements

5 unchanged sentences

Contracts with customers usually stipulate the timing of payment, which is defined by the terms found within the various contracts under which work was performed during the period.

Therefore, contract assets and liabilities are created when the timing of costs incurred on work performed does not coincide with the billing terms, which frequently include retention provisions contained in each contract.

Therefore, contract assets and liabilities are created when the timing of costs incurred on work performed does not coincide with the billing terms.

These contracts frequently include retention provisions contained in each contract.

The Company’s consolidated balance sheets present contract assets, which contain unbilled revenue and contract retainages associated with contract work that has been completed and billed but not paid by customers, pursuant to retainage provisions, that are generally due once the job is completed and approved.

The allowance for doubtful accounts associated with contract assets was $ 0.6 million as of June 30, 2023 and $ 0.5 million as of December 31, 2022.

The allowance for doubtful accounts associated with contract assets was $ 0.6 million as of September 30, 2023 and $ 0.5 million as of December 31, 2022.

Contract assets consisted of the following:

(in thousands) June 30,

(in thousands) September 30,

2023 December 31,

4 unchanged sentences

Contract liabilities consisted of the following:

(in thousands) June 30,

(in thousands) September 30,

2023 December 31,

3 unchanged sentences

The following table provides information about contract assets and contract liabilities from contracts with customers:

(in thousands) June 30,

(in thousands) September 30,

2023 December 31,

3 unchanged sentences

The difference between the opening and closing balances of the Company’s contract assets and contract liabilities primarily results from the timing of the Company’s billings in relation to its performance of work.

The amounts of revenue recognized in the period that were included in the opening contract liability balances were $ 17.3 million and $ 107.0 million for the three and six months ended June 30, 2023, respectively.

The amounts of revenue recognized in the period that were included in the opening contract liability balances were $ 25.8 million and $ 58.6 million for the three and six months ended June 30, 2022, respectively.

The amounts of revenue recognized in the period that were included in the opening contract liability balances were $ 16.3 million and $ 114.0 million for the three and nine months ended September 30, 2023, respectively.

The amounts of revenue recognized in the period that were included in the opening contract liability balances were $ 42.1 million and $ 101.1 million for the three and nine months ended September 30, 2022, respectively.

The net asset position for contracts in process consisted of the following:

(in thousands) June 30,

(in thousands) September 30,

2023 December 31,

3 unchanged sentences

The net asset position for contracts in process is included within the contract asset and contract liability in the accompanying consolidated balance sheets as follows:

(in thousands) June 30,

(in thousands) September 30,

2023 December 31,

9 unchanged sentences

Additionally, all of the Company's month-to-month leases are cancelable, by the Company or the lessor, at any time and are not included in our right-of-use asset or liability.

At June 30, 2023, the Company had several leases with residual value guarantees.

At September 30, 2023, the Company had several leases with residual value guarantees.

Typically, the Company has purchase options on the equipment underlying its long-term leases and many of its short-term rental arrangements.

2 unchanged sentences

The following is a summary of the lease-related assets and liabilities recorded:

September 30,

2023 December 31,

11 unchanged sentences

The following is a summary of the lease terms and discount rates:

September 30,

2023 December 31,

5 unchanged sentences

(in thousands) Three months ended

June 30, Six months ended

September 30, Nine months ended

September 30,

2023 2022 2023 2022

6 unchanged sentences

The following is a summary of other information and supplemental cash flow information related to finance and operating leases:

Six months ended June 30,

Nine months ended September 30,

(in thousands) 2023 2022

4 unchanged sentences

Right-of-use asset obtained in exchange for new finance lease obligations $ — $ 510

The future undiscounted minimum lease payments, as reconciled to the discounted minimum lease obligation indicated on the Company’s consolidated balance sheets, under financial leases, less interest, and under operating leases, less imputed interest, as of June 30, 2023 were as follows:

(in thousands) Finance

18 unchanged sentences

The terms and rental rates of these leases are at or below market rental rates.

As of June 30, 2023, the minimum lease payments required under these leases totaled $ 5.9 million, which are due over the next 3.5 years.

As of September 30, 2023, the minimum lease payments required under these leases totaled $ 7.1 million, which are due over the next 4.8 years.

Fair Value Measurements

4 unchanged sentences

and Level 3 (the lowest priority), defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.

As of June 30, 2023 and December 31, 2022, the Company determined that the carrying value of cash and cash equivalents approximated fair value based on Level 1 inputs.

As of June 30, 2023 and December 31, 2022, the fair value of the Company’s long-term debt and finance lease obligations was based on Level 2 inputs.

The Company’s long-term debt was based on variable and fixed interest rates at June 30, 2023 and December 31, 2022, for new issues with similar remaining maturities, and approximated carrying value.

As of September 30, 2023 and December 31, 2022, the Company determined that the carrying value of cash and cash equivalents approximated fair value based on Level 1 inputs.

As of September 30, 2023 and December 31, 2022, the fair value of the Company’s long-term debt and finance lease obligations was based on Level 2 inputs.

The Company’s long-term debt was based on variable and fixed interest rates at September 30, 2023 and December 31, 2022, for new issues with similar remaining maturities, and approximated carrying value.

In addition, based on borrowing rates currently available to the Company for borrowings with similar terms, the carrying value of the Company’s finance lease obligations also approximated fair value.

As of June 30, 2023, the fair value of the Company’s contingent earn-out consideration liability associated with the acquisition of Powerline Plus Ltd.

As of September 30, 2023, the fair value of the Company’s contingent earn-out consideration liability associated with the acquisition of Powerline Plus Ltd.

and its affiliate PLP Redimix Ltd.

(collectively, the “Powerline Plus Companies") was based on Level 3 inputs.

The contingent earn-out consideration recorded represents the estimated fair value of future amounts potentially payable to the former owners of the acquired Powerline Plus Companies and was initially determined using a Monte Carlo simulation valuation methodology based on probability-weighted performance projections and other inputs, including a discount rate and an expected volatility factor.

(collectively, the “Powerline Plus Companies") on January 4, 2022, was based on Level 3 inputs.

The contingent earn-out consideration recorded represents the estimated fair value of future amounts potentially payable to the former owners of the acquired Powerline Plus Companies, if the Powerline Plus Companies achieve certain performance targets over a three-year post-acquisition period.

The fair value was initially determined using a Monte Carlo simulation valuation methodology based on probability-weighted performance projections and other inputs, including a discount rate and an expected volatility factor.

The fair value of this contingent earn-out consideration liability will be evaluated on an ongoing basis by management.

2 unchanged sentences

As of the acquisition date, the fair value of the contingent earn-out consideration was $ 0.9 million.

As of June 30, 2023 and December 31, 2022, the fair value of the contingent earn-out consideration was $ 0.2 million.

As of September 30, 2023 and December 31, 2022, the fair value of the contingent earn-out consideration was $ 0.2 million.

The future payout of the contingent earn-out consideration, if any, is unlimited and could be significantly higher than the acquisition date fair value.

If the minimum thresholds of the performance targets are achieved the contingent earn-out consideration payment will be approximately $ 16.6 million.

There were no changes in contingent earn-out consideration during the three and six months ended June 30, 2023 and 2022.

There were no changes in contingent earn-out consideration during the three and nine months ended September 30, 2023.

During the three and nine months ended September 30, 2022, the Company recorded changes in contingent earn-out consideration, subsequent to the acquisition, of approximately $ 0.5 million.

Any changes in contingent earn-out consideration are recorded in other income.

5 unchanged sentences

Balance as of

June 30, 2023

September 30, 2023

Balance as of

16 unchanged sentences

dollar equivalent of $ 150 million.

Of the Facility, up to $ 75 million may be used for letters of credit, with an additional $ 75 million available for letters of credit, subject to the sole discretion of each issuing bank.

Up to $ 75 million, of the Facility may be used for letters of credit, with an additional $ 75 million available for letters of credit, subject to the sole discretion of each issuing bank.

The Facility also allows for $ 15 million to be used for swingline loans.

12 unchanged sentences

The Credit Agreement restricts certain types of payments when the Company’s Net Leverage Ratio, after giving pro forma effect thereto, exceeds 2.75 .

The weighted average interest rate on borrowings outstanding on the Facility for the six months ended June 30, 2023 was 6.88 % per annum.

The weighted average interest rate on borrowings outstanding on the Facility for the nine months ended September 30, 2023 was 6.96 % per annum.

Under the Credit Agreement, the Company is subject to certain financial covenants including a maximum Net Leverage Ratio of 3.0 and a minimum Interest Coverage Ratio (as defined in the Credit Agreement) of 3.0 .

The Credit Agreement also contains covenants including limitations on asset sales, investments, indebtedness and liens.

The Company was in compliance with all of its financial covenants under the Credit Agreement as of June 30, 2023.

As of June 30, 2023, the Company had $ 20.0 million of borrowings outstanding under the Facility and letters of credit outstanding under the Facility of approximately $ 19.0 million, including $ 11.7 million related to the Company's payment obligation under its insurance programs and approximately $ 7.3 million related to contract performance obligations.

The Company was in compliance with all of its financial covenants under the Credit Agreement as of September 30, 2023.

As of September 30, 2023, the Company had $ 39.3 million of borrowings outstanding under the Facility and letters of credit outstanding under the Facility of approximately $ 18.9 million, including $ 11.7 million related to the Company's payment obligation under its insurance programs and approximately $ 7.2 million related to contract performance obligations.

As of December 31, 2022, the Company had $ 12.9 million of borrowings outstanding under the revolving credit facility under its previous credit agreement and letters of credit outstanding under the revolving credit facility under its previous credit agreement of approximately $ 12.8 million, which were almost entirely related to the Company's payment obligation under its insurance programs.

The Company had remaining deferred debt issuance costs totaling $ 2.5 million as of June 30, 2023, related to the line of credit.

The Company had remaining deferred debt issuance costs totaling $ 2.4 million as of September 30, 2023, related to the line of credit.

As permitted, debt issuance costs have been deferred and are presented as an asset within other assets, which is amortized as interest expense over the term of the line of credit.

Unamortized deferred debt issuance costs totaling $ 0.4 million relating to our previous credit agreement will be amortized over the life of the Facility.

On May 31, 2023, the Company had remaining deferred debt issuance costs related to our previous credit agreement totaling $ 0.4 million, which will be amortized over the life of the Facility.

Equipment Notes

2 unchanged sentences

Each Equipment Note executed under the Master Loan Agreements constitutes a separate, distinct and independent financing of equipment and a contractual obligation of the Company, which may contain prepayment clauses.

As of June 30, 2023, the Company had two Equipment Notes outstanding under the Master Loan Agreements that are collateralized by equipment and vehicles owned by the Company.

As of June 30, 2023, the Company had one other equipment note outstanding that is collateralized by a vehicle owned by the Company.

The following table sets forth our remaining principal payments for all of the Company’s outstanding equipment notes as of June 30, 2023:

As of September 30, 2023, the Company had two Equipment Notes outstanding under the Master Loan Agreements that are collateralized by equipment and vehicles owned by the Company.

As of September 30, 2023, the Company had one other equipment note outstanding that is collateralized by a vehicle owned by the Company.

The following table sets forth our remaining principal payments for all of the Company’s outstanding equipment notes as of September 30, 2023:

(in thousands) Future

23 unchanged sentences

Additional information related to the Company’s market types is provided in Note 10–Segment Information.

The components of the Company’s revenue by contract type for the three months ended June 30, 2023 and 2022 were as follows:

Three months ended June 30, 2023

The components of the Company’s revenue by contract type for the three months ended September 30, 2023 and 2022 were as follows:

Three months ended September 30, 2023

T&D C&I Total

4 unchanged sentences

$ 548,595 100.0 % $ 390,881 100.0 % $ 939,476 100.0 %

Three months ended June 30, 2022

Three months ended September 30, 2022

T&D C&I Total

4 unchanged sentences

$ 452,014 100.0 % $ 347,834 100.0 % $ 799,848 100.0 %

The components of the Company’s revenue by contract type for the six months ended June 30, 2023 and 2022 were as follows:

Six months ended June 30, 2023

The components of the Company’s revenue by contract type for the nine months ended September 30, 2023 and 2022 were as follows:

Nine months ended September 30, 2023

T&D C&I Total

4 unchanged sentences

$ 1,497,655 100.0 % $ 1,142,053 100.0 % $ 2,639,708 100.0 %

Six months ended June 30, 2022

Nine months ended September 30, 2022

T&D C&I Total

4 unchanged sentences

$ 1,232,105 100.0 % $ 912,481 100.0 % $ 2,144,586 100.0 %

The components of the Company’s revenue by market type for the three months ended June 30, 2023 and 2022 were as follows:

Three months ended June 30, 2023 Three months ended June 30, 2022

The components of the Company’s revenue by market type for the three months ended September 30, 2023 and 2022 were as follows:

Three months ended September 30, 2023 Three months ended September 30, 2022

(dollars in thousands) Amount Percent Segment Amount Percent Segment

4 unchanged sentences

Total revenue $ 939,476 100.0 % $ 799,848 100.0 %

The components of the Company’s revenue by market type for the six months ended June 30, 2023 and 2022 were as follows:

Six months ended June 30, 2023 Six months ended June 30, 2022

The components of the Company’s revenue by market type for the nine months ended September 30, 2023 and 2022 were as follows:

Nine months ended September 30, 2023 Nine months ended September 30, 2022

(dollars in thousands) Amount Percent Segment Amount Percent Segment

4 unchanged sentences

Remaining Performance Obligations

As of June 30, 2023, the Company had $ 2.54 billion of remaining performance obligations.

As of September 30, 2023, the Company had $ 2.40 billion of remaining performance obligations.

The Company’s remaining performance obligations include projects that have a written award, a letter of intent, a notice to proceed or an agreed upon work order to perform work on mutually accepted terms and conditions.

The following table summarizes the amount of remaining performance obligations as of June 30, 2023 that the Company expects to be realized and the amount of the remaining performance obligations that the Company reasonably estimates will not be recognized within the next twelve months.

Remaining Performance Obligations at June 30, 2023

The following table summarizes the amount of remaining performance obligations as of September 30, 2023 that the Company expects to be realized and the amount of the remaining performance obligations that the Company reasonably estimates will not be recognized within the next twelve months.

Remaining Performance Obligations at September 30, 2023

(in thousands) Total Amount estimated to not be

7 unchanged sentences

“Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

federal statutory tax rate was 21 % for each of the three and six months ended June 30, 2023 and 2022.

The Company’s effective tax rate for the three and six months ended June 30, 2023 was 29.5 % and 22.6 %, respectively, of pretax income compared to the effective tax rate for the three and six months ended June 30, 2022 of 29.4 % and 22.8 %, respectively.

federal statutory tax rate was 21 % for each of the three and nine months ended September 30, 2023 and 2022.

The Company’s effective tax rate for the three and nine months ended September 30, 2023 was 30.3 % and 25.2 %, respectively, of pretax income compared to the effective tax rate for the three and nine months ended September 30, 2022 of 29.4 % and 25.0 %, respectively.

The difference between the U.S.

federal statutory tax rate and the Company’s effective tax rate for the three months ended June 30, 2023 and June 30, 2022, was primarily due to state income taxes, Canadian taxes and other permanent difference items.

federal statutory tax rate and the Company’s effective tax rate for the three months ended September 30, 2023 and September 30, 2022, was primarily due to state income taxes, Canadian taxes and other permanent difference items.

The difference between the U.S.

federal statutory tax rate and the Company’s effective tax rate for the six months ended June 30, 2023 and June 30, 2022, was primarily due to state income taxes, Canadian taxes and other permanent difference items partially offset by a favorable impact from stock compensation excess tax benefits.

The Company had unrecognized tax benefits of approximately $ 0.5 million as of June 30, 2023 and December 31, 2022, respectively, which were included in other liabilities in the accompanying consolidated balance sheets.

federal statutory tax rate and the Company’s effective tax rate for the nine months ended September 30, 2023 and September 30, 2022, was primarily due to state income taxes, Canadian taxes and other permanent difference items partially offset by a favorable impact from stock compensation excess tax benefits.

The Company had unrecognized tax benefits of approximately $ 0.6 million and $ 0.5 million as of September 30, 2023 and December 31, 2022, respectively, which were included in other liabilities in the accompanying consolidated balance sheets.

The Company’s policy is to recognize interest and penalties related to income tax liabilities as a component of income tax expense in the consolidated statements of operations.

The amount of interest and penalties charged to income tax expense related to unrecognized tax benefits was no t significant for the three and six months ended June 30, 2023 and 2022.

The amount of interest and penalties charged to income tax expense related to unrecognized tax benefits was no t significant for the three and nine months ended September 30, 2023 and 2022.

The Company is subject to taxation in various jurisdictions.

4 unchanged sentences

Purchase Commitments

As of June 30, 2023, the Company had approximately $ 24.7 million in outstanding purchase orders for certain construction equipment, with cash payments scheduled to occur in 2023 and 2024.

As of September 30, 2023, the Company had approximately $ 37.4 million in outstanding purchase orders for certain construction equipment, with cash payments scheduled to occur in 2023 and 2024.

Insurance and Claims Accruals

8 unchanged sentences

The Company has indemnified its sureties for any expenses paid out under these bonds.

As of June 30, 2023, an aggregate of approximately $ 2.14 billion in original face amount of bonds issued by the Company’s sureties were outstanding.

The Company estimated the remaining cost to complete these bonded projects was approximately $ 765.0 million as of June 30, 2023.

As of September 30, 2023, an aggregate of approximately $ 2.30 billion in original face amount of bonds issued by the Company’s sureties were outstanding.

The Company estimated the remaining cost to complete these bonded projects was approximately $ 732.2 million as of September 30, 2023.

From time to time, the Company guarantees the obligations of wholly owned subsidiaries, including obligations under certain contracts with customers, certain lease agreements, and, in some states, obligations in connection with obtaining contractors’ licenses.

11 unchanged sentences

These actions typically seek, among other things, compensation for alleged personal injury, breach of contract, property damages, punitive damages, civil penalties or other losses, or injunctive or declaratory relief.

The Company is routinely subject to other civil claims, litigation and arbitration, and regulatory investigations arising in the ordinary course of our present business.

The Company is routinely subject to other civil claims, litigation and arbitration, and regulatory investigations arising in the ordinary course of business.

These claims, lawsuits and other proceedings include claims related to the Company’s current services and operations, as well as our historic operations.

8 unchanged sentences

The Company has outstanding grants of non-qualified stock options, time-vested stock awards in the form of restricted stock units and internal metric-based and market-based performance stock units.

During the six months ended June 30, 2023, the Company granted time-vested stock awards covering 51,167 shares of common stock under the LTIP, which vest ratably over three years for employee awards and after one year for non-employee director awards, at a weighted average grant date fair value of $ 117.60 .

During the six months ended June 30, 2023, time-vested stock awards covering 63,722 shares of common stock vested at a weighted average grant date fair value of $ 59.71 .

During the six months ended June 30, 2023, the Company granted 32,994 performance share awards under the LTIP at target, which will cliff vest, if earned, on December 31, 2025, at a weighted average grant date fair value of $ 136.54 .

During the nine months ended September 30, 2023, the Company granted time-vested stock awards covering 51,167 shares of common stock under the LTIP, which vest ratably over three years for employee awards and after one year for non-employee director awards, at a weighted average grant date fair value of $ 117.60 .

During the nine months ended September 30, 2023, time-vested stock awards covering 63,722 shares of common stock vested at a weighted average grant date fair value of $ 59.71 .

During the nine months ended September 30, 2023, the Company granted 32,994 performance share awards under the LTIP at target, which will cliff vest, if earned, on December 31, 2025, at a weighted average grant date fair value of $ 136.54 .

The number of shares ultimately earned under a performance award may vary from zero to 200 % of the target shares granted, based upon the Company’s performance compared to certain metrics.

1 unchanged sentence

Performance awards granted cliff vest following the performance period if the stated performance targets and minimum service requirements are attained and are paid in shares of the Company’s common stock.

During the six months ended June 30, 2023, plan participants exercised options to purchase 827 shares of the Company’s common stock with a weighted average exercise price of $ 24.68 .

During the six months ended June 30, 2023, 42 options expired.

During the nine months ended September 30, 2023, plan participants exercised options to purchase 827 shares of the Company’s common stock with a weighted average exercise price of $ 24.68 .

During the nine months ended September 30, 2023, 42 options expired.

On March 25, 2023, the Company's final outstanding and exercisable options expired, and the Company had no remaining awards outstanding under the 2007 LTIP.

24 unchanged sentences

Three months ended

June 30, Six months ended

September 30, Nine months ended

September 30,

(in thousands) 2023 2022 2023 2022

10 unchanged sentences

The Company computes earnings per share using the treasury stock method.

Under the treasury stock method, basic earnings per share are computed by dividing net income available to shareholders by the weighted average number of common shares outstanding during the period, and diluted earnings per share are computed by dividing net income available to shareholders by the weighted average number of common shares outstanding during the period plus all potentially dilutive common stock equivalents, except in cases where the effect of the common stock equivalent would be anti-dilutive.

Under the treasury stock method, basic earnings per share are computed by dividing net income by the weighted average number of common shares outstanding during the period, and diluted earnings per share are computed by dividing net income by the weighted average number of common shares outstanding during the period plus all potentially dilutive common stock equivalents, except in cases where the effect of the common stock equivalent would be anti-dilutive.

Net income and the weighted average number of common shares used to compute basic and diluted earnings per share were as follows:

Three months ended

June 30, Six months ended

September 30, Nine months ended

September 30,

(in thousands, except per share data) 2023 2022 2023 2022

6 unchanged sentences

Diluted $ 1.28 $ 1.09 $ 3.98 $ 3.45

For the three and six months ended June 30, 2023 and 2022, certain common stock equivalents were excluded from the calculation of dilutive securities because their inclusion would have been anti-dilutive.

For the three and nine months ended September 30, 2023 and 2022, certain common stock equivalents were excluded from the calculation of dilutive securities because their inclusion would have been anti-dilutive.

All of the Company’s unvested time-vested stock awards were included in the computation of weighted average dilutive securities.

The following table summarizes the shares of common stock underlying the Company’s unvested time-vested stock awards and performance awards that were excluded from the calculation of dilutive securities:

The following table summarizes the shares of common stock underlying the Company’s unvested performance awards that were excluded from the calculation of dilutive securities:

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(in thousands) 2023 2022 2023 2022

Time-vested stock awards — 35 — 35

Performance awards — 13 14 13

Share Repurchases

During the six months ended June 30, 2023 the Company repurchased 76,150 shares of stock, for approximately $ 7.9 million, from its employees to satisfy tax obligations on shares vested under the LTIP.

During the six months ended June 30, 2022 the Company repurchased 68,675 shares of stock, for approximately $ 6.8 million, from its employees to satisfy tax obligations on shares vested under the LTIP.

During the nine months ended September 30, 2023 the Company repurchased 76,150 shares of stock, for approximately $ 7.9 million, from its employees to satisfy tax obligations on shares vested under the LTIP.

During the nine months ended September 30, 2022 the Company repurchased 68,675 shares of stock, for approximately $ 6.8 million, from its employees to satisfy tax obligations on shares vested under the LTIP.

On May 2, 2023, the Company announced that its Board of Directors had authorized a new $ 75.0 million share repurchase program (the "Repurchase Program"), which became effective on May 9, 2023.

The Repurchase Program will expire on November 8, 2023, or when the authorized funds are exhausted, whichever is earlier.

During the six months ended June 30, 2023, the Company had no repurchases of its common stock under the Repurchase Program or the prior repurchase program.

During the six months ended June 30, 2022, the Company repurchased 280,907 shares of its common stock under a prior repurchase program at a weighted-average price of $ 83.54 per share.

As of June 30, 2023, the Company had $ 75.0 million of remaining availability to repurchase shares of the Company’s common stock under the Repurchase Program.

During the nine months ended September 30, 2023, the Company had no repurchases of its common stock under the Repurchase Program or the prior repurchase program.

During the nine months ended September 30, 2022, the Company repurchased 398,152 shares of its common stock under a prior repurchase program at a weighted-average price of $ 83.81 per share.

As of September 30, 2023, the Company had $ 75.0 million of remaining availability to repurchase shares of the Company’s common stock under the Repurchase Program.

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-Q

Item 1. Financial Statements