v3.25.2
Fair Value of Financial Instruments
 6 Months Ended
Jun. 30, 2025
Fair Value Disclosures [Abstract]  
Fair Value of Financial Instruments Fair Value of Financial Instruments
The Company’s financial instruments are primarily composed of cash and cash equivalents, accounts receivable and contract assets, notes receivable, cash collateral deposited with insurance carriers, life insurance assets, equity investments, certain other assets and investments, deferred compensation plan assets and liabilities, accounts payable and other current liabilities, acquisition-related contingent consideration and other liabilities, and debt obligations.
Fair value is the price that would be received to sell an asset or the amount paid to transfer a liability, also referred to as the “exit price,” in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The fair value guidance establishes a valuation hierarchy, which requires maximizing the use of observable inputs when measuring fair value. The three levels of inputs that may be used are: (i) Level 1 - quoted market prices in active markets for identical assets or liabilities; (ii) Level 2 - observable market-based inputs or other observable inputs, including quoted market prices for identical or similar assets or liabilities in markets that are not active; and (iii) Level 3 - significant unobservable inputs that cannot be corroborated by observable market data, which are generally determined using valuation models incorporating management estimates of market participant assumptions.
Acquisition-Related Contingent Consideration
Acquisition-related contingent consideration is composed of earn-outs, which represent the estimated fair value of future amounts payable for businesses, which the Company refers to as “Earn-outs,” that are contingent upon the acquired businesses achieving certain levels of earnings in the future. The fair values of the Company’s Earn-out liabilities are estimated using income approaches such as discounted cash flows or option pricing models, both of which incorporate significant inputs not observable in the market (Level 3 inputs), including management’s estimates and entity-specific assumptions, and are evaluated on an ongoing basis. Key assumptions include the discount rate, which was 10.5% as of June 30, 2025, and probability-weighted projections of EBITDA. Significant changes in any of these assumptions could result in significantly higher or lower estimated Earn-out liabilities. The ultimate payment amounts for the Company’s Earn-out liabilities will be determined based on the actual results achieved by the acquired businesses. As of June 30, 2025, the range of potential undiscounted Earn-out liabilities was estimated to be between $38 million and $101 million; however, there is no maximum payment amount.
Earn-out activity consists primarily of additions from new business combinations; changes in the expected fair value of future payment obligations; and payments. The following table, which may contain slight summation differences due to rounding, provides a reconciliation of changes in Earn-out liabilities measured at fair value for the periods indicated (in millions):
Six Months Ended
June 30,
20252024
Balance as of beginning of period (a)
$112.7 $77.4 
Fair value adjustments (b)
(3.7)(1.8)
Payments(19.2)(4.6)
Balance as of end of period (a)
$89.8 $71.1 
(a)Earn-out liabilities included within other current liabilities totaled approximately $50.7 million and $70.0 million as of June 30, 2025 and December 31, 2024, respectively.
(b)For the six months ended June 30, 2025, fair value adjustments related primarily to decreases within the Company’s Power Delivery segment, which were partially offset by increases primarily within the Company’s Pipeline Infrastructure segment. For the six months ended June 30, 2024, such adjustments related primarily to acquisitions within the Company’s Communications and Pipeline Infrastructure segment.
Equity Investments
The Company’s equity investments as of June 30, 2025 include: (i) the Company’s 33% equity interests in Trans-Pecos Pipeline, LLC (“TPP”) and Comanche Trail Pipeline, LLC (“CTP,” and together with TPP, the “Waha JVs”); (ii) a 15% equity interest in Cross Country Infrastructure Services, Inc. (“CCI”); (iii) the Company’s 50% equity interests in each of FM Technology Holdings, LLC, FM USA Holdings, LLC and All Communications Solutions Holdings, LLC, collectively “FM Tech”; (iv) the Company’s interests in certain proportionately consolidated non-controlled contractual joint ventures; and (v) certain other equity investments.
As of both June 30, 2025 and December 31, 2024, the aggregate carrying value of the Company’s equity investments, which are recorded within other long-term assets in the consolidated balance sheets, totaled approximately $330 million. There were no impairments related to these investments in any of the three or six months ended June 30, 2025 or 2024.
The Waha JVs. The Waha JVs own and operate certain pipeline infrastructure that transports natural gas to the Mexican border for export. The Company’s investments in the Waha JVs are accounted for as equity method investments. Cumulative undistributed earnings from the Waha JVs, which represents cumulative equity in earnings for the Waha JVs less distributions of earnings, totaled $144.5 million as of June 30, 2025. The Company’s net investment in the Waha JVs, which differs from its proportionate share of the net assets of the Waha JVs due primarily to equity method goodwill associated with capitalized investment costs, totaled approximately $289 million and $287 million as of June 30, 2025 and December 31, 2024, respectively. The table below reflects the investment activity of the Waha JVs for the periods indicated (in millions):
Three Months Ended
June 30,
Six Months Ended
June 30,
2025202420252024
Equity in earnings (a)
$7.8 $6.4 $16.0 $14.1 
Distributions of earnings (b)
6.1 5.1 9.8 9.3 
(a)Equity in earnings related to the Company’s proportionate share of income from the Waha JVs is included within the Company’s Other segment.
(b)Distributions of earnings from the Waha JVs are included within operating cash flows.
Other Investments. The Company has equity interests in certain other entities that are accounted for as equity method investments. The Company made no equity contributions to these other entities for the six months ended June 30, 2025, and made equity contributions of approximately $0.2 million for the six months ended June 30, 2024. The Company has subcontracting arrangements with certain of these entities for the performance of construction services, and expenses recognized in connection with these arrangements totaled approximately $0.6 million and $2.0 million for the three and six months ended June 30, 2025, respectively, and totaled approximately $1.2 million and $2.4 million for the three and six months ended June 30, 2024, respectively. As of June 30, 2025 and December 31, 2024, related amounts payable to these entities totaled approximately $0.2 million and $0.3 million, respectively. In addition, the Company advanced approximately $0.1 million to certain of these entities for the six months ended June 30, 2024. As of June 30, 2025 and December 31, 2024, receivables related to these arrangements totaled approximately $4.0 million and $4.1 million, respectively.
Variable Interest Entities. The Company has determined that certain of its investment arrangements are variable interest entities (“VIEs”). Management assesses its VIEs on an ongoing basis to determine if the Company is the primary beneficiary and if consolidation is required. As of June 30, 2025, management determined that the Company is the primary beneficiary of two of its VIEs, and accordingly, has consolidated these entities within the Company’s financial statements, with the other parties’ interests accounted for as non-controlling interests.
The Company’s consolidated VIEs include an electric utility contractor in which the Company acquired a 49% interest in the first quarter of 2024. As of June 30, 2025 and December 31, 2024, the carrying values of assets associated with the Company’s consolidated VIEs totaled approximately $140.9 million and $134.8 million, respectively, which amounts consisted primarily of accounts receivable, net of allowance and contract assets. The carrying values of liabilities associated with the Company’s consolidated VIEs totaled approximately $136.8 million and $132.8
million as of June 30, 2025 and December 31, 2024, respectively, which amounts consisted primarily of accounts payable. The Company has not provided, nor is it obligated to provide, any financial support to any of its consolidated VIEs.
The carrying values of the Company’s VIEs that are not consolidated totaled approximately $22 million and $23 million as of June 30, 2025 and December 31, 2024, respectively, which amounts are recorded within other long-term assets in the consolidated balance sheets. Management believes that the Company’s maximum exposure to loss for its non-consolidated VIEs, inclusive of additional financing commitments, approximated $30 million and $34 million as of June 30, 2025 and December 31, 2024, respectively.