MYR Group Annual Report 2015

FY2015 Annual Report · MYR Group

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myrgroup.com

2015 ANNUAL REPORT

CORPORATE HEADQUARTERS: 1701 GOLF ROAD, SUITE 3-1012, ROLLING MEADOWS, IL 60008 | 847.290.1891 | MYRGROUP.COM | NASDAQ: MYRG

DIRECTORS & OFFICERS

BOARD OF DIRECTORS

Jack L. Alexander

Larry F. Altenbaumer

Henry W. Fayne

Kenneth M. Hartwick

William A. Koertner

Chairman, President and

Chief Executive Officer

Gary R. Johnson

Donald C.I. Lucky

Maurice E. Moore

William D. Patterson

EXECUTIVE OFFICERS

William A. Koertner

Chairman, President and

Chief Executive Officer

Richard S. Swartz

Senior Vice President

Betty R. Johnson

Senior Vice President,

Chief Financial Officer

and Treasurer

Tod M. Cooper

and Chief Operating Offier

Senior Vice President

Gerald B. Engen, Jr.

Senior Vice President,

Chief Legal Officer

and Secretary

COMPANY OFFICERS

Martin D. Browne

Vice President

Steven D. Cavanaugh

Vice President, Safety

Wayne D. Dorris

Vice President

Don A. Egan

Vice President

Thomas D. Eslick

Vice President

William H. Green

Senior Vice President

Russell A. Hinnen

Vice President, Corporate

Accounting

Raymond Holland, Sr.

Vice President, Fleet

Operations

J. Edward Horne

Vice President

Elaine K. Hughes

Vice President, Business

Development

Doreen L. Keller

Vice President, Human

Resources

D. Scott Lamont

Group Vice President

Kelley S. Lange

Vice President

Brandon M. Lark

President, Great Southwestern

Construction Company, Inc.

Jean A. Luber

Vice President, Information

Technology

Matthew T. McCain

Vice President

Mindie W. McIff

Regional Vice President

Marisa A. Owens

Vice President, Operational

Accounting

Richard A. Pieper

Vice President

Rodney R. Quinn

Regional Vice President

Terry C. Roberts

President, Sturgeon Electric

Company T&D

Lawrence D. Schweitzer

Regional Vice President

Robert M. Smith, Jr.

Group Vice President

Richard D. Reyes

Vice President

Mark W. Sterkel

Regional Vice President

Brian K. Stern

Regional Vice President

R. Clay Thompson

President, High Country Line

Construction

Michael W. Troutman

Regional Vice President

Jeffrey J. Waneka

President, Sturgeon Electric

Company, C&I

AUDITORS

Ernst & Young LLP

155 North Wacker Drive

Chicago, IL 60606

312.879.2000

STOCKHOLDER INQUIRIES

Dresner Corporate Services

Philip Kranz

20 North Clark, Suite 3550

Chicago, IL 60602

312.780.7240

pkranz@dresnerco.com

REGISTRAR AND TRANSFER AGENT

American Stock Transfer &

Trust Company, LLC

6201 15th Avenue

Brooklyn, NY 11219

800.937.5449

FORM 10-K

A copy of the Company’s Annual

Report on Form 10-K will be provided

without charge upon written request

to the Company’s Secretary.

MYRG

For more than a century, MYR Group has served the electrical construction needs
of clients. Our reputation for excellence in both the transmission and distribution
and commercial and industrial markets makes us a leader in the industry.

TO OUR STOCKHOLDERS

As we begin our 125th year in business, we are pleased to report that continued execution of our
business strategy in 2015 solidified MYR Group’s position as a market leader in transmission and
distribution (T&D) and commercial and industrial (C&I) electrical construction.

We achieved key financial milestones, including record revenues of $1.06 billion in 2015, which
represents a 12.47 percent increase compared to 2014.

Our three-pronged approach to capital allocation, including internal growth investments, strategic
acquisitions, and prudent capital returns, enabled us to once again lead our peers with respect to
return on investment metrics.

Reflecting MYR Group’s reputation for superior customer service and cost-effective project
delivery, we saw strong activity in both our T&D and C&I segments in 2015, including completing
one of the highest-profile C&I projects in our company’s history.

While we continue to face some near-term macro challenges,
which resulted in fewer large project closeouts in 2015 and
lowered net income to $27.3 million compared to $36.5 million
in the prior year, we continue to have confidence in the business
and our ability to drive enhanced value for our stockholders and
customers. Indeed, the fundamentals of MYR Group and our
industry remain strong.

In addition to benefitting from a highly skilled national workforce,
MYR Group is entering 2016 with a broader operating footprint
and expanded expertise as a result of key acquisitions and
investments we made in the business in 2015. We also have a
strong balance sheet to support our continued growth.

From an industry perspective, current trends indicate that the
U.S. and Canadian T&D markets should remain robust for the
foreseeable future. We see opportunities in the market as increased
capital spending in the T&D market is being driven by a necessity
to replace aging infrastructure, integration of new and renewable
generation sources and compliance with federal policy mandates.
Announcements throughout 2015 indicate that significant planning
and capital investment efforts related to electrical infrastructure are
taking place in every region of the U.S. and Canada.

We also see opportunities in our C&I segment in both traditional
service territories and new geographic markets where activity

remains robust as a result of the strengthening economy. We
will capitalize on our expertise as well as the extensive customer
relationships we have cultivated to expand geographically in
growing market sectors and with national clients.

We are proud of the actions we took in 2015, which reinforce our
belief in the future of our company and the opportunities that exist.
We believe that by continuing to invest in our capabilities, we are
positioning MYR Group for long-term profitable growth, providing
increasing value for our shareholders, stronger infrastructure for our
customers and meaningful careers for our employees.

ORGANIC GROWTH INVESTMENTS
To better serve existing customers and capture new growth
opportunities in 2015, we established eight new offices
throughout the U.S. and Canada to serve both our T&D and C&I
customer bases. These offices are staffed with local management
talent who have established customer relationships. We will
continue to pursue opportunities for growth through organic
expansion in new and existing markets that align with our core
capabilities and which we see as viable, long-term investments.

Whether in a new or existing market, we remain focused on our
value proposition to remain the lowest cost, highest value option
for our customers. To ensure we deliver on the cost side of the
equation, we work to achieve top-tier labor productivity, fleet

TO OUR STOCKHOLDERS

throughout the Northeast. High Country
has strengthened our position to capture
new T&D projects and clients throughout
the West and Midwest.

RETURN OF CAPITAL TO
STOCKHOLDERS
In addition to organic growth and strategic
acquisitions, the MYR Group Board of
Directors also considers capital returns
as part of the value proposition for
stockholders. In 2012, we instituted a $20
million share repurchase program, which
was increased and extended several times
to the December 2015 level of $67.5
million. Through December 31, 2015, we
repurchased shares for a total of $42.7
million under that program, including $27
million in 2015. In February 2016, the
Board again increased the program, to
$142.5 million, extended it through April
30, 2017 and approved certain provisions
to potentially accelerate the pace of share
repurchases. The decision to increase
the size and pace of the Company’s share

costs and utilization, material procurement and subcontractor
management. On the value side, we are focused on maintaining
safe working environments, meeting customer schedules,
providing quality construction, complying with environmental
regulations and effectively managing contractual requirements.

We have an outstanding reputation within our client base, and
in order to keep that reputation and increase market share, we
always strive to improve in all areas of our business.

STRATEGIC ACQUISITIONS
We regularly evaluate targeted, strategic acquisitions as a way to
expand our business and hone our operating expertise. That said,
any acquisition we make must meet certain criteria, including
long-term return thresholds and a management team and culture
that is compatible with MYR Group’s own values and culture. As a
result, for every one acquisition we pursue, we decline numerous
other acquisition prospects.

After considering these M&A criteria, we completed two
acquisitions during the year to further strengthen our
geographic reach and add new service offerings to existing
markets. The acquisition of E.S. Boulos Company (E.S. Boulos)
in April, followed by the acquisition of High Country Line
Construction (High Country) in November, brought MYR Group
two companies with excellent reputations and four new district
offices. E.S. Boulos has a long history of performing quality work,
safely, and in a cost effective manner throughout the region it
serves and has expanded both our T&D and C&I capabilities

repurchase authorization reflects the Board’s confidence in the
Company’s long-term strategy and our belief that MYR Group’s
stock at current levels represents an attractive investment
opportunity. We are pleased that MYR Group has a strong
balance sheet that enables us to support our core business, while
at the same time, capitalize on internal and external growth
opportunities in the current environment.

TRANSMISSION & DISTRIBUTION
Throughout 2015, we experienced strong T&D activity with a
mix of all project types and sizes throughout the United States.
Large project milestones included completion of our four-year
contract to build the 210-mile, 115kV and 345kV “Northern
Loop” portion of the $1 billion Maine Power Reliability
Program; as well as the 140-mile, 345kV Antelope Valley to
Judson transmission line in North Dakota; and the 38-mile,
500kV Central Ferry to Lower Monumental transmission line
in Washington. Construction began on the 138kV Kanawah
Valley Area Reinforcement Project and the 500kV Cloverdale to
Lexington line for AEP in Virginia and West Virginia. Completing
and executing complex projects continues to expand our
depth and breadth of project knowledge, further establishes
our reputation and credibility as a top performing contractor
throughout the nation and reinforces our position as a
contractor of choice for future opportunities.

Our efforts to expand service offerings within Canada resulted
in the award of the new Keewatinohk 230kV AC switchyard in
Manitoba, part of the Bipole III Transmission Reliability Project.
This project provides us with a strong foundation to compete for
additional work in this region and in provinces beyond Manitoba.

The past year was also marked by our participation on project
opportunities related to the competitive transmission market
resulting from FERC Order 1000, which have begun to take root in
multiple planning authority regions across the U.S. We anticipate
this activity to increase over the next several years.

Increased utility spending and improved market share resulted in
steady, broad-based growth across the nation in our distribution
business, as we continued to perform large portions of distribution
work through a number of long-term alliance agreements. An
improving housing market along with the need to replace aging
infrastructure, and internal utility resource constraints remained
key drivers throughout 2015. We expect these trends to continue
into 2016 and beyond as we look forward to exploring future
opportunities throughout North America.

COMMERCIAL & INDUSTRIAL
In 2015, we completed construction on one of the highest-profile
C&I projects in our company’s history, the Hotel and Transit
Center at Denver International Airport (DIA). The project consisted
of a 519-room Westin-DIA hotel and conference center, a new
public transit center that will service the RTD Fastrack’s commuter
rail connection to and from downtown Denver, and an 82,000
square-foot, outdoor public plaza that links the hotel conference
center and train station to DIA’s Jeppesen terminal. We also
completed electrical construction on the expansion of USAA’s one
million square-foot campus in Phoenix, Arizona, and continued
construction on the seven-floor expansion of the Eastern Maine
Medical Center in Bangor, Maine.

Significant commercial and industrial activity throughout 2015
resulted from a steady stream of bidding opportunities and
project activity in our established markets, the utilization of our
expertise and customer relationships with national clients to
expand into new markets, as well as our continued geographic
expansion throughout the U.S. due to newly-established
operations in Alaska, Nevada, Utah, Washington and in the
northeast through our E.S. Boulos acquisition.

As U.S. economic conditions continued to improve throughout
2015, we undertook numerous projects as many of our
long-term clients expanded facilities and constructed new ones
related to our areas of specialization, including healthcare,
data centers, airports and industrial facilities. Our reputation
for quality and experience in data center work allowed us to
capture project opportunities in new geographic areas such
as Oregon and Minnesota, and our vast experience with
transportation and airport projects led to several teaming
agreements with reputable civil contractors to pursue
public-private partnerships.

We also enhanced our project management capabilities as
they relate to the electrical needs of complex water projects.
We are actively pursuing opportunities as this market grows
due to concerns throughout the U.S. regarding water storage
and water treatment.

SAFETY
Once again, in 2015, MYR Group exhibited exemplary safety
performance. Maintaining a focus on continuous improvement
in safety served as a compass for our operations. We have
increased management support for safety programs, behaviors
and practices at all levels of the organization to ensure that
every employee takes personal responsibility for safety and is
provided with the best tools, training and equipment possible. As
always, we remained actively involved in industry-wide initiatives
to continuously improve the safety of the mobile workforce,
demonstrating the personal dedication and commitment to safety
that exists throughout our company.

PEOPLE MAKE THE DIFFERENCE
We strengthened our executive leadership team and Board of
Directors this year through the appointment of Ken Hartwick
and Don Lucky as new independent directors, both of whom
have extensive industry expertise and considerable international
experience. In addition, Betty Johnson transitioned from her role
as an MYR Group board member to become our chief financial
officer. She brings broad industry insight, knowledge and a
hands-on approach to further enhance our growth strategy.

MYR Group is comprised of exceptional people who are among
the best in our industry. They exhibit outstanding performance
on a daily basis, through their abilities to address every challenge
to serve our clients and grow our business. We thank all of our
employees for their contributions.

To our shareholders and clients, we also thank you for your
continued confidence and support of MYR Group. Without you,
our success would not be possible.

We are excited about what’s next for MYR Group, and look
forward to reporting on our continued progress.

Sincerely,

William A. Koertner
Chairman, President and
Chief Executive Officer

Richard A. Swartz
Senior Vice President and
Chief Operating Officer

PROJECT PROFILES

CENTRAL FERRY TO
LOWER MONUMENTAL
Client: Bonneville Power Administration
In November, 2015 this 38-mile,
500kV transmission line was
energized following construction
through the steep, rugged terrain
of southwest Washington.

WESTAR ENERGY
ALLIANCE
Client: Westar Energy
We continue to perform
transmission and distribution
construction and maintenance
work for this major Kansas
utility under our seven-year
alliance contract.

SOUTHERN REINFORCEMENT
PROJECT (SRP)
Client: Public Service Electric & Gas
In the fall of 2015, we completed construction on
the rebuild of an existing 10-mile, 230kV overhead
transmission line and installed a second new,
10-mile parallel line, both located over an active
railroad track and crossing the Delaware River.

KANAWAH VALLEY AREA
(KVA) REINFORCEMENT
Client: American Electric Power
In 2015, work began on the KVA project
which consists of approximately 50
miles of double circuit 138kV line rebuild
through the mountainous Kanawah Valley
Area in West Virginia. The scheduled
completion date is fall of 2016.

ANTELOPE VALLEY TO
JUDSON 345KV LINE
Client: Basin Electric Power Coop.
Construction completed in late 2015 on this
140-mile, 345kV project in North Dakota.
Several significant environmental challenges
were successfully overcome including the
setting of two H-frame structures inside
Theodore Roosevelt National Park.

CLOVERDALE TO
LEXINGTON 500KV LINE
Client: American Electric Power
Work continues on this 36.5-mile,
500kV lattice tower transmission
line replacement project which runs
through the Appalachian Mountains
in Virginia. The scheduled completion
date is summer of 2016.

T&D C&I

KEEWATINOHK 230KV AC
SWITCHYARD PROJECT
Client: SNC-Lavalin for Manitoba Hydro
We are currently performing construction
on our first major transmission-related
project in Canada. The 9-bay, Keewatinohk
230kV AC switchyard project is part of the
Bipole III Transmission Reliability Project. Our
scheduled completion date is early 2017.

HOTEL AND TRANSIT CENTER AT
DENVER INTERNATIONAL AIRPORT
Client: Denver International Airport
Work at the Denver International Airport included a
new, 519-room hotel, conference center and event
plaza, as well as a public transit center for the new
commuter rail connecting downtown Denver to the
airport. The hotel opened in the fall of 2015.

MAINE POWER
RELIABILITY
PROGRAM (MPRP)
Client: Central Maine Power
Our portion of the MPRP was
completed in early 2015, and
consisted of a four-year contract
to construct the program’s
complex, 210-mile, 115kV and
345kV “Northern Loop.”

USAA PHOENIX CORP.
CAMPUS EXPANSION
Client: USAA
Construction was completed on this
corporate campus expansion project
which includes a 310,000 square-foot
office building and parking garage.

EASTERN MAINE
MEDICAL CENTER
Client: Cianbro/Brasfield & Gorrie
Construction continues on the
addition/renovation to this multi-
phase, 8-story healthcare facility in
Bangor, Maine, which is scheduled
to be completed in 2017.

FINANCIAL SUMMARY

SUMMARY BALANCE SHEET
(dollars in thousands, except per share data)

Total current assets
Property and equipment, net
Goodwill
Intangible assets, net
Other assets
Total assets

Current liabilities
Deferred income tax liabilities
Other liabilities
Stockholders’ equity
Total liabilities and stockholders’ equity

SUMMARY INCOME STATEMENT

Contract revenues
Gross profit
Income from operations
Net income
Diluted earnings per share

OTHER SUMMARY DATA

EBITDA (1)
Net cash provided by operating activities
Expenditures for property and equipment
Cash paid for acquisitions (2)
Backlog

2015

2014

$
$
$
$
$

303,367
160,678
47,124
11,362
2,394
524,925

179,737
14,382
926
329,880
524,925

2015

1,061,681
122,341
44,841
27,302
1.30

83,044
43,000
46,599
13,087
450,934

$
$
$
$
$

313,501
148,654
46,599
9,865
1,467
520,086

171,588
24,729
1,216
322,553
520,086

2014

943,967
132,414
58,404
36,544
1.69

91,989
54,976
39,045
0
433,641

(1) EBITDA is a non-GAAP measure that management believes is useful to investors in
understanding MYR Group’s results of operations. A reconciliation of EBITDA to its GAAP
counterpart (net income) is provided in Footnote 2 to the tables in “Item 6. Selected
Financial Data.” (2) Net of cash acquired.

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

(cid:2)

□

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the ﬁscal year ended December 31, 2015

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from

Commission ﬁle number: 1-08325

MYR GROUP INC.

(Exact name of registrant as speciﬁed in its charter)

Delaware
(State or other jurisdiction of
incorporation or organization)

36-3158643
(I.R.S. Employer
Identiﬁcation No.)

1701 Golf Road, Suite 3-1012
Rolling Meadows, IL 60008
(Address of principal executive offices, including zip code)

(847) 290-1891
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class

Name of Exchange on Which Registered

Common Stock, $0.01 par value

NASDAQ

Securities registered pursuant to Section 12(g) of the Act:
None

Indicate by check mark if the registrant is a well-known seasoned issuer, as deﬁned in Rule 405 of the Securities Act. Yes (cid:4) No (cid:2)
Indicate by check mark if the registrant is not required to ﬁle reports pursuant to Section 13 or Section 15(d) of the Act. Yes (cid:4) No (cid:2)
Indicate by check mark whether the registrant (1) has ﬁled all reports required to be ﬁled by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to ﬁle such reports), and
(2) has been subject to such ﬁling requirements for the past 90 days. Yes (cid:2) No (cid:4)

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every
Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the
preceding 12 months (or for such shorter period that the registrant was required to submit and post such ﬁles). Yes (cid:2) No (cid:4)

Indicate by check mark if disclosure of delinquent ﬁlers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not

contained herein, and will not be contained, to the best of the registrant’s knowledge, in deﬁnitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. (cid:2)

Indicate by check mark whether the registrant is a large accelerated ﬁler, an accelerated ﬁler, a non-accelerated ﬁler, or a smaller
reporting company. See the deﬁnitions of ‘‘large accelerated ﬁler,’’ ‘‘accelerated ﬁler’’ and ‘‘smaller reporting company’’ in Rule 12b-2 of the
Exchange Act.

Large accelerated ﬁler □

Accelerated ﬁler (cid:2)

Smaller reporting company □

Non-accelerated ﬁler □
(Do not check if a
smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as deﬁned in Rule 12b-2 of the Act). Yes (cid:4) No (cid:2)
As of June 30, 2015 (the last business day of the registrant’s most recently completed second ﬁscal quarter), the aggregate market value

of the outstanding common equity held by non-affiliates of the registrant was approximately $633.4 million, based upon the closing sale
price of the common stock on such date as reported by the NASDAQ Global Market (for purposes of calculating this amount, only
directors, officers and beneﬁcial owners of 10% or more of the outstanding capital stock of the registrant have been deemed affiliates).

As of February 26, 2016 there were 19,437,086 shares of the registrant’s $0.01 par value common stock outstanding.

Portions of the registrant’s deﬁnitive proxy statement to be ﬁled with the Securities and Exchange Commission (the ‘‘SEC’’) in

connection with its 2016 annual meeting of stockholders to be held on April 28, 2016, are incorporated into Part III hereof.

DOCUMENTS INCORPORATED BY REFERENCE

[This page intentionally left blank.]

MYR GROUP INC.

ANNUAL REPORT ON FORM 10-K
FOR THE YEAR ENDED DECEMBER 31, 2015

TABLE OF CONTENTS

PART I

Item 1.

Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Item 1A.

Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Item 1B. Unresolved Staff Comments

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Item 2.

Item 3.

Item 4.

PART II

Item 5.

Item 6.

Item 7.

Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Mine Safety Disclosures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Selected Financial Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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

Item 7A. Quantitative and Qualitative Disclosures About Market Risk . . . . . . . . . . . . . . . . .

Item 8.

Item 9.

Financial Statements and Supplementary Data . . . . . . . . . . . . . . . . . . . . . . . . . . .

Changes in and Disagreements With Accountants on Accounting and Financial
Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Item 9A.

Controls and Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Item 9B. Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

PART III

Item 10.

Directors, Executive Officers and Corporate Governance . . . . . . . . . . . . . . . . . . . .

Item 11.

Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Item 12.

Security Ownership of Certain Beneﬁcial Owners and Management and Related
Stockholder Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Item 13.

Certain Relationships and Related Transactions, and Director Independence . . . . . . .

Item 14.

Principal Accounting Fees and Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Page

PART IV

Item 15.

Exhibits and Financial Statement Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Throughout this report, references to ‘‘MYR Group,’’ the ‘‘Company,’’ ‘‘we,’’ ‘‘us,’’ and ‘‘our’’ refer to
MYR Group Inc. and its consolidated subsidiaries, except as otherwise indicated or as the context otherwise
requires.

FORWARD-LOOKING STATEMENTS

Statements in this annual report on Form 10-K contain various forward-looking statements within the

meaning of Section 27A of the Securities Act of 1933 (the ‘‘Securities Act’’) and Section 21E of the
Securities Exchange Act of 1934 (the ‘‘Exchange Act’’), which represent our management’s beliefs and
assumptions concerning future events. When used in this document and in documents incorporated by
reference, forward-looking statements include, without limitation, statements regarding ﬁnancial forecasts or
projections, and our expectations, beliefs, intentions or future strategies that are signiﬁed by the words
‘‘anticipate,’’ ‘‘believe,’’ ‘‘estimate,’’ ‘‘expect,’’ ‘‘intend,’’ ‘‘may,’’ ‘‘objective,’’ ‘‘outlook,’’ ‘‘plan,’’ ‘‘project,’’
‘‘likely,’’ ‘‘unlikely,’’ ‘‘possible,’’ ‘‘potential,’’ ‘‘should’’ or other words that convey the uncertainty of future
events or outcomes. The forward-looking statements in this annual report on Form 10-K speak only as of
the date of this annual report on Form 10-K. We disclaim any obligation to update these statements (unless
required by securities laws), and we caution you not to rely on them unduly. We have based these
forward-looking statements on our current expectations and assumptions about future events. While our
management considers these expectations and assumptions to be reasonable, they are inherently subject to
signiﬁcant business, economic, competitive, regulatory and other risks, contingencies and uncertainties, most
of which are difficult to predict, and many of which are beyond our control. These and other important
factors, including those discussed in Item 1A ‘‘Risk Factors’’ of this report, may cause our actual results,
performance or achievements to differ materially from any future results, performance or achievements
expressed or implied by these forward-looking statements.

IMPORTANT ADDITIONAL INFORMATION

MYR Group, its directors and certain of its executive officers may be deemed to be participants in the

solicitation of proxies from MYR Group stockholders in connection with the matters to be considered at
MYR Group’s 2016 Annual Meeting. MYR Group intends to ﬁle a proxy statement with the U.S. Securities
and Exchange Commission (the ‘‘SEC’’) in connection with any such solicitation of proxies from MYR Group
stockholders. MYR Group STOCKHOLDERS ARE STRONGLY ENCOURAGED TO READ ANY
SUCH PROXY STATEMENT AND ACCOMPANYING WHITE PROXY CARD WHEN THEY
BECOME AVAILABLE AS THEY WILL CONTAIN IMPORTANT INFORMATION. Information
regarding the ownership of MYR Group’s directors and executive officers in MYR Group securities is
included in their SEC ﬁlings on Forms 3, 4 and 5. More detailed information regarding the identity of
potential participants, and their direct or indirect interests, by security holdings or otherwise, will be set forth
in the proxy statement and other materials to be ﬁled with the SEC in connection with MYR Group’s 2016
Annual Meeting. Stockholders will be able to obtain any proxy statement, any amendments or supplements to
the proxy statement and other documents ﬁled by MYR Group with the SEC for no charge at the SEC’s
website at www.sec.gov. Copies will also be available at no charge at MYR Group’s website at
www.myrgroup.com or by writing to our Corporate Secretary, at MYR Group Inc., 1701 Golf Road, Suite 3-
1012, Rolling Meadows, Illinois 60008.

WEBSITE ACCESS TO COMPANY’S REPORTS

Our website address is www.myrgroup.com. Our annual reports on Form 10-K, quarterly reports on
Form 10-Q, current reports on Form 8-K, and amendments to those reports ﬁled or furnished pursuant to
Section 13(a) or 15(d) of the Exchange Act will be available free of charge through our website as soon as
reasonably possible after they are electronically ﬁled with, or furnished to, the SEC. The information on our
website is not, and shall not be deemed to be, a part of this annual report on Form 10-K or incorporated into
any other ﬁlings we make with the SEC.

Item 1.

Business

General

PART I

We are a holding company of specialty electrical construction service providers that was established in

1995 through the merger of long-standing specialty contractors. Through our subsidiaries, we have served
the electric utility infrastructure markets since 1891. Our operations are currently conducted through
wholly-owned subsidiaries, including: The L. E. Myers Co.; Harlan Electric Company; Great Southwestern
Construction, Inc.; Sturgeon Electric Company, Inc.; MYR Transmission Services, Inc.; E.S. Boulos Company;
High Country Line Construction, Inc.; MYR Group Construction Canada, Ltd.; MYR Transmission Services
Canada, Ltd.; and Northern Transmission Services, Ltd. We provide electrical construction services, and
limited gas construction services, through a network of local offices located throughout the United States and
Canada. We provide a broad range of services, which includes design, engineering, procurement, construction,
upgrade, maintenance and repair services, with a particular focus on construction, maintenance and repair.

Our principal executive offices are located at 1701 Golf Road, Suite 3-1012, Rolling Meadows,

Illinois 60008. The telephone number of our principal executive offices is (847) 290-1891.

Reportable Segments

We are a leading specialty contractor serving the electrical infrastructure market in the United States. We
also have operations in parts of Canada. We manage and report our operations through two industry segments:
Transmission and Distribution (‘‘T&D’’) and Commercial and Industrial (‘‘C&I’’) electrical contracting
services.

In the second quarter of 2015, we expanded the geographic reach of our C&I segment to the northeastern
United States, while enhancing our northeastern T&D presence, with the acquisition of E.S. Boulos Company
(‘‘ESB’’). In the fourth quarter of 2015 we expanded our T&D segment in the western United States with the
acquisition of High Country Line Construction (‘‘HCL’’).

Transmission and Distribution segment We have operated in the T&D industry since 1891. We are one

of the largest U.S. contractors servicing the T&D sector of the electric utility industry. We provide a broad
range of services on electric transmission and distribution networks and substation facilities, which include
design, engineering, procurement, construction, upgrade, maintenance and repair services, with a particular
focus on construction, maintenance and repair, to customers in the electric utility and the renewable energy
industries throughout the United States and in parts of Canada. Our T&D services include the construction
and maintenance of high voltage transmission lines, substations and lower voltage underground and overhead
distribution systems. We also provide storm restoration services in response to hurricane, ice or other
storm-related damage.

In our T&D segment, we generally serve the electric utility industry as a prime contractor, either through

traditional design-bid-build or engineering, procurement and construction (‘‘EPC’’) forms of project delivery.
We have long-standing relationships with many of our T&D customers who rely on us to construct and
maintain reliable electric and other utility infrastructure. We also provide many services to our customers
under multi-year master service agreements (‘‘MSAs’’) and other variable-term service agreements. We
generally focus on improving our proﬁtability by selecting projects we believe will provide attractive margins,
actively monitoring the costs of completing our projects, holding customers accountable for costs related to
changes to contract speciﬁcations, and rewarding our employees for effectively managing costs.

Commercial and Industrial segment We have provided electrical contracting services for C&I

construction in the western United States since 1912. Our C&I segment provides services such as the design,
installation, maintenance and repair of commercial and industrial wiring, installation of traffic networks and
the installation of bridge, roadway and tunnel lighting. Our C&I operations are primarily in the western
United States where we have sufficient scale to deploy the level of resources necessary to achieve signiﬁcant
market share. We concentrate our efforts on projects where our technical and project management expertise
are critical to successful and timely execution. Typical C&I contracts cover electrical contracting services for

airports, hospitals, data centers, hotels, stadiums, convention centers, manufacturing plants, processing
facilities, waste-water treatment facilities, mining facilities and transportation control and management
systems.

In our C&I segment, we generally provide our electric construction and maintenance services as a
subcontractor to general contractors in the C&I industry, but also contract directly with facility owners. We
have a diverse customer base with many long-standing relationships.

Additional ﬁnancial information related to our business segments is provided under ‘‘Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations’’ and in Note 14 to
our Financial Statements.

Customers

Our T&D customers include many of the leading companies in the electric utility industry. Our T&D

customers include investor-owned utilities, cooperatives, private developers, government-funded utilities,
independent power producers, independent transmission companies, industrial facility owners and other
contractors. Our C&I customer base includes general contractors, commercial and industrial facility owners,
local governments and developers. We have long-standing relationships with many of our customers, and we
cultivate these relationships at all levels of our organization from senior management to project supervisors.
We seek to build upon our customer relationships to secure additional projects from our current customer
base. Many of our customer relationships originated decades ago and are maintained through a partnering
approach, which includes project evaluation and consulting, quality performance, performance measurement
and direct customer contact. At all levels of management we maintain a focus on pursuing growth
opportunities with prospective customers. In addition, our management teams promote and market our services
for prospective large-scale projects and national accounts. We believe that our industry experience, technical
expertise, customer relationships and emphasis on safety and customer service contribute to us obtaining new
contracts with both existing and new customers.

For the years ended December 31, 2015, 2014 and 2013, our top 10 customers accounted for 44.6%,
46.5%, and 57.8% of our revenues, respectively. For the years ended December 31, 2015, 2014 and 2013, no
single customer accounted for more than 10.0% of annual revenues.

For the years ended December 31, 2015, 2014 and 2013, revenues derived from T&D customers
accounted for 74.9%, 74.1%, and 80.0%, of our total revenues, respectively, and revenues derived from C&I
customers accounted for 25.1%, 25.9% and 20.0% of our total revenues, respectively.

Types of Service Arrangements and Bidding Process

We enter into contracts principally through a competitive bid process. Our typical construction project
begins with the preparation and submission of a bid to a customer. If selected as the successful bidder, we
generally enter into a contract with the customer that provides for payment upon completion of speciﬁed work
or units of work as identiﬁed in the contract. Although there is considerable variation in the terms of the
contracts we undertake, our contracts are primarily structured as ﬁxed-price agreements, under which we agree
to do the entire project for a ﬁxed amount or unit-price agreements, under which we agree to do the work at a
ﬁxed price per unit of work as speciﬁed in the agreement. We also enter into time-and-equipment contracts
under which we are paid for labor and equipment at negotiated hourly billing rates and for other expenses,
including materials, as incurred, and time-and-materials contracts under which we are paid for labor at
negotiated hourly billing rates and for other expenses, including materials, as incurred. Finally, we sometimes
enter into cost-plus contracts, where we are paid for our costs plus a negotiated margin. On occasion,
time-and-equipment, time-and-materials and cost-plus contracts require us to include a guaranteed
not-to-exceed maximum price.

Fixed-price and unit-price contracts typically have the highest potential margins; however, they hold a

greater risk in terms of proﬁtability because cost overruns may not be recoverable. Time-and-equipment,
time-and-materials and cost-plus contracts have less margin upside, but generally have a lower risk of cost
overruns. Work in our T&D segment is generally completed under ﬁxed-price, time-and-materials,
time-and-equipment, unit-price and cost-plus agreements. C&I work is typically performed under ﬁxed-price,
time-and-materials, cost-plus, and unit-price agreements. Fixed-price contracts accounted for 54.2% of total

revenue for the year ended December 31, 2015, including 48.4% of our total revenue for our T&D segment
and 71.6% of our total revenue for our C&I segment.

Our EPC contracts are typically ﬁxed-price. We may act as the prime contractor for an EPC project

where we perform the procurement and construction functions but use a subcontractor to perform the
engineering component, or we may use a subcontractor for both engineering and procurement functions. We
may also act as a subcontractor on an EPC project to an engineering or construction management ﬁrm. When
acting as a subcontractor for an EPC project, we typically provide construction services only, although we
may also perform both the construction and procurement functions.

Our T&D segment also provides services under MSAs that cover maintenance, upgrade and extension

services, as well as new construction. Work performed under MSAs is typically billed on a unit-price,
time-and-materials or time-and-equipment basis. MSAs are typically one to three years in duration; however,
most of our contracts, including MSAs, may be terminated by our customers on short notice, typically 30 to
90 days, even if we are not in default under the contract. Under MSAs, customers generally agree to use us
for certain services in a speciﬁed geographic region. Most MSA customers have no obligation to assign
speciﬁc volumes of work to us and are not required to use us exclusively, although in some cases they are
subject to our right of ﬁrst refusal. Many of our contracts, including MSAs, are open to public bid at
expiration and generally attract numerous bidders.

A portion of the work we perform requires performance and payment bonds at the time of execution of

the contract. Contracts generally include retention provisions of up to 10% which may be withheld from each
progress payment as retainage until the contract work has been completed and approved.

Materials

In many cases, our T&D customers are responsible for supplying their own materials on projects;
however, under certain contracts, we may agree to provide all or a portion of the required materials. For our
C&I contracts, we usually procure the necessary materials and supplies. We are not dependent on any one
supplier for materials or supplies.

Subcontracting

We are the prime contractor for the majority of our T&D projects. We may use subcontractors to perform
portions of our contracts and to manage workﬂow, particularly for design, engineering, procurement and some
foundation work. We often work with subcontractors who are sole proprietorships or small business entities.
Subcontractors normally provide their own employees, vehicles, tools and insurance coverage. We are not
dependent on any single subcontractor. Contracts with subcontractors often contain provisions limiting our
obligation to pay the subcontractor if our client has not paid us. We hold our subcontractors responsible for
their work or delays in their performance. On larger projects we may require performance and payment
bonding from subcontractors, where we deem appropriate, based on the risk involved. We occasionally
perform work as a subcontractor, and we may elect to do so from time-to-time on larger projects in order to
manage our execution risk.

The majority of the work in our C&I segment is done as a subcontractor to a general contractor.

Competition

Our business is highly competitive in both our T&D and C&I segments. Competition in both of our
business segments is primarily based on the price of the construction services and upon the reputation for
safety, quality and reliability of the contractor. The competition we encounter can vary depending upon the
type and/or location of construction services.

We believe that the principal competitive factors that customers consider in our industry are:

•

price and ﬂexible contract terms;

safety programs and safety performance;

technical expertise and experience;

management team experience;

•

reputation and relationships with the customer;

geographic presence and breadth of service offerings;

willingness to accept risk;

quality of service execution;

specialized equipment, tooling and centralized ﬂeet structure;

the availability of qualiﬁed and/or licensed personnel;

adequate ﬁnancial resources and bonding capacity;

weather-damage restoration abilities and reputation; and

technological capabilities.

While we believe our customers consider a number of factors when selecting a service provider, most of
their work is awarded through a bid process where price is always a principal factor. See ‘‘Risk Factors-Our
industry is highly competitive.’’

T&D Competition

Our T&D segment competes with a number of companies in the local markets where we operate, ranging

from small local independent companies to large national ﬁrms. The national or large regional ﬁrms that
compete with us for T&D contracts include Asplundh Construction Corp., Davis H. Elliot Company, Inc.,
Henkels & McCoy, Inc., MasTec, Inc., MDU Resources Group, Inc., Michels Corporation, Pike Corporation,
Power Line Services, Inc., Quanta Services, Inc. and Willbros Group, Inc.

There are a number of barriers to entry into the transmission services business, including the cost of
equipment and tooling necessary to perform transmission work, the availability of qualiﬁed labor, the scope of
typical transmission projects and the technical, managerial and supervisory skills necessary to complete the
job. Larger transmission projects generally require specialized heavy duty equipment as well as strong
ﬁnancial resources to meet the cash ﬂow, bonding, or letter of credit requirements of these projects. These
factors sometimes reduce the number of potential competitors on these projects. The number of ﬁrms that
generally compete for any one signiﬁcant transmission infrastructure project varies greatly depending on a
number of factors, including the size of the project, its location and the bidder qualiﬁcation requirements
imposed upon contractors by the customer. Some of our competitors restrict their operations to one geographic
area, and others operate nationally and internationally.

Compared to the transmission markets, there are fewer signiﬁcant barriers to entry into the distribution

markets in which we operate. As a result, any organization that has adequate ﬁnancial resources and access to
technical expertise can compete for distribution projects. Instead of outsourcing to us, some of our T&D
customers also employ personnel internally to perform the same type of services that we provide.

C&I Competition

Our C&I segment competes with a number of regional or small local ﬁrms and subsidiaries of larger
national ﬁrms. Competition for our C&I construction services varies greatly. There are few signiﬁcant barriers
to entry in the C&I business, and there are a number of small companies that compete for C&I business. The
size, location and technical requirements of the project will impact which competitors and the number of
competitors that we will encounter when bidding on any particular project.

A major competitive factor in our C&I segment is the individual relationships that we and our

competitors have developed with general contractors who typically manage the bid process. Additionally, the
equipment requirements for C&I work are generally not as signiﬁcant as that of T&D construction. Since C&I
construction typically involves the purchase of materials, the ﬁnancial resources to meet the materials
procurement and equipment requirements of a particular project may impact the competition that we
encounter. We differentiate ourselves from our competitors by bidding for larger and/or more technically
complex projects, which we believe many of our smaller competitors may not be capable of executing

effectively or proﬁtably. We believe that we have a favorable competitive position in the markets that we
serve due in part to our strong operating history and strong local market share as well as our reputation and
relationships with our customers.

Project Bonding Requirements

Many customers, particularly in connection with new construction, require us to post performance and
payment bonds issued by a ﬁnancial institution known as a surety. These bonds provide a guarantee to the
customer that we will perform under the terms of a contract and that we will pay subcontractors and vendors.
If we fail to perform under a contract or to pay subcontractors and vendors, the customer may demand that
the surety make payments or provide services under the bond. We generally must reimburse the surety for any
expenses or outlays it incurs. These bonds are typically issued at the face value of the contract awarded. As
of December 31, 2015, we had approximately $707.1 million in original face amount of bonds outstanding
for projects in our T&D segment and $204.9 million for projects in our C&I segment. Our estimated
remaining cost to complete these bonded projects for both segments was approximately $87.0 million as of
December 31, 2015. As of December 31, 2014, we had approximately $636.5 million in original face amount
of bonds outstanding for projects in our T&D segment and $188.6 million for projects in our C&I segment.
The ability to post bonds provides us with a competitive advantage over smaller or less ﬁnancially secure
competitors. We believe that the strength of our balance sheet, as well as our strong and long-standing
relationship with our surety, enhances our ability to obtain adequate ﬁnancing and bonds.

Backlog

We refer to our estimated revenue on uncompleted contracts, including the amount of revenue on
contracts for which work has not begun, less the revenue we have recognized under such contracts, as
‘‘backlog.’’ We calculate backlog differently for different types of contracts. For our ﬁxed-price contracts,
we include the full remaining portion of the contract in our calculation of backlog. A customer’s intention
to award us work under a ﬁxed-price contract is not included in backlog unless there is an actual award
to perform a speciﬁc scope of work at speciﬁc terms and pricing. For many of our unit-price,
time-and-equipment, time-and-materials and cost-plus contracts, we only include projected revenue for a
three-month period in the calculation of backlog, although these types of contracts are generally awarded as
part of MSAs that typically have a one-year to three-year duration from execution. Given the duration of our
contracts and MSAs and our method of calculating backlog, our backlog at any point in time may not
accurately represent the revenue that we expect to realize during any period and our backlog as of the end of
a ﬁscal year may not be indicative of the revenue we expect to generate in the following ﬁscal year and
should not be viewed or relied upon as a stand-alone indicator. See ‘‘Item 1A. Risk Factors-Backlog may not
be realized or may not result in proﬁts and may not accurately represent future revenue.’’

Certain projects that we undertake are not completed in one accounting period. Revenue on construction

contracts is recorded based upon the percentage-of-completion accounting method, under which revenue is
determined by the ratio of costs incurred to date on the contracts (excluding uninstalled direct materials) to
management’s estimates of total contract costs. Under the percentage-of-completion method of accounting,
revenue recognition is largely a function of contract costs incurred for any given period. Contract costs may
include direct material, labor, subcontractor and material procurement services, equipment, and those indirect
costs related to contract performance such as indirect labor, supplies, tools and repairs. While our contracts
typically include labor, equipment and indirect costs, the amount of subcontractor and material costs on any
individual contract can vary considerably.

There can be no assurance as to the accuracy of our customers’ requirements or of our estimates of
existing and future needs under MSAs, or of the values of our cost or time-dependent contracts and, therefore,
our current backlog may not be realized as part of our future revenues. Subject to the foregoing discussions,
the following table summarizes that amount of our backlog that we believe to be ﬁrm as of the dates shown
and the amount of our current backlog that we reasonably estimate will not be recognized within the next
twelve months:

(in thousands)

T&D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
C&I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total

Backlog at December 31, 2015
Amount
estimated to
not be
recognized
within
12 months
$22,561
12,907
$35,468

Total
$323,570
127,364
$450,934

Total
Backlog at
December 31,
2014
$320,435
113,206
$433,641

Changes in backlog from period to period are primarily the result of ﬂuctuations in the timing of awards
and revenue recognition of contracts. The increase in the 2015 backlog was primarily due to acquisitions and
expansion into new geographic markets, partially offset by declines in large, multi-year project activity.

Trade Names and Intellectual Property

We operate in the U.S. under a number of trade names, including MYR Group Inc., The L. E. Myers

Co., Harlan Electric Company, Great Southwestern Construction, Inc., Sturgeon Electric Company, Inc.,
MYR Transmission Services, Inc,. E.S. Boulos Company and High Country Line Construction, Inc. We
operate in Canada under the trade names MYR Group Construction Canada, Ltd., MYR Transmission Services
Canada, Ltd., and Northern Transmission Services, Ltd. We do not generally register our trade names, but
instead rely on statutory and common law protection. While we consider our trade names to be valuable
assets, we do not consider any single trade name to be of such material importance that its absence would
cause a material disruption to our business. We also do not materially rely upon any patents, licenses or other
intellectual property.

Equipment

Our long history in the T&D industry has allowed us to be instrumental in designing much of the
specialty tools and equipment used in the industry, including wire pullers, wire tensioners and aerial devices.
We operate a ﬂeet of trucks and trailers, support vehicles, bulldozers, bucket trucks, digger derricks and cranes
and specialty construction equipment, such as wire pullers and wire tensioning machines. We also rely on
specialized tooling, including stringing blocks, wire grips and presses. The standardization of our trucks and
trailers allows us to streamline training, maintenance and parts costs. We operate a centralized ﬂeet facility, as
well as 20 regional maintenance shops throughout the United States, which are staffed by over 150 mechanics
and equipment managers who service our ﬂeet. Our ability to internally service our ﬂeet in various markets
often allows us to reduce repair costs and the time equipment is out of service by eliminating both the need to
ship equipment long distances for repair and dependence on third party maintenance providers. Our
maintenance shops are also able to modify standard construction equipment to meet the speciﬁc needs of our
specialty applications. We are a ﬁnal-stage manufacturer for several conﬁgurations of our specialty vehicles,
and, in the event that a particular piece of equipment is not available to us, we can build the component
on-site, which reduces our reliance on our equipment suppliers.

Our ﬂeet of equipment is managed by our centralized ﬂeet management group. Our ﬂeet is highly mobile,

which gives us the ability to shift resources from region-to-region quickly and to effectively respond to
customer needs or major weather events. Our centralized ﬂeet management group is designed to enable us to
optimize and maintain our equipment to achieve the highest equipment utilization which helps to maintain a
competitive position with respect to our equipment costs. We develop internal equipment rates which provide
our business units with appropriate pricing levels to estimate their bids for new projects more accurately. We
also involve our business units in prioritizing the use of our ﬂeet assets. The ﬂeet management group also

manages the procurement and disposition of equipment and short-term rentals. All of these factors are critical
in allowing us to operate efficiently and meet our customers’ needs.

Regulation

Our operations are subject to various laws and regulations including:

•

licensing, permitting and inspection requirements applicable to electricians and engineers;

regulations relating to worker safety and environmental protection;

permitting and inspection requirements applicable to construction projects;

building and electrical codes;

special bidding and procurement requirements on government projects; and

local laws and government acts regulating work on protected sites.

We believe that we are in compliance with applicable regulatory requirements and have all material
licenses required to conduct our operations. Our failure to comply with applicable regulations could result in
project delays, cost overruns, remediation costs, substantial ﬁnes and/or revocation of our operating licenses.

Environmental Matters

As a result of our current and past operations, we are subject to numerous environmental 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 certain 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 and results of operations.

We believe that we are in substantial compliance with environmental laws and regulations and that any

obligations related to environmental matters should not have a material effect on our ﬁnancial condition,
results of operations and cash ﬂows.

Additionally, there are signiﬁcant environmental regulations under consideration to encourage the use of

clean energy technologies and regulate emissions of greenhouse gases to address climate change. We regularly
monitor the various proposals in this regard. Although the impact of climate change regulations on our
business will depend on the speciﬁcs of governmental policies, legislation, and regulation, we believe that we
will be well-positioned to adapt our business to meet new regulations. See ‘‘Item 1A. Risk Factors-We are
subject to risks associated with climate change’’ and ‘‘Item 1A. Risk Factors-Our failure to comply with
environmental and other laws and regulations could result in signiﬁcant liabilities.’’

Cyclical Nature of Business and Seasonality

The demand for construction and maintenance services from our customers is cyclical in nature and
vulnerable to downturns in the industries we serve as well as the economy in general. As a result, our volume
of business could be adversely affected by declines or delays in new projects in various geographic regions.

Although our revenues are primarily driven by spending patterns in our customers’ industries, our
revenues and results of operations can be subject to seasonal and other variations. These variations are
inﬂuenced by weather, daylight hours, availability of system outages from utilities and holidays. For example,
during the winter months, demand for our T&D work may be high, but our work can be delayed due to
inclement weather. During the summer months, the demand for our T&D work may be affected by fewer

available system outages during which we can perform electrical line service work due to peak electrical
demands caused by warmer weather conditions. During the spring and fall months, the demand for our T&D
work may increase due to improved weather conditions and system availability; however, extended periods of
rain and other severe weather can affect the deployment of our crews and efficiency of operations.

Employees

We seek to attract and retain highly qualiﬁed craft employees by providing a superior work environment
through our emphasis on safety, our high quality ﬂeet of equipment, and our competitive compensation. The
number of individuals we employ varies signiﬁcantly throughout the year, typically with lower staffing levels
at year end and through the winter months when fewer projects are active. The number of craft employees
ﬂuctuates depending on the number and size of projects at any particular time. As of December 31, 2015, we
had approximately 4,075 employees, consisting of approximately 725 salaried employees, including executive
officers, district managers, project managers, superintendents, estimators, office managers, and staff and
clerical personnel, and approximately 3,350 craft employees. Approximately 91% of our craft employees were
members of unions, with the majority being members of the International Brotherhood of Electrical Workers
(‘‘IBEW’’), who are represented by many local unions under agreements with generally uniform terms and
varying expiration dates. We generally are not direct parties to such local agreements, but instead these
agreements are entered into by and between the IBEW local unions and the National Electrical Contractors
Association (‘‘NECA’’), of which we are a member. NECA negotiates the terms of these agreements on our
behalf. On occasion we will also employ individuals who are members of other trade unions pursuant to
multi-employer, multi-union project agreements.

Executive Officers

Name

William A. Koertner . . . .
Betty R. Johnson . . . . . .
Richard S. Swartz, Jr. . . .
Gerald B. Engen, Jr. . . . .
Tod M. Cooper . . . . . . .

Age on
March 1, 2016

Position

66
57
52
65
51

Chairman, President and Chief Executive Officer
Senior Vice President, Chief Financial Officer and Treasurer
Senior Vice President and Chief Operating Officer
Senior Vice President, Chief Legal Officer and Secretary
Senior Vice President

William A. Koertner has served as chairman since December 2007. Mr. Koertner joined us in 1998 as
senior vice president, treasurer and chief ﬁnancial officer and became our president and chief executive officer
in December 2003. Prior to joining us, Mr. Koertner served as vice president at Central Illinois Public Service
Company from 1989 until 1998.

Betty R. Johnson joined us as senior vice president, chief ﬁnancial officer and treasurer on October 19,

2015. Prior to joining us, Ms. Johnson served as the chief ﬁnancial officer of Faith Technologies, Inc., a
privately held electrical, engineering and technology systems contractor. From 2009 to 2014, Ms. Johnson
served as the vice president of Global Finance and chief ﬁnancial officer of Sloan Valve Company. Prior to
this, Ms. Johnson was executive vice president and chief ﬁnancial officer with Block and Company, Inc. from
2003 to 2009. From 1999 to 2003 she served as the Vice President-Operations/Finance with Encompass
Services Corporation. Ms. Johnson served as our controller from 1992 to 1998 and vice president and
controller from 1998 to 1999. Ms. Johnson served as a member of our board of directors from 2007 until
accepting her current position with us.

Richard S. Swartz, Jr. has served as senior vice president and chief operating officer since May 2011.
Mr. Swartz served as senior vice president from August 2009 to May 2011. Mr. Swartz served as a group vice
president from 2004 to 2009. Prior to becoming a group vice president, Mr. Swartz served as vice president of
our transmission & distribution central division from 2002 to 2004. Mr. Swartz has held a number of
additional positions since he joined us in 1982, including project foreman, superintendent, project manager
and district manager.

Gerald B. Engen, Jr. has served as senior vice president, chief legal officer and secretary since
August 2009. Between November 2002 and August 2009, Mr. Engen served as vice president, chief legal
officer and secretary. Mr. Engen joined us as an assistant general counsel in September 2000 from Wells, Love
& Scoby, LLC, a law ﬁrm specializing in construction law.

Tod M. Cooper was appointed senior vice president in August 2013. Mr. Cooper served as group vice
president, east from 2009 to 2013 and vice president T&D, east from 2006 to 2009. Mr. Cooper has held a
number of additional positions since joining us in 1989, including business development manager, regional
manager, district manager, and estimator.

Item 1A. Risk Factors

RISK FACTORS

You should read the following risk factors carefully in connection with evaluating our business and the

forward-looking information contained in this annual report on Form 10-K. We operate in a changing
environment that involves numerous known and unknown risks and uncertainties that could affect our
operations. 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.

Our operating results may vary signiﬁcantly from period to period.

Our business can be highly cyclical and subject to seasonal and other variations that can result in
signiﬁcant differences in operating results from period to period. Additionally, our results may be materially
and adversely affected by:

•

the timing and volume of work under contract;

increased competition and changes in the competitive marketplace for our services;

the spending patterns of customers and governments;

safety performance and reputation;

the amount of subcontractor and material costs in our projects;

decreased equipment utilization;

permitting, regulatory or customer-caused delays on projects;

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;

increased costs of performance of our services caused by adverse weather conditions;

increases in design and construction costs that we are unable to pass through to our customers;

the termination or expiration of existing agreements;

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

losses experienced in our operations not otherwise covered by insurance;

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

payment risk associated with the ﬁnancial condition of our customers;

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

availability of qualiﬁed labor for speciﬁc projects;

changes in bonding requirements applicable to existing and new agreements;

costs we incur to support growth internally or otherwise;

the timing and integration of acquisitions and the magnitude of the related acquisition and
integration costs;

costs associated with our multi-employer pension plan obligations;

•

the availability of equipment;

costs associated with responding to proxy contests and other actions of activist stockholders;

signiﬁcant ﬂuctuations in foreign currency exchange rates;

impairment of goodwill or intangible assets;

warranty claims; and

changes in accounting pronouncements that require us to account for items differently than historical
pronouncements.

Accordingly, our operating results in any particular reporting period may not be indicative of the results

that can be expected for any other reporting period.

Our industry is highly competitive.

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. Relatively few barriers prevent
entry into the C&I market and the distribution market. 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. 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. In addition, some of our competitors may have
greater ﬁnancial, technological and human resources than we do. We cannot be certain that our competitors
will not develop the expertise, experience and resources to provide services that are superior in both price and
quality to our services. 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. 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. If
we are unable to compete successfully in our markets, our operating results could be adversely affected.

We may be unsuccessful in generating internal growth.

Our ability to generate internal growth will be affected by, among other factors, our ability to:

•

attract new customers;

increase the number of projects performed for existing customers;

hire and retain qualiﬁed personnel;

successfully bid new projects;

expand geographically; and

adapt the range of services we offer to customers to address their evolving construction needs.

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.

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 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 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. 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.

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.

Many projects involve challenging engineering, procurement and construction phases that may occur over

several years. 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 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. 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. We may not be able to
recover the costs we incur that are caused by delays. In certain circumstances, we guarantee project
completion by a scheduled acceptance date or achievement of certain acceptance and performance testing
levels. 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, adversely affecting our ability to secure new contracts.

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 in any given period.

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

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 have
from time-to-time experienced shortages of certain types of qualiﬁed personnel, such as engineers, project
managers, ﬁeld supervisors, and linemen, in certain regions. In addition, our projects are sometimes located in
remote areas which can make recruitment and deployment of our employees challenging. During periods with
large volumes of storm restoration services work, linemen are frequently recruited across geographic regions
to satisfy demand. 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 engineers, project managers, ﬁeld supervisors, linemen 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. Labor shortages could impair our
ability to maintain our business or grow our revenues. If we are unable to hire employees with the requisite
skills, we may also be forced to incur signiﬁcant training expenses.

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. 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. This can present
difficulty in matching workforce size and equipment location with contract needs. In some cases, we may be
required to bear the cost of a ready workforce and equipment that is larger than necessary, which could impact
our cash ﬂow, expenses and proﬁtability. If an expected contract award or the related work release is delayed
or not received, we could incur substantial costs without receipt of any corresponding revenues. Moreover,
construction projects for which our services are contracted may require signiﬁcant expenditures by us prior to
receipt of relevant payments from the customer. 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 or as
they are completed or expire. 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. Certain of our
customers assign work to us on a project-by-project basis under MSAs. Under these agreements, our
customers often have no obligation to assign a speciﬁc amount of work to us. Our operations could decline
signiﬁcantly if the anticipated volume of work is not assigned to us or is cancelled. Many of our contracts,
including our MSAs, are opened to competitive bid 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.

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

Backlog is difficult to determine accurately, and companies within our industry may deﬁne backlog
differently. Reductions in backlog due to cancellation, termination or scope adjustment by a customer or for
other reasons could signiﬁcantly reduce the revenue and proﬁt we actually receive from contracts in backlog.
In the event of a project cancellation, termination or scope adjustment, we typically have no contractual right
to the total revenues reﬂected in our backlog. The timing of contract awards, duration of large new contracts

and the mix of services, subcontracted work and material in our contracts can signiﬁcantly affect backlog
reporting. Given these factors and our method of calculating backlog, our backlog at any point in time may
not accurately represent the revenue that we expect to realize during any period, and our backlog as of the
end of a ﬁscal year may not be indicative of the revenue we expect to earn in the following ﬁscal year and
should not be viewed or relied upon as a stand-alone indicator. Consequently, we cannot provide assurance as
to our customers’ requirements or our estimates of backlog. See ‘‘Item 1. Business-Backlog’’ for a discussion
on how we calculate backlog for our business.

Our business growth could outpace the capability of our internal resources.

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
engineers, project managers, ﬁeld supervisors, linemen 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 dependence on suppliers, subcontractors and equipment manufacturers could expose us to the risk of
loss in our operations.

On certain projects, we rely on suppliers to obtain the necessary materials and subcontractors to perform
portions of our services. We also rely on equipment manufacturers to provide us with the equipment required
to conduct our operations. 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 conditions. 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.

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

We may enter into joint venture or other strategic arrangements with other parties as part of our business

operations. Success on a jointly performed project depends in large part on whether all parties satisfy their
contractual obligations. Joint venture partners are generally jointly and severally liable for all liabilities and
obligations of the joint venture. If a joint venture partner fails to perform or is ﬁnancially unable to bear its
portion of required capital contributions or other obligations, including liabilities relating to claims or lawsuits,
we could be required to make additional investments, provide additional services or pay more than our
proportionate or agreed upon share of a liability to compensate for the partner’s shortfall. 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.

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. 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. Additionally, renewable energy is generally
more expensive to produce and may require additional power generation sources as backup. The locations of
renewable energy projects are often remote and may not be viable unless new or expanded transmission
infrastructure to transport the electricity to demand centers is economically feasible. Furthermore, funding for
renewable energy initiatives may not be available. 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 on a percentage-of-completion method of accounting, using the
cost-to-cost method. This method is used because management considers expended costs to be the best
available measure of progress on these contracts. This accounting method is commonly used in the
construction industry for ﬁxed-price contracts. The percentage-of-completion accounting practice we use
results in our recognizing contract revenues and earnings ratably over the contract term in proportion to our
incurrence of contract costs. The earnings or losses recognized on individual contracts are based on estimates
of contract revenues, costs and proﬁtability. Contract losses are recognized in full when determined, and
contract proﬁt estimates are adjusted based on ongoing reviews of contract proﬁtability. In addition, we record
adjustments to estimated costs of contracts when we believe the change in estimate is probable and the
amounts can be reasonably estimated. These adjustments could result in both increases and decreases in proﬁt
margins. Actual results could differ from estimated amounts and could result in a reduction or elimination of
previously recognized earnings.

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 must estimate the costs of completing a particular project
when we bid for these types of contracts. The actual cost of labor and materials, however, may vary from the
costs we originally estimated and we may not be successful in recouping additional costs from our customers.
These variations, along with other risks inherent in performing ﬁxed-price and unit-price contracts, may cause
actual revenue and gross proﬁts for a project to differ from those we originally estimated and could result in
reduced proﬁtability or losses on projects due to changes in a variety of factors such as:

•

failure to properly estimate costs of engineering, material, equipment or labor;

unanticipated technical problems with the materials or services being supplied by us, which may
require us to incur additional costs to remedy the problem;

project modiﬁcations that create unanticipated costs;

changes in the costs of equipment, materials, labor or subcontractors;

the failure of our suppliers or subcontractors to perform;

difficulties in our customers obtaining required governmental permits or approvals;

site conditions that differ from those assumed in the original bid (to the extent contract remedies are
unavailable);

•

the availability and skill level of workers in the geographic location of the project;

an increase in the cost of fuel or other resources;

changes in local laws and regulations;

delays caused by local weather conditions, third parties or customers; or

quality issues requiring rework.

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 (‘‘U.S. 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, 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 on contracts, insurance reserves,

estimates surrounding stock-based compensation, the recoverability of goodwill and intangibles, and accounts
receivable reserves. We also may use estimates in our assessment of the useful lives of property and
equipment, the valuation allowance on deferred taxes and the provision for income taxes. 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.

We maintain insurance policies with respect to automobile liability, general liability, workers’

compensation, employers’ liability and other coverages, but those policies do not cover all possible claims and
are subject to certain deductible limits. We also have an employee health care beneﬁt plan for employees not
subject to collective bargaining agreements, which is subject to certain deductible 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. However, 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.

The loss of a key customer could have an adverse affect on us.

Our customer base is highly concentrated, with our top ten customers accounting for 44.6% of our
revenue for the year ended December 31, 2015. 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.

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

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 and results of operations.

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 ﬁnancial condition and results of operations. 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 related 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 in light of
our large ﬂeet. 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.

Unavailability or cancellation of third party insurance coverage would increase our overall risk exposure
and could disrupt our operations.

We maintain insurance coverage from third party insurers as part of our overall risk management strategy

and 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 coverage, these policies are subject to high deductibles,
and we are self-insured up to the amount of those deductibles. There can be no assurance that our current or
past insurance coverage will be sufficient or effective under all circumstances or against all claims and
liabilities to which we may be subject.

We renew our insurance policies on an annual basis; therefore, deductibles and levels of insurance

coverage may change in future periods. There can be no assurance that any of our existing insurance coverage
will be renewed upon the expiration of the coverage period or that future coverage will be affordable at the
required limits. In addition, our current or past third party 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 any of these events occur, our overall risk exposure would increase and our operations could be

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

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. These hazards can cause personal injury and loss of life, severe damage
to or destruction of property and equipment and other consequential damages and could lead to suspension of
operations, large damage claims and, in extreme cases, criminal liability. We have suffered serious injuries and
fatalities in the past and may suffer additional serious injuries and fatalities in the future. 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
might become ineligible to bid on certain work, and our customers could cancel our contracts and not award
us future business.

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, local governments 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.

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

Our contracts may require that we provide to our customers security for the performance of their projects
in the form of bonds, letters of credit, bank guarantees or other ﬁnancial assurances. 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. 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. We may be unable to secure these alternatives in a timely manner, on acceptable terms, or at all,
which could affect our ability to bid for or work on future projects requiring ﬁnancial assurances.

We have also granted security interests in various of our assets to collateralize our obligations to our
sureties and lenders. Furthermore, under standard terms in the surety market, sureties issue or continue bonds
on a project-by-project basis and can decline to issue bonds at any time or require the posting of additional
collateral as a condition to issuing or renewing any bonds. 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 each operating subsidiary. 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 employees to 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 employees, could negatively impact our ability to
manage our business and relationships with our customers.

Work stoppages or other labor issues with our unionized workforce could adversely affect our business.

As of December 31, 2015, approximately 91% 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. Strikes or work stoppages could
adversely impact our relationships with our customers and could cause us to lose business, resulting in
decreased revenues.

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

Our collective bargaining agreements may require us to participate with other companies in various
multi-employer pension plans. 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. 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.

We have been informed that several of the multi-employer pension plans to which our subsidiaries
contribute have been classiﬁed as ‘‘critical’’ or ‘‘endangered’’ status as deﬁned by the PPA. 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.

We may fail to execute or integrate acquisitions or joint ventures successfully.

As part of our growth strategy, we may acquire companies or enter into joint ventures that expand,
complement or diversify our business. The number of acquisition targets or joint venture opportunities that
meet our criteria may be limited, and we may face competition for these opportunities. Acquisitions or joint
ventures that we may pursue may also involve signiﬁcant cash expenditures, the incurrence or assumption of
debt or burdensome regulatory requirements.

Future acquisitions or joint ventures may expose us to operational challenges and risks, including the

diversion of management’s attention from our existing business, the failure to retain key personnel or
customers of an acquired business, difficulties integrating the 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.

Our business may be affected by seasonal and other variations, including severe weather conditions.

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. 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.

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 principal sources of cash are our operating activities and
borrowing availability under our credit facility, which expires on December 21, 2016. 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. We anticipate
that we will be able to renew our credit facility before it expires, but we can give no assurance that we can do
so on favorable terms, if at all.

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 will continue to closely monitor our
liquidity and the overall condition of the ﬁnancial markets; however, we can give no assurance that we will be
able to obtain such ﬁnancing either on favorable terms or at all in the future.

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 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.

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

We do not have extensive experience operating in Canada and 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 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 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.

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.

The U.S. 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.

The nature of our business exposes us to warranty claims, 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. As much of the work we
perform is inspected by our customers for any defects in construction prior to acceptance of the project, the
warranty claims that we have historically received have been minimal. 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. 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 as a result of warranty claims could adversely affect our operating results, ﬁnancial
condition and cash ﬂows.

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 shareholders. 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 any holder of 15% or more of our outstanding common stock, an
‘‘interested’’ stockholder, and prohibits us from engaging in any of a broad range of business transactions with
an ‘‘interested’’ stockholder for a period of three years following the date such stockholder became classiﬁed
as an ‘‘interested’’ stockholder.

We, or our business partners, may be subject to failures, interruptions or breaches of information
technology systems, which could affect our operations, competitive position or damage our reputation.

We use our own information technology systems as well as our business partners’ systems to maintain

certain data and provide reports. 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 capital
investments could be required to remediate the problem. Additionally, our security measures, and those of our
business partners, may be compromised as a result of third-party security breaches, employee error,
malfeasance, faulty password management, or other irregularity, and may result in persons obtaining
unauthorized access to our data or accounts. While we devote signiﬁcant resources to network security and
other security measures to protect our systems and data, these security measures cannot provide absolute
security. If an informational technology security breach affects our systems, or results in the unauthorized
release of our proprietary information, our competitive situation or our reputation could be damaged.

Our stock price and trading volume may be volatile and future sales 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, as well as the stock of other
companies in our industry, may experience periods of signiﬁcant volatility. Company-speciﬁc issues and
developments generally in our industry (including the regulatory environment) and the capital markets and the
economy in general 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, 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.

We are subject to risks associated with climate change.

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 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.

Item 1B. Unresolved Staff Comments

None.

Item 2.

Properties

Our principal executive offices are located at 1701 Golf Road, Suite 3-1012, Rolling Meadows,

Illinois 60008, the lease term of which expires on January 31, 2020. In addition to our executive offices, our
corporate accounting and ﬁnance departments, corporate information technology department and certain legal
and other personnel are located at this office. As of December 31, 2015, we owned 16 operating facilities and
leased many other properties in various locations throughout our service territory. Most of our properties are
used as offices or for ﬂeet operations. We believe that our facilities are adequate for our current operating
needs. We do not believe that any owned or leased facility is material to our operations and, if necessary, we
could obtain replacement facilities for our leased facilities.

Item 3.

Legal Proceedings

We are, from time-to-time, party to various lawsuits, claims and other legal proceedings that arise in the

ordinary course of business. These actions typically seek, among other things, compensation for alleged
personal injury, breach of contract and/or property damages, punitive damages, civil and criminal penalties or
other losses, or injunctive or declaratory relief. With respect to all such lawsuits, claims and proceedings, we
record reserves when it is probable that a liability has been incurred and the amount of loss can be reasonably
estimated. We do not believe that any of these proceedings, separately or in the aggregate, would be expected
to have a material adverse effect on our ﬁnancial position, results of operations, or cash ﬂows.

We are routinely subject to other civil claims, litigation and arbitration, and regulatory investigations

arising in the ordinary course of our past and present businesses as well as in respect of our divested
businesses. Some of these include claims related to our services and operations, and asbestos-related claims
concerning operations of a divested subsidiary of our predecessor. We believe that we have strong defenses to
these claims as well as insurance coverage that will contribute to any settlement or liability in the event any
asbestos-related claim is not resolved in our favor. These claims have not had a material impact on us to date,
and we believe the likelihood that a future material adverse outcome will result from these claims is remote.
However, if facts and circumstances change in the future, we cannot be certain that an adverse outcome of
one or more of these claims would not have a material adverse effect on our ﬁnancial condition, results of
operations, or cash ﬂows.

In January 2013, L. E. Myers was joined as a defendant in Northern States Power Company (Wisconsin)
v. The City of Ashland, Wisconsin et al., ﬁled in the U.S. District Court for the Western District of Wisconsin.
Northern States Power Company alleged that named defendants, including L. E. Myers, contributed to
contamination at the Ashland Lakefront Superfund Site in Ashland, Wisconsin. Speciﬁcally, the lawsuit alleged
that L. E. Myers operated a manufactured gas plant at the site for 6 to 12 years of the plant’s operation during
the time frame from 1885 to 1947. In April 2015, L. E. Myers negotiated a settlement of this litigation with
Northern States Power Company, funded largely by L. E. Myers’ insurance carriers, with L. E. Myers’
contribution being $230,000.

Item 4.

Mine Safety Disclosures

Not Applicable.

PART II

Item 5.

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases
of Equity Securities

Our common stock, par value $0.01, is listed on The NASDAQ Global Market under the symbol ‘‘MYRG.’’

The following table sets forth the high and low sales prices of our common stock per share, as reported

by The NASDAQ Global Market for each of the periods listed:

High

Low

Year Ended December 31, 2015

First Quarter
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Second Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Third Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fourth Quarter

Year Ended December 31, 2014

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
First Quarter
Second Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Third Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fourth Quarter

$32.24
$31.92
$31.70
$27.52

$25.85
$26.37
$27.25
$28.33

$24.55
$27.90
$25.40
$18.18

$22.19
$22.55
$22.43
$22.81

Holders of Record

As of February 26, 2016, we had 17 holders of record of our common stock.

Dividend Policy

We have neither declared nor paid any cash dividend on our common stock since our common stock
began trading publicly on August 12, 2008. Any future determination to declare cash dividends will be made
at the discretion of our board of directors, subject to compliance with legal requirements and covenants under
any existing ﬁnancing agreements, which may restrict or limit our ability to declare or pay dividends, and will
depend on our ﬁnancial condition, results of operations, capital requirements, general business conditions, and
other factors that our board of directors may deem relevant.

Purchases of Common Stock.

The following table includes all of the Company’s repurchases of common stock during the three months
ending December 31, 2015, including those made pursuant to publicly announced plans or programs and those
not made pursuant to publicly announced plans or programs. Repurchased shares are returned to authorized
but unissued common stock.

Period
October 1, 2015 − October, 31 2015 . . . . . .
November 1, 2015 − November, 30 2015 . .
December 1, 2015 − December, 31 2015 . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total
Number
of Shares
Repurchased(1)
263,767
280,600
316,700
861,067

Average
Price Paid
per Share
$23.93
$20.27
$20.27
$21.39

Total Number of
Shares Purchased
as Part of
Publicly
Announced Plans
or Programs(2)
259,330
280,600
316,700
856,630

Approximate Dollar
Value of Shares
That May Yet Be
Purchased Under
the Plans or
Programs
$11,900,604
$31,213,000
$24,794,515

(1) On August 1, 2012, the Company’s Board of Directors authorized the repurchase of up to $20.0 million
of the Company’s common stock (‘‘Repurchase Program’’), and the Company subsequently established a
Rule 10b5-1 plan to facilitate this repurchase. The Company’s Board of Directors has extended and
increased the size of the Repurchase Program several times since 2012. This column includes all
repurchases of common stock, including stock repurchased under the Repurchase Program and stock
repurchased outside the Repurchase Program. The Company repurchased 4,437 shares of its common
stock to satisfy tax obligations on the vesting of restricted stock under the 2007 Long-Term Incentive
Plan (as amended).

(2) Through December 31, 2015, the Company has purchased 1,835,120 shares under the Repurchase

Program.

Performance Graph

The following Performance Graph and related information shall be deemed ‘‘furnished’’ and not ‘‘ﬁled’’
for purposes of Section 18 of the Exchange Act, and such information shall not be incorporated by reference
into any future ﬁling under the Securities Act or the Exchange Act except to the extent that we speciﬁcally
incorporate it by reference into such ﬁling.

The following graph compares, for the period from December 31, 2010 to December 31, 2015, the
cumulative total stockholder return on our common stock with the cumulative total return on the Standard &
Poor’s 500 Index (the ‘‘S&P 500 Index’’), the Russell 2000 Index, and a peer group index selected by our
management that includes fourteen publicly traded companies within our industry (the ‘‘Peer Group’’). The
comparison assumes that $100 was invested on December 31, 2010 and further assumes any dividends were
reinvested quarterly. The stock price performance reﬂected on the following graph is not necessarily indicative
of future stock price performance.

The companies in the Peer Group were selected because they comprise a broad group of publicly traded
companies, each of which has some operations similar to ours. When taken as a whole, the Peer Group more
closely resembles our total business than any individual company in the group while reducing the impact of a
signiﬁcant change in any one of the Peer Group company’s stock price. The Peer Group is composed of the
following companies:

Aegion Corporation
Astec Industries, Inc.
Comfort Systems USA, Inc.
Dycom Industries, Inc.
EMCOR Group*

Granite Construction Incorporated
Integrated Electrical Services, Inc.
MasTec, Inc.*
Matrix Service Company
Primoris Services Corporation

Quanta Services, Inc.*
Tetra Tech, Inc.
TRC Companies, Inc.
Willbros Group, Inc.*

Considered our core group of peers with a more signiﬁcant portion of operations being similar to ours
than the overall group. Graph presents entire Peer Group.

COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
Among MYR Group Inc., the S&P 500 Index, the Russell 2000 Index,
and a Peer Group

$200

$180

$160

$140

$120

$100

$80

$60

$40

$20

12/10

12/11

12/12

12/13

12/14

12/15

MYR Group Inc.

S&P 500

Russell 2000

Peer Group

*$100 invested on 12/31/10 in stock or index, including reinvestment of dividends.
Fiscal year ending December 31.

MYR Group Inc.
. .
S&P 500 . . . . . . . .
Russell 2000 . . . . . .
Peer Group . . . . . .

12/31/2010
100.00
100.00
100.00
100.00

12/31/2011
91.14
102.11
95.82
97.75

12/31/2012
105.95
118.45
111.49
123.48

12/31/2013
119.43
156.82
154.78
153.86

12/31/2014
130.48
178.29
162.35
141.43

12/31/2015
98.14
180.75
155.18
140.42

Item 6.

Selected Financial Data

The following table sets forth certain summary ﬁnancial information on a historical basis. The summary

statement of operations and the balance sheet data set forth below have been derived from our audited
Financial Statements and footnotes thereto included elsewhere in this ﬁling or in prior ﬁlings. Our Financial
Statements have been prepared in accordance with U.S. GAAP. Historical results are not necessarily indicative
of the results we expect in the future and quarterly results are not necessarily indicative of the results of
any future quarter or any full-year period. The information below should be read in conjunction with
‘‘Item 7. Management’s Discussion and Analysis of Financial Condition and Results from Operations’’ and
the Financial Statements and notes thereto included in this annual report on Form 10-K.

Statement of operations data:

(in thousands, except per share data)
. . . . . . . . . . . .
Contract revenues
Contract costs . . . . . . . . . . . . . . .
. . . . . . . . . . . . .

Gross proﬁt

Selling, general and administrative

expenses . . . . . . . . . . . . . . . . .
Amortization of intangible assets . .
Gain on sale of property and

equipment . . . . . . . . . . . . . . . .
Income from operations . . . . .

Other income (expense):

Interest income . . . . . . . . . . . .
Interest expense . . . . . . . . . . . .
. . . . . . . . . . . . . . . .
Other, net

Income before provision

for income taxes . . . . . . . .
Income tax expense . . . . . . . . . . .
Net income . . . . . . . . . . . . . . . . .

Income per common share:

. . . . . . . . . . . . . . . . .
Basic
Diluted . . . . . . . . . . . . . . . .

Weighted average number of

common shares and potential
common shares outstanding:

2015
$1,061,681
939,340
122,341

79,186
571

(2,257)
44,841

25
(741)
174

For the year ended December 31,
2013
$902,729
777,852
124,877

2012
$998,959
880,306
118,653

2014
$943,967
811,553
132,414

73,818
334

(142)
58,404

106
(722)
162

69,818
335

(893)
55,617

9
(727)
(27)

63,575
335

(1,019)
55,762

2
(852)
(222)

2011
$780,356
694,790
85,566

56,776
335

(1,174)
29,629

53
(544)
(81)

44,299
16,997
27,302

57,950
21,406
$ 36,544

54,872
20,113
$ 34,759

54,690
20,428
$ 34,262

29,057
10,759
$ 18,298

1.33
1.30

$
$

1.73
1.69

$
$

1.65
1.61

$
$

1.67
1.60

$
$

0.90
0.87

$
$

Basic
. . . . . . . . . . . . . . . . .
Diluted . . . . . . . . . . . . . . . .

20,577
21,038

20,922
21,466

20,821
21,431

20,391
21,172

20,151
20,993

Balance sheet data:

(in thousands)
Cash and cash equivalents . . . . . . .
Working capital(1)
. . . . . . . . . . . .
Total assets . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . .
Long-term debt
Total liabilities
. . . . . . . . . . . . . .
Stockholders’ equity . . . . . . . . . . .

2015
$ 39,797
123,630
524,925
—
195,045
$329,880

Other Data: (Unaudited)

(in thousands)
EBITDA(2)
. . . . . . . . . . . . . . . . .
Backlog(3) . . . . . . . . . . . . . . . . . .
Capital expenditures . . . . . . . . . . .
Depreciation and amortization(4) . . .
Net cash ﬂows provided by

2015
$ 83,044
450,934
46,599
38,029

2014
$ 77,636
141,913
520,086
—
197,533
$322,553

As of December 31,
2013
$ 76,454
119,570
525,422
—
229,331
$296,091

2012
$ 19,825
89,507
466,348
—
211,658
$254,690

For the year ended December 31,
2013
$ 84,785
326,094
42,725
29,195

2012
$ 80,696
497,579
37,249
25,156

2014
$ 91,989
433,641
39,045
33,423

2011
$ 34,013
59,154
412,568
—
196,830
$215,738

2011
$ 49,059
692,778
42,342
19,511

operating activities . . . . . . . . . .

43,000

54,976

95,062

29,999

30,394

Net cash ﬂows used in investing

activities . . . . . . . . . . . . . . . . .

(56,928)

(38,725)

(41,574)

(36,045)

(41,036)

Net cash ﬂows (used in) provided

by ﬁnancing activities . . . . . . . .

$ (23,911)

$ (15,069)

3,141

$ (8,142)

$ (17,968)

(1) Working capital represents total current assets less total current liabilities.
(2) EBITDA, a performance measure used by management, is deﬁned as net income (loss) plus: interest

income and expense, provision (beneﬁt) for income taxes and depreciation and amortization, as shown in
the table below. EBITDA, a non-GAAP ﬁnancial measure, does not purport to be an alternative to net
income as a measure of operating performance or to net cash ﬂows provided by operating activities as a
measure of liquidity. Because not all companies use identical calculations, this presentation of EBITDA
may not be comparable to other similarly-titled measures of other companies. We use, and we believe
investors beneﬁt from the presentation of, EBITDA in evaluating our operating performance because it
provides us and our investors with an additional tool to compare our operating performance on a
consistent basis by removing the impact of certain items that management believes do not directly reﬂect
our core operations. We believe that EBITDA is useful to investors and other external users of our
ﬁnancial statements in evaluating our operating performance and cash ﬂow because EBITDA is widely
used by investors to measure a company’s operating performance without regard to items such as interest
expense, taxes, depreciation and amortization, which can vary substantially from company to company
depending upon accounting methods and book value of assets, capital structure and the method by which
assets were acquired.
Using EBITDA as a performance measure has material limitations as compared to net income, or other
ﬁnancial measures as deﬁned under U.S. GAAP as it excludes certain recurring items which may be
meaningful to investors. EBITDA excludes interest expense or interest income; however, as we have
borrowed money in order to ﬁnance transactions and operations, or invested available cash to generate
interest income, interest expense and interest income are elements of our cost structure and can affect our
ability to generate revenue and returns for our stockholders. Further, EBITDA excludes depreciation and
amortization; however, as we use capital and intangible assets to generate revenues, depreciation and
amortization are a necessary element of our costs and ability to generate revenue. Finally, EBITDA
excludes income taxes; however, as we are organized as a corporation, the payment of taxes is a
necessary element of our operations. As a result of these exclusions from EBITDA, any measure that
excludes interest expense, interest income, depreciation and amortization and income taxes has material
limitations as compared to net income. When using EBITDA as a performance measure, management
compensates for these limitations by comparing EBITDA to net income in each period, so as to allow for
the comparison of the performance of the underlying core operations with the overall performance of the

company on a full-cost, after-tax basis. Using both EBITDA and net income to evaluate the business
allows management and investors to (a) assess our relative performance against our competitors and
(b) monitor our capacity to generate returns for our stockholders. The following table provides a
reconciliation of net income to EBITDA:

(in thousands)
Net income . . . . . . . . . . . . . . . . . .
Interest expense, net . . . . . . . . . . .
Provision for income taxes . . . . . .
Depreciation and amortization(4) . . .
EBITDA . . . . . . . . . . . . . . . . . . . .

2015
$27,302
716
16,997
38,029
$83,044

For the year ended December 31,
2012
2013
$34,262
$34,759
718
850
20,428
20,113
25,156
29,195
$80,696
$84,785

2014
$36,544
616
21,406
33,423
$91,989

2011
$18,298
491
10,759
19,511
$49,059

We also use EBITDA as a liquidity measure. We believe that EBITDA is important in analyzing our
liquidity because it is a key component of certain material covenants (interest coverage ratio and leverage
ratio) contained within our credit facility. Noncompliance with these ﬁnancial covenants under our credit
facility could result in our lenders requiring us to immediately repay all amounts borrowed. If we
anticipated a potential covenant violation, we would seek relief from our lenders, which may cause us to
incur additional cost, and such relief might not be available, or if available, might not be on terms as
favorable as those in our credit facility. In addition, if we cannot satisfy these ﬁnancial covenants, we
would be prohibited under our credit facility from engaging in certain activities, such as incurring
additional indebtedness, making certain payments, and acquiring or disposing of assets. Based on the
information above, management believes that the presentation of EBITDA as a liquidity measure would
be useful to investors and relevant to their assessment of our capacity to service, or incur, debt.
The following table provides a reconciliation of EBITDA to net cash ﬂows provided by operating
activities:

(in thousands)
EBITDA . . . . . . . . . . . . . . . . . . . .
Add/(subtract)

2015
$ 83,044

For the year ended December 31,
2012
2013
$ 80,696
$ 84,785

2014
$ 91,989

2011
$ 49,059

Interest expense, net . . . . . . . . . . .
Provision for income taxes . . . . . .
Depreciation and amortization(4) . . .
Adjustments to reconcile net income
to net cash ﬂows provided by
operating activities. . . . . . . . . . .

Changes in operating assets and

(716)
(16,997)
(38,029)

(616)
(21,406)
(33,423)

(718)
(20,113)
(29,195)

(850)
(20,428)
(25,156)

(491)
(10,759)
(19,511)

42,367

41,746

32,353

29,857

19,185

liabilities . . . . . . . . . . . . . . . . .

(26,669)

(23,314)

27,950

(34,120)

(7,089)

Net cash ﬂows provided by

operating activities . . . . . . . . . . .

$ 43,000

$ 54,976

$ 95,062

$ 29,999

$ 30,394

(3) Backlog represents our estimated revenue on uncompleted contracts, including the amount of revenue on
contracts on which work has not begun, minus the revenue we have recognized under such contracts.
See ‘‘Item 1. Business-Backlog’’ for a discussion on how we calculate backlog for our business’’ and
‘‘Item 1A. Risk Factors-Backlog may not be realized or may not result in proﬁts and may not accurately
represent future revenue.’’

(4) Depreciation and amortization includes depreciation on capital assets and amortization of ﬁnite-lived

intangible assets.

Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussions should be read in conjunction with the other sections of this report, including

the Financial Statements and related notes contained in Item 8 of this annual report on Form 10-K. In
addition to historical information, this discussion contains forward-looking statements that involve risks,
uncertainties and assumptions that could cause actual results to differ materially from management’s
expectations. Factors that could cause such differences are discussed in ‘‘Forward-Looking Statements’’ and
‘‘Risk Factors.’’ We assume no obligation to update any of these forward-looking statements.

Overview — Introduction

We are a leading specialty contractor serving the electrical infrastructure market. We manage and report
our operations through two industry segments: T&D and C&I. We have operated in the T&D industry since
1891. We are one of the largest contractors servicing the T&D sector of the electric utility industry in the
United States, and our customers include many of the leading companies in the industry. We have provided
C&I electrical contracting services to facility owners and general contractors in the western United States
since 1912. On April 13, 2015, we acquired substantially all the assets of ESB, which enhanced our T&D
presence in the northeast U.S. and expanded our C&I presence outside of our existing markets. On
November 24, 2015 we acquired all of the common stock of HCL, which added to our T&D capacity,
predominantly in the western United States. In the second quarter of 2015 we were awarded our ﬁrst project
in Canada and have commenced work on this project in Manitoba as well as on several smaller projects
in Canada.

We believe that we have a number of competitive advantages in both of our segments, including our
skilled workforce, extensive centralized ﬂeet, proven safety performance and reputation for timely completion
of quality work that allow us to compete favorably in our markets. In addition, we believe that we are better
capitalized than some of our competitors, which provides us with valuable ﬂexibility to take on additional and
complex projects.

We had revenues, for the year ended December 31, 2015, of $1.062 billion compared to $944.0 million

for the year ended December 31, 2014. For the year ended December 31, 2015, our net income was
$27.3 million compared to $36.5 million for the year ended December 31, 2014. While beneﬁting from
increased spending by our customers in 2015, our project mix shifted away from large, multi-year
transmission projects and included more shorter-duration projects. Shorter duration jobs often negatively
affect gross margin and net income due to ﬂeet utilization issues, labor productivity and mobilization and
demobilization costs. In addition, increased competition in many of our markets resulted in lower bid margins,
causing lower gross margins on those projects. The year ended December 31, 2014 beneﬁted from unusually
high gross margins that were primarily the result of favorable closeouts on several large, multi-year
transmission projects, including several large claims or change orders.

Overview — Segments

Transmission and Distribution segment. Our T&D segment provides comprehensive solutions to

customers in the electric utility industry and the renewable energy industry. Our T&D segment generally
serves the electric utility industry as a prime contractor to customers such as investor-owned utilities,
cooperatives, private developers, government-funded utilities, independent power producers, independent
transmission companies, industrial facility owners and other contractors. Our T&D segment provides a broad
range of services on electric transmission and distribution networks and substation facilities which include
design, engineering, procurement, construction, upgrade, maintenance and repair services with a particular
focus on construction, maintenance and repair. The demand for transmission construction and maintenance
services increased over the past several years due to the modernization of the existing electric utility
infrastructure and the need to integrate renewable generation into the electric power grid.

For the year ended December 31, 2015, our T&D revenues were $794.9 million or 74.9% of our
revenue, compared to $699.6 million or 74.1% of our revenue for the year ended December 31, 2014 and
$722.4 million or 80.0% of our revenue for the year ended December 31, 2013. Revenues from transmission
projects represented 73.9%, 77.8% and 84.8% of T&D segment revenue for the years ended December 31,
2015, 2014 and 2013, respectively.

Our T&D segment also provides storm restoration services in response to hurricanes, ice or other storm
related events, which typically account for less than 5% of our annual revenues. In 2015, 2014 and 2013, we
recognized revenues from storm restoration services of approximately $7.7 million, $13.3 million and
$14.6 million, respectively, which represented approximately 0.7%, 1.4% and 1.6% of our annual revenues,
respectively.

Measured by revenues in our T&D segment, we provided 48.4%, 53.1% and 55.4% of our T&D services
under ﬁxed-price contracts during the years ended December 31, 2015, 2014 and 2013, respectively. We also
provide many services to our customers under multi-year maintenance service agreements and other variable
service agreements.

Commercial and Industrial segment. Our C&I segment provides services such as the design,

installation, maintenance and repair of commercial and industrial wiring, installation of traffic networks and
the installation of bridge, roadway and tunnel lighting. In our C&I segment, we generally provide our electric
construction and maintenance services as a subcontractor to general contractors in the C&I industry as well as
to facility owners. Our C&I operations are primarily in the western and northeastern United States where we
have sufficient scale to deploy the level of resources necessary to achieve signiﬁcant market share. We
concentrate our efforts on projects where our technical and project management expertise are critical to
successful and timely execution. The majority of C&I contracts cover electrical contracting services for
airports, hospitals, data centers, hotels, stadiums, convention centers, manufacturing plants, processing
facilities, waste-water treatment facilities, mining facilities and transportation control and management
systems.

For the year ended December 31, 2015, our C&I revenues were $266.8 million or 25.1% of our revenue,

compared to $244.4 million or 25.9% of our revenue for the year ended December 31, 2014 and
$180.3 million or 20.0% of our revenue for the year ended December 31, 2013.

Measured by revenues in our C&I segment, we provided 71.6%, 41.7% and 45.9% of our services under

ﬁxed-price contracts for the years ended December 31, 2015, 2014 and 2013, respectively.

Overview — Revenue and Gross Margins

Revenue Recognition. We recognize revenue on a percentage-of-completion method of accounting,
which is commonly used in the construction industry. The percentage-of-completion accounting method results
in recognizing contract revenues and earnings ratably over the contract term in proportion to our incurrence of
contract costs (excluding uninstalled direct materials). The proﬁts or losses recognized on individual contracts
are based on estimates of contract revenues, costs and proﬁtability. Contract losses are recognized in full when
determined, and contract proﬁt estimates are adjusted based on ongoing reviews of contract proﬁtability.
Changes in job performance, labor costs, equipment costs, job conditions, weather, estimated proﬁtability and
ﬁnal contract settlements may result in revisions to costs and income and their effects are recognized in the
period in which the revisions are determined. We record adjustments to estimated costs of contracts when we
believe the change in estimate is probable and the amounts can be reasonably estimated. These adjustments
could result in either increases or decreases in proﬁt margins. The gross margins we record in the current
period may not be indicative of margins in future periods.

Gross Margins. Our gross margin can vary between periods as a result of many factors, some of which

are beyond our control. These factors include: the mix of revenue derived from the industries we serve, the
size and duration of our projects, the mix of business conducted in different parts of the country, the mix in
service and maintenance work compared to new construction work, the amount of work that we subcontract,
the amount of material we supply, changes in labor, equipment or insurance costs, seasonal weather patterns,
changes in ﬂeet utilization, pricing pressures due to competition, efficiency of work performance, ﬂuctuations
in commodity prices of materials, delays in the timing of projects and other factors.

Overview — Economic, Industry and Market Factors

We operate in competitive markets, which can result in pricing pressures for the services we provide.

Work is often awarded through a bidding and selection process, where price is always a principal factor. We
generally focus on managing our proﬁtability by: selecting projects that we believe will provide attractive
margins; actively monitoring the costs of completing our projects; holding customers accountable for costs
related to changes to contract speciﬁcations; and rewarding our employees for controlling costs.

The demand for construction and maintenance services from our customers has been, and will likely
continue to be, cyclical in nature and vulnerable to downturns in the markets we serve as well as the economy
in general. The ﬁnancial condition of our customers and their access to capital, variations in the margins of
projects performed during any particular period, and regional and national economic conditions may materially
affect results. Project schedules, particularly in connection with larger, multi-year projects, can also create
ﬂuctuations in our revenues. Other market and industry factors, such as changes to our customers’ capital
spending plans or delays in regulatory approvals can affect project schedules. Changes in technology, tax and
other incentives and new or changing regulatory requirements affecting the industries we serve can impact
demand for our services. While we actively monitor economic, industry and market factors affecting our
business, we cannot predict the impact such factors may have on our future results of operations, liquidity and
cash ﬂows. As a result of economic, industry and market factors, our operating results in any particular period
or year may not be indicative of the results that can be expected for any other period or for any other year.

Overview — Seasonality

Although our revenues are primarily driven by spending patterns in our customers’ industries, our
revenues, particularly those derived from our T&D segment, and results of operations can be subject to
seasonal variations. These variations are inﬂuenced by weather, daylight hours, availability of system outages
from utilities, and holidays. During the winter months, demand for our T&D work may be high, but our work
can be delayed due to inclement weather. During the summer months, the demand for our T&D work may be
affected by fewer available system outages during which we can perform electrical line service work due to
peak electrical demands caused by warmer weather conditions. During the spring and fall months, the demand
for our T&D work may increase due to improved weather conditions and system availability; however,
extended periods of rain and other severe weather can affect the deployment of our crews and efficiency of
operations.

We also provide storm restoration services to our T&D customers. These services tend to have a higher
proﬁt margin. However, storm restoration service work that is performed under an MSA typically has similar
rates to other work under the agreement. In addition, deploying employees on storm restoration work may, at
times, delay work on other transmission and distribution work. Storm restoration service work is unpredictable
and can affect results of operations.

Outlook

In the last few years we beneﬁted from increased activity and spending in the electrical transmission
markets we serve. We continue to expect long-term growth in the transmission market, although the timing of
large bids and subsequent construction is likely to be highly variable from year to year. We believe several
multi-year transmission projects will be available for bid in the 2016 to 2017 timeframe. We also expect
bidding activity in small- to medium-sized transmission and distribution projects to continue in 2016 In 2015,
we expanded our T&D presence organically through establishing new or additional operating locations in
California, Kansas, Texas and Canada; and with the acquisitions of ESB and HCL. We also started work on
our ﬁrst project in Canada. In 2015, we expanded our C&I presence into the northeast with the acquisition of
ESB, further increased our C&I business through organic growth in our existing markets and expanded
geographically into Oregon, Minnesota and Washington. We believe that legislative and regulatory actions,
state renewable portfolio standards, the aging of the electric grid, and the general improvement of the
economy will positively impact the level of spending by our customers. Although competition remains strong,
we see these trends as positive factors for us in the future.

Our business is directly impacted by the level of spending on T&D infrastructure across the U.S. and
Canada and the level of commercial and industrial electrical construction activity in the markets we serve. The
electric grid is aging and requires signiﬁcant upgrades and maintenance to meet current and future demands
for electricity. In addition, regulatory pressures and low energy prices may accelerate the shut-down of
coal-ﬁred generating plants, which could result in the need for line upgrades and new substations. Over the
past several years, many utilities have begun to implement plans to improve their transmission systems,
improve reliability and reduce congestion. These utilities have started or planned new construction, line
upgrades and maintenance projects on many transmission systems. We believe that our customers remain
committed to the expansion and strengthening of their transmission infrastructure, with planning, engineering
and funding for many of their projects already in place.

We believe we will continue to see signiﬁcant bidding activity on large transmission projects in 2016 and
2017. The timing of multi-year transmission project awards and substantial construction activity is difficult to
predict due to regulatory requirements and right-of-way permits needed to commence construction. Signiﬁcant
construction on any large, multi-year projects awarded in 2016 will not likely occur until 2017. Bidding and
construction activity for small to medium-size transmission projects and upgrades remains strong, and we
expect this trend to continue in 2016, primarily due to reliability and economic drivers. Competition in the
transmission market continues to make winning projects difficult and has increased pressure on contract
margins.

We continue to see opportunities in the Canadian transmission market which we expect will extend over
the next several years driven by load center delivery requirements, aging infrastructure, additional hydropower
generation development and hydropower interconnection projects to serve Canadian load and the import of
hydro power to the U.S. In 2015, our efforts to expand our service offerings within Canada resulted in the
award of a large switchyard related to the Bipole III initiative in Manitoba, and we are evaluating several
near- and long-term Canadian projects and opportunities that we believe would ﬁt our portfolio of work.

Legislative or regulatory actions may affect demand for the services provided by our T&D segment in

the long term, particularly in connection with electric power infrastructure. Federal Energy Regulatory
Commission (FERC) Order No. 1000 promotes more efficient and cost-effective development of new
transmission facilities, which we believe could have a long-term positive impact on electric transmission line
development. We also anticipate increased infrastructure spending over the long term as a result of legislation
requiring the electric power industry to meet national and local reliability standards for its transmission and
distribution systems and incentives to the industry to invest in and improve maintenance on its systems. The
U.S. Environmental Protection Agency’s Mercury and Air Toxics Standards (‘‘MATS’’) may force retirement
of some coal-ﬁred and oil-ﬁred generating plants in the U.S. This compliance planning and implementation
could result in increased spending by the affected utilities to strengthen their transmission infrastructure to
alleviate congestion and deliver new and existing power sources to their regions.

We believe that renewable resources in the U.S. will be a driver for large transmission project activity.
State renewable portfolio standards, which set required or voluntary standards for how much electricity is to
be generated from renewable energy sources, as well as general environmental concerns, are driving the
development of renewable energy projects. The economic feasibility of renewable energy projects, and
therefore the attractiveness of investment in the projects, may depend on the availability of tax incentive
programs or the ability of the projects to take advantage of such incentives. The late-2015 congressional
approval of a ﬁve-year extension to the Production Tax Credit and Investment Tax Credit should help spur
additional wind and solar development, and we believe we will beneﬁt from an increase in these projects.

As a result of reduced spending by U.S. utilities on their distribution systems for several years, we
believe there is a growing need for sustained investment by utilities on their distribution systems to properly
maintain or meet reliability requirements. In 2015 we saw increased bidding activity in some of our electric
distribution markets, as economic conditions improved in those areas. We believe that a recovery in the
U.S. economy, and in the housing market in particular, over the next few years could provide additional
stimulus for spending by our customers on their distribution systems. In addition, we believe there will be a
push to strengthen utility distribution systems against major storm-related damage. Several industry and
market trends are also prompting customers in the electric utility industry to seek outsourcing partners rather

than performing projects internally. These trends include an aging electric utility workforce, increasing costs
and labor issues. We believe electric utility employee retirements could increase with further economic
recovery, which may result in an increase in outsourcing opportunities. We expect to see an incremental
increase in distribution opportunities in the U.S. in 2016 and we believe these opportunities will continue to
be bid in a competitive market.

We saw increased activity in many of our C&I markets in 2015. Results in our C&I segment improved
signiﬁcantly over the prior year as economic conditions improved. We expect to see continued improvement in
both bidding opportunities and margins in our C&I segment in 2016. We expect the long-term growth in our
C&I segment to generally track the economic growth of the regions we serve and beneﬁt to the extent
economic conditions continue to improve in the markets we serve. In the event economic conditions in these
regions continue to improve, we ecpect our operations will beneﬁt.

We continue to invest in developing key management and craft personnel in both our T&D and C&I
markets and in procuring the specialty equipment and tooling needed to win and execute projects of all sizes
and complexity. In 2015 and 2014, we invested in capital expenditures of approximately $46.6 million and
$39.0 million, respectively. Most of our capital expenditures supported opportunities in our T&D business. We
plan to continue to invest in additional equipment and tooling, substantially through cash ﬂows from
operations and cash on hand, with a focus on transmission and distribution but we expect our capital
expenditures in 2016 will be reduced from our 2015 capital expenditures as we look to expand our ﬂeet
through alternative ﬁnancing approaches such as leasing. For some years we have been entering into operating
leases for some of our facility, vehicle and equipment needs. These leases allow us to conserve cash by
paying a monthly lease rental fee for the use of facilities, vehicles and equipment rather than purchasing them.
We intend to increase our use of leasing arrangements in 2016, particularly for the acquisition of shorter-lived
assets, but will continue to purchase specialty equipment, which provides us with valuable ﬂexibility to take
on additional and complex projects.

Our investment strategy is based on our belief that spending in transmission and distribution projects will
continue to remain strong over the next several years as electric utilities, cooperatives and municipalities make
up for the lack of infrastructure spending in the past, combined with the overall need to integrate new
generation into the electric power grid, and our belief that distribution demand will increase over the next
several years.

Our future growth may be organic or through strategic acquisitions or joint ventures that we expect will
improve our competitive position within our existing markets or expand our geographic footprint. We ended
2015 in a strong ﬁnancial position, which included cash and cash equivalents of $39.8 million and availability
of $155.7 million under our credit facility. We believe that our ﬁnancial and operational strengths will enable
us to manage the current challenges and uncertainties in the markets we serve and give us the ﬂexibility for
further strategic investments.

Understanding Backlog

We deﬁne backlog as our estimated revenue on uncompleted contracts, including the amount of revenue

on contracts for which work has not begun, less the revenue we have recognized under such contracts.
Backlog may not accurately represent the revenues that we expect to realize during any particular period.
Several factors, such as the timing of contract awards, the type and duration of contracts, and the mix of
subcontractor and material costs in our projects, can impact our backlog at any point in time. Some of our
revenue does not appear in our periodic backlog reporting because the award of the project, as well as the
execution of the work, can all take place within the period. For many of our unit-price, time-and-equipment,
time-and-materials and cost-plus contracts, we only include projected revenue for a three-month period in the
calculation of backlog, although these types of contracts are generally awarded as part of MSAs that typically
have a one-year to three-year duration from execution. Our backlog only includes projects that have a signed
contract or an agreed upon work order to perform work on mutually accepted terms and conditions.

Changes in backlog from period to period are primarily the result of ﬂuctuations in the timing of awards

and revenue recognition of contracts.

Understanding Gross Margins

Our gross margin is gross proﬁt expressed as a percentage of revenues. Gross proﬁt is calculated by
subtracting contract costs from revenue. Contract costs consist primarily of salaries, wages and beneﬁts to
employees, depreciation, fuel and other equipment expenses, equipment rentals, subcontracted services,
insurance, facilities expenses, materials and parts and supplies. Various factors affect our gross margins on a
quarterly or annual basis, including those listed below.

Performance Risk. Margins may ﬂuctuate because of the volume of work and the impacts of pricing
and job productivity, which can be impacted both favorably and negatively by customer decisions and crew
productivity, as well as other factors. When comparing a service contract between periods, factors affecting the
gross margins associated with the revenues generated by the contract may include pricing under the contract,
the volume of work performed under the contract, the mix of the type of work speciﬁcally being performed,
the availability of labor resources at expected labor rates and the productivity of the crews performing the
work. Productivity can be inﬂuenced by many factors including the experience level of the crew, whether the
work is on an open or encumbered right of way, weather conditions, geographical conditions and effects of
environmental restrictions or regulatory delays.

Seasonal, Weather and Geographical. Seasonal patterns, primarily related to weather conditions and the

availability of system outages, can have a signiﬁcant impact on gross margins in a given period. It is typical
during the winter months that parts of the country may experience snow or rainfall, which can affect our
crews’ ability to work efficiently. 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. In both cases, projects may be delayed or temporarily placed on hold.
Conversely, in periods when weather remains dry and temperatures are moderate, more work can be done,
sometimes with less cost, which would have a favorable impact on gross margins. The mix of business
conducted in different parts of the country will also affect margins, as some parts of the country offer the
opportunity for higher margins than others due to the geographic characteristics associated with the physical
location where the work is being performed. Such characteristics include whether the project is performed in
an urban versus a rural setting; in a mountainous area or in open terrain; or in normal soil conditions or rocky
terrain. Site conditions, including unforeseen underground conditions, can also impact margins.

Depreciation and Amortization. We include depreciation on equipment in contract costs. This is

common practice in our industry, but can make comparability to other companies difficult. Over the last
few years, we have spent a signiﬁcant amount of capital on property, facilities and equipment, with the
majority of such expenditures being used to purchase additional specialized equipment to enhance our ﬂeet
and to reduce our reliance on lease arrangements and short term equipment rentals. In 2016 we intend to
redeploy our capital by purchasing less equipment and increasing the use of alternative ﬁnancing approaches,
such as leasing, to meet our capital needs. We believe the investment in specialized equipment helps to reduce
our costs and improve our margins and provides us with valuable ﬂexibility to take on additional and complex
projects. However, in 2016 we intend to procure more of our shorter-lived equipment through leasing
arrangements, which will decrease our depreciation expense.

Revenue Mix. The mix of revenue derived from the industries we serve will impact gross margins.
Changes in our customers’ spending patterns in each of the industries we serve can cause an imbalance in
supply and demand and, therefore, affect margins and mix of revenue by industry served. Storm restoration
services typically command higher proﬁt margins than other maintenance services. Seasonal and weather
factors, as noted above, can impact the timing at which customers perform maintenance and repairs, which
can cause a shift in the revenue mix.

Service and Maintenance Compared to New Construction.

In general, new construction work has a

higher gross margin than maintenance and repair work. New construction work is often obtained on a
ﬁxed-price basis, which carries a higher risk than other types of pricing arrangements because a contractor can
bear the risk of increased expenses. As such, we generally bid ﬁxed-price contracts with higher proﬁt margins.
We typically derive approximately 10% to 35% of our revenue from maintenance and repair work that is
performed under pre-established or negotiated prices or cost-plus pricing arrangements which generally allow

us a set margin above our costs. Thus, the mix between new construction work, at ﬁxed-price, and
maintenance and repair work, at cost-plus, in a given period will impact gross margin in that period.

Material and Subcontract Costs. Projects that include a greater amount of material or subcontractor
costs can experience lower overall project gross margins as we typically add less mark up to material and
subcontractor costs in our bids than what we would to our labor and equipment cost. In addition, successful
completion of our contracts may depend on whether our subcontractors successfully fulﬁll their contractual
obligations. If our subcontractors fail to satisfactorily perform their contractual obligations as a result of
ﬁnancial or other difficulties, we may be required to incur additional costs and provide additional services in
order to make up such shortfalls.

Cost of Material. On ﬁxed-price contracts where we are required to provide materials, our overall gross

margin may be affected if we experience increases in material quantity or higher commodity costs.

Materials versus Labor. Projects that include a greater amount of material cost can experience lower

overall project gross margins as we typically add less mark up to material cost in our bids than what we
would to our labor and equipment cost.

Insurance. Gross margins could be impacted by ﬂuctuations in insurance accruals related to our
deductibles in the period in which such adjustments are made. We carry insurance policies, which were
subject to certain deductibles, for workers’ compensation, general liability, automobile liability and other
coverages. Losses up to the deductible amounts are accrued based upon estimates of the ultimate liability for
claims reported and an estimate of claims incurred but not yet reported.

Fleet Utilization, Estimation, and Bidding. We operate a centrally-managed ﬂeet in an effort to achieve
the highest equipment utilization. We also develop internal equipment rates which provide our business units
with appropriate cost information to estimate bids for new projects. Availability of equipment for a particular
contract is determined by our internal ﬂeet ordering process which is designed to optimize the use of internal
ﬂeet assets and allocate equipment costs to individual contracts. We believe these processes allow us to utilize
our equipment efficiently, which leads to improved gross margins.

Our team of trained estimators helps us to determine potential costs and revenues and make informed

decisions on whether to bid for a project and, if bid, the rates to use in estimating the costs for that bid. The
ability to accurately estimate labor, equipment, subcontracting and material costs in connection with a new
project may affect the gross margins achieved for the project.

Selling, General and Administrative Expenses

Selling, general and administrative expenses consist primarily of compensation, related beneﬁts and

employee costs for management and administrative personnel, office rent and utilities, stock compensation,
communications, professional fees, depreciation, marketing costs and bad debt expense.

Consolidated Results of Operations

The following table sets forth selected statements of operations data and such data as a percentage of

revenues for the years indicated:

(dollars in thousands)
. . . . . . .
Contract revenues
Contract costs . . . . . . . . . .
. . . . . . . .

Gross proﬁt
Selling, general and

2015

For the year ended December 31,
2014

2013

$1,061,681
939,340
122,341

100.0%
88.5
11.5

$943,967
811,553
132,414

100.0%
86.0
14.0

$902,729
777,852
124,877

100.0%
86.2
13.8

administrative expenses . .

79,186

(2,257)

(0.2)

7.5

—

4.2

—
—
—

571

25
(741)
174

73,818

334

(142)

58,404

106
(722)
162

7.8

—

6.2

—
(0.1)
—

operations . . . . . . . .

44,841

Amortization of intangible

assets . . . . . . . . . . . . . .
Gain on sale of property and
equipment . . . . . . . . . . .

Income from

Other income (expense)

Interest income . . . . . . .
Interest expense . . . . . . .
. . . . . . . . . . .
Other, net

Income before
provision for
income taxes . . . .
Income tax expense . . . . . .
Net income . . . . . . . . . . . .

44,299
16,997
27,302

4.2
1.6
2.6%

57,950
21,406
$ 36,544

6.1
2.2
3.9%

54,872
20,113
$ 34,759

69,818

335

7.7

—

(893)

(0.1)

55,617

9
(727)
(27)

6.2

—
(0.1)
—

6.1
2.2
3.9%

Year Ended December 31, 2015 Compared to the Year Ended December 31, 2014

Revenues. Revenues increased $117.7 million, or 12.5%, to $1.062 billion for the year ended

December 31, 2015 from $944.0 million for the year ended December 31, 2014. The increase was primarily
due to higher T&D revenues and the acquisition of ESB. We beneﬁted from increased spending by our
customers and organic growth from new geographic markets, however, our project mix of shorter-duration
projects increased while the number of large, multi-year transmission projects declined.

Gross margin. Gross margin decreased to 11.5% for the year ended December 31, 2015 from 14.0% for
the year ended December 31, 2014. Gross margin in 2014 beneﬁted from favorable closeouts on several large,
multi-year transmission projects. The remaining year-over-year decline in gross margin was primarily due to
lower bid margins caused by increased competition in many of our markets and an increase in the number of
shorter duration projects (which affects ﬂeet utilization, labor productivity and mobilization and demobilization
costs). Additionally, some of our jobs underperformed in 2015 due to labor productivity below previous
estimates as a result of excessive labor turnover, rework on certain jobs and severe weather conditions in
some of our markets. Changes in estimates of gross proﬁt on certain projects resulted in gross margin
increases of 0.5% for the year ended December 31, 2015. Changes in estimates of gross proﬁt on certain
projects, including several large claims or change orders, resulted in gross margin increases of 1.9% for the
year ended December 31, 2014.

Gross proﬁt. Gross proﬁt decreased $10.1 million, or 7.6%, to $122.3 million for year ended

December 31, 2015 from $132.4 million for the year ended December 31, 2014, primarily due to lower gross
margin partially offset by higher revenues.

Selling, general and administrative expenses. Selling, general and administrative expenses, which were
$79.2 million for the year ended December 31, 2015, increased $5.4 million from $73.8 million for the year
ended December 31, 2014. The increase in selling, general and administrative expenses for the year ended
December 31, 2015 as compared to the year ended December 31, 2014 was primarily due to higher personnel

and overhead costs to support our organic and acquisitive geographic market expansion, the impact of
reversing a $2.3 million legal reserve in the fourth quarter in 2014, $1.4 million related to an executive officer
transition and costs associated with the ESB and HCL acquisitions, partially offset by lower bonus and proﬁt
sharing costs. As a percentage of revenues, selling, general and administrative expenses decreased to 7.5% for
the year ended December 31, 2015 from 7.8% for the year ended December 31, 2014.

Gain on sale of property and equipment. Gains from the sale of property and equipment in the year
ended December 31, 2015 were $2.3 million compared to $0.1 million in the year ended December 31, 2014.
Gains from the sale of property and equipment are attributable to routine sales of property and equipment no
longer useful or valuable to our ongoing operations.

Interest expense.

Interest expense was $0.7 million for both of the years ended December 31, 2015

and 2014.

Income tax expense. The provision for income taxes was $17.0 million for the year ended

December 31, 2015, with an effective tax rate of 38.4%, compared to a provision of $21.4 million for the year
ended December 31, 2014, with an effective tax rate of 36.9%. The increase in the effective rate was primarily
caused by changes in the mix of business between states and the impact of the foreign tax differential.

Net income. Net income decreased to $27.3 million for the year ended December 31, 2015 from

$36.5 million for the year ended December 31, 2014. The decrease was primarily for the reasons stated above.

Segment Results

The following table sets forth, for the periods indicated, statements of operations data by segment,
segment net sales as a percentage of total net sales and segment operating income as a percentage of segment
net sales:

For the Year Ended December 31,

2015

2014

Amount

Percent

Amount

Percent

(dollars in thousands)
Contract revenues:
Transmission & Distribution . . . . . . . . . . . . . . .
Commercial & Industrial
. . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total

$ 794,898
266,783
$1,061,681

74.9%
25.1
100.0

$699,595
244,372
$943,967

Operating income (loss):
Transmission & Distribution . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . .
Commercial & Industrial
Total
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Corporate . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated . . . . . . . . . . . . . . . . . . . . . . . . . .

63,155
13,592
76,747
(31,906)
44,841

7.9
5.1
7.2
(3.0)
4.2%

$ 75,439
16,542
91,981
(33,577)
$ 58,404

74.1%
25.9
100.0

10.8
6.8
9.7
(3.5)
6.2%

Transmission & Distribution

Revenues for our T&D segment for the year ended December 31, 2015 were $794.9 million compared to

$699.6 million for the year ended December 31, 2014, an increase of $95.3 million or 13.6%. While we
beneﬁted from increased spending by our customers, our project mix shifted away from large, multi-year
transmission projects and included more shorter-duration projects.

Revenues from transmission projects represented 73.9% and 77.8% of T&D segment revenue for
the years ended December 31, 2015 and 2014, respectively. Additionally, for the year ended December 31,
2015, measured by revenue in our T&D segment, we provided 48.4% of our T&D services under ﬁxed-price
contracts, as compared to 53.1% for the year ended December 31, 2014.

Operating income for our T&D segment for the year ended December 31, 2015 was $63.1 million
compared to $75.4 million for the year ended December 31, 2014. Operating income in 2014 beneﬁted from
large, multi-year transmission projects. The remaining year-over-year decline in operating income was
primarily due to lower bid margins caused by increased competition in many of our markets and an increase

in the number of shorter duration projects (which affects ﬂeet utilization, labor productivity and mobilization
and demobilization costs). Additionally, some of our jobs underperformed in 2015 due to labor productivity
below previous estimates, incremental costs associated with expansion into new geographic markets and
severe weather conditions in some of our markets, partially offset by higher revenues. Operating income, as
a percentage of revenues, for our T&D segment decreased to 7.9% for the year ended December 31, 2015
from 10.8% for the year ended December 31, 2014.

Commercial & Industrial

Revenues for our C&I segment for the year ended December 31, 2015 were $266.8 million compared to
$244.4 million for the year ended December 31, 2014, an increase of $22.4 million or 9.2%, due primarily to
the acquisition of ESB. For the year ended December 31, 2015, measured by revenue in our C&I segment, we
provided 71.6% of our services under ﬁxed-price contracts, as compared to 41.7% for the year ended
December 31, 2014.

Operating income for our C&I segment for the year ended December 31, 2015 was $13.6 million
compared to $16.5 million for the year ended December 31, 2014, a decrease of $2.9 million, or 17.6%. The
year-over-year decline in operating income compared to the year ended December 31, 2014 was primarily due
to lower bid margins caused by increased competition in many of our markets and certain underperforming
jobs due to labor productivity below previous estimates as a result of excessive labor turnover and rework and
incremental costs associated with expansion into new geographic markets, partially offset by higher revenues.
As a percentage of revenues, operating income for our C&I segment decreased to 5.1% for the year ended
December 31, 2015 from 6.8% for the year ended December 31, 2014.

Corporate

The decrease in corporate expenses in 2015 was primarily attributable to lower bonus and proﬁt sharing

costs.

Year Ended December 31, 2014 Compared to the Year Ended December 31, 2013

Revenues. Revenues increased $41.3 million, or 4.6%, to $944.0 million for the year ended

December 31, 2014 from $902.7 million for the year ended December 31, 2013 due to higher C&I revenues,
partially offset by lower transmission revenues. Material and subcontractor cost comprised approximately 33%
of total contract cost in the year ended December 31, 2014, compared to approximately 31% in the year ended
December 31, 2013.

Gross proﬁt. Gross proﬁt increased $7.5 million, or 6.0%, to $132.4 million for the year ended
December 31, 2014 from $124.9 million for the year ended December 31, 2013. Gross margin increased to
14.0% in the year ended December 31, 2014 from 13.8% in the year ended December 31, 2013. Gross
margins in 2014 and 2013 included net beneﬁts of approximately 1.9% and 0.8%, respectively, from improved
contract margins on several transmission projects due to change orders, resolution of claims, cost efficiencies,
additional work and effective contract management. The gross margin beneﬁt in 2014 was partially offset by
lower equipment utilization, particularly large specialty transmission equipment as several large transmission
projects were nearing completion, and higher equipment repair and maintenance costs.

Selling, general and administrative expenses. Selling, general and administrative expenses increased

approximately $4.0 million, or 5.7%, to $73.8 million for the year ended December 31, 2014 from
$69.8 million for the year ended December 31, 2013 primarily due to an increase in employee compensation
and fringe beneﬁts related to the increased number of personnel assigned to support operations and higher
proﬁt sharing and stock compensation costs. In the third quarter of 2013, we recorded a $2.3 million legal
reserve which represented estimated punitive damages, interest and cost of an appeal bond pertaining to an
adverse judgment involving a traffic accident in Florida. On February 27, 2015, a Florida appeals court
unanimously reversed this judgment, determined that punitive damages were not available and remanded the
case for a new trial. As a result, the $2.3 million legal reserve was reversed in the fourth quarter of 2014. As
a percentage of revenues, selling, general and administrative expenses increased to 7.8% for the year ended
December 31, 2014 from 7.7% for the year ended December 31, 2013.

Gain on sale of property and equipment. Gains from the sale of property and equipment decreased
$0.8 million to $0.1 million for the year ended December 31, 2014 from $0.9 million for the year ended

December 31, 2013. Gains from the sale of property and equipment are the result of routine sales of property
and equipment that are no longer useful or valuable to our ongoing operations.

Interest expense.

Interest expense was $0.7 million for both the years ended December 31, 2014

and 2013.

Income tax expense. The provision for income taxes was $21.4 million for the year ended

December 31, 2014, with an effective tax rate of 36.9%, compared to a provision of $20.1 million for the year
ended December 31, 2013, with an effective tax rate of 36.7%.

Net income. Net income in 2014 increased to $36.5 million for the year ended December 31, 2014 from

$34.8 million for the year ended December 31, 2013 for the reasons stated above.

Segment Results

For the Year Ended December 31,

2014

2013

Amount

Percent

Amount

Percent

(dollars in thousands)
Contract revenues:
Transmission & Distribution . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . .
Commercial & Industrial
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total

$699,595
244,372
$943,967

74.1%
25.9
100.0

$722,387
180,342
$902,729

Operating income (loss):
Transmission & Distribution . . . . . . . . . . . . . . .
Commercial & Industrial
. . . . . . . . . . . . . . . . .
Total
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Corporate . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 75,439
16,542
91,981
(33,577)
$ 58,404

10.8
6.8
9.7
(3.5)
6.2%

$ 81,413
10,423
91,836
(36,219)
$ 55,617

80.0%
20.0
100.0

11.3
5.8
10.2
(4.0)
6.2%

Transmission & Distribution

Revenues for our T&D segment for the year ended December 31, 2014 were $699.6 million compared to

$722.4 million for the year ended December 31, 2013, a decrease of $22.8 million or 3.2%. The decline in
revenue was primarily due to lower revenues on several large transmission projects that were substantially
complete or nearing completion, which were partially offset by higher distribution revenues. Material and
subcontractor costs in our T&D segment comprised approximately 28% of total contract costs in the year
ended December 31, 2014, compared to approximately 27% in the year ended December 31, 2013.

Revenues from transmission projects represented 77.8% and 84.8% of T&D segment revenue for
the years ended December 31, 2014 and 2013, respectively. Additionally, for the year ended December 31,
2014, measured by revenue in our T&D segment, we provided 53.1% of our T&D services under ﬁxed-price
contracts, as compared to 55.4% for the year ended December 31, 2013.

Operating income for our T&D segment for the year ended December 31, 2014 was $75.4 million

compared to $81.4 million for the year ended December 31, 2013 primarily due to lower equipment
utilization, particularly large specialty transmission equipment as several large transmission projects were
nearing completion, as well as higher equipment repair and maintenance costs. The impact of lower equipment
utilization was partially offset by improved contract margins on several transmission projects due to change
orders, resolution of claims, cost efficiencies, additional work and effective contract management. Operating
income, as a percentage of revenues, for our T&D segment decreased to 10.8% for the year ended
December 31, 2014 from 11.3% for the year ended December 31, 2013.

Commercial & Industrial

Revenues for our C&I segment for the year ended December 31, 2014 were $244.4 million compared to
$180.3 million for the year ended December 31, 2013, an increase of $64.1 million or 35.5%. The increase in
revenues was largely due to increased activity in most of our service offerings as well as improved market
conditions in Colorado and Arizona. Material and subcontractor cost in our C&I segment comprised
approximately 48% of total contract cost in the year ended December 31, 2014, compared to approximately
44% in the year ended December 31, 2013.

For the year ended December 31, 2014, measured by revenue in our C&I segment, we provided 41.7% of

our services under ﬁxed-price contracts, as compared to 45.9% for the year ended December 31, 2013.

Operating income for our C&I segment for the year ended December 31, 2014 was $16.5 million
compared to $10.4 million for the year ended December 31, 2013, an increase of $6.1 million, or 58.7%.
As a percentage of revenues, operating income for our C&I segment increased to 6.8% for the year ended
December 31, 2014 from 5.8% for the year ended December 31, 2013. The increase in operating income
was primarily due to increased revenue compared to 2013 and improved efficiency on the jobs we performed
in 2014.

Corporate

The decrease in corporate expenses in 2014 was primarily attributable to the reversal in the fourth quarter

of 2014 of the $2.3 million legal reserve, which had been accrued in 2013. The year over year impact of the
legal reserve was partially offset by increased employee compensation and fringe beneﬁts related to the
increased number of personnel assigned to support operations and higher proﬁt sharing and stock
compensation costs.

Liquidity and Capital Resources

As of December 31, 2015, we had cash and cash equivalents of $39.8 million and working capital of

$123.6 million. During the year ended December 31, 2015, consolidated operating activities of our business
resulted in net cash ﬂow from operations of $43.0 million compared to $55.0 million for the year ended
December 31, 2014. The $12.0 million decline in cash provided by operating activities was primarily due to
the $9.2 decline in net income. Cash ﬂow from operations is primarily inﬂuenced by demand for our services,
operating margins and the type of services we provide our customers. The changes in various working capital
accounts (such as: accounts receivable, including retention; costs and estimated earnings in excess of billings
on uncompleted contracts; accounts payable; and billings in excess of costs and estimated earnings on
uncompleted contracts) are due to both the volume and timing of work performed, the mix of the types of
projects and customers and their varying billing requirements as well as settlements of payables and other
obligations. In particular, the gross amount of accounts receivable, net, costs and estimated earnings in excess
of billings on uncompleted contracts, and billings in excess of costs and estimated earnings on uncompleted
contracts used cash of $21.3 million in 2015, net of acquired balances, compared to $3.2 million of cash used
in 2014, a year-over-year decline in cash used of $18.1 million.

Days sales outstanding (DSO) was 66.7 days as of December 31, 2015, as compared to 59.8 days at
December 31, 2014. The increase of 6.9 days has an impact of approximately $20.3 million in increased
working capital, unrelated to volume. This increase is primarily due to timing of collections on our accounts
receivable for various projects due to resolution of change orders and project close outs as well as customer
mix and size of projects. In addition, billings are impacted by new customer billing processes that require
additional efforts to process invoices, as well as requirements under various contracts. DSO is calculated by
using the sum of current accounts receivable, net of allowances, retention receivables plus costs and estimated
earnings in excess of billings on uncompleted contracts less billing in excess of costs and estimated earnings
on uncompleted contracts, divided by average revenues per day during the last quarter.

Accounts payable, which provided $6.7 million in cash in 2015 compared to using $17.3 million in 2014,
accounted for a $24.0 million year-over-year change in cash used as a result of an increase in revenue volume
and the timing of material purchases and subcontractor payments on contracts. Additionally, year-over-year
changes in self-insurance reserves and other liabilities contributed to the year-over-year decline in cash
provided by operating activities.

During the years ended December 31, 2015 and 2014, we used net cash of $56.9 million and

$38.7 million, respectively, in investing activities. The $56.9 million of cash used in investing activities in the
year ended December 31, 2015 consisted of $46.6 million for capital expenditures and $13.1 million to
acquire ESB and HCL, partially offset by $2.8 million of proceeds from the sale of equipment.

During the years ended December 31, 2015 and 2014, we used net cash of $23.9 million and

$15.1 million, respectively, in ﬁnancing activities. The $23.9 million of cash used in ﬁnancing activities in the
year ended December 31, 2015 consisted of $27.6 million of cash used to purchase shares of our common
stock, which was partially offset by proceeds from stock options and tax beneﬁts related to our stock
compensation programs. The $27.6 million of cash used to purchase shares of our common stock consisted of
$26.1 million purchased under our Repurchase Program and $1.5 million to purchase shares surrendered by
employees to satisfy employee tax obligations under our stock compensation program. On July 30, 2015, our
Board of Directors approved an amended Repurchase Program, which increased the program from
$25.0 million to $42.5 million and extended the term of the program through August 31, 2016. On
December 10, 2015, our Board of Directors approved an amended Repurchase Program, which increased the
program from $42.5 million to $67.5 million. As of December 31, 2015, we had $24.8 million of remaining
availability to purchase shares under the Repurchase Program. As of December 31, 2015, the Company has
spent $42.7 million to repurchase 1,835,120 shares at an average repurchase price of $23.22 since the
inception of this program.

We anticipate that our cash and cash equivalents on hand, borrowing capacity under our credit facility,
and future cash ﬂow from operations will provide sufficient cash to enable us to meet our future operating
needs, debt service requirements, share repurchases and planned capital expenditures. We expect our capital
expenditures in 2016 will be lower than the last few years as we look to expand our ﬂeet through an increased
use of alternative ﬁnancing approaches, such as leasing. For some years we have been using operating leases
for some of our facility, vehicle and equipment needs. These leases allow us to conserve cash by paying a
monthly lease rental fee for the use of facilities, vehicles and equipment rather than purchasing them. We
intend to increase our use of leasing arrangements in 2016, particularly for the acquisition of shorter-lived
assets, but will continue to purchase specialty equipment, which provides us with valuable ﬂexibility to take
on additional and complex projects.

Although we believe that we have adequate cash and availability under our credit facility to meet our
liquidity needs, our involvement in any multi-year transmission projects or the acquisition of other companies
may require additional capital, depending upon the size of the project or the acquisition and the ﬁnancial
terms of the underlying agreement.

Share Repurchase Amendment

On February 10, 2016 the Board approved amendments to our Repurchase Program to increase the
capacity by $75.0 million, modify its provisions to accelerate the pace of share repurchases, and extend the
term through April 30, 2017. The amendments increased the overall size of the Repurchase Program to
$142.5 million. The Company intends to fund the repurchase program from cash on hand and through
borrowings under its credit facility.

Debt Instruments

On December 21, 2011, we entered into a ﬁve-year syndicated credit agreement (the ‘‘Credit
Agreement’’) for an initial facility of $175.0 million (the ‘‘Facility’’). The entire Facility is available for
revolving loans and the issuance of letters of credit. We have an option to increase the commitments under
the Facility or enter into incremental term loans, subject to certain conditions, by up to an additional
$75.0 million upon receipt of additional commitments from new or existing lenders. Up to $25.0 million of
the Facility is available for swingline loans.

Revolving loans under the Facility bear interest, at our option, at either (1) ABR, which is the greatest of

the Prime Rate, the Federal Funds Effective Rate plus 0.50% or adjusted LIBOR plus 1.00%, plus in each
case an applicable margin ranging from 0.00% to 1.00%; or (2) adjusted LIBOR plus an applicable margin
ranging from 1.00% to 2.00%. The applicable margin is determined based on our leverage ratio (the
‘‘Leverage Ratio’’), deﬁned under the Credit Agreement as consolidated total indebtedness divided by
consolidated EBITDA as deﬁned by the Credit Agreement (‘‘Consolidated EBITDA’’). Letters of credit issued

under the Facility are subject to a letter of credit fee of 1.00% to 2.00%, based on our Leverage Ratio and a
fronting fee of 0.125%. Swingline loans will bear interest at the ABR Rate. We are required to pay a 0.2%
commitment fee on the unused portion of the Facility.

Subject to certain exceptions, the Facility is secured by substantially all of our assets and the assets of all

of our subsidiaries and by a pledge of all of the capital stock of our subsidiaries. Our subsidiaries also
guarantee the repayment of all amounts due under the Facility. The Credit Agreement provides for customary
events of default. If an event of default occurs and is continuing, on the terms and subject to the conditions
set forth in the Credit Agreement, amounts outstanding under the Facility may be accelerated and may become
or be declared immediately due and payable.

Under the Credit Agreement, we are subject to certain ﬁnancial covenants, a Leverage Ratio and an
interest coverage ratio (‘‘Interest Coverage Ratio’’), deﬁned under the Credit Agreement as Consolidated
EBITDA divided by interest expense. The Credit Agreement also contains a number of covenants including
limitations on asset sales, investments, indebtedness and liens. We were in compliance with all covenants at
December 31, 2015.

As of December 31, 2015 and 2014, we had no debt outstanding, $155.7 million available for borrowing

under our Credit Agreement and approximately $19.3 million in irrevocable standby letters of credit
outstanding under our Credit Agreement at an interest rate of 1.125%. The Facility expires on December 21,
2016 and we anticipate that we will be able to renew the Facility before it expires, but we can give no
assurance that we can do so on favorable terms, if at all.

Off-Balance Sheet Arrangements

As is common in our industry, we enter into certain off-balance sheet arrangements in the ordinary course

of business that result in risks not directly reﬂected in our balance sheets. Our signiﬁcant off-balance sheet
transactions include liabilities associated with non-cancelable operating leases, letter of credit obligations and
bond guarantees entered into in the normal course of business. We have not engaged in any off-balance sheet
ﬁnancing arrangements through special purpose entities.

Leases

We enter into non-cancelable operating leases for some of our facility, vehicle and equipment needs.
These leases allow us to conserve cash by paying a monthly lease rental fee for the use of facilities, vehicles
and equipment rather than purchasing them. We may decide to cancel or terminate a lease before the end of
its term, in which case we are typically liable to the lessor for the remaining lease payments under the term of
the lease. At December 31, 2015, we had no leases with residual value guarantees.

We typically have purchase options on the equipment underlying our long-term operating leases and
many of our short-term rental arrangements. We exercise some of these purchase options when the need for
equipment is on-going and the purchase option price is attractive.

Purchase Commitments for Construction Equipment

As of December 31, 2015, we had approximately $2.2 million in outstanding purchase obligations for

certain construction equipment to be paid, with most of the cash outlay scheduled to occur over the ﬁrst
three months of 2016.

Letters of Credit

Some of our vendors require letters of credit to ensure reimbursement for amounts they are disbursing on

our behalf, such as to beneﬁciaries under our insurance programs. In addition, from time-to-time certain
customers require us to post letters of credit to ensure payment to our subcontractors and vendors under those
contracts and to guarantee performance under our contracts. Such letters of credit are generally issued by a
bank or similar ﬁnancial institution. The letter of credit commits the issuer to pay speciﬁed amounts to the
holder of the letter of credit if the holder claims that we have failed to perform speciﬁed actions in accordance
with the terms of the letter of credit. If this were to occur, we would be required to reimburse the issuer of
the letter of credit. Depending on the circumstances of such a reimbursement, we may also have to record a
charge to earnings for the reimbursement. Currently, we do not believe that it is likely that any claims will be
made under any letter of credit in the foreseeable future.

At December 31, 2015, we had $19.3 million in irrevocable standby letters of credit outstanding under
our Credit Agreement at an interest rate of 1.125%, including $17.5 million related to the Company’s payment
obligation under its insurance programs and approximately $1.8 million related to contract performance
obligations.

Performance and Payment Bonds

Many customers, particularly in connection with new construction, require us to post performance and
payment bonds issued by a ﬁnancial institution known as a surety. These bonds provide a guarantee to the
customer that we will perform under the terms of a contract and that we will pay subcontractors and vendors.
If we fail to perform under a contract or to pay subcontractors and vendors, the customer may demand that
the surety make payments or provide services under the bond. We must reimburse the surety for any expenses
or outlays it incurs. Under our continuing indemnity and security agreement with the surety, with the consent
of our lenders under the Credit Agreement, we have granted security interests in certain of our assets to
collateralize our obligations to the surety. We may be required to post letters of credit or other collateral in
favor of the surety or our customers. Posting letters of credit in favor of the surety or our customers reduces
the borrowing availability under the Facility. To date, we have not been required to make any reimbursements
to the surety for bond-related costs. We believe that it is unlikely that we will have to fund signiﬁcant claims
under our surety arrangements in the foreseeable future. As of December 31, 2015, an aggregate of
approximately $912.0 million in original face amount of bonds issued by the surety were outstanding. Our
estimated remaining cost to complete these bonded projects was approximately $87.0 million as of
December 31, 2015.

Indemnities

From time to time, pursuant to our service arrangements, we indemnify our customers for claims related

to the services we provide under those service arrangements. These indemniﬁcation obligations may subject us
to indemnity claims, liabilities and related litigation. We are not aware of any material unrecorded liabilities
for asserted claims in connection with these indemniﬁcation obligations.

Contractual Obligations

As of December 31, 2015, our future contractual obligations are as follows:

(in thousands)
Operating lease obligations . .
Purchase obligations . . . . . . .
Income tax contingencies . . .
. . . . . . . . . . . . . . . . .
Total

Total
$4,567
2,164
564
$7,295

Less than
1 Year
$1,717
2,164
—
$3,881

1 − 3 Years
$1,977
—
—
$1,977

3 − 5 Years
$807
—
—
$807

More than
5 Years
$66
—
—
$66

Other
$ —
—
564
$564

Excluded from the above table are our multi-employer pension plan contributions, which are determined

annually, based on our union employee payrolls, and which cannot be determined for future periods in
advance.

The amount of income tax contingencies has been presented in the ‘‘Other’’ column in the table above
due to the fact that the period of future payment cannot be reliably estimated. For further information, refer to
Note 10 to the Financial Statements.

Concentration of Credit Risk

We grant trade credit under normal payment terms, generally without collateral, to our customers, which

include high credit quality electric utilities, governmental entities, general contractors and builders, owners and
managers of commercial and industrial properties. Consequently, we are subject to potential credit risk related
to changes in business and economic factors. However, we generally have certain statutory lien rights with
respect to services provided. Under certain circumstances such as foreclosures or negotiated settlements, we
may take title to the underlying assets in lieu of cash in settlement of receivables. As of December 31, 2015,
one customer individually exceeded 10.0% of accounts receivable with approximately 13.0% of the total
accounts receivable amount (excluding the impact of allowance for doubtful accounts). As of December 31,

2014, one customer individually exceeded 10.0% of accounts receivable with approximately 14.2% of the total
accounts receivable amount (excluding the impact of allowance for doubtful accounts). Management believes
the terms and conditions in its contracts, billing and collection policies are adequate to minimize the potential
credit risk.

Inﬂation

Inﬂation did not have a signiﬁcant effect on our results during the years ended December 31, 2015, 2014

or 2013.

New Accounting Pronouncements

For a discussion of recent accounting pronouncements, see Note 1 — Summary of Signiﬁcant Accounting

Policies in the Notes to the Financial Statements.

Critical Accounting Policies

The discussion and analysis of our ﬁnancial condition and results of operations are based on our
Financial Statements, which have been prepared in accordance with U.S. GAAP. The preparation of these
Financial Statements requires us to make estimates and assumptions that affect the reported amounts of assets
and liabilities, disclosures of contingent assets and liabilities known to exist at the date of the Financial
Statements and the reported amounts of revenues and expenses during the reporting period. We evaluate our
estimates on an ongoing basis, based on historical experience and on various other assumptions that are
believed to be reasonable under the circumstances. There can be no assurance that actual results will not differ
from those estimates. We believe the following accounting policies affect our more signiﬁcant judgments and
estimates used in the preparation of our Financial Statements:

Revenue Recognition. Revenues under long-term contracts are accounted for under the

percentage-of-completion method of accounting. Under the percentage-of-completion method, we estimate
proﬁt as the difference between total estimated revenue and total estimated cost of a contract and recognize
that proﬁt over the contract term based on either input (e.g., costs incurred under the cost-to-cost method) or
output (e.g., units delivered under the units-of-delivery method), as appropriate under the circumstances.

Revenues from our construction services are performed under ﬁxed-price, time-and-equipment,

time-and-materials, unit-price, and cost-plus fee contracts. For ﬁxed-price contracts, we use the ratio of cost
incurred to date on the contract (excluding uninstalled direct materials) to management’s estimate of the
contract’s total cost, to determine the percentage of completion on each contract. This method is used as
management considers expended costs to be the best available measure of progression of these contracts.
Contract cost includes all direct costs on contracts, including labor and material, subcontractor costs and those
indirect costs related to contract performance, such as supplies, fuel, tool repairs and depreciation. We
recognize revenues from construction services with fees based on time-and-materials, unit prices, or cost-plus
fee as the services are performed and amounts are earned. If contracts include contract incentive or bonus
provisions, they are included in estimated contract revenues only when the achievement of such incentive or
bonus is reasonably certain.

Contract costs incurred to date and expected total contract costs are continuously monitored during the
term of the contract. Changes in job performance, job conditions and ﬁnal contract settlements are factors that
inﬂuence management’s assessment of total contract value and the total estimated costs to complete those
contracts and therefore, our proﬁt recognition. These changes, which include contracts with estimated costs in
excess of estimated revenues, are recognized in contract costs in the period in which the revisions are
determined. At the point we anticipate a loss on a contract, we estimate the ultimate loss through completion
and recognize that loss in the period in which the possible loss was identiﬁed.

A change order is a modiﬁcation to a contract that changes the provisions of the contract, typically

recognized when incurred. Revenue from a change order is included in total estimated contract revenue when
it is probable that the change order will result in an addition to contract value and can be reliably estimated.
Revenue from a claim is included in total estimated contract revenues, only to the extent that contract costs
related to the claim have been incurred, when it is probable that the claim will result in an addition to contract
value which can be reliably estimated. No proﬁt is recognized on a claim until ﬁnal settlement occurs.

The accuracy of our revenue and proﬁt recognition in a given period is dependent on the accuracy of our
estimates of the cost to complete each project. Cost estimates for all of our signiﬁcant projects use a detailed
‘‘bottoms up’’ approach and we believe our experience typically allows us to provide materially reliable
estimates. There are a number of factors that can contribute to changes in estimates of contract cost and
proﬁtability. The most signiﬁcant of these include, among others:

•

the completeness and accuracy of the original bid;

costs associated with scope changes, change orders or claims;

costs of labor and/or materials;

extended overhead due to owner, weather and other delays;

subcontractor performance issues;

changes in productivity expectations;

site conditions that differ from those assumed in the original bid (to the extent contract remedies are
unavailable);

the availability and skill level of workers in the geographic location of the project; and

a change in the availability and proximity of equipment and materials.

The foregoing factors as well as the stage of completion of contracts in process and the mix of contracts

at different margins may cause ﬂuctuations in gross proﬁt between periods.

We provide warranties to customers on a basis customary to the industry; however, the warranty period

does not typically exceed one year. Historically, warranty claims have not been material.

Total revenues do not include sales tax as we consider ourselves a pass-through conduit for collecting

and remitting sales taxes.

Insurance. We carry insurance policies, which are subject to certain deductibles, for workers’
compensation, general liability, automobile liability and other coverages. Our deductible for each line of
coverage is up to $1.0 million, except for certain health beneﬁt plans, which are subject to a $0.1 million
deductible for qualiﬁed individuals. Losses up to the deductible amounts are accrued based upon our estimates
of the ultimate liability for claims reported and an estimate of claims incurred but not yet reported.

The insurance and claims accruals are based on known facts, actuarial estimates and historical trends.

While recorded accruals are based on the ultimate liability, which includes amounts in excess of the
deductible, a corresponding receivable for amounts in excess of the deductible is included in current assets in
the consolidated balance sheets.

Stock-Based Compensation. We determine compensation expense for stock-based awards based on their
estimated fair value at the grant date and recognize the related compensation expense over the vesting period
or requisite service period, whichever is shorter. We use the straight-line attribution method to recognize
compensation expense related to stock-based awards that have graded vesting and only service conditions.
This method recognizes stock compensation expense on a straight-line basis over the requisite service period
for the entire award. Stock-based compensation expense is adjusted for changes in estimated and actual
forfeitures. We use historical data to estimate the forfeiture rate that we use; however, these estimates are
subject to change and may impact the value that will ultimately be recognized as stock compensation expense.
We recognize stock-based compensation expense related to performance awards based upon our determination
of the potential achievement of the performance target at each reporting date, net of estimated forfeitures.

Impairment of Goodwill and Intangibles. Goodwill and intangible assets with indeﬁnite lives are not

amortized. Intangible assets with ﬁnite lives are amortized on a straight-line basis over their estimated useful
lives. We review goodwill and intangible assets with indeﬁnite lives for impairment on an annual basis at the
beginning of the fourth quarter, or when circumstances change, such as a signiﬁcant adverse change in the
business climate or the decision to sell a business, both of which would indicate that impairment may have
occurred. We perform a qualitative assessment to determine whether it is necessary to perform a two-step
goodwill impairment test. The qualitative assessment considers ﬁnancial, industry, segment and
macroeconomic factors. If the qualitative assessment indicates a potential for impairment, the two-step method
is used to determine if impairment exists. The two-step method begins with a comparison of the fair value of
the reporting unit with its carrying value. If the carrying amount of the reporting unit exceeds its fair value,
the second step of the process involves a comparison of the implied fair value and carrying value of the
goodwill of that reporting unit. The company also performs a qualitative assessment on intangible assets with
indeﬁnite lives. If the qualitative assessment indicates a potential for impairment, a quantitative impairment
test would be performed to compare the fair value of the indeﬁnite-lived intangible asset with its carrying
value. If the carrying value of goodwill or other indeﬁnite lived assets exceeds its implied fair value, an
impairment charge would be recorded in the statement of operations.

In 2015, we determined, based on our qualitative analysis, that it was appropriate to perform a two-step
analysis. The ﬁrst step involves a comparison of the fair value of the reporting unit with its carrying value. If
the carrying amount of the reporting unit exceeds its fair value, the second step of the process involves a
comparison of the implied fair value and carrying value of the goodwill of that reporting unit. If the carrying
value of goodwill exceeds its implied fair value, an impairment charge is recorded in the statement of
operations. The step one analysis did not indicate that our goodwill or indeﬁnite lived intangible assets were
impaired. As a result, no step two analysis was performed.

As a result of the annual qualitative review process in 2014 and 2013, we determined it was not

necessary to perform a two-step analysis.

Accounts Receivable and Allowance for Doubtful Accounts. We do not generally charge interest to our

customers, and we carry our customer receivables at their face amounts, less an allowance for doubtful
accounts. Included in accounts receivable are balances billed to customers pursuant to retainage provisions in
certain contracts that are due upon completion of the contracts and acceptance by the customer, or earlier, as
provided by the contract. Based on our experience in recent years, the majority of customer balances at each
balance sheet date are collected within twelve months. We grant trade credit, on a non-collateralized basis
(with the exception of lien rights against the property in certain cases) to our customers, and we are subject to
potential credit risk related to changes in business and overall economic activity. We analyze speciﬁc accounts
receivable balances, historical bad debts, customer credit-worthiness, current economic trends and changes in
customer payment terms when evaluating the adequacy of the allowance for doubtful accounts. In the event
that a customer balance is deemed to be uncollectible the account balance is written-off against the allowance
for doubtful accounts.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

As of December 31, 2015, we were not parties to any derivative instruments. We did not use any

material derivative ﬁnancial instruments during the years ended December 31, 2015, 2014 or 2013.

Borrowings under our Facility are based upon an interest rate that will vary depending upon the prime

rate, federal funds rate and LIBOR. If the prime rate, federal funds rate or LIBOR rises, our interest payment
obligations will increase and have a negative effect on our cash ﬂow and ﬁnancial condition. We currently do
not maintain any hedging contracts that would limit our exposure to variable rates of interest. We had no
borrowings outstanding under the Facility as of December 31, 2015. If we had borrowings outstanding under
the Facility as of December 31, 2015, the borrowings would have accrued annual interest at the one-month
LIBOR in effect at each month end plus a spread of 1.00%, based upon our current Leverage Ratio, as
deﬁned in the Credit Agreement.

Item 8.

Financial Statements and Supplementary Data

INDEX TO FINANCIAL STATEMENTS

Report of Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Reports of Independent Registered Public Accounting Firm . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Consolidated Balance Sheets as of December 31, 2015 and 2014 . . . . . . . . . . . . . . . . . . . . . . . .

Consolidated Statements of Operations and Comprehensive Income for the years ended

December 31, 2015, 2014 and 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2015, 2014

and 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Consolidated Statements of Cash Flows for the years ended December 31, 2015, 2014 and 2013 . . .

Notes to Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Management’s Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over ﬁnancial

reporting as deﬁned in Rule 13a-15(f) under the Exchange Act. Our internal control over ﬁnancial reporting is
a process designed to provide reasonable assurance regarding the reliability of ﬁnancial reporting and the
preparation of our Financial Statements for external purposes in accordance with U.S. GAAP. Internal control
over ﬁnancial reporting includes those policies and procedures that (i) pertain to the maintenance of records
that in reasonable detail accurately and fairly reﬂect the transactions and dispositions of the assets of the
company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of
ﬁnancial statements in accordance with U.S. GAAP, and that receipts and expenditures of the company are
being made only in accordance with authorizations of management and directors of the company; and
(iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or
disposition of the company’s assets that could have a material effect on the ﬁnancial statements.

Under the supervision and with the participation of our management, including our Chief Executive
Officer and Chief Financial Officer, we have conducted an evaluation of the effectiveness of our internal
control over ﬁnancial reporting based upon the criteria established in Internal Control — Integrated
Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013
framework). Based on this evaluation, our management has concluded that our internal control over ﬁnancial
reporting was effective as of December 31, 2015 to provide reasonable assurance regarding the reliability of
ﬁnancial reporting and the preparation of ﬁnancial statements for external reporting purposes in accordance
with U.S. GAAP.

Because of its inherent limitations, a system of internal control over ﬁnancial reporting can provide only

reasonable assurances and may not prevent or detect misstatements. Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become inadequate because of changes
in conditions, or that the degree of compliance with policies and procedures may deteriorate.

Ernst & Young LLP, an independent registered public accounting ﬁrm, who audited and reported on the

Financial Statements included in this report on Form 10-K, has audited the effectiveness of MYR Group’s
internal control over ﬁnancial reporting as of December 31, 2015 as stated in their report which appears
herein.

March 3, 2016

Report of Independent Registered Public Accounting Firm

To Board of Directors and Stockholders of
MYR Group Inc.

We have audited the accompanying consolidated balance sheets of MYR Group Inc. as of December 31,

2015 and 2014, and the related consolidated statements of operations and comprehensive income,
stockholders’ equity and cash ﬂows for each of the three years in the period ended December 31, 2015. These
financial statements are the responsibility of the Company’s management. Our responsibility is to express an
opinion on these ﬁnancial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight

Board (United States). Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in the Financial Statements. An
audit also includes assessing the accounting principles used and signiﬁcant estimates made by management, as
well as evaluating the overall ﬁnancial statement presentation. We believe that our audits provide a reasonable
basis for our opinion.

In our opinion, the ﬁnancial statements referred to above present fairly, in all material respects, the

consolidated ﬁnancial position of MYR Group Inc. at December 31, 2015 and 2014, and the consolidated
results of its operations and its cash ﬂows for each of the three years in the period ended December 31, 2015,
in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight

Board (United States), MYR Group Inc.’s internal control over ﬁnancial reporting as of December 31, 2015,
based on criteria established in Internal Control — Integrated Framework issued by the Committee of
Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated March 3,
2016 expressed an unqualiﬁed opinion thereon.

/s/ Ernst & Young LLP

Chicago, Illinois
March 3, 2016

Report of Independent Registered Public Accounting Firm

To Board of Directors and Stockholders of
MYR Group Inc.

We have audited MYR Group Inc.’s internal control over ﬁnancial reporting as of December 31, 2015,

based on criteria established in Internal Control — Integrated Framework issued by the Committee of
Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). MYR Group
Inc.’s management is responsible for maintaining effective internal control over ﬁnancial reporting, and for its
assessment of the effectiveness of internal control over ﬁnancial reporting included in the accompanying
Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an
opinion on the Company’s internal control over ﬁnancial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight

Board (United States). Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether effective internal control over ﬁnancial reporting was maintained in all material
respects. Our audit included obtaining an understanding of internal control over ﬁnancial reporting, assessing
the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of
internal control based on the assessed risk, and performing such other procedures as we considered necessary
in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over ﬁnancial reporting is a process designed to provide reasonable

assurance regarding the reliability of ﬁnancial reporting and the preparation of Financial Statements for
external purposes in accordance with generally accepted accounting principles. A company’s internal control
over ﬁnancial reporting includes those policies and procedures that (1) pertain to the maintenance of records
that, in reasonable detail, accurately and fairly reﬂect the transactions and dispositions of the assets of the
company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of
ﬁnancial statements in accordance with generally accepted accounting principles, and that receipts and
expenditures of the company are being made only in accordance with authorizations of management and
directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the
ﬁnancial statements.

Because of its inherent limitations, internal control over ﬁnancial reporting may not prevent or detect
misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that
controls may become inadequate because of changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate.

In our opinion, MYR Group Inc. maintained, in all material respects, effective internal control over

ﬁnancial reporting as of December 31, 2015, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight

Board (United States), the consolidated balance sheets of MYR Group Inc. as of December 31, 2015 and
2014, and the related consolidated statements of operations and comprehensive income, stockholders’ equity,
and cash ﬂows for each of the three years in the period ended December 31, 2015 of MYR Group Inc. and
our report dated March 3, 2016 expressed an unqualiﬁed opinion thereon.

/s/ Ernst & Young LLP

Chicago, Illinois
March 3, 2016

MYR GROUP INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share data)

ASSETS

Current assets

December 31,

2015

2014

Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accounts receivable, net of allowances of $376 and $1,179, respectively . . . .
Costs and estimated earnings in excess of billings on uncompleted contracts . .
Deferred income tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Receivable for insurance claims in excess of deductibles . . . . . . . . . . . . . . .
Refundable income taxes
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 39,797
187,235
51,486
—
11,290
5,617
7,942
303,367

$ 77,636
158,101
44,609
11,905
12,311
2,059
6,880
313,501

Property and equipment, net of accumulated depreciation of $181,575 and

$147,956, respectively . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Goodwill
Intangible assets, net of accumulated amortization of $3,798 and $3,227,

160,678
47,124

148,654
46,599

respectively . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

11,362
2,394
$524,925

9,865
1,467
$520,086

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accounts payable
Billings in excess of costs and estimated earnings on uncompleted contracts . .
Accrued self insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total current liabilities
Deferred income tax liabilities
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 73,300
40,614
36,967
28,856
179,737
14,382
926
195,045

$ 62,247
38,121
39,480
31,740
171,588
24,729
1,216
197,533

Commitments and contingencies
Stockholders’ equity

Preferred stock − $0.01 par value per share; 4,000,000 authorized shares; none
issued and outstanding at December 31, 2015 and December 31, 2014 . . . .

Common stock − $0.01 par value per share; 100,000,000 authorized shares;

19,969,347 and 20,791,623 shares issued and outstanding at December 31,
2015 and December 31, 2014, respectively . . . . . . . . . . . . . . . . . . . . . . . .
Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accumulated other comprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . .
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total stockholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total liabilities and stockholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . .

—

198
161,342
116
168,224
329,880
$524,925

206
151,111
13
171,223
322,553
$520,086

The accompanying notes are an integral part of these Financial Statements.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

MYR GROUP INC.

Gross proﬁt

(in thousands, except per share data)
Contract revenues
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Contract costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Selling, general and administrative expenses
. . . . . . . . . . . . . .
Amortization of intangible assets . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . .
Gain on sale of property and equipment
Income from operations . . . . . . . . . . . . . . . . . . . . . . . . .

Other income (expense):

Interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other, net
Income before provision for income taxes . . . . . . . . . . . . .
Income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Income per common share:

− Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
− Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Weighted average number of common shares and potential

common shares outstanding:
− Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
− Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2015
$1,061,681
939,340
122,341
79,186
571
(2,257)
44,841

Year ended December 31,
2014
$943,967
811,553
132,414
73,818
334
(142)
58,404

2013
$902,729
777,852
124,877
69,818
335
(893)
55,617

25
(741)
174
44,299
16,997
27,302

106
(722)
162
57,950
21,406
$ 36,544

9
(727)
(27)
54,872
20,113
$ 34,759

1.33
1.30

$
$

1.73
1.69

$
$

1.65
1.61

$
$

20,577
21,038

20,922
21,466

20,821
21,431

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

27,302

$ 36,544

$ 34,759

Other comprehensive income:

Foreign currency translation adjustment . . . . . . . . . . . . . . . .
Other comprehensive income . . . . . . . . . . . . . . . . . . . . . . . . .
Total comprehensive income . . . . . . . . . . . . . . . . . . . . . . . . .

103
103
27,405

13
13
$ 36,557

—
—
$ 34,759

The accompanying notes are an integral part of these Financial Statements.

MYR GROUP INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

Preferred
Stock

Common Stock

Amount

Additional
Paid-In
Capital

Accumulated
Other
Comprehensive
Income

Retained
Earnings

Total

$— 20,747
—

$206
—

$154,564
—

$ —
—

$ 99,920
34,759

$254,690
34,759

(in thousands)
Balance at December 31,

2012 . . . . . . . . . . . . . . .

Net income
Stock issued under

. . . . . . . . . . . . —

compensation plans, net
Tax beneﬁt from stock-based

. . —

awards . . . . . . . . . . . . . . —

Stock-based compensation

expense . . . . . . . . . . . . . —
Shares repurchased . . . . . . . —
Stock issued − other . . . . . . . —
Balance at December 31,

494

—

—
(21)
3

2013 . . . . . . . . . . . . . . .

— 21,223

Net income
Stock issued under

. . . . . . . . . . . . —

compensation plans, net
Tax beneﬁt from stock-based

. . —

awards . . . . . . . . . . . . . . —

Stock-based compensation

expense . . . . . . . . . . . . . —
Shares repurchased . . . . . . . —
Other comprehensive

income . . . . . . . . . . . . . . —
Stock issued − other . . . . . . . —
Balance at December 31,

—

253

—

—
(686)

—
2

2014 . . . . . . . . . . . . . . .

— 20,792

—

413

—

Net income
Stock issued under

. . . . . . . . . . . . —

compensation plans, net
Tax beneﬁt from stock-based

. . —

awards . . . . . . . . . . . . . . —

Stock-based compensation

expense . . . . . . . . . . . . . —
Shares repurchased . . . . . . . —
Other comprehensive

income . . . . . . . . . . . . . . —

Reclassiﬁcation of shares

repurchased . . . . . . . . . . . —
Stock issued − other . . . . . . . —
Balance at December 31,

—

—
—
—

210

—

—
(7)

—
—

206

—

2,300

1,305

3,519
(542)
56

161,202

—

1,061

592

4,671
(16,440)

(13)
38

151,111

—

1,919

1,612

—

—
—
—

—

—
—

13
—

—

—
—

—

—
—
—

2,304

1,305

3,519
(542)
56

134,679

296,091

36,544

—

1,064

592

4,671
—
— (16,447)

—
—

—
38

171,223

322,553

27,302

—

1,923

1,612

—
(16,336)

4,837
(28,478)

—
(1,236)

—
(12)

4,837
(12,130)

—

—
—

—

—
—

—

103

—

13,965
28

—
—

(13,965)
—

103

—
28

2015 . . . . . . . . . . . . . . .

$— 19,969

$198

$161,342

$116

$168,224

$329,880

The accompanying notes are an integral part of these Financial Statements.

MYR GROUP INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)
Cash ﬂows from operating activities:

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjustments to reconcile net income to net cash ﬂows provided by

operating activities −
Depreciation and amortization of property and equipment . . . . .
. . . . . . . . . . . . . . . . . . . . .
Amortization of intangible assets
Stock-based compensation expense . . . . . . . . . . . . . . . . . . . .
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gain on sale of property and equipment . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other non-cash items

Changes in operating assets and liabilities, net of acquisitions

Accounts receivable, net
Costs and estimated earnings in excess of billings on

. . . . . . . . . . . . . . . . . . . . . . . . .

uncompleted contracts

. . . . . . . . . . . . . . . . . . . . . . . . .
Receivable for insurance claims in excess of deductibles . . . .
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Billings in excess of costs and estimated earnings on

uncompleted contracts

. . . . . . . . . . . . . . . . . . . . . . . . .
Accrued self insurance . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . .

Net cash ﬂows provided by operating activities

Cash ﬂows from investing activities:

Proceeds from sale of property and equipment
. . . . . . . . . . . . . .
Cash paid for acquisitions, net of cash acquired . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . .
Purchases of property and equipment
Net cash ﬂows used in investing activities . . . . . . . . . . . .

Cash ﬂows from ﬁnancing activities:

Proceeds from exercise of stock options . . . . . . . . . . . . . . . . . .
Excess tax beneﬁt from stock-based awards . . . . . . . . . . . . . . . .
Repurchase of common shares . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other ﬁnancing activities
Net cash ﬂows provided by (used in) ﬁnancing activities . .
. . . . . . . . . . .

Net increase (decrease) in cash and cash equivalents

Cash and cash equivalents:
Beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
End of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Supplemental Cash Flow Information:
Cash paid during the period for:

Year ended December 31,
2014

2013

2015

$ 27,302

$ 36,544

$ 34,759

37,458
571
4,837
1,558
(2,257)
200

33,089
334
4,671
3,655
(142)
139

28,860
335
3,519
381
(893)
151

(17,765)

15,706

(6,227)

(4,597)
1,021
(5,634)
6,742

1,003
(2,616)
(4,823)
43,000

2,758
(13,087)
(46,599)
(56,928)

1,923
1,720
(27,582)
28
(23,911)
(37,839)

(4,090)
(922)
(1,255)
(17,303)

(14,831)
369
(988)
54,976

320
—
(39,045)
(38,725)

725
615
(16,447)
38
(15,069)
1,182

21,254
(10)
(2,138)
(5,289)

20,363
(472)
469
95,062

1,151
—
(42,725)
(41,574)

2,304
1,323
(542)
56
3,141
56,629

77,636
$ 39,797

76,454
$ 77,636

19,825
$ 76,454

Income taxes payments . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 16,960
591

$ 17,403
577

$ 18,115
571

Noncash investing activities:

Acquisition of property and equipment for which payment is

pending . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,328

Noncash ﬁnancing activities:

Share repurchases that have not settled . . . . . . . . . . . . . . . . .

896

749

—

804

—

The accompanying notes are an integral part of these Financial Statements.

MYR GROUP INC.

NOTES TO FINANCIAL STATEMENTS

1. Organization, Business and Signiﬁcant Accounting Policies

Organization and Business

MYR Group Inc. (the ‘‘Company’’) is a holding company of specialty electrical construction service

providers and is currently conducting operations through wholly-owned subsidiaries including: The
L. E. Myers Co., a Delaware corporation; Harlan Electric Company, a Michigan corporation; Great
Southwestern Construction, Inc., a Colorado corporation; Sturgeon Electric Company, Inc., a Michigan
corporation; MYR Transmission Services, Inc., a Delaware corporation; E.S. Boulos Company, a Delaware
corporation; High Country Line Construction, Inc., a Nevada corporation; MYR Group Construction Canada,
Ltd., a British Columbia corporation; MYR Transmission Services Canada, Ltd., a British Columbia
corporation; and Northern Transmission Services, Ltd., a British Columbia corporation.

The Company performs construction services in two business segments: Transmission and Distribution

(‘‘T&D’’), and Commercial and Industrial (‘‘C&I’’). T&D customers include investor-owned utilities,
cooperatives, private developers government-funded utilities, independent power producers, independent
transmission companies, industrial facility owners and other contractors. The Company provides a broad range
of services, which include design, engineering, procurement, construction, upgrade, maintenance and repair
services, with a particular focus on construction, maintenance and repair. The Company also provides C&I
electrical contracting services to general contractors, commercial and industrial facility owners, local
governments and developers in the western and northeastern United States.

Signiﬁcant Accounting Policies

Consolidation

The accompanying Financial Statements include the results of operations of the Company and its

subsidiaries. Signiﬁcant intercompany transactions and balances have been eliminated.

Reclassiﬁcation

A reclassiﬁcation was made in the current year presentation of the consolidated balance sheets and

consolidated statements of stockholder’s equity. The Company adjusted the classiﬁcation of the impact of
shares repurchased, which had previously been recorded as a deduction to additional paid-in capital, to a
deduction allocated between additional paid-in capital and retained earnings. As a result of this reclassiﬁcation,
retained earnings were reduced by $14.0 million and additional paid-in capital was increased by the same
amount. Additionally, comprehensive income associated with the start-up of the Company’s Canadian
operations, which was included in additional paid-in capital in the December 31, 2014 balance sheet, was
reclassiﬁed to accumulated other comprehensive income.

Revenue Recognition

Revenues under long-term contracts are accounted for under the percentage-of-completion method of

accounting. Under the percentage-of-completion method, the Company estimates proﬁt as the difference
between total estimated revenue and total estimated cost of a contract and recognizes that proﬁt over the
contract term based on either input (e.g., costs incurred under the cost-to-cost method) or output (e.g., units
delivered under the units-of-delivery method), as appropriate under the circumstances.

Revenues from the Company’s construction services are performed under ﬁxed-price,

time-and-equipment, time-and-materials, unit-price, and cost-plus fee contracts. For ﬁxed-price contracts, the
Company uses the ratio of cost incurred to date on the contract (excluding uninstalled direct materials) to
management’s estimate of the contract’s total cost, to determine the percentage of completion on each
contract. This method is used as management considers expended costs to be the best available measure of
progression of these contracts. Contract cost includes all direct costs on contracts, including labor and
material, subcontractor costs and those indirect costs related to contract performance, such as supplies, fuel,
tool repairs and depreciation. The Company recognizes revenues from construction services with fees based
on time-and-materials, unit prices, or cost-plus fee as the services are performed and amounts are earned.

MYR GROUP INC.

NOTES TO FINANCIAL STATEMENTS

1. Organization, Business and Signiﬁcant Accounting Policies − (continued)

Contract costs incurred to date and expected total contract costs are continuously monitored during the
term of the contract. Changes in job performance, job conditions and ﬁnal contract settlements are factors that
inﬂuence management’s assessment of total contract value and the total estimated costs to complete those
contracts and therefore, the Company’s proﬁt recognition. These changes, which include contracts with
estimated costs in excess of estimated revenues, are recognized in contract costs in the period in which the
revisions are determined. At the point the Company anticipates a loss on a contract, the Company estimates
the ultimate loss through completion and recognizes that loss in the period in which the possible loss was
identiﬁed. If contracts include contract incentive or bonus provisions, they are included in estimated contract
revenues only when the achievement of such incentive or bonus is reasonably certain.

A change order is a modiﬁcation to a contract that changes the provisions of the contract, typically

resulting from changes in scope, speciﬁcations, design, manner of performance, facilities, equipment,
materials, sites, or period of completion of the work under the contract. A claim is an amount in excess of the
agreed-upon contract price that the Company seeks to collect from its clients or others for client-caused
delays, errors in speciﬁcations and designs, contract terminations, change orders that are either in dispute or
are unapproved as to both scope and price, or other causes. Costs related to change orders and claims are
recognized when incurred. Revenue from a change order is included in total estimated contract revenue when
it is probable that the change order will result in an addition to contract value and can be reliably estimated.
Revenue from a claim is included in total estimated contract revenues, only to the extent that contract costs
related to the claim have been incurred, when it is probable that the claim will result in an addition to contract
value which can be reliably estimated. No proﬁt is recognized on a claim until ﬁnal settlement occurs.

The Company provides warranties to customers on a basis customary to the industry; however, the
warranty period does not typically exceed one year. Historically, warranty claims have not been material to the
Company.

Total revenues do not include sales tax as the Company considers itself a pass-through conduit for
collecting and remitting sales taxes. Sales tax and value added tax collected from customers is included in
other current liabilities on our consolidated balance sheets.

Foreign Currency

The functional currency for the Company’s Canadian operations is the Canadian dollar. Assets and
liabilities denominated in Canadian dollars are translated into U.S. dollars at the end-of-period exchange rate.
Revenues and expenses are translated using average exchange rates for the periods reported. Cumulative
translation adjustments are included as a separate component of accumulated other comprehensive income in
shareholders’ equity. Foreign currency transaction gains and losses, arising primarily from changes in
exchange rates on foreign currency denominated balances, are recorded in the ‘‘other, net’’ line on the
consolidated statements of operations. For the year ended December 31, 2015, the Company recorded
$0.3 million of foreign currency losses.

Use of Estimates

The preparation of ﬁnancial statements in conformity with U.S. GAAP requires management to make

estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the ﬁnancial statements and revenues and expenses during the
period reported. Actual results could differ from those estimates.

The most signiﬁcant estimates are related to estimates of costs to complete on contracts, insurance
reserves, income tax reserves, estimates surrounding stock-based compensation, the recoverability of goodwill
and intangibles and accounts receivable reserves. Actual results could differ from these estimates.

During 2015, 2014 and 2013, the Company revised its cost estimates on several large multi-year

transmission projects, which resulted in the recognition of approximately 0.5%, 1.9% and 0.8% of incremental

MYR GROUP INC.

NOTES TO FINANCIAL STATEMENTS

1. Organization, Business and Signiﬁcant Accounting Policies − (continued)

gross margin, respectively. During 2015, the incremental gross margin resulted in $5.9 million of additional
income from operations, $3.6 million of additional net income, and increased diluted earnings per share by
$0.17. During 2014, the incremental gross margin resulted in $18.4 million of additional income from
operations, $11.6 million of additional net income, and increased diluted earnings per share by $0.54. During
2013, the incremental gross margin resulted in $7.7 million of additional income from operations, $4.9 million
of additional net income, and increased diluted earnings per share by $0.23.

Advertising

Advertising costs are expensed when incurred. Advertising costs, included in selling, general and
administrative expenses, were $0.5 million, $0.4 million and $0.3 million for the years ended December 31,
2015, 2014 and 2013, respectively.

Income Taxes

The Company follows the liability method of accounting for income taxes. Under this method, deferred

tax assets and liabilities are recorded for future tax consequences of temporary differences between the
ﬁnancial reporting and tax basis of assets and liabilities, and are measured using the enacted tax rates and
laws that are expected to be in effect when the underlying assets or liabilities are recovered or settled.

Interest and penalties related to uncertain income tax positions are included in income tax expense in the

accompanying consolidated statements of operations. Interest and penalties actually incurred are charged to
interest expense and the ‘‘other, net’’ line, respectively.

Stock-Based Compensation

The Company determines compensation expense for stock-based awards based on their estimated fair

value at the grant date and recognizes the related compensation expense over the vesting period or requisite
service period, whichever is shorter. The Company uses the straight-line attribution method to recognize
compensation expense related to stock-based awards that have graded vesting and only service conditions.
This method recognizes stock compensation expense on a straight-line basis over the requisite service period
for the entire award. Stock-based compensation expense is adjusted for changes in estimated and actual
forfeitures. The Company uses historical data to estimate the forfeiture rate that it uses; however, these
estimates are subject to change and may impact the value that will ultimately be recognized as stock
compensation expense. The Company recognizes stock-based compensation expense related to market-based
performance awards based on the grant date fair value, which is computed using a Monte Carlo simulation,
net of forfeitures. The Company recognizes stock-based compensation expense related to non-market-based
performance awards according to its determination of the potential achievement of the performance target at
each reporting date, net of estimated forfeitures.

Earnings Per Share

The Company computes earnings per share using the treasury stock method unless the two-class method
is more dilutive. The Company computed earnings per share for the year ended December 31, 2015 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.

MYR GROUP INC.

NOTES TO FINANCIAL STATEMENTS

1. Organization, Business and Signiﬁcant Accounting Policies − (continued)

participating securities according to dividends declared and participation rights in undistributed earnings.
Under the two-class method, the Company’s unvested grants of restricted stock that contained non-forfeitable
rights to dividends were treated as participating securities and were excluded from the computation of basic
and diluted earnings per share. All shares of restricted stock granted since 2013 are not participating because
the grant agreements contain provisions that dividends, if declared, will be forfeited if the grantee leaves the
Company before the stock is vested.

Cash Equivalents

The Company considers all highly liquid investments purchased with an original maturity of three months

or less to be cash equivalents. As of December 31, 2015 and 2014, the Company held its cash in checking
accounts or in highly liquid money market funds.

Accounts Receivable and Allowance for Doubtful Accounts

The Company does not charge interest to its customers and carries its customer receivables at their face

amounts, less an allowance for doubtful accounts. Included in accounts receivable are balances billed to
customers pursuant to retainage provisions in certain contracts that are due upon completion of the contract
and acceptance by the customer, or earlier as provided by the contract. Based on the Company’s experience in
recent years, the majority of customer balances at each balance sheet date are collected within twelve months.
As is common practice in the industry, the Company classiﬁes all accounts receivable, including retainage, as
current assets. The contracting cycle for certain long-term contracts may extend beyond one year, and
accordingly, collection of retainage on those contracts may extend beyond one year. The Company estimates
that approximately 90% of retainage recorded at December 31, 2015 will be collected within one year.

The Company grants trade credit, on a non-collateralized basis (with the exception of lien rights against

the property in certain cases), to its customers and is subject to potential credit risk related to changes in
business and overall economic activity. The Company analyzes speciﬁc accounts receivable balances,
historical bad debts, customer credit-worthiness, current economic trends and changes in customer payment
terms when evaluating the adequacy of the allowance for doubtful accounts. In the event that a customer
balance is deemed to be uncollectible, the account balance is written-off against the allowance for doubtful
accounts.

Classiﬁcation of Construction Contract-related Assets and Liabilities

Costs and estimated earnings in excess of billings on uncompleted contracts are presented as a current

asset in the accompanying consolidated balance sheets, and billings in excess of costs and estimated earnings
on uncompleted contracts are presented as a current liability in the accompanying consolidated balance sheets.
The Company’s contracts vary in duration, with the duration of some larger contracts exceeding one year.
Consistent with industry practices, the Company includes the amounts realizable and payable under contracts,
which may extend beyond one year, in current assets and current liabilities. These balances are generally
settled within one year.

Construction Materials Inventory

When required, the Company provides construction materials for projects. Construction materials which

have not yet been installed are included in construction materials inventory. Construction materials inventories
are stated at the lower of cost or market, as determined by the speciﬁc identiﬁcation method. As of
December 31, 2015 and 2014, the Company did not carry any construction materials inventory.

Property and Equipment

Property and equipment is carried at cost. Depreciation is computed using the straight-line method over

estimated useful lives. Major modiﬁcations or refurbishments which extend the useful life of the assets are
capitalized and depreciated over the adjusted remaining useful life of the assets. Upon retirement or

MYR GROUP INC.

NOTES TO FINANCIAL STATEMENTS

1. Organization, Business and Signiﬁcant Accounting Policies − (continued)

disposition of property and equipment, the cost and related accumulated depreciation are removed and any
resulting gain or loss is recognized into income from operations. The cost of maintenance and repairs is
charged to expense as incurred. Additional ﬁnancial information related to our property and equipment is
provided in Note 6 to the Financial Statements.

The Company leases certain real estate, construction equipment and office equipment. Real estate is
generally leased for terms up to ten years in duration. No new construction equipment leases have been
entered into since 2010, although the Company continues to rent some equipment under short-term, cancelable
agreements. The terms and conditions of leases, if material, are reviewed at inception to determine the
classiﬁcation (operating or capital) of the lease. Nonperformance-related default covenants, cross-default
provisions, subjective default provisions and material adverse change clauses contained in material lease
agreements, if any, are also evaluated to determine whether those clauses affect lease classiﬁcation in
accordance with Accounting Standards Codiﬁcation (‘‘ASC’’) Topic 840-10-25.

Insurance

The Company carries insurance policies, which are subject to certain deductibles, for workers’
compensation, general liability, automobile liability and other coverages. The deductible for each line of
coverage is up to $1.0 million, except for certain of the Company’s health insurance beneﬁt plans, which are
subject to a $0.1 million deductible for qualiﬁed individuals. Losses up to the deductible amounts are accrued
based upon the Company’s estimates of the ultimate liability for claims reported and an estimate of claims
incurred but not yet reported.

The insurance and claims accruals are based on known facts, actuarial estimates and historical trends.

Goodwill and Intangible Assets

Goodwill and intangible assets with indeﬁnite lives are not amortized. Intangible assets with ﬁnite lives
are amortized on a straight-line basis over their estimated useful lives. The Company reviews goodwill and
intangible assets with indeﬁnite lives for impairment on an annual basis at the beginning of the fourth quarter,
or when circumstances change, such as a signiﬁcant adverse change in the business climate or the decision to
sell a business, both of which would indicate that impairment may have occurred. The Company performs a
qualitative assessment to determine whether it is necessary to perform a two-step goodwill impairment test.
The qualitative assessment considers ﬁnancial, industry, segment and macroeconomic factors. If the qualitative
assessment indicates a potential for impairment, the two-step method is used to determine if impairment
exists. The two-step method begins with a comparison of the fair value of the reporting unit with its carrying
value. If the carrying amount of the reporting unit exceeds its fair value, the second step of the process
involves a comparison of the implied fair value and carrying value of the goodwill of that reporting unit. The
company also performs a qualitative assessment on intangible assets with indeﬁnite lives. If the qualitative
assessment indicates a potential for impairment, a quantitative impairment test would be performed to
compare the fair value of the indeﬁnite-lived intangible asset with its carrying value. If the carrying value of
goodwill or other indeﬁnite-lived assets exceeds its implied fair value, an impairment charge would be
recorded in the statement of operations.

In 2015, the Company determined, based on our qualitative analysis, that it was appropriate to perform a
two-step analysis. The ﬁrst step involves a comparison of the fair value of the reporting unit with its carrying
value. If the carrying amount of the reporting unit exceeds its fair value, the second step of the process
involves a comparison of the implied fair value and carrying value of the goodwill of that reporting unit. If
the carrying value of goodwill exceeds its implied fair value, an impairment charge is recorded in the

MYR GROUP INC.

NOTES TO FINANCIAL STATEMENTS

1. Organization, Business and Signiﬁcant Accounting Policies − (continued)

statement of operations. The step one analysis did not indicate that the Company’s goodwill or indeﬁnite lived
intangible assets were impaired. As a result, no step two analysis was performed.

As a result of the annual qualitative review process in 2014 and 2013, the Company determined it was

not necessary to perform a two-step analysis. Additional ﬁnancial information related to our goodwill and
intangible assets is provided in Note 7 to the Financial Statements.

Concentrations

Financial instruments that potentially subject the Company to a concentration of credit risk consist
principally of cash and cash equivalents and accounts receivable. The Company maintains substantially all of
its cash and cash equivalent balances with large ﬁnancial institutions which are believed to be high quality
institutions.

The Company grants trade credit under normal payment terms, generally without collateral, to its
customers, which include high credit quality electric utilities, governmental entities, general contractors and
builders, owners and managers of commercial and industrial properties. Consequently, the Company is subject
to potential credit risk related to changes in business and economic factors. However, the Company generally
has certain statutory lien rights with respect to services provided. Under certain circumstances such as
foreclosures or negotiated settlements, the Company may take title to the underlying assets in lieu of cash in
settlement of receivables. As of December 31, 2015, one customer individually exceeded 10.0% of
consolidated accounts receivable with an aggregate of approximately 13.0% of the total consolidated accounts
receivable amount (excluding the impact of allowance for doubtful accounts). As of December 31, 2014, one
customer individually exceeded 10.0% of consolidated accounts receivable with an aggregate of approximately
14.2% of the total consolidated accounts receivable amount (excluding the impact of allowance for doubtful
accounts). The Company believes the terms and conditions in its contracts, billing and collection policies are
adequate to minimize the potential credit risk.

The Company is subject to a concentration of risk because it derives a signiﬁcant portion of its revenues

from a few customers. The Company’s top ten customers accounted for approximately 44.6%, 46.5% and
57.8% of consolidated revenues for the years ended December 31, 2015, 2014 and 2013, respectively. For
the years ended December 31, 2015, 2014 and 2013, no single customer accounted for more than 10.0% of
annual revenues.

As of December 31, 2015, approximately 91% of the Company’s craft labor employees were covered by

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

Recent Accounting Pronouncements

Changes to U.S. GAAP are typically established by the Financial Accounting Standards Board (‘‘FASB’’)

in the form of accounting standards updates (‘‘ASUs’’) to the FASB’s Accounting Standards Codiﬁcation
(‘‘ASC’’). The Company considers the applicability and impact of all ASUs. The Company, based on its
assessment, determined that any recently issued or proposed ASUs not listed below are either not applicable to
the Company or have minimal impact on its Financial Statements.

Recently Issued Accounting Pronouncements

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). The amendments under this

pronouncement will change the way all leases with a duration of one year of more are treated. Under this
guidance, lessees will be required to recognize virtually all leases on the balance sheet as a right-of-use asset
and an associated ﬁnancing lease liability or capital lease liability. The right-of-use asset represents the
lessee’s right to use, or control the use of, a speciﬁed asset for the speciﬁed lease term. The lease liability
represents the lessee’s obligation to make lease payments arising from the lease, measured on a discounted

MYR GROUP INC.

NOTES TO FINANCIAL STATEMENTS

1. Organization, Business and Signiﬁcant Accounting Policies − (continued)

basis. Based on certain characteristics, leases are classiﬁed as ﬁnancing leases or operating leases. Financing
lease liabilities, those that contain provisions similar to capitalized leases, are amortized like capital leases are
under current accounting, as amortization expense and interest expense in the statement of operations.
Operating lease liabilities are amortized on a straight-line basis over the life of the lease as lease expense in
the statement of operations. This update is effective for annual reporting periods, and interim periods within
those reporting periods, beginning after December 15, 2018. The Company is evaluating the impact this
pronouncement will have on its policies and procedures pertaining to its existing and future lease
arrangements, disclosure requirements and on the Company’s Financial Statements.

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606).

The amendments under this pronouncement may change how an entity recognizes revenue from contracts
it enters to transfer goods, services or nonﬁnancial assets to its customers. These changes created a
comprehensive framework for all entities in all industries to apply in the determination of when to recognize
revenue, and, therefore, supersede virtually all existing revenue recognition requirements and guidance. This
framework is expected to result in less complex guidance in application while providing a consistent and
comparable methodology for revenue recognition. The core principle of the guidance is that an entity should
recognize revenue to depict the transfer of promised goods or services to customers in an amount that reﬂects
the consideration to which the entity expects to be entitled in exchange for those goods or services. To
achieve that core principle, an entity should apply the following steps: Step 1: Identify the contract(s) with the
customer; Step 2: Identify the performance obligations in the contract; Step 3: Determine the transaction price;
Step 4: Allocate the transaction price to the performance obligations in the contract; Step 5: Recognize
revenue when, or as, the entity satisﬁes the performance obligations. In addition, the amendments require
expanded disclosure to enable the users of the ﬁnancial statements to understand the nature, timing and
uncertainty of revenue and cash ﬂow arising from contracts with customers. The update is effective for annual
reporting periods, and interim periods within those reporting periods, beginning after December 15, 2016.
On August 16, 2015, the FASB deferred the effective date by one year to December 15, 2017 for annual
reporting periods beginning after that date, permitting early adoption of the standard, but not before the
original effective date of December 15, 2016. The Company is evaluating the impact of this pronouncement
on its policies and procedures pertaining to recognition of revenue from contracts with customers, the
pronouncement’s expanded disclosure requirements and the impact on the Company’s Financial Statements.

Recently Adopted Accounting Pronouncements

In November 2015, the FASB issued ASU 2015-17 Income Taxes (Topic 740): Balance Sheet

Classiﬁcation of Deferred Taxes. The amendments in ASU 2015-17 simplify the accounting for, and
presentation of, deferred taxes by eliminating the need to separately classify the current amount of deferred
tax assets or liabilities. Instead, aggregated deferred tax assets and liabilities are classiﬁed and reported as
non-current assets or liabilities. The update is effective for annual reporting periods, and interim periods
within those reporting periods, beginning after December 15, 2016. Early adoption is permitted for ﬁnancial
statements that have not been issued. The Company elected to prospectively adopt ASU 2015-17 on
December 31, 2015 and reclassiﬁed all deferred tax assets in current assets to deferred income tax liabilities.
The adoption of ASU 2015-17 did not have a signiﬁcant impact on the Company’s Financial Statements.

In September 2015, the FASB issued ASU 2015-16 Business Combinations (Topic 805): Simplifying the
Accounting for Measurement-Period Adjustments. The amendments in ASU 2015-16 simplify the accounting
for adjustments to provisional amounts by eliminating the requirements to record those adjustments
retrospectively. The update is effective for annual reporting periods, and interim periods within those reporting
periods, beginning after December 15, 2015. Early adoption is permitted for ﬁnancial statements that have not
been issued. The Company elected to adopt ASU 2015-16 in September 2015, which did not have a
signiﬁcant impact on the Company’s Financial Statements.

MYR GROUP INC.

NOTES TO FINANCIAL STATEMENTS

1. Organization, Business and Signiﬁcant Accounting Policies − (continued)

In February 2013, the FASB issued ASU No. 2013-04, Liabilities (Topic 405): Obligations Resulting
from Joint and Several Liability Arrangements for Which the Total Amount of the Obligation Is Fixed at the
Reporting Date. This update requires an entity to measure obligations resulting from joint and several liability
arrangements for which the total amount of the obligation within the scope of this guidance is ﬁxed at the
reporting date, as the sum of the amount the reporting entity agreed to pay on the basis of its arrangement
among its co-obligors and any additional amount the reporting entity expects to pay on behalf of its
co-obligors. Obligations within the scope of this update include debt arrangements, other contractual
obligations and settled litigation and judicial rulings. The Company adopted this ASU in January 2014 and
there was no impact on its Financial Statements.

2. Acquisitions

E.S. Boulos Company

On April 13, 2015, the Company acquired substantially all of the assets of E.S. Boulos Company
(‘‘ESB’’), one of New England’s largest and most experienced electrical contractors with over 95 years in
operation, from a subsidiary of Eversource Energy. The total consideration paid was approximately
$11.4 million, subject to working capital adjustments, which was funded through existing cash resources of
the Company. Headquartered in Westbrook, Maine, ESB offers construction capabilities under the Company’s
T&D segment, including substation, transmission and distribution construction. ESB also provides commercial
and industrial electrical construction under its C&I segment, including a wide range of commercial electrical
construction services.

The results of operations for ESB are included in the Company’s consolidated statement of operations

and the T&D and C&I segments from the date of acquisition. Costs of approximately $0.4 million related to
the acquisition were included in selling, general and administrative expenses in the consolidated statement
of operations. The purchase accounting for ESB was complete as of December 31, 2015. The following
table summarizes the allocation of the opening balance sheet from the date of acquisition through
December 31, 2015:

(in thousands)
Total consideration . . . . . . . . . . . . . . . . . . . . . . . .

Accounts receivable . . . . . . . . . . . . . . . . . . . . . . .
Costs and estimated earnings in excess of billings on

uncompleted contracts . . . . . . . . . . . . . . . . . . . .
Other current assets . . . . . . . . . . . . . . . . . . . . . . . .
Property and equipment . . . . . . . . . . . . . . . . . . . . .
Intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . .
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . .
Billings in excess of costs and estimated earnings on

uncompleted contracts . . . . . . . . . . . . . . . . . . . .
Other current liabilities . . . . . . . . . . . . . . . . . . . . .
Net identiﬁable assets . . . . . . . . . . . . . . . . . . . . . .
Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(as of
acquisition date)
April 13, 2015
$11,374

Measurement
Period
Adjustments
$ —

(adjusted
acquisition
amounts as of)
December 31, 2015
$11,374

$10,662

$ —

$10,662

2,102
59
1,778
—
(3,621)

(1,490)
(437)
9,053
$ 2,321

—
—
253
2,068
—

—
—
2,321
$(2,321)

2,102
59
2,031
2,068
(3,621)

(1,490)
(437)
11,374
$ —

MYR GROUP INC.

NOTES TO FINANCIAL STATEMENTS

2. Acquisitions − (continued)

The following table summarizes the estimated fair values of identiﬁable intangible assets (level 3
valuations) and the related weighted average amortization periods by type as of the respective acquisition
dates for the 2015 acquisitions.

(in thousands)

Customer relationships . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Backlog . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trade names . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total intangible assets

High Country Line Construction, Inc.

Estimated
Fair Value at
Acquisition Date
(in thousands)
$1,129
244
695
$2,068

Weighted Average
Amortization
Period at
Acquisition Date
(in years)
12.7
1.0
15.0

On November 24, 2015, the Company acquired all of the outstanding common stock of High Country
Line Construction, Inc. (HCL). The acquisition of HCL expands the Company’s T&D construction services,
predominantly in the western United States. The preliminary acquisition date fair value of consideration
transferred was $1.7 million, net of cash acquired, of which $0.5 million was preliminarily allocated to
goodwill. The Company’s process of valuing the acquired assets and liabilities is in its preliminary stages.
Costs of approximately $0.2 million related to the acquisition were included in selling, general and
administrative expenses in the consolidated statement of operations.

3. Fair Value Measurements

The Company uses the three-tier hierarchy of fair value measurement, which prioritizes the inputs used in

measuring fair value based upon their degree of availability in external active markets. These tiers include:
Level 1 (the highest priority), deﬁned as observable inputs, such as quoted prices in active markets; Level 2,
deﬁned as inputs other than quoted prices in active markets that are either directly or indirectly observable;
and Level 3 (the lowest priority), deﬁned as unobservable inputs in which little or no market data exists,
therefore requiring an entity to develop its own assumptions.

As of December 31, 2015 and 2014, the Company determined that the carrying value of cash and cash

equivalents approximated fair value based on Level 1 inputs.

4. Accounts Receivable

Accounts receivable consisted of the following at December 31:

(in thousands)
Contract receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Contract retainages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other

Less: Allowance for doubtful accounts . . . . . . . . . . . . . . . . . . . . . .

2015
$159,794
27,474
343
187,611
(376)
$187,235

2014
$120,295
38,379
606
159,280
(1,179)
$158,101

MYR GROUP INC.

NOTES TO FINANCIAL STATEMENTS

4. Accounts Receivable − (continued)

The roll-forward of activity in the allowance for doubtful accounts was as follows for the years ended

December 31:

(in thousands)
Balance at beginning of period . . . . . . . . . . . . . . . . .
Less: Reduction in (provision for) allowances . . . . .
Less: Write offs, net of recoveries . . . . . . . . . . . . .
Balance at end of period . . . . . . . . . . . . . . . . . . . . .

2015
$1,179
528
275
$ 376

2014
$1,132
(96)
49
$1,179

2013
$1,305
159
14
$1,132

5. Contracts in Process

The net asset position for contracts in process consisted of the following at December 31:

(in thousands)
Costs and estimated earnings on uncompleted contracts . . . . . . . . . .
Less: Billings to date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2015
$2,153,085
2,142,213
10,872

2014
$1,746,507
1,740,019
6,488

The net asset position for contracts in process is included in the accompanying consolidated balance

sheets as follows at December 31:

(in thousands)
Costs and estimated earnings in excess of billings on uncompleted

2015

2014

contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 51,486

$ 44,609

Billings in excess of costs and estimated earnings on uncompleted

contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(40,614)
$ 10,872

(38,121)
$ 6,488

6. Property and Equipment

Property and equipment consisted of the following at December 31:

(dollars in thousands)
Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Buildings and improvements
. . . . . . . . . . . . . . . . . .
Construction equipment . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . .
Office equipment

Less: Accumulated depreciation and amortization . . . .

Estimated
Useful Life
in Years
—
3 to 39
3 to 12
3 to 10

2015

2014

5,782
21,401
308,628
6,442
342,253
(181,575)
$ 160,678

4,813
16,898
269,121
5,778
296,610
(147,956)
$ 148,654

Depreciation and amortization expense of property and equipment for the years ended December 31,

2015, 2014 and 2013 was $37.5 million, $33.1 million and $28.9 million, respectively.

MYR GROUP INC.

NOTES TO FINANCIAL STATEMENTS

7. Goodwill and Intangible Assets

Goodwill and intangible assets consisted of the following at December 31:

(in thousands)
Goodwill

2015

2014

Gross
Carrying
Amount

Accumulated
Amortization

Net
Carrying
Amount

Gross
Carrying
Amount

Accumulated
Amortization

T&D . . . . . . . . . . . . . . . . . .
C&I . . . . . . . . . . . . . . . . . . .
Total goodwill . . . . . . . . . . . .

$40,567
6,557
47,124

Amortizable Intangible Assets

Backlog . . . . . . . . . . . . . . . .
Customer relationships . . . . . .
Trade names . . . . . . . . . . . . .

765
5,144
695

Indeﬁnite-lived Intangible Assets
Trade names . . . . . . . . . . . . .
. . . . . .
Total Intangible assets

8,556
15,160
$62,284

$ —
—
—

695
3,103
—

—
3,798
$3,798

$40,567
6,557
47,124

$40,042
6,557
46,599

70
2,041
695

521
4,015
—

8,556
11,362
$58,486

8,556
13,092
$59,691

$ —
—
—

521
2,706
—

—
3,227
$3,227

Net
Carrying
Amount

$40,042
6,557
46,599

—
1,309
—

8,556
9,865
$56,464

The increase in the gross carrying amount of goodwill and intangible assets as of December 31, 2015

compared to December 31, 2014 was due to the ESB and HCL acquisitions. Additional ﬁnancial information
related to the these acquisitions is provided in Note 2 to the Financial Statements.

Customer relationships and backlog are being amortized on a straight-line method over an estimated
useful life of approximately 12 years and 1 year, respectively, and have been determined to have no residual
value. Amortizable trade names are being amortized on a straight-line method over an estimated useful life
of approximately 15 years. Inﬁnite-lived trade names have been determined to have indeﬁnite lives and,
therefore, are not being amortized. Intangible asset amortization expense was $0.6 million for the year ended
December 31, 2015 and $0.3 million for the years ended December 31, 2014 and 2013. Intangible asset
amortization expense for the years subsequent to December 31, 2015 is expected to be approximately
$0.5 million in 2016, $0.4 million for the years 2017 and 2018 and $0.1 million for each of the years from
2019 to 2026.

8. Accrued Liabilities

Other current liabilities consisted of the following at December 31:

(in thousands)
Payroll and incentive compensation . . . . . . . . . . . . . . . . . . . . . . . .
Union dues and beneﬁts
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proﬁt sharing and thrift plan . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Taxes, other than income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . .
Legal settlements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other

2015
$10,499
8,182
1,294
3,578
—
5,303
$28,856

2014
$11,432
6,721
4,760
3,709
302
4,816
$31,740

MYR GROUP INC.

NOTES TO FINANCIAL STATEMENTS

9. Debt and Borrowing Arrangements

On December 21, 2011, the Company entered into a ﬁve-year syndicated credit agreement (the ‘‘Credit
Agreement’’) with a facility of $175.0 million (the ‘‘Facility’’). The entire Facility is available for revolving
loans and the issuance of letters of credit. The Company has an option to increase the commitments under
the Facility or enter into incremental term loans, subject to certain conditions, by up to an additional
$75.0 million upon receipt of additional commitments from new or existing lenders. Up to $25.0 million of
the Facility is available for swingline loans.

Revolving loans under the Credit Agreement bear interest, at the Company’s option, at either (1) the

ABR, which is the greatest of the Prime Rate, the Federal Funds Effective Rate plus 0.50% or LIBOR plus
1.00%, plus in each case an applicable margin ranging from 0.00% to 1.00%; or (2) LIBOR plus an
applicable margin ranging from 1.00% to 2.00%. The applicable margin is determined based on the
Company’s leverage ratio (the ‘‘Leverage Ratio’’), deﬁned under the Credit Agreement as consolidated total
indebtedness divided by consolidated EBITDA as deﬁned by the Credit Agreement (‘‘Consolidated
EBITDA’’). Letters of credit issued under the Facility are subject to a letter of credit fee of 1.00% to 2.00%,
based on the Company’s leverage ratio and a facing fee of 0.125%. Swingline loans bear interest at the ABR
rate. The Company is currently required to pay a 0.2% commitment fee on the unused portion of the Facility.

Subject to certain exceptions, the Facility is secured by substantially all of the United States assets of the

Company and its subsidiaries and by a pledge of all of the capital stock of the Company’s subsidiaries. The
Company’s subsidiaries also guarantee the repayment of all amounts due under the Credit Agreement. The
Credit Agreement provides for customary events of default. If an event of default occurs and is continuing, on
the terms and subject to the conditions set forth in the Credit Agreement, amounts outstanding under the
Facility may be accelerated and may become or be declared immediately due and payable.

Under the Credit Agreement, the Company is subject to certain ﬁnancial covenants and must maintain a
maximum Leverage Ratio of 3.0 and a minimum interest coverage ratio of 3.0, (‘‘Interest Coverage Ratio’’),
deﬁned under the Credit Agreement as Consolidated EBITDA divided by interest expense. The Company was
in compliance with the ﬁnancial covenants at December 31, 2015, as well as in all previous quarters. The
Credit Agreement also contains a number of covenants including limitations on asset sales, investments,
indebtedness and liens.

The Company had no revolving loans outstanding as of December 31, 2015 and 2014. As of

December 31, 2015 and 2014, the Company had approximately $19.3 million in irrevocable standby letters of
credit outstanding at an interest rate of 1.125%. The Company had $155.7 million available for borrowing
under the Facility as of December 31, 2015.

10. Income Taxes

Income before income taxes by geographic area was, for the years ended December 31:

(in thousands)
Federal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2015
$45,456
(1,157)
$44,299

2014
$57,950
—
$57,950

2013
$54,872
—
$54,872

MYR GROUP INC.

NOTES TO FINANCIAL STATEMENTS

10. Income Taxes − (continued)

The income tax provision consisted of the following for the years ended December 31:

(in thousands)
Current

Federal
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Deferred
Federal
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Income tax expense . . . . . . . . . . . . . . . . . . . . . . . .

2015

2014

2013

$12,433
3,006
15,439

1,553
(272)
277
1,558
$16,997

$14,720
3,031
17,751

3,154
—
501
3,655
$21,406

$16,812
2,920
19,732

218
—
163
381
$20,113

The differences between the U.S. federal statutory tax rate and the Company’s effective tax rate for

continuing operations were as follows for the years ended December 31:

U.S federal statutory rate . . . . . . . . . . . . . . . . . . . . . . . . .
State income taxes, net of U.S. federal income tax expense . .
. . . . . . . . . . . . . . . . . .
Provision to return adjustments, net
. . . . . . . . . . . . . . . . . .
Tax differential on foreign earnings
Domestic production/manufacturing deduction . . . . . . . . . . .
Non-deductible meals and entertainment . . . . . . . . . . . . . . .
Expiration of uncertain tax positions
. . . . . . . . . . . . . . . . .
Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effective rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2015
35.0%
4.6
0.5
0.3
(2.4)
0.6
(0.4)
0.2
38.4%

2014
35.0%
3.6
0.2
—
(2.3)
0.4
—
—
36.9%

2013
35.0%
3.5
(0.3)
—
(2.0)
0.4
—
0.1
36.7%

The net deferred tax assets and (liabilities) arising from temporary differences was as follows at

December 31:

(in thousands)
Deferred income tax assets:

2015

2014

Self insurance reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Contract loss reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stock-based awards
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Bonus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other
Total deferred income tax assets . . . . . . . . . . . . . . . . . . . . . . . .

$ 7,464
240
3,986
2,497
960
15,147

$ 8,369
72
4,420
2,578
886
16,325

Deferred income tax liabilities:

Property and equipment − tax over book depreciation . . . . . . . . . . . .
Intangible assets − tax over book amortization . . . . . . . . . . . . . . . .
Total deferred income tax liabilities . . . . . . . . . . . . . . . . . . . . . .
Net deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(25,859)
(3,670)
(29,529)
$(14,382)

(25,350)
(3,799)
(29,149)
$(12,824)

MYR GROUP INC.

NOTES TO FINANCIAL STATEMENTS

10. Income Taxes − (continued)

As of December 31, 2015, the Company had no undistributed earnings of our Canadian subsidiary. We

expect future earnings to be reinvested. Accordingly, no provision for U.S. income taxes or foreign
withholding taxes has been made.

The Company is subject to taxation in various jurisdictions. The Company is currently under examination

by U.S. federal authorities for the open tax years 2012 through 2014 and subject to examination by various
state authorities for the years 2011 through 2014.

The Company has recorded a liability for unrecognized tax beneﬁts related to tax positions taken on its

various income tax returns. If recognized, the entire amount of unrecognized tax beneﬁts would favorably
impact the effective tax rate that is reported in future periods. The Company anticipates the total unrecognized
tax beneﬁts will be reduced within the next 12 months due to the lapses in the applicable statutes of
limitations, as well as pending federal tax settlements for the three years under examination. The adjustment
related to these items is estimated at approximately $0.3 million. Interest and penalties related to uncertain
income tax positions are included as a component of income tax expense in the Financial Statements.

The following is a reconciliation of the beginning and ending liability for unrecognized tax beneﬁts at

December 31:

(in thousands)
Balance at beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . .
Gross increases in current period tax positions . . . . . . . . . . . . . . . .
Gross increases in prior period tax positions . . . . . . . . . . . . . . . . . .
Gross decreases in prior period tax positions
. . . . . . . . . . . . . . . . .
Balance at end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued interest and penalties at end of period . . . . . . . . . . . . . . . .
Total liability for unrecognized tax beneﬁts . . . . . . . . . . . . . . . . .

2015
$ 507
62
19
(163)
425
139
$ 564

2014
$ 657
93
—
(243)
507
223
$ 730

The liability for unrecognized tax beneﬁts, including accrued interest and penalties, was included in other

liabilities in the accompanying consolidated balance sheets. The amount of interest and penalties charged or
credited to income tax expense as a result of the unrecognized tax beneﬁts was not signiﬁcant in the years
ended December 31, 2015, 2014 and 2013.

11. Commitments and Contingencies

Letters of Credit

As of both December 31, 2015 and 2014, the Company had irrevocable standby letters of credit

outstanding of approximately $19.3 million, including $17.5 million related to the Company’s payment
obligation under its insurance programs and approximately $1.8 million related to contract performance
obligations.

Leases

The Company leases real estate, construction equipment and office equipment under operating leases with

remaining lease terms ranging from one to less than six years. As of December 31, 2015, future minimum
lease payments for these operating leases were as follows: $1.7 million for 2016, $1.1 million for 2017,
$0.9 million for 2018, $0.7 million for 2019, $0.1 million for 2020 and $0.1 million for 2021. The Company
had no leases in effect in 2015 or 2014 that included guaranteed residual values.

Rent expense includes lease payments as well as rent on items that are rented under cancellable rental
agreements. Total rent expense for the years ended December 31, 2015, 2014 and 2013, was $57.2 million,
$41.1 million and $51.2 million, respectively.

MYR GROUP INC.

NOTES TO FINANCIAL STATEMENTS

11. Commitments and Contingencies − (continued)

Purchase Commitments for Construction Equipment

As of December 31, 2015, the Company had approximately $2.2 million in outstanding purchase
obligations for certain construction equipment, with most of the cash outlay scheduled to occur during the
next three months.

Insurance and Claims Accruals

The Company carries insurance policies, which are subject to certain deductibles, for workers’
compensation, general liability, automobile liability and other coverages. The deductible for each line of
coverage is up to $1.0 million, except for certain health beneﬁt plans which are subject to a $0.1 million
deductible for qualiﬁed individuals. Losses up to the deductible amounts are accrued based upon the
Company’s estimates of the ultimate liability for claims reported and an estimate of claims incurred but not
yet reported.

The insurance and claims accruals are based on known facts, actuarial estimates and historical trends.

While recorded accruals are based on the ultimate liability, which includes amounts in excess of the
deductible, a corresponding receivable for amounts in excess of the stop loss deductible is included in current
assets in the consolidated balance sheets at December 31:

(in thousands)
Balance at beginning of period . . . . . . . . . . . . . . . .
Net increases in reserves . . . . . . . . . . . . . . . . . . . . .
Net payments made . . . . . . . . . . . . . . . . . . . . . . . .
Balance at end of period . . . . . . . . . . . . . . . . . . . .

2015
$ 39,480
15,686
(18,199)
$ 36,967

2014
$ 39,111
16,220
(15,851)
$ 39,480

2013
$ 39,583
16,861
(17,333)
$ 39,111

Insurance expense, including premiums, for workers’ compensation, general liability, automobile liability,

employee health beneﬁts, and other coverages for the years ended December 31, 2015, 2014 and 2013 was
$23.6 million, $21.0 million and $20.1 million, respectively.

Performance and Payment Bonds

In certain circumstances, the Company is required to provide performance and payment bonds in

connection with its future performance on contractual commitments. The Company has indemniﬁed its sureties
for any expenses paid out under these bonds. As of December 31, 2015, an aggregate of approximately
$912.0 million in original face amount of bonds issued by the surety were outstanding. Our estimated
remaining cost to complete these bonded projects was approximately $87.0 million as of December 31, 2015.

Indemnities

From time to time, pursuant to its service arrangements, the Company indemniﬁes its customers for
claims related to the services it provides under those service arrangements. These indemniﬁcation obligations
may subject the Company to indemnity claims, liabilities and related litigation. The Company is not aware of
any material unrecorded liabilities for asserted claims in connection with these indemniﬁcation obligations.

Collective Bargaining Agreements

Many of the Company’s subsidiaries’ craft labor employees are covered by collective bargaining
agreements. The agreements require the subsidiaries to pay speciﬁed wages, provide certain beneﬁts and
contribute certain amounts to multi-employer pension plans. If a subsidiary withdraws from one or more
multi-employer pension plans or if the plans were to otherwise become underfunded, the subsidiary could be
assessed the funding status of liabilities for additional contributions related to the underfunding of these plans.
Although we have been informed that several of the multi-employer pension plans to which our subsidiaries
contribute have been classiﬁed as being in a ‘‘critical’’ status, we are not currently aware of any potential

MYR GROUP INC.

NOTES TO FINANCIAL STATEMENTS

11. Commitments and Contingencies − (continued)

signiﬁcant liabilities related to this issue. See Note 13 to the Financial Statements for further information
related to the Company’s participation in multi-employer plans.

Litigation and Other Legal Matters

The Company is from time-to-time party to various lawsuits, claims, and other legal proceedings that

arise in the ordinary course of business. These actions typically seek, among other things, compensation for
alleged personal injury, breach of contract and/or property damages, punitive damages, civil penalties or
other losses, or injunctive or declaratory relief. With respect to all such lawsuits, claims and proceedings, the
Company records reserves when it is probable that a liability has been incurred and the amount of loss can
be reasonably estimated. The Company does not believe that any of these proceedings, separately or in the
aggregate, would be expected to have a material adverse effect on the Company’s ﬁnancial position, results of
operation or cash ﬂows.

The Company is routinely subject to other civil claims, litigation and arbitration, and regulatory
investigations arising in the ordinary course of our present business as well as in respect of our divested
businesses. Some of these claims and litigations include claims related to the Company’s current services and
operations, and asbestos-related claims concerning historic operations of a predecessor affiliate. The Company
believes that it has strong defenses to these claims as well as insurance coverage that could contribute to any
settlement or liability in the event any asbestos-related claim is not resolved in the Company’s favor. These
claims have not had a material impact on the Company to date, and the Company believes that the likelihood
that a future material adverse outcome will result from these claims is remote. However, if facts and
circumstances change in the future, the Company cannot be certain that an adverse outcome of one or more of
these claims would not have a material adverse effect on the Company’s ﬁnancial condition, results of
operations or cash ﬂows.

In January 2013, The L. E. Myers Co. (‘‘L. E. Myers’’) was joined as a defendant in Northern States

Power Company (Wisconsin) v. The City of Ashland, Wisconsin et al., ﬁled in the U.S. District Court for the
Western District of Wisconsin. Northern States Power Company alleged that named defendants, including
L. E. Myers, contributed to contamination at the Ashland Lakefront Superfund Site in Ashland, Wisconsin.
Speciﬁcally, the lawsuit alleged that L. E. Myers operated a manufactured gas plant at the site for 6 to
12 years of the plant’s operation during the time frame from 1885 to 1947. In April 2015, L. E. Myers
negotiated a settlement of this litigation with Northern States Power Company, funded largely by L. E. Myers’
insurance carriers, with L. E. Myers’ contribution being $230,000.

12. Stock-Based Compensation

The Company maintains two equity compensation plans under which stock-based compensation has been

granted, the 2006 Stock Option Plan (the ‘‘2006 Plan’’) and the 2007 Long-Term Incentive Plan (Amended
and Restated as of May 1, 2014) (the ‘‘LTIP’’). Upon the adoption of the LTIP, awards were no longer
granted under the 2006 Plan. The LTIP was approved by our stockholders and provides for grants of
(a) incentive stock options qualiﬁed as such under U.S. federal income tax laws, (b) stock options that do not
qualify as incentive stock options, (c) stock appreciation rights, (d) restricted stock awards, (e) performance
awards, (f) phantom stock, (g) stock bonuses, (h) dividend equivalents, or (i) any combination of such awards.
The LTIP permits the granting of up to 4,000,000 shares to directors, officers and other employees of the
Company. Grants of awards to employees are approved by the Compensation Committee of the Board of
Directors and grants to independent members of the Board of Directors are approved by the Board of
Directors. All awards are made with an exercise price or base price, as the case may be, that is not less than
the full fair market value per share on the date of grant. No stock option or stock appreciation right may be
exercised more than 10 years from the date of grant.

MYR GROUP INC.

NOTES TO FINANCIAL STATEMENTS

12. Stock-Based Compensation − (continued)

Shares issued as a result of stock option exercises or stock grants may be made available from authorized

unissued shares of common stock or treasury stock. The Company believes that it currently has adequate
authorized unissued shares to meet any requirements to issue shares during 2016.

Stock Options

The Company did not award any stock options in 2015 or 2014. Stock options granted prior to 2014
to employees or directors vest ratably over a three- or four-year vesting period and were granted with an
exercise price equal to the market price of the Company’s stock on the date of grant. The Company used the
Black-Scholes-Merton option-pricing model to estimate the fair value of options as of the date of grant. The
resulting compensation costs are amortized on a straight-line basis over the vesting period. The expected term
of awards granted under the LTIP was determined using the simpliﬁed method as outlined in the applicable
guidance because the Company did not have sufficient historical exercise data when the options were granted.
The expected volatility was determined based on the historical volatility of the Company’s stock. The risk-free
interest rate was based on U.S. Treasury zero-coupon issues with a remaining term commensurate with the
expected term of the award. The expected dividend yield was based on the Company’s intent to not issue
cash dividends.

The following summarizes the assumptions used in determining the fair value of stock options granted

for ﬁxed awards with graded vesting schedules during the year ended December 31, 2013:

Risk-free interest rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expected dividend yield . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Weighted average expected volatility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expected term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Weighted average grant-date fair value

2013
1.0%
0.0%
50%
6.0 years
$11.74

Following is a summary of stock option activity for the three-year period ending December 31, 2015:

Outstanding at January 1, 2013 . . . . . . . . . . . . .
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Exercised . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expired . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Outstanding at December 31, 2013 . . . . . . . . . . .
Exercised . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expired . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Outstanding at December 31, 2014 . . . . . . . . . . .
Exercised . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expired . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Outstanding at December 31, 2015 . . . . . . . . . . .
Exercisable at December 31, 2015 . . . . . . . . . . .

Weighted-
Average
Remaining
Contractual
Term

Aggregate
Intrinsic Value
(in thousands)

5.1 years

$13,623

4.2 years

$13,652

3.6 years
3.4 years

$3,722
$3,722

Weighted-
Average
Exercise
Price
$10.34
$24.68
$ 5.90
$20.28
$15.96
$13.21
$ 7.93
$22.66
$24.26
$13.87
$ 7.19
$23.14
$ 5.92
$16.40
$16.01

Options
1,432,228
111,147
(390,652)
(4,003)
(1,400)
1,147,320
(134,273)
(2,838)
(1,428)
1,008,781
(267,440)
(1,290)
(9,446)
730,605
698,303

MYR GROUP INC.

NOTES TO FINANCIAL STATEMENTS

12. Stock-Based Compensation − (continued)

Other data relating to option activity for the years ended December 31 are as follows:

(dollars in thousands)
Intrinsic value of options exercised . . . . . . . . . . . . . . . . . . . .
Fair value of options vested . . . . . . . . . . . . . . . . . . . . . . . . .

2015
$5,857
948

2014
$2,383
1,187

2013
$6,878
1,047

The following table summarizes information with respect to stock options outstanding and exercisable

under the Company’s plans at December 31, 2015:

Options Outstanding

Options Exercisable

Weighted-
Average
Exercise
Price
$3.90
$14.62
$23.85
$16.40

Weighted-
Average
Remaining
Contractual
Term
0.6 years
3.2 years
5.1 years
3.6 years

Number Of
Options
42,923
497,116
158,264
698,303

Weighted-
Average
Exercise
Price
$ 3.90
$14.62
$23.68
$16.01

Number Of
Options
42,923
497,116
190,566
730,605

Exercise Price
$3.65 − $9.00 . . . . . . . . . . . . . . . . . .
$9.01 − $18.00 . . . . . . . . . . . . . . . . .
$18.01 − $24.68 . . . . . . . . . . . . . . . .

Restricted Stock

Restricted stock awards granted to non-employee directors and eligible employees in 2015 vest ratably,

on an annual basis, over three years. The grant date fair value of the restricted stock was equal to the closing
market price of the Company’s common stock on the date of grant. During the restriction period, the restricted
stockholders are entitled to the same rights as a common stockholder with respect to the shares, including the
right to vote and receive dividends: however, starting with the 2014 grants, any dividends on restricted stock
will be deferred and paid only when the stock vests. Restricted stock awards are also subject to certain
claw-back provisions, as deﬁned in the grant agreements.

Following is a summary of restricted stock activity for the three-year period ending December 31, 2015:

Outstanding unvested at January 1, 2013 . . . . . . . . . . . . . . . . . . . . . .
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Vested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Outstanding unvested at December 31, 2013 . . . . . . . . . . . . . . . . . . . .
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Vested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Outstanding unvested at December 31, 2014 . . . . . . . . . . . . . . . . . . . .
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Vested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Outstanding unvested at December 31, 2015 . . . . . . . . . . . . . . . . . . . .

Per Share
Weighted-
Average
Grant Date
Fair Value
$19.54
$24.48
$19.50
$20.03
$21.33
$24.46
$20.85
$21.34
$22.64
$29.21
$22.42
$24.10
$24.48

Shares
185,764
76,590
(48,513)
(2,125)
211,716
82,351
(64,657)
(9,073)
220,337
83,236
(102,297)
(3,131)
198,145

MYR GROUP INC.

NOTES TO FINANCIAL STATEMENTS

12. Stock-Based Compensation − (continued)

Phantom Stock Units

Phantom stock unit awards granted to Canadian non-employee directors in 2015 vest ratably, on an

annual basis, over three years and are settled in stock. The phantom stock unit agreements contain tandem
dividend provisions which allow grantees to accrue and receive dividends, if any are declared and paid. The
grant date fair value of the phantom stock units was equal to the closing market price of the Company’s
common stock on the date of grant. A total of 3,804 phantom stock units were issued during 2015, at a grant
date fair value of $29.57, and are outstanding as of December 31, 2015.

Performance Awards

The Company has granted performance awards under which shares of the Company’s common stock may

be earned based on the Company’s performance compared to certain metrics. The number of shares actually
earned under a performance award may vary from zero to 200% of the target shares awarded, based upon
the Company’s performance compared to the metrics. The metrics used are determined at grant by the
Compensation Committee of the Board of Directors and may be either based on performance compared to an
internal measure, such as return on invested capital (‘‘ROIC’’) or return on equity (‘‘ROE’’), or the metric
may be based on market performance, such as total shareholder return (‘‘TSR’’). The 2015 performance award
grants were allocated evenly between two performance metrics; ROIC and relative TSR.

ROIC is deﬁned by the Company as net income, less any dividends, divided by stockholders’ equity plus

net debt (total debt less cash and marketable securities) at the beginning of the performance period. The
ROIC-based target shares awarded in 2015 were valued at $30.16, which represented the closing price of the
Company’s stock on the date of grant and are measured over a three-year performance period ending
December 31, 2017.

TSR is deﬁned by the Company as the change in the fair market value, adjusted for dividends, of a

company’s stock. The TSR of the Company’s stock will be compared to the TSR of a peer group of
companies deﬁned at the time of the grant. For the 2015 grant of TSR-based performance awards, TSR will
be calculated using the average stock price of the 20 trading days prior to January 1, 2015 and compared to
the average stock price of the 20 trading days prior to December 31, 2017. Because TSR is a market-based
performance metric, the Company used a Monte Carlo simulation model to calculate the fair value of the
grant made in 2015, which resulted in a fair value of $47.24 per share.

MYR GROUP INC.

NOTES TO FINANCIAL STATEMENTS

12. Stock-Based Compensation − (continued)

Following is a summary of performance share award activity for the three-year period ending

December 31, 2015:

Outstanding at January 1, 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Granted at target
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Earned for performance above target . . . . . . . . . . . . . . . . . . . . . . . . .
Vested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Outstanding at December 31, 2013 . . . . . . . . . . . . . . . . . . . . . . . . . .
Granted at target
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Earned for performance above target . . . . . . . . . . . . . . . . . . . . . . . . .
Vested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Outstanding at December 31, 2014 . . . . . . . . . . . . . . . . . . . . . . . . . .
Granted at target
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . .
Forfeited for performance below target
Vested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Outstanding at December 31, 2015 . . . . . . . . . . . . . . . . . . . . . . . . . .

Per Share
Weighted-
Average
Grant Date
Fair Value
$20.51
$24.68
$24.18
$24.18
$21.29
$27.69
$17.48
$17.48
$24.84
$26.63
$38.70
$24.68
$24.68
$30.87
$32.68

Shares
74,923
46,106
11,281
(45,116)
87,194
85,078
25,292
(65,237)
(5,524)
126,803
69,978
(3,810)
(40,474)
(8,889)
143,608

A total of 40,474 shares, or 91.4% of the target number of shares, were earned by the participants for the

performance period ending December 31, 2015. A total of 65,237 shares, or 163.3% of the target number of
shares, were earned by the participants for the performance period ending December 31, 2014. A total of
45,116 shares, or 133.3% of the target number of shares, were earned by the participants for the performance
period ending December 31, 2013. The 143,608 performance awards outstanding as of December 31, 2015 are
split evenly between ROIC performance shares and TSR performance shares.

Stock-based Compensation Expense

The Company recognized stock-based compensation expense of approximately $4.8 million, $4.7 million

and $3.5 million for the years ended December 31, 2015, 2014 and 2013, respectively, in selling, general
and administrative expenses. As of December 31, 2015, there was approximately $5.7 million of total
unrecognized stock-based compensation expense related to awards granted under the LTIP, net of estimated
forfeitures. This included $0.1 million of unrecognized compensation cost related to unvested stock options to
be recognized over a remaining weighted average vesting period of approximately 0.2 years, $2.9 million of
unrecognized compensation cost related to unvested restricted stock expected to be recognized over a
remaining weighted average vesting period of approximately 1.6 years and $2.7 million of unrecognized
compensation cost related to unvested performance awards, expected to be recognized over a remaining
weighted average vesting period of approximately 1.5 years. Award agreements for restricted stock and
phantom stock granted to non-employee directors after 2013 contained provisions which call for the vesting of
all shares awarded upon change in control or resignation from the board for any reason except breach of
ﬁduciary duty. As a result of these provisions, the fair value of restricted stock granted to the non-employee
directors after 2013 was expensed on the date of the grant.

MYR GROUP INC.

NOTES TO FINANCIAL STATEMENTS

13. Employee Beneﬁt Plans

The Company has a proﬁt sharing and thrift employee beneﬁt plan in effect for all eligible employees.

Company contributions under this deﬁned contribution plan are based upon a percentage of income with
limitations as deﬁned by the plan. Contributions for the years ended December 31, 2015, 2014 and
2013 amounted to $3.4 million, $6.9 million, and $4.9 million, respectively. The Company also has an
employee beneﬁt plan in effect for certain non-union hourly employees. Company contributions under this
deﬁned contribution plan are based upon a percentage of income with limitations as deﬁned by the plan.
Contributions for the years ended December 31, 2015, 2014 and 2013 amounted to $0.7 million, $0.6 million
and $0.6 million, respectively.

The Company contributes to a number of multiemployer deﬁned beneﬁt pension plans under the terms of

collective-bargaining agreements that cover its union-represented employees, who are represented by over
100 local unions. The related collective-bargaining agreements between those organizations and the Company,
which specify the rate at which the Company must contribute to the multi-employer deﬁned pension plan,
expire at different times between 2016 and 2018.

The risks of participating in these multiemployer deﬁned beneﬁt pension plans are different from

single-employer plans in the following aspects:

1) Assets contributed to the multiemployer plan by one employer may be used to provide beneﬁts to

employees of other participating employers.

If a participating employer stops contributing to a plan, the unfunded obligations of the plan may be
borne by the remaining participating employers.

If the Company chooses to stop participating in a multiemployer plan, it may be required to pay the
plan an amount based on the underfunded status of the plan, referred to as a withdrawal liability.

The amount of additional funds, if any, that the Company may be obligated to contribute to these plans
in the future cannot be estimated due to uncertainty of the future levels of work that require the speciﬁc use
of union employees covered by these plans, as well as the future contribution levels and possible surcharges
on contributions applicable to these plans.

MYR GROUP INC.

NOTES TO FINANCIAL STATEMENTS

13. Employee Beneﬁt Plans − (continued)

The following table summarizes plan information relating to the Company’s participation in

multi-employer deﬁned beneﬁt pension plans, including company contributions for the last three years, the
status under the Pension Protection Act (PPA) of the plans and whether the plans are subject to a funding
improvement or rehabilitation plan, or contribution surcharges. The most recent zone status is for the plan’s
year-end indicated in the table. The zone status is based on information that the Company received from the
plan, as well as from publicly available information on the U.S. Department of Labor website. The PPA zone
status for plan years ending on December 31, 2015 has not been listed because Forms 5500 were not yet
available. Among other factors, plans in the red zone are generally less than 65 percent funded, plans in the
yellow zone are less than 80 percent funded, and plans in the green zone are at least 80 percent funded. Also
listed in the table below are the Company’s contributions to deﬁned contribution plans. Information in the
table has been presented separately for individually signiﬁcant plans and in the aggregate for all other plans.

Pension Fund

EIN/Pension
Plan Number

Pension Protection Act Zone Status

Status

Plan Year
End

Status

Plan Year
End

Contributions to Plan for the
Year Ended December 31,

Funding
Plan

Surcharge
Imposed

2015

2014
(in thousands)

2013

Deﬁned Beneﬁt Plans:
National Electrical Beneﬁt Fund . . 53-0181657 001 Green 12/31/2014 Green 12/31/2013 $ 6,930 $ 6,330 $ 6,048
Eighth District Electrical

Management Pension Fund . . . . 84-6100393 001 Green

3/31/2015 Green

3/31/2014

5,598

5,197

5,672

IBEW Local 769 Management

Pension Plan . . . . . . . . . . . . . 86-6049763 001 Green

6/30/2013
IBEW Local 1249 Pension Plan . . 15-6035161 001 Yellow 12/31/2014 Yellow 12/31/2013

6/30/2014 Green

2,120
2,042

1,833
2,103

1,291
3,147

Deﬁned Contribution Plans:
National Electrical Annuity Plan . . 52-6132372 001
Eighth District Electrical Pension

Fund Annuity Plan . . . . . . . . . 84-6100393 002

All other plans:
. . . . . . . . . . . .
Total Contributions: . . . . . . . . . .

n/a

24,226

20,694

21,002

3,700

3,553

2,427

8,070

4,300
$52,686 $44,824 $43,887

5,114

No
Yes

n/a

No
No

n/a

The data presented in the table above represents data available to us for the two most recent plan years.
Total contributions to these plans correspond to the number of union employees employed at any given time
and the plans in which they participate and varies depending upon the location and number of ongoing
projects at a given time and the need for union resources in connection with such projects.

One of the Company’s subsidiaries was listed in the Eighth District Electrical Pension Fund’s Form 5500

as providing more than 5 percent of the total contributions to that plan for the plan years ending March 31,
2015, 2014 and 2013 and the IBEW local 769 Management Pension Fund’s Form 5500 as providing more
than 5 percent of the total contributions to that plan for the plan years ending June 30, 2014 and 2013.
Another of the company’s subsidiaries was listed in the IBEW Local 1249 Pension Plan’s Form 5500 as
providing more than 5 percent of the total contributions to that plan for the plan years ending December 31,
2014 and 2013.

MYR GROUP INC.

NOTES TO FINANCIAL STATEMENTS

14. Segment Information

MYR Group is a specialty contractor serving the U.S. electrical infrastructure market. It also has
operations in parts of Canada. The Company has two reporting segments, each a separate operating segment,
which are referred to as T&D and C&I. Performance measurement and resource allocation for the reporting
segments are based on many factors. The primary ﬁnancial measures used to evaluate the segment information
are contract revenues and income from operations, excluding general corporate expenses. General corporate
expenses include corporate facility and staffing costs, which includes safety, professional fees, management
fees, and intangible amortization. The accounting policies of the segments are the same as those described in
the Summary of Signiﬁcant Accounting Policies.

Transmission and Distribution: The T&D segment provides a broad range of services on electric

transmission and distribution networks and substation facilities which include design, engineering,
procurement, construction, upgrade, maintenance and repair services with a particular focus on construction,
maintenance and repair. T&D services include the construction and maintenance of high voltage transmission
lines, substations and lower voltage underground and overhead distribution systems. The T&D segment also
provides emergency restoration services in response to hurricane, ice or other storm-related damage. T&D
customers include investor-owned utilities, cooperatives, private developers, government-funded utilities,
independent power producers, independent transmission companies, industrial facility owners and other
contractors.

Commercial and Industrial: The C&I segment provides services such as the design, installation,

maintenance and repair of commercial and industrial wiring, installation of traffic networks and the installation
of bridge, roadway and tunnel lighting. Typical C&I contracts cover electrical contracting services for airports,
hospitals, data centers, hotels, stadiums, convention centers, manufacturing plants, processing facilities,
waste-water treatment facilities, mining facilities and transportation control and management systems.
C&I segment services are generally performed in the western and northeastern United States.

The information in the following table is derived from the segment’s internal ﬁnancial reports used for

corporate management purposes:

(in thousands)
Contract revenues:

For the Year Ended December 31,
2014

2013

2015

T&D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
C&I

$ 794,898
266,783
$1,061,681

$699,595
244,372
$943,967

$722,387
180,342
$902,729

Income from operations:

T&D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
C&I
General Corporate . . . . . . . . . . . . . . . . . . . . . . . .

63,155
13,592
(31,906)
44,841

$ 75,439
16,542
(33,577)
$ 58,404

$ 81,413
10,423
(36,219)
$ 55,617

MYR GROUP INC.

NOTES TO FINANCIAL STATEMENTS

14. Segment Information − (continued)

The Company does not identify capital expenditures and total assets by segment in its internal ﬁnancial
reports due in part to the shared use of a centralized ﬂeet of vehicles and specialized equipment. Identiﬁable
assets, consisting of contract receivables, costs and estimated earnings in excess of billings on uncompleted
contracts, construction materials inventory, goodwill and intangibles for each segment are as follows as of
December 31:

(in thousands)

T&D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
C&I
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other

2015
$204,309
92,939
227,677
$524,925

2014
$190,105
69,640
260,341
$520,086

An allocation of total depreciation, including depreciation of shared construction equipment, and

amortization to each segment is as follows:

(in thousands)
Depreciation and amortization

T&D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
C&I

For the Year Ended December 31,
2013
2014

2015

$35,456
2,573
$38,029

$30,957
2,466
$33,423

$27,545
1,650
$29,195

For the year ended December 31, 2015, the Company had Canadian contract revenues of $1.5 million, of
which $1.4 million and $0.1 million is attributable to the T&D and C&I segments, respectively. The Company
had no Canadian contract revenues in the years ended December 31, 2014 and 2013. As of December 31,
2015, $1.9 million of identiﬁable assets were attributable to Canadian operations.

15. Earnings Per Share

The Company computes earnings per share using the treasury stock method unless the two-class method
is more dilutive. The Company computed earnings per share for the year ended December 31, 2015 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
share is computed using the weighted average number of common shares outstanding during the period
adjusted for plus all potentially dilutive common stock equivalents, except in cases where the effect of the
common stock equivalent would be anti-dilutive.

For the years ended December 31, 2014 and 2013, the Company computed earnings per share using the
two-class method because that method resulted in a more dilutive effect than the treasury stock method. The
two-class method is an earnings allocation formula that determines earnings per share for common stock and
participating securities according to dividends declared and participation rights in undistributed earnings.
Under the two-class method, the Company’s unvested grants of restricted stock that contained non-forfeitable
rights to dividends were treated as participating securities and were excluded from the computation of basic
and diluted earnings per share. All shares of restricted stock granted since 2013 are not participating because
the grant agreements contain provisions that dividends, if declared, will be forfeited if the grantee leaves the
Company before the stock is vested.

MYR GROUP INC.

NOTES TO FINANCIAL STATEMENTS

15. Earnings Per Share − (continued)

Net income available to common shareholders and the weighted average number of common shares used

to compute basic and diluted earnings per share was as follows:

(in thousands, except per share data)
Numerator:

For the Year Ended December 31,
2013
2014

2015

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less: Net income allocated to participating securities . . .
Net income available to common shareholders . . . . . . . . .

$27,302
—
$27,302

$36,544
(277)
$36,267

$34,759
(336)
$34,423

Denominator:

Weighted average common shares outstanding . . . . . . . .
Weighted average dilutive securities . . . . . . . . . . . . . . .
Weighted average common shares outstanding, diluted . . . .

Income per common share, basic . . . . . . . . . . . . . . . . . .
Income per common share, diluted . . . . . . . . . . . . . . . . .

20,577
461
21,038

$
$

1.33
1.30

20,922
544
21,466

$
$

1.73
1.69

20,821
610
21,431

$
$

1.65
1.61

For the years ended December 31, 2015, 2014 and 2013, certain common stock equivalents were

excluded from the calculation of dilutive securities because their inclusion would either have been anti-dilutive
or, for stock options, the exercise prices of those stock options were greater than the average market price of
the Company’s common stock for the period. All of the Company’s non-participating unvested restricted
shares were included in the computation of weighted average dilutive securities. The following table
summarizes the shares of common stock underlying the Company’s unvested stock options and performance
awards that were excluded from the calculation of dilutive securities:

(In thousands)
Stock options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Performance awards . . . . . . . . . . . . . . . . . . . . . . . . . . .

2015
3
34

2014
100
—

2013
220
—

Share Repurchase Program

On July 30, 2015, the Company increased its stock repurchase program (the ‘‘Repurchase Program’’)
from $25.0 million to $42.5 million, and extended the term of the program through August 31, 2016. On
December 10, 2015 the Company increased the Repurchase Program by $25.0 million to $67.5 million

During 2015 the Company repurchased 1,183,862 shares of common stock (at a weighted-average price
of $22.84 per share) under the Repurchase Program. The total cost of $27.0 million, $26.1 million of which
had settled as of December 31, 2015, was recorded as a reduction of common stock, additional paid-in capital
and retained earnings in 2015. Under the Repurchase Program, all shares repurchased are retired and returned
to authorized but unissued stock. The remaining availability to purchase shares under the Repurchase Program
was $24.8 million as of December 31, 2015.

On February 10, 2016 the Company increased the Repurchase Program by $75.0 million to

$142.5 million, amended the provisions of the plan to accelerate the pace of repurchases, and extended the
program through April 30, 2017.

MYR GROUP INC.

NOTES TO FINANCIAL STATEMENTS

16. Quarterly Financial Data (Unaudited)

The following table presents the unaudited consolidated operating results by quarter for the years ended

December 31, 2015 and 2014:

(in thousands, except per share data)
2015:

Revenues . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . .
Gross proﬁt
Net income
. . . . . . . . . . . . . . . . . . . . . . . .
Basic earnings per share . . . . . . . . . . . . . . . .
Diluted earnings per share . . . . . . . . . . . . . .

2014:

March 31,

$244,148
29,374
7,172
0.35
0.34

$
$

$215,638
27,080
6,272
0.30
0.29

$
$

For the Three Months Ended
September 30,
June 30,

December 31,

$276,488
31,736
8,074
0.39
0.38

$
$

$228,877
30,528
7,741
0.36
0.36

$
$

$269,861
28,620
6,175
0.30
0.29

$
$

$248,473
32,724
8,404
0.40
0.39

$
$

$271,184
32,611
5,881
0.29
0.29

$
$

$250,979
42,082
14,127
0.68
0.66

$
$

Earnings per share amounts for each quarter are required to be computed independently using the

weighted average number of shares outstanding during the period. As a result, the sum of the individual
quarterly earnings per share amounts may not agree to the earnings per share calculated for the year.

Gross proﬁt in the fourth quarter of 2014 beneﬁted from higher levels of claim settlements and change

orders.

Item 9.

Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

None.

Item 9A. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures designed to provide reasonable assurance that

information required to be disclosed in the reports we ﬁle or submit pursuant to the Exchange Act is recorded,
processed, summarized and reported within the time periods speciﬁed in the rules and forms of the SEC, and
that such information is accumulated and communicated to our management, including our Chief Executive
Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Management, together with our Chief Executive Officer and Chief Financial Officer, has evaluated the

effectiveness of our disclosure controls and procedures (as deﬁned in Exchange Act Rules 13a-15(e) and
15d-15(e)) as of the end of the period covered by this annual report on Form 10-K. Based upon that
evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and
procedures were effective to provide reasonable assurance related to the matters stated in the above paragraph
as of December 31, 2015.

Evaluation of Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over ﬁnancial

reporting, as such term is deﬁned in Exchange Act Rule 13a-15(f). Under the supervision and with the
participation of our management, including our principal executive officer and principal ﬁnancial officer, we
conducted an evaluation of the effectiveness of our internal control over ﬁnancial reporting based on the
framework set forth in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring
Organizations of the Treadway Commission. Management’s annual report on internal control over ﬁnancial
reporting and the report of our independent registered public accounting ﬁrm appear in Part II,
Item 8 ‘‘Financial Statements and Supplementary Data’’ of this Annual Report on Form 10-K.

This annual report on Form 10-K includes a report of management’s assessment regarding internal
control over ﬁnancial reporting (see ‘‘Management’s Report on Internal Control over Financial Reporting’’)
and an attestation report of our independent registered public accounting ﬁrm regarding internal control over
ﬁnancial reporting (see ‘‘Report of Independent Registered Public Accounting Firm’’).

Changes in Internal Control Over Financial Reporting

There have been no changes in our internal control over ﬁnancial reporting during the fourth quarter
ended December 31, 2015 that have materially affected, or that are reasonably likely to materially affect, our
internal control over ﬁnancial reporting.

Limitations on the Effectiveness of Controls

Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that

our disclosure controls and procedures or our internal control over ﬁnancial reporting will detect or prevent
all errors and all fraud. A control system, no matter how well designed and operated, can provide only
reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a
control system must reﬂect the fact that there are resource constraints, and the beneﬁts of controls must be
considered relative to their costs. Because of its inherent limitations, internal control over ﬁnancial reporting
may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods
are subject to the risk that controls may become inadequate because of changes in conditions, or that the
degree of compliance with the policies or procedures may deteriorate. These inherent limitations include the
realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple
error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by
collusion of two or more people, or by management override of the control. The design of any system of
controls also is based in part upon certain assumptions about the likelihood of future events, and there can be
no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

Over time, controls may become inadequate because of changes in conditions, or the degree of compliance
with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control
system, misstatements due to error or fraud may occur and not be detected.

Item 9B. Other Information

None.

PART III

Item 10. Directors, Executive Officers and Corporate Governance

Information required by this Item 10 related to our directors is incorporated by reference to the

information to be included under ‘‘Proposal No. 1. Election of Directors’’ of our deﬁnitive Proxy Statement
for our Annual Meeting of Stockholders scheduled to be held April 28, 2016 (‘‘2016 Proxy Statement’’).
Information about compliance with Section 16(a) of the Exchange Act is incorporated by reference to the
information to be included under the heading ‘‘Section 16(a) Beneﬁcial Ownership Reporting Compliance’’ in
our 2016 Proxy Statement. Information regarding the procedures by which our stockholders may recommend
nominees to our board of directors is incorporated by reference to the information to be included under the
heading ‘‘Nominating and Corporate Governance Committee Matters — Criteria for Nomination to the Board
of Directors and Diversity’’ in our 2016 Proxy Statement. Information about our Audit Committee, including
its members, and our Audit Committee ﬁnancial experts, is incorporated by reference to the information to be
included under the headings ‘‘Audit Committee Matters’’ in our 2016 Proxy Statement. The balance of the
information required by this item is contained in the discussion entitled ‘‘Executive Officers’’ in Part I of this
Annual Report on Form 10-K.

We have a code of ethics that applies to all of our directors, officers and other employees. This code is
publicly available on our website at www.myrgroup.com. Amendments to the code of ethics or any grant of a
waiver from a provision of the code requiring disclosure under applicable SEC and NASDAQ Global Market
rules will be disclosed on our website or, if so required, disclosed in a Current Report on Form 8-K ﬁled with
the SEC. The information on our website is not, and shall not be deemed to be, a part of this Annual Report
on Form 10-K or incorporated into any other ﬁlings we make with the SEC.

Item 11.

Executive Compensation

The information required by this Item 11 is incorporated by reference to the information to be included
in our 2016 Proxy Statement under the headings ‘‘Director Compensation,’’ ‘‘Compensation Discussion and
Analysis,’’ ‘‘Executive Compensation Tables’’ and ‘‘Compensation Committee Matters — Compensation
Committee Report for the Year Ended December 31, 2015.’’

Item 12.

Security Ownership of Certain Beneﬁcial Owners and Management and Related Stockholder
Matters

The information required by this Item 12 is incorporated by reference to the information to be included

in our 2016 Proxy Statement under the headings ‘‘Ownership of Equity Securities,’’ and ‘‘Compensation
Discussion and Analysis.’’

Item 13. Certain Relationships and Related Transactions, and Director Independence

The information required by this Item 13 is incorporated by reference to the information to be included

in our 2016 Proxy Statement under the headings ‘‘Certain Relationship and Related Person Transactions’’ and
‘‘Corporate Governance — Director Independence.’’

Item 14.

Principal Accounting Fees and Services

The information required by this Item 14 is incorporated by reference to the information to be included
in our 2016 Proxy Statement under the heading ‘‘Audit Committee Matters — Independent Auditors’ Fees.’’

PART IV

Item 15.

Exhibits and Financial Statement Schedules

i) Documents ﬁled as part of this Report

(1) The following Financial Statements are ﬁled herewith in Item 8 of Part II above.

(a) Report of Management

(b) Reports of Independent Registered Public Accounting Firm

(d) Consolidated Statements of Operations

(e) Consolidated Statements of Comprehensive Income

(f) Consolidated Statements of Stockholders’ Equity

(g) Consolidated Statements of Cash Flows

(h) Notes to Financial Statements

ii) Financial Statement Schedules

All other supplemental schedules are omitted because of the absence of conditions under which they
are required, or the required information is shown in the notes to the Financial Statements.

iii) Exhibit List

Number

Description

3.1

3.2

4.1

4.2

10.1

10.2

10.3

10.4

10.5

10.6

10.7

10.8

10.9

10.10

Restated Certiﬁcate of Incorporation, incorporated by reference to exhibit 3.1 of the Company’s
Form 8-K (File No. 001-08325), ﬁled with the SEC on May 7, 2014
Amended and Restated By-Laws, incorporated by reference to exhibit 3.1 of the Company’s
Form 8-K (File No. 001-08325), ﬁled with the SEC on December 22, 2015
Registration Rights Agreement, dated December 20, 2007, between the Registrant and
Friedman, Billings, Ramsey & Co., Inc., incorporated by reference to exhibit 4.1 of the
Company’s Registration Statement on Form S-1 (File No. 333-148864), ﬁled with the SEC on
January 25, 2008
Specimen Common Stock Certiﬁcate, incorporated by reference to exhibit 4.2 of the Company’s
Registration Statement on Form S-1/A (File No. 333-148864), ﬁled with the SEC on
July 14, 2008
Credit Agreement, dated December 21, 2011, between the Registrant and J.P. Morgan Chase
Bank, N.A., Bank of America, N.A., PNC Bank, National Association, BMO Harris Bank N.A
and Wells Fargo Bank, National Association, incorporated by reference to exhibit 10.1 of the
Company’s Current Report on Form 8-K (File No. 001-08325), ﬁled with the SEC on
December 23, 2011
Pledge and Security Agreement, dated December 21, 2011, between the Registrant, certain of its
Subsidiaries and J.P. Morgan Chase Bank, N.A., in its capacity as administrative agent for the
lenders party to the Credit Agreement, incorporated by reference to exhibit 10.2 of the Company’s
Current Report on Form 8-K (File No. 001-08325), ﬁled with the SEC on December 23, 2011
Guaranty, dated December 21, 2011, between certain Subsidiaries of the Registrant in favor of
J.P. Morgan Chase Bank, N.A., as administrative agent for the beneﬁt of the Holders of Secured
Obligations under the Credit Agreement, incorporated by reference to exhibit 10.3 of the
Company’s Current Report on Form 8-K (File No. 001-08325), ﬁled with the SEC on
December 23, 2011
Amended and Restated 2006 Stock Option Plan, incorporated by reference to exhibit 10.1 of
the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2009
(File No. 001-08325), ﬁled with the SEC on August 10, 2009+
Form of Option Award under 2006 Stock Option Plan, incorporated by reference to exhibit 10.2
of the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2009
(File No. 001-08325), ﬁled with the SEC on August 10, 2009+
MYR Group Inc. 2007 Long-Term Incentive Plan (Amended and Restated as of May 1, 2014),
incorporated by reference to exhibit 10.1 of the Company’s Form 8-K (File No. 001-08325), ﬁled
with the SEC on May 7, 2014+
Form of Named Executive Officer Nonqualiﬁed Stock Option Award under the 2007 Long-Term
Incentive Plan, incorporated by reference to exhibit 10.1 of the Company’s Form 10-Q for the
quarter ended March 31, 2010 (File No. 001-08325), ﬁled with the SEC on May 10, 2010+
Form of Named Executive Officer Restricted Stock Award under the 2007 Long-Term Incentive
Plan, incorporated by reference to exhibit 10.2 of the Company’s Form 10-Q for the quarter ended
March 31, 2010 (File No. 001-08325), ﬁled with the SEC on May 10, 2010+
Form of Named Executive Officer Performance Share Award under the 2007 Long-Term Incentive
Plan, incorporated by reference to exhibit 10.3 of the Company’s Form 10-Q for the quarter ended
March 31, 2010 (File No. 001-08325), ﬁled with the SEC on May 10, 2010+
Form of Independent Director Restricted Stock Award under the 2007 Long-Term Incentive Plan,
incorporated by reference to exhibit 10.4 of the Company’s Form 10-Q for the quarter ended
March 31, 2010 (File No. 001-08325), ﬁled with the SEC on May 10, 2010+

Number

10.11

10.12

10.13

Description

Form of Employment Agreement, dated March 11, 2010, between the Registrant and Executive
Officer, incorporated by reference to exhibit 10.5 of the Company’s Form 10-Q for the quarter
ended March 31, 2010 (File No. 001-08325), ﬁled with the SEC on May 10, 2010+
Employment Agreement, dated January 3, 2012, between the Company and Paul J. Evans,
incorporated by reference to exhibit 10.12 of the Company’s Form 10-K for the year ended
December 31, 2011 (File No. 001-08325), ﬁled with the SEC on March 7, 2012+
Form of Indemniﬁcation Agreement for Directors and Officers, incorporated by reference to
exhibit 10.1 of the Company’s Form 8-K (File No. 001-08325), ﬁled with the SEC on
May 11, 2011+

10.14 MYR Group Senior Management Incentive Plan, Amended and Restated as of May 1, 2014,

10.15

10.16

10.17

10.18

10.19

10.20

incorporated by reference to exhibit 10.2 of the Company’s Current Report on Form 8-K
(File No. 001-08325), ﬁled with the SEC on May 7, 2014+
Form of Named Executive Officer Restricted Stock Award under 2007 Long-Term Incentive Plan,
incorporated by reference to exhibit 10.15 of the Company’s Form 10-K for the year ended
December 31, 2013 (File No. 001-08325), ﬁled with the SEC on March 5, 2014+
Form of Named Executive Officer Performance Share Award under 2007 Long-Term Incentive
Plan, incorporated by reference to exhibit 10.16 of the Company’s Form 10-K for the year ended
December 31, 2013 (File No. 001-08325), ﬁled with the SEC on March 5, 2014+
Form of Independent Director Restricted Stock Award under 2007 Long-Term Incentive Plan,
incorporated by reference to exhibit 10.17 of the Company’s Form 10-K for the year ended
December 31, 2013 (File No. 001-08325), ﬁled with the SEC on March 5, 2014+
Form of Independent Director Phantom Stock and Dividend Equivalents Award under the 2007
Long-Term Incentive Plan, incorporated by reference to exhibit 10.1 of the Company’s Form 10-Q
for the quarter ended June 30, 2015 (File No. 001-08325), ﬁled with the SEC on August 5, 2015+
Employment agreement with Betty R. Johnson, incorporated by reference to exhibit 10.1 of the
Company’s Form 10-Q for the quarter ended September 30, 2015 (File No. 001-08325), ﬁled with
the SEC on November 4, 2015+
Employment Agreement Waiver and Release of Claims with Paul J. Evans, incorporated by
reference to exhibit 10.2 of the Company’s Form 10-Q for the quarter ended September 30, 2015
(File No. 001-08325), ﬁled with the SEC on November 4, 2015+
Employment Agreement, dated April 29, 2015 between the Company and Tod Cooper†+
List of Subsidiaries†
Consent of Ernst & Young LLP†
Power of Attorney†
Certiﬁcation of Chief Executive Officer pursuant to SEC Rule 13a-14(a)/15d-14(a)†
Certiﬁcation of Chief Financial Officer pursuant to SEC Rule 13a-14(a)/15d-14(a)†
Certiﬁcation of Chief Executive Officer pursuant to 18 U.S.C. §1350†
Certiﬁcation of Chief Financial Officer pursuant to 18 U.S.C. §1350†

10.21
21.1
23.1
24.1
31.1
31.2
32.1
32.2
101.INS XBRL Instance Document*
101.SCH XBRL Taxonomy Extension Schema Document*
101.CAL XBRL Taxonomy Extension Calculation Linkbase Document*
101.DEF XBRL Taxonomy Extension Deﬁnition Linkbase Document*
101.LAB XBRL Taxonomy Extension Label Linkbase Document*
101.PRE XBRL Taxonomy Extension Presentation Linkbase Document*

†
+
*

Filed herewith.
Indicates management contract or compensatory plan or arrangement.
Electronically ﬁled.

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the

registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

SIGNATURES

March 3, 2016

MYR GROUP INC.
(Registrant)

/s/ BETTY R. JOHNSON
Name: Betty R. Johnson
Title:

Senior Vice President, Chief Financial Offıcer and
Treasurer

Pursuant to the requirements of the Securities Act of 1934, this report has been signed by the following

persons on behalf of the Registrant and in the capacities and on the dates indicated.

Signature

Title

Date

March 3, 2016

*
William A. Koertner

/s/ BETTY R. JOHNSON
Betty R. Johnson

Chairman, President and Chief Executive
Officer (Principal Executive Officer)

Senior Vice President, Chief Financial
Officer and Treasurer (Principal Financial
Officer and Principal Accounting Officer)

*
Jack L. Alexander

*
Larry F. Altenbaumer

*
Henry W. Fayne

*
Kenneth M. Hartwick

*
Gary R. Johnson

*
Donald C.I. Lucky

*
Maurice E. Moore

*
William D. Patterson

*By: /s/ BETTY R. JOHNSON
(Betty R. Johnson)
(Attorney-in-fact)

Director

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this

report to be signed on its behalf by the undersigned thereunto duly authorized.

SIGNATURE

March 3, 2016

/s/ BETTY R. JOHNSON
Senior Vice President, Chief Financial Offıcer and Treasurer

MYR GROUP INC.
(Registrant)

[This page intentionally left blank.]

DIRECTORS & OFFICERS

BOARD OF DIRECTORS

Jack L. Alexander

Larry F. Altenbaumer

Henry W. Fayne

Kenneth M. Hartwick

William A. Koertner
Chairman, President and
Chief Executive Officer

AUDITORS
Ernst & Young LLP
155 North Wacker Drive
Chicago, IL 60606
312.879.2000

STOCKHOLDER INQUIRIES
Dresner Corporate Services
Philip Kranz
20 North Clark, Suite 3550
Chicago, IL 60602
312.780.7240
pkranz@dresnerco.com

REGISTRAR AND TRANSFER AGENT
American Stock Transfer &
Trust Company, LLC
6201 15th Avenue
Brooklyn, NY 11219
800.937.5449

FORM 10-K
A copy of the Company’s Annual
Report on Form 10-K will be provided
without charge upon written request
to the Company’s Secretary.

Gary R. Johnson

Donald C.I. Lucky

Maurice E. Moore

William D. Patterson

EXECUTIVE OFFICERS
William A. Koertner
Chairman, President and
Chief Executive Officer

Richard S. Swartz
Senior Vice President
and Chief Operating Offier

Betty R. Johnson
Senior Vice President,
Chief Financial Officer
and Treasurer

Tod M. Cooper
Senior Vice President

Gerald B. Engen, Jr.
Senior Vice President,
Chief Legal Officer
and Secretary

COMPANY OFFICERS
Martin D. Browne
Vice President

Steven D. Cavanaugh
Vice President, Safety

Wayne D. Dorris
Vice President

Don A. Egan
Vice President

Thomas D. Eslick
Vice President

William H. Green
Senior Vice President

Russell A. Hinnen
Vice President, Corporate
Accounting

Raymond Holland, Sr.
Vice President, Fleet
Operations

Elaine K. Hughes
Vice President, Business
Development

Doreen L. Keller
Vice President, Human
Resources

D. Scott Lamont
Group Vice President

Kelley S. Lange
Vice President

Brandon M. Lark
President, Great Southwestern
Construction Company, Inc.

Jean A. Luber
Vice President, Information
Technology

Matthew T. McCain
Vice President

Mindie W. McIff
Regional Vice President

Marisa A. Owens
Vice President, Operational
Accounting

Richard A. Pieper
Vice President

Rodney R. Quinn
Regional Vice President

Terry C. Roberts
President, Sturgeon Electric
Company T&D

Lawrence D. Schweitzer
Regional Vice President

Robert M. Smith, Jr.
Group Vice President

Richard D. Reyes
Vice President

Mark W. Sterkel
Regional Vice President

Brian K. Stern
Regional Vice President

R. Clay Thompson
President, High Country Line
Construction

Michael W. Troutman
Regional Vice President

Jeffrey J. Waneka
President, Sturgeon Electric
Company, C&I

For more than a century, MYR Group has served the electrical construction needs

of clients. Our reputation for excellence in both the transmission and distribution

and commercial and industrial markets makes us a leader in the industry.

J. Edward Horne
Vice President

MYRG

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myrgroup.com

2015 ANNUAL REPORT

CORPORATE HEADQUARTERS: 1701 GOLF ROAD, SUITE 3-1012, ROLLING MEADOWS, IL 60008 | 847.290.1891 | MYRGROUP.COM | NASDAQ: MYRG